DEFA14A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported): June 1, 2007

CKX, INC.

(Exact name of registrant as specified in charter)

Delaware	0-17436	27-0118168
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)
	650 Madison Avenue	10022
	New York, New York	(Zip Code)
	(Address of principal
	executive offices)

Registrant’s telephone number, including area code: (212) 838-3100

(Former Name or Former Address, if

Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

þ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

Merger Agreement and Management Cooperation Agreement

On June 1, 2007, CKX, Inc., a Delaware corporation (“CKX” or the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with 19X, Inc., a Delaware corporation (“Parent”), and 19X Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”).

Pursuant to the terms of the Merger Agreement, Merger Sub will be merged with and into the Company, and as a result, the Company will continue as the surviving corporation and as a wholly owned subsidiary of Parent (the “Merger”). All of Parent’s capital stock is owned by Robert F.X. Sillerman, Chairman and Chief Executive Officer of CKX, and Simon R. Fuller, a director of CKX and the Chief Executive Officer of 19 Entertainment Limited, a wholly owned subsidiary of CKX. At the effective time of the Merger, each outstanding share of common stock of the Company (the “Common Stock”) will be cancelled and converted into the right to receive $13.75 in cash, without interest (the “Merger Consideration”). Also at the effective time of the Merger, each outstanding share of Series B Convertible Preferred Stock of the Company (“Series B Preferred Stock”) will, at the election of the holder, (i) be canceled and converted into the right to receive the consideration contemplated by the terms of the Company’s Certificate of Incorporation, or (ii) subject to the terms of the Merger Agreement, remain outstanding as a share of Series B Preferred Stock with terms identical to the terms of the shares of Series B Preferred Stock currently outstanding, and each outstanding share of Series C Convertible Preferred Stock of the Company (“Series C Preferred Stock”) automatically will (x) in the event the holder of Series B Preferred Stock chooses to receive the consideration specified in clause (i) above, be canceled and converted into the right to receive the Merger Consideration, or (y) in the event that the holder of the Series B Preferred Stock chooses to receive the consideration specified in clause (ii) above, subject to the terms of the Merger Agreement, remain outstanding as a share of Series C Preferred Stock with terms identical to the terms of the shares of Series C Preferred Stock currently outstanding.

Consummation of the Merger is subject to various customary closing conditions, including approval of the transaction by the Company’s stockholders, absence of a “material adverse effect” on the Company and receipt of regulatory approvals, as well as to the distribution by the Company of 50% of its interest in FXLR (as defined below) to its stockholders (as more fully described below), stockholders of the Company holding no more than 7.5% of the outstanding Common Stock exercising appraisal rights under Delaware law, and there being no pending litigation which has the effect of preventing the consummation of Parent’s financing on terms substantially similar to the terms set forth in financing commitment letters to be obtained by Parent, as described below.

The Company’s Board of Directors, acting upon the unanimous recommendation of a special committee comprised entirely of independent directors (the “Special Committee”), has (except for directors affiliated with Parent or Merger Sub, who abstained) unanimously approved the Merger Agreement and recommended that the Company’s stockholders adopt the Merger Agreement and approve the Merger. The Special Committee engaged Houlihan, Lokey, Howard & Zukin, Inc. (“Houlihan Lokey”) to serve as independent financial advisor to the Special Committee. On June

1, 2007, Houlihan Lokey delivered an opinion to the Special Committee and the Board of Directors that as of the date of the opinion, the Merger Consideration to be received by holders of the Company’s Common Stock is fair from a financial point of view to such holders (other than holders of Common Stock that are affiliated with Parent).

Parent has informed the Company that it expects to finance the acquisition through a combination of equity and debt financing, with equity constituting approximately $600 million of the overall financing package. The proceeds of the financing will be used by Parent to pay the aggregate Merger Consideration and related fees and expenses of the transactions contemplated by the Merger Agreement. Although Parent has not received any financing commitments to date, Parent has advised the Company that it has received “cold comfort” indications for financing sufficient to consummate the proposed transaction. Parent has 60 days from the date of the Merger Agreement to deliver financing commitment letters to the Company from equity investors and financial institutions committing to provide an amount sufficient to pay the total amount of the Merger Consideration. Messrs. Sillerman and Fuller, as well as certain other members of senior management of the Company are expected to contribute shares of Common Stock representing approximately $200 million to Parent as part of the financing, with Mr. Sillerman contributing a substantial portion of the contributed shares and Mr. Fuller contributing his entire equity ownership in the Company. The Company and its subsidiaries have agreed to use their commercially reasonable efforts to cooperate with Parent’s financing sources to finalize Parent’s financing commitments. Completion of the Merger is not conditioned upon Parent receiving financing.

Pursuant to a Management Cooperation Agreement entered into in connection with the Merger Agreement, Messrs. Sillerman and Fuller and certain other members of senior management of the Company have agreed to vote their shares of Common Stock in favor of the Merger. In addition, they have agreed to vote their shares in favor of an alternative agreement entered into by the Company during the “go shop” period (as more fully described below) with respect to an offer that the Board of Directors, acting through the Special Committee, deems more favorable than the transactions contemplated by the Merger Agreement to the stockholders of the Company, from a financial point of view, provided that such alternative agreement provides for a cash purchase price of at least $0.25 per share greater than the Merger Consideration.

The Merger Agreement contains a “go-shop” provision, pursuant to which, for 45 days after the date of the Merger Agreement, the Company, under the direction of the Special Committee, is permitted to solicit competing proposals, terminate the Merger Agreement and enter into an alternative agreement with respect to a “superior proposal” (an offer that the Board of Directors, acting through the Special Committee, deems more favorable to the Company’s stockholders than the transactions contemplated by the Merger Agreement, from a financial point of view) without the payment of any expenses or a termination fee to Parent. Houlihan Lokey will conduct the solicitation of competing proposals on behalf of the Company during such 45-day period, under the direction of the Special Committee. Following the “go shop” period, the Company is subject to a “no shop” restriction on its ability to solicit third-party acquisition proposals or engage in discussions or negotiations with respect to such proposals (other than proposals from parties that submitted a written indication of interest during the “go shop” period that the Board of Directors, acting through the Special Committee, believes could result in a “superior proposal”).

The Company may terminate the Merger Agreement after the “go shop” and enter into an alternative agreement if its Board of Directors, acting through the Special Committee, determines

in good faith that the agreement constitutes a “superior proposal”, and otherwise complies with the terms of the Merger Agreement, including (if Parent has failed to make an offer that is at least as favorable from a financial point of view as the superior proposal) payment of Parent’s and its affiliates’ actual out-of-pocket fees and expenses up to a maximum of $10 million. The Company must also pay Parent’s and its affiliates’ fees and expenses (up to $10 million) if Parent or the Company terminates the Merger Agreement following the failure by the Company’s stockholders to approve the Merger (so long as Mr. Sillerman and his affiliates parties thereto have complied in all material respects with the Management Cooperation Agreement), or if Parent terminates the Merger Agreement due to a breach by the Company of its representations, warranties or covenants contained in the Merger Agreement, or the occurrence of a “material adverse effect” on the Company (other than in certain circumstances a breach or material adverse effect caused by the Company’s management), in each case which prevents the Merger from closing by February 25, 2008 (the “Outside Date”), or due to the occurrence of a “triggering event” (defined generally as the Board of Directors failing to recommend the Merger Agreement for adoption by the Company’s stockholders or withdrawing or changing its recommendation in a manner adverse to Parent or approving or recommending an alternative transaction, or the Company materially breaching its covenant relating to the meeting of stockholders for approval of the Merger (and related SEC filings) or the “no shop” covenant). The Merger Agreement further provides that upon termination due to a breach of any representation, warranty, covenant or agreement on the part of Parent or Merger Sub which prevents the Merger from closing by the Outside Date, a material breach of the Management Cooperation Agreement by Mr. Sillerman or his affiliates that are parties thereto, or a failure by Parent to obtain the necessary financing by the Outside Date, Parent must pay to the Company a termination fee of $37 million, payable at the option of Parent in cash or Common Stock valued at a price of $12.00 per share. If the failure by Parent to obtain financing is due to pending litigation with respect to the transaction and all other closing conditions have been satisfied, the Outside Date may be extended to April 25, 2008. If Parent is unable to consummate the financing by this extended Outside Date due to the pending litigation, Parent must pay the Company’s actual out-of-pocket fees and expenses up to a maximum of $15 million. Mr. Sillerman has guaranteed the payment by Parent of the termination fees described above.

The foregoing summary of the Merger Agreement, and the transactions contemplated thereby, does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement and Management Cooperation Agreement and the Company’s press release dated June 1, 2007, which are attached hereto as Exhibits 2.1, 2.2 and 99.1, respectively, and incorporated herein by reference.

The parties expect to close the transaction during the fourth quarter of 2007.

The Merger Agreement and Management Cooperation Agreement have been included to provide investors and security holders with information regarding their terms. They are not intended to provide any factual information about the Company. The representations, warranties and covenants contained in the Merger Agreement and Management Cooperation Agreement were made only for purposes of such agreements and as of the specific dates set forth therein, were solely for the benefit of the parties to the Merger Agreement and Management Cooperation Agreement, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement and Management Cooperation Agreement, instead of establishing these matters as facts, and may be subject to standards of materiality applicable

to the contracting parties that differ from those applicable to investors. Investors and security holders are not third party beneficiaries under the Merger Agreement or Management Cooperation Agreement, and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or conditions of the Company, Parent or Merger Sub or any of their respective subsidiaries or affiliates or any other parties thereto. Moreover, information concerning the subject matter of the representation and warranties may change after the date of the Merger Agreement and Management Cooperation Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosure.

Important Additional Information Regarding the Merger will be Filed with the SEC: In connection with the proposed Merger, the Company will file with the Securities and Exchange Commission (“SEC”) a proxy statement and a Rule 13e-3 transaction statement on Schedule 13e-3. BEFORE MAKING A VOTING DECISION ABOUT THE PROPOSED TRANSACTION INVESTORS AND SECURITY HOLDERS ARE STRONGLY ADVISED TO READ THE PROXY STATEMENT, THE SCHEDULE 13e-3 AND OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders may obtain a free copy of the proxy statement, the Schedule 13e-3 and other documents filed by CKX, Inc. (when available) at the SEC’s website at http://www.sec.gov. The proxy statement, the Schedule 13e-3 and such other documents may also be obtained for free by directing such request to CKX, Inc. Investor Relations, 650 Madison Avenue, New York, New York 10022 or on the Company’s website at http://www.ckx.com.

The Company and its directors, executive officers and certain other members of its management and employees may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the proposed Merger. Information regarding the interests of the Company’s participants in the solicitation will be included in the proxy statement relating to the proposed Merger when it becomes available.

Investment in FX Luxury Realty, LLC and License Agreements

On June 1, 2007, the Company acquired 50% of the common membership interests in FX Luxury Realty, LLC, a Delaware limited liability company (“FXLR”) engaged in the ownership and development of real estate-based projects. The consideration for the acquired interests (the “FXLR Investment”) was $100 million, paid in cash at closing. The Company funded the $100 Million purchase price with proceeds from a drawdown under its amended credit facility, as more fully described below.

Simultaneous with the CKX investment in FXLR, FXLR entered into a worldwide license agreement with Elvis Presley Enterprises, Inc., a 85% owned subsidiary of CKX (“EPE”), granting FXLR the exclusive right to utilize Elvis Presley-related intellectual property in connection with the development, ownership and operation of Elvis Presley-themed hotels, casinos and certain other real estate-based projects and attractions around the world. FXLR also entered into a worldwide license agreement with Muhammad Ali Enterprises LLC, a 80% owned subsidiary of CKX (“MAE”), granting FXLR the right to utilize Muhammad Ali-related intellectual property in connection with Muhammad Ali-themed hotels and certain other real estate-based projects and attractions. The terms of the License Agreements are described more fully below under “License Agreements.”

In connection with the FXLR Investment, the Company, FXLR, Flag, Robert F.X. Sillerman and certain other members of Flag entered into a Repurchase Agreement (the “Repurchase Agreement”) designed to ensure the value of the Company’s investment in FXLR under certain limited circumstances. Specifically, if none of certain specified events designed to establish the value of the FXLR Investment at its original purchase price have occurred prior to the second anniversary of the date of the stockholder distribution (as described below), Flag, Mr. Sillerman and certain other members of Flag shall be required to contribute such number of shares of FXLR back to FXLR as would result in the shares held by CKX and its holders being worth the aforementioned purchase price. If the merger agreement (as described above) closes, the Company becomes subject to the contribution obligation along with Flag, Mr. Sillerman and the specified members of Flag, each in a proportionate amount based on share ownership, with the intent that the value of the shares of FXLR distributed to the CKX stockholders in the distribution continue to retain their proportionate value of the original FXLR Investment.

About FXLR

FXLR owns a 50% interest in entities that own and control 17.72 contiguous acres of land located at the corner of Harmon and Las Vegas Boulevard in Las Vegas, Nevada (the “Park Central Properties”) and has entered into a binding agreement to acquire the other 50% of such entities. The acquisition of the remaining 50% of such entities, which will give FXLR 100% ownership and control of the Park Central Properties, is expected to close no later than July 29, 2007.

FXLR intends to evaluate and pursue a retail, hotel, commercial and residential development project on the Park Central Properties. In addition, FXLR will pursue similar real estate and attraction based projects throughout the world, including the development of one or more hotels near by or contiguous to the Graceland property in Memphis Tennessee, as more fully described below under “Elvis Presley License Agreement — Hotel at Graceland.”

In addition to its interest in the Park Central Properties and its plans with respect to a Graceland-based hotel, FXLR directly and through subsidiaries, holds 836,588 shares of common stock, par value $0.0001 per share (“Riv Shares”), in Riviera Holdings Corporation [AMEX:RIV], a company that owns and operates the Riviera Hotel & Casino in Las Vegas, Nevada (“Riviera”), as well as a 50% economic interest in an option to acquire an additional 1,147,550 Riv Shares at a price of $23 per share (the “Riv Option”). On May 16, 2007, Riviera Acquisitions Holdings, a 57% owned subsidiary of FXLR, made an offer to acquire the remaining outstanding shares of Riviera at a price of $34 per share. The closing price of Riv Shares on the American Stock Exchange on May 30, 2007 was $36.35 per share.

Affiliated Elements of Transaction

Flag Luxury Properties LLC, a Delaware limited liability company and private real estate development company (“Flag”), owns the other 50% common membership interests in FXLR and retains a $45 million preferred priority distribution right, which amount will be payable upon the consummation of certain predefined capital transactions. Robert F.X. Sillerman, the Chairman and Chief Executive Officer of the Company, owns, directly and indirectly, an approximate 30% interest in Flag. Based on his ownership interests in Flag, Mr. Sillerman will be entitled to receive his pro rata participation of the $45 million priority distribution right held by Flag, when paid by FXLR.

In addition, Mr. Sillerman has provided a personal guarantee for a $23 million loan from Credit Suisse to FXLR.

Approval Process

The Company’s Board of Directors, acting upon the unanimous recommendation of the Special Committee, has (except for directors affiliated with Parent or Merger Sub, who abstained) unanimously approved the FXLR Investment and the license agreements. On June 1, 2007, Houlihan Lokey delivered an opinion to the Special Committee and the Board of Directors that as of the date of the opinion, the terms of the FXLR Investment and the licenses were fair to the

holders of the Company’s Common Stock (other than holders of Common Stock that are affiliated with Parent) from a financial point of view.

In addition to the approvals described above, the terms of the license agreements were approved by the minority equity owners of EPE and MAE.

Reorganization, Stockholder Distribution and Mandatory Flag Distribution

Under the terms of the purchase agreement governing the FXLR Investment, the Company has agreed to distribute one-half of its interests in FXLR (representing a 25% common membership interests therein) to its stockholders through a registered distribution, on the basis of one share of FXLR for each CKX share held by such stockholders as of a to be determined record date. FXLR has agreed to file a registration statement with the SEC as soon as is practical to register the shares to be distributed by CKX to its stockholders. CKX will consummate the distribution as soon as is commercially practicable following effectiveness of the registration statement. In addition, Flag has agreed to a mandatory distribution of its interests in FXLR (except for Flag’s preferred priority distribution right) to the members of Flag, including Mr. Sillerman. Immediately prior to the distributions, FXLR will be reorganized so that its members, and therefore the distributees in both the CKX distribution and the Flag distribution, will receive shares of a Delaware corporation that will wholly own all of the interests in the current FXLR (except for Flag’s preferred priority distribution right). Following consummation of the distributions, the stockholders of CKX will hold approximately 25% of the outstanding shares of common stock of FXLR (the “FXLR Shares”), CKX will hold approximately 25% of the FXLR Shares and the members of Flag will hold approximately 50% of the FXLR Shares.

The distribution is intended to allow current CKX stockholders to share directly in the continued growth and exploitation of the existing Elvis Presley and Muhammad Ali intellectual property rights and assets, more specifically in the areas to be pursued by FXLR in accordance with the terms of the license agreements. Completion of the distribution is a condition precedent to the closing of the Merger. Conversely, consummation of the distribution is not conditioned on the closing of the Merger.

Rights Offering

As soon as is commercially practicable following the distribution described above, FXLR will offer its stockholders a right to purchase additional shares of FXLR in a rights offering. Both CKX and Flag (on behalf of itself and its members), which immediately prior to the rights offering will own 25% and 50% of the outstanding common stock of FXLR, respectively, have agreed to waive their rights to participate in the rights offering. As a result, the only stockholders who may participate in the rights offering will be the CKX stockholders who received their FXLR Shares in the distribution. The rights offering will take place as soon as a registration statement registering the rights is declared effective by the SEC. FXLR intends to generate approximately $100 million in gross proceeds from the rights offering, if it is fully subscribed. It is anticipated that following the closing of the rights offering, and assuming full subscription (which will be guaranteed by a backstop from a to be determined third party), FXLR will be owned 40% by the members of Flag, 40% by public stockholders (consisting of the CKX stockholders who received shares in the distribution and acquire shares in the rights offering) and 20% by CKX.

Elvis Presley License Agreement

Grant of Rights

Simultaneous with the FXLR Investment, EPE entered into a worldwide exclusive license agreement with FXLR, granting FXLR the right to use Elvis Presley-related intellectual property in connection with designing, constructing, operating, and promoting Elvis Presley-themed real estate and attraction based properties, including Elvis Presley-themed hotels, casinos, theme parks, lounges and clubs (subject to certain restrictions). The license also grants FXLR the non-exclusive right to use Elvis Presley-related intellectual property in connection with designing, constructing, operating and promoting Elvis Presley-themed restaurants. Under the terms of the license agreement, FXLR has the right to manufacture and sell merchandise relating to each Elvis Presley property at the applicable property, but EPE will have final approval over all types and categories of merchandise that may be sold by FXLR. If FXLR has not opened an Elvis Presley-themed restaurant, theme park and/or lounge within 10 years, then the rights for the category not exploited by FXLR revert to EPE.

FXLR’s rights under the license are subject to the Company’s obligations to the minority interest holder of EPE, such as a restriction that the Elvis Presley intellectual property not be used in a manner that would tarnish the reputation or public image of Elvis Presley or EPE.

Hotel at Graceland

Under the terms of the license agreement, FXLR is given the option to construct and operate one or more of the hotels to be developed as part of the Company’s previously disclosed plan to grow the Graceland experience as the centerpiece of the Whitehaven section of Memphis, which plans include building an expanded visitors center, developing new attractions and merchandising shops and building a new boutique convention hotel.

Royalty Payments and Minimum Guarantees

FXLR will pay to EPE an amount equal to 3% of gross revenues generated at any Elvis Presley property (including gross revenues derived from lodging, entertainment attractions, ticket sales, sale of food and beverages, rental space, but excluding gambling if payment of percentage of gambling royalty revenues would be contrary to law or require EPE to be licensed) and 10% of gross revenues with respect to the sale of merchandise. In addition, FXLR will pay EPE a set dollar amount per square foot of casino floor space at each Elvis Presley property where percentage royalties are not paid on gambling revenues.

FXLR will pay a guaranteed annual minimum royalty payment to EPE of $9 million in 2007, 2008, and 2009, $18 million in 2010, 2011, and 2012, $22 million in 2013, 2014, 2015 and 2016, and increasing by 5% for each year thereafter, in each case recoupable only against royalties payable during the year in question. The initial payment under the license agreement will be due on the earlier of the completion of the rights offering described above or December 1, 2007.

Beginning on the date of the agreement and ending on the eighth anniversary of the opening of the first Elvis Presley themed hotel, FXLR has the right to buy out all remaining royalty payment obligations due to EPE under the license agreement by paying EPE $450 million. FXLR would be required to buy out royalty payments due to MAE under its license agreement with MAE at the same time that it exercises its buyout right under the EPE license agreement.

Termination Rights

Unless FXLR exercises its buy-out right, either FXLR or EPE will have the right to terminate the license upon the date that is the later of (i) 10 years after the effective date of the license, or (ii) the date on which FXLR’s buy-out right expires. If such right is not exercised, either FLXR or EPE will again have the right to so terminate the license on each 10^th anniversary of such date. In the event that FXLR exercises its termination right, then (x) the license agreement between FXLR and MAE will also terminate and (y) FXLR will pay to EPE a termination fee of $45 million. Upon any termination, the rights granted to FXLR (including the rights granted by FXLR to any project company to develop an Elvis Presley-themed real estate property) will remain in effect with respect to all Elvis Presley-related real estate properties that are open or under construction at the time of such termination, provided that royalties continue to be paid to EPE.

Muhammad Ali License Agreement

Grant of Rights

Simultaneous with the FXLR Investment, MAE entered into a worldwide exclusive license agreement with FXLR, granting MAE the right to use Muhammad Ali-related intellectual property in connection with designing, constructing, operating, and promoting Muhammad Ali-themed real estate and attraction based properties, including Muhammad Ali-themed hotels and retreat centers (subject to certain restrictions). Under the terms of the license agreement, FXLR has the right to manufacture and sell merchandise relating to each Muhammad Ali property at the applicable property, but MAE will have final approval over all types and categories of merchandise that may be sold by FXLR.

FXLR’s rights under the license are subject to the Company’s obligations to the minority interest holder of MAE, such as a restriction that the Muhammad Ali intellectual property not be used in a manner that would present Muhammad Ali in a negative and disparaging light or in a manner that is offensive, immoral, derogatory or in poor taste, that is offensive to the religious beliefs of Muhammad Ali, or that would tarnish the reputation or public image of Muhammad Ali or MAE.

Royalty Payments and Minimum Guarantees

FXLR will pay to MAE an amount equal to 3% of gross revenues generated at any Muhammad Ali property (including gross revenues derived from lodging, entertainment attractions, ticket sales, sale of food and beverages and rental space) and 10% of gross revenues with respect to the sale of merchandise.

FXLR will pay a guaranteed annual minimum royalty payment to EPE of $1 million in 2007, 2008, and 2009, $2 million in 2010, 2011, and 2012, $3 million in 2013, 2014, 2015 and 2016 and increasing by 5% for each year thereafter. The initial payment under the license agreement will be due on the earlier of the completion of the rights offering described above or December 1, 2007.

Beginning on the date of the agreement and ending on the eighth anniversary of the opening of the first Elvis Presley themed hotel, FXLR has the right to buy-out all remaining royalty payment obligations due to MAE under the license agreement by paying MAE $50 million. FXLR would

be required to buy-out royalty payments due to EPE under its license agreement with EPE at the same time that it exercises its buy-out right under the MAE license agreement.

Termination Rights

Unless FXLR exercises its buy-out right, either FXLR or MAE will have the right to terminate the license upon the date that is the later of (i) 10 years after the effective date of the license, or (ii) the date on which FXLR’s buy-out right expires. If such right is not exercised, either FLXR or MAE will again have the right to so terminate the license on each 10^th anniversary of such date. In the event that FXLR exercises its termination right, then (x) the agreement between FXLR and EPE will also terminate and (y) FXLR will pay to MAE a termination fee of $5 million. Upon any termination, the rights granted to FXLR (including the rights granted by FXLR to any project company to develop a Muhammad Ali-themed real estate property) will remain in effect with respect to all Muhammad Ali-related real estate properties that are open or under construction at the time of such termination, provided that royalties continue to be paid to MAE.

Amendment of $125 Million Revolving Credit Agreement

In connection with the Company’s investment in FXLR, the Company entered into an agreement with Bear Stearns Corporate Lending Inc., as administrative agent, to amend its $125 million revolving credit agreement, to, among other things, increase the amount of the credit facility by $25 million, to a total of $150 million, and to permit the investment by the Company in FXLR and the subsequent distribution to the Company’s stockholders of half of the Company’s equity interests in FXLR.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated as of June 1, 2007, by and among 19X, Inc., 19 Acquisition Corp. and CKX, Inc. (Pursuant to Item 601(b)(2) of Regulation S-K, the Company agrees to furnish, supplementally, a copy of any exhibit or schedule omitted from the Merger Agreement to the SEC upon request.)
2.2	Management Cooperation Agreement, dated as of June 1, 2007, by and among CKX, Inc. and each of the stockholders set forth on Schedule I thereto.
2.3	Membership Interest Purchase Agreement, dated as of June 1, 2007, by and among FX Luxury Realty, LLC, CKX, Inc., and Flag Luxury Properties, LLC.
2.4	Repurchase Agreement, dated as of June 1, 2007, by and among FX Luxury Realty, LLC, CKX, Inc., Flag Luxury Properties, LLC, Robert F.X. Sillerman, Brett Torino and Paul C. Kanavos
99.1	Press Release dated June 1, 2007.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CKX, INC.
BY:	/s/  Howard J. Tytel
Name:	Howard J. Tytel
Title:	Senior Executive Vice President

DATE: June 1, 2007

INDEX TO EXHIBITS

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated as of June 1, 2007, by and among 19X, Inc., 19 Acquisition Corp. and CKX, Inc. (Pursuant to Item 601(b)(2) of Regulation S-K, the Company agrees to furnish, supplementally, a copy of any exhibit or schedule omitted from the Merger Agreement to the SEC upon request.)
2.2	Management Cooperation Agreement, dated as of June 1, 2007, by and among CKX, Inc. and each of the stockholders set forth on Schedule I thereto.
2.3	Membership Interest Purchase Agreement, dated as of June 1, 2007, by and among FX Luxury Realty, LLC, CKX, Inc., and Flag Luxury Properties, LLC.
2.4	Repurchase Agreement, dated as of June 1, 2007, by and among FX Luxury Realty, LLC, CKX, Inc., Flag Luxury Properties, LLC, Robert F.X. Sillerman, Brett Torino and Paul C. Kanavos
99.1	Press Release dated June 1, 2007.

