Document:

Exhibit 10.13

 

$39,000,000

 

AMENDED AND
RESTATED BRIDGE LOAN 

CREDIT AGREEMENT

 

among

 

SPORTS
ENTERTAINMENT ENTERPRISES, INC.,

 

a Colorado
corporation,

 

EPE HOLDING
CORPORATION,

 

a Delaware
corporation,

 

as Borrower,

 

The Several
Lenders

 

from Time to
Time Parties Hereto,

 

and

 

BEAR STEARNS
CORPORATE LENDING INC.,

 

as
Administrative Agent

 

Dated as of March 17,
2005

 

 

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

 

 

TABLE OF CONTENTS

 

 

	
  SECTION 1. DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.1.

  	
   

  	
  Defined Terms

  	
   

  
	
  1.2.

  	
   

  	
  Other Definitional Provisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2. AMOUNT AND TERMS OF BRIDGE
  COMMITMENTS

  	
   

  
	
  2.1.

  	
   

  	
  Bridge Commitments

  	
   

  
	
  2.2.

  	
   

  	
  [Reserved]

  	
   

  
	
  2.3.

  	
   

  	
  Repayment of Bridge Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3. GENERAL PROVISIONS
  APPLICABLE TO LOANS

  	
   

  
	
  3.1.

  	
   

  	
  Optional Prepayments

  	
   

  
	
  3.2.

  	
   

  	
  Mandatory Prepayments

  	
   

  
	
  3.3.

  	
   

  	
  Conversion and Continuation Options

  	
   

  
	
  3.4.

  	
   

  	
  Limitations on Eurodollar Tranches

  	
   

  
	
  3.5.

  	
   

  	
  Interest Rates and Payment Dates

  	
   

  
	
  3.6.

  	
   

  	
  Computation of Interest and Fees

  	
   

  
	
  3.7.

  	
   

  	
  Inability to Determine Interest Rate

  	
   

  
	
  3.8.

  	
   

  	
  Pro Rata Treatment and Payments

  	
   

  
	
  3.9.

  	
   

  	
  Requirements of Law

  	
   

  
	
  3.10.

  	
   

  	
  Taxes

  	
   

  
	
  3.11.

  	
   

  	
  Indemnity

  	
   

  
	
  3.12.

  	
   

  	
  Change of Lending Office

  	
   

  
	
  3.13.

  	
   

  	
  Replacement of Lenders

  	
   

  
	
  3.14.

  	
   

  	
  Evidence of Debt

  	
   

  
	
  3.15.

  	
   

  	
  Illegality

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4. REPRESENTATIONS AND
  WARRANTIES 

  	
   

  
	
  4.1.

  	
   

  	
  Financial Condition

  	
   

  
	
  4.2.

  	
   

  	
  No
  Change

  	
   

  
	
  4.3.

  	
   

  	
  Corporate Existence; Compliance with Law

  	
   

  
	
  4.4.

  	
   

  	
  Power; Authorization; Enforceable
  Obligations

  	
   

  
	
  4.5.

  	
   

  	
  No Legal Bar

  	
   

  
	
  4.6.

  	
   

  	
  Litigation

  	
   

  
	
  4.7.

  	
   

  	
  No
  Default

  	
   

  
	
  4.8.

  	
   

  	
  Ownership of Property; Liens

  	
   

  
	
  4.9.

  	
   

  	
  Intellectual Property.

  	
   

  
	
  4.10.

  	
   

  	
  Taxes

  	
   

  
	
  4.11.

  	
   

  	
  Federal Regulations

  	
   

  

 

 

	
  4.12.

  	
   

  	
  Labor Matters

  	
   

  
	
  4.13.

  	
   

  	
  ERISA

  	
   

  
	
  4.14.

  	
   

  	
  Investment Company Act; Other Regulations

  	
   

  
	
  4.15.

  	
   

  	
  Subsidiaries

  	
   

  
	
  4.16.

  	
   

  	
  Use of Proceeds

  	
   

  
	
  4.17.

  	
   

  	
  Environmental Matters

  	
   

  
	
  4.18.

  	
   

  	
  Accuracy of Information, etc.

  	
   

  
	
  4.19.

  	
   

  	
  Security Documents

  	
   

  
	
  4.20.

  	
   

  	
  Solvency

  	
   

  
	
  4.21.

  	
   

  	
  Senior Indebtedness

  	
   

  
	
  4.22.

  	
   

  	
  Certain Documents

  	
   

  
	
  4.23.

  	
   

  	
  Foreign Assets Control Regulations and
  Anti-Money Laundering

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5. CONDITIONS PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6. AFFIRMATIVE COVENANTS

  	
   

  
	
  6.1.

  	
   

  	
  Financial Statements

  	
   

  
	
  6.2.

  	
   

  	
  Certificates; Other Information

  	
   

  
	
  6.3.

  	
   

  	
  Payment of Obligations

  	
   

  
	
  6.4.

  	
   

  	
  Maintenance of Existence; Compliance

  	
   

  
	
  6.5.

  	
   

  	
  Maintenance of Property; Insurance

  	
   

  
	
  6.6.

  	
   

  	
  Inspection of Property; Books and Records;
  Discussions

  	
   

  
	
  6.7.

  	
   

  	
  Notices

  	
   

  
	
  6.8.

  	
   

  	
  Intellectual Property.

  	
   

  
	
  6.9.

  	
   

  	
  Environmental Laws

  	
   

  
	
  6.10.

  	
   

  	
  Additional Collateral, etc.

  	
   

  
	
  6.11.

  	
   

  	
  Use of Proceeds

  	
   

  
	
  6.12.

  	
   

  	
  Further Assurances

  	
   

  
	
  6.13.

  	
   

  	
  Warrants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7. NEGATIVE COVENANTS

  	
   

  
	
  7.1.

  	
   

  	
  Financial Condition Covenants.

  	
   

  
	
  7.2.

  	
   

  	
  Indebtedness

  	
   

  
	
  7.3.

  	
   

  	
  Liens

  	
   

  
	
  7.4.

  	
   

  	
  Fundamental Changes

  	
   

  
	
  7.5.

  	
   

  	
  Disposition of Property

  	
   

  
	
  7.6.

  	
   

  	
  Restricted Payments

  	
   

  
	
  7.7.

  	
   

  	
  Capital Expenditures

  	
   

  
	
  7.8.

  	
   

  	
  Investments

  	
   

  
	
  7.9.

  	
   

  	
  Optional Payments and Modifications of
  Indebtedness

  	
   

  
	
  7.10.

  	
   

  	
  Transactions with Affiliates

  	
   

  
	
  7.11.

  	
   

  	
  Sales and Leasebacks

  	
   

  
	
  7.12.

  	
   

  	
  Hedge Agreements

  	
   

  
	
  7.13.

  	
   

  	
  Changes in Fiscal Periods

  	
   

  
	
  7.14.

  	
   

  	
  Negative Pledge Clauses

  	
   

  

 

 

	
  7.15.

  	
   

  	
  Clauses Restricting Subsidiary
  Distributions

  	
   

  
	
  7.16.

  	
   

  	
  Lines of Business

  	
   

  
	
  7.17.

  	
   

  	
  Certain Amendments

  	
   

  
	
  7.18.

  	
   

  	
  Accounting Changes

  	
   

  
	
  7.19.

  	
   

  	
  Intellectual Property.

  	
   

  
	
  7.20.

  	
   

  	
  Hazardous Substances

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8. EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9. THE AGENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.1.

  	
   

  	
  Appointment

  	
   

  
	
  9.2.

  	
   

  	
  Delegation of Duties

  	
   

  
	
  9.3.

  	
   

  	
  Exculpatory Provisions

  	
   

  
	
  9.4.

  	
   

  	
  Reliance by Agents

  	
   

  
	
  9.5.

  	
   

  	
  Notice of Default

  	
   

  
	
  9.6.

  	
   

  	
  Non-Reliance on Agents and Other Lenders

  	
   

  
	
  9.7.

  	
   

  	
  Indemnification

  	
   

  
	
  9.8.

  	
   

  	
  Agent in Its Individual Capacity

  	
   

  
	
  9.9.

  	
   

  	
  Successor Administrative Agent

  	
   

  
	
  9.10.

  	
   

  	
  Agents Generally

  	
   

  
	
  9.11.

  	
   

  	
  The Lead Arranger

  	
   

  
	
  9.12.

  	
   

  	
  Withholding Tax

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10. MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.1.

  	
   

  	
  Amendments and Waivers

  	
   

  
	
  10.2.

  	
   

  	
  Notices

  	
   

  
	
  10.3.

  	
   

  	
  No Waiver; Cumulative Remedies

  	
   

  
	
  10.4.

  	
   

  	
  Survival of Representations and Warranties

  	
   

  
	
  10.5.

  	
   

  	
  Payment of Expenses and Taxes

  	
   

  
	
  10.6.

  	
   

  	
  Successors and Assigns; Participations and
  Assignments

  	
   

  
	
  10.7.

  	
   

  	
  Adjustments; Set-off

  	
   

  
	
  10.8.

  	
   

  	
  Counterparts

  	
   

  
	
  10.9.

  	
   

  	
  Severability

  	
   

  
	
  10.10.

  	
   

  	
  Integration

  	
   

  
	
  10.11.

  	
   

  	
  GOVERNING LAW

  	
   

  
	
  10.12.

  	
   

  	
  Submission To Jurisdiction; Waivers

  	
   

  
	
  10.13.

  	
   

  	
  Acknowledgments

  	
   

  
	
  10.14.

  	
   

  	
  Releases of Liens

  	
   

  
	
  10.15.

  	
   

  	
  Confidentiality

  	
   

  
	
  10.16.

  	
   

  	
  WAIVERS OF JURY TRIAL

  	
   

  
	
  10.17.

  	
   

  	
  Delivery of Addenda

  	
   

  
	
  10.18.

  	
   

  	
  USA PATRIOT Act

  	
   

  
					

 

 

	
  SCHEDULES:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.1(a)

  	
   

  	
  Permitted Indebtedness

  	
   

  
	
  1.1(b)

  	
   

  	
  Permitted Liens

  	
   

  
	
  4.4

  	
   

  	
  Consents, Authorizations, Filings and Notices

  	
   

  
	
  4.15

  	
   

  	
  Subsidiaries

  	
   

  
	
  4.19

  	
   

  	
  UCC Filing Jurisdictions

  	
   

  
	
  7.10

  	
   

  	
  Affiliate Transactions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  A-1

  	
   

  	
  Form of First Amendment to Guarantee and Collateral Agreement

  	
   

  
	
  A-2

  	
   

  	
  Form of UK Second Charge Over Shares

  	
   

  
	
  B

  	
   

  	
  Form of Compliance Certificate

  	
   

  
	
  C

  	
   

  	
  Form of Closing Certificate

  	
   

  
	
  D

  	
   

  	
  Form of Assignment and Assumption

  	
   

  
	
  E-1

  	
   

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

  	
   

  
	
  E-2

  	
   

  	
  Form of Legal Opinion of Greenberg Traurig

  	
   

  
	
  E-3

  	
   

  	
  Form of Legal Opinion of Baker & McKenzie

  	
   

  
	
  F

  	
   

  	
  Form of Exemption Certificate

  	
   

  
	
  G

  	
   

  	
  Form of Bridge Note

  	
   

  
	
  H

  	
   

  	
  Form of Addendum

  	
   

  
	
  I

  	
   

  	
  [Reserved]

  	
   

  
	
  J

  	
   

  	
  Subordination Provisions

  	
   

  
	
  K

  	
   

  	
  Form of Intercreditor Agreement

  	
   

  
						

 

 

AMENDED AND RESTATED BRIDGE LOAN CREDIT
AGREEMENT, dated as of March 17, 2005, among SPORTS ENTERTAINMENT
ENTERPRISES, INC., a Colorado corporation (d/b/a CKX, Inc.) (“Holdings”),
EPE HOLDING CORPORATION, a Delaware corporation and a direct wholly owned
subsidiary of Holdings (the “Borrower”), the several banks and other
financial institutions or entities from time to time parties to this Agreement
as lenders (the “Lenders”), BEAR, STEARNS & CO. INC., as sole
lead arranger (in such capacity, the “Lead Arranger”), and BEAR STEARNS
CORPORATE LENDING INC., as administrative agent (in such capacity, the “Administrative
Agent”).

 

RECITALS

 

WHEREAS, on February 7, 2005 (the “Closing
Date”), the parties hereto executed that certain Bridge Loan Credit
Agreement (the “Original Credit Agreement”) pursuant to which the
Lenders extended $39,000,000 in principal amount of term loans to the Borrower;

 

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

 

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

 

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

 

WHEREAS, the parties to the Original Credit
Agreement wish to amend and restate the Original Credit Agreement to, among
other things, permit certain indebtedness to be incurred by certain
Subsidiaries to be formed or acquired by Holdings (including indebtedness to be
incurred on the date hereof by CKX UK Holdings Limited (“19 Holdco”), a
company incorporated in England and Wales with registered number 05389449,
pursuant to the 19 Bridge Loan Agreement (as defined below)) and the guarantee
thereof by Holdings.

 

1

 

NOW, THEREFORE, for good and valuable
consideration, the parties hereto hereby amend and restate the Original Credit
Agreement (which is hereby superseded in all respects by this Agreement) in its
entirety as follows:

 

SECTION 1.  DEFINITIONS

 

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

 

“Acquired Indebtedness”:  Indebtedness of any Person substantially all
of the Capital Stock or other ownership interests of which is, or in respect of
any business unit of any Person, acquired after the Closing Date by Holdings or
one of its Subsidiaries in connection with a Permitted Acquisition, but only to
the extent such Indebtedness was outstanding prior to giving effect to such
Permitted Acquisition and was not incurred in contemplation of or for purposes
of consummating such Permitted Acquisition.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

	
   

  	
   

  	
  Eurodollar Loans

  	
   

  	
  Base Rate Loans

  	
   

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

  	
   

  	
  4.00

  	
  %

  	
  3.00

  	
  %

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

  	
   

  	
  5.00

  	
  %

  	
  4.00

  	
  %

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

  	
   

  	
  6.00

  	
  %

  	
  5.00

  	
  %

  

 

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

 

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

 

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

 

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

 

“Base Rate”:  for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate
in effect on such day plus 0.50%.  For
purposes hereof:  “Prime Rate”
shall mean the rate of interest per annum publicly announced from time to time
by the Reference Lender as its prime rate in effect at its principal office in
New York City (the Prime Rate not being intended to be the lowest rate of
interest charged by the Reference Lender in

 

3

 

connection with extensions of
credit to debtors).  Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective as of the opening of business on the effective day of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Bridge Loans”:  as defined in Section 2.1.

 

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

 

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

 

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

 

“Capital Lease Obligations”:  as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such Person under GAAP and,

 

4

 

for purposes of this Agreement,
the amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.

 

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

 

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

 

“Change of Control”: the occurrence of
any of the following: (a) Robert F.X. Sillerman shall (i) cease to
own beneficially at least 40% of the outstanding voting interests in Holdings
on a fully diluted basis or (ii) transfer more than 5% of the economic interest
in Holdings that are held by Robert F.X. Sillerman as of the Closing Date; (b) the
board of directors of Holdings shall cease to consist of a majority of
Continuing Directors; (c) Holdings shall cease to own and control, of
record and beneficially, directly, 100% of each class of outstanding Capital
Stock of the Borrower free and clear of all Liens (except Liens created by the
Guarantee and Collateral Agreement and the “Guarantee and Collateral Agreement”
as defined in the 19 Bridge Loan Agreement); (d) the Borrower shall cease
to own and control, of record and beneficially, directly, at least the
percentage of the ownership interests of the Operating

 

5

 

Companies as are owned by the
Borrower as of the Closing Date free and clear of all Liens (except Liens
created by the Guarantee and Collateral Agreement); or (e) either
Operating Company shall cease to own and control, of record and beneficially,
directly, the percentage of each class of outstanding Capital Stock and other
ownership interests of its Subsidiaries as is owned by it as of the Closing
Date free and clear of all Liens (other than pursuant to a merger permitted by Section 7.4).

 

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

 

“Closing Date”:  as defined in the Recitals.

 

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

 

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

 

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

 

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

 

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

 

“Consolidated EBITDA”:  for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income for such period, (and
provided that to the extent that all or any portion of the income of any
Subsidiary or other Person is excluded from Consolidated Net Income pursuant to
the definition thereof for such period or portion thereof, any amounts set
forth in the following clauses (a) through (g) that are attributable
to such Subsidiary or other Person shall not

 

6

 

be included for purposes of
such clauses for such period or portion thereof) the sum of (a) income tax
expense, (b) interest expense, amortization or write-off of debt discount
and debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organizational costs, (e) any extraordinary
charges or losses determined in accordance with GAAP, (f) non-cash
compensation expenses arising from the issuance of stock, options to purchase
stock and stock appreciation rights to the management of the Borrower, and (g) any
other non-cash charges, non-cash expenses or non-cash losses of the Borrower or
any of its Subsidiaries for such period (excluding any such charge, expense or
loss incurred in the ordinary course of business that constitutes an accrual of
or a reserve for cash charges for any future period), provided, however,
that cash payments made in such period or in any future period in respect of
such non-cash charges, expenses or losses (excluding any such charge, expense
or loss incurred in the ordinary course of business that constitutes an accrual
of or a reserve for cash charges for any future period) shall be subtracted
from Consolidated Net Income in calculating Consolidated EBITDA in the period
when such payments are made, and minus, to the extent included in the
statement of such Consolidated Net Income for such period, the sum of (a) interest
income, (b) any extraordinary income or gains determined in accordance
with GAAP and (c) any other non-cash income (excluding any items that
represent the reversal of any accrual of, or cash reserve for, anticipated cash
charges in any prior period that are described in the parenthetical to clause (g) above),
all as determined on a consolidated basis.