EX-2.1

EXHIBIT 2.1

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

19X, INC.

19X ACQUISITION CORP.

AND

CKX, INC.

June 1, 2007

ARTICLE I DEFINITIONS		2
SECTION 1.1	DEFINITIONS	2
SECTION 1.2	TERMS GENERALLY	9
ARTICLE II THE MERGER		9
SECTION 2.1	THE MERGER	9
SECTION 2.2	CONVERSION OF SECURITIES	10
SECTION 2.3	PAYMENT OF CONSIDERATION FOR MERGER SHARES AND PREFERRED SHARES	12
SECTION 2.4	TREATMENT OF OPTIONS AND WARRANTS	14
ARTICLE III THE SURVIVING CORPORATION		15
SECTION 3.1	CERTIFICATE OF INCORPORATION	15
SECTION 3.2	BYLAWS	15
SECTION 3.3	DIRECTORS AND OFFICERS	15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY		15
SECTION 4.1	CORPORATE EXISTENCE AND POWER	15
SECTION 4.2	CORPORATE AUTHORIZATION; COMPANY FAIRNESS OPINION	16
SECTION 4.3	GOVERNMENTAL AUTHORIZATION	17
SECTION 4.4	CAPITALIZATION	17
SECTION 4.5	REPORTS AND FINANCIAL STATEMENTS	18
SECTION 4.6	DISCLOSURE DOCUMENTS	19
SECTION 4.7	FINDERS’ FEES	19
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB		20
SECTION 5.1	CORPORATE EXISTENCE AND POWER	20
SECTION 5.2	CORPORATE AUTHORIZATION	20
SECTION 5.3	GOVERNMENTAL AUTHORIZATION	20
SECTION 5.4	NON-CONTRAVENTION	21
SECTION 5.5	DISCLOSURE DOCUMENTS	21
SECTION 5.6	FINDERS’ FEES	21
SECTION 5.7	SOLVENCY OF THE COMPANY FOLLOWING COMPLETION OF THE MERGER	21
SECTION 5.8	MANAGEMENT AGREEMENTS	22
ARTICLE VI COVENANTS		22

ii 

SECTION 6.1	CONDUCT OF THE COMPANY AND SUBSIDIARIES	22
SECTION 6.2	STOCKHOLDER MEETING; PROXY MATERIALS AND OTHER SEC FILINGS	22
SECTION 6.3	ACCESS TO INFORMATION	24
SECTION 6.4	FINANCING	24
SECTION 6.5	SOLICITATION	26
SECTION 6.6	RULE 16B-3	30
SECTION 6.7	DIRECTOR AND OFFICER LIABILITY	30
SECTION 6.8	COMMERCIALLY REASONABLE EFFORTS	32
SECTION 6.9	CERTAIN FILINGS	32
SECTION 6.10	PUBLIC ANNOUNCEMENTS	33
SECTION 6.11	FURTHER ASSURANCES	33
SECTION 6.12	NOTICES OF CERTAIN EVENTS	33
SECTION 6.13	DISPOSITION OF LITIGATION	34
SECTION 6.14	EMPLOYEE MATTERS	34
SECTION 6.15	CONTROL OF OPERATIONS	35
SECTION 6.16	RESIGNATIONS	35
ARTICLE VII CONDITIONS TO THE MERGER		36
SECTION 7.1	CONDITIONS TO THE OBLIGATIONS OF EACH PARTY	36
SECTION 7.2	CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB	36
SECTION 7.3	CONDITIONS TO THE OBLIGATIONS OF THE COMPANY	37
ARTICLE VIII TERMINATION		37
SECTION 8.1	TERMINATION	37
SECTION 8.2	TERMINATION FEE	40
SECTION 8.3	EFFECT OF TERMINATION	41
ARTICLE IX MISCELLANEOUS		42
SECTION 9.1	NOTICES	42
SECTION 9.2	SURVIVAL	43
SECTION 9.3	AMENDMENTS; NO WAIVERS	43
SECTION 9.4	EXPENSES	44
SECTION 9.5	SUCCESSORS AND ASSIGNS	44

iii 

SECTION 9.6	GOVERNING LAW	44
SECTION 9.7	COUNTERPARTS; EFFECTIVENESS; THIRD PARTY BENEFICIARIES	44
SECTION 9.8	SEVERABILITY	44
SECTION 9.9	SPECIFIC PERFORMANCE	45
SECTION 9.10	ENTIRE AGREEMENT	45
SECTION 9.11	JURISDICTION	45
SECTION 9.12	AUTHORSHIP	46
SECTION 9.13	LIMITED PAYMENT GUARANTEE	46

EXHIBITS

A.    Form of Contribution and Exchange Agreement
B.    Certificate of Incorporation of the Surviving Corporation
C.    Bylaws of the Surviving Corporation

Schedules

Schedule 1 — Executive Management Team
Schedule 2 — Senior Management Team
Schedule 3 — Voting Group

iv 

AGREEMENT AND PLAN OF MERGER

          This Agreement and Plan of Merger (this “Agreement”) is made and entered into as of this 1st day of June, 2007 by and among CKX, Inc., a Delaware corporation (the “Company”), 19X, Inc. a Delaware corporation (“Parent”), and 19X Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”).

RECITALS

          A. The Special Committee unanimously (i) has determined that the merger of Merger Sub with and into the Company on the terms and conditions set forth in this Agreement (the “Merger”) is in the best interests of the Company and its stockholders, (ii) has recommended that the Board of Directors of the Company approve and adopt this Agreement, and (iii) recommends that the Company stockholders adopt this Agreement and approve the Merger.

          B. The Board of Directors of the Company (except for directors affiliated with Parent or Merger Sub who abstained) (i) has determined that the Merger is in the best interests of the Company and its stockholders, (ii) has approved and adopted this Agreement, and (iii) has resolved to recommend that the Company stockholders adopt this Agreement and approve the Merger.

          C. The Board of Directors of Merger Sub has unanimously approved this Agreement. The Board of Directors of Parent has approved, and Parent, as the sole stockholder of Merger Sub, will approve, this Agreement, the Merger and the other transactions contemplated hereby.

          D. The Company, Parent and Merger Sub desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe certain conditions to the Merger, as set forth herein.

          E. Simultaneously with the execution of this Agreement, the Company is entering into a Membership Interest Purchase Agreement with FX Luxury Realty, LLC (“FX Luxury”) and Flag Luxury Properties, LLC (“Flag”), pursuant to which the Company shall purchase a 50% membership interest in FX Luxury and enter into certain license agreements with respect to the intellectual property of the Company (the “Flag License Agreements”). Prior to the Effective Time and as a condition precedent to the Merger, the Company will distribute to its stockholders shares of common stock of the successor corporation to FX Luxury, representing 25% of the then issued and outstanding shares of common stock of such corporation, all as more fully set forth in the Flag Transaction Agreements.

          F. Simultaneously herewith, each member of the Voting Group is entering into a Management Cooperation Agreement, pursuant to which, among other things, each such party has agreed to (i) vote his shares in favor of a Permitted Cash Agreement (as defined in the Management Cooperation Agreement), and (ii) to reasonably cooperate with the Company (acting through the Special Committee) in the Company’s efforts to solicit, evaluate and negotiate Company Acquisition Proposals as permitted by this Agreement.

          G. Simultaneously herewith, Robert F.X. Sillerman is entering into a letter agreement with the Company waiving as of the Effective Time his rights to any change-in-control or similar payments payable to him in connection with the transactions contemplated by this Agreement pursuant to his employment or other agreement with the Company.

AGREEMENT

          NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, intending to be legally bound, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

          SECTION 1.1 DEFINITIONS. For purposes of this Agreement, the following terms have the respective meanings set forth below:

          “Acceptable Confidentiality Agreement” has the meaning set forth in Section 6.5(f)(i).

          “Action” means any claim, action, litigation, arbitration, demand, mediation or any other proceeding, administrative, regulatory, judicial or other, by or before any Governmental Authority, arbitrator, mediator or other Person acting in a dispute resolution capacity.

          “Adverse Recommendation Change” has the meaning set forth in Section 6.5(d).

          “Affiliate” means, with respect to any Person, any other Person, directly or indirectly, controlling, controlled by, or under common control with, such Person. For purposes of this definition, the term “control” (including the correlative terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

          “Agreement” has the meaning set forth in the preamble to this Agreement.

          “Balance Sheet Date” means December 31, 2006.

          “Business Day” means any day other than the days on which banks in the City of New York are required or authorized to close.

          “Certificate of Incorporation” has the meaning set forth in Section 2.2(d).

          “Certificate of Merger” has the meaning set forth in Section 2.1(b).

          “Claim” has the meaning set forth in Section 6.7(a).

2

          “Closing” has the meaning set forth in Section 2.1(d).

          “Closing Date” has the meaning set forth in Section 2.1(d)

          “Common Stock” means the common stock of the Company, par value $0.01 per share.

          “Company” has the meaning set forth in the preamble to this Agreement.

          “Company Acquisition Proposal” has the meaning set forth in Section 6.5(f)(ii).

          “Company Employees” has the meaning set forth in Section 6.14(a).

          “Company Options” means the outstanding options to acquire shares of Common Stock granted under the Company’s 2005 Plan.

          “Company Proxy Statement” has the meaning set forth in Section 4.6.

          “Company Restricted Shares” means all shares of restricted Common Stock granted under the Company’s 2005 Plan.

          “Company SEC Reports” has the meaning set forth in Section 4.5(a).

          “Company Securities” has the meaning set forth in Section 4.4(b).

          “Company Stockholder Meeting” has the meaning set forth in Section 6.2(a).

          “Company’s 2005 Plan” means the Company’s 2005 Omnibus Long-Term Incentive Compensation Plan.

          “Contracts” means contracts, undertakings, commitments or agreements.

          “Contributing Holders” means any holder of shares of Common Stock or Preferred Stock who enters into a Contribution and Exchange Agreement or other agreement providing for such holder to acquire shares of capital stock of Parent immediately prior to the Effective Time.

          “Contribution and Exchange Agreement” means each agreement by and between Parent and the Contributing Holders, in the form set forth as Exhibit A hereto, pursuant to which such Contributing Holders will exchange all or a portion of their respective shares of Common Stock or Preferred Stock for shares of capital stock of Parent immediately prior to the Effective Time.

          “Current Policies” has the meaning set forth in Section 6.7(a).

          “Debt Commitment Letter” has the meaning set forth in Section 6.4(a).

          “Debt Financing” has the meaning set forth in Section 6.4(b).

3

          “DGCL” means the Delaware General Corporation Law, as amended.

          “Disbursing Agent” has the meaning set forth in Section 2.3(a).

          “Disclosure Letter” has the meaning set forth in the preamble to Article IV.

          “Dissenting Shares” has the meaning set forth in Section 2.2(e).

          “Effective Time” has the meaning set forth in Section 2.1(b).

          “Employee Plan” means any bonus, stock option, stock purchase, incentive, deferred compensation, supplemental retirement, health, life, or disability insurance, dependent care, severance and other similar fringe or employee benefit plans or programs maintained or contributed to by the Company or any of its Subsidiaries for the benefit of or relating to any employee or former employee.

          “Employment Agreement” means a contract, offer letter or agreement of the Company or any of its Subsidiaries with or addressed to any individual who is rendering or has rendered services thereto as an employee, officer, director, independent contractor or consultant pursuant to which the Company or any of its Subsidiaries has any liability or obligation to provide compensation and/or benefits in consideration for past, present or future services.

          “Equity Commitment Letter” has the meaning set forth in Section 6.4(a).

          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

          “Excluded Party” means any Person or group of related Persons from whom the Company has received, after the date hereof and prior to the Exclusivity Period Start Date, a written indication of interest that the Board of Directors of the Company (acting through the Special Committee) believes in good faith is bona fide and could reasonably be expected to result in a Superior Proposal.

          “Exclusivity Period Start Date” has the meaning set forth in Section 6.5(a).

          “Executive Management Team” means the individuals listed on Schedule 1.

          “Expenses” has the meaning set forth in Section 6.7(a).

          “Fairness Opinion” has the meaning set forth in Section 4.2(d).

          “Financial Advisor” has the meaning set forth in Section 4.2(d).

          “Financing” has the meaning set forth in Section 6.4(a).

          “Financing Letters” has the meaning set forth in Section 6.4(a).

          “Flag” has the meaning set forth in the Recitals.

4

          “Flag License Agreements” has the meaning set forth in the Recitals.

          “Flag Transaction Agreements” means the Membership Interest Purchase Agreement dated as of the date hereof, by and among the Company, FX Luxury, and Flag and all of the related agreements referenced therein, contemplated thereby, or necessary or desired in connection therewith, including the Flag License Agreements, in each case, to be executed and delivered by the Company, FX Luxury Realty, LLC and/or Flag Luxury Properties, LLC.

          “FX Luxury” has the meaning set forth in the Recitals.

          “GAAP” means United States generally accepted accounting principles.

          “Governmental Authority” means any agency, public or regulatory authority, instrumentality, department, commission, court, arbitrator, ministry, tribunal or board of any nation or government or political subdivision thereof, whether foreign or domestic and whether national, supranational, federal, tribal, provincial, state, regional, local or municipal.

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

          “Indemnified Party” has the meaning set forth in Section 6.7(a).

          “Law” means applicable statutes, common laws, rules, ordinances, regulations, codes, licensing requirements, orders, judgments, decisions, injunctions, writs, decrees, licenses, governmental guidelines or interpretations having the force of law, permits, rulings and bylaws, in each case, of a Governmental Authority.

          “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset.

          “Management Cooperation Agreement” means the Management Cooperation Agreement to be entered into by each member of the Voting Group on the date hereof.

          “Marketing Period” shall mean the first period of 30 consecutive days after the date hereof (but excluding the period from August 22, 2007 through and including September 4, 2007) throughout which (a) Parent shall have the Required Financial Information that the Company is required to provide to Parent pursuant to Section 6.4(b), and (b) the conditions set forth in Section 7.1 shall be satisfied and nothing has occurred and no condition exists that would cause any of the conditions set forth in Section 7.2 or Section 7.3 to fail to be satisfied assuming the Closing were to be scheduled for any time during such 30 consecutive day period, provided, that (A) Parent shall use commercially reasonable efforts to cause the Marketing Period to end as promptly as reasonably practicable after the Requisite Stockholder Vote; (B) if the financial statements included in the Required Financial Information that is available to Parent on the first day of such 30-day period would not be sufficiently current on any day during such 30-day Period to permit (i) a registration statement using such financial statements to be declared effective by the SEC on the last day of such 30-day period, or (ii) the Company’s independent accounting firm to issue a customary comfort letter to Parent (in accordance with its normal practices and procedures) on the last day of the 30-day period, then a new 30-day period shall

5

commence upon Parent receiving updated Required Financial Information that would be sufficiently current to permit the actions described in clauses (i) and (ii) above on the last day of such 30-day period; and (C) the Marketing Period shall not be deemed to have commenced if, prior to the completion of the Marketing Period, any applicable auditor shall have withdrawn its audit opinion with respect to any financial statements contained in the Company SEC Reports or has indicated to the Company in writing that any such opinion may not be relied upon.

          “Material Adverse Effect on the Company” means any fact, change, circumstance, development, event, effect or occurrence that has had or would reasonably be expected to have a materially adverse effect on the business, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole; provided, however, that the following shall not be deemed to be a Material Adverse Effect on the Company: (a) any fact, change, circumstance, development, event, effect or occurrence (i) generally relating to the U.S. or global economy or securities, credit or financial markets, which does not have a materially disproportionate effect on the Company and its Subsidiaries, taken as a whole (relative to most industry participants), (ii) caused by or resulting from the announcement of this Agreement or the transactions contemplated hereby, including (x) the loss of any key employee and (y) any fees or expenses incurred in connection with the transactions contemplated by this Agreement, (iii) caused by or resulting from the identity of the Parent, Merger Sub or any of their respective Affiliates as the acquiror of the Company, (iv) caused by or resulting from any action required or contemplated in this Agreement, (v) relating to the industries in which the Company and its Subsidiaries operate, which does not have a materially disproportionate effect on the Company and its Subsidiaries, taken as a whole (relative to most industry participants), (vi) relating to changes in any Laws or applicable accounting regulations or principles after the date hereof, or (vii) caused by or resulting from any action of, or omission by, any one or more members of the Executive Management Team or by any other Person at the direction of any such member or members, other than actions or omissions taken in the ordinary course of business consistent with past practice in good faith and not with the purpose or intent of adversely affecting the transactions contemplated hereby, or (b) any failure to meet internal or published projections, forecasts or revenue or earnings predictions for any period (provided that the underlying causes of such failure shall be considered in determining whether there is a Material Adverse Effect on the Company).

          “Merger” has the meaning set forth in the Recitals.

          “Merger Consideration” has the meaning set forth in Section 2.2(c).

          “Merger Shares” has the meaning set forth in Section 2.2(c).

          “Merger Sub” has the meaning set forth in the preamble to this Agreement.

          “New Financing Letters” has the meaning set forth in Section 6.4(a).

          “New Plans” has the meaning set forth in Section 6.14(a).

          “Old Plans” has the meaning set forth in Section 6.14(a).

          “Option Holder” has the meaning set forth in Section 2.4(a).

6

          “Other Antitrust Laws” means any Law enacted by any Governmental Authority relating to antitrust matters or regulating competition.

          “Outside Date” means February 25, 2008; provided that the Outside Date shall be extended an additional 60 days to April 25, 2008 in the event that as of April 25, 2008 all the conditions to closing set forth in Article VII hereof shall have been satisfied or waived other than the condition set forth in Section 7.2(g).

          “Parent” has the meaning set forth in the preamble to this Agreement.

          “Parent Expenses” has the meaning set forth in Section 8.2(a).

          “Parent Termination Fee” has the meaning set forth in Section 8.2(b).

          “Permits” means any licenses, franchises, permits, certificates, consents, approvals or other similar authorizations of, from or by a Governmental Authority possessed by or granted to or necessary for the ownership of the material assets or conduct of the business of, the Company or its Subsidiaries.

          “Person” means any individual, corporation, limited liability company, partnership, joint venture, association, trust, firm or any other entity or organization, including any government or political subdivision or any agency or instrumentality thereof.

          “Preferred Shares” means outstanding shares of Series B Preferred Stock and Series C Preferred Stock.

          “Preferred Stock” has the meaning set forth in Section 4.4(a).

          “Recommendation” has the meaning set forth in Section 6.2(b).

          “Replacement Policies” has the meaning set forth in Section 6.7(a).

          “Representatives” means the officers, directors, employees, agents, advisors, investment bankers, Affiliates and other representatives of a Person.

          “Required Financial Information” has the meaning set forth in Section 6.4(b).

          “Requisite Stockholder Vote” has the meaning set forth in Section 4.2(a).

          “Schedule 13e-3” has the meaning set forth in Section 4.6.

          “SEC” means the Securities and Exchange Commission.

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

          “Senior Management Team” means the individuals set forth on Schedule 2.

          “Series A Preferred Stock” has the meaning set forth in Section 4.4(a).

7

          “Series B Preferred Stock” has the meaning set forth in Section 4.4(a).

          “Series C Preferred Stock” has the meaning set forth in Section 4.4(a).

          “Special Committee” means a committee comprised of three independent members of the Company’s Board of Directors formed for the purpose of, inter alia, evaluating, and making a recommendation to the full Board of Directors of the Company with respect to, this Agreement and the Merger.

          “Spin-Off” means the Stockholder Distribution as defined in the Flag Transaction Agreements.

          “Subsidiary” of any Person means any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect at least a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person.

          “Superior Proposal” has the meaning set forth in Section 6.5(f)(iii).

          “Surviving Corporation” has the meaning set forth in Section 2.1(a).

          “Tax” means (i) all federal, state, local, foreign and other taxes (including withholding taxes), fees and other governmental charges of any kind or nature whatsoever, together with any interest and any penalties, additions or additional amounts with respect thereto, (ii) any liability for payment of amounts described in clause (i) whether as a result of transferee liability, joint and several liability for being a member of an affiliated, consolidated, combined, unitary or other group for any period, or otherwise by operation of law, and (iii) any liability for the payment of amounts described in clause (i) or (ii) as a result of any tax sharing or tax allocation agreement or any other express or implied agreement to pay or indemnify any other Person.

          “Triggering Event” shall be deemed to have occurred if, subject to the provisions of Section 6.5, after the Exclusivity Period Start Date: (i) the Board of Directors of the Company shall have failed to recommend that the Company stockholders vote to adopt this Agreement or shall have made an Adverse Recommendation Change or publicly proposed an Adverse Recommendation Change; (ii) the Company shall have failed to include in the Proxy Statement the Recommendation; (iii) the Company is in material breach of its obligations under Section 6.2 (other than those specified under Section 6.2(b) and (c)) or Section 6.5, (iv) the Board of Directors of the Company shall have approved or recommended to the Company’s stockholders any Company Acquisition Proposal; or (v) a tender or exchange offer relating to the Company Securities shall have been commenced (other than by Parent or an Affiliate of Parent) and the Board shall have recommended to its security holders to tender their shares in such tender or exchange offer.

          “Voting Group” means the Persons set forth on Schedule 2 hereto.

          “Warrants” has the meaning set forth in Section 2.4(b).

8

          SECTION 1.2 TERMS GENERALLY. The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” unless the context expressly provides otherwise. All references herein to Sections, paragraphs, subparagraphs, clauses, Exhibits or Schedules shall be deemed references to Sections, paragraphs, subparagraphs or clauses of, or Exhibits or Schedules to, this Agreement, unless the context requires otherwise. Unless otherwise expressly defined, terms defined in this Agreement have the same meanings when used in any Exhibit or Schedule hereto, including the Disclosure Letter. Unless otherwise specified, the words “herein,” “hereof,” “hereto” and “hereunder” and other words of similar import refer to this Agreement as a whole (including the Schedules and Exhibits) and not to any particular provision of this Agreement.

ARTICLE II
THE MERGER

          SECTION 2.1 THE MERGER.

          (a) At the Effective Time, in accordance with the DGCL, and upon the terms and subject to the conditions set forth in this Agreement, Merger Sub shall be merged with and into the Company, at which time the separate existence of Merger Sub shall cease and the Company shall survive the Merger as a wholly owned subsidiary of Parent (the “Surviving Corporation”).

          (b) As soon as reasonably practicable after the satisfaction or valid waiver of all conditions to the Merger, the Company and Merger Sub will file a certificate of merger (the “Certificate of Merger”) meeting the requirements of the DGCL with the Secretary of State of the State of Delaware. The Merger shall become effective at such time as the Certificate of Merger is duly filed with the Secretary of State of the State of Delaware, or at such later time as the Company and Merger Sub may agree and specify in the Certificate of Merger (such time as the Merger becomes effective, the “Effective Time”).

          (c) The Merger shall have the effects set forth in the applicable provisions of the DGCL. Without limiting the generality of the foregoing, from and after the Effective Time, all property, rights, privileges, immunities, powers, franchises, licenses and authority of the Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions and duties of each of the Company and Merger Sub shall become the debts, liabilities, obligations, restrictions and duties of the Surviving Corporation.

          (d) The closing of the Merger (the “Closing”) shall take place (i) at the offices of Paul, Hastings, Janofsky & Walker LLP located at 75 East 55th Street, New York, New York, as soon as reasonably practicable (but in any event, no later than the second Business Day) after the day on which the last condition to the Merger set forth in Article VII is satisfied or validly waived (other than those conditions that by their nature cannot be satisfied until the Closing Date, but subject to the satisfaction or valid waiver of such conditions) or (ii) at such other place and time or on such other date as the Company and Merger Sub may agree in writing (the actual date of the Closing, the “Closing Date”); provided, however, that if the Marketing Period

9

has not ended at the time of the satisfaction or waiver of the conditions set forth in Article VII (other than those conditions that by their nature cannot be satisfied until the Closing Date, but subject to the satisfaction or valid waiver of such conditions), the Closing shall occur on the date following the satisfaction or waiver of such conditions that is the earliest to occur of (A) a date during the Marketing Period to be specified by Parent on no less than three Business Days’ notice to the Company; (B) the final day of the Marketing Period; or (C) the Outside Date.

          SECTION 2.2 CONVERSION OF SECURITIES. At the Effective Time, pursuant to this Agreement and by virtue of the Merger and without any action on the part of the Company, Parent, Merger Sub or any of the holders of Common Stock or Preferred Stock:

          (a) Each share of Common Stock or Preferred Stock held by the Company as treasury stock or otherwise owned by Parent, Merger Sub or any Company Subsidiary immediately prior to the Effective Time (including shares of Common Stock or Preferred Stock acquired by Parent immediately prior to the Effective Time pursuant to the Contribution and Exchange Agreements or otherwise in exchange for securities of Parent), if any, shall be canceled and shall cease to exist, and no consideration shall be paid in exchange therefor.

          (b) Each Merger Sub Common Share issued and outstanding immediately prior to the Effective Time shall be converted into and become one newly issued, fully paid and non-assessable share of common stock of the Surviving Corporation.

          (c) Each share of Common Stock issued and outstanding immediately prior to the Effective Time (other than shares of Common Stock to be canceled pursuant to Section 2.2(a) and Dissenting Shares (as hereinafter defined)), automatically shall be canceled and converted into the right to receive $13.75 in cash, without interest (the “Merger Consideration”), payable to the holder thereof upon surrender of the stock certificate formerly representing such share of Common Stock in the manner provided in Section 2.3. Such shares of Common Stock (other than those canceled pursuant to Section 2.2(a), together with such shares canceled pursuant to Section 2.3(g) below), sometimes are referred to herein as the “Merger Shares.”

          (d) (i) Each share of Series B Preferred Stock issued and outstanding immediately prior to the Effective Time (other than shares of Series B Preferred Stock to be canceled pursuant to Section 2.2(a) and Dissenting Shares (as hereinafter defined)) shall, at the election of the holder thereof in accordance with the terms of the Company’s Certificate of Incorporation (the “Certificate of Incorporation”) (A) be canceled and converted into the amount specified in Section 4 of Appendix B to the Certificate of Incorporation, or (B) subject to Section 3.1 hereof, remain outstanding as a share of Series B Preferred Stock with terms identical to the terms of the shares of Series B Preferred Stock currently outstanding; and (ii) each share of Series C Preferred Stock issued and outstanding immediately prior to the Effective Time (other than shares of Series C Preferred Stock to be canceled pursuant to Section 2.2(a) and Dissenting Shares), automatically shall, (A) in the event the holder of the Series B Preferred Stock chooses to receive the consideration for the shares of Series B Preferred Stock specified in Section 2.2(d)(i)(A), be canceled and converted into the right to receive the Merger Consideration, or (B) in the event the holder of the Series B Preferred Stock chooses to receive the consideration for the Series B Preferred Stock specified in Section 2.2(d)(i)(B), subject to Section 3.1 hereof, remain outstanding as a share of Series C Preferred Stock with terms identical to the terms of the

10

shares of Series C Preferred Stock currently outstanding. The consideration payable pursuant to Sections 2.2(d)(i)(A) and Section 2.2(d)(ii)(A) is referred to herein collectively as the “Preferred Stock Consideration”. Preferred Stock Consideration payable in respect of each Preferred Share shall in each case be deliverable to the holder thereof upon surrender of the stock certificate formerly representing such Preferred Share in the manner provided in Section 2.3.

          (e) Notwithstanding any provision of this Agreement to the contrary, if required by the DGCL but only to the extent required thereby, shares of Common Stock and Preferred Stock that are issued and outstanding immediately prior to the Effective Time (other than shares of Common Stock and Preferred Stock to be canceled pursuant to Section 2.2(a)) and that are held by holders of such shares of Common Stock or Preferred Stock who have not voted in favor of the adoption of this Agreement or consented thereto in writing and who have properly exercised appraisal rights with respect thereto in accordance with, and who have complied with, Section 262 of the DGCL (the “Dissenting Shares”) shall not be converted into or represent the right to receive the consideration specified herein, and holders of such Dissenting Shares shall be entitled to receive payment of the appraised value of such Dissenting Shares in accordance with the provisions of such Section 262 unless and until any such holder fails to perfect or effectively withdraws or loses its rights to appraisal and payment under the DGCL. If, after the Effective Time, any such holder fails to perfect or effectively withdraws or loses such right, such Dissenting Shares shall be converted or deemed to have been converted, as the case may be, into the right to receive the consideration specified herein in the manner provided in Section 2.2(c) in the case of Common Stock, or in the manner provided in Section 2.2(d) in the case of Preferred Stock. At the Effective Time, any holder of Dissenting Shares shall cease to have any rights with respect thereto, except the rights provided in Section 262 of the DGCL and as provided in the previous sentence. The Company shall give Parent (i) prompt notice of any demands for appraisal, withdrawals (or attempted withdrawals) of demands for appraisal and any other instruments served pursuant to Section 262 of the DGCL and received by the Company and (ii) the opportunity to participate in and direct all negotiations and proceedings with respect to such notices and demands. The Company shall not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisal or offer to settle or settle any such demands.

          (f) If between the date of this Agreement and the Effective Time the number of outstanding shares of Common Stock or Preferred Stock is changed into a different number of shares or a different class, by reason of any stock dividend, subdivision, reclassification, recapitalization, split-up, combination, exchange of shares or the like, other than pursuant to the Merger, the amount of Merger Consideration payable per share of Common Stock or Preferred Stock Consideration payable per share of Preferred Stock, as the case may be, shall be correspondingly adjusted.

          (g) All vested or unvested Company Restricted Shares outstanding immediately prior to the Effective Time shall, by virtue of this Agreement and, without further action of the Company, Parent, Merger Sub or the holder of such Company Restricted Shares, vest and become free of all restrictions immediately prior to the Effective Time and shall be canceled and converted into the right to receive the Merger Consideration.

          (h) The Company Options shall be treated as provided in Section 2.4.

11

          (i) The Warrants shall be treated as provided in Section 2.4.

          (j) For the avoidance of doubt, the parties acknowledge and agree that the contribution of shares of Common Stock and Preferred Stock by the Contributing Holders to Parent pursuant to the Contribution and Exchange Agreements shall be deemed to occur immediately prior to the Effective Time and prior to any other above-described event.

          SECTION 2.3 PAYMENT OF CONSIDERATION FOR MERGER SHARES AND PREFERRED SHARES.

          (a) Prior to the Closing Date, the Company shall designate a bank or trust company that is reasonably satisfactory to Parent, to serve as the disbursing agent for the Merger Consideration, the Preferred Stock Consideration and payments in respect of the Company Options and Warrants, unless another agent is designated as provided in Section 2.4(a) (the “Disbursing Agent”). At or prior to the Closing, Parent will cause to be deposited with the Disbursing Agent cash in the aggregate amount of cash sufficient to pay the Merger Consideration and Preferred Stock Consideration in respect of all Merger Shares and Preferred Shares outstanding immediately prior to the Effective Time and entitled thereto plus any cash necessary to pay for Company Options and Warrants pursuant to Section 2.4. Pending distribution of the cash deposited with the Disbursing Agent, such cash shall be held in trust for the benefit of the holders of Merger Shares, Preferred Shares, such Company Options and Warrants and shall not be used for any other purposes; provided, however, that Parent may direct the Disbursing Agent to invest such cash in obligations of or guaranteed by the United States of America, as long as no such investments have maturities that could prevent or delay payments to be made pursuant to Section 2.3(b).

          (b) As promptly as practicable after the Effective Time (but no later than five Business Days after the Effective Time), the Surviving Corporation shall send, or cause the Disbursing Agent to send, to each record holder of Merger Shares and the holder of Preferred Shares as of immediately prior to the Effective Time (other than shares of Common Stock and Preferred Stock to be canceled pursuant to Section 2.2(a)) a letter of transmittal and instructions for exchanging their Merger Shares and Preferred Shares for the Merger Consideration or Preferred Stock Consideration, as applicable, payable therefor in accordance with the terms hereof. The letter of transmittal will be in customary form and will specify that delivery of Merger Shares and Preferred Shares will be effected, and risk of loss and title will pass, only upon delivery of the stock certificates representing the Merger Shares and Preferred Shares to the Disbursing Agent. Upon surrender of such stock certificate or certificates to the Disbursing Agent together with a properly completed and duly executed letter of transmittal and any other documentation that the Disbursing Agent may reasonably require, the record holder thereof shall be entitled to receive the Merger Consideration or Preferred Stock Consideration payable in exchange therefor, less any withholding Taxes deductible under Section 2.3(i). Until so surrendered and exchanged, each such certificate shall, after the Effective Time, be deemed to represent only the right to receive the Merger Consideration or Preferred Stock Consideration, as the case may be, and until such surrender and exchange, no cash shall be paid to the holder of such certificate in respect thereof.

12

          (c) If payment is to be made to a Person other than the registered holder of the Merger Shares or Preferred Shares represented by the certificate or certificates surrendered in exchange therefor, it shall be a condition to such payment that the certificate or certificates so surrendered shall be properly endorsed or otherwise be in proper form for transfer and that the Person requesting such payment shall pay to the Disbursing Agent any applicable stock transfer taxes required as a result of such payment to a Person other than the registered holder of such Merger Shares or Preferred Shares or establish to the satisfaction of the Disbursing Agent that such stock transfer taxes have been paid or are not payable.

          (d) After the Effective Time, there shall be no further transfers on the stock transfer books of the Surviving Corporation of the shares of Common Stock or Preferred Stock that were outstanding immediately prior to the Effective Time, except for the shares of Preferred Stock remaining outstanding as such pursuant to the terms hereof. If, after the Effective Time, certificates representing Merger Shares or Preferred Shares, except for the shares of Preferred Stock remaining outstanding as such pursuant to the terms hereof, are presented to the Surviving Corporation, such shares shall be canceled and exchanged for the consideration provided for, and in accordance with the procedures set forth, in this Article II.

          (e) If any cash deposited with the Disbursing Agent remains unclaimed twelve months after the Effective Time (other than cash deposited with respect to the Warrants, which shall be held until the expiration of the Warrants), such cash shall be returned to the Surviving Corporation upon demand, and any holder who has not surrendered Merger Share certificates for the Merger Consideration or Preferred Share certificates for the Preferred Stock Consideration prior to that time shall thereafter look only to the Surviving Corporation for payment of the Merger Consideration or Preferred Stock Consideration, as the case may be. Notwithstanding anything herein to the contrary, none of the Company, Parent, Merger Sub, the Surviving Corporation, the Disbursing Agent or any other Person shall be liable to any holder of Merger Shares or Preferred Shares for an amount paid to a public official pursuant to any applicable unclaimed property laws. Any amounts remaining unclaimed by holders of Merger Shares or Preferred Shares as of a date immediately prior to such time that such amounts would otherwise escheat to or become property of any Governmental Authority shall, to the extent permitted by applicable Law, become the property of the Surviving Corporation on such date, free and clear of any claims or interest of any Person previously entitled thereto.

          (f) No dividends or other distributions with respect to capital stock of the Surviving Corporation with a record date after the Effective Time shall be paid to the holder of any unsurrendered certificate for shares of Common Stock or Preferred Stock, except for the shares of Preferred Stock remaining outstanding as such pursuant to the terms hereof.

          (g) From and after the Effective Time, any holder of shares of Common Stock or Preferred Stock (other than Dissenting Shares) outstanding immediately prior to the Effective Time, except for the shares of Preferred Stock remaining outstanding as such pursuant to the terms hereof, shall cease to have any rights with respect to such shares of Common Stock or Preferred Stock, other than the right to receive the Merger Consideration or Preferred Stock Consideration, as applicable, as provided in this Agreement.

13

          (h) In the event that any Merger Share or Preferred Share certificate has been lost, stolen or destroyed, upon the making of an affidavit (in form and substance reasonably satisfactory to the Surviving Corporation) of that fact by the Person claiming such Merger Share or Preferred Share certificate to be lost, stolen or destroyed, in addition to the posting by such holder of any bond in such reasonable amount as the Surviving Corporation may direct as indemnity against any claim that may be made against the Surviving Corporation with respect to such Merger Share or Preferred Share certificate, the Disbursing Agent will issue in exchange for such lost, stolen or destroyed Merger Share or Preferred Share certificate the proper amount of the Merger Consideration or Preferred Stock Consideration, as applicable.

          (i) Parent, Surviving Corporation and the Disbursing Agent shall be entitled to deduct and withhold from the Merger Consideration and Preferred Stock Consideration, as applicable, otherwise payable hereunder any amounts required to be deducted and withheld under any applicable Tax Law. To the extent any amounts are so withheld, such withheld amounts shall be treated for all purposes as having been paid to the holder from whose Merger Consideration or Preferred Stock Consideration, as applicable, the amounts were so deducted and withheld.

          SECTION 2.4 TREATMENT OF OPTIONS AND WARRANTS.

          (a) As of the Effective Time, each Company Option, to the extent outstanding, vested and unexercised will be canceled and extinguished, and the holder thereof (each, an “Option Holder”) will be entitled to receive in consideration of the cancellation and as settlement of all rights of such Option Holder with respect to such Company Option, an amount in cash equal to the amount (if any) by which (A) the product of (i) the number of shares of Common Stock subject to such Company Option and (ii) the Merger Consideration exceeds (B) the aggregate exercise price of such Company Option, without interest and less any amounts required to be deducted and withheld under any applicable Law. All payments with respect to canceled Company Options shall be made by the Disbursing Agent (or such other agent reasonably acceptable to the Company as Parent shall designate prior to the Effective Time) as promptly as reasonably practicable after the Effective Time from funds deposited by or at the direction of Parent to pay such amounts in accordance with Section 2.3(a).

          (b) As of the Effective Time, each warrant to purchase shares of Common stock (the “Warrants”) that is issued and outstanding immediately prior to the Effective Time and not terminated pursuant to its terms shall not thereafter be exchangeable for capital stock of the Surviving Corporation, but rather shall be exercisable for an amount in cash equal to the amount by which (A) the product of (i) the number of shares of Common Stock subject to such Warrant and (ii) the Merger Consideration exceeds (B) the aggregate exercise price of such Warrant.

          (c) Prior to the Effective Time, the Company and Parent (or their respective boards of directors or applicable committees thereof) will adopt such resolutions as may be reasonably required to effectuate the actions contemplated by this Section 2.4, without paying any consideration or incurring any debts or obligations on behalf of the Company or the Surviving Corporation.

14

          (d) Parent and the Surviving Corporation shall be entitled to deduct and withhold from any amounts to be paid hereunder in respect of Company Options, Company Restricted Shares or Warrants any amounts required to be deducted and withheld under any applicable Tax Law. To the extent any amounts are so withheld, such withheld amounts shall be treated for all purposes as having been paid to the holder of such Company Option, Company Restricted Share or Warrant from whose payments in respect of Company Options, Company Restricted Shares or Warrants the amounts were so deducted and withheld.

ARTICLE III
THE SURVIVING CORPORATION

          SECTION 3.1 CERTIFICATE OF INCORPORATION. The certificate of incorporation of the Company as in effect immediately prior to the Effective Time shall be amended as set forth on Exhibit B, and, as so amended, shall be the certificate of incorporation of the Surviving Corporation until thereafter amended in accordance with the terms thereof and as provided by applicable Law.

          SECTION 3.2 BYLAWS. The bylaws of the Company in effect at the Effective Time shall be amended as set forth on Exhibit C, and as so amended, shall be the bylaws of the Surviving Corporation until thereafter amended in accordance with the terms thereof and as provided by applicable Law.

          SECTION 3.3 DIRECTORS AND OFFICERS. Unless otherwise determined by Parent prior to the Effective Time, from and after the Effective Time, (i) the directors of Merger Sub at the Effective Time shall be the directors of the Surviving Corporation and (ii) the officers of the Company at the Effective Time shall be the officers of the Surviving Corporation, in each case, until their respective successors are duly elected or appointed and qualified in accordance with applicable Law.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

          Except as set forth in the disclosure letter delivered to Parent and Merger Sub by the Company concurrently with entering into this Agreement (the “Disclosure Letter”) or as may be disclosed in any Company SEC Report filed prior to the date hereof, the Company hereby represents and warrants to Parent and Merger Sub that:

          SECTION 4.1 CORPORATE EXISTENCE AND POWER.

          (a) Each of the Company and its Subsidiaries is a corporation, partnership, or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization. Each of the Company and its Subsidiaries has the requisite power and authority required to own, lease and operate its respective properties and to carry on its business as now conducted. The Company has the requisite corporate power and authority to execute and deliver this Agreement, and to consummate the Merger and the other transactions contemplated hereby and to perform each of its obligations hereunder.

15

          (b) Each of the Company and its Subsidiaries is duly qualified or licensed and in good standing to do business in each jurisdiction where the character of the property owned or leased by it or the nature of its activities makes such qualification or licensing necessary, except where the failure to be so qualified, licensed or in good standing would not, individually or in the aggregate, have a Material Adverse Effect on the Company.

          (c) The Company has made available to Parent and Merger Sub true and complete copies of the currently effective articles of incorporation and bylaws or similar organizational and governing documents of the Company and its Subsidiaries. Neither the Company nor any Subsidiary is in violation of its organizational or governing documents.

          SECTION 4.2 CORPORATE AUTHORIZATION; COMPANY FAIRNESS OPINION.

          (a) The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Merger and the other transactions contemplated hereby have been duly and validly authorized by the Board of Directors of the Company (including the Special Committee) and, other than obtaining the Requisite Stockholder Vote described below and the filing of the Certificate of Merger along with any document in connection therewith in accordance with the DGCL, no other corporate proceeding on the part of the Company is necessary for the consummation by the Company of the Merger or the other transactions contemplated hereby. The vote required to adopt this Agreement and approve the Merger is the affirmative vote of the holders of a majority of the shares of Common Stock, Series B Preferred Stock and Series C Preferred Stock, voting as a single class (with (x) each share of Series B Preferred Stock being entitled to that number of votes equal to the largest number of whole shares of Common Stock into which such shares could be converted and (y) each share of Series C Preferred Stock being entitled to one vote) (the “Requisite Stockholder Vote”).

          (b) This Agreement has been duly and validly executed and delivered by the Company and, assuming the due and valid execution and delivery by Parent and Merger Sub, constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as rights to indemnity hereunder may be limited by federal or state securities laws or the public policies embodied therein, (ii) as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors’ rights generally, and (iii) as the remedy of specific performance and other forms of injunctive relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

          (c) The Special Committee, at a meeting duly called and held, has by unanimous vote of all of its members, determined that this Agreement and the Merger are advisable and in the best interests of, the Company and its stockholders, and recommended that the Board of Directors of the Company approve and adopt this Agreement. On or prior to the date hereof, the Board of Directors of the Company, based on the unanimous recommendation of the Special Committee, has (except for directors affiliated with Parent or Merger Sub who abstained) unanimously adopted resolutions (i) approving this Agreement and declaring this Agreement, the Merger and the other transactions contemplated by this Agreement advisable and (ii) recommending that the Company stockholders adopt this Agreement and approve the

16

Merger. As of the date hereof, all such resolutions are in full force and effect and none have been amended or superseded.

          (d) Houlihan, Lokey, Howard & Zukin, Inc. (the “Financial Advisor”) has delivered to the Special Committee and the Board of the Directors of the Company its opinion to the effect that, as of the date such opinion was delivered, the consideration to be received in the Merger is fair, from a financial point of view, to the holders of shares of Common Stock other than the Voting Group (the “Fairness Opinion”). As of the date hereof, the Company has been authorized by the Financial Advisor to permit the inclusion in full of the Fairness Opinion in the Company Proxy Statement. As of the date hereof, the Fairness Opinion has not been withdrawn, revoked or modified.

          SECTION 4.3 GOVERNMENTAL AUTHORIZATION. The execution, delivery and performance by the Company of this Agreement and the consummation of the Merger by the Company require no action by, or by the Company or any Subsidiary in respect of, or filing or notification by the Company or any Subsidiary with, or receiving any consent, approval or any type of authorization (including any licenses and permits) from, any Governmental Authority other than (i) the filing of the Certificate of Merger; (ii) compliance with any applicable requirements of the HSR Act or any other applicable Other Antitrust Laws; (iii) compliance with any applicable requirements of the Exchange Act, including the filing of the Company Proxy Statement and the Schedule 13e-3; (iv) compliance with any applicable requirements of the Securities Act; (v) compliance with any applicable foreign or state securities or Blue Sky laws; (vi) compliance with any applicable rules and regulations of the Nasdaq Stock Market; and (vii) such other items or filings, which if not taken or made, (A) would not, individually or in the aggregate, have a Material Adverse Effect on the Company.

          SECTION 4.4 CAPITALIZATION.

          (a) The authorized capital stock of the Company consists of (i) 275,000,000 shares of Common Stock and (ii) 75,000,000 shares of preferred stock, out of which (A) 2,172,400 shares are designated as Series A Convertible Redeemable Preferred Stock of the Company, par value $0.01 per share (the “Series A Preferred Stock”), (B) 1,491,817 shares are designated as Series B Convertible Preferred Stock of the Company, par value $0.01 per share (the “Series B Preferred Stock”), and (C) one share is designated as Series C Convertible Preferred Stock of the Company, par value $0.01 per share (the “Series C Preferred Stock” and together with the Series A Preferred Stock and the Series B Preferred Stock, the “Preferred Stock”). As of the close of business on May 22, 2007, (i) 97,059,164 shares of Common Stock were issued and outstanding, (ii) no shares of Common Stock were held in treasury, (iii) no shares of Series A Preferred Stock were issued and outstanding, (iv) 1,491,817 shares of Series B Preferred Stock were issued and outstanding, (v) one share of Series C Preferred Stock was issued and outstanding, (vi) no shares of Preferred Stock were held in treasury, (vii) 604,000 shares of Common Stock were subject to Company Options, (ix) 500,000 shares of Common Stock were subject to Warrants, and (x) 1,491,818 shares of Common Stock were reserved for issuance upon conversion of outstanding Preferred Stock pursuant to the terms thereof. All issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. Section 4.4(a) of the Disclosure Letter sets forth a complete and accurate list of all outstanding Company Options and other stock-related

17

awards, including grants of Company Restricted Shares, and all outstanding Warrants, which list sets forth the name of the holders thereof and, to the extent applicable thereto, the exercise price or purchase price thereof, the governing stock option plan with respect thereto and the expiration date thereof. There are no options outstanding to purchase shares of Preferred Stock.

          (b) Except as set forth in Section 4.4(a), there are no issued and outstanding, and there have not been reserved for issuance, any (i) shares of capital stock or other voting securities of the Company or any Subsidiary of the Company; (ii) securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company or its Subsidiaries; (iii) Company Options or other rights, options, warrants, calls, subscriptions, arrangements or undertakings of any kind, to acquire from the Company or its Subsidiaries, or obligations of the Company or its Subsidiaries to issue, any shares of capital stock, voting securities, securities convertible into or exchangeable for shares of capital stock or voting securities, or any type of equity equivalent whatsoever of the Company or such Subsidiary, as the case may be; or (iv) equity equivalent interests in the ownership or earnings of the Company or its Subsidiaries or other similar rights (the items in clauses (i) through (iv) collectively, “Company Securities”). There are no outstanding obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any Company Securities. There are no stockholder agreements, voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party or by which it is bound relating to the voting or registration of any shares of capital stock of the Company or any of its Subsidiaries or preemptive rights with respect thereto.

          (c) Other than the issuance of shares of Common Stock upon exercise of Company Options or Warrants, since the Balance Sheet Date, the Company has not declared or paid any dividend or distribution in respect of any Company Securities, and the Board of Directors of the Company has not authorized the foregoing.

          (d) No holder of Company Securities has any right to have such securities or the offering or sale thereof registered under or pursuant to any securities Laws by the Company or any of its Subsidiaries.

          SECTION 4.5 REPORTS AND FINANCIAL STATEMENTS.

          (a) The Company has timely filed with or, if applicable, otherwise furnished to the SEC all forms, reports, schedules, statements and other documents required to be filed or furnished by it under the Securities Act or the Exchange Act since February 7, 2005 (such documents, as supplemented or amended since the time of filing, the “Company SEC Reports”). No Subsidiary of the Company is or at any time since February 7, 2005 has been required to file with or furnish to the SEC any such forms, reports, schedules or other documents. The Company SEC Reports, including any financial statements or schedules included or incorporated by reference therein at the time filed (and, in the case of registration statements and proxy statements, on the dates of effectiveness and the dates of mailing, respectively) (i) complied as to form in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as applicable, and (ii) did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make

18

the statements therein, in light of the circumstances under which they were made, not misleading.

          (b) The audited consolidated financial statements and unaudited consolidated interim financial statements included or incorporated by reference in the Company SEC Reports (including the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2006 and the Company’s quarterly report on Form 10-Q for the quarterly period ended March 31, 2007), along with any related notes and schedules, comply, in all material respects, with applicable accounting requirements and fairly present, in all material respects, the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof, and the results of their operations and their cash flows for the periods set forth therein, and in each case were prepared in accordance with GAAP consistently applied during the periods involved (except as otherwise disclosed in the notes thereto and subject, where appropriate, to normal year-end adjustments that would not be material in amount or effect).

          (c) The Company has heretofore made available or promptly will make available to Parent and Merger Sub a complete and correct copy of any amendments or modifications to any Company SEC Reports filed prior to the date hereof which are required to be filed with the SEC but have not yet been filed with the SEC, and any Company SEC Reports required to be filed by the Company on or after the date hereof and prior to the Effective Time. Public availability of such SEC Reports through EDGAR will be deemed to satisfy the requirements of this Section 4.5(c).

          SECTION 4.6 DISCLOSURE DOCUMENTS. The proxy statement, together with any amendments thereof or supplements thereto (the “Company Proxy Statement”), and the Rule 13e-3 Transaction Statement on Schedule 13e-3, together with any amendments thereof or supplements thereto (the “Schedule 13e-3”), relating to the Merger and the other transactions contemplated hereby, to be filed by the Company with the SEC in connection with seeking the adoption and approval of this Agreement by the Company stockholders will not, (a) at the date it is first mailed to stockholders of the Company, in the case of the Company Proxy Statement, or (b) at the time of the Company Stockholder Meeting (other than as to information supplied by Parent and Merger Sub in writing specifically for inclusion therein), contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Company will cause the Company Proxy Statement, the Schedule 13e-3 and all related SEC filings to comply as to form in all material respects with the requirements of the Exchange Act applicable thereto as of the date of such filing. No representation is made by the Company with respect to statements made in the Company Proxy Statement or the Schedule 13e-3 based on information supplied in writing, or required to be supplied, by Parent and Merger Sub or their Affiliates specifically for inclusion therein.

          SECTION 4.7 FINDERS’ FEES. There is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of the Company or any of its Subsidiaries or Affiliates and that might be entitled to any fee or commission from the Company or any of its Affiliates in connection with the transactions contemplated by this Agreement (other than the fee of the Financial Advisor set forth on Section 4.7 of the Disclosure Letter).

19

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

          Parent and Merger Sub hereby jointly and severally represent and warrant to the Company that:

          SECTION 5.1 CORPORATE EXISTENCE AND POWER. Each of Parent and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite power and authority required to execute and deliver this Agreement and to consummate the Merger and the other transactions contemplated hereby and to perform each of its obligations hereunder. Since their respective dates of organization, neither Parent nor Merger Sub has engaged in any material activities other than in connection with or as contemplated by this Agreement or in connection with arranging the Financing.

          SECTION 5.2 CORPORATE AUTHORIZATION. The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation by Parent and Merger Sub of the Merger and the other transactions contemplated hereby have been duly and validly authorized by all necessary Parent and Merger Sub corporate and stockholder action (other than the adoption of this Agreement by Parent, as sole stockholder of Merger Sub, which shall occur promptly after the execution and delivery of this Agreement). This Agreement has been duly and validly executed and delivered by Parent and Merger Sub and, assuming the due and valid execution and delivery by the Company, constitutes a legal, valid and binding obligation of Parent and Merger Sub, respectively, enforceable against Parent and Merger Sub in accordance with its terms, except (i) as rights to indemnity hereunder may be limited by federal or state securities laws or the public policies embodied therein, (ii) as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors’ rights generally, and (iii) as the remedy of specific performance and other forms of injunctive relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

          SECTION 5.3 GOVERNMENTAL AUTHORIZATION. The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation of the Merger by Parent and Merger Sub will require no action by, or by Parent or Merger Sub in respect of, or filing or notification by Parent or Merger Sub with, or Parent or Merger Sub receiving any consent, approval or any type of authorization (including any licenses and permits) from, any Governmental Authority other than (i) the filing of the Certificate of Merger; (ii) compliance with any applicable requirements of the HSR Act or any other applicable Other Antitrust Laws; (iii) compliance with any applicable requirements of the Exchange Act, including the filing of the Company Proxy Statement and the Schedule 13e-3; (iv) compliance with any applicable requirements of the Securities Act, (v) compliance with any applicable foreign or state securities or Blue Sky laws; (vi) compliance with any applicable rules and regulations of the Nasdaq Stock Market; and (vii) such other items or filings, which if not taken or made, (A) would not, individually or in the aggregate, be reasonably expected to be material to Parent or Merger Sub and (B) would not reasonably be expected to adversely affect in any material respect, or materially hinder or delay the consummation of Parent’s and Merger Sub’s ability to observe and perform their respective obligations hereunder.