 

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

 

7

 

For purposes of this definition, whenever pro
forma effect is to be given to any Asset Sale, Disposition or Permitted
Acquisition and the amount of income or earnings relating thereto, the pro
forma calculations shall be determined in good faith by a responsible financial
or accounting officer of the Borrower and shall comply with the requirements of
Rule 11-02 of Regulation S-X promulgated by the SEC, except that such pro
forma calculations may include operating expense reductions for the applicable
period resulting from any Permitted Acquisition which is being given pro forma
effect that have been realized or for which the steps necessary for realization
have been taken or are reasonably expected to be taken within six months
following such Permitted Acquisition, including, but not limited to, the
execution or termination of any contracts, the termination of any personnel or
the closing (or approval by the board of directors of such Person of any
closing) of any facility, as applicable, provided that, in either case, such
adjustments are reasonably satisfactory to the Administrative Agent and are set
forth in an certificate signed by the Person’s chief financial officer which
states (i) the amount of such adjustment or adjustments, (ii) that
such adjustment or adjustments are based on the reasonable good faith beliefs
of the officer executing such certificate at the time of such execution and (iii) that
any related incurrence of Indebtedness is permitted pursuant to this Agreement.

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Effective Date”:  the date on which the conditions precedent
set forth in Section 5 shall have been satisfied or waived, which date is March 17,
2005.

 

“Engagement Letter”:  the engagement letter entered into by the
Lead Arranger, RFX and Robert F.X. Sillerman on December 10, 2004, as
acceded to by Holdings in replacement of RFX and fulfillment of the obligation
of Robert F.X. Sillerman thereunder on March 17, 2005, and as amended on March 17,
2005.

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  Eurodollar Base Rate

  
	
  1.00 - Eurocurrency Reserve Requirements

  

 

10

 

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

 

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

 

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

 

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

 

“Federal Funds Effective Rate”:  for any day, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average
of the quotations for the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it.

 

“First Amendment to Guarantee and
Collateral Agreement”:  that certain
First Amendment, to be executed and delivered by Holdings and the Borrower on
the Effective Date, substantially in the form of Exhibit A-1.

 

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

 

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

 

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

 

11

 

Standards Board of the American
Institute of Certified Public Accountants or, if applicable, the SEC.

 

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

 

“Group Members”:  the collective reference to Holdings, the
Borrower and their respective Subsidiaries, other than 19 Holdco Limited and
its Subsidiaries.

 

“Guarantee and Collateral Agreement”:  the Guarantee and Collateral Agreement, dated
as of the Closing Date, by Holdings and the Borrower, as amended on the date
hereof.

 

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

 

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

 

“Hazardous Substances”
shall mean any material substance or waste presently listed, defined,
designated or classified as hazardous, toxic or radioactive under, or otherwise

 

12

 

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

 

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

 

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

 

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

 

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

 

13

 

“Indemnified Liabilities”:  as defined in Section 10.5.

 

“Indemnitee”:  as defined in Section 10.5.

 

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

 

“Insolvent”:  pertaining to a condition of Insolvency.

 

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

 

“Intercreditor Agreement”:  that certain Intercreditor Agreement, dated
as of the date hereof, by and between the Administrative Agent and the 19
Administrative Agent, substantially in the form of Exhibit K.

 

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

 

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

 

(i)            if any Interest Period would
otherwise end on a day that is not a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately preceding
Business Day;

 

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

 

(iii)          any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and

 

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

 

14

 

“Investments”:  as defined in Section 7.8.

 

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

 

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

 

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

 

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

 

“Lien”:  any mortgage, pledge, hypothecation,
assignment by way of collateral, deposit arrangement, encumbrance, lien
(statutory or other), charge or other security interest or any preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement and any capital lease having substantially the same economic effect
as any of the foregoing).

 

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

 

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

 

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

 

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

 

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

 

“Material Adverse Effect”:  a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise), results of
operations or prospects of Holdings, the Borrower, the Operating Companies and
the respective Subsidiaries of the Borrower and the Operating Companies, taken
as a whole, excluding, however, any effect attributable to (i) changes in
conditions generally affecting the industries in which Holdings operates and (ii) changes
in law after the Closing Date or (b) the validity or enforceability of
this Agreement or

 

15

 

any of the other Loan Documents
or the rights or remedies of the Agents or the Lenders hereunder or thereunder
or the validity, perfection or priority of the Administrative Agent’s Liens on
the Collateral.

 

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

 

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

 

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

 

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

 

“19 Administrative Agent”:  Bear Stearns Corporate Lending, Inc., as
administrative agent under the 19 Bridge Loan Agreement.

 

“19 Bridge Loan Agreement”:  that certain Bridge Loan Credit Agreement,
dated as of the date hereof, among Holdings, 19 Holdco, the several lenders
from time to time parties thereto, and the 19 Administrative Agent.

 

“19 Holdco”:  as defined in the Recitals.

 

16

 

“19 Second Lien Collateral Agreement”:  that certain Second Lien Collateral
Agreement, dated as of the date hereof, by the Borrower in favor of the 19
Administrative Agent.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Patriot Act”: as defined in Section 10.18.

 

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

 

“Permitted Acquisition”:  one or more acquisitions by any Group Member
of a business unit (with any associated assets) or all of the outstanding
capital stock or other ownership interests (other than margin stock) of any
other Person, provided that (a) no more than $2.0 million of cash
and/or Cash Equivalents in the aggregate shall be used in connection with all
such Permitted Acquisitions, (b) in the case of an asset acquisition, the
applicable assets to be acquired are used, or, in the case of a stock
acquisition, the applicable Person to be acquired is predominantly engaged, in
media, entertainment or content related businesses, (c) in the case of an
acquisition by the Borrower or any of its Subsidiaries, the Borrower shall be
in compliance with the financial covenants set forth in Section 7.1 on a
pro forma basis after giving effect to such acquisition (and a Responsible
Officer of the Borrower shall have certified to such compliance), (d) in
connection with any such acquisition involving a merger, Holdings, or a

 

17

 

Wholly Owned Subsidiary of
Holdings or one of the Operating Companies shall be the surviving entity
(provided that (x) if such merger involves the Borrower, the Borrower shall be
the surviving entity and (y) if such merger involves any Subsidiary of the
Borrower, the Borrower, an Operating Company, or a Wholly Owned Subsidiary of
the Borrower shall be the surviving entity), (e) immediately prior, and
after giving effect, to such acquisition, no Default or Event of Default shall
have occurred and be continuing and (f) in the case of the acquisition of
the Capital Stock or other ownership interests of another Person by the
Borrower, the Borrower shall pledge such Capital Stock or other ownership
interest and, to the extent that such Person is then 100% owned by the
Borrower, cause such Person to become a Guarantor, in each case, in accordance
with the Guarantee and Collateral Agreement.

 

“Permitted Indebtedness”: the
following types of Indebtedness:

 

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

 

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

 

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

 

(4)           Indebtedness in respect of bankers’
acceptances and bid, performance and surety or appeal bonds, workers’
compensation claims and payment obligations in connection with self-insurance
or similar obligations, in each case in the ordinary course of business,
including guarantees or obligations of the Borrower with respect to letters of
credit, issued in the ordinary course of business, supporting such obligations;

 

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

 

(6)           Hedge Agreements permitted under Section 7.12;

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

(15)         Indebtedness of Holdings comprised of
its guarantee of Indebtedness of 19 Holdco Limited under the 19 Bridge Loan
Agreement.

 

“Permitted Liens”:  the following types of Liens:

 

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

 

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

 

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

 

19

 

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

 

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

 

(6)           Liens created pursuant to the
Security Documents;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(15)         Liens not otherwise permitted by this Section on
the assets of the Borrower and its Subsidiaries so long as neither (i) the
aggregate outstanding principal

 

20

 

amount of the obligations
secured thereby nor (ii) the aggregate fair market value (determined as of
the date such Lien is incurred) of the assets subject thereto exceeds (as to
the Borrower and all Subsidiaries) $100,000 at any one time; and

 

(16)         Liens granted on a second priority
basis by (a) Holdings on the Capital Stock of the Borrower pursuant to the
Guarantee and Collateral Agreement (as defined in the 19 Bridge Loan Agreement)
and (b) the Borrower on its assets pursuant to the 19 Second Lien
Collateral Agreement.

 

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

 

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

 

“Pledged Equity Interests”:  the “Pledged Stock” as defined in the
Guarantee and Collateral Agreement and the “Shares” as defined in the UK Second
Charge Over Shares.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Reference Lender”:  Bear Stearns Corporate Lending Inc.

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

22

 

“Reservations”:  the principle that equitable remedies may be
granted or refused at the discretion of the courts of England and Wales; the
limitations imposed by laws relating to bankruptcy, insolvency, liquidation,
reorganization, court schemes, moratoria, administration and other laws
generally affecting the rights of creditors or (as the case may be) secured
creditors; the time barring of claims; the possibility that an undertaking to
assume liability for or to indemnify against non-payment of United Kingdom
stamp duty may be void; defenses of set-off or counterclaim and other similar
principles of English law.

 

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

 

“Restricted Payments”:  as defined in Section 7.6.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

23

 

payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured or (y) right to an equitable remedy for breach of performance if such
breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.

 

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

 

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

 

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

 

“Transferee”:  any Assignee or Participant.

 

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

 

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

 

“UK Second Charge Over Shares”:  That certain charge over shares, whereby
Holdings grants a second lien security interest in certain of its equity in 19
Holdco Limited to the Administrative Agent, substantially in the form of Exhibit A-2.

 

“United States”:  the United States of America.

 

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

 

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

 

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

 

(b)           As used herein and in the other Loan
Documents, and any certificate or other document made or delivered pursuant
hereto or thereto, (i) accounting terms relating to any

 

24

 

Group Member not defined in Section 1.1
and accounting terms partly defined in Section 1.1, to the extent not
defined, shall have the respective meanings given to them under GAAP, (ii) the
words “include”, “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”, (iii) the word “incur” shall be construed
to mean incur, create, issue, assume, become liable in respect of or suffer to
exist (and the words “incurred” and “incurrence” shall have correlative meanings),
(iv) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, Capital Stock, securities, revenues, accounts,
leasehold interests and contract rights, and (v) references to agreements
or other Contractual Obligations shall, unless otherwise specified, be deemed
to refer to such agreements or Contractual Obligations as amended,
supplemented, restated or otherwise modified from time to time (subject to any
applicable restrictions hereunder).

 

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

 

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

 

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

 

SECTION 2.  AMOUNT AND TERMS
OF BRIDGE COMMITMENTS

 

2.1.          Bridge Commitments. 
Subject to the terms and conditions of the Original Credit Agreement,
each Bridge Lender severally made a bridge loan (a “Bridge Loan”) to the
Borrower on the Closing Date in the amount of the Bridge Commitment of such
Lender.  The Bridge Loans from time to
time may be Eurodollar Loans or Base Rate Loans, as determined by the Borrower
and notified to the Administrative Agent in accordance with Sections 2.2
and 3.3.

 

2.2.          [Reserved].

 

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

 

25

 

SECTION 3.  GENERAL
PROVISIONS APPLICABLE TO LOANS

 

3.1.          Optional
Prepayments.

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

 

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

 

3.2.          Mandatory
Prepayments.   (a)If any Capital Stock (other than
the Warrants or any Capital Stock issued in respect of the exercise of any
Warrants) or Indebtedness (other than Permitted Indebtedness) shall be issued
or incurred by Holdings or any of its Subsidiaries, or Holdings or any of its
Subsidiaries shall otherwise receive any other capital or similar contribution,
an amount equal to 100% of the Net Cash Proceeds thereof, if any, shall be
applied on the date of such issuance or incurrence toward the prepayment of the
Bridge Loans and the loans under the 19 Bridge Loan Agreement, on a pro rata
basis, as set forth in Section 3.2(d); provided, however,
that amounts described in this Section 3.2(a) shall be required to be
so applied only if and to the extent such amounts are not equity issuances of
Holdings to the Seller (as defined in the 19 Bridge Loan Agreement) in
satisfaction of the obligation of Holdings to pay the Deferred Consideration
(as defined in the 19 Bridge Loan Agreement).

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

3.4.          Limitations
on Eurodollar Tranches. 
Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions and continuations of Eurodollar Loans hereunder and all
selections of Interest Periods hereunder shall be in such amounts and be made
pursuant to such elections so that, (a) after giving effect thereto, the
aggregate principal amount of the Eurodollar Loans comprising each Eurodollar
Tranche shall be equal to $5,000,000 or a

 

27

 

whole multiple of $1,000,000 in
excess thereof and (b) no more than five Eurodollar Tranches shall be
outstanding at any one time.

 

3.5.          Interest
Rates and Payment Dates.

 

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

 

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

 

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

 

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

 

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

 

3.6.          Computation
of Interest and Fees.

 

(a)           Interest
and fees payable pursuant hereto shall be calculated on the basis of a 360-day
year for the actual days elapsed, except that, with respect to Base Rate Loans
the rate of interest on which is calculated on the basis of the Prime Rate, the
interest thereon shall be

 

28

 

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

 

(b)           Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error.  The Administrative Agent
shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Administrative Agent in determining any interest
rate pursuant to Section 3.5(a).

 

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

 

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

 

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

 

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

 

3.8.          Pro
Rata Treatment and Payments.

 

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

 

(b)           Each payment (including each prepayment) by
the Borrower on account of principal of and interest on the Bridge Loans shall
be made pro  rata according to the respective

 

29

 

outstanding principal amounts
of the Bridge Loans then held by the Bridge Lenders.  Amounts prepaid on account of the Bridge
Loans may not be reborrowed.

 

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

 

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

 

(e)           Unless the Administrative Agent shall have
been notified in writing by the Borrower prior to the date of any payment due
to be made by the Borrower hereunder that the Borrower will not make such
payment to the Administrative Agent, the Administrative Agent may assume that
the Borrower is making such payment, and the Administrative Agent may, but
shall not be required to, in reliance upon such assumption, make available to
the Lenders their respective pro  rata shares of a corresponding
amount.  If such payment is not made to
the Administrative Agent by the Borrower within three Business Days after such
due date, the Administrative Agent shall be entitled to recover, on demand,
from each Lender to which any amount which was made available pursuant to the
preceding sentence, such amount with interest thereon at the rate per annum
equal to the daily average Federal Funds Effective Rate.  Nothing herein shall be deemed to limit the
rights of the Administrative Agent or any Lender against the Borrower.

 

30

 

3.9.          Requirements
of Law.

 

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

 

(i)            shall subject any Lender to any tax of any
kind whatsoever with respect to this Agreement or any Eurodollar Loan made by
it, or change the basis of taxation of payments to such Lender in respect
thereof (except for Non-Excluded Taxes covered by Section 3.10 (including
Non-Excluded Taxes not subject to indemnification under Section 3.10) and
changes in the rate of tax on the overall net income of such Lender);

 

(ii)           shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of funds by,
any office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate hereunder; or

 

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

 

and the result
of any of the foregoing is to increase the cost to such Lender, by an amount
that such Lender deems to be material, of making, converting into, continuing
or maintaining Eurodollar Loans, or to reduce any amount receivable hereunder
in respect thereof, then, in any such case, the Borrower shall promptly pay
such Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such increased cost or reduced amount receivable.  If any Lender becomes entitled to claim any
additional amounts pursuant to this paragraph, it shall promptly notify the
Borrower (with a copy to the Administrative Agent) of the event by reason of
which it has become so entitled.

 

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

 

(c)           A certificate as to any additional amounts
payable pursuant to this Section 3.9 submitted by any Lender to the
Borrower (with a copy to the Administrative Agent) shall be

 

31

 

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

 

3.10.        Taxes.

 

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

 

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

 

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

 

32

 

any incremental taxes, interest
or penalties that may become payable by any Agent or any Lender as a result of
any such failure.

 

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

 

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

 

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

 

33

 

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

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

3.14.        Evidence
of Debt.

 

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

 

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

 

35

 

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

 

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

 

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

 

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

 

SECTION 4.  REPRESENTATIONS
AND WARRANTIES

 

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

 

4.1.          Financial
Condition.

 

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

 

36

 

(b)           The audited consolidated balance sheets of
the Operating Companies and their respective Subsidiaries as at December 31,
2001, December 31, 2002, December 31, 2003 and September 30,
2004, and the related combined statements of changes in net assets and cash
flows for the ninth month period ended September 30, 2004 and the years
ended December 31, 2001, December 31, 2002 and December 31,
2003, reported on by and accompanied by an unqualified report from Deloitte &
Touche, present fairly the consolidated financial condition of the Operating
Companies and their respective Subsidiaries as at such dates, and the
consolidated results of their respective operations and their respective
consolidated cash flows for the respective months and years then ended.  All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed in their reports
thereon).  No Group Member (other than
Holdings, solely pursuant to its guarantee of the obligations of 19 Holdco
Limited under the 19 Bridge Loan Agreement) has any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including any interest rate
or foreign currency swap or exchange transaction or other obligation in respect
of derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph.  During
the period from December 31, 2003 to and including the date hereof there
has been no Disposition by any Group Member of any material part of its
business or property (other than pursuant to the Acquisition Documentation).

 

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

 

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

 

4.4.          Power;
Authorization; Enforceable Obligations.  Each Group Member has the power and
authority, and the legal right, to make, deliver and perform each Loan Document
to which it is a party and the Acquisition Documentation to which it is a party
and, in the case of the Borrower, to obtain extensions of credit
hereunder.  Each Group Member has taken
all necessary organizational action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and the Acquisition
Documentation to which it is a party and, in the case of the Borrower, to
authorize the extensions of credit on the terms and conditions of this
Agreement.  No consent or authorization
of, filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the Acquisition
(or the other transactions contemplated thereby) and the extensions of credit
hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the

 

37

 

Loan Documents or of the
Acquisition Documentation, except (i) consents, authorizations, filings
and notices described in Schedule 4.4, which consents, authorizations,
filings and notices have been obtained or made and are in full force and effect
and (ii) the filings referred to in Section 4.19.  Each Loan Document and the Acquisition
Documentation has been duly executed and delivered on behalf of each Group
Member party thereto.  This Agreement
constitutes, and each other Loan Document upon execution will constitute, a
legal, valid and binding obligation of each Loan Party thereto, enforceable
against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

 

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

 

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

 

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

 

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

 

4.9.          Intellectual
Property.

 

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

 

(b)           All
Intellectual Property material to the conduct of its business as currently
conducted and owned by each Group Member is valid, subsisting, unexpired and

 

38

 

enforceable, has not been
abandoned and does not infringe the intellectual property rights of any other
Person.