20

          SECTION 5.4 NON-CONTRAVENTION. The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation by Parent and Merger Sub of the transactions contemplated hereby do not and will not (i) contravene or conflict with the organizational or governing documents of Parent or Merger Sub; (ii) assuming compliance with the matters referenced in Sections 5.2 and 5.3, contravene, conflict with or constitute a violation of any provision of any Law binding upon or applicable to Parent or Merger Sub or any of their respective properties or assets; (iii) result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) or require a consent under, result in the loss of a material benefit under or give others any right of termination, amendment, acceleration, payment or cancellation of, or result in the creation of a lien or other encumbrance on any property or under any contract, lease, license, permit, franchise or other instrument or obligation to which Parent or Merger Sub is a party or by which Parent or Merger Sub or any of their properties or assets is bound or affected, except in the case of (ii) and (iii) above, which would not materially hinder or delay the consummation of the Merger or each of Parent’s and Merger Sub’s ability to observe and perform its obligations hereunder.

          SECTION 5.5 DISCLOSURE DOCUMENTS. None of the information supplied or to be supplied by Parent or Merger Sub in writing specifically for inclusion in the Company Proxy Statement or Schedule 13e-3 will, (a) at the date it is first mailed to stockholders of the Company (in the case of the Company Proxy Statement), or (b) at the time of the Company Stockholder Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading; provided, however, that this representation and warranty shall not apply to any information so provided by Parent or Merger Sub that subsequently changes or becomes incomplete or incorrect to the extent such changes or failure to be complete or correct are promptly disclosed to the Company and to the further extent that Parent and Merger Sub reasonably cooperate with the Company in preparing, filing or disseminating updated information to the extent required by Law.

          SECTION 5.6 FINDERS’ FEES. There is no investment banker, broker, finder or other intermediary who is entitled to any fee or commission from the Company in connection with the transactions contemplated by this Agreement based on any arrangements made by Parent or Merger Sub or any of their respective Affiliates.

          SECTION 5.7 SOLVENCY OF THE COMPANY FOLLOWING COMPLETION OF THE MERGER. As of the date hereof, to the knowledge of Parent and Merger Sub, assuming that the Company is solvent immediately prior to the Effective Time, immediately following the Effective Time and after giving effect to the Merger and the other transactions contemplated hereby, the Company and each of its Subsidiaries will not (i) be insolvent (either because of its financial condition is such that the sum of its debts is greater than the fair market value of its assets or because the fair saleable value of its assets is less than the amount required to pay its probable liability on its existing debts as they mature), (ii) have unreasonably small capital with which to engage in its business or (iii) have incurred debts beyond its ability to pay as they become due.

21

          SECTION 5.8 MANAGEMENT AGREEMENTS. Other than (i) the Contribution and Exchange Agreements and any future agreements that may be entered into prior to the Effective Time between Parent and/or Merger Sub and holders of Common Stock or Preferred Stock in connection with the contribution of such Common Stock or Preferred Stock to Parent and/or Merger Sub, (ii) any employment agreements, (iii) the Letter Agreement, dated as of June 1, 2007, among Parent, Robert F.X. Sillerman and Simon Fuller and (iv) a stockholders agreement to be entered into by Parent and its subscribers or holders of capital stock, there are no Contracts between Parent and/or Merger Sub, on the one hand, and members of the Company’s management on the other hand. None of the foregoing agreements requires any material performance or forbearance by the Contributing Holders prior to the Effective Time.

ARTICLE VI
COVENANTS

          SECTION 6.1 CONDUCT OF THE COMPANY AND SUBSIDIARIES. Except as set forth in Section 6.1 of the Disclosure Letter or as otherwise expressly contemplated in this Agreement or the Flag Transaction Agreements, from and after the date hereof until the Effective Time, without the prior written consent of Parent, the Company shall not and shall cause its subsidiaries not to, take any action recommended by the Board of Directors of the Company with respect to matters outside the ordinary course of business consistent with past practice.

          SECTION 6.2 STOCKHOLDER MEETING; PROXY MATERIALS AND OTHER SEC FILINGS.

          (a) Subject to Section 6.5, the Company shall duly call and hold a meeting of its stockholders (the “Company Stockholder Meeting”) for the purpose of obtaining the adoption of this Agreement and the approval of the Merger by the Company stockholders in accordance with applicable Law as promptly as reasonably practicable after the SEC clears (whether orally or in writing) the Company Proxy Statement and the Schedule 13e-3, and this Agreement shall be submitted for adoption to the stockholders of the Company at the Company Stockholder Meeting. In connection with the Company Stockholder Meeting, the Company will (i) as promptly as reasonably practicable prepare and file with the SEC the Company Proxy Statement relating to the Merger and the other transactions contemplated hereby, (ii) respond as promptly as reasonably practicable to any comments received from the SEC with respect to such filings and will provide copies of such comments to Parent and Merger Sub promptly upon receipt, (iii) as promptly as reasonably practicable prepare and file any amendments or supplements necessary to be filed in response to any SEC comments or as required by Law, (iv) use its commercially reasonable efforts to have cleared by the SEC and will thereafter mail to its stockholders as promptly as reasonably practicable, the Company Proxy Statement and all other customary proxy or other materials for meetings such as the Company Stockholder Meeting, (v) to the extent required by applicable Law, as promptly as reasonably practicable prepare, file and distribute to the Company stockholders (in the case of the Company Proxy Statement) any supplement or amendment to the Company Proxy Statement if any event shall occur which requires such action at any time prior to the Company Stockholder Meeting, and (vi) otherwise use its commercially reasonable efforts to comply with all requirements of Law applicable to the Company Stockholder Meeting and the Merger. Parent and Merger Sub shall reasonably cooperate with the Company in connection with the preparation and filing of the

22

Company Proxy Statement, including promptly furnishing the Company upon request with any and all information as may be required to be set forth in the Company Proxy Statement under the Exchange Act. The Company will provide Parent and Merger Sub a reasonable opportunity to review and comment upon the Company Proxy Statement, or any amendments or supplements thereto, prior to filing the same with the SEC. In connection with the filing of the Company Proxy Statement, the Company and Parent and Merger Sub will cooperate to (i) concurrently with the preparation and filing of the Company Proxy Statement, jointly prepare and file with the SEC the Schedule 13e-3 relating to the Merger and the other transactions contemplated hereby and furnish to each other all information concerning such party as may be reasonably requested in connection with the preparation of the Schedule 13e-3, (ii) respond as promptly as reasonably practicable to any comments received from the SEC with respect to such filings and will consult with each other prior to providing such response, (iii) as promptly as reasonable practicable after consulting with each other, prepare and file any amendments or supplements necessary to be filed in response to any SEC comments or as required by Law, (iv) have cleared by the SEC the Schedule 13e-3 and (v) as promptly as reasonably practicable prepare, to the extent required by applicable Law, file and distribute to the Company stockholders any supplement or amendment to the Schedule 13e-3 if any event shall occur which requires such action at any time prior to the Company Stockholder Meeting.

          (b) Subject to Section 6.5, (i) the Company Proxy Statement will contain the recommendation of the Board of Directors of the Company (acting through the Special Committee) that the stockholders of the Company adopt this Agreement and approve the Merger (the “Recommendation”) and, (ii) the Company shall use commercially reasonable efforts to solicit proxies in favor of the adoption of this Agreement and the approval of the Merger by the Company stockholders.

          (c) Until the Effective Time, the Company will use commercially reasonable efforts to timely file with the SEC each of the Company SEC Reports. As of their respective filing dates, none of the Company SEC Reports shall contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The audited consolidated financial statements and unaudited interim financial statements of the Company included in the Company SEC Reports shall be prepared in accordance with GAAP applied on a consistent basis (except as may be indicated in the notes thereto and subject, where appropriate, to normal year-end adjustments that would not be material in amount or effect) and in compliance in all material respects with Regulation S-X promulgated by the SEC and shall fairly present, in all material respects, the financial position of the Company and its consolidated Subsidiaries as at the dates thereof and the results of their operations, cash flows and changes in financial position for the periods then ended.

          (d) If at any time prior to the Effective Time, any information should be discovered by any party to this Agreement that should be set forth in an amendment or supplement to the Proxy Statement or the Schedule 13e-3 so that the Proxy Statement or the Schedule 13e-3, as the case may be, would not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the party that discovers such information shall promptly notify the other parties and, to the extent required

23

by applicable Law, an appropriate amendment or supplement describing such information shall be promptly filed by the appropriate party with the SEC and disseminated by the Company to the stockholders of the Company.

          SECTION 6.3 ACCESS TO INFORMATION. From the date hereof until the Effective Time, subject to applicable Law, the Company will provide and will cause its Subsidiaries and its and their respective Representatives to provide Parent and Merger Sub and their respective Representatives, during normal business hours and upon reasonable advance notice (i) such access to the offices, properties, Contracts, personnel, books and records of the Company and such Subsidiaries (so long as such access does not unreasonably interfere with the operations of the Company) as Parent or Merger Sub reasonably may request, and (ii) a copy of each report, schedule, registration statement and other document filed or received by it during such period pursuant to the requirements of federal or state securities laws that is not available immediately upon filing via EDGAR.

          SECTION 6.4 FINANCING

          (a) Within 60 days after the date hereof, Parent and Merger Sub shall deliver to the Company true and complete copies of (i) a fully executed commitment letter (the “Debt Commitment Letter”), except for any fee letters, pursuant to which the financial institutions party to such Debt Commitment Letter shall have committed upon the terms and subject to the conditions set forth therein, to provide, or cause to be provided, debt financing in the amount set forth therein in connection with the Merger and (ii) a fully executed commitment letter (the “Equity Commitment Letter”, and together with the Debt Commitment Letter, the “Financing Letters”), pursuant to which the investors party thereto shall have committed, upon the terms and subject to the conditions set forth therein, to provide, or cause to be provided, equity financing in the aggregate amount set forth therein in connection with the Merger. The Financing Letters shall reflect debt and equity commitments from such equity investors and financial institutions, which together with any equity to be issued in connection with the Contribution and Exchange Agreements or to be issued in exchange for securities of Parent, shall be sufficient to pay the full Merger Consideration (and all other cash amounts payable pursuant hereto), and all of the related fees and expenses payable by Parent or Merger Sub (or, after the Closing, the Surviving Corporation) in connection with the Merger (the funds necessary to pay the foregoing amounts, the “Financing”). Notwithstanding anything in this Agreement to the contrary, one or more Financing Letters may be superseded at the option of Parent and Merger Sub prior to the Effective Time by instruments (the “New Financing Letters”) which replace existing Financing Letters and/or contemplate co-investment by or financing from one or more other or additional parties; provided that the terms of the New Financing Letters shall not (a) expand upon the conditions precedent to the Financing as set forth in the Financing Letters in any respect that would make such conditions less likely to be satisfied, (b) reasonably be expected to delay the Closing or (c) otherwise have an adverse impact on the Company at any time that is prior to the Closing. In such event, the term “Financing Letters” as used herein shall be deemed to include the Financing Letters that are not so superseded at the time in question and the New Financing Letters to the extent then in effect.

          (b) Prior to the Effective Time, the Company and its Subsidiaries shall use their commercially reasonable efforts, to provide and to cause their respective officers,

24

employees, representatives and advisors, including legal and accounting advisors to provide, to Parent all cooperation reasonably requested by Parent that is necessary, proper or advisable in connection with the Financing (in each case, provided that such requested cooperation does not unreasonably interfere with the ongoing operations of the Company and its Subsidiaries) including using commercially reasonable efforts with respect to (i) participation in a reasonable number of meetings, drafting sessions, presentations, road shows, due diligence sessions and sessions with rating agencies, (ii) assisting with the preparation of materials for rating agency presentations, offering documents, business projections, private placement memoranda, bank information memoranda, prospectuses and similar documents required in connection with the debt commitments contemplated by the Debt Commitment Letter (the “Debt Financing”); provided, however, that any private placement memoranda or prospectuses in relation to high yield debt securities need not be issued by the Company or any of its Subsidiaries prior to the Effective Time (it being understood and agreed that this proviso shall not impair Parent’s or Merger Sub’s ability to issue any private placement memorandum or prospectus which contains information with respect to the Company and its Subsidiaries, prior to the Effective Time); and provided, further that any such memoranda or prospectuses shall contain disclosure and financial statements with respect to the Company or the Surviving Corporation reflecting the Surviving Corporation and/or its Subsidiaries as the obligor, (iii) executing and delivering immediately prior to the Effective Time any pledge and security documents, other definitive financing documents, or other certificates, legal opinions or documents as may be reasonably requested by Parent (including a certificate of the chief executive officer of any of the Company or its Subsidiaries with respect to solvency matters and consents of accountants for use of their reports in any materials relating to the Debt Financing) and otherwise facilitating the pledging of collateral, (iv) furnishing Parent and its Debt Financing sources with financial and other pertinent information regarding the Company and its Subsidiaries as may be reasonably requested by Parent, including (A) audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Company and its Subsidiaries for the fiscal years ended December 31, 2006, December 31, 2005 and December 31, 2004, (B) unaudited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Company and its Subsidiaries for each subsequent fiscal quarter ended at least 45 days before the Closing Date and the same period during the fiscal year ended 2006, (C) a pro forma consolidated balance sheet and related pro forma consolidated statement of income of the Company and its Subsidiaries as of and for, (1) the fiscal year ended December 31, 2006, (2) the subsequent quarterly periods, and (3) the twelve-month period ending on the last day of the most recently completed four-fiscal quarter period ended at least 45 days prior to the Closing Date and after giving effect to the transactions contemplated by this Agreement and the Financing as if such transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such other financial statements) and (D) any other financial statements and financial data of the type required by Regulation S-X and Regulation S-K under the Securities Act and of the type and form customarily included in private placements under Rule 144A of the Securities Act to consummate the offerings of debt securities contemplated by the Debt Financing (the “Required Financial Information”), (v) obtaining any necessary accountants’ consents and comfort letters, legal opinions, surveys and title insurance as reasonably requested by Parent; provided that nothing herein shall require such cooperation to the extent it would interfere unreasonably with the business or operations of the Company or its Subsidiaries, (vi) taking all actions reasonably necessary to (A) permit the prospective lenders

25

involved in the Debt Financing to evaluate the Company’s current assets, cash management and accounting systems, policies and procedures relating thereto for the purposes of establishing collateral arrangements and (B) establish bank and other accounts and blocked account agreements and lock box arrangements in connection with the foregoing, (vii) obtaining any necessary rating agencies’ confirmation or approvals for the Debt Financing (including any high-yield financing), and (viii) taking all corporate actions necessary to permit the consummation of the Debt Financing and to permit the proceeds thereof to be made available as of the Effective Time; provided, however, that no obligation of the Company or any of its Subsidiaries under any such agreement, certificate, document or instrument shall be effective until the Effective Time and neither the Company nor any of its Subsidiaries will be required to pay any commitment or other fee or incur any extraordinary cost, expense or other liability that is not simultaneously reimbursed by Parent or Merger Sub in connection with the Debt Financing prior to the Effective Time. Parent shall, promptly upon request by the Company, reimburse, or cause its Affiliates to reimburse, the Company for all reasonable and documented extraordinary out-of-pocket costs and expenses incurred by the Company or its Subsidiaries in connection with such cooperation and shall indemnify and hold harmless the Company, its Subsidiaries and their respective Representatives for and against any and all losses suffered or incurred by them in connection with the arrangement of the Debt Financing and any information utilized in connection therewith. The Company hereby consents to the use of its and its Subsidiaries’ logos in connection with the Debt Financing, provided that such logos are used solely in a manner that is not intended to nor reasonably likely to harm or disparage the Company or any of its Subsidiaries or the reputation or goodwill of the Company or any of its Subsidiaries and its or their marks.

          (c) Parent and Merger Sub shall use all commercially reasonable efforts to obtain the Financing. In the event that any portion of the Financing becomes unavailable otherwise than due to the material breach of representations and warranties or covenants of the Company or a failure of a condition to be satisfied by the Company, Parent and Merger Sub will use all commercially reasonable efforts, for a period not to exceed 90 days, to arrange alternative Financing from the same or other sources on terms and conditions not materially less favorable to Parent and Merger Sub than those to be contained in the Financing Letters. Parent and Merger Sub shall use all commercially reasonable efforts to satisfy on or before the Closing all requirements of the definitive agreements pursuant to which the Financing will be obtained. Parent and Merger Sub shall keep the Company reasonably apprised of material developments relating to the Financing. Notwithstanding the foregoing, nothing in this Section 6.4 shall affect Parent’s and Merger Sub’s obligation to provide the Financing in such amount as may be necessary to consummate the transactions contemplated hereby.

          SECTION 6.5 SOLICITATION.

          (a) Notwithstanding any other provision of this Agreement to the contrary, during the period beginning on the date of this Agreement and continuing until 11:59 p.m. (EST) on the 45th day after the date of this Agreement (the “Exclusivity Period Start Date”), the Company and its Subsidiaries and their respective Representatives shall have the right (acting under the direction of the Special Committee) to, directly or indirectly: (i) initiate, solicit and encourage, whether publicly or otherwise, Company Acquisition Proposals (as hereinafter defined), including by way of providing access to non-public information pursuant to (but only pursuant to) one or more Acceptable Confidentiality Agreements (as hereinafter defined);

26

provided that the Company shall promptly provide to Parent and Merger Sub any material non-public information concerning the Company or its Subsidiaries that is provided to any Person given such access which was not previously provided or made available to Parent and Merger Sub; (ii) enter into and maintain or continue discussions or negotiations with respect to Company Acquisition Proposals or otherwise cooperate with or assist or participate in, or facilitate any such inquiries, proposals, discussions or negotiations, and (iii) accept a Company Acquisition Proposal that the Board of Directors of the Company (acting through the Special Committee) believes in good faith is bona fide and is reasonably expected to result in a Company Acquisition Agreement that constitutes a Superior Proposal, or approve or recommend, or (provided that the Company has exercised its termination right under Section 8.1(f)) execute or enter into, a Company Acquisition Agreement that constitutes a Superior Proposal; it being understood and agreed that the Company (acting through the Special Committee) shall have the right (but not the obligation) to inform Parent of its intention to enter into a Company Acquisition Agreement, including the material terms and conditions thereof.

          (b) Subject to Section 6.5(c), and except as may relate to an Excluded Party, from the Exclusivity Period Start Date until the Effective Time or, if earlier, the termination of this Agreement in accordance with Article VIII, the Company shall not, and shall direct its Representatives not to, directly or indirectly, (A) initiate, continue, solicit or knowingly encourage (including by way of providing information) the submission of any inquiries, proposals or offers or any other efforts or attempts that constitute or may reasonably be expected to lead to, any Company Acquisition Proposal or engage in any discussions or negotiations with respect thereto or otherwise cooperate with or knowingly assist or participate in, or knowingly facilitate any such inquiries, proposals, discussions or negotiations or (B) accept a Company Acquisition Proposal or enter into any agreement or agreement in principle (other than an Acceptable Confidentiality Agreement) providing for or relating to a Company Acquisition Proposal or enter into any agreement or agreement in principle requiring the Company to abandon, terminate or fail to consummate the transactions contemplated hereby or breach its obligations hereunder. Notwithstanding the foregoing, the Company may continue to take any of the actions described in clause (A) above from and after the Exclusivity Period State Date with respect to any Excluded Party. Subject to Section 6.5(c) and except as may relate to an Excluded Party, on the Exclusivity Period Start Date the Company shall immediately cease and cause to be terminated any existing solicitation, encouragement, discussion or negotiation with any Persons conducted theretofore by the Company or any Company’s Representatives with respect to any Company Acquisition Proposal. Notwithstanding anything to the contrary contained herein, the Company (A) shall not, and shall not permit any of the Company’s Representatives to, provide any non-public information to any Excluded Party without first entering into an Acceptable Confidentiality Agreement and (B) will promptly provide to Parent and Merger Sub any material non-public information concerning the Company or its Subsidiaries provided to any Excluded Party which was not previously provided or made available to Parent and Merger Sub.

          (c) Notwithstanding anything to the contrary contained in Section 6.5(b), if at any time after the Exclusivity Period Start Date and prior to obtaining the Requisite Stockholder Vote, (i) the Company has otherwise complied with its obligations under this Section 6.5 in all material respects and has received a written Company Acquisition Proposal from a third party that the Board of Directors of the Company (acting through the Special Committee ) believes in good faith to be bona fide, and (ii) the Board of Directors of the Company (acting through the

27

Special Committee) determines in good faith, after consultation with its independent financial advisors and outside legal counsel, that such Company Acquisition Proposal constitutes or could reasonably be expected to result in a Superior Proposal, and (iii) after consultation with its outside legal counsel, the Board of Directors of the Company (acting through the Special Committee) determines in good faith that the failure to take such action would reasonably be expected to result in a breach of the Board of Directors’ fiduciary duties to the stockholders of the Company under applicable Law, then the Company may (x) furnish information with respect to the Company and its Subsidiaries to the Person making such Company Acquisition Proposal and (y) participate in discussions or negotiations with the Person making such Company Acquisition Proposal regarding such Company Acquisition Proposal; provided that the Company (A) will not, and will use its commercially reasonable efforts to cause its Representatives not to, disclose any non-public information to such Person without entering into an Acceptable Confidentiality Agreement, (B) will promptly provide to Parent and Merger Sub any material non-public information concerning the Company or its Subsidiaries provided to such other Person which was not previously provided or made available to Parent and Merger Sub and (C) in the event it receives such Company Acquisition Proposal, will promptly, and in any case within 48 hours after receipt thereof, notify Parent and Merger Sub of such Company Acquisition Proposal, including the material terms and conditions thereof and the identity of the party making such proposal, and shall keep Parent and Merger Sub reasonably informed as to the status and any material developments concerning the same. Notwithstanding anything to the contrary contained in Section 6.5(b) (other than the last sentence thereof) or this Section 6.5(c), but subject to the proviso to the immediately preceding sentence, after the Exclusivity Period Start Date and prior to obtaining the Requisite Stockholder Vote, the Company shall in any event be permitted to take the actions described in clauses (x) and (y) above with respect to any Excluded Party. Nothing contained in this Section 6.5(c) shall prohibit the Company or the Board of Directors of the Company (in each case, acting through the Special Committee) from (x) taking and disclosing to the Company’s stockholders a position with respect to a tender or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or (y) making any other disclosure required by applicable Law; provided, however, with respect to clause (x) that any such disclosure that is not a recommendation of rejection of such offer or a “stop, look and listen” letter or similar communication of the type contemplated by Rule 14d-9(f) promulgated under the Exchange Act shall be deemed to be an Adverse Recommendation Change.

          (d) Subject to the last sentence of this Section 6.5(d), from and after the Exclusivity Period Start Date until the Requisite Stockholder Vote is obtained, neither the Board of Directors of the Company nor any committee thereof shall, directly or indirectly, (i) (A) withdraw (or modify in a manner adverse to Parent or Merger Sub), or publicly propose to withdraw (or modify in a manner adverse to Parent or Merger Sub), the Recommendation or (B) recommend, adopt or approve, or propose publicly to recommend, adopt or approve, any alternative Company Acquisition Proposal (any such action described in clause (A) or (B) being referred to as an “Adverse Recommendation Change”), or (ii) approve or recommend, or publicly propose to approve or recommend, or allow the Company or any of its Subsidiaries to execute or enter into, any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar agreement constituting or relating to any Company Acquisition Proposal (other than an Acceptable Confidentiality Agreement and, to the extent a

28

Company Acquisition Proposal involves the issuance of securities to stockholders of the Company, other than an appropriate confidentiality agreement that allows the Company to receive and review confidential information with respect to a proposed issuer of any such securities) (a “Company Acquisition Agreement”); provided that the Company shall not be prohibited from terminating this Agreement and entering into a Permitted Alternative Agreement in accordance with Section 8.1(e). Notwithstanding the foregoing, at any time after the Exclusivity Period Start Date and prior to obtaining the Requisite Stockholder Vote, the Board of Directors of the Company (acting through the Special Committee) may make an Adverse Recommendation Change if it determines in good faith (after consultation with its independent financial advisors and outside legal counsel) that failure to take such action would reasonably be expected to result in a breach of the Board of Directors’ fiduciary duties to the stockholders of the Company under applicable Law; provided that the Board of Directors notifies Parent in writing of its intention to make such Adverse Recommendation Change at least three days prior to doing so.

          (e) From and after the Exclusivity Period Start Date, the Company shall provide notice promptly to Parent and Merger Sub of any resolution to terminate this Agreement in accordance with Section 8.1(e).

          (f) As used in this Agreement, the term:

          (i) “Acceptable Confidentiality Agreement” means a confidentiality and standstill agreement that contains customary terms and conditions with respect to transactions of the type contemplated by this Agreement;

          (ii) “Company Acquisition Proposal” means any inquiry, proposal or offer from any Person or group of Persons other than Parent, Merger Sub or their respective Affiliates relating to (A) any direct or indirect acquisition or purchase of a business that constitutes 15% or more of the net revenues, net income or assets of the Company and its Subsidiaries, taken as a whole, or 15% or more of the outstanding Company Securities, (B) any tender offer or exchange offer that if consummated would result in any Person or group of Persons beneficially owning 15% or more of the outstanding Company Securities, or (C) any merger, reorganization, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company (or any Subsidiary or Subsidiaries of the Company whose business constitutes 15% or more of the net revenues, net income or assets of the Company and its Subsidiaries, taken as a whole);

          (iii) “Superior Proposal” means a Company Acquisition Proposal (but changing the references to “15% or more” in the definition of “Company Acquisition Proposal” to “50% or more”) which the Board of Directors of the Company (acting through the Special Committee) in good faith determines (based on such matters as it deems relevant, including the advice of its independent financial advisor and outside legal counsel), would, if consummated, result in a transaction that is more favorable from a financial point of view to the stockholders of the Company (in their capacities as stockholders) than the transactions contemplated hereby.

29

          (g) The Company reserves the right to include in any agreement with a party who has submitted a Company Acquisition Proposal customary representations and warranties and customary covenants regarding the conduct of the Company.