 

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

 

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

 

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

 

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

 

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

 

4.10.        Taxes.  Each Group Member has filed or caused to be
filed all Federal, state and other material tax returns that are required to be
filed and has paid all taxes shown to be due and payable on said returns or on
any assessments made against it or any of its property and all other material
taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being

 

39

 

contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of Holdings, the Borrower or their
Subsidiaries, as the case may be); no material tax Lien has been filed, and, to
the knowledge of Holdings and the Borrower, no material claim is being
asserted, with respect to any such tax, fee or other charge other than those
permitted pursuant to Section 7.3. 
No Loan Party and no Subsidiary thereof intends to treat the Loan, the
Acquisition, or any other transaction contemplated hereby as being a “reportable
transaction” (within the meaning of Treasury Regulation section 1.6011-4).

 

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

 

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

 

4.13.        ERISA.  Neither a Reportable Event nor an “accumulated
funding deficiency” (within the meaning of Section 412 of the Code or Section 302
of ERISA) has occurred during the five-year period prior to the date on which
this representation is made or deemed made with respect to any Plan, and each
Plan intended to be qualified under Section 401 of the Code has received a
favorable determination letter from the Internal Revenue Service regarding such
qualified status and has not, since receipt of the most recent favorable
determination letter, been amended or operated in a way which could reasonably
be expected to adversely affect such qualified status.  No termination of a Single Employer Plan has
occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year period.  The present value of
all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits
by a material amount.  Neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan that has resulted or could reasonably be
expected to result in a liability under ERISA that would reasonably be expected
to cause a Material Adverse Effect, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding
the date on which this

 

40

 

representation is made or
deemed made.  No such Multiemployer Plan
is in Reorganization or Insolvent. 
Neither the Borrower nor any of its Subsidiaries has any liability with
respect to any employee benefit plan that is not subject to the laws of the
United States or a political subdivision thereof that could reasonably be expected
to result in a Material Adverse Effect.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

41

 

or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect to
the Properties or the Business;

 

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

 

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

 

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

 

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

 

42

 

4.19.        Security
Documents.  (a)  The
Guarantee and Collateral Agreement (as amended on the date hereof) is effective
to create in favor of the Administrative Agent, for the benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds and products thereof.  In the case of the Pledged Equity Interests
described in the Guarantee and Collateral Agreement, when certificates
representing such Pledged Equity Interests and related transfer powers were
delivered to the Administrative Agent, and in the case of the other Collateral
described in the Guarantee and Collateral Agreement, when financing statements
and other filings specified on Schedule 4.19 in appropriate form were
filed in the offices specified on Schedule 4.19 to the extent that a
security interests therein can be perfected by the filing of a financing
statement, the Guarantee and Collateral Agreement constituted, and on the
Effective Date continues to constitute, a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as security for the Obligations (as
defined in the Guarantee and Collateral Agreement), in each case prior and
superior in right to any other Person (except, in the case of Collateral other
than Pledged Equity Interests, Liens permitted by Section 7.3).

 

(b)           Subject
to the Reservations, the UK Second Charge Over Shares is effective to create in
favor of the Administrative Agent, for the benefit of the Secured Parties, a
legal, valid and enforceable security interest in the Collateral described
therein and proceeds and products thereof. 
In the case of the Pledged Equity Interests described in the UK Second
Charge Over Shares, when certificates representing such Pledged Equity
Interests and related blank executed stock transfer forms are delivered to the
Administrative Agent (or the 19 Administrative Agent acting as an agent, for
purposes of perfection, of the Administrative Agent), the UK Second Charge Over
Shares shall (subject to the Reservations) constitute a fully perfected Lien
on, and security interest in, all right, title and interest of Holdings in such
Collateral and the proceeds thereof, as security for the Obligations (as
defined in the UK Second Charge Over Shares), prior and superior in right to
any other Person (other than Liens in favor of the 19 Administrative Agent).

 

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

 

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

 

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

 

4.23.        Foreign
Assets Control Regulations and Anti-Money Laundering.  (a) Neither the making of Loans under
this Agreement nor the use of the proceeds thereof shall cause the Borrower or
any Subsidiary of the Borrower to violate any material provision of the U.S.
Bank Secrecy Act, as amended, and any applicable regulations thereunder or any
of the sanctions programs administered by the U.S. Department of the Treasury’s
Office of Foreign Assets Control (“OFAC”) of the United States
Department of Treasury, any regulations

 

43

 

promulgated thereunder by OFAC
or under any affiliated or successor governmental or quasi-governmental office,
bureau or agency and any enabling legislation or executive order relating
thereto.  Without limiting the foregoing,
neither the Borrower nor any Subsidiary of the Borrower (i) is a person
whose property or interests in property are blocked or subject to blocking
pursuant to Section 1 of Executive Order 13224 of September 23, 200l
Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) knowingly
engages in any dealings or transactions prohibited by such Section 2 of
such executive order, or is otherwise knowingly associated with any such person
in any manner violative of Section 2, or (iii) is a person on the
list of Specially Designated Nationals and Blocked Persons or subject to the
limitations or prohibitions under any other OFAC regulation or executive order.

 

(b)           The Borrower and its Subsidiaries are in
compliance, in all material respects, with the Uniting and Strengthening of
America by Providing the Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001.  No part of the
proceeds of the Loans hereunder will knowingly be used, directly or indirectly,
for any payments to any governmental official or employee, political party,
official of a political party, candidate for political office, or anyone else
acting in an official capacity, in order to obtain, retain or direct business
or obtain any improper advantage, in violation of the United States Foreign
Corrupt Practices Act of 1977, as amended.

 

SECTION 5.  CONDITIONS PRECEDENT

 

The effectiveness of this Agreement and the supercession of all
provisions set forth in the Original Credit Agreement by the terms hereof is
subject to the satisfaction on the Effective Date (but in any event no later
than March 17, 2005), of the following conditions precedent:

 

(a)           Loan Documents.  The
Administrative Agent shall have received (i) this Agreement executed and
delivered by each Agent, Holdings, the Borrower and each Lender, (ii) the
First Amendment to Guarantee and Collateral Agreement, executed and delivered
the Guarantor and the Borrower, (iii) the UK Second Charge Over Shares,
executed and delivered by the Guarantor, and (iv) the Intercreditor
Agreement, executed and delivered by the 19 Administrative Agent.

 

(b)           Fees.  The Lenders and the Agents
shall have received all fees required to be paid, and all expenses for which
invoices have been presented (including the reasonable fees and expenses of
legal counsel and excluding corporate overhead and other non out-of-pocket expenses),
on or before the Effective Date.

 

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

 

44

 

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

 

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

 

(ii)           the legal opinion of Greenberg Traurig, local
counsel in Colorado, substantially in the form of Exhibit E-2; and

 

(iii)          the legal opinion of
Baker & McKenzie, counsel to Holdings, substantially in the form of Exhibit E-3.

 

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

 

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

 

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

 

(g)           Agent for Service of Process.  The
Administrative Agent shall have received evidence that Holdings has appointed
19 Holdco to be its agent for service of process in connection with the UK
Second Charge Over Shares.

 

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

 

SECTION 6.  AFFIRMATIVE COVENANTS

 

Holdings and the Borrower hereby jointly and
severally agree that, so long as the Bridge Commitments remain in effect or any
Loan or other amount is owing to any Lender or

 

45

 

Agent hereunder, each of
Holdings and the Borrower shall and shall cause each other Group Member to:

 

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

 

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

 

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

 

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

 

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

 

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

 

(a)           concurrently with the delivery of the
financial statements referred to in Section 6.1(a), a certificate of the
independent certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge was

 

46

 

obtained of any Default or
Event of Default with respect to the financial covenants set forth in Section 7.1,
except as specified in such certificate;

 

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

 

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

 

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

 

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

 

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

 

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

 

47

 

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

 

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

 

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

 

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

 

48

 

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

 

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

 

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

 

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

 

(d)           the following events, as soon as possible and
in any event within 30 days after the Borrower knows or has reason to know
thereof:  (i) the occurrence of any
Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan
or any withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal
from, or the termination, Reorganization or Insolvency of, any Plan; and

 

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

 

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

 

6.8.          Intellectual
Property.

 

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

 

(b)           Notify
the Administrative Agent and the Lenders immediately if it knows, or has reason
to know, that any application or registration relating to any material
Intellectual Property may become forfeited, abandoned or dedicated to the
public, or of any adverse determination or development (including, without
limitation, the institution of, or any such determination or development in,
any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office or any court or tribunal in any country) regarding such
Group Member’s ownership of, or the validity of, any Intellectual Property or
such Group Member’s right to register the same or to own and maintain the same,
unless such forfeiture,

 

49

 

abandonment or dedication or
such adverse determination or development could not reasonably be expected to
cause a Material Adverse Effect or constitute an Event of Default.

 

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

 

(d)           Take
all reasonable and necessary steps, including, without limitation, in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country or
group of countries or any political subdivision of any of the foregoing, to
maintain and pursue each application (and to obtain the relevant registration) and
to maintain each registration of the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.

 

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

 

6.9.          Environmental
Laws.

 

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

 

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

 

6.10.        Additional
Collateral, etc.  (a) 
With respect to any property acquired after the Closing Date by the Borrower or
any Wholly Owned Subsidiary thereof (other than any property described in
paragraph (b) below) as to which the Administrative Agent, for the benefit

 

50

 

of the Secured Parties, does
not have a perfected Lien, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
or such other documents as the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders,
a security interest in such property and (ii) take all actions necessary
or advisable to grant to the Administrative Agent, for the benefit of the
Secured Parties, a perfected first priority security interest in such property
(subject to Liens on assets other than Capital Stock permitted under Section 7.3
and as otherwise permitted to not be so granted according to the terms of the
Collateral Documents), including the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the Guarantee
and Collateral Agreement or by law or as may be requested by the Administrative
Agent and the delivery of certificates and transfer powers in respect of any
newly formed or acquired Subsidiary.

 

(b)           With respect to any fee interest in any real
property having a value (together with improvements thereof) of at least
$500,000 acquired after the Closing Date by any Loan Party, promptly (i) execute
and deliver a first priority Mortgage, in favor of the Administrative Agent,
for the benefit of the Secured Parties, covering such real property, (ii) if
requested by the Administrative Agent, provide the Secured Parties with (x)
title and extended coverage insurance covering such real property in an amount
at least equal to the purchase price of such real property (or such other
amount as shall be reasonably specified by the Administrative Agent) as well as
a current ALTA survey thereof, together with a surveyor’s certificate and (y)
any consents or estoppels reasonably deemed necessary or advisable by the
Administrative Agent in connection with such Mortgage, each of the foregoing in
form and substance reasonably satisfactory to the Administrative Agent and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.

 

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

 

51

 

insertions and attachments, and
(iv) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above, which
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.

 

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

 

6.12.        Further
Assurances.  From time to time
execute and deliver, or cause to be executed and delivered, such additional
instruments, certificates or documents, and take all such actions, as the
Administrative Agent may reasonably request for the purposes of implementing or
effectuating the provisions of this Agreement and the other Loan Documents, or
of more fully perfecting or renewing the rights of the Administrative Agent and
the Lenders with respect to the Collateral (or with respect to any additions
thereto or replacements or proceeds thereof or with respect to any other
property or assets hereafter acquired by the borrower or any Subsidiary which
may be deemed to be part of the Collateral) pursuant hereto or thereto.  Upon the exercise by the Administrative Agent
or any Lender of any power, right, privilege or remedy pursuant to this
Agreement or the other Loan Documents which requires any consent, approval,
recording qualification or authorization of any Governmental Authority, each of
Holdings and the Borrower will execute and deliver, or will cause the execution
and delivery of, all applications, certifications, instruments and other
documents and papers that the Administrative Agent or such Lenders may be
required to obtain from Holdings, the Borrower or any of their respective Subsidiaries
for such governmental consent, approval, recording, qualification or
authorization.

 

6.13.        Warrants.  In the event that all or any portion of the
Warrants are exercised at any time following the Closing Date, Holdings will
contribute the first $2.5 million of proceeds from such exercises to the
Borrower.  The Borrower will segregate
and hold aside such proceeds (in an account which shall be pledged to the
Lenders as collateral on a first-priority basis) for use solely in order to
comply with Holdings’ obligations pursuant to the Distribution Letter (as
defined in Section 8(o)), and shall not apply such proceeds as Restricted
Payments or for any other use.

 

SECTION 7.  NEGATIVE COVENANTS

 

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

 

7.1.          Financial
Condition Covenants.

 

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

 

52

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           Holdings may be merged or consolidated with
or into any Subsidiary of Holdings (other than the Borrower or 19 Holdco
Limited or any of its Subsidiaries) for the purpose of changing the
jurisdiction of domicile of Holdings provided that the surviving entity shall
be required to assume all of the obligations of Holdings under this Agreement
and the other Loan Documents to which Holdings is a party in a manner
reasonably satisfactory to the Administrative Agent;

 

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

 

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

 

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

 

53

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)           so long as no Default under Section 8(a) and
no Event of Default shall have occurred and be continuing or would result
therefrom (including the requirement that the Borrower and the Operating
Companies maintain cash and Cash Equivalents of at least $500,000), the
Borrower may pay dividends to Holdings to reimburse Holdings for (i) out-of-pocket
expenses incurred in connection with compliance by Holdings and the Borrower
with the Sarbanes-Oxley Act of 2002 and corporate overhead expenses and
management services in the ordinary course of business in an aggregate amount
not to exceed $1.75 million during any fiscal quarter after the Closing Date,
provided that to the extent such reimbursement is less than $1.75 million in
any fiscal quarter, the Borrower may carry forward such difference to any
subsequent fiscal quarter (it being understood that any future payments made in
excess of $1.75 million in any subsequent fiscal quarter shall reduce the
amount of the amount so carried forward) and (ii) any taxes that are due
and payable by Holdings and the Borrower as part of a consolidated or combined
group in an amount not to exceed the lesser of (x) the relevant amount of any
taxes (including any penalties and interest) that the Borrower would owe if the
Borrower were filing a

 

54

 

separate tax return (or a
separate consolidated or combined return with its Subsidiaries that are members
of the consolidated or combined group) at the rate applicable to Holdings as
part of a consolidated or combined group with the Borrower, taking into account
any carryovers or carrybacks of tax attributes (such as operating losses) of
the Borrower and such Subsidiaries from other taxable years and (y) the net
amount of the relevant tax that Holdings actually owes to the appropriate
taxing authority; provided that any such payment in respect of taxes
received by Holdings shall be paid over to the appropriate taxing authority
within 60 days of Holdings’ receipt of such payments or shall be refunded to
the Borrower;

 

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

 

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

 

7.7.          Capital
Expenditures.  Make or commit
to make any Capital Expenditure, except (a) Capital Expenditures of the
Borrower and its Subsidiaries in the ordinary course of business not exceeding
$1,000,000, (b) Capital Expenditures made with the proceeds of any
Reinvestment Deferred Amount and (c) Capital Expenditures consisting of
Permitted Acquisitions.

 

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

 

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

 

(b)           Investments in cash and Cash Equivalents;

 

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

 

(d)           the Acquisition;

 

55

 

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

 

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

 

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

 

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

 

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

 

(j)            Permitted Acquisitions;

 

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

 

(l)            Investments
by Holdings in non-Guarantor Subsidiaries permitted by Section 7.8(k) of
the 19 Bridge Loan Agreement, as in effect on the date hereof.

 

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

 

56

 

any scheduled redemption
payment or reduce the rate or extend any date for payment of dividends thereon
and (ii) does not involve the payment of a consent fee) or (y) would
be required in connection with effecting any merger or consolidation
contemplated by Section 7.4(b).

 

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

 

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

 

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

 

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

 

7.14.        Negative
Pledge Clauses.  Enter into or
suffer to exist or become effective any agreement that prohibits or limits the
ability of any Group Member to create, incur, assume or suffer to exist any
Lien upon any of its property or revenues, whether now owned or hereafter
acquired, other than this Agreement and the other Loan Documents, and the 19
Bridge Loan Agreement or any guarantee of obligations thereunder.

 

7.15.        Clauses
Restricting Subsidiary Distributions.  Enter into or suffer to exist or become
effective any consensual encumbrance or restriction on the ability of any
Subsidiary of the Borrower to (a) make Restricted Payments in respect of any
Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to, the
Borrower or any other Subsidiary of the Borrower, (b) make loans or advances
to, or other Investments in, the Borrower or any other Subsidiary of the
Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents, (ii) applicable law or any rule, regulation or order, (iii)
customary non-assignment provisions or restrictions on cash or other deposits
contained in any contract or any lease governing a leasehold interest of any
Group

 

57

 

Member, (iv) restrictions on
the transfer of assets subject to any Lien permitted under this Agreement
imposed by the holder of such Lien, (v) restrictions imposed by any agreement
to sell assets or Capital Stock permitted under this Agreement to any Person
pending the closing of such sale (vi) customary provisions in joint venture
agreements and other similar agreements entered into by Holdings or one of its
Subsidiaries (other than the Borrower or any of its Subsidiaries), in each
case, relating solely to the respective joint venture or similar entity or the
equity interests therein and entered into in the ordinary course of business,
(vii) purchase money obligations (including any capitalized lease obligations)
relating to property acquired in the ordinary course of business, or (viii)
restrictions imposed under the LLC Operating Agreement, the EPE Charter and the
EPE Shareholders Agreement, in each case, as in effect on the Closing Date.

 

7.16.        Lines
of Business.  Enter into any
business, either directly or through any Subsidiary, except for those
businesses in which the Borrower and its Subsidiaries are engaged on the
Effective Date or that are reasonably related thereto.