          SECTION 6.6 RULE 16B-3. Prior to the Effective Time, the Company shall take such steps as may be reasonably necessary or advisable hereto to cause dispositions of Company equity securities (including derivative securities) pursuant to the transactions contemplated by this Agreement by each individual who is a director or officer of the Company to be exempt under Rule 16b-3 promulgated under the Exchange Act.

          SECTION 6.7 DIRECTOR AND OFFICER LIABILITY.

          (a) The Surviving Corporation shall: (i) indemnify and hold harmless each person who at the date hereof or during the period from the date hereof through the Effective Time is serving as a director or officer of the Company or the Subsidiaries (collectively, the “Indemnified Parties”) to the fullest extent authorized or permitted by applicable law, as now or hereafter in effect, in connection with any Claim and any judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such judgments, fines, penalties or amounts paid in settlement) resulting therefrom; and (ii) promptly pay on behalf of each of the Indemnified Parties, to the fullest extent authorized or permitted by applicable law, as now or hereafter in effect, any Expenses incurred in defending, serving as a witness with respect to or otherwise participating in any Claim in advance of the final disposition of such Claim, including payment on behalf of or advancement to the Indemnified Party of any Expenses incurred by such Indemnified Party in connection with enforcing any rights with respect to such indemnification and/or advancement, in each case without the requirement of any bond or other security, but subject to the Surviving Corporation’s receipt of an undertaking by or on behalf of such Indemnified Party, if required by applicable Law, to repay such Expenses if it is ultimately determined under applicable Laws that such Indemnified Party is not entitled to be indemnified); provided, however, that the Surviving Corporation shall not be liable for any settlement effected without the Surviving Company’s written consent (which consent shall not be unreasonably withheld or delayed) and shall not be obligated to pay the fees and Expenses of more than one counsel (selected by a plurality of the applicable Indemnified Parties) for all Indemnified Parties in any jurisdiction with respect to any single Claim except to the extent that two or more of such Indemnified Parties shall have conflicting interests in the outcome of such action. All rights to indemnification and advancement conferred hereunder shall continue as to a person who has ceased to be a director or officer of the Company or the Subsidiaries after the date hereof and shall inure to the benefit of such person’s heirs, executors and personal and legal representatives. For purposes of this Section 6.7, (x) the term “Claim” means any threatened, asserted, pending or completed Action, whether instituted by any party hereto, any Governmental Authority or any other party, that any Indemnified Party in good faith believes might lead to the institution of any such Action, whether civil, criminal, administrative, investigative or other, including any arbitration or other alternative dispute resolution mechanism, arising out of or pertaining to matters that relate to such Indemnified Party’s duties or service as a director or officer of the Company or any of the Subsidiaries, at or prior to the Effective Time at the request of the Company or any of the Subsidiaries; and (y) the term “Expenses” means reasonable attorneys’ fees and all other reasonable costs, expenses and obligations (including experts’ fees, travel

30

expenses, court costs, retainers, transcript fees, duplicating, printing and binding costs, as well as telecommunications, postage and courier charges) paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend, be a witness in or participate in, any Claim for which indemnification is authorized pursuant to this Section 6.7 including any Action relating to a claim for indemnification or advancement brought by an Indemnified Party. Neither Parent nor the Surviving Corporation shall settle, compromise or consent to the entry of any judgment in any Claim in respect of which indemnification has been or could be sought by such Indemnified Party hereunder unless (i) such settlement, compromise or judgment includes an unconditional release of such Indemnified Party from all liability arising out of such Claim, (ii) such Indemnified Party otherwise consents thereto, or (iii) Parent or the Surviving Corporation acknowledges that such Claim is subject to this Section 6.7.

          (b) For a period of six years after the Effective Time, the Surviving Corporation shall cause to be maintained in effect the current policies of officers’ and directors’ liability insurance maintained on the date hereof by the Company and its respective Subsidiaries (the “Current Policies”); provided, however, that the Surviving Corporation may, and in the event of the cancellation or termination of such policies shall, substitute therefor policies providing at least the same coverage and amount and containing terms and conditions that are no less favorable to the covered persons (the “Replacement Policies”) in respect of claims arising from facts or events that existed or occurred prior to or at the Effective Time under the Current Policies; provided further, however, that in no event will the Surviving Corporation be required to expend annually in excess of 250% of the annual premium currently paid by the Company under the Current Policies; provided further, however, that in lieu of the foregoing insurance coverage, Parent may direct the Company to purchase prepaid “tail” insurance coverage that provides coverage no less favorable than the coverage described above.

          (c) This Section 6.7 shall survive the consummation of the Merger and is intended to be for the benefit of, and shall be enforceable by, present or former directors or officers of the Company or its Subsidiaries, their respective heirs and personal representatives and shall be binding on the Surviving Corporation and its successors and assigns, and the agreements and covenants contained herein shall not be deemed to be exclusive of any other rights to which any such present or former director or officer is entitled, whether pursuant to Law, contract or otherwise. Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to directors’ and officers’ insurance claims under any policy that is or has been in existence with respect to the Company or any of its Subsidiaries or their respective officers, directors and employees, it being understood and agreed that the indemnification provided for in this Section 6.7 is not prior to or in substitution for any such claims under any such policies.

          (d) If the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity or (ii) transfers or conveys substantially all of its properties and assets to any person, then and in each case to the extent reasonably necessary, proper provision shall be made so that the successors and assigns of the Surviving Corporation shall assume the obligations set forth in this Section 6.7.

31

          SECTION 6.8 COMMERCIALLY REASONABLE EFFORTS. Subject to the terms and conditions of this Agreement (including Section 6.5), each party will use its commercially reasonable efforts to take, or cause to be taken, all actions, to file, or cause to be filed, all documents and to do, or cause to be done, all things necessary, proper or advisable to consummate the transactions contemplated by this Agreement, including obtaining all necessary consents, waivers, approvals, authorizations, Permits or orders from all Governmental Authorities or other Persons. Each party shall also refrain from taking, directly or indirectly, any action that would be reasonably likely to result in a failure of any of the conditions to the Merger in this Agreement being satisfied or restrict such party’s ability to consummate the Merger and the other transactions contemplated hereby. Without limiting the foregoing, the parties shall use their respective commercially reasonable efforts to (i) to take all action necessary so that no takeover, anti-takeover, moratorium, “fair price,” “control share” or other similar Law is or becomes applicable to the Merger or any of the other transactions contemplated by this Agreement and (ii) if any such Law is or becomes applicable to any of the foregoing, to take all action necessary so that the Merger and the other transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to minimize the effect of such statute or regulation on the Merger and the other transactions contemplated by this Agreement.

          SECTION 6.9 CERTAIN FILINGS.

          (a) The parties shall cooperate with one another (i) in determining whether any action by or in respect of, or filing with, any Governmental Authority is required, or any actions, consents, approvals or waivers are required to be obtained from any parties to any Contracts, in connection with the consummation of the transactions contemplated by this Agreement and (ii) in seeking and obtaining any such actions, consents, approvals or waivers or making any such filings, furnishing information required in connection therewith or with the Company Proxy Statement or the Schedule 13e-3; provided, however, that the conditions to the parties’ respective obligations to consummate the transactions contemplated hereby shall be limited to those conditions specified in Article VII. The parties shall have the right to review in advance, and to the extent reasonably practicable each will consult the other on, all the information relating to the other and each of their respective Subsidiaries that appears in any filing made with, or written materials submitted to, any Governmental Authority in connection with the Merger and the other transactions contemplated by this Agreement. Each of the Company and Parent shall promptly notify and provide a copy to the other party of any substantive written communication received from any Governmental Authority with respect to any filing or submission or with respect to the Merger and the other transactions contemplated by this Agreement. Each of the Company and Parent shall give the other reasonable prior notice of any substantive communication with, and any proposed understanding, undertaking or agreement with, any Governmental Authority regarding any such filing or any such transaction. Neither the Company nor Parent shall, nor shall they permit their respective representatives to, participate independently in any meeting or engage in any substantive conversation with any Governmental Authority in respect of any such filing, investigation or other inquiry without giving the other party prior notice of such meeting or conversation and without giving, unless prohibited by such Governmental Authority, the opportunity of the other party to attend or participate. The parties to this Agreement will consult and cooperate with one another in connection with any analyses, appearance, presentations, memoranda, briefs, arguments, opinions, and proposals made or

32

submitted by or on behalf of any party to this Agreement in connection with proceedings under or related to the HSR Act or Other Antitrust Laws.

          (b) The parties (i) shall use their respective commercially reasonable efforts to take or cause to be taken (A) all actions necessary, proper or advisable by such party with respect to the prompt preparation and filing with the SEC of the Company Proxy Statement and the Schedule 13e-3, (B) such actions as may be required to have the Company Proxy Statement and any related materials cleared by the SEC as promptly as reasonably practicable, and (C) such actions as may be required to be taken under the Exchange Act and state securities or applicable rules and regulations of the Nasdaq Stock Market or Blue Sky Laws in connection with the Merger; and (ii) shall promptly prepare and file all necessary documentation, effect all necessary applications, notices, petitions and filings, and use all reasonable efforts to obtain all material Permits from any Governmental Authorities necessary to consummate the Merger (including, without limitation, any filing under the HSR Act or any applicable Other Antitrust Law), including (1) responding as promptly as practicable to any inquiries from the Federal Trade Commission and the Antitrust Division of the Department of Justice for additional information or documentation; and (2) complying with the requirements of, and responding as promptly as reasonably practicable to all inquiries and requests received from any Governmental Authority in connection with, the HSR Act or Other Antitrust Laws related to the Merger or the other transactions contemplated by this Agreement.

          SECTION 6.10 PUBLIC ANNOUNCEMENTS. So long as this Agreement is in effect, the parties will consult with each other before issuing any press release or making any public statement with respect to this Agreement or the transactions contemplated hereby and, except for any press release or public statement as may be required by applicable Law or any listing agreement with any national securities exchange or quotation system, will not issue any such press release or make any such public statement without the consent of the other parties (such consent not to be unreasonably delayed, conditioned or withheld). The parties agree that the press release announcing the execution and delivery of this Agreement shall be a joint release of the parties.

          SECTION 6.11 FURTHER ASSURANCES. At and after the Effective Time, the officers and directors of the Surviving Corporation will be authorized to execute and deliver, in the name and on behalf of the Company or Merger Sub, any deeds, bills of sale, assignments or assurances and to take and do, in the name and on behalf of the Company or Merger Sub, any other actions and things to vest, perfect or confirm of record or otherwise in the Surviving Corporation any and all right, title and interest in, to and under any of the rights, properties or assets of the Company.

          SECTION 6.12 NOTICES OF CERTAIN EVENTS. Each of the Company, on the one hand, and Parent and Merger Sub, on the other hand, shall use commercially reasonable efforts to promptly notify the other party of:

          (a) the occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which would reasonably be expected to cause any representation or warranty of such party contained in this Agreement to be untrue or inaccurate in any material respect;

33

          (b) any failure of the Company, Parent or Merger Sub, as the case may be, to comply with or satisfy, or the occurrence or nonoccurrence of any event, the occurrence or nonoccurrence of which would reasonably be expected to cause the failure by such party to comply with or satisfy, any covenant, condition or agreement to be complied with or satisfied by it hereunder;

          (c) the receipt by such party of any notice or other communication from any Person alleging that the consent of such Person, which consent is or could reasonably be expected to be material to the Company and its Subsidiaries or the operation of their businesses, is or may be required in connection with the transactions contemplated by this Agreement;

          (d) the receipt by such party of any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement; and

          (e) its learning of any actions, suits, claims, investigations or proceedings commenced against, or affecting such party that, if they were pending on the date of this Agreement, would have been required to be disclosed pursuant to this Agreement or which relate to the consummation of the transactions contemplated by this Agreement.

          SECTION 6.13 DISPOSITION OF LITIGATION. The Company will keep Parent and Merger Sub reasonably apprised of all important developments relating to, and consult with Parent and Merger Sub with respect to, any action by any third party to restrain or prohibit or otherwise oppose the Merger or the other transactions contemplated by this Agreement and, subject to Section 6.5, will use commercially reasonable efforts to resist any such effort to restrain or prohibit or otherwise oppose the Merger or the other transactions contemplated by this Agreement. Parent and Merger Sub may participate in (but not control) the defense or settlement of any stockholder litigation against the Company and its Directors relating to the transactions contemplated by this Agreement at Parent and Merger Sub’s sole cost and expense (subject to Section 8.2); provided, however, that no such settlement shall be agreed to without the prior written consent of Parent (such consent not to be unreasonably withheld). In addition, subject to Section 6.5, the Company will cooperate with Parent and Merger Sub to resist any such effort to restrain or prohibit or otherwise oppose the Merger or the other transactions contemplated by this Agreement.

          SECTION 6.14 EMPLOYEE MATTERS.

          (a) For all purposes (other than benefit accrual) under the employee benefit plans of the Parent and its Subsidiaries providing benefits to each current and former employee of the Company and its Subsidiaries (“Company Employees”) after the Effective Time (the “New Plans”), except as would result in a duplication of benefits, each Company Employee shall be credited with all years of service for which such Company Employee was credited before the Effective Time under any similar Employee Plans. In addition, except as restricted by the insurance carriers for the New Plans: (i) each Company Employee shall be immediately eligible to participate, without any waiting time, in any and all New Plans to the extent coverage under such New Plan replaces coverage under a comparable Employee Plan in which such Company Employee participated immediately before the Effective Time (such plans, collectively, the “Old

34

Plans”); and (ii) for purposes of each New Plan providing medical, dental, disability, pharmaceutical and/or vision benefits to any Company Employee, Parent shall cause all pre-existing condition exclusions and actively-at-work requirements of such New Plan to be waived for such employee and his or her covered dependents during the portion of the plan year of the Old Plan ending on the date such employee’s participation in the corresponding New Plan begins to be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan.

          (b) For a period of one year from the Effective Time, Parent shall honor, fulfill and discharge the Company’s and its Subsidiaries’ obligations under the Company’s severance plans without any amendment or change that is adverse to the Company Employees. During the period specified above, severance benefits offered to Company Employees shall be determined without taking into account any reduction after the Effective Time in the compensation paid to Company Employees and used to determine severance benefits.

          (c) No Representative of the Company shall make any communication to employees of the Company regarding any compensation or benefits to be provided after the Closing Date without the advance written approval of Parent.

          (d) Notwithstanding anything to the contrary in this Section 6.14, the parties expressly acknowledge and agree that (i) nothing in this Agreement shall be deemed or construed to require Parent or the Company or any of the Company’s Subsidiaries to continue to employ any particular employee of the Company or any of the Company’s Subsidiaries for any period after the Closing, (ii) nothing in this Agreement shall be deemed or construed to limit Parent’s right to terminate the employment of any employee of the Company or the Company’s Subsidiaries during any period after Closing, (iii) no Company Employee shall be deemed a third party beneficiary of this Agreement, and (iv) nothing in this Agreement shall modify or amend any Employee Plan or other agreement, plan, program, or document unless this agreement explicitly states that the provision “amends” such Employee Plan or other agreement, plan, program, or document.

          SECTION 6.15 CONTROL OF OPERATIONS. Without in any way limiting any party’s rights or obligations under this Agreement, the parties understand and agree that (i) nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s operations prior to the Effective Time, and (ii) prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations.

          SECTION 6.16 RESIGNATIONS. The Company shall obtain and deliver to Parent at the Closing, evidence reasonably satisfactory to Parent of the resignation, effective as of the Effective Time, of all directors of the Company and each of its Subsidiaries (except those designated by Parent prior to the Closing).

35

ARTICLE VII
CONDITIONS TO THE MERGER

          SECTION 7.1 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The obligations of the Company, Parent and Merger Sub to consummate the Merger are subject to the satisfaction of the following conditions:

          (a) This Agreement shall have been approved by the Requisite Stockholder Vote.

          (b) All waiting periods (and any extensions thereof) applicable to the consummation of the Merger under the HSR Act and applicable foreign antitrust Laws shall have expired or otherwise been terminated.

          (c) The Spin-Off shall have been completed and the Flag License Agreements shall be in full force and effect.

          (d) No law, rule or statute, or order, injunction or decree issued by any court or agency of competent jurisdiction, preventing or making illegal the consummation of the Merger or any of the other transactions contemplated by this Agreement shall be in effect.

          (e) No orders suspending the use of the Company Proxy Statement shall have been issued and no proceeding for that purpose shall have been initiated by the SEC.

          SECTION 7.2 CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB. The obligations of Parent and Merger Sub to consummate the Merger are subject to the satisfaction or valid waiver of the following further conditions:

          (a) the Company shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to the Effective Time;

          (b) the representations and warranties (i) set forth in Sections 4.2(a) through (c), 4.4 and 4.7 shall be true and correct in all respects (except for inaccuracies that are de minimis in the aggregate) as of the date of this Agreement and as of the Effective Time as if made at and as of such time and (ii) set forth in Article IV, other than those described in clause (i) above, shall be true and correct as of the date of this Agreement and as of the date of the Effective Time as if made at and as of such time (without giving effect to any materiality qualifications set forth therein), except in the case of this clause (ii) where the failure to be so true and correct does not constitute a Material Adverse Effect on the Company and except where the failure to be so true and correct relates to facts or circumstances of which any member of the Senior Management Team had knowledge as of the date hereof or should have had knowledge by reason of being a member of the Senior Management Team, provided that representations made as of a specific date shall be required to be so true and correct (subject to such qualifications) as of such date only; and

          (c) Parent and Merger Sub shall have received a certificate signed by a senior officer of the Company attesting to Section 7.2(a) and (b) above;

36

          (d) there shall not have occurred a Material Adverse Effect on the Company other than Material Adverse Effect on the Company of which as of the date hereof any member of the Senior Management Team had knowledge or should have had knowledge by reason of being a member of the Senior Management Team;

          (e) the Company shall have delivered an affidavit satisfying the requirements of Treasury Regulation Section 1.1445-2(c)(3), in form and substance reasonably satisfactory to Parent, to Parent;

          (f) the aggregate number of shares of Common Stock at the Effective Time, the holders of which have demanded appraisal of their shares from the Company in accordance with the provisions of Section 262 of the DGCL, shall not equal 7.5% or more of the Common Stock outstanding as of the record date for the Stockholder Meeting; and

          (g) no material action, suit or proceeding is pending in any court of competent jurisdiction which has the effect of preventing the consummation of the Financing on terms substantially similar to the terms set forth in the Financing Letters delivered pursuant to Section 6.4(a) hereof; provided that Parent has used commercially reasonable efforts to contest or resolve such action, suit or proceeding.

          SECTION 7.3 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligation of the Company to consummate the Merger is subject to the satisfaction or valid waiver of the following further conditions:

          (a) Parent and Merger Sub shall have performed in all material respects all of their respective obligations hereunder required to be performed by them at or prior to the Effective Time;

          (b) the representations and warranties of Parent and Merger Sub contained in this Agreement shall be true and correct as of the date of this Agreement and as of the Effective Time as if made at and as of such time (without giving effect to any materiality qualifications set forth therein), except where the failure to be so true and correct does not have a material adverse effect on the ability of Parent or Merger Sub to consummate the Merger or carry out its other obligations hereunder, provided that representations made as of a specific date shall be required to be so true and correct (subject to such qualifications) as of such date only; and

          (c) the Company shall have received a certificate signed by a senior officer of Parent and Merger Sub attesting to Section 7.3(a) and (b) above.

ARTICLE VIII
TERMINATION

          SECTION 8.1 TERMINATION. This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time (notwithstanding the adoption of this Agreement by the stockholders of the Company):

          (a) by mutual written consent of the Company, on the one hand, and Parent and Merger Sub, on the other hand;

37

          (b) by either the Company, on the one hand, or Parent and Merger Sub, on the other hand, if:

          (i) the Merger has not been consummated by the Outside Date; provided, however, that a party shall not be permitted to terminate this Agreement pursuant to this Section 8.1(b)(i) if the failure to consummate the Merger by the Outside Date is principally the result of a failure on the part of such party to perform any covenant or obligation in this Agreement that is required to be performed by such party at or prior to the Effective Time;

          (ii) there shall be in effect any final and nonappealable Law or other legal restraint or prohibition preventing or making illegal the consummation of the Merger; provided, however, that the right to terminate this Agreement pursuant to this Section 8.1(b)(ii) shall not be available to any party whose breach of any provision of this Agreement is the principal cause of, or resulted in, the application or imposition of such Law or other legal restraint or prohibition; provided, further, that, the party seeking to terminate this Agreement pursuant to this Section 8.1(b)(ii) shall have used its commercially reasonable efforts to remove such Law or other legal restraint or prohibition in accordance with Section 6.8; or

          (iii) at the Company Stockholder Meeting or any adjournment thereof at which this Agreement has been voted upon, the Company stockholders fail to approve this Agreement by the Requisite Stockholder Vote;

          (c) by the Company, if:

          (i) a breach of any representation, warranty, covenant or agreement on the part of Parent or Merger Sub set forth in this Agreement shall have occurred which would cause any of the conditions set forth in Sections 7.1, 7.3(a) or 7.3(b) not to be satisfied, and such condition is incapable of being satisfied by the Outside Date; provided, however, that the Company is not then in material breach of this Agreement so as to cause any of the conditions set forth in Sections 7.1, 7.2(a) or 7.2(b) not to be satisfied; or

          (ii) there shall be any material breach of the Management Cooperation Agreement by Robert F.X. Sillerman or any of his Affiliates who are parties to the Management Cooperation Agreement;

          (d) by Parent or Merger Sub, if:

          (i) a breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement shall have occurred which would cause any of the conditions set forth in Sections 7.1, 7.2(a) or 7.2(b) not to be satisfied, and such condition is incapable of being satisfied by the Outside Date; provided, however, that (A) no member of the Senior Management Team had any knowledge as of the date of this Agreement of such breach and such breach was not caused by or resulting from any action of, or omission by, any one or more members of the Executive Management Team or by any other Person at the direction of any such member or

38

members other than actions or omissions taken in the ordinary course of business consistent with past practice in good faith and not with the purpose or intent of adversely affecting the transactions contemplated hereby, and (B) neither Parent nor Merger Sub is then in material breach of this Agreement so as to cause any of the conditions set forth in Sections 7.1, 7.3(a) or 7.3(b) not to be satisfied;

          (ii) the closing condition set forth in Section 7.2(d) is incapable of being satisfied; or

          (iii) a Triggering Event shall have occurred at any time after the Exclusivity Period Start Date and prior to the adoption of this Agreement by the Required Stockholder Vote;

          (e) by the Company, at any time after the Exclusivity Period Start Date and prior to obtaining the Requisite Stockholder Vote, upon the Board of Directors of the Company (acting through the Special Committee) resolving to enter into a Company Acquisition Agreement; provided, that, (i) the Board of Directors of the Company (acting through the Special Committee) shall not so resolve unless (A) the Company shall have complied in all material respects with its obligations under Section 6.5, (B) the Board of Directors of the Company (acting through the Special Committee) shall have determined in good faith (after consultation with its independent financial advisors and outside legal counsel) that the Company Acquisition Proposal to which such Company Acquisition Agreement relates constitutes a Superior Proposal and the failure to take such action would reasonably be expected to result in a breach of the Board of Directors’ fiduciary duties to the stockholders of the Company under applicable Law, (C) the Company shall have first provided Parent with notice that the Board of Directors of the Company is prepared to effect such resolution, which notice shall include all material terms and conditions of such Company Acquisition Proposal, be accompanied by copies of the relevant proposed transaction agreement and other material documents with the party making such Company Acquisition Proposal, and disclose to Parent the identity of the Person making such Company Acquisition Proposal, and (D) for the three days following delivery of the notice described in clause (i)(C), the Company shall, and shall cause it Representatives to, negotiate with Parent (to the extent Parent desires to negotiate) in good faith to make such adjustments to the terms of this Agreement so that such Company Acquisition Proposal would cease to constitute a Superior Proposal, (ii) during three day period described in clause (i)(D) Parent shall not have made an offer that the Board of Directors of the Company (acting through the Special Committee) determines in good faith, after consultation with its independent financial advisors and outside legal counsel, is at least as favorable from a financial point of view to the stockholders of the Company as such Superior Proposal, including successive Superior Proposals, (iii) the Company shall have paid to Parent the Parent Expenses as provided in Section 8.2, and (iv) the Company shall have entered into a definitive agreement (a “Permitted Alternative Agreement”) with respect to such Company Acquisition Proposal following such resolution of the Board of Directors of the Company (acting through the Special Committee). The Company shall make a copy of such executed Permitted Alternative Agreement available to Parent (provided that failure of the Company to comply with this obligation shall not affect any of the Company’s rights under this Section 8.1(e)); or

39

          (f) by the Company or Parent if at any time prior to the Exclusivity Period Start Date the Company executes or enters into a Company Acquisition Agreement under the circumstances described in Section 6.5(a)(iii).

The party desiring to terminate this Agreement pursuant to Sections 8.1(b) through (f) shall give written notice of such termination to the other party in accordance with Section 9.1 of this Agreement.

          SECTION 8.2 TERMINATION FEE.

          (a) Notwithstanding any other provision of this Agreement, if this Agreement is terminated on or after the Exclusivity Period Start Date pursuant to Section 8.1(b)(iii) (provided that Robert F.X. Sillerman and his Affiliates who are parties to the Management Cooperation Agreement shall have complied in all material respects with their obligations under the Management Cooperation Agreement), Section 8.1(d) or Section 8.1(e), then the Company shall pay to Parent and Merger Sub, collectively, at or prior to such termination, all of Parent’s and Merger Sub’s actual and reasonably documented out-of-pocket expenses and fees (including reasonable attorneys’ fees) incurred by Parent, Merger Sub and their respective Affiliates on or prior to the termination of this Agreement in connection with the transactions contemplated by this Agreement, which amount shall not be greater than $10,000,000 (the “Parent Expenses”); provided, however, that, if Parent exercises its right to terminate due to a breach of a representation or warranty pursuant to Sections 8.1(d)(i) or a Material Adverse Effect on the Company pursuant to Section 8.1(d)(ii) and such breach or Material Adverse Effect on the Company has been caused by an action or omission by any one or more members of the Executive Management Team or by any other Person at the direction of such member or members (other than an action or omission specifically excluded from definition of Material Adverse Effect on the Company in clause (a)(vii) thereof), the Company shall not be required to pay the Parent Expenses, and Parent shall pay the Company Expenses pursuant to Section 8.2(c).