 

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

 

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

 

7.19.        Intellectual
Property.  

 

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

 

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

 

7.20.        Hazardous
Substances.  Knowingly permit,
or cause any of its Subsidiaries to knowingly permit, any Hazardous Substances
to be brought on to or located on any of the Properties, except in compliance
in all material respects with, and in a manner not reasonably likely to lead to
any liability pursuant to, all applicable Environmental Laws only in such
quantities and types as reasonably needed to conduct the Business.  If any such Hazardous Substance is brought by
any Group Member or found located thereon due to the actions of any Group Member
in violation of this Section 7.20,
the Borrower shall diligently undertake all

 

58

 

removal, remedial and other
response actions required under applicable Environmental Laws.  EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT ALL
MATERIALS OF ENVIRONMENTAL CONCERN HANDLING PRACTICES AND ENVIRONMENTAL
PRACTICES AND PROCEDURES ARE THE SOLE RESPONSIBILITY OF SUCH LOAN PARTY AND ITS
SUBSIDIARIES.  EACH LOAN PARTY FURTHER
ACKNOWLEDGES THAT NEITHER THE ADMINISTRATIVE AGENT NOR ANY LENDER IS AN
ENVIRONMENTAL CONSULTANT, ENGINEER, INVESTIGATOR OR INSPECTOR OF ANY TYPE
WHATSOEVER.  NO ACT (OR DECISION NOT TO
ACT) OF THE ADMINISTRATIVE AGENT OR ANY LENDER RELATED TO THIS AGREEMENT OR ANY
LOAN DOCUMENT SHALL GIVE RISE TO ANY OBLIGATION OR LIABILITY ON THE PART OF
THE ADMINISTRATIVE AGENT OR ANY LENDER WITH RESPECT TO ENVIRONMENTAL MATTERS OR
PURSUANT TO ENVIRONMENTAL LAWS.  IN NO
EVENT SHALL ANY INFORMATION OBTAINED FROM THE ADMINISTRATIVE AGENT OR ANY
LENDER OR THEIR RESPECTIVE EMPLOYEES, REPRESENTATIVES OR AGENTS PURSUANT TO
THIS AGREEMENT OR ANY LOAN DOCUMENT CONCERNING THE ENVIRONMENTAL CONDITION OF
THE PROPERTIES OR THE BUSINESS OF ANY LOAN PARTY OR ANY SUBSIDIARY OF ANY LOAN
PARTY BE CONSIDERED BY ANY LOAN PARTY OR ANY SUBSIDIARY OF ANY LOAN PARTY (OR
ANY OTHER RECIPIENT OF SUCH INFORMATION) AS CONSTITUTING LEGAL OR ENVIRONMENTAL
CONSULTING, ENGINEERING, INVESTIGATING OR INSPECTING ADVICE, AND NEITHER ANY
LOAN PARTY NOR ANY SUBSIDIARY OF ANY LOAN PARTY (NOR ANY OTHER RECIPIENT OF
SUCH INFORMATION) SHALL RELY ON SAID INFORMATION.  THE RESPONSIBILITY FOR COMPLIANCE WITH
ENVIRONMENTAL LAWS WITH RESPECT TO THE PROPERTIES OR BUSINESS RESTS SOLELY WITH
EACH LOAN PARTY AND ITS SUBSIDIARIES. 
NOTHING IN THIS SECTION 7.20 SHALL LIMIT ANY RIGHTS THAT ANY LOAN
PARTY OR ANY OF THEIR RESPECTIVE SUBSIDIARIES MAY HAVE TO SEEK
CONTRIBUTION OR ALLOCATE RESPONSIBILITY PURSUANT TO ENVIRONMENTAL LAW FROM ANY
THIRD PARTY (OTHER THAN ANY SECURED PARTY).

 

SECTION 8.  EVENTS OF DEFAULT

 

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

 

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

 

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

 

59

 

(c)           (i) any Loan Party shall default in the
observance or performance of any agreement contained in Sections 6.4(a)(i), 6.7(a) or
7 of this Agreement or Sections 5.4 or 5.7(b) of the Guarantee and
Collateral Agreement or Section Clauses 7.1(i) or 8.1 of the UK
Second Charge Over Shares, or (ii) an “Event of Default” under and as
defined in any Mortgage shall have occurred and be continuing; or

 

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

 

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

 

(f)            (i) any Group Member shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial part
of its assets, or any Group Member shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against any
Group Member any case, proceeding or other action of a nature referred to in
clause (i) above that (A) results in the entry of an order for relief
or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against any Group Member any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets that results in the entry of
an order for any such relief that shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60

 

60

 

days from the entry thereof; or
(iv) any Group Member shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) any Group Member
generally shall not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or

 

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

 

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

 

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

 

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

 

(k)           Holdings shall (i) conduct, transact or
otherwise engage in, or commit to conduct, transact or otherwise engage in, any
business or operations other than those incidental to its ownership of the
Capital Stock of the Borrower or 19 Holdco or any entity comprising a Permitted
Acquisition or the business related thereto, (ii) incur, create, assume or
suffer to exist any Indebtedness or other liabilities or financial obligations,
except (x) nonconsensual obligations imposed by operation of law, (y) pursuant
to the Loan Documents to which it is a party and its guarantee of the loans
under the 19 Bridge Loan Agreement, and (z) obligations with respect to its
Capital Stock, or (iii) own, lease, manage or otherwise operate any
properties

 

61

 

or assets (including cash
(other than cash received in connection with dividends made by the Borrower in
accordance with Section 7.6 pending application in the manner contemplated
by said Section) and Cash Equivalents) other than the ownership of shares of
Capital Stock of the Borrower or 19 Holdco or any entity comprising a Permitted
Acquisition or the business related thereto; or

 

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

 

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

 

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

 

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

 

then, and in
any such event, (A) if such event is an Event of Default specified in
clause (i) or (ii) of paragraph (f) above with respect to the
Borrower, automatically the Loans hereunder (with accrued interest thereon and
the prepayment premium in respect thereof) and all other amounts owing under
this Agreement and the other Loan Documents shall immediately become due and
payable, and (B) if such event is any other Event of Default, with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon and
the prepayment premium in respect thereof) and all other amounts owing under
this Agreement and the other Loan Documents to be due and payable forthwith,
whereupon the same shall immediately become due and payable.  Except as expressly provided above in this Section 8,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived by the Borrower and Holdings.

 

SECTION 9.  THE AGENTS

 

9.1.          Appointment.  Each Lender hereby irrevocably designates and
appoints each Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes such Agent,
in such capacity, to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and to exercise

 

62

 

such powers and perform such
duties as are expressly delegated to such Agent by the terms of this Agreement
and the other Loan Documents, together with such other powers as are reasonably
incidental thereto.  Notwithstanding any
provision to the contrary elsewhere in this Agreement, no Agent shall have any
duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.

 

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

 

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

 

9.4.          Reliance
by Agents.  Each Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to Holdings or the Borrower),
independent accountants and other experts selected by such Agent.  The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes unless a written
notice of assignment, negotiation or transfer thereof shall have been filed
with the Administrative Agent.  Each
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders (or, if so specified by this
Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability
and expense that may be incurred by it by reason of taking or continuing to
take any such action.  The Agents shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance

 

63

 

with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Loans.

 

9.5.          Notice
of Default.  No Agent shall be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless such Agent has received notice from a Lender, Holdings
or the Borrower referring to this Agreement, describing such Default or Event
of Default and stating that such notice is a “notice of default”.  In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders.  The Administrative Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders or any other instructing group of Lenders specified by
this Agreement); provided, that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.

 

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

 

9.7.          Indemnification.  The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by Holdings or the Borrower
and without limiting the obligation of Holdings or the Borrower to do so),
ratably according to their respective Aggregate Exposure Percentages in effect
on the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Bridge Commitments

 

64

 

shall have terminated and the
Loans shall have been paid in full, ratably in accordance with such Aggregate
Exposure Percentages immediately prior to such date), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever that may at any
time (whether before or after the payment of the Loans) be imposed on, incurred
by or asserted against such Agent in any way relating to or arising out of, the
Bridge Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court
of competent jurisdiction to have resulted from such Agent’s gross negligence
or willful misconduct.  The agreements in
this Section 9.7 shall survive the payment of the Loans and all other
amounts payable hereunder.

 

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

 

9.9.          Successor
Administrative Agent.  The
Administrative Agent may resign as Administrative Agent upon 10 days’ notice to
the Lenders and the Borrower.  If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 8(a) or Section 8(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers
and duties of the Administrative Agent, and the term “Administrative Agent”
shall mean such successor agent effective upon such appointment and approval,
and the former Administrative Agent’s rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. 
If no successor agent has accepted appointment as Administrative Agent
by the date that is 10 days following a retiring Administrative Agent’s notice
of resignation, the retiring Administrative Agent’s resignation shall
nevertheless thereupon become effective and the Lenders shall assume and
perform all of the duties of the Administrative Agent hereunder until such
time, if any, as the Required Lenders appoint a successor agent as provided for
above.  After any retiring Administrative
Agent’s resignation as Administrative Agent, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents.

 

9.10.        Agents
Generally.  Except as
expressly set forth herein, no Agent shall have any duties or responsibilities
hereunder in its capacity as such.

 

65

 

9.11.        The
Lead Arranger.  The Lead
Arranger, in its capacity as such, shall have no duties or responsibilities,
and shall incur no liability, under this Agreement or any other Loan Document.

 

9.12.        Withholding
Tax.  To the extent required
by any applicable law, the Administrative Agent may withhold from any interest
payment to any Lender an amount equivalent to any applicable withholding
tax.  If any Governmental Authority
asserts a claim that the Administrative Agent did not properly withhold tax
from amounts paid to or for the account of any Lender because the appropriate
form was not delivered or was not properly executed or because such Lender
failed to notify the Administrative Agent of a change in circumstance which
rendered the exemption from, or reduction of, withholding tax ineffective or
for any other reason, such Lender shall indemnify the Administrative Agent
fully for all amounts paid, directly or indirectly, by the Administrative Agent
as tax or otherwise, including any penalties or interest and together with all
expenses (including legal expenses, allocated internal costs and out-of-pocket
expenses) incurred.

 

SECTION 10.  MISCELLANEOUS

 

10.1.        Amendments
and Waivers.  Neither this
Agreement, any other Loan Document, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with the provisions of
this Section 10.1.  The Required
Lenders and each Loan Party to the relevant Loan Document may, or, with the
written consent of the Required Lenders, the Administrative Agent and each Loan
Party to the relevant Loan Document may, from time to time, (a) enter into
written amendments, supplements or modifications hereto and to the other Loan
Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement
or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (i) forgive the principal amount
or extend the final scheduled date of maturity of any Loan (inclusive of any
interest capitalized pursuant to Section 3.5(e)), reduce the stated rate
of any interest or fee payable hereunder (except in connection with the waiver
of applicability of any post-default increase in interest rates, which waiver
shall be effective with the consent of the Required Lenders) or extend the
scheduled date of any payment thereof, in each case without the written consent
of each Lender directly affected thereby; (ii) eliminate or reduce the
voting rights of any Lender under this Section 10.1 without the written
consent of such Lender; (iii) reduce any percentage specified in the
definition of Required Lenders, consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the
other Loan Documents or, except as set forth in Section 10.14, release all
or substantially all of the Collateral or release the Guarantor from its
obligations under the Guarantee and Collateral Agreement, in each case without
the written consent of all Lenders; or (iv) amend, modify or waive any
provision of Section 9 without the written consent of each Agent adversely
affected thereby.  Any such waiver and
any such amendment, supplement or modification shall apply equally to each of
the Lenders and shall be

 

66

 

binding upon the Loan Parties,
the Lenders, the Agents and all future holders of the Loans.  In the case of any waiver, the Loan Parties,
the Lenders and the Agents shall be restored to their former position and
rights hereunder and under the other Loan Documents, and any Default or Event
of Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.

 

10.2.        Notices.  All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed as follows in the case of Holdings, the Borrower and
the Agents, and as set forth in an administrative questionnaire delivered to
the Administrative Agent in the case of the Lenders, or to such other address
as may be hereafter notified by the respective parties hereto:

 

	
  Holdings:

  	
  Sports Entertainment
  Enterprises, Inc.

  
	
   

  	
  650 Madison Avenue, 16th
  Floor

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Attention: General Counsel

  
	
   

  	
  Telecopy: (212) 753-3188

  
	
   

  	
  Telephone: (212) 407-9101

  
	
   

  	
   

  
	
  The Borrower:

  	
  EPE Holding Corporation

  
	
   

  	
  650 Madison Avenue, 16th
  Floor

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Attention: General Counsel

  
	
   

  	
  Telecopy: (212) 753-3188

  
	
   

  	
  Telephone: (212) 407-9101

  
	
   

  	
   

  
	
  with a copy to:

  	
  Paul, Hastings,
  Janofsky & Walker LLP

  
	
   

  	
  75 East 55th Street

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Attention: William
  Schwitter, Esq.

  
	
   

  	
  Telecopy: (212) 230-7834

  
	
   

  	
  Telephone: (212) 318-6400

  
	
   

  	
   

  
	
  The Administrative Agent:

  	
  Bear Stearns Corporate
  Lending Inc.

  
	
   

  	
  383 Madison Avenue

  
	
   

  	
  New York, New York 10179

  
	
   

  	
  Attention:  Kevin Cullen

  
	
   

  	
  Telecopy:  (212) 272-9184

  
	
   

  	
  Telephone:  (212) 272-5724

  

 

 

67

 

	
  with a copy to:

  	
  Latham & Watkins
  LLP

  
	
  885 Third Avenue,
  Suite 1000

  	
   

  
	
  New York, New York 10022

  	
   

  
	
  Attention: Michèle
  Penzer, Esq.

  	
   

  
	
  Telecopy: (212) 751-4864

  	
   

  
	
  Telephone: (212) 906-1245

  	
   

  

 

provided
that any notice, request or demand to or upon any Agent or the Lenders shall
not be effective until received.

 

Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall
not apply to notices pursuant to Section 2 unless otherwise agreed by the
Administrative Agent and the applicable Lender. 
The Administrative Agent or the Borrower may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.

 

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

 

10.4.        Survival
of Representations and Warranties. 
All representations and warranties made hereunder, in the other Loan
Documents and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the making of the Loans and other extensions of credit
hereunder.

 

10.5.        Payment
of Expenses and Taxes.  The
Borrower agrees (a) to pay or reimburse each Agent for all its reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, including the reasonable fees
and disbursements of counsel to such Agent (and excluding corporate overhead
and other non out-of-pocket expenses) and filing and recording fees and
expenses, with statements with respect to the foregoing to be submitted to the
Borrower prior to the Closing Date (in the case of amounts to be paid on the
Closing Date) and from time to time thereafter on a monthly basis or such other
periodic basis as such Agent shall deem appropriate, (b) to pay or
reimburse each Lender and Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
fees and disbursements of counsel (and excluding corporate overhead and other
non out-of-pocket expenses) to each Lender and of counsel to such Agent and (c) to
pay,

 

68

 

indemnify, and hold each Lender
and Agent harmless from any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, that may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents.  Holdings and the Borrower jointly and
severally agree to pay, indemnify, and hold each Lender and Agent and their
respective officers, directors, employees, affiliates, agents and controlling
persons (each, an “Indemnitee”) harmless from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement, the other Loan Documents and any such other documents,
including any of the foregoing relating to the use of proceeds of the Loans or
the violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of any Group Member or any of the Properties or
the Business or the unauthorized use by Persons of information or other
materials sent through electronic, telecommunications or other information
transmission systems that are intercepted by such Persons and the reasonable
fees and expenses of legal counsel in connection with claims, actions or
proceedings by any Indemnitee against any Loan Party under any Loan Document (all
the foregoing, collectively, the “Indemnified Liabilities”), provided,
that neither Holdings nor the Borrower shall have any obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found to have resulted from the gross negligence or
willful misconduct of such Indemnitee. 
Without limiting the foregoing, and to the extent permitted by
applicable law, Holdings and the Borrower agree not to assert and to cause
their respective Subsidiaries not to assert, and hereby waive and agree to
cause their respective Subsidiaries to waive, all rights for contribution or
any other rights of recovery with respect to all claims, demands, penalties,
fines, liabilities, violations, settlements, damages, costs and expenses of
whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee.  All amounts due under this Section 10.5
shall be payable not later than 10 days after written demand therefor.  Statements payable by Holdings or the
Borrower pursuant to this Section 10.5 shall be submitted to the General
Counsel of the Borrower (Telephone No. (212) 407-9101) (Telecopy No. (212)
753-3188), at the address of the Borrower set forth in Section 10.2, or to
such other Person or address as may be hereafter designated by Holdings or the
Borrower in a written notice to the Administrative Agent.  The agreements in this Section 10.5
shall survive repayment of the Loans and all other amounts payable hereunder.

 

10.6.        Successors
and Assigns; Participations and Assignments.  (a)  The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that (i) neither
Holdings nor the Borrower may assign or otherwise transfer any of their
respective rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by Holdings or the
Borrower without such consent shall be null and void) and (ii) no Lender
may assign or otherwise transfer its rights or obligations hereunder except in
accordance

 

69

 

with this Section (and any
attempted assignment or transfer in violation of this Section 10.6 shall
be null and void).

 

(b)           (i)  Subject to the conditions set forth
in paragraph (b)(ii) below, any Lender may assign to one or more assignees
(each, an “Assignee”) all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Bridge Commitments and
the Bridge Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld) of:

 

(A) the Borrower, provided that no
consent of the Borrower shall be required for an assignment to a Lender, an
Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred
and is continuing, any other Person; and

 

(B) the Administrative Agent, provided
that no consent of the Administrative Agent shall be required for an assignment
to an Assignee that is a Lender, an Affiliate of a Lender or an Approved Fund
immediately prior to giving effect to such assignment.

 

(ii) Assignments
shall be subject to the following additional conditions:

 

(A) except in the case of an assignment to a
Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender’s Bridge Commitments or Bridge
Loans, the amount of the Bridge Commitments or Bridge Loans of the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $1,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that (1) no
such consent of the Borrower shall be required if an Event of Default has
occurred and is continuing and (2) such amounts shall be aggregated in
respect of each Lender and its affiliates or Approved Funds, if any;

 

(B) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $3,500;

 

(C) the Assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an administrative questionnaire; and

 

(D) in the case of an
assignment to a CLO, the assigning Lender shall retain the sole right to
approve any amendment, modification or waiver of any provision of this
Agreement and the other Loan Documents, provided that the Assignment and
Assumption between such Lender and such CLO may provide that such Lender will
not, without the consent of such CLO, agree to any amendment, modification or
waiver that (1) requires the consent of each Lender directly affected
thereby pursuant to the proviso to the second sentence of Section 10.1 and
(2) directly affects such CLO.

 

70

 

(iii) Subject
to acceptance and recording thereof pursuant to paragraph (b)(iv) below,
from and after the effective date specified in each Assignment and Assumption
the Assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 3.9, 3.10, 3.11 and 10.5). 
Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this Section 10.6 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

 

(iv)  The
Administrative Agent, acting for this purpose as an agent of the Borrower,
shall maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Bridge Commitments of, and principal amount and stated
interest of the Loans owing to, each Lender pursuant to the terms hereof from
time to time (the “Register”). 
The entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

 

(v)  Upon its receipt
of a duly completed Assignment and Assumption executed by an assigning Lender
and an Assignee, the Assignee’s completed administrative questionnaire (unless
the Assignee shall already be a Lender hereunder), the processing and
recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register.  No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this paragraph.

 

(c)           (i)  Any Lender may, without the consent
of the Borrower or the Administrative Agent, sell participations to one or more
banks or other entities (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a
portion of its Bridge Commitments and the Loans owing to it); provided
that (A) such Lender’s obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) the
Borrower, the Administrative Agent and the Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement. 
Any agreement pursuant to

 

71

 

which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver that (1) requires the
consent of each Lender directly affected thereby pursuant to the proviso to the
second sentence of Section 10.1 and (2) directly affects such
Participant.  Subject to paragraph (c)(ii) of
this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.9, 3.10 or 3.11 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section 10.6.  To the extent
permitted by law, each Participant also shall be entitled to the benefits of Section 10.7(b) as
though it were a Lender, provided such Participant shall be subject to Section 10.7(a) as
though it were a Lender.

 

(ii)  A Participant shall not be
entitled to receive any greater payment under Section 3.9 or 3.10 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent.  Any Participant that is a Non-U.S. Lender
shall not be entitled to the benefits of Section 3.10 unless such
Participant complies with Section 3.10(d).

 

(d)  Any Lender may at any time pledge
or assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall
not apply to any such pledge or assignment of a security interest; provided
that no such pledge or assignment of a security interest shall release a Lender
from any of its obligations hereunder or substitute any such pledgee or
Assignee for such Lender as a party hereto.

 

(e)  The Borrower, upon receipt of
written notice from the relevant Lender, agrees to issue Notes to any Lender
requiring Notes.

 

(f)  Notwithstanding the foregoing, any
Conduit Lender may assign any or all of the Loans it may have funded hereunder
to its designating Lender without the consent of the Borrower or the
Administrative Agent and without regard to the limitations set forth in Section 10.6(b).  Each of Holdings, the Borrower, each Lender
and the Administrative Agent hereby confirms that it will not institute against
a Conduit Lender or join any other Person in instituting against a Conduit
Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any state bankruptcy or similar law, for one year and one day
after the payment in full of the latest maturing commercial paper note issued
by such Conduit Lender; provided, however, that each Lender designating
any Conduit Lender hereby agrees to indemnify, save and hold harmless each
other party hereto for any loss, cost, damage or expense arising out of its
inability to institute such a proceeding against such Conduit Lender during
such period of forbearance.

 

10.7.        Adjustments;
Set-off.  (a)  Except to
the extent that this Agreement expressly provides for payments to be allocated
to a particular Lender, if any Lender (a

 

72

 

“Benefited Lender”)
shall receive any payment of all or part of the Obligations owing to it, or
receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than
any such payment to or collateral received by any other Lender, if any, in
respect of the Obligations owing to such other Lender, such Benefited Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefited Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such recovery,
but without interest.

 

(b)           In addition to any rights and remedies of the
Lenders provided by law, each Lender shall have the right, without prior notice
to Holdings or the Borrower, any such notice being expressly waived by Holdings
and the Borrower to the extent permitted by applicable law, upon any amount
becoming due and payable by Holdings or the Borrower hereunder (whether at the
stated maturity, by acceleration or otherwise), to set off and appropriate and
apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or
the account of Holdings or the Borrower, as the case may be.  Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application
made by such Lender, provided that the failure to give such notice shall
not affect the validity of such setoff and application.

 

10.8.        Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.  Delivery of an
executed signature page of this Agreement by facsimile transmission shall
be effective as delivery of a manually executed counterpart hereof.  A set of the copies of this Agreement signed
by all the parties shall be lodged with the Borrower and the Administrative
Agent.

 

10.9.        Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

10.10.      Integration.  This Agreement and the other Loan Documents
represent the entire agreement of Holdings, the Borrower, the Agents and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by any Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.

 

73

 

10.11.      GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

10.12.      Submission
To Jurisdiction; Waivers. 
Each of Holdings and the Borrower hereby irrevocably and
unconditionally:

 

(a)           submits for itself and its property in any
legal action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States for the
Southern District of New York, and appellate courts from any thereof;

 

(b)           consents that any such action or proceeding
may be brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;

 

(c)           agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
Holdings or the Borrower, as the case may be, at its address set forth in Section 10.2
or at such other address of which the Administrative Agent shall have been
notified pursuant thereto;

 

(d)           agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and

 

(e)           waives, to the maximum extent not prohibited
by law, any right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary, punitive or
consequential damages.

 

10.13.      Acknowledgments.  Each of Holdings and the Borrower hereby
acknowledges that:

 

(a)           it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents;

 

(b)           no Agent or Lender has any fiduciary
relationship with or duty to Holdings or the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Agents and Lenders, on one hand, and Holdings and the
Borrower, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor; and

 

(c)           no joint venture is created hereby or by the
other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among Holdings, the Borrower and the
Lenders.

 

74

 

10.14.      Releases of Liens.  (a)  Notwithstanding anything to the
contrary contained herein or in any other Loan Document, the Administrative
Agent is hereby irrevocably authorized by each Lender (without requirement of
notice to or consent of any Lender except as expressly required by Section 10.1)
to take any action requested by the Borrower having the effect of releasing any
Collateral (i) to the extent necessary to permit consummation of any
transaction not prohibited by any Loan Document or that has been consented to
in accordance with Section 10.1 or (ii) under the circumstances described
in paragraph (b) below.

 

(b)           At such time as the Loans and the other
obligations under the Loan Documents shall have been paid in full and the
Bridge Commitments have been terminated, the Collateral shall be released from
the Liens created by the Security Documents, and the Security Documents and all
obligations (other than those expressly stated to survive such termination) of
the Administrative Agent and each Loan Party under the Security Documents shall
terminate, all without delivery of any instrument or performance of any act by
any Person and the Administrative Agent agrees (at the sole cost and expense of
the Borrower) to take such actions as may reasonably be requested by the
Borrower to evidence such release and termination.

 

10.15.      Confidentiality.  Each Agent and each Lender agrees to keep
confidential all non-public information provided to it by any Loan Party
pursuant to or in connection with this Agreement that is designated by such
Loan Party as confidential; provided that nothing herein shall prevent any
Agent or any Lender from disclosing any such information (a) to any Agent,
any other Lender or any Lender Affiliate, (b) subject to an agreement to
comply with the provisions of this Section 10.15, to any actual or
prospective Transferee or any direct or indirect counterparty to any Hedge
Agreement (or any professional advisor to such counterparty), (c) to its
employees, directors, agents, attorneys, accountants and other professional
advisors or those of any of its affiliates, (d) upon the request or demand
of any Governmental Authority, (e) in response to any order of any court
or other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection
with any litigation or similar proceeding, (g) that has been publicly
disclosed, (h) to the National Association of Insurance Commissioners or
any similar organization or any nationally recognized rating agency that
requires access to information about a Lender’s investment portfolio in
connection with ratings issued with respect to such Lender, or (i) in
connection with the exercise of any remedy hereunder or under any other Loan
Document.

 

10.16.      WAIVERS OF JURY TRIAL.  HOLDINGS, THE BORROWER, THE
AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

10.17.      Delivery
of Addenda.  Each initial
Lender shall become a party to this Agreement by delivering to the
Administrative Agent an Addendum duly executed by such Lender.

 

10.18.      USA
PATRIOT Act.  Each Lender
hereby notifies the Borrower that pursuant to the requirements of the USA
PATRIOT Act (Title III of Publ. L. 107-56 (signed into

 

75

 

law October 26, 2001)),
(the “Patriot Act”), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender
to identify the Borrower in accordance with the Patriot Act.

 

76

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the day and year
first above written.

 

	
   

  	
  SPORTS ENTERTAINMENT ENTERPRISES,

  INC., a Colorado Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Thomas P. Benson

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas P. Benson

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EPE HOLDING CORPORATION, a Delaware

  corporation, as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Thomas P. Benson

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas P. Benson

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  Arranger

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Keith C. Barnish

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Keith C. Barnish

  
	
   

  	
   

  	
  Title:

  	
  Senior Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BEAR STEARNS CORPORATE LENDING INC.,

  as Administrative Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Victor Bulzacchelli

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Victor Bulzacchelli

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
								

 

77Exhibit 10.14

 

Portions of this exhibit have
been omitted pursuant to a request for confidential treatment filed with the
Securities and Exchange Commission. The omissions have been indicated by (“***”),
and each page containing confidential information is footnoted with the phrase “FOIA
Confidential Treatment”. The omitted text has been filed separately with the
Securities Exchange Commission.

 

As of April 22, 2002

 

Fox Broadcasting Company

P.O.  Box 900

Beverly Hills, California 90213

Attention:  Marisa Fermin and
Minna Taylor

 

Re:                               “American
Idol:  The Search for a Superstar”

 

Ladies and Gentlemen:

 

This letter sets forth the agreement (the “Agreement”) between 19TV
Limited (“19TV”) and FremantleMedia North America, Inc. (“Fremantle”), on the
one hand, and Fox Broadcasting Company (“FBC”), on the other hand, with respect
to the production by Fremantle and the license to FBC by Fremantle and 19TV of
episodes of the proposed United States television series currently entitled “American
Idol: The Search for a Superstar” (the “Series”) for exhibition on the FBC
national free television network (the “FBC Network”), which Series is based on
the television format currently entitled “Pop Idols” a/k/a “Idols” created by
Simon Fuller and developed by 19TV and Fremantle (the “Format”).

 

In consideration of the mutual covenants and conditions contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows;

 

1.                                       Episode
Order.

 

(a)                                  Initial
Episodes.  FBC hereby gives Fremantle
an order (the “Initial Order”) to produce and deliver to FBC *** hours of
episodes of the Series, broken down currently as follows; ***-minute episode of
the Series, ***-minute episodes of the Series, and ***-minute episodes of the
Series (collectively, the “Initial Episodes”) during the first production
season of the Series.  It is acknowledged
that FBC also gave Fremantle, and Fremantle approved and accepted, an
additional order (an “Additional Initial Episode Order”) to produce and deliver
to FBC an additional *** hours of episodes of the Series during the first
production season of the Series as part of the group of episodes produced
pursuant to the Initial Order, which additional hours of episodes shall be deemed
part of the Initial Episodes.  As used
herein, the term “first production season” means the period beginning on the
commencement of taping of the first Initial Episode (i.e., April 22, 2002) and
ending June 10, 2003.  Each subsequent “production
season” means the period commencing upon expiration of the immediately
preceding production season and ending fifty-two (52) weeks thereafter.

 

*** FOIA Confidential Treatment

 

 

(b)                                 Series
Options.  FBC shall have five (5)
separate, successive, dependent, annual options (each, a “Series Option”) to
require Fremantle to produce and deliver to FBC additional episodes of the
Series during the second and subsequent four (4) production seasons (each such
episode being an “Optional Episode”).  It
is acknowledged that FBC customarily obtains only four (4) such Series Option
and that Fremantle and 19TV granted to FBC an additional Series Option on a
strictly non-precedential basis in exchange for improved ratings bonuses.  The Series Option for the second production season
must be exercised, if at all, by FBC giving written notice thereof to Fremantle
not later than June 10, 2003, and each subsequent Series Option must be
exercised, if at all, by FBC giving written notice thereof to Fremantle not
later than the end of the production season immediately preceding the
production season for which such Series Option is to be exercised.  If FBC exercises any Series Option, then FBC
shall order (each, as it may be increased as set forth below, a “Series Option
Order”) the production of ***-minute Optional Episodes, and ***-minute Optional
Episodes, all to be produced during the applicable production season for which
the Series Option is exercised.  The
number and length of the Optional Episodes ordered pursuant to any Series Option
Order may be different from that set forth above only if FBC obtains the prior
written approval of Fremantle (it being agreed that Fremantle shall not
unreasonably withhold its approval for a Series Option Order for more Optional
Episodes than set forth above).  After
exercising a Series Option and making a Series Option Order, FBC shall have the
right to increase that Series Option Order only after obtaining the prior
written approval of Fremantle (which approval Fremantle shall not unreasonably
withhold).  The term “Episodes” as used
herein means and includes the Initial Episodes and the Optional Episodes.  Any such Series Option Order shall provide to
Fremantle no less than four (4) months notice prior to the scheduled initial
broadcast of the first Episode to be aired pursuant to such Series Option
Order; it being agreed that, as set forth in paragraph 3(a) below, without
Fremantle’s prior written consent, the initial broadcast of the first Episode
aired of any Production Order (as defined below) may not occur any earlier than
five (5) months after the initial broadcast of the last Episode aired of the
immediately preceding Production Order. 
If requested by FBC, Fremantle shall consider, in good faith, consenting
to a reduction in such five (5) month period by as much as one (1) month in
order to permit Episodes produced pursuant to any Production Order to be aired
during sweeps.

 

(c)                                  FBC
shall have the right (each an “In-Season Order Right”), during the first
production season and each additional production season for which FBC has
exercised a Series Option, to order from Fremantle additional Episodes to be
produced during such production season as a group of Episodes separate from the
group of Episodes produced pursuant to the Series Option Order (each, as it may
be increased as set forth below, an “In-Season Order”).  It is acknowledged that FBC made an In-Season
Order during the first production season, FBC shall only have the right to make
one (1) In-Season Order during each production season; it being understood and
agreed that each In-Season Order shall be for the production of ***-minute
Episodes, and ***-minute Episodes, all to be produced during the applicable
production season during which such In-Season Order right is exercised.  The number and length of the Episodes ordered
pursuant to any In-Season Order may be different from that set forth above only
if FBC obtains the prior written approval of Fremantle (it being agreed that

 

*** FOIA Confidential Treatment

 

2

 

Fremantle shall not
unreasonably withhold its approval for an In-Season Order for more Episodes
than set forth above).  After making an
In-Season Order, FBC shall have the right to increase that In-Season Order only
after obtaining the prior written approval of Fremantle (which approval
Fremantle shall not unreasonably withhold). 
Any such In-Season Order shall be in writing and shall provide to
Fremantle no less than four (4) months notice prior to the scheduled initial
broadcast of the first Episode to be aired pursuant to such In-Season Order; it
being agreed that, as set forth in paragraph 3(a) below, without Fremantle’s
prior written consent, the initial broadcast of the first Episode aired of any
Production Order may not occur any earlier than five (5) months after the
initial broadcast of the last Episode aired of the immediately preceding
Production Order.  If requested by FBC,
Fremantle shall consider, in good faith, consenting to a reduction in such five
(5) month period by as much as one (1) month in order to permit Episodes
produced pursuant to an In-Season Order to be aired during sweeps.  The term “Production Order” as used herein
means and includes the Initial Order, any Series Option Order and any In-Season
Order.

 

(d)                                 First
Negotiation/First Refusal.

 

(1)                                  If
FBC exercises all its Series Options under paragraph 1(b) above and does not
cancel or reduce below *** hours of Episodes any Production Order, FBC shall
have the rights of First Negotiation and of First Refusal set forth in
paragraph l(d)(2) below and in this paragraph 1(d)(1), with respect to the
production and license for exhibition of new Episodes of the Series after the
sixth production season (such production and license is the “Covered Matter”
under this paragraph l(d)(l)).  With
respect to said Covered Matter, the “Exclusive Negotiation Period” shall be
thirty (30) days commencing upon the 120th day prior to the expiration of the
sixth production season, and the “First Refusal Period” shall commence upon the
expiration of the Exclusive Negotiation Period and continue for one (1) year
after the expiration of the sixth production season.

 

(2)                                  With
respect to each applicable Covered Matter under paragraph 1(d)(l) above and
paragraphs 3(b)(3)(iii) and 3(d) below:

 

(i)                                     FBC’s
“First Negotiation” rights shall be as follows:

 

(A)                              Fremantle,
in consultation with 19TV, shall negotiate in good faith solely with FBC during
the applicable Exclusive Negotiation Period. 
If no agreement is reached during such Exclusive Negotiation Period,
then upon the expiration thereof, Fremantle, in consultation with 19TV shall
furnish FBC, in Fremantle’s last written offer (“Final Offer”), the terms and
conditions relating to the applicable Covered Matter least favorable to
Fremantle that Fremantle, in consultation with 19TV, is willing to accept.

 

(ii)                                  FBC’s
“First Refusal” rights, which shall apply until the expiration of the
applicable First Refusal Period, or until there is a Third Party Contract (as
defined below), whichever first occurs, shall be as follows:

 

3

 

(A)                              Neither
Fremantle nor 19TV shall enter into any agreement with a third party respecting
the Covered Matter, in connection with any form of television, on terms less
favorable to Fremantle and 19TV than the Final Offer, without first offering in
writing to enter into an agreement with FBC on the same terms which Fremantle,
in consultation with 19TV, and such third party are both willing to accept.  FBC shall have ten (10) days after receipt of
such written offer in which to accept (but the offer may include only
provisions that relate solely to the Covered Matter).  If FBC fails to accept those terms within
that period, Fremantle, in consultation with 19TV, shall then be free to contract
on those terms (and no others) with the third party, and if Fremantle, in
consultation with 19TV, does so there shall be deemed to be a “Third Party
Contract.”