          (b) If this Agreement is terminated by the Company pursuant to Section 8.1(b)(i) as a result of Parent’s or Merger Sub’s failure to consummate the Financing, provided that the condition set forth in Section 7.2(g) shall have been satisfied, or pursuant to Section 8.1(c) (in the case of Section 8.1(c)(ii), only if the material breach of the Management Cooperation Agreement was by Robert F. X. Sillerman or any of his Affiliates who are parties to the Management Cooperation Agreement), then Parent shall pay to the Company, at or prior to such termination, a termination fee of $37,000,000 (the “Parent Termination Fee”). If this Agreement is terminated by either the Company, on the one hand, or Parent or Merger Sub, on the other hand, pursuant to Section 8.1(b)(i) as a result of Parent’s or Merger Sub’s failure to consummate the Financing and the condition set forth in Section 7.2(g) shall not have been satisfied, then Parent shall pay to the Company, at or prior to such termination, all of the Company’s actual and reasonably documented out-of-pocket expenses and fees (including reasonable attorneys’ fees) incurred by the Company and its Subsidiaries on or prior to the termination of this Agreement in connection with the transactions contemplated by this Agreement (the “Company Expenses”), which amount, for the purposes of this Section 8.2(b), shall not be greater than $15,000,000. All or part of the Parent Termination Fee may be paid at Parent’s option in shares of Common Stock valued for the purposes of this Section 8.2 at an assumed valuation of $12.00 per share. In the event that Purchaser elects payment in Common

40

Stock, certificates representing such shares of Common Stock shall be delivered to the Company accompanied by stock powers duly endorsed in blank.

          (c) If Parent exercises its right to terminate due to a breach of a representation or warranty pursuant to Sections 8.1(d)(i) or a Material Adverse Effect on the Company pursuant to Section 8.1(d)(ii) and such breach or Material Adverse Effect on the Company has been caused by an action or omission by any one or more members of the Executive Management Team or by any other Person at the direction of such member or members (other than by an action or omission specifically excluded from definition of Material Adverse Effect on the Company in clause (a)(vii) thereof), Parent shall pay to the Company, at or prior to such termination, all of the Company’s Company Expenses, which amount, for the purposes of this Section 8.2(c) shall not be greater than $10,000,000.

          (d) The parties hereto agree that none of the Parent Expenses, the Company Expenses and the Parent Termination Fee is a penalty, but rather are liquidated damages in, respectively, a reasonable amount that will compensate, as applicable, Parent and Merger Sub on the one hand, and the Company on the other hand, for their respective efforts and resources expended and opportunities foregone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the transactions contemplated hereby, which amount would otherwise be impossible to calculate with precision. The parties further agree that, except as specifically provided in Section 8.3, in the event any payment of the Parent Expenses, Company Expenses or the Parent Termination Fee, as applicable, is made by the Company to Parent and Merger Sub, or by Parent to the Company, pursuant to this Section 8.2, (A) the Parent Expenses paid shall be the exclusive remedy available to Parent and Merger Sub and, upon payment of such amount by the Company, the Company shall have no further liability to Parent or Merger Sub hereunder and (B) the Parent Termination Fee and Company Expenses, as applicable, paid shall be the exclusive remedy available to the Company and, upon payment of such amount by Parent, neither Parent nor Merger Sub shall have any further liability to the Company hereunder.

          SECTION 8.3 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to Section 8.1, this Agreement shall forthwith become null and void and there shall be no liability or obligation on the part of the Company, Parent, Merger Sub or their respective Subsidiaries or Affiliates, except (i) Sections 8.2 and 8.3, and Article IX will survive the termination hereof and (ii) with respect to any liabilities for damages incurred or suffered by (x) a party as a result of the bad faith or willful misconduct of any other party or (y) Parent or Merger Sub in the event that the Company has terminated this Agreement pursuant to Section 8.1(b)(iii) hereof and there has been a material breach by the Company of its obligations under Section 6.2 (other than those specified in Section 6.2(c)) or Section 6.5. For the avoidance of doubt, any failure by Parent to obtain the Financing shall not constitute bad faith or willful misconduct, provided Parent has complied in all material respects with its obligations hereunder with respect to the Financing.

41

ARTICLE IX
MISCELLANEOUS

          SECTION 9.1 NOTICES. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile or similar writing) and shall be given:

if to Parent or Merger Sub, to:

19X, Inc.
650 Madison Avenue
New York, NY 10022
Attention: Robert F.X. Sillerman
Fax: (212) 832-5121

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

Paul, Hastings, Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
Attention: William F. Schwitter
Fax: (212) 230-7834

if to the Company, to:

CKX, Inc.
650 Madison Avenue
New York, NY 10022
Attention: Howard J. Tytel
Fax: (212) 832-5121

with a copy to the Special Committee (which shall not constitute notice) to:

CKX, Inc.
650 Madison Avenue
New York, NY 10022
Attention: Edwin M. Banks
Fax: (212) 832-5121

42

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

Reed Smith LLP
599 Lexington Avenue
29th Floor
New York, New York 10022
Attention: Herbert F. Kozlov
Fax: (212) 521-5450

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

Greenberg Traurig, LLP
MetLife Building
200 Park Avenue
New York, New York 10166
Attention: Alan I. Annex
Fax: (212) 801 6400

or such other address or facsimile number as such party may hereafter specify for by notice to the other parties hereto. Each such notice, request or other communication shall be effective (i) if given by facsimile, when such facsimile is transmitted to the facsimile number specified above and electronic confirmation of transmission is received or (ii) if given by any other means, when delivered at the address specified in this Section 9.1.

          SECTION 9.2 SURVIVAL. None of the representations, warranties, covenants or agreements contained herein or in any certificate or other writing delivered pursuant hereto shall survive the Effective Time; provided, however, that, this Section 9.2 shall not limit any covenant or agreement of the parties that by its terms contemplates performance in whole or in part after the Effective Time. None of the representations or warranties herein shall be considered modified, vitiated or waived in regard to any matter by any due diligence review or research conducted by or on behalf of Parent or Merger Sub, except to the extent contained in the Disclosure Letter or an amendment to such representation and warranty adopted pursuant to Section 9.3(a). As of the date hereof, neither Parent, Merger Sub nor any member of the Senior Management Team is aware of any fact, change, circumstance, development, event, effect or occurrence that would serve as the basis for a breach of any of the representations and warranties of the Company contained in this Agreement or breach of any of the Company’s covenants or agreements to be performed prior to the Effective Time.

          SECTION 9.3 AMENDMENTS; NO WAIVERS.

          (a) Any provision of this Agreement may be amended or waived prior to the Effective Time only by amendment or waiver in writing and signed, (i) in the case of an amendment to this Agreement, by the Company (approved by the Special Committee), Parent and Merger Sub, or (ii) in the case of a waiver, by the party against whom the waiver is to be effective; provided, however, that after receipt of the Requisite Stockholder Approval, any proposed amendment that by law would require further stockholder approval (including any such

43

amendment that reduces the amount or changes the type of consideration into which each share of Common Sock or Preferred Stock shall be converted upon consummation of the Merger) shall not be effective without such further stockholder approval.

          (b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as expressly set forth in Section 8.2, the rights and remedies herein provided shall be cumulative and not exclusive of any other rights or remedies herein provided or available at Law or in equity.

          SECTION 9.4 EXPENSES. Except as otherwise expressly provided in Sections 6.13 and 8.2, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense; provided, however, that Parent and the Company shall share equally the expenses (other than attorneys’ fees and expenses) incurred in connection with the filings required under the HSR Act (including the HSR filing fee).

          SECTION 9.5 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other parties hereto. Any purported assignment in violation of these provisions shall be null and void.

          SECTION 9.6 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware, without giving effect to the conflicts or choice of Law principles thereof.

          SECTION 9.7 COUNTERPARTS; EFFECTIVENESS; THIRD PARTY BENEFICIARIES. This Agreement may be executed by facsimile signatures and in any number of counterparts, each of which shall be deemed to be an original, with the same effect as if the signatures thereto and hereto were upon one and the same instrument. This Agreement shall become effective only when actually signed by each party hereto and each such party has received counterparts hereof signed by all of the other parties hereto. No provision of this Agreement is intended to or shall confer upon any Persons, other than the parties hereto, any rights or remedies hereunder or with respect hereto, except with respect to the matters provided in Sections 2.3, 2.4 and 6.7.

          SECTION 9.8 SEVERABILITY. If any term or other provision of this Agreement is held by court of competent jurisdiction or other governmental authority to be invalid, illegal or incapable of being enforced by virtue of any Law, or due to any public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties

44

as closely as possible in an acceptable manner so that the transactions contemplated hereby are fulfilled as originally contemplated to the fullest extent possible.

          SECTION 9.9 SPECIFIC PERFORMANCE. The parties hereby acknowledge and agree that the failure of any party to perform its agreements and covenants hereunder, including its failure to take all actions as are necessary on its part to consummate the Merger, will cause irreparable injury to the other parties, for which damages, even if available, will not be an adequate remedy. Accordingly, each party hereby consents to the issuance of injunctive relief by any court of competent jurisdiction to compel performance of such party’s obligations and to the granting by any court of the remedy of specific performance of its obligations hereunder, in addition to any other rights or remedies available hereunder or at law or in equity.

          SECTION 9.10 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the parties hereto with respect to its subject matter and supersedes all oral or written prior or contemporaneous agreements and understandings among the parties with respect to such subject matter.

          SECTION 9.11 JURISDICTION.

          (a) Except as otherwise expressly provided in this Agreement, the parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought exclusively in the Court of Chancery of the State of Delaware, County of New Castle or, if such court does not have jurisdiction over the subject matter of such proceeding or if such jurisdiction is not available, in the United States District Court for the District of Delaware, and each of the parties hereby irrevocably consents to the exclusive jurisdiction of those courts (and of the appropriate appellate courts therefrom) in any suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection which it may now or hereafter have to the laying of the venue of any suit, action or proceeding in any of those courts or that any suit, action or proceeding which is brought in any of those courts has been brought in an inconvenient forum. Process in any suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any of the named courts.

          (b) EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH PARTY

45

HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

          SECTION 9.12 AUTHORSHIP. The parties agree that the terms and language of this Agreement were the result of negotiations between the parties and their respective advisors and, as a result, there shall be no presumption that any ambiguities in this Agreement shall be resolved against any party. Any controversy over construction of this Agreement shall be decided without regard to events of authorship or negotiation.

          SECTION 9.13 LIMITED PAYMENT GUARANTEE. Robert F.X. Sillerman irrevocably guarantees to the Company, the full and timely payment of any Parent Termination Fee or Company Expenses payable by Parent pursuant to the terms of Section 8.2. This is a guarantee of payment, and not of collection, and Robert F.X. Sillerman acknowledges and agrees that this guarantee is full and unconditional, and no release or extinguishment of Parent’s obligations or liabilities (other than in accordance with the terms of this Agreement), whether by decree in any bankruptcy proceeding or otherwise, shall affect the continuing validity and enforceability of this guarantee. Parent hereby waives, for the benefit of the Company, (i) any right to require the Company as a condition of payment by Robert F.X. Sillerman to proceed against Parent or pursue any other remedies whatsoever, and (ii) to the fullest extent permitted by Law, any defenses or benefits that may be derived from or afforded by Law that limit the liability of or exonerate guarantors or sureties. For the avoidance of doubt, Robert F.X. Sillerman may assert, as a defense to any payment by him, any defense to such payment that Parent or Merger Sub could assert against the Company under the terms of this Agreement. Robert F.X. Sillerman understands that the Company is relying on this guarantee in entering into this Agreement.

[Signature Page Follows]

46

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers (or other authorized signatory) as of the day and year first above written.

CKX, INC.
By:	/s/ Michael G. Ferrel
	Name:	Michael G. Ferrel
	Title:	President
19X, INC.
By:	/s/ Robert F.X. Sillerman
	Name:	Robert F.X. Sillerman
	Title:	President
19X ACQUISITION CORP.
By:	/s/ Simon Fuller
	Name:	Simon Fuller
	Title:	CEO
Solely with respect to Section 9.13
/s/ Robert F.X. Sillerman
Robert F.X. Sillerman

[Signature Page to Merger Agreement]

EX-2.2

EXHIBIT 2.2

MANAGEMENT COOPERATION AGREEMENT

     This MANAGEMENT COOPERATION AGREEMENT, dated as of June 1, 2007 (this “Agreement”), is entered into by and among CKX, Inc., a Delaware corporation (the “Company”), and each of the holders of shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”) set forth on Schedule I hereto (each a “Stockholder”). Each individual listed in Column A of Schedule 1 is referred to herein as an “Executive Officer”, and each Executive Officer together with his affiliates listed on Column B of Schedule 1 are referred to as an “Executive Officer Group”. All of the Stockholders collectively are referred to as the “Voting Group”.

     WHEREAS, as of the date hereof, the Voting Group collectively owns of record and beneficially 43,443,503 shares of Common Stock, as set forth on Schedule I hereto (such shares and any other voting securities or rights of the Company acquired by any Stockholder after the date hereof being referred to herein collectively as, the “Shares”);

     WHEREAS, concurrently with the execution of this Agreement, the Company is entering into an Agreement and Plan of Merger with 19X, Inc., a Delaware corporation (“Parent”), and 19X Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), dated as of the date hereof (the “Merger Agreement”), pursuant to which, upon the terms and subject to the conditions thereof, Merger Sub shall be merged with and into the Company, at which time the separate existence of Merger Sub shall cease and the Company shall survive the Merger as a wholly owned subsidiary of Parent (the “Merger”). Capitalized terms used, but not defined, herein have the meanings ascribed to such terms in the Merger Agreement;

     WHEREAS, pursuant to the terms and subject to the conditions of the Merger Agreement, the Company has the right (a) during the period beginning on the date of the Merger Agreement and continuing until 11:59 p.m. (EST) on the 45th day after the date thereof (the “Non-Exclusivity Period”), to, among other things, (i) initiate, solicit and encourage Company Acquisition Proposals, (ii) enter into and maintain or continue discussions or negotiations with respect to Company Acquisition Proposals, and (iii) accept a Company Acquisition Proposal that the Board of Directors of the Company (acting through the Special Committee) believes in good faith is bona fide and is reasonably expected to result in a Company Acquisition Agreement that constitutes a Superior Proposal, or approve or recommend, or (provided that the Company has exercised its termination right under Section 8.1(f) of the Merger Agreement) execute or enter into, a Company Acquisition Agreement that constitutes a Superior Proposal (a “Permitted Agreement”);

     WHEREAS, as an inducement for the Company to enter into the Merger Agreement, the Company has requested that (i) each Stockholder agrees, and in order to induce the Company to enter into the Merger Agreement, each Stockholder is willing to agree to vote all of such

Stockholder’s Shares in favor of any Permitted Cash Agreement (as defined below), and (ii) each Executive Officer agrees to assist the Company (under the direction of the Special Committee) and its advisors with respect to any Company Acquisition Proposal received during the Non-Exclusivity Period, all upon the terms and subject to the conditions set forth herein.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereby agree as follows:

     Section 1. Voting of Shares. Each Stockholder hereby, jointly and severally with respect to the other Stockholders in such Stockholder’s Executive Officer Group, and severally and not jointly with respect to each of the other Stockholders, covenants and agrees to the Company as follows:

          (a) Until the Expiration Time (as defined in Section 6) (the “Support Period”), at every annual, special or other meeting (and at every adjournment and postponement thereof) of the stockholders of the Company, however called, and in any stockholder consent in lieu of a meeting or otherwise, such Stockholder will vote, or cause to be voted, all of such Stockholder’s Shares in favor of, as applicable (i) the adoption of the Merger Agreement (as it may be modified or amended from time to time) and the approval of the Merger contemplated thereby, and any actions required in furtherance thereof, or (ii) the adoption of any Permitted Agreement (as it may be modified or amended from time to time) and the approval of the transactions contemplated thereby, and any actions required in furtherance thereof, but only if such Permitted Agreement shall provide for consideration payable to the holders of Common Stock by the purchaser of such stock (the “Purchaser”) in an amount of no less than $14.00 in cash per share of Common Stock (a “Permitted Cash Agreement”).

          (b) Upon request by the Company or Purchaser, as the case may be (i) furnish written confirmation, in form and substance reasonably acceptable to the Company or Purchaser, as the case may be, of such Stockholder’s vote in favor of the Merger Agreement and the transactions contemplated thereby, including the Merger, or the Permitted Cash Agreement and the transactions contemplated thereby (the “Purchaser Transaction”), as the case may be, and (ii) prior to any vote contemplated by Section 1(a), deliver promptly to the Company or Purchaser, as the case may be, an irrevocable proxy (with full power of substitution), for and in the name, place and stead of such Stockholder, to vote, or cause to be voted, such Stockholder’s Shares, or grant a consent or approval in respect of such Stockholder’s Shares, at every annual, special or other meeting (and at every adjournment and postponement thereof) of the stockholders of the Company, however called, or pursuant to any stockholder consent in lieu of a meeting or otherwise, solely with respect to the matters and in the manner specified in Section 1(a), which shall be irrevocable in accordance with Section 212(e) of the Delaware General Corporation Law. Each Stockholder hereby affirms that the irrevocable proxy set forth in this Section 1(b) is given in connection with the execution of the Merger Agreement, and is given to secure the performance of such Stockholder’s obligations under this Agreement. The grant of proxy contemplated hereby is coupled with an interest and may under no circumstances be revoked, but

2

shall automatically terminate and be of no further force and effect at the Expiration Time. Each Stockholder hereby ratifies and confirms all that such irrevocable proxy may lawfully do or cause to be done in accordance herewith. Such irrevocable proxy shall be executed and intended to be irrevocable in accordance with the provisions Section 212(e) of the Delaware General Corporation Law.

          (c) In the event any Stockholder becomes the record or beneficial owner of (i) any additional shares of Common Stock, or (ii) any other securities (whether through any stock dividend, stock split, recapitalization, reclassification, combination or exchange of shares of capital stock of the Company or otherwise) entitling the holder thereof to vote or give consent with respect to the matters set forth in Section 1(a), then the terms of this Agreement shall apply to the shares of Common Stock or such other securities held by such Stockholder immediately following such Stockholder becoming the record or beneficial owner thereof as though they were such Stockholder’s Shares hereunder. Each Stockholder hereby agrees, until the Expiration Time, to notify the Company or Purchaser, as the case may be, of the number of any new shares of Common Stock acquired by such Stockholder, if any, after the date hereof.

          (d) No Stockholder executing this Agreement who is or becomes during the term hereof a director or officer of the Company makes (or shall be deemed to have made) any agreement or understanding herein in his or her capacity as such director or officer. Without limiting the generality of the foregoing, each Stockholder signs solely in his, her or its capacity as the record and/or beneficial owner, as applicable, of such Stockholder’s Shares and nothing herein shall, prohibit, limit or affect the exercise by such Stockholder (or a designee of such Stockholder), acting in his or her capacity as an officer or director of the Company, of his or her fiduciary duties to the Company and its stockholders, or any other actions taken by such Stockholder (or a designee of such Stockholder) in his or her capacity as an officer or director of the Company in exercising his or her or the Company’s or the Company’s Board of Directors’ rights in connection with the Merger Agreement or the Permitted Cash Agreement, as the case may be, or otherwise, and such actions shall not be deemed to be a breach of this Agreement.

     Section 2. Transfer of Shares. Each Stockholder hereby, jointly and severally with respect to the other Stockholders in such Stockholder’s Executive Officer Group, and severally and not jointly with respect to each of the other Stockholders, that, until the Expiration Time, such Stockholder will not directly or indirectly, except as specifically provided in this agreement (i) sell, assign, transfer (by merger or otherwise by operation of law), pledge, encumber or otherwise dispose of (including by gift) any of such Stockholder’s Shares, or any interest therein, (ii) deposit any of such Stockholder’s Shares into a voting trust or enter into a voting agreement or arrangement with respect to any of such Shares or grant any proxy or power of attorney with respect thereto that is inconsistent with this Agreement, (iii) enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect sale, assignment, transfer, tender, pledge, encumbrance, or other disposition of any of such Shares, or (iv) commit or agree to take any of the foregoing actions. Notwithstanding anything in this Section 2 to the contrary, each Stockholder (y) may tender and sell such Stockholder’s Shares to Parent or its Affiliates or Purchaser in a tender offer that is recommended by the Company’s Board of Directors (acting

3

through the Special Committee), and (z) may transfer any of such Stockholder’s Shares to one or more of its Affiliates or to Parent or its Affiliates (a “Permitted Transferee”), provided that prior (and as a condition) to any such transfer such Stockholder shall deliver to the Company a signed counterpart to this Agreement indicating that such Permitted Transferee agrees to be joined as a party to this Agreement (in addition to, and not in substitution of, the Stockholder named herein), as if (and to the same extent) such Permitted Transferee were originally named as “Stockholder” in this Agreement, and all references herein to “Stockholder” shall also be deemed to include such Permitted Transferee as applicable.

     Section 3. Cooperation. Each Executive Officer hereby agrees to reasonably cooperate with the Company (acting through the Special Committee) and its advisors, during the Non-Exclusivity Period, in the Company’s solicitation, evaluation and negotiation of any Company Acquisition Proposal, including cooperating with, assisting, participating in, or facilitating any such inquiries, proposals, discussions or negotiations, as permitted under the Merger Agreement.

     Section 4. Waiver of Appraisal Rights. Each Stockholder hereby waives, to the full extent of the law, and agrees not to assert any appraisal rights pursuant to Section 262 of the DGCL or otherwise in connection with the Merger with respect to any and all of such Stockholder’s Shares.

     Section 5. Representations and Warranties of the Stockholders. Each Stockholder hereby, jointly and severally with respect to the other Stockholders in such Stockholder’s Executive Officer Group, and severally and not jointly with respect to each of the other Stockholders, represents and warrants to the Company as of the date hereof:

          (a) Ownership of Shares. The Shares set forth opposite such Stockholder’s name on Schedule I are, owned beneficially and of record by such Stockholder or its nominee. As of the date of this Agreement, the Shares set forth opposite such Stockholder’s name on such Schedule I attached hereto represent all of the shares of capital stock of the Company owned (beneficially or of record) by such Stockholder, except shares of Common Stock which may be acquired by such Stockholder upon exercise of options, if any, held by such Stockholder (as noted in such Schedule). Except as set forth in Schedule 1, such Stockholder has sole voting power, without restrictions, with respect to all of such Stockholder’s Shares. Except as set forth in Schedule 1, such Stockholder owns such Stockholder’s Shares free and clear of any and all pledges, security interests, liens, encumbrances or adverse interests of any kind. Except for a Permitted Transferee, no Person has, or will have, the right to purchase or otherwise acquire such Stockholder’s Shares pursuant to any option agreement, purchase rights or other agreement, instrument or document binding upon such Stockholder.

          (b) Power, Binding Agreement. Such Stockholder (where applicable, is a limited partnership duly formed under the laws of the jurisdiction of its formation and) has the legal capacity, (where applicable, partnership) power and authority to enter into and to perform all of its obligations under this Agreement. The execution, delivery and performance of this

4

Agreement by such Stockholder does not and will not violate any material agreement to which such Stockholder is a party, including any voting agreement, stockholders’ agreement, partnership agreement or voting trust. Assuming the due authorization, execution and delivery of this Agreement by the other parties hereto, this Agreement has been duly and validly executed and delivered by such Stockholder and constitutes a valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

          (c) No Conflicts. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby will not, conflict with or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any material obligation or to a loss of a material benefit under, any provision of any loan or credit agreement, note, bond, mortgage, indenture, lease, or other agreement, instrument, permit, concession, franchise, license, judgment, order, writ, decree, statute, law, ordinance, rule or regulation applicable to such Stockholder or any of its properties or assets, other than such conflicts, violations or defaults or terminations, cancellations, accelerations or losses which individually or in the aggregate do not, and will not, materially impair the ability of such Stockholder to perform its obligations hereunder.

          (d) Revocation of Earlier Proxies. All proxies or voting agreements heretofore given in respect of such Stockholder’s Shares have been revoked.

          (e) Broker Fees. No broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission based upon arrangements made by or on behalf of such Stockholder in connection with its entering into this Agreement.

     Section 6. Expiration. This Agreement shall terminate upon the earliest to occur (the “Expiration Time”) of (a) with respect to each Stockholder’s obligations hereunder in respect of any Permitted Cash Agreement, (i) the effective time of any merger of the Company provided for in such Permitted Cash Agreement or, if there is no provision for such a merger, the closing of the transactions contemplated thereby, (ii) any termination of such Permitted Cash Agreement in accordance with the terms thereof, (iii) the public announcement by the Company of the withdrawal by the Company’s Board of Directors (acting through the Special Committee) of its recommendation of the Purchaser Transaction, and (iv) 11:59 p.m. (EST) on the Outside Date (provided, however, that the right to terminate this Agreement pursuant to this clause (iv) shall not be available to any party that is in breach in any material respect of its obligations hereunder); and (b) with respect to each Executive Officer’s obligations hereunder in respect of the Merger Agreement, (i) the effective time of the Merger, (ii) any termination of the Merger Agreement in accordance with its terms, and (iii) 11:59 p.m. (EST) on the Outside Date

5

(provided, however, that the right to terminate this Agreement pursuant to this clause (iii) shall not be available to any party that is in breach in any material respect of its obligations hereunder); provided that no such termination shall relieve any party of liability for a willful or intentional breach hereof prior to such termination.

     Section 7. Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement were not performed in accordance with its specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled, without the posting of any bond, to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of competent jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity, and no party will oppose the granting of such relief on the basis that any other party has an adequate remedy at law.

     Section 8. Further Assurances. For so long as this Agreement is in effect, each Stockholder agrees not to take any action which would make any representation or warranty of such Stockholder herein untrue or incorrect in any material respect or knowingly take any action that would have the effect of preventing or disabling it from performing its obligations under this Agreement. Each Stockholder will, from time to time, execute and deliver, or cause to be executed and delivered, such additional or further consents, documents and other instruments, and take or cause to be taken all actions and do or cause to be done all things, as the Company may reasonably request for the purpose of effectively carrying out the purposes of the transactions contemplated by this Agreement.

     Section 9. Miscellaneous.

          (a) Nothing in this Agreement is intended, or shall be construed, to prevent, limit or restrict in any way the right of any Stockholder or any of its Affiliates to make, for any reason or no reason, an offer, proposal or inquiry with respect to an improvement or modification in favor of the Company and its stockholders in the terms of the transaction to be effected by the Merger Agreement, or to enter into any negotiation or discussion relating thereto, or to make what would be a Superior Proposal with respect to any Company Acquisition Proposal or any Company Acquisition Agreement entered into by the Company in connection with or following the termination of the Merger Agreement (or to make any inquiry with respect thereto, or to enter into any negotiation or discussion relating thereto).

          (b) This Agreement, together with the Merger Agreement, constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, both oral and written, between the parties with respect thereto. No provision of this Agreement may be amended, modified, rescinded or waived except by an instrument signed in writing by the Company (acting through the Special Committee) and each of the Stockholders; provided that, with respect to the obligations of any individual Stockholder under this Agreement, this Agreement may be amended with the approval

6

of such Stockholder and the Company (acting through the Special Committee) notwithstanding the failure to obtain the approval of the other Stockholders.

          (c) The parties acknowledge that this Agreement is intended to be a voting agreement within the meaning of Section 218(c) of the Delaware General Corporation Law, as amended.

          (d) Except as provided in Section 2 hereof, neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise by any of the parties hereto without the prior written consent of the other parties hereto and any such assignment without such prior written consent shall be null and void. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns.

          (e) If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable law in a mutually acceptable manner in order that the terms of this Agreement remain as originally contemplated to the fullest extent possible.

          (f) The definitions in this Agreement shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” unless the context expressly provides otherwise. All references herein to Sections, paragraphs, subparagraphs, clauses, Exhibits or Schedules shall be deemed references to Sections, paragraphs, subparagraphs or clauses of, or Exhibits or Schedules to, this Agreement, unless the context requires otherwise. Unless otherwise specified, the words “herein,” “hereof,” “hereto” and “hereunder” and other words of similar import refer to this Agreement as a whole (including the Schedules and Exhibits) and not to any particular provision of this Agreement.

          (g) Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought exclusively in the Court of Chancery of the State of Delaware, County of New Castle or, if such court does not have jurisdiction over the subject matter of such proceeding or if such jurisdiction is not available, in the United States District Court for the District of Delaware, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in

7

any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient form. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 9.1 of the Merger Agreement as to giving notice hereunder shall be deemed effective service of process on such party.

          (h) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the principles of conflicts of laws thereof.

          (i) EACH OF THE COMPANY AND EACH STOCKHOLDER HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE COMPANY OR EACH STOCKHOLDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT.

          (i) This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute on and the same instrument.

[Remainder of this page intentionally left blank]

8

          IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be signed by its respective duly authorized officer as of the date first written above.

CKX, INC
By:	/s/ Michael G. Ferrel
	Name:	Michael G. Ferrel
	Title:	President
/s/ Robert F.X. Sillerman
Name:	Robert F. X. Sillerman
/s/ Laura Baudo Sillerman
Name:	Laura Baudo Sillerman
SILLERMAN COMMERCIAL HOLDINGS PARTNERSHIP L.P. By: SILLERMAN INVESTMENT CORPORATION, its General Partner
By:	/s/ Robert F.X. Sillerman
	Name:	Robert F. X. Sillerman
	Title:
SILLERMAN CAPITAL HOLDINGS L.P. By: SILLERMAN CAPITAL HOLDINGS, INC., its General Partner
By:	/s/ Robert F.X. Sillerman
	Name:	Robert F. X. Sillerman
	Title:	President

[Signature Page to Management Cooperation Agreement]

/s/ Michael G. Ferrel
Name:	Michael G. Ferrel

[Signature Page to Management Cooperation Agreement]

/s/ Mitchell J. Slater
Name:	Mitchell J. Slater
Mitchell J. Slater 2004 GRAT
By:	Mitchell J. Slater
	Name:	Mitchell J. Slater
	Title:	Trustee

[Signature Page to Management Cooperation Agreement]

/s/ Howard J. Tytel
Name:	Howard J. Tytel
/s/
Name:	Sandra Tytel

[Signature Page to Management Cooperation Agreement]

/s/ Simon Fuller
Name:	Simon Fuller

[Signature Page to Management Cooperation Agreement]

/s/ Thomas P. Benson
Name:	Thomas P. Benson

[Signature Page to Management Cooperation Agreement]

Draft of 5/27/07

SCHEDULE 1

Voting Group

Column A	Column B
Executive Officer	Affiliates/Direct Ownership	Holdings
Robert F.X. Sillerman	Direct Ownership		23,681,565
	Laura Baudo Sillerman		1,000,000
	Sillerman Commercial Holdings		6,135,704
	Partnership L.P.
	Sillerman Capital Holdings, L.P.		2,556,392
Michael G. Ferrel	Direct Ownership		1,829,112
Mitchell J. Slater	Direct Ownership		2,597,148
	Mitchell J. Slater 2004 GRAT		499,255
Howard J. Tytel	Howard J. Tytel and Sandra Tytel		2,246,2321
Simon Fuller	Direct Ownership		1,507,315
Thomas P. Benson	Direct Ownership		1,390,780

¹ 302,044 of such shares are pledged to Goldman Sachs as security for a margin account.

EX-2.3

EXHIBIT 2.3

Execution Copy

MEMBERSHIP INTEREST

PURCHASE AGREEMENT

OF

FX LUXURY REALTY, LLC

Dated as of June 1, 2007

MEMBERSHIP INTEREST PURCHASE AGREEMENT

          This MEMBERSHIP INTEREST PURCHASE AGREEMENT (the “Agreement”), dated as of June 1, 2007, is entered into by and among FX LUXURY REALTY, LLC, a Delaware limited liability company (the “Company”), CKX, Inc., a Delaware corporation (“Purchaser”), and Flag Luxury Properties, LLC, a Delaware limited liability company (“Flag”).

          WHEREAS, upon the terms and conditions contained in this Agreement, Purchaser is purchasing membership interests comprising, immediately after giving effect to such purchase, fifty percent (50%) of the aggregate outstanding membership interests in the Company (subject, as provided in the Operating Agreement, to the Flag Priority Interest described below) for an aggregate investment of $100 million, the proceeds of which will be used in the manner and at the times required hereby; and

          WHEREAS, as a condition to the closing of the transactions contemplated hereby, Purchaser and Flag are required to enter into the FX LUXURY REALTY, LLC Operating Agreement in substantially the form attached hereto as Exhibit A (the “Operating Agreement”), all on the terms and conditions set forth herein; and

          WHEREAS, in connection with the formation and capitalization of the Company by Flag, (i) Flag previously has effected or caused the contribution or transfer of certain interests and other assets to the Company (the “Formation Transactions”) and (ii) in connection therewith, Flag shall receive the Class A preferred membership interest in the Company which reflects the priority distribution that the parties have agreed that Flag is entitled to receive (the “Flag Priority Interest”); and

          WHEREAS, as a condition to the closing of the transactions contemplated hereby, the Company shall enter into a license agreement with Elvis Presley Enterprises, Inc. (“EPE”) in substantially the form attached hereto as Exhibit B (the “EPE License”), and a license agreement with Muhammad Ali Enterprises, LLC (“MAE LLC”) in the form attached hereto as Exhibit C (the “MAE License”), all on the terms and conditions set forth herein; and

          WHEREAS, following the Closing, the Company intends to evaluate and pursue a retail, hotel, commercial and residential development project for the approximately 17.72 contiguous acres of real estate that are owned by Company Subsidiaries and are located at the beginning at the corner of Las Vegas Boulevard and Harmon Avenue in Las Vegas, Nevada (the “Project”); and

          WHEREAS, following the Closing, and in anticipation of the Stockholder Distribution (as defined below) and subsequent Rights Offering (as defined below), the parties intend to reorganize (the “Reorganization”) their respective ownership interests in the Company by (i) establishing a corporation (“NEWCO Inc.”) (the certificate of incorporation of which shall be substantially in the form of Exhibit D attached hereto), (ii) requiring all members of the Company to contribute to NEWCO Inc. their membership interests in the Company for shares of common stock of NEWCO Inc,

except that Flag will not contribute to NEWCO Inc. the Flag Priority Interest (for the avoidance of doubt, the Flag Priority Interest shall remain outstanding pursuant to its terms set forth in the Operating Agreement, and (iii) taking such other actions as may be reasonably necessary to effectuate the Reorganization, all on the terms and conditions set forth herein; provided, that such Reorganization shall only be effective immediately prior to the consummation of the Stockholder Distribution and subsequent Rights Offering;

          WHEREAS, as soon as reasonably practical following the Reorganization, Purchaser shall effect the distribution of at least 50% of the shares of common stock of NEWCO Inc. that Purchaser receives in connection with such Reorganization in a pro rata distribution to its stockholders (the “Stockholder Distribution”); and

          WHEREAS, following the Reorganization, Flag shall effect a mandatory, pro rata distribution (for no consideration) to its members (the “Flag Members”) of all of the shares of common stock of NEWCO Inc. that Flag receives in connection with such Reorganization, which shares shall be subject, at all times, to the Waiver of Rights and Lock-Up Agreement described below (the “Mandatory Distribution”);

          WHEREAS, , Purchaser and Flag shall use commercially reasonable efforts to cause NEWCO Inc. to effect a rights offering on substantially the terms and conditions contained in Exhibit E attached hereto (the “Rights Offering”) as soon as reasonably practicable after the Stockholder Distribution;

          WHEREAS, in connection with certain of the transactions contemplated by this Agreement the Company shall issue a series of promissory notes to Flag or Flag Leisure Group LLC (“Flag Leisure”) which shall be due and payable pursuant to their respective terms, as provided herein;

          WHEREAS, as a condition to the closing of the transactions contemplated hereby, Purchaser (but only with respect to shares it shall hold and not shares distributed in the Stockholder Distribution) and Flag (and the Flag Members set forth in Schedule W-1 attached hereto (the “Designated Flag Members”)) in connection with the Mandatory Distribution shall enter into a waiver of their rights to participate in the Rights Offering on substantially the terms and conditions contained in Exhibit F attached hereto (the “Waiver of Rights”); and

          WHEREAS, as a condition to the closing of the transactions contemplated hereby, Purchaser and Flag (and the Designated Flag Members in connection with the Mandatory Distribution) shall enter into a three (3) year lock-up agreement in substantially the form attached hereto as Exhibit G (the “Lock-Up Agreement”) with respect to their shares of common stock of NEWCO Inc. to be received in connection with the Reorganization and Mandatory Distribution; provided, that such Lock-Up Agreements (i) shall only be effective for one (1) year for all members of Flag other than the Designated Flag Members and (ii) shall not become effective until the Reorganization is effected (it being understood that, except for Robert F.X. Sillerman (who shall be subject to a one (1) year lock-up regarding shares received in the Stockholder Distribution)), no Lock-Up Agreement shall be effective with respect to any shares of

-3-

common stock of NEWCO Inc. that were distributed to the stockholders of Purchaser as part of the Stockholder Distribution).

          NOW, THEREFORE, in consideration of these premises and the mutual covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE I.
PURCHASE OF MEMBERSHIP INTEREST

          1.1 Purchase of Membership Interests. Upon the terms and subject to the conditions set forth herein, Purchaser shall purchase from the Company, and the Company shall sell and issue to Purchaser, membership interests comprising fifty percent of the aggregate outstanding membership interests in the Company (subject, as provided in the Operating Agreement, to the Flag Priority Interest) for an aggregate price of $100,000,000 (the “Purchase Price”).

          1.2 Closing.

          (a) The consummation of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Paul, Hastings, Janofsky & Walker LLP, 75 East 55th Street, New York, New York, at 11:00 a.m. local time, on the business day specified by Purchaser which is two business days from the date upon which all of the conditions precedent set forth in Articles V and VI of this Agreement are satisfied or waived by the appropriate party hereto (other than those conditions which by their nature are to be satisfied at Closing, but subject to the fulfillment or waiver of those conditions). The actual date of the Closing is herein referred to as the “Closing Date”.

          (b) At the Closing, the Company shall deliver or cause to be delivered to Purchaser the membership interests described in Section 1.1 above, free and clear of all pledges, claims, liens, charges, encumbrances, adverse claims, mortgages and security interests of any kind or nature whatsoever (collectively, the “Liens”).

          (c) At the Closing, Purchaser shall deliver to the Company the Purchase Price, by wire transfer of immediately available funds to an account specified by the Company at least two business days prior to the Closing Date.

          1.3 Use of Proceeds. Upon delivery of the Purchase Price by Purchaser to the Company, the Company shall use the Purchase Price for legal and appropriate corporate purposes, as determined by the Company and as shall be consistent with the terms of this Agreement.

-4-

ARTICLE II.
REPRESENTATIONS AND WARRANTIES
OF FLAG AND THE COMPANY

          The Company and Flag, jointly and severally, hereby make the following representations and warranties to Purchaser:

          2.1 Organization and Corporation Power. Each of the Company and the direct and indirect subsidiaries listed in Schedule 2.1 attached hereto (the “Subsidiaries”) is a limited liability company duly organized, validly existing and in good standing under the laws of the state of its formation and has full limited liability company power and authority to conduct its business as presently conducted and as proposed to be conducted. Each of the Company and its Subsidiaries has full limited liability power and authority to enter into and perform its obligations under this Agreement and to carry out the transactions contemplated hereby. Each of the Company and its Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in every jurisdiction in which it is required to be so qualified, except where the failure to be so qualified would not have a Company Material Adverse Effect. Each of the Company and its Subsidiaries has furnished to Purchaser true and complete copies of the certificate of formation and operating agreement for the Company and each of its Subsidiaries, each as amended to date and presently in effect. Neither the Company nor any of its Subsidiaries is in violation of any material provision of its certificate of formation or operating agreement.

          2.2 Subsidiaries.

          (a) Except as set forth in Schedule 2.2(a), other than the Subsidiaries, neither the Company nor any of its Subsidiaries own or control, directly or indirectly, any shares of capital stock of any other corporation or any interest in any partnership, limited liability company, joint venture or other non-corporate business enterprise.

          (b) Except as set forth in Schedule 2.2(b), none of the Subsidiaries can, directly or indirectly, take or effect any material action (including, without limitation, any asset sale, the incurrence of indebtedness or the issuance of any equity securities), nor can any member of any such Subsidiary cause such Subsidiary to any such material action, in any case, without the prior written consent of the Company, other than such actions that are not material to the Company and are taken in the ordinary course of business of any such Subsidiary.

          2.3 Capitalization.

          (a) Schedule 2.3(a) sets forth a true, correct and complete schedule of membership interests in the Company immediately prior to the Closing. Other than these membership interests, the Company has no other membership

-5-

interests. Except as contemplated by the Operating Agreement and this Agreement, there are no outstanding subscriptions, rights, options, warrants, conversion rights, agreements, commitments, understandings or other claims for the purchase or acquisition of the membership interests in the Company, or otherwise entitling any person other than the parties hereto to acquire any membership interest in the Company or obligating the Company or any of the Subsidiaries to issue, repurchase or otherwise acquire any membership interest in the Company.

          (b) Immediately following the Closing, Purchaser will own fifty percent (50%) of the aggregate outstanding membership interests in the Company and Flag will own fifty percent (50%) of the aggregate outstanding membership interests in the Company and the Flag Priority Interest.

          (c) Except as contemplated by the Operating Agreement, the AI Purchase Agreement (as defined in Section 2.20), this Agreement or as set forth in Schedule 2.3(c), (i) neither the Company nor any of its Subsidiaries have an obligation to issue any membership interest or any subscriptions, options, warrants, preemptive rights or other rights (contingent or otherwise) to purchase membership interests, or to distribute to their members any membership interests, any evidence of indebtedness or any of their assets and (ii) neither the Company nor any of its Subsidiaries have an obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any of their membership interests or any interest therein or to pay any dividend or make any other distribution in respect thereof.

          2.4 Authorization; No Conflicts.

          (a) The execution, delivery and performance by the Company of this Agreement and the consummation by the Company and each of its Subsidiaries of the transactions contemplated hereby, including the purchase of the membership interests by Purchaser and the Formation Transactions, have been duly authorized by all necessary Company and Subsidiary action. No meeting of the members of the Company or any of the Subsidiaries is necessary to authorize the consummation of the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting generally creditors’ rights and subject to general principles of equity.

          (b) Except as set forth in Schedule 2.4(b), the execution and delivery of this Agreement by the Company and the performance by the Company of its obligations (including the Formation Transactions) hereunder will not (i) conflict with or violate the certificate of formation or operating agreement of the Company or any of the Subsidiaries, (ii) conflict with or violate any material law, statute, ordinance, rule, regulation, order, judgment, decree, injunction or other binding action or requirement of any Governmental Authority or agency applicable to the Company

-6-

or any of its Subsidiaries, or (iii) result in a violation or breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in any loss of any benefit under, or the creation of any lien on any of the property or assets of the Company or any of the Subsidiaries pursuant to, any material note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation of the Company or any of the Subsidiaries or to which the Company or any of the Subsidiaries are a party.

          2.5 Governmental Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any U.S. Federal, state, local, municipal or foreign governmental authority, quasi-governmental authority (including any governmental agency, commission, public authority, branch, department or official, and any court or other tribunal) or body exercising, or entitled to exercise, any governmentally derived administrative, executive, judicial, legislative, police, regulatory or taxing authority, or any self-regulatory organization, administrative or regulatory agency, commission, tribunal or authority (a “Governmental Authority”) is required on the part of the Company or any of the Subsidiaries in connection with the execution, delivery or performance of this Agreement and the transactions to be consummated hereby, except as would not have a Company Material Adverse Effect.

          2.6 Litigation. Except as disclosed in Schedule 2.6, no claim, action, suit or other proceeding is pending or, to the Company’s or any of the Subsidiaries’ knowledge, threatened against the Company or any of the Subsidiaries (i) which questions the validity of this Agreement or the right of the Company to enter into it or to consummate the transactions contemplated hereby or to pursue and complete the Project, or (ii) which might, either individually or in the aggregate, have a material adverse effect on, or result in any material adverse change in the Company or any of the Subsidiaries or impair the ability of the Company or any of the Subsidiaries to perform their obligations hereunder or their ability to pursue and complete the Project. Neither the Company nor any of its Subsidiaries are a party to or subject to any writ, order, decree, injunction or judgment of any Governmental Authority, which would adversely affect the Company or any of its Subsidiaries or the performance of their obligations hereunder or their ability to pursue and complete the Project, and to the knowledge of the Company there is no reasonable basis therefor or threat thereof.

          2.7 Taxes. Except as disclosed in Schedule 2.7:

               (a) All Tax Returns required to be filed under any applicable Tax Law by or with respect to the Company, any of its Subsidiaries and the Assets have been timely filed and all such Tax Returns were correct and complete in all material respects. All Taxes with respect to the Company, its Subsidiaries and the Assets have been paid through the Closing Date. No claim has ever been made by any governmental

-7-

entity in a jurisdiction where Tax Returns are not filed that the Company, its Subsidiaries and the Assets is or may be subject to taxation in that jurisdiction.

               (b) All Taxes that the Company and its Subsidiaries are or were required by Tax Law to withhold or collect in connection with any amounts paid or owing to any employee, independent contractor, nonresident, creditor or other third party have been duly withheld or collected and, to the extent required, have been paid to the proper governmental entity. For the avoidance of doubt, if the closing of the AI Purchase occurs prior to the Closing herein, the Company and its Subsidiaries will duly withhold and pay all required withholding amounts to the proper governmental entity. The Company and its Subsidiaries have complied with (or, if the closing of the AI Purchase occurs prior to the Closing herein, will comply with) all information reporting and record keeping requirements related to withholding and back-up withholding on payments to third parties.

               (c) Schedule 2.7(c) lists all the foreign countries where the Company and any of its Subsidiaries has a “permanent establishment” within the meaning of any applicable Tax Law in any foreign country.

               (d) None of the Company, any of its Subsidiaries or the Assets is subject to an IRS private letter ruling or a comparable ruling of any taxing authorities, and no request for such a ruling is currently pending.

               (e) Neither the Company nor any of its Subsidiaries will be required to include any amount in, or exclude any item of deduction from, taxable income for any taxable period or portion thereof ending after the Closing Date as a result of (i) any installment sale or open transaction; (ii) any prepaid amount received on or prior to the Closing Date; or (iii) change in method of accounting for a taxable period ending on or prior to the Closing Date. Neither the Company nor any of its Subsidiaries has had any item of income, gain, loss or deduction reportable in a taxable period ending after the date hereof but attributable to a transaction that occurred and is reportable in a taxable period or portion thereof ending on or before the date hereof.

               (f) No claim or Tax Proceeding is pending, currently being conducted or has been threatened against or with respect to the Company, any of its Subsidiaries or the Assets in respect of any Tax. There are no liens for Taxes upon the Company, any of its Subsidiaries or the Assets, except liens for current Taxes not yet due and payable.

               (g) Neither the Company nor any of its Subsidiaries has agreed to or is required to make any adjustments in taxable income for any tax period (or portion thereof) beginning after the Closing Date pursuant to Section 481(a) or 263A of the Code or any similar provision of state, local or foreign Tax Law as a result of transactions or events occurring prior to the Closing Date, nor is any application pending with any governmental entity requesting permission for any changes in accounting methods that relate to the Company, any of its Subsidiaries or the Assets.

-8-

               (h) There are no outstanding agreements, waivers or arrangements extending the statutory period of limitation applicable to any claim for, or the period for the collection or assessment of, Taxes due from or with respect to the Company, any of its Subsidiaries or the Assets for any taxable period and no such extension or waiver has been requested (formally or informally) from the Company or any of its Subsidiaries, or with respect to Taxes due on the Assets.

               (i) No closing agreement pursuant to Section 7121 of the Code (or any predecessor provision) or any similar provision of any state, local or foreign Tax Law has ever been entered into by or with respect to the Company, any of its Subsidiaries, or the Assets.

               (j) The Company and its Subsidiaries have at all times been in compliance with the provisions of Sections 6011, 6111 and 6112 of the Code (or any corresponding provision of state, local, or foreign Tax Law) relating to tax shelter disclosure, registration, list maintenance and record keeping and with the Treasury Regulations thereunder (including any predecessor or successor Code provisions or Treasury Regulations thereof, as applicable). Neither the Company nor its Subsidiaries have, at any time, engaged in or entered into a “listed transaction” within the meaning of Treasury Regulation Sections 1.6011, 301.6111 or 301.6112 or that would have been such a “listed transaction” if current Tax Law was in effect at the time the transaction was entered into.

               (k) Neither the Company nor any Subsidiary is party to or bound by or obligated under any Tax allocation or sharing, indemnification or similar agreement.

               (l) No power of attorney is currently in force with respect to any matter relating to Taxes that could affect the Company, or any of its Subsidiaries or the Assets.

               (m) None of the assets of the Company or its Subsidiaries: (v) is property required to be treated as being owned by another Person pursuant to the provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect immediately prior to the enactment of the Tax Reform Act of 1986; (w) is “tax-exempt use property” within the meaning of Section 168(h)(1) of the Code, (x) is “tax-exempt bond financed property” within the meaning of Section 168(g) of the Code, (y) is subject to Section 168(g)(1)(A) of the Code, or (z) is “limited use property” (as the term is used in Rev. Proc. 2001-28).

               (n) The Company is a limited liability company, wholly owned by Flag and disregarded as an entity separate from Flag, and neither the Company nor any of its Subsidiaries is or has been treated as a corporation for federal income tax purposes and is not and has not been a member of an affiliated group filing a consolidated federal income Tax Return.

-9-

               (o) Flag is not a foreign person within the meaning of Section 1445 of the Code.

          For purposes of this Section 2.7 and Section 7.6(a) herein, any reference to the Company or any of its Subsidiaries shall include (i) any entity which merged or was liquidated with and into the Company or any of its Subsidiaries, (ii) any predecessor to the Company or any of its Subsidiaries, and (iii) Flag to the extent of any assets, income and transactions that relate to the Company.

          For purposes of this Agreement, capitalized terms used but otherwise not defined in this Agreement shall have the following meanings:

                    (i) “Assets” shall mean all property of any kind, tangible or intangible, either owned currently by the Company and its Subsidiaries, or previously owned by the Company and its Subsidiaries.

                    (ii) “Code” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder, all as the same shall be in effect from time to time; “IRS” shall mean the Internal Revenue Service;

                    (iii) “Tax” shall mean any tax (including any income tax, franchise tax, capital gains tax, estimated tax, gross receipts tax, value added tax, surtax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business tax, occupation tax, inventory tax, occupancy tax, withholding tax or payroll tax), levy, assessment, tariff, impost, imposition, toll, duty (including any customs duty), deficiency or fee, and any related charge or amount (including any fine, penalty or interest), that is, has been or may in the future be (a) imposed, assessed or collected by or under the authority of any governmental entity, or (b) payable pursuant to any tax sharing agreement or similar contract;

                    (iv) “Tax Law” shall mean any federal, state, foreign or local law, statute, ordinance, rule, regulation, order, judgment or decree, administrative order, decree, administrative or judicial decision and any other executive, legislative, regulatory or administrative proclamation related to Tax;

                    (v) “Tax Return” shall mean any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification, form, election, certificate or other document or information that is, has been or may in the future be filed with or submitted to, or required to be filed with or submitted to, any governmental entity in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any applicable Tax Law relating to any Tax; and

                    (vi) “Tax Proceeding” shall mean any audit, examination, contest, litigation or other proceeding with respect to Taxes.

-10-

          2.8 Personal Property.

          (a) Except as set forth in Schedule 2.8, the Company and each of its Subsidiaries has good title to all of its material tangible assets and properties, free and clear of any mortgage, judgment, claim, lien, security interest, pledge, escrow, charge, easement, option, debt, assessment, right of first refusal, imperfection of title, lease or tenancy, legal or equitable right or other encumbrances of any kind or character whatsoever except for (i) taxes not yet due and payable; and (ii) those that arise in the ordinary course of business and do not materially impair the Company’s or any of its Subsidiaries’ ownership or use of any such asset or property or the Company’s or any of its Subsidiaries’ ability to obtain financing by using such assets or property as collateral.

          (b) Effective as of the Closing, the Company or one or more of its Subsidiaries will be the record and beneficial owner of (i) 836,588 shares of common stock, par value $0.0001 per share (the “Riv Shares”), of Riviera Holdings Corporation and (ii) one-half of an interest in an option held by Riv Acquisition Holdings, Inc. to acquire an additional 1,147,550 Riv Shares at an exercise price of $23.00 per share (subject to adjustment as may be provided pursuant to the terms of such option).

          (c) This Section 2.8 shall not apply to intellectual property or real property assets, which are the subject of the representations and warranties set forth in Section 2.9, 2.10 and 2.11 below.