 

2.                                       Consideration.

 

(a)                                  License
Fees.  FBC shall pay to Fremantle
license fees equal to the Approved Budgets (as defined below) for the Episodes
produced pursuant to the Initial Order, which Approved Budgets shall be, in the
aggregate for the first *** hours of the Initial Episodes produced pursuant to
the Initial Order, up to *** Dollars (U.S.$***) times the number of hours or
fractions of hours of all such Episodes (i.e., the aggregate Approved Budgets
for *** hours of such Initial Episodes shall be no more than $***), unless FBC
agrees in writing to an increase.  The
license fees payable by FBC for hours of the Initial Episodes produced pursuant
to the Additional Initial Episode Order shall be equal to the Approved Budgets
for such additional Initial Episodes. 
The license fees payable by FBC for all Episodes produced pursuant to
any In-Season Order or any Series Option Order shall be equal to the Approved
Budgets for such Episodes, but in no event shall be less, on a per hour basis,
than the applicable maximum license fees for the first *** hours of the Initial
Episodes (i.e., $***), increased by *** percent (***%) (on a cumulative basis)
each production season (the “License Fee Cap”). 
The license fees for the first *** hours of the Initial Episodes (which
FBC agrees shall be no less than U.S. $***) plus the license fees for the hours
of the Initial Episodes produced pursuant to the Additional Initial Episode
Order (which FBC agrees shall be no less than U.S. $***), shall be payable,
upon appropriate invoicing from Fremantle, as follows: (i) U.S. $*** payable
immediately; (ii) U.S. $*** payable on May 31, 2002; (iii) U.S. $*** on June
30, 2002; (iv) U.S. $*** on July 31, 2002; (v) U.S.                         
on delivery to FBC of the final Initial Episode; and (vi) no less than U.S. $                       
(the “Audit Holdback Amount”) upon completion of FBC’s audit of Fremantle’s
books and records relating to Fremantle’s costs of production of the Initial
Episodes (“Books arid Records”). 
Notwithstanding the foregoing, it is agreed that, subject to delays
caused by events of force majeure, (A) if FBC has not completed such audit
within forty-five (45) days after delivery to FBC of the final Initial Episode
and Fremantle’s making available to FBC all of its Books and Records, FBC shall
pay to Fremantle one-half (l/2) of such Audit Holdback Amount at the end of
such forty-five (45) day period, and (B) if FBC has not completed such audit
within ninety (90) days after delivery to FBC of the final Initial Episode, FBC
shall pay to Fremantle the remainder of such Audit Holdback Amount at the end of
such

 

*** FOIA Confidential Treatment

 

4

 

ninety (90) day period except
for such portion of such Audit Holdback Amount that FBC reasonably disputes in
writing prior to the end of such 60-day period as being payable as a result of
FBC’s such audit.  The license fees for
all Episodes produced pursuant to any In-Season Order or any Series Option
Order shall be payable in accordance with a schedule to be negotiated in good
faith; it being the intent that the payment schedule meet Fremantle’s cash flow
needs and be no less favorable to Fremantle than the following: (i) *** percent
(***%) of the total license fees for all Episodes of the applicable In-Season
Order or Series Option Order upon commencement of pre-production; (ii) ***
percent (***%) of such total license fees two (2) months thereafter; (iii) ***
percent (***%) of such total license fees one (1) month thereafter, (iv) ***
percent (***%) of such total license fees one (1) month thereafter; (v) *** percent
(***%) of such total license: fees upon delivery to FBC of the final Episode
produced pursuant to the applicable In-Season Order or Series Option Order; and
(vi) *** percent (***%) of such total license fees upon completion of FBC’s
audit of Fremantle’s Books and Records relating to Fremantle’s costs of
production of the Episodes produced pursuant to the applicable In-Season Order
or Series Option Order, subject to earlier payment of this last installment
pursuant to the same mechanism as set forth about with regard to the Audit
Holdback Amount on the Initial Episodes. 
In the event that FBC pays to Fremantle amounts in excess of the amounts
due to Fremantle hereunder and/or under any other agreement with FBC, FBC shall
notify Fremantle in writing with a detailed explanation of the overpayment and,
provided that Fremantle does not reasonably dispute the existence or amount of
such overpayment and provided further that Fremantle has not disbursed to any
third parties amounts due to such third parties calculated based on such
over-payment, Fox may deduct an amount equal to amount of such over-payment
from any payments or advances thereafter payable to Fremantle under this
Agreement or any other agreement between FBC and Fremantle or, at FBC’s
election, Fremantle will repay the amount of such over-payment promptly
following FBC’s written demand therefor.

 

(b)                                 Overages/Underages.  In addition to the license fees set forth
above, FBC shall promptly reimburse Fremantle for any out-of-pocket costs of
production of any Episodes incurred by Fremantle in excess of the Approved
Budgets that are approved in writing by a member of FBC’s Business Affairs
Department or by any other authorized representative of FBC (it being agreed
that FBC shall not unreasonably withhold or delay its approval of any such
costs which are not avoidable by use of commercially reasonable efforts and
arise out of the exigencies of production) or that are caused by FBC’s
negligent or willful misconduct.  If and
to the extent the costs of production of all Episodes produced during a single
production season are less than the aggregate license fees paid by FBC to
Fremantle for such Episodes and any overages paid by FBC to Fremantle for such
Episodes, then Fremantle shall pay such difference to FBC.  FBC shall have the right to offset any
undisputed amount of such difference against future license fee or other
payments due to Fremantle in the event Fremantle does not pay such undisputed
amount to FBC within thirty (30) days of FBC’s reasonable written demand to
Fremantle therefor.  With respect to any
In-Season Order and any Series Option Order, FBC and Fremantle shall discuss in
good faith modifying the foregoing, bearing in mind that FBC does not wish to
bear budget overages and Fremantle wishes to retain budget underages; it being
understood that no such modification shall be in effect without the written
agreement of FBC and

 

*** FOIA Confidential Treatment

 

5

 

Fremantle.  The “costs of production” and Approved Budget
for each Episode shall include all costs incurred or to be incurred by
Fremantle to produce and deliver such Episode to FBC, including without
limitation (i) executive producer fees (which may be payable to Fremantle on
its own behalf or on behalf of Fremantle and 19TV) equal to *** Dollars
(U.S.$***) per thirty (30)-minute Episode, *** Dollars (U.S.$***) per sixty
(60)-minute Episode and *** Dollars (U.S.$***) per ninety (90)-minute Episode
(which fees shall increase by *** percent (***%), on a cumulative basis, each
production season) (the “Executive Producer Fees”), (ii) co-executive producer
fees (which may be payable to Fremantle on its own behalf or on behalf of
Fremantle and 19TV) as set forth in paragraph 2(e) below, (iii) a Fremantle and
19TV format fee (the “Format Fee”) equal to *** percent (***%) of the Approved
Budget of such Episode (less the Format Fee), and (iv) a packaging fee payable
to Creative Artists Agency equal to *** percent (***%) of Fremantle’s actual
out-of-pocket costs of production of such Episode up to the Approved Budget
(less such package fee).  It is
acknowledged that FBC may agree to increase such packaging fee to Creative
Artists Agency for Episodes produced during the second and subsequent
production season.  FBC shall fund and
bear any such increase itself, and such increase shall not be included within
the Approved Budget for the purposes of calculating the License Fee Cap
hereunder.  FBC shall have the right to
audit Fremantle’s books and records with respect to the production of the
Series during business hours and upon reasonable prior written notice in
accordance with FBC’s standard and reasonable audit procedures to be negotiated
in good faith within customary parameters.

 

(c)                                  Ratings
Bonuses.

 

(1)                                  FBC
hereby acknowledges that the mean average Nielsen rating for the 18-49 age
demographic (the “Average Nielsen Rating”) for the initial FBC broadcast of the
Initial Episodes was 6.0 or greater and that FBC exercised its In-Season Order
Right to order from Fremantle additional Episodes of the Series.  Therefore, FBC shall pay to Fremantle ratings
bonuses (“Ratings Bonuses”) equal to (i) *** Dollars (U.S.$***) for each thirty
(30) minute Episode produced pursuant to such In-Season Order, and (ii) ***
Dollars (U.S.$***) for each sixty (60) minute Episode produced pursuant to such
In-Season Order.  For each Episode longer
than sixty (60) minutes produced pursuant to such In-Season Order, FBC shall
pay to Fremantle a Ratings Bonus equal to such sixty (60)-minute Episode
Ratings Bonus increased pro-rata based on the length of the Episode in
question.

 

(2)                                  If
the Average Nielsen Rating for the initial FBC broadcast of all Episodes
produced pursuant to any particular Production Order (other than the Initial
Episodes that are covered by paragraph 2(c)(1) above) is *** or greater and
Fremantle produces Episodes pursuant to the next Production Order from FBC,
then FBC shall pay to Fremantle Ratings Bonuses for each Episode produced
pursuant to such next Production Order from FBC, as follows:

 

*** FOIA Confidential Treatment

 

6

 

	
  For each such 30-

  minute Episode

  	
   

  	
  For each such 60-

  minute Episode

  	
   

  	
  For each such 90-

  minute Episode

  	
   

  	
  For each such 120-

  minute Episode

  
	
  U.S. $*** plus U.S.
  $*** for each tenth of a rating point in excess of ***.

  	
   

  	
  U.S. $*** plus U.S.
  $*** for each tenth of a rating point in excess of ***

  	
   

  	
  U.S. $*** plus U.S.
  $*** for each tenth of a rating point in excess of ***.

  	
   

  	
  U.S $*** plus U.S. $***
  for each tenth of a rating point in excess of ***.

  

 

(3)                                  Ratings
Bonuses shall be payable to Fremantle within ten (10) days following the
delivery to FBC of the applicable Episode which triggers the Ratings Bonus
payment obligation.  It is understood and
agreed that Fremantle shall have the right, but not the obligation, to grant to
FBC one (1) or more additional Series Option(s) and/or In-Season Order Right(s)
to order Episodes pursuant to the terms of this Agreement to be produced during
the seventh and/or subsequent production season.  For avoidance of doubt, it is understood that
the term “next Production Order” as used herein may be a Series Option Order,
an In-Season Order, and/or any production order pursuant to any additional
Series Option and/or In-Season Order Right that may be granted by Fremantle to
FBC.

 

(4)                                  In
addition to any payments under paragraphs 2(c)(1) and 2(c)(2) above, if any
Initial Episode is re-run by FBC, then Fremantle shall be entitled to a ratings
bonus (a “Re-Run Ratings Bonus”) for the first such re-run (and each subsequent
re-run of any Initial Episode taken by FBC pursuant to any license hereafter
granted by Fremantle in Fremantle’s sole discretion) of each such Initial
Episode equal to *** Dollars (U.S. $***) per each such re-run.

 

(5)                                  In
addition to any payments under paragraphs 2(c)(1) and 2(c)(2) above, if the
Average Nielsen Rating for the initial FBC broadcast of all Episodes produced
pursuant to any particular Production Order (other than the Initial Episodes
that are covered by paragraph 2(c)(4) above) is *** or greater and any Episode
produced pursuant to such Production Order is re-run by FBC, then Fremantle
shall be entitled to a Re-Run Ratings Bonus for the first such re-run (and each
subsequent re-run of any such Episode taken by FBC pursuant to any license
hereafter granted by Fremantle in Fremantle’s sole discretion) of each such
Episode equal to *** Dollars (U.S. $***) plus, for each tenth of a rating point
in excess of ***, *** Dollars (U.S. $***), per each such rerun.

 

(6)                                  The
Re-Run Ratings Bonuses for Episodes produced pursuant to any Production Order
(other than Episodes produced during the sixth production season) shall be
payable to Fremantle only if FBC makes a next Production Order and, in such
event, such Re-Run Ratings bonuses shall be paid to Fremantle upon FBC making
such next Production Order; provided, however, that if any ratings bonuses are
earned based

 

*** FOIA Confidential Treatment

 

7

 

on re-runs
occurring after FBC makes such next Production Order, then each such additional
Re-Run Ratings Bonus shall be payable promptly following the date of the applicable
such re-run.  Each Re-Run Ratings Bonus
for Episodes produced during the sixth production season shall be payable to
Fremantle promptly following the date of the applicable re-run.

 

(d)                                 Order
Reduction/Cancellation:

 

(1)                                  Without
limitation to any of FBC’s other rights under this Agreement, at law, in equity
or otherwise, FBC shall have the right in writing, at its election and at any
time, to reduce or cancel FBC’s then-current order of Episodes, in whole or in
part, pursuant to any Series Option Order (it being agreed that any In-Season
Order may not be reduced or cancelled without Fremantle’s prior written
consent), and FBC shall thereafter not be further obligated to Fremantle for
the payment of license fees with respect to the Episodes not ordered as a
result of such reduction or cancellation, except that FBC shall, subject to the
provisions of paragraph 2(d)(2) below, reimburse Fremantle and 19TV for
Fremantle’s and 19TV’s actual, direct, auditable, out-of-pocket costs, if any,
incurred by Fremantle and/or 19TV (which are not avoidable by use of
commercially reasonable efforts) in connection with the Episodes not ordered or
cancelled or otherwise arising out of such reduction or cancellation; provided,
however, that FBC shall not be liable for any such costs in excess of the sum
of (A) the applicable licensee fee plus FBC-approved overages (it being agreed
that FBC shall not unreasonably withhold or delay its approval of any such
costs which are not avoidable by use of commercially reasonable efforts and
arise out of the exigencies of production) plus (B) FBC-approved non-budgeted
contractual commitments paid or payable to third parties.  Notwithstanding the foregoing, FBC shall be
liable without limitation for costs caused by FBC’s negligent or willful
misconduct.  Concurrently with making any
such cancellation, FBC shall pay to Fremantle additional consideration equal to
(A) with respect to the Initial Order, the difference between (x) the sum of
the Executive Producer Fees plus the Format Fees that otherwise would have been
payable for six (6) sixty (60)-minute Episodes and (y) the sum of the Executive
Producer Fees plus the Format Fees that were actually paid with respect to the
Episodes produced arid delivered pursuant to such Initial Order, or (B) with
respect to any Series Option Order of any In-Season Order, the difference
between (x) the sum of the Executive Producer Fees plus the Format Fees that
otherwise would have been payable for thirteen (13) sixty (60)-minute Episodes
and (y) the sum of the Executive Producer Fees plus the Format Fees that were
actually paid with respect to for the Episodes produced and delivered pursuant
to such Series Option Order or In-Season Order. 
Such Format Fees shall be calculated based on the highest Approved
Budget for sixty (60) minute Episodes ordered by FBC pursuant to the applicable
Production Order.

 

(2)                                  To
the extent that FBC is obligated to reimburse Fremantle with respect to
out-of-pocket costs for any Episodes not produced and/or delivered hereunder
under paragraph 2(d)(1) above (i) FBC shall not be obligated to reimburse
Fremantle for any fees to Fremantle or 19TV (other than as set forth in
paragraph 2(d)(l) above) for such Episodes, nonspecific general office overhead
or packaging fees or agency commissions or for costs relating to services,
facilities, equipment or other items in

 

8

 

connection with such Episodes to the extent
that such costs are recouped by Fremantle or 19TV by the use of such items by
Fremantle or 19TV on any other production or otherwise, (ii) such costs shall
not in any event be reimbursed to the extent otherwise reimbursed under this
Agreement, and (iii) Fremantle shall use its reasonable commercial efforts to
minimize the amounts FBC is required to reimburse by entering into settlement
agreements, by taking advantage of an employer’s rights regarding mitigation of
damages by an employee or by other appropriate methods.

 

(3)                                  Notwithstanding
anything to the contrary contained herein, if FBC cancels or reduces below
seventeen (17) hours of Episodes any Production Order (except if such cancellation
or reduction (A) is due to the occurrence of an event of force majeure, (B) is
due to a material, uncured breach by Fremantle or (C) is made after obtaining
Fremantle’s written agreement both to such cancellation or reduction and to a
waiver of Fremantle’s rights under this subparagraph 2(d)(3)), FBC shall have
no right to exercise any further Series Options or In-Season Order Rights.

 

(e)                                  The
“costs of production” and applicable Approved Budgets shall include without
limitation co-executive producer fees (which may be payable to Fremantle on its
own behalf or on behalf of Fremantle and 19TV) equal to (i) with respect to
Episodes produced pursuant to the Initial Order, *** Dollars (U.S. $***) per
sixty (60)-minute Episode per co-executive producer and *** Dollars (U.S. $***)
per thirty (30)-minute Episode per co-executive producer for the services of up
to three (3) co-executive producers, and (ii) with respect to Episodes produced
pursuant to the Production Order subsequent to the Initial Order (i.e., the
second Production Order), for the services of Nigel Lythgoe and Ken Warwick,
*** Dollars (U.S. $***) for each such individual per each week during which
both one sixty minute Episode and one thirty minute Episode are being produced,
*** Dollars (U.S. $***) for each such individual per each week during which
only one sixty minute Episode is being produced, *** Dollars (U.S. $***) for
each such individual per week during which only one two hour Episode is being
produced, with minimum compensation (to be credited against the foregoing) of
*** Dollars (U.S. $***) for each such individual per week for fifteen (15)
weeks being payable starting on October 15, 2002.  If Nigel Lythgoe and Ken Warwick render
co-executive producer services on Episodes produced pursuant to either or both
of the third and/or fourth Production Order(s), the foregoing fees set forth in
clause (ii) above apply.  If Nigel
Lythgoe and Ken Warwick render co-executive producer services on Episodes
produced pursuant to either or both of the fifth and/or sixth Production
Order(s), the foregoing fees set forth in clause (ii) above apply, increased by
*** percent (***%) on a cumulative basis for each such Production Order.  Living and travel expenses for the co-executive
producers are also included in the “costs of production” and the Approved
Budgets and shall be no less than the amounts provided for in the “costs of
production” and the Approved Budgets for the Initial Episodes.  FBC shall have the right to require Fremantle
and 19TV to engage the services of Nigel Lythgoe and Ken Warwick as
co-executive producers on

 

*** FOIA Confidential Treatment

 

9

 

Episodes to be produced
pursuant to either or both of the second and/or third Production Order(s).  Further, FBC shall have the right to require
Fremantle and 19TV to engage the services of Nigel Lythgoe and Ken Warwick as
co-executive producers on Episodes to be produced pursuant to any or all of the
fourth, fifth and/or sixth Production Order(s); provided, however, that
Fremantle and 19TV shall have the right to decline to so engage Nigel Lythgoe
and/or Ken Warwick to render such services on Episodes to be produced pursuant
to any or all of such Production Order(s) if (i) Fremantle and/or 19TV desire either
or both such individuals to render services on one or more other television
projects during the production periods of the applicable Episodes and Fremantle
and/or 19TV obtain the services on the Series of replacement co-executive
producer(s) approved by FBC, such approval not to be unreasonably withheld, or
(ii) either or both such individuals desire to remain in the United Kingdom
during the production periods of the applicable Episodes.  Any failure by Fremantle and/or 19TV to
furnish the services of Nigel Lythgoe and/or Ken Warwick on account of the
breach or disability of either or both such individuals shall not be a breach
by Fremantle and/or 19TV of this Agreement. 
FBC will not unreasonably withhold or delay its approval of co-executive
producer compensation proposed by Fremantle and/or 19TV for co-executive
producers Episodes of the Series other than Nigel Lythgoe and/or Ken Warwick.