          2.9 Real Property. Schedule 2.9 sets forth a complete and correct list of all Owned Real Property and interests in Real Property held by the Company and each of its Subsidiaries. Except as disclosed in Schedule 2.9 (and other Schedules referenced in this Section 2.9):

          (a) The Company and each of its Subsidiaries has good, marketable and insurable fee simple absolute interest in the Owned Real Property and real property interests other than leasehold interests. The Company has obtained commercially appropriate and reasonable policies of title insurance in favor of the Company and any of its Subsidiaries with respect to the Owned Real Property, the Leased Real Property and the real property interests other than leasehold interests (collectively, the “Real Property”), a copy of which policies are attached hereto as Schedule 2.9(a) and remain valid and effective such that all Owned Real Property and Leased Real Property listed in Schedules 2.9(k)(ii) and 2.9(k)(iii) are thereby insured.

          (b) There are no Liens, restrictions or encumbrances to title to any portion of the Real Property. To the knowledge of the Company, the Real Property or the improvements thereon are not subject to any unrecorded contracts, deeds, options, leases, easements, rights, obligations, covenants, conditions, restrictions, limitations or agreements not of record, except as set forth in the title policies or in the surveys listed in Schedule 2.9(a);

-11-

          (c) There is no pending condemnation or similar proceeding affecting the Real Property or any portion thereof and, to the Company’s or any its Subsidiaries’ best knowledge, no such action is presently contemplated or threatened against the Real Property;

          (d) Neither the Company nor any of its Subsidiaries have received any notice from any insurance company of any defects or inadequacies in the Real Property or any part thereof which could adversely affect the insurability of the Real Property or the premiums for the insurance thereof. Neither the Company nor any of its Subsidiaries have received any notice from any insurance company which has issued or refused to issue a policy with respect to any portion of the Real Property or by any board of fire underwriters (or other body exercising similar functions) requesting the performance of any repairs, alterations or other work with which full compliance has not been made;

          (e) Except as set forth in Schedule 2.9, as of April 23, 2007 there are no parties in possession of any portion of the Real Property other than the Company and each of its Subsidiaries. Except as set forth in Schedule 2.9(e), there are no options or rights in any party to purchase or acquire any ownership interest in the Real Property, including without limitation pursuant to any executory contracts of sale, rights of first refusal or options;

          (f) To the Company’s and each of its Subsidiaries’ knowledge, no zoning, subdivision, building, health, land-use, fire or other federal, state or municipal law, ordinance, regulation or restriction is violated by the continued maintenance, operation, use or occupancy of the Real Property or any tract or portion thereof or interest therein in its present manner, except for such violations which would not have a material adverse effect. To the Company’s and each of its Subsidiaries’ knowledge, the current use of the Real Property and all parts thereof as aforesaid does not violate any restrictive covenants affecting the Real Property. Except as set forth in the title policies listed in Schedule 2.9(a), no current use by the Company or any of its Subsidiaries of the Real Property or any improvement located thereon or any current use of the Real Property Leases is dependent on a nonconforming use or other approval from any Governmental Authority, the absence of which would significantly limit the use of any of the properties or assets in the operation of the Real Property;

          (g) Except as set forth in Schedule 2.9(g), the Real Property has adequate access to and from completed, dedicated and accepted public roads, and there is no pending, or to the Company’s or any of its Subsidiaries’ knowledge, threatened, governmental proceeding which could impair or curtail such access. Except as set forth in Schedule 2.9(g), no improvement or portion thereof is dependent for its access, operation, or utility on any land, building, or other improvement not included in the Real Property;

-12-

          (h) There are presently in existence water, sewer, gas and/or electrical lines or private systems on the Real Property which have been completed, installed and paid for and which are sufficient to service adequately the current operations of each building, facility or tower located on the Real Property, as the case may be;

          (i) All material Environmental Permits and other Permits which are necessary to permit the lawful access, use and operation of the buildings and improvements located on the Real Property for their present and intended use have been obtained, are in full force and effect, and to the Company’s and each of its Subsidiaries’ knowledge, there is no pending threat of modification or cancellation of any such Environmental Permits and other Permits. Neither the Company nor any of its Subsidiaries have received or been informed by a third party of the receipt by it of any written notice from any Governmental Authority having jurisdiction over the Real Property threatening a suspension, revocation, modification or cancellation of any Environmental Permit or other Permit.

          (j) Definitions. For purposes of this Section 2.9 and Section 2.10 below, capitalized terms used but otherwise not defined in this Agreement shall have the following meanings:

          (i) “Environmental Permit” shall mean any permit, license, certificate, approval, identification number or other authorization required under applicable Environmental Laws.

          (ii) “Leased Real Property” shall mean any parcel of Real Property of which the Company or any of its Subsidiaries are the lessee or sublessee (together with all fixtures and improvements thereon), including, but not limited to, the real property described in Schedule 2.9(j)(ii) attached hereto.

          (iii) “Owned Real Property” shall mean all real property owned by the Company or any of its Subsidiaries, together with all structures, facilities, fixtures, systems, improvements and items of property located thereon, or attached or appurtenant thereto, and all easements, rights and appurtenances relating to the foregoing, including, but not limited to, the real property described in Schedule 2.9(j)(iii) attached hereto.

          (iv) “Permit” shall mean permits, licenses, franchises, approvals, certificates, consents, waivers, concessions, exemptions, orders, registrations, notices or other authorizations issued to, or required to be obtained or maintained by, the Company or any of its Subsidiaries by a Governmental Authority, and all pending applications therefor and amendments, modifications and renewals thereof.

-13-

          (v) “Real Property Leases” shall mean each lease, sublease and license to which the Company or any of its Subsidiaries are a party relating to any Real Property, including, but not limited to, leasehold interests in the real property described in Schedule 2.9(j)(v) attached hereto.

          (k) The Project.

          (i) Schedule 2.9(k) accurately sets forth the legal description of the 17.72 contiguous areas of real estate that are included in the Project are owned by Company Subsidiaries and are located at the corner of Las Vegas Boulevard and Harmon Avenue in Las Vegas, Nevada.

          (ii) All of the Real Property included in the Project has a base zoning classification of H-1 for high density hospitality development and is within the MUD-1 subdistrict. The current zoning of the Real Property included in the Project includes a designation as a gaming enterprise district and casino gaming would be a permitted use of such Real Property included in the Project if the required special use permit is obtained.

          2.10 Real Property Leases. Except as set forth in Schedule 2.10, neither the Company nor any Subsidiary occupies or leases any Leased Real Property. Except as set forth in Schedule 2.10 and except as would not have a Company Material Adverse Effect:

          (a) All of the Real Property Leases (i) constitute legal, valid and binding obligations of the Company and each of its Subsidiaries and to the Company’s and any of its Subsidiaries’ knowledge, the other parties thereto, (ii) are in full force and effect, and (iii) neither the Company nor any of its Subsidiaries nor, to the Company’s and each of its Subsidiaries’ knowledge, any other party thereto has violated any provisions of, or committed or failed to perform any act which, with notice, lapse of time or both, would constitute a default under the provisions of any of, the Real Property Leases that would allow the other party to bring a claim for damages, except as would not individually or in the aggregate have, or could reasonably be expected to have, a material adverse effect, or to terminate such Real Property Lease;

          (b) The Real Property Leases constitute all of the agreements between the Company or any of its Subsidiaries, and third parties relating to the Leased Real Property. Schedule 2.10 lists all of the Real Property Leases, each of which has been delivered to Purchaser. None of the Real Property Leases has been cancelled, modified, assigned, extended or amended;

-14-

          2.11 Intellectual Property. Neither the Company nor any of its Subsidiaries own or use any patents, trademarks, service marks, trade names, domain names and copyrights, domestic and foreign (the “Intellectual Property Rights”). To the Knowledge of the Company, neither the Company nor any of its Subsidiaries are infringing on any person’s Intellectual Property Rights.

          2.12 Insurance. Schedule 2.12 lists all insurance policies maintained by the Company and each of its Subsidiaries, and a copy of each such policy listed in Schedule 2.12 has been delivered to Purchaser.

          2.13 Environmental Matters. No material hazardous waste, substance or material, and no oil, petroleum, petroleum product, asbestos, toxic substance, pollutant or contaminant (collectively, “Hazardous Material”), has been improperly generated, transported, used, handled, processed, disposed, stored or treated on any real property owned, leased, or operated by the Company or any of its Subsidiaries. No material Hazardous Material has been spilled upon, released from, discharged from, disposed of upon or transported from any real property owned, leased or operated by the Company or any of its Subsidiaries, and no such material Hazardous Material is present in, on, or to the knowledge of the Company and each of its Subsidiaries under any such property. The Company and each of its Subsidiaries is, in compliance in all material respects with all applicable material environmental rules, ordinances, by-laws and regulations, and with all permits, registrations and approvals required under such laws, rules, ordinances, by-laws and regulations (collectively, “Environmental Laws”). Neither the Company nor any of its Subsidiaries are aware of any fact or circumstance which they believe could involve the Company or any of its Subsidiaries in any material litigation, or impose upon the Company or any of its Subsidiaries any liability, arising under any Environmental Laws.

          2.14 Material Contracts and Obligations. Schedule 2.14 sets forth a list of all agreements or commitments of any nature to which the Company or any of its Subsidiaries are parties to or by which they are bound, whether written or verbal, including, without limitation, (a) each agreement or lease which requires future payments or guarantees by the Company or any of its Subsidiaries, (b) all employment and consulting agreements, employee benefit, bonus, pension, profit-sharing, and similar plans and arrangements, (c) any agreement with any member of the Company or any of its Subsidiaries or any affiliate of such persons, (d) any agreement relating to the purchase of membership interests of the Company or any of its Subsidiaries, (e) all loans, guarantees, pledges and other agreements of the Company or any of its Subsidiaries relating to indebtedness for borrowed money, (f) all non-competition and similar agreements entered into by the Company or any of its Subsidiaries (except for exclusives as contained in existing Real Property Leases), (g) any material agreement relating to the Project. Each of such agreements is valid and binding on and enforceable against the Company or its Subsidiaries, as applicable, and, to the knowledge of the Company and each of its Subsidiaries, each other party thereto and is in full force and effect. Neither the Company nor any of its Subsidiaries are in breach of or noncompliance with any term of any such agreement, and no event has occurred which, with the passage of time or giving of notice (or both), would constitute a breach under any such agreement, except as

-15-

would not have a Company Material Adverse Effect. To the Company’s and each of its Subsidiaries’ knowledge, no third party to such agreements is in material breach of or default under any of the provisions thereof. To the Company’s and each of its Subsidiaries’ knowledge, each such agreement listed in Schedule 2.14, unless otherwise noted therein, shall survive Closing and is not terminable on less than thirty (30) days’ written notice.

          2.15 Compliance. The Company and each of its Subsidiaries is, in all respects, in compliance with all applicable domestic and foreign statutes, laws, regulations, ordinances, permits, rules, writs, judgments, orders, decrees and arbitration awards (including, without limitation, environmental laws, labor laws and the Foreign Corrupt Practices Act) except as would not have a Company Material Adverse Effect. There is no term or provision of any mortgage, indenture, contract, agreement or instrument to which the Company or any of its Subsidiaries are a party or by which they are bound, or of any provision of any foreign, Federal or state judgment, decree, order, statute, rule or regulation applicable to or binding upon the Company or any of its Subsidiaries, which restricts in any material respect the conduct of their business, or that otherwise materially adversely affects the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries have, during the past two years, received any notice relating to any violation or potential violation of any applicable statutes, laws, regulations, ordinances, permits, rules, writs, judgments, orders, decrees and arbitration awards.

          2.16 Employees. Except as set forth in Schedule 2.16, neither the Company nor any of its Subsidiaries have employees who receive a salary and no employee of or consultant to the Company or any of its Subsidiaries are a party to a written employment or consulting agreements or arrangements. None of the employees of the Company or any of its Subsidiaries are or ever have been represented by any labor union, neither the Company nor any of its Subsidiaries have had any collective bargaining relationship or duty to bargain with any “Labor Organization” (as such term is defined in Section 2(5) of the National Labor Relations Act, as amended), and neither the Company nor any of its Subsidiaries have recognized any labor organization as the collective bargaining representative of any of its employees. There is no contract, agreement, plan or arrangement (oral or written) covering any employee of the Company or any of its Subsidiaries with “change of control”, “stay-put”, severance or similar provisions.

          2.17 ERISA. Neither the Company nor any of its Subsidiaries maintain or contribute to, or have any obligations to contribute to, any employee pension plans, as defined in Section 3(2) of the Employer Retirement Income Securities Act of 1974, as amended (“ERISA”), or any employer welfare plans, as defined in Section 3(1) of ERISA, or any equity-based compensation plans. All such employee benefit plans are in compliance with the applicable provisions of ERISA, the Internal Revenue Code of 1986, as amended, and all other applicable rules, regulations and administrative pronouncements. Neither the Company nor any of its Subsidiaries have contributed to a

-16-

multi-employer pension plan or a single-employer plan as described in Title IV of ERISA.

          2.18 Financial Statements; Absence of Undisclosed Liabilities.

          (a) Flag has previously made available to Purchaser complete and correct copies of the audited combined financial statements for Metroflag BP, LLC, Metroflag Polo, LLC, Metroflag Cable, LLC, CAP/TOR, LLC, Metroflag SW, LLC, Metro Flag HD, LLC, and Metroflag Management, LLC (collectively, the “Subject Entities”) the fiscal year ended December 31, 2005, and the related audited combined statements of income, cash flows and parent funding for the fiscal year ended December 31, 2005, including the notes thereto (collectively, the “2005 Audited Financial Statements”). The 2005 Audited Financial Statements fairly present in all material respects the financial position of the Subject Entities as of the respective dates thereof, and the results of operations and changes in cash flows, changes in parent funding or other information included therein for such periods or as of the dates then ended, in each case except as otherwise noted therein and subject, where appropriate, to normal year-end audit adjustments. The 2005 Audited Financial Statements have been prepared in accordance with United States generally accepted accounting principals (“GAAP”), applied on a consistent basis, except as otherwise noted therein.

          (b) As of the date hereof, except as set forth in Schedule 2.18(a) and in the balance sheet included in the 2005 Audited Financial Statements, and except for liabilities (i) incurred in the ordinary course of business, consistent with past practice and (ii) that individually not exceed $500,000 (or, $2,000,000 in the aggregate), neither the Company nor any of its Subsidiaries have any liabilities or obligations arising from the operations of their respective businesses that are of a nature that would be required to be disclosed on a combined balance sheet prepared consistently with the Company’s audited financial statements or in the notes thereto prepared in conformity with GAAP, other than liabilities or obligations that (x) would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect and (y) do not exceed $500,000 (or, $2,000,000 in the aggregate). Schedule 2.18(a) sets forth and describes all obligations of the Company and its Subsidiaries as of the date hereof for borrowed money or other funded indebtedness.

          2.19 Brokers. The Company does not have any contract, arrangement or understanding with any broker, investment banker, financial advisor, finder, consultant or similar agent relating to the payment of commissions, fees or other compensation in connection with the transactions contemplated by this Agreement.

-17-

          2.20 Purchase of AI Interests.

          (a) The execution, delivery and performance by the Company of the Purchase and/or Redemption Agreement, dated as of May 30, 2007, between the Company and Leviev Boymelgreen of Nevada, LLC (the “AI Purchase Agreement”) and the consummation by the Company of the transactions contemplated thereby, have been duly authorized by all necessary Company and Subsidiary action. No meeting of the members of the Company or any of the Subsidiaries is necessary to authorize the consummation of the transactions contemplated thereby. The AI Purchase Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting generally creditors’ rights and subject to general principles of equity. A true and complete copy of the AI Purchase Agreement has been delivered to Purchaser.

          (b) The execution and delivery of the AI Purchase Agreement by the Company and the performance by the Company of its obligations thereunder does not (i) conflict with or violate the certificate of formation or operating agreement of the Company or any of the Subsidiaries, (ii) conflict with or violate any material law, statute, ordinance, rule, regulation, order, judgment, decree, injunction or other binding action or requirement of any Governmental Authority or agency applicable to the Company or any of its Subsidiaries, or (iii) result in a violation or breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in any loss of any benefit under, or the creation of any lien on any of the property or assets of the Company or any of the Subsidiaries pursuant to, any material note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation of the Company or any of the Subsidiaries or to which the Company or any of the Subsidiaries are a party or bound.

          (c) To the Company’s knowledge, there exists no facts or circumstances that would cause any condition to the closing and consummation of the transactions contemplated by the AI Purchase Agreement to be or remain unsatisfied, other than the payment by the Company of the purchase price thereunder. The Company expects that the transactions contemplated by the AI Purchase Agreement shall be consummated no later than September 28, 2007 (but makes no representation of warranty that such transaction will occur on or before such date).

          2.21 Refinancings.

          (a) Metrotoflag Polo, LLC, Metroflag Cable, LLC, Metroflag BP, LLC, Metroflag SW, LLC, Metroflag HD, LLC, CAP/TOR, LLC, and BP Parent, LLC (collectively, “Borrower”) have refinanced in full (the “Refinancing”) all indebtedness and other amounts owed under the Loan Agreement, dated as of July 15,

-18-

2005 (as amended, the “Loan Agreement”), between Borrower and Barclay’s Capital Real Estate Inc., as Lender, and the Loan Agreement has been terminated and is of no force and effect and any and all liens and other encumbrances on any asset of any Borrower have been terminated and released. Flag has delivered to Purchaser true and complete copies of all primary replacement loan and related agreements with any new lender(s) relating to the Refinancing

          (b) Metroflag BP, LLC(the “BP Borrower”) has refinanced in full (the “BP Refinancing”) all indebtedness and other amounts owed under the Loan Agreement, dated as of July 15, 2005 (as amended, the “BP Loan Agreement”), between the BP Borrower and Barclay’s Capital Real Estate Inc., as Lender, and the BP Loan Agreement has been terminated and of is of no force and effect and any and all liens and other encumbrances on any asset of BP Borrower have been terminated and released. Flag and the BP Borrower have delivered to Purchaser true and complete copies of all replacement loan and related agreements with any new lender(s) relating to the BP Refinancing.

          2.22 No MAE. Except as set forth in Schedule 2.22, since December 31, 2005, as of the date hereof, with respect to the Company and its Subsidiaries there has not occurred any state of facts, change, development, event, effect, condition or occurrence that, individually or in the aggregate, has had or would be reasonably likely to have a Company Material Adverse Effect.

          2.23 Stockholder Distribution and Rights Offering. To the knowledge of the Company, the consummation by the Company of the Stockholder Distribution and the Rights Offering as contemplated hereby will not (i) conflict with or violate the certificate of formation or operating agreement of any of the Subsidiaries, or (ii) result in a violation or breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in any loss of any benefit under, or the creation of any lien on any of the property or assets of the Company or any of the Subsidiaries pursuant to, any material note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation of the Company or any of the Subsidiaries or to which the Company or any of the Subsidiaries are a party.

          2.24 No Other Representations. Except for the representations and warranties contained in this Agreement (as modified by the Schedules hereto), none of the Company, Flag or any of their Affiliates or any other Person makes any other express or implied representation or warranty with respect to the Company or its Subsidiaries, the business conducted or to be conducted by any of them, the transactions contemplated by this Agreement, or with respect to any financial information or other information provided to Purchaser or any other Person, whether on behalf of the Company, Flag or any of their Affiliates or any other Person, including as to the probable success or profitability of the ownership, or use or operation of the Company or its Subsidiaries, and each of the Company and Flag (on behalf of themselves and any of their Affiliates and

-19-

any other Person) disclaims any representations or warranties not contained in this Agreement, whether made by the Company, Flag or any of their Affiliates or any other Person or any of their respective officers, directors, employees, agents or representatives. Except for the representations and warranties contained in this Agreement (as modified by the Schedules), each of the Company and Flag (on behalf of themselves and any of their Affiliates and any other Person) hereby disclaims all liability and responsibility for any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to Purchaser or its Affiliates or representatives (including any opinion, information, projection, or advice that may have been or may be provided to Purchaser or any other Person by any director, officer, employee, agent, consultant, or representative of the Company, Flag or any of their Affiliates or any other Person).

ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PURCHASER

          Purchaser represents and warrants to the Company as follows:

          3.1 Investment Intent. Purchaser is acquiring the membership interests for its own account for investment and not with a view to, or for sale in connection with, any distribution thereof (other than as contemplated by this Agreement and in accordance with applicable law).

          3.2 Authority. Purchaser is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Purchaser has full power and authority to enter into and to perform its obligations under this Agreement in accordance with its terms.

          3.3 Validity of Agreements.

          (a) The execution, delivery and performance by Purchaser of this Agreement and the consummation by Purchaser of the transactions contemplated hereby, including the purchase of the membership interests by Purchaser, have been duly authorized by all necessary Purchaser action, including the approval of Purchaser’s Board of Directors (based on the recommendation of the Special Committee of the Board of Directors). This Agreement has been duly executed and delivered by Purchaser and, assuming due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and binding obligation of Purchaser enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting generally creditors’ rights and subject to general principles of equity.

          (b) Purchaser’s Board of Directors has received a fairness opinion from Houlihan Lokey Howard & Zukin, Inc. with respect to the fairness to Purchaser of the investment made by Purchaser hereunder.

-20-

          3.4 No Conflicts. The execution and delivery of this Agreement by Purchaser and the performance by Purchaser of its obligations hereunder will not (i) conflict with or violate the certificate of incorporation or bylaws of Purchaser or any of the subsidiaries, (ii) conflict with or violate any law, statute, ordinance, rule, regulation, order, judgment, decree, injunction or other binding action or requirement of any Governmental Authority or agency applicable to Purchaser or any of its subsidiaries, or (iii) result in a violation or breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in any loss of any benefit under, or the creation of any lien on any of the property or assets of Purchaser or any of its subsidiaries pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation of Purchaser or any of its subsidiaries or to which Purchaser or any of its subsidiaries are a party except, in the case of subclauses (ii) and (iii), as would not have a Purchaser Material Adverse Effect.

          3.5 Litigation. No claim, action, suit or other proceeding is pending or, to Purchaser’s or any of its subsidiaries’ knowledge, threatened against Purchaser or any of its subsidiaries (i) which questions the validity of this Agreement or the right of Purchaser to enter into it or to consummate the transactions contemplated hereby or to pursue and complete the Project, or (ii) which might, either individually or in the aggregate, have a material adverse effect on Purchaser’s ability to perform its obligations hereunder. Neither Purchaser or any its subsidiaries is a party to or subject to any writ, order, decree, injunction or judgment of any Governmental Authority, which would adversely affect Purchaser’s ability to perform its obligations hereunder.

          3.6 Experience. Purchaser represents that Purchaser is experienced in evaluating and investing in companies in a similar stage of development and acknowledges that such Purchaser can bear the economic risk of such Purchaser’s investment, and has such knowledge and experience in financial and business matters that such Purchaser is capable of evaluating the merits and risks of the investment in the Company.

          3.7 Brokers. Purchaser does not have any contract, arrangement or understanding with any broker, investment banker, financial advisor, finder, consultant or similar agent relating to the payment of commissions, fees or other compensation in connection with the transactions contemplated by this Agreement.

          3.8 Stockholder Distribution and Rights Offering. To the knowledge of Purchaser, the consummation by Purchaser of the Stockholder Distribution and by the Company of the Rights Offering as contemplated hereby will not (i) conflict with or violate the certificate of incorporation of Purchaser, or (ii) result in a violation or breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in any loss of any benefit under, or the creation

-21-

of any lien on any of the property or assets of Purchaser or any of its Subsidiaries pursuant to, any material note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation of Purchaser or any of its Subsidiaries or to which Purchaser or any of its Subsidiaries are a party.

          3.9 Riv Shares. As of the date hereof, Purchaser (not to be deemed to include any director, officer or stockholder of Purchaser) does not, directly or indirectly, own any Riv Shares.

ARTICLE IV.
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF FLAG

          4.1 Organization and Corporation Power. Flag is a limited liability company duly organized, validly existing and in good standing under the laws of the state of its formation and has full limited liability company power and authority to conduct its business as presently conducted and as proposed to be conducted. Flag has full limited liability power and authority to enter into and perform its obligations under this Agreement and to carry out the transactions contemplated hereby. Flag is duly qualified to do business as a foreign corporation and is in good standing in every jurisdiction in which it is required to be so qualified, except where the failure to be so qualified would not have a Flag Material Adverse Effect. Flag has furnished to Purchaser true and complete copies of its certificate of formation and operating agreement, each as amended to date and presently in effect. Flag is not in violation of any material provision of its certificate of formation or operating agreement.

          4.2 Authorization; no conflicts. The execution, delivery and performance by Flag of this Agreement have been duly authorized by all necessary company action. The execution, delivery and performance by Flag of this Agreement and the consummation by Flag of the transactions contemplated hereunder will not (i) conflict with or violate the certificate of formation or operating agreement of Flag or (ii) conflict with or violate any law, statute, ordinance, rule, regulation, order, judgment, decree, injunction or other binding action or requirement of any Governmental Authority or agency applicable to Flag, or (iii) result in a violation or breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in any loss of any benefit under, or the creation of any lien on any of the property or assets of Flag pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation of Flag or to which Flag is a party except in the case of subclauses (ii) and (iii) as would not have a Flag Material Adverse Effect.

          4.3 Validity of Agreements. This Agreement has been duly executed and delivered by Flag and, assuming due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and binding obligation of Flag enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency,

-22-

reorganization, moratorium or similar laws affecting generally creditors’ rights and subject to general principles of equity.

ARTICLE V.
CLOSING CONDITIONS OF PURCHASER

          The obligation of Purchaser to pay the Purchase Price, to acquire the membership interests and otherwise consummate the transactions contemplated hereby shall be subject to the satisfaction or waiver by Purchaser of the following conditions precedent on and as of the Closing Date:

          5.1 Representations and Warranties of the Company and Flag. Each of the representations and warranties of the Company and Flag contained in this Agreement shall be true and correct in all material respects as of the date hereof and as of the Closing Date as though made on and as of the Closing Date (except that those representations and warranties which address matters only as of a specified date shall be true and correct as of such specified date).

          5.2 Obligations and Covenants of the Company. The Company and Flag shall have performed all obligations and agreements and complied with all covenants and conditions required by this Agreement and any document contemplated hereby to be performed by or complied with by them prior to or at the Closing, in each case in all material respects.

          5.3 EPE License. The Company and EPE shall have executed and delivered the EPE License in substantially the form attached hereto as Exhibit B, and upon delivery of the required notice and payment of the required licensing fees, the Company shall have the right to cause the EPE License to become effective within twelve months of the Closing Date.

          5.4 MAE License. The Company and MAE LLC shall have executed and delivered the MAE License in substantially the form attached hereto as Exhibit C, and upon delivery of the required notice and payment