 

3.                                       Rights.

 

(a)                                  Broadcast
Rights.  FBC shall have the right to
make one (1) original network broadcast in the English language of each Episode
on the FBC Network in the United States and its territories and possessions
(including Puerto Rico) (the “Exhibition Territory”), one re-run in the English
language of each such Episode on the FBC Network in the Exhibition Territory
and, subject to Fremantle’s approval rights as set forth below, one
re-broadcast in the English language of such Episode on a national cable
network in the Exhibition Territory (provided that such cable re-broadcast is
intended for promotional purposes only and that no cash, barter time or other
consideration is received by or on behalf of FBC or any affiliate of FBC
therefor other than commercial time to promote the Series or other
consideration in the form of promotion for the Series).  If such national cable network is an
affiliate of FBC, Fremantle shall have a right of approval over the terms of
the agreement between FBC and such national cable network (which must be made
at arm’s length), such approval not to be unreasonably withheld or delayed.  In addition, FBC shall have the right (i) to
broadcast a SAP audio signal to supplement the English language broadcast of
any Episode with audio in any other language, (ii) a radio simulcast of the
audio portion of any broadcast of any Episode, provided that the only
consideration received from the radio broadcast is in the form of promotion for
the Series, and (iii) to broadcast in any language sub-titles to the English
language broadcast of any Episode.  The
original broadcast and the FBC Network re-run of each Episode of the Series
shall be broadcast during prime time only. 
With respect to each Episode produced hereunder, the original broadcast,
the FBC Network re-run and the national cable network re-broadcast of such
Episode shall occur no later than fifty-two (52) weeks after the original
broadcast of the first Episode aired that was produced pursuant to the
Production Order of which such Episode is a part (such fifty-two (52) week
period being referred to herein as the “Exhibition Period”); provided, however,
that, without Fremantle’s prior written consent, the initial broadcast of the
first Episode aired of any Production Order may not occur any earlier than five
(5) months after the initial broadcast of the last Episode aired of the
immediately preceding Production Order and no FBC Network re-run and no
national cable network re-broadcast of any Episode shall occur during the
period from the initial broadcast of the first Episode aired of any Production
Order through the initial broadcast of the last Episode aired of such
Production Order.

 

10

 

(b)                                 Exclusivity.

 

(1)                                  Except
as expressly provided otherwise herein (including without limitation as
expressly provided otherwise in paragraph 3(c) below), from the date hereof
through the earlier of (i) the end of the last production season for which FBC
orders Episodes hereunder or (ii) the date that FBC cancels or reduces below
*** hours of Episodes any Production Order such that Fremantle is ordered by
FBC to produce less than *** hours of Episodes during any production season
(the “Exclusivity Term”), Fremantle and 19TV shall not exploit, or authorize
any third party to exploit, the Series or any Episode or any motion picture,
program or series Based Substantially Upon The-Series And The Format (as
defined below) in the Exhibition Territory in any language on any form of
television (including without limitation free, pay, subscription, community
antenna and closed circuit and other television (including, without limitation,
television exhibition by means of transmission or retransmission over-the-air
or otherwise, or by wire, cable, community antenna system, multipoint
distribution system or any other technique, now known or unknown, over any
network, station or translator [whether full or low power], space satellite,
satellite station or other facility located in or outside the Exhibition
Territory) or on the Internet; provided, however, that it is acknowledged that
transmissions of other broadcasters located outside the Exhibition Territory
may be received by television receivers or other electronic devices located
within the Exhibition Territory and any such incidental spillover shall not be
deemed a breach of this Agreement.  For
avoidance of doubt, it is understood and agreed that Home Video Exploitation
(as defined below) shall not be considered hereunder to be a form of television
or internet exploitation that is subject to the restriction contained in the
immediately preceding sentence.  However,
with respect to each Episode produced hereunder, Fremantle and 19TV shall not
advertise to the public or exercise, or authorize any third party to advertise
to the public or exercise, Home Video Exploitation rights in such Episode in
the Exhibition Territory until the initial broadcast on FBC of the last Episode
produced by Fremantle pursuant to the Production Order of which such Episode is
a part; provided, however, that in no event shall such restriction last beyond
the Exclusivity Term or the production season of which such Episode is a
part.  Notwithstanding anything to the
contrary contained herein, Fremantle shall be free without restriction to
exploit and authorize the exploitation of, clips and excerpts from the Series
or any Episode or any motion picture, program or series Based Substantially
Upon The Series And The Format on television and on the Internet during the
Exclusivity Term throughout the Exhibition Territory, provided that no such
clip or except has a continuous running time of more than five (5)
minutes.  In the event that, during the
Exclusivity Term, Fremantle desires to produce any motion picture, program or
series Based Substantially Upon The Series And The Format for exploitation on
television or the Internet in the Exhibition Territory (including without
limitation a Spanish language series), FBC will negotiate in good faith with
Fremantle with regard to the production and exploitation of such motion
picture, program or series.

 

*** FOIA Confidential Treatment

 

11

 

(2)                                  Except
as expressly provided otherwise herein, during the Exclusivity Term, neither
Fremantle nor 19TV shall license any Episode (except clips excerpts as
expressly permitted herein) to be broadcast over any free over-the-air English
language television station having a transmitter located in Tijuana, Mexico or
Windsor, Ontario.  Neither Fremantle nor
19TV shall authorize the pre-release of any Episode for broadcast by any third
party anywhere in the world prior to its scheduled FBC first exhibition;
provided that FBC has given Fremantle reasonable advance written notice of the
date of such scheduled broadcast and provided further that Fremantle shall not
be in breach hereof if any such third party broadcast is prior to any rescheduled
FBC first exhibition.

 

(3)                                  Notwithstanding
the foregoing provisions of this paragraph 3(b), Fremantle may license the
telecast on television (including without limitation free, pay, subscription,
community antenna and closed circuit and other television exhibition) and
exhibition on the Internet of Episodes in the Exhibition Territory during the
Exclusivity Term; provided, however, that:

 

(i)                                     No
such telecast on television or exhibition on the Internet (except clips and
excerpts as expressly permitted herein) in the Exhibition Territory during the
Exclusivity Term shall be made until after, with respect to the telecast on
television of not more than one (1) Episode during any week or any such
exhibition on the Internet, three (3) years from the commencement of the first
production season and, with respect to the telecast on television of more than
one (1) Episode per week (“Stripping”), four (4) years from the commencement of
the first production season;

 

(ii)                                  No
Episode shall be telecast on television or exhibited on the Internet (except
clips and excerpts as expressly permitted herein) in the Exhibition Territory
by any party other than FBC during the Exclusivity Term prior to the expiration
of the production season for which it was initially ordered; and

 

(iii)                               FBC
shall have the rights of First Negotiation and of First Refusal set forth in
paragraph 1(d)(2) above and in this paragraph 3(b)(3)(iii), with respect to the
non-prime time Stripping on an approximately five (5) times per week basis of
the Episodes on a “network” (including, without limitation, any free
television, pay television, basic cable network or Internet) basis in the
Exhibition Territory during the Exclusivity Term (any such Stripping is the “Covered
Matter” under this paragraph 3(b)(3)(iii)). 
With respect to said Covered Matter, the Exclusive Negotiation Period
shall be thirty (30) days commencing upon such date as either FBC or Fremantle
elects (which date shall not be earlier than one year prior to the date that
the applicable telecasts could commence), or the 120th day prior to the
expiration of the Exclusivity Term, whichever is earlier, and the First Refusal
Period shall commence upon the expiration of the Exclusive Negotiation Period
and continue until the expiration of the Exclusivity Term.

 

12

 

(c)                                  Reserved
Rights.  Fremantle and 19TV shall own
the copyright in the Series and the Episodes and hereby reserve all rights in
and to the Series, the Episodes and the Format not expressly licensed to FBC
hereunder.  Nothing contained in this
Agreement shall be construed to be prejudicial to, or operate in derogation of,
any rights, licenses, privileges or property which Fremantle, 19TV and/or their
successors, licensees or assigns may enjoy or be entitled to as a member of the
public if this instrument were not in existence, including without limitation
Fremantle’s and 19TV’s right to exploit motion pictures, programs or series
Based Substantially Upon The Series And The Format in the Exhibition Territory
during the Exclusivity Term if a member of the public would be entitled to do
so without infringing proprietary rights protectible at law in the Series
and/or the Format without reference to this Agreement.

 

(d)                                 Additional
Productions.  If FBC exercises all of
its Series Options under paragraph 1(b) above and does not cancel or reduce
below *** hours of Episodes any Production Order hereunder, and, after the end
of the Exclusivity Term, Fremantle desires to produce any motion picture,
program or series Based Substantially Upon The Series And The Format for
exploitation on television or the Internet in the Exhibition Territory, then
FBC shall have the rights of First Negotiation and of First Refusal set forth
in paragraph l(d)(2) above and in this paragraph 3(d), independently and
separately with respect to the production and license for exhibition of each
and every particular such motion picture, program or series (such production
and license is the “Covered Matter” under this paragraph 3(d)).  With respect to each such Covered Matter, the
Exclusive Negotiation Period shall be thirty (30) days commencing upon the date
that Fremantle, in consultation with 19TV, notifies FBC in writing that they
desire to enter into an arrangement for a Covered Matter, and the First Refusal
Period shall commence upon the expiration of the Exclusive Negotiation Period
and shall continue until the expiration of FBC’s First Refusal Rights under
paragraph 1(d)(l) above.  Once such First
Refusal Period expires, FBC’s rights of First Negotiation and of First Refusal
shall expire.

 

(e)                                  Certain
Definitions.  As used in this
Agreement, a motion picture, program or series is “Based Substantially Upon The
Series And The Format” if and only if such motion picture, program or series
bears the “American Idol” title or fits the following description in all
respects: such motion picture, program or series is a singing talent
competition among aspiring pop singers, all of whom are resident in the United
States; the viewing public votes to eliminate contestants and select a final
winner after viewing performances of popular songs by the contestants; the
performances are judged and commented upon by a panel of judges from the music
industry; and the prize for the final winner is a recording agreement; and the
primary initial market for the motion picture, program or series is the United
States.  As used in this Agreement, the
term “Home Video Exploitation” means the exploitation a motion picture or
program, whether by means of a pre-recorded Cassette (as defined below)
(including without limitation the manufacture, distribution, lease, rental,
sale and/or other disposition or delivery of Cassettes) or by means of “downloading”,
streaming or otherwise transmitting such motion picture or program to a viewer,
whereby the viewer can view the motion picture or program in an non-public
setting at any time (subject only to exhibition period length limits, if any)
selected by

 

*** FOIA Confidential Treatment

 

13

 

the viewer (as opposed to
selecting from a pre-established exhibition schedule).  As used in this Agreement, the term “Cassette”
means a copy (whether temporary or permanent, in any form or made by any
process now known or hereafter devised) of a motion picture or program stored
in a cassette, cartridge, videogram, video disc, tape, magnetic disc or ‘storage/retrieval’
device now known or hereafter devised and designed to be used in conjunction
with a reproduction apparatus which cause a motion picture or program to be
visible on the screen of a television receiver, television monitor, portable
viewing device or any comparable devise now known or hereafter devised.

 

4.                                       Telephony.***

 

5.                                       Off-Network
Television Distribution,  Merchandising
and Print Publication Rights.

 

(a)                                  Division
of Ancillary Net Proceeds.  Fremantle
shall pay to FBC *** of the Ancillary Net Proceeds (as defined below), if
any.  “Ancillary Net Proceeds” means
Ancillary Gross Receipts less Ancillary Distribution Fees and less Ancillary
Costs (as such terms are defined below), determined on non-cross-collateralized
basis among Television Distribution, Merchandising and Print Publication rights
(as such terms are defined below).  “Ancillary
Gross Receipts” means all non-returnable revenues actually received by or
credited to Fremantle or any Defined Fremantle Affiliates (as defined below)
from third parties (other than FBC) on account of (i) the distribution and
exhibition of the Episodes on television (“Television Distribution”),
(ii) the exploitation of merchandise (excluding record albums and other
sound recordings and including any merchandise sold though promotions on the
Internet) during the Exclusivity Term that both bears the name of the Series
and is based on the Series (excluding merchandise that bears the name or
likeness of a Series winning artist or finalist or otherwise touches or
concerns a Series winning artist or finalist and relates primarily to such
Series winning artist or finalist) (“Merchandising”), and (iii) the
exploitation of print publications during the Exclusivity Term that both bears
the name of the Series and are based on the Series (excluding publications that
bears the name or likeness of a Series winning artist or finalist or otherwise
touches or concerns a Series winning artist or finalist and relates primarily
to such Series winning artist or finalist) (“Print Publication”).  A “finalist” is any of the contestants
reaching the final stages of the Series competition pursuant to any Production
Order.  For the Initial Order, there were
ten (10) finalists.  “Ancillary
Distribution Fees” means a distribution fee of *** (***%) of Ancillary Gross
Receipts from Television Distribution and *** percent (***%) of all other
Ancillary Gross Receipts.  “Ancillary Costs”
means all costs and expenses incurred by Fremantle or 19TV in connection with
Television Distribution, Merchandising and Print Publication, including without
limitation all costs of style guides, production and marketing materials,
trademark registration, residuals, royalties and other third party payments,
taxes, participations (including without limitation the CAA back-end package
commission but excluding any participation in Ancillary Net Proceeds payable to
19TV), and deferments.  “Defined Fremantle
Affiliates” means affiliates of Fremantle engaged in the distribution of motion
pictures or television programs for exhibition by third parties or in the
licensing of Merchandising or Print Publication rights for manufacture,

 

*** FOIA Confidential Treatment

 

14

 

distribution and other
exploitation by third parties; provided, however, that the term “Defined
Fremantle Affiliates” does not include the following: television broadcast
stations, electronic transmission systems (including cable, direct broadcast
satellite, microwave and master antenna) and program delivery services (and
other exhibitors of motion pictures and television programs to viewers by any
means now known or hereafter devised), or laboratories producing and/or
distributing motion picture copies, or merchandisers, manufacturers, sellers,
wholesale dealers or retail dealers of cassettes, discs or of any other
products, or book or music publishers, or parties producing or distributing
sound records, or pay television or home video marketers, or any other parties
similar to any of the foregoing excluded parties (whether or not any of the
foregoing excluded parties are affiliates of Fremantle), or subdistributors.

 

(b)                                 Print
Publishing.  Notwithstanding the
provisions of paragraph 5(a) above, the parties acknowledge and agree that, if
no publishing company affiliated with Bertelsmann AG exploits Print Publication
rights, then Fremantle shall afford Harper Collins a fifteen (15)-business day
right of negotiation with respect to the exploitation of Print Publication
rights commencing upon Fremantle’s written notice to Harper Collins.  If Fremantle and Harper Collins fail to reach
an agreement within such fifteen (15)-business day period, then Fremantle shall
be free to negotiate and enter into a license or other agreement with any third
party with respect to the exploitation of Print Publication rights without any
further obligation to Harper Collins except as set forth in the next
sentence.  Fremantle shall not enter into
any such agreement with a third party within one (1) year after the expiration
of such fifteen (l5)-business day negotiation period on terms that are equal or
less favorable to Fremantle than those set forth in Fremantle’s final written
offer submitted to Harper Collins during such negotiation period without first
offering such terms to Harper Collins. 
Harper Collins shall have five (5) business days in which to accept such
offer in writing, and if Harper Collins does not so accept such offer, then
Fremantle shall be free to enter into such agreement with such third
party.  If Fremantle and Harper Collins
enter into any agreement with respect to the exploitation of Print Publication
rights, then (notwithstanding anything to the contrary contained in paragraph
5(a) above), Print Publication shall be excluded from the calculation of
Ancillary Net Proceeds.

 

(c)                                  U.S.
Syndication Subdistribution.  In the
event that Fremantle elects to engage a third party subdistributor that is not
an affiliate of Fremantle to syndicate Episodes of the Series in the free
television market in the United States, Fremantle will discuss in good faith
with FBC the possibility of engaging a FBC affiliate to be such subdistributor;
provided, however, that Fremantle shall have no obligation to conclude any such
arrangement with any FBC affiliate and shall be free to engage any
subdistributor it elects to engage.

 

6.                                       Home
Video.  ***.

 

7.                                       Record
Royalty.  ***.

 

8.                                       Sponsorships.  Fremantle and 19TV may, with FBC’s approval
and involvement, elect to develop one or more sponsorship packages to offer to
FBC’s third party sponsors buying traditional advertising time from FBC on the
Series (“Ad Time Sponsors”), which sponsorship

 

*** FOIA Confidential Treatment

 

15

 

packages shall include product
placements in the Series and other forms of in-show promotions for the Ad Time
Sponsor and may include off-air sponsorship opportunities in connection with
the Series for the Ad Time Sponsor (it being understood that FBC shall have no
interest in any advertising, endorsement or sponsorships using the name or
likeness of a Series winning artist or finalist).  Such sponsorship packages offered to Ad Time
Sponsors that include product placements in the Series and other forms of
in-show promotions shall hereinafter be referred to as the “Sponsorship
Packages”.  Fremantle, 19TV and FBC shall
mutually approve, in advance of the making of any offer, the offering price and
all Other Sponsorship Components (as defined below) of such Sponsorship
Packages to be offered to Ad Time Sponsors. 
Fremantle, 19TV and FBC shall coordinate their respective efforts in
soliciting Ad Time Sponsors and potential Ad Time Sponsors for such Sponsorship
Packages.  Without the approval of FBC,
Fremantle and 19TV may not enter into a Sponsorship Package agreement with any
third party that includes product placements in the Series as aired on FBC or
in-show promotions in the Series as aired on FBC.  Without the approval of Fremantle and 19TV,
FBC may only enter into sponsorship agreements relating to the Series with
third parties that contain a traditional advertising time buy plus, at FBC’s
election, additional sponsorship components that are customarily part of an exclusively
advertising time buy in the U.S. network television industry (“Pure Advertising
Time Buys”).  The terms of each
Sponsorship Package agreement with any Ad Time Sponsors that includes product
placements in the Series and other forms of in-show promotions shall be jointly
negotiated by Fremantle, 19TV and FBC, and such parties shall mutually approve
a reasonable, good faith allocation of revenues between the traditional
advertising time buy and the other sponsorship components (the “Other Sponsorship
Components”) in any such agreement based on the relative values of these
components; provided, however, that no less than *** percent (***%) of the
total revenues from each such agreement shall be allocated to the Other
Sponsorship Components and all such Sponsorship Package agreements with Ad Time
Sponsors shall be entered into in FBC’s name. 
For purposes of such allocation, the Other Sponsorship Components shall
be considered to include only such components that are not customarily part of
Pure Advertising Time Buys.  Any proposed
modification in the terms of any Sponsorship Package agreement with any Ad Time
Sponsor that would reduce the Other Sponsorship Component fees payable by the
Ad Time Sponsor shall require the prior written approval of Fremantle and
19TV.  Subject to the next sentence, FBC
shall pay to Fremantle *** percent (***%) of “Shared Sponsorship Net Proceeds”
(i.e., all nonreturnable revenues (other than revenues from Pure Advertising
Time Buys) actually received by or credited to FBC in connection with
sponsorship rights related to the Series (including without limitation the
revenues mutually-agreed to be allocated to the Other Sponsorship Component in
any Sponsorship Packages), after the deduction of all direct, out-of-pocket
costs and expenses actually paid by FBC to unaffiliated third parties solely in
connection with such Other Sponsorship Components).  For avoidance of doubt and notwithstanding
anything to the contrary contained herein, it is understood and agreed that in
the event any such Sponsorship Package includes any merchandising, telephony
(wireless or otherwise), voting or call-in, website, or non-sponsorship
components (which it may do only with the prior approval of FBC, Fremantle and
19TV), the revenue allocable to such components shall be controlled and split
as otherwise provided in other paragraphs of this Agreement or as agreed among
the parties.  Notwithstanding

 

*** FOIA Confidential Treatment

 

16

 

the foregoing, it is agreed
that if any such Sponsorship Package includes a wireless telephony component,
FBC shall pay to Fremantle *** percent (***%), and to 19TV *** percent (***%),]
of “Wireless Telephony Net Proceeds” (i.e., the non-returnable revenue
allocable to such wireless telephony component (as mutually agreed among FBC,
Fremantle and 19TV), after the deduction of all direct, out-of-pocket costs and
expenses actually paid by FBC to unaffiliated third parties solely in
connection with such wireless telephony component); provided, however, that
such percentages above in this sentence shall be *** percent (***%) with
respect to Wireless Telephony Proceeds from the agreement with AT&T
relating to the Second Production Order.

 

9.                                       On-Air
Tour Promotion.  FBC hereby consents
to the inclusion in any one or more Episodes of the Series produced for initial
broadcast during the last five (5) weeks of any Production Order of up to ten
(10) seconds in each such Episode promotional mentions (which may include dates
and venues) of any concerts or concert tours featuring Series contestants (it
being understood and agreed that references to the Series website hall not
count towards such ten (10)-second limitation). 
The form and substance of all such promotional mentions shall be subject
to the approval of FBC, which approval shall not be unreasonably withheld or
delayed.  19TV shall pay to FBC ***
percent (***%) of one hundred percent (100%) of 19TV’s tour net proceeds, if
any, in connection with concerts or concert tours featuring contestants who
appeared in any of the Episodes, which concerts or concert tours are actually
promoted in one or more Episodes as contemplated above.

 

10.                                 On-Air
Promotion of Contestant Single.  FBC
hereby consents to the inclusion in any one or more Episodes of the Series of
up to ten (10) seconds in each such Episode of promotional mentions of any
single containing sound recordings featuring one or more contestants from
Episodes of the Series (each, a “Contestant Single”).  The form and substance of all such
promotional mentions shall be subject to the approval of FBC, which approval
shall not be unreasonably withheld or delayed. 
Notwithstanding the foregoing, it is understood and agreed that FBC
consent is not required for the inclusion in any Episodes of promotions for any
Series-Branded Compilation Album/Single and that references to any
Series-Branded Compilation Album/Single shall not count towards such ten
(10)-second limitation.  19TV shall pay,
or cause 19 Recordings Limited or its nominee (as applicable) to pay, to FBC a
royalty of *** percent (***%) of the dealer price of any and all Contestant
Single(s) (other than any Series-Branded Compilation Album(s)/Single(s) on
which the royalty provisions set forth in paragraph 7 above shall apply) that is/are
actually promoted in one or more Episodes as contemplated above and for which
19 Recordings Limited or its nominee receives a royalty payment from the record
company or other entity undertaking the distribution of such Contestant
Single(s).

 

11.                                 Accounting
and Audit Rights.

 

(a)                                  Ancillary
Net Proceeds.  Fremantle shall
account to FBC with respect to FBC’s share of Ancillary Net Proceeds, if any,
on a semi-annual calendar year basis within ninety (90) days following the end
of each such semi-annual period provided there are payments due FBC, and such
accounting shall be accompanied by payment of FBC’s share of Ancillary

 

*** FOIA Confidential Treatment

 

17

 

Net Proceeds payable for such
semi-annual period.  During the term of
this Agreement, FBC or its designated certified public accountant may, at
Fremantle’s principal place of business and at reasonable times during business
hours upon reasonable advance, written notice, but no more than once per year,
inspect any relevant portions of books and records of Fremantle relating to
Ancillary Net Proceeds.  Any statement or
report submitted to FBC by Fremantle hereunder shall be deemed conclusively
true, accurate and binding as to all of the items and information contained
therein if not disputed in writing by FBC within eighteen (18) months after
such statement or report shall have been provided to FBC, which written notice
shall state with specificity the basis of such objection and the transactions
concerned.  FBC must commence an action
in a court of competent jurisdiction within twelve (12) months of the date of
such dispute or any claim or cause of action in connection therewith shall be
deemed waived.

 

(b)                                 Record
Royalties.  During the term of this
Agreement, FBC or its designated certified public accountant may at reasonable
times during business hours upon reasonable advance, written notice, but no
more than once per year, inspect any relevant portions of books and records of
19TV or 19 Recordings Limited or its nominee (as applicable) relating to the
royalty payable to FBC under paragraphs 7 and 10 above.  Any statement or report submitted to FBC by
19TV or 19 Recordings Limited or its nominee, as applicable, hereunder shall be
deemed conclusively true, accurate and binding as to all of the items and
information contained therein if not disputed in writing by FBC within eighteen
(18) months after such statement or report shall have been provided to FBC,
which written notice shall state with specificity the basis of such objection
and the transactions concerned.  FBC must
commence an action in a court of competent jurisdiction within twelve (12)
months of the date of such dispute or any claim or cause of action in connection
therewith shall be deemed waived.

 

(c)                                  Shared
Sponsorship Net Proceeds, Call-In Sponsorship Net Proceeds and Wireless
Telephony Net Proceeds.  FBC shall
account to Fremantle and 19TV with respect to Fremantle’s share of Shared
Sponsorship Net Proceeds and Fremantle and 19TV’s share of Call-In Sponsorship
Net Proceeds and Wireless Telephony Net Proceeds, if any, on a semi-annual
calendar year basis within ninety (90) days following the end of each such
semi-annual period provided there are payments due Fremantle and/or 19TV, and
such accounting shall be accompanied by payment of Fremantle’s share of Shared
Sponsorship Net Proceeds and Fremantle and 19TV’s share of Call-In Sponsorship
Net Proceeds and Wireless Telephony Net Proceeds payable for such semi-annual
period.  During the term of this
Agreement, Fremantle and/or 19TV (or their designated certified public
accountant(s)) may, at FBC’s principal place of business and at reasonable
times during business hours upon reasonable advance, written notice, but no
more than once per year, inspect any relevant portions of books and records of
FBC relating to Shared Sponsorship Net Proceeds, Call-In Sponsorship Net
Proceeds and Wireless Telephony Net Proceeds. 
Any statement or report submitted to Fremantle and 19TV by FBC hereunder
shall be deemed conclusively true, accurate and binding as to all of the items
and information contained therein if not disputed in writing by Fremantle
and/or 19TV within eighteen (18) months after such statement or report shall
have been provided to Fremantle and 19TV, which written notice shall state with
specificity the basis of such objection and the transactions concerned.  Fremantle and/or 19TV must commence an action
in a court of competent jurisdiction within twelve (12) months of the date of
such dispute or any claim or cause of action in connection therewith shall be
deemed waived.

 

18

 

12.                                 Approvals.  FBC shall have an approval right with respect
to the key elements of the Series, including the budget for each Episode (each,
an “Approved Budget”), host(s), contestants, executive producers (Cecile
Frot-Coutaz, Simon Fuller and Simon Jones are hereby pre-approved),
co-executive producers (Nigel Lythgoe, Ken Warwick and Brian Gadinsky are
hereby pre-approved), producers, director(s), music compositions (which musical
compositions are to be selected by 19TV, subject to budgetary and clearance
constraints, and approved by FBC after consultation with Fremantle), and
production sets for the Series.  FBC’s
approval rights under this Agreement shall be exercised reasonably and in good
faith so as not to prevent Fremantle’s on-schedule and on-budget production and
delivery of the Episodes.

 

13.                                 Talent.

 

(a)                                  Publicity
Services.  Fremantle shall include in
its agreements with the host(s), judges and each contestant appearing in any
Episode an obligation to appear on FBC programs to promote the Series.

 

(b)                                 Performing
Services.  Fremantle shall include in
its agreements with each of the final thirty (30) contestants appearing in Episodes
produced pursuant to any Production Order, provisions whereby each such
contestant agrees ***.

 

14.                                 Third
Party Obligations.

 

(a)                                  Advertising
and Promotion.  FBC shall comply with
all of Fremantle’s contractual restrictions and requirements of which FBC is
notified in writing and approves (which approval shall not to be unreasonably
withheld or delayed), and all guild and union restrictions and requirements, in
connection with the advertising and promotion of the Series and the Episodes,
including without limitation with regard to the use of music, clips, and names,
likenesses and other personal identification of individuals appearing in,
performing services in, or providing rights or materials in connection with,
the Series.  Fremantle will inform FBC if
Fremantle is unable to obtain music clearances within the Approved Budget for
use of any music contained in the Series in connection with advertising and
promotion of the Series, in which case, notwithstanding anything to the
contrary contained herein, FBC shall be responsible for obtaining and paying
for such music clearances if FBC elects to use such music in connection with
advertising and promoting the Series.

 

(b)                                 Credit.  FBC acknowledges that, unless and until
Fremantle and 19TV notify FBC to the contrary, Simon Fuller, Cecile Frot-Coutaz
and Simon Jones shall be entitled to executive producer credit on-screen in
each Episode on a shared card, that Nigel Lythgoe, Ken Warwick and Brian
Gadinsky shall be entitled to co-executive producer credit on-screen in each
Episode on a shared card, that Simon Fuller shall be entitled to “created by”
credit on-screen in each Episode, and that Fremantle and 19TV shall be entitled
to receive a company “in association with” credit (which may be in the form of
a logo or animated logo) on-screen in each Episode on a separate card at the
end of each Episode.  No casual or
inadvertent failure by FBC to comply with the credit obligations hereunder
shall be deemed a material breach of this

 

*** FOIA Confidential Treatment

 

19

 

Agreement; provided that FBC
shall make reasonable efforts to cure on a prospective basis any such failure
to accord credit by altering future prints and ads.

 

15.                                 Residuals
and Music Performance Clearance.  FBC
hereby agrees to reimburse Fremantle or its designee for all guild and union
residual and reuse obligations (including fringes and taxes thereon) arising
out of FBC’s exploitation of the Series and the Episodes hereunder.  FBC shall be solely responsible for clearing
and paying all music performance rights and fees related to FBC’s exploitation
of the Series and Episodes hereunder. 
Fremantle shall be responsible for obtaining all music synchronization
licenses necessary for FBC’s exhibition of the Episodes as permitted hereunder.

 

16.                                 Miscellaneous.

 

(a)                                  Assignment.  FBC may not assign or otherwise transfer this
Agreement or any of its rights or obligations hereunder in whole or in part
without the prior written consent of Fremantle and 19TV; provided, however,
that FBC may assign or otherwise transfer this Agreement and/or its rights or
obligations hereunder in whole or in part without Fremantle’s or 19TV’s consent
in connection with the sale or other transfer of all or substantially all of
FBC’s assets.  Fremantle and 19TV may not
assign or otherwise transfer this Agreement and/or any of its rights or
obligations hereunder in whole or in part without the prior written consent of
FBC; provided, however, that Fremantle may assign or otherwise transfer this
Agreement and/or their rights or obligations hereunder in whole or in part
without FBC’s consent in connection with the sale or other transfer of all or
substantially all of Fremantle’s assets and 19TV may assign or otherwise
transfer this Agreement and/or their rights or obligations hereunder in whole
or in part without FBC’s consent in connection with the sale or other transfer
of all or substantially all of 19TV’s assets. 
This Agreement will bind and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.

 

(b)                                 Notices.  All notices, demands, and other
communications to any party hereunder shall be in writing and shall be given to
such party at the address set forth below, or such other address as either
party may hereafter specify in writing, and may be given by means of hand
delivery, air mail, express mail, express courier service or facsimile.  All such notices will be deemed given only
upon receipt by the appropriate party.

 

If to Fremantle:

 

 

 

 

 

 

 

If to 19TV:

 

 

 

 

 

 

20

 

If to FBC:

 

 

 

 

 

 

(c)                                  Governing
Law.  This Agreement shall be deemed
to have been made under and shall be interpreted in accordance with and
governed by the internal laws of the State of California and shall be deemed by
the parties and for purposes of choice of law, to be executed and performed
wholly in the County of Los Angeles.  Any
action or proceeding related to or arising out of this Agreement shall be
brought and maintained in the state and federal courts located in Los Angeles
County, California.  The parties
stipulate that either such forum is convenient to them.  Any process in such proceeding may be served
by, among other methods, delivering it or mailing it, by registered or certified
mail, directed to, as applicable, Fremantle’s, or FBCs address as designated in
this Agreement.  Any such delivery or
mail service shall have the same effect as personal service within the State of
California.  The foregoing shall not
preclude any party hereto from seeking enforcement of any order or judgment
rendered by any California court in any other court or forum.

 

(d)                                 Counterparts.  This Agreement may be executed by facsimile
and in separate counterparts, each of which will be deemed an original, and
when executed, separately or together, all of such counterparts will constitute
a single original instrument, effective in the same manner as if all parties
hereto had executed one and the same instrument.  Any executed faxed copy hereof shall be deemed
to be an original.

 

(e)                                  Withholdings.  All payments to any party hereunder shall be
subject to such withholdings and deductions as may be permitted or required by
law.

 

(f)                                    No
Partnership.  Nothing herein shall
constitute a partnership between or joint venture among any of the parties
hereto or constitute any party the agent of any other.  No party hereto shall hold itself out
contrary to the terms of this paragraph. 
No party hereto shall become liable by any representation, act or
omission of any other party contrary to the provisions hereof.

 

(g)                                 Waivers,
Amendments, Prior Agreement and More Formal Agreement.  No waiver of any term or condition of this
Agreement shall be construed as a waiver of any other term or condition; nor
shall any waiver of any default under this Agreement be construed as a waiver
of any other default.  The descriptive
headings of the sections of this Agreement are for convenience only and do not
constitute a part of this Agreement.  The
parties hereto anticipate entering into a more formal agreement with respect to
the subject matter hereof, which such agreement shall contain additional FBC
standard provisions for agreement of this type consistent with the terms
hereof, subject to good faith negotiations. 
Until such more formal agreement is prepared and executed by all
parties, or if for any reason it is not prepared and executed by all parties,
it is agreed that this Agreement constitutes a binding contract between the
parties, contains the full and complete understanding among the parties hereto
with respect to the subject matter hereof, supersedes all prior agreements and
understandings, whether written or oral,

 

21

 

pertaining thereto and cannot
be modified except by a written instrument signed by each party hereto.

 

22

 

Please indicate your acceptance of and agreement with the foregoing by
signing in the space provided below and returning an executed copy hereof to
Fremantle.

 

	
  Sincerely,

  	
   

  
	
   

  	
   

  
	
  FremantleMedia North America, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  19TV Limited

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED AND AGREED TO

  AS OF THE DATE HEREOF:

  	
   

  
	
   

  	
   

  
	
  Fox Broadcasting Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Its:

  	
   

  	
   

  

 

23

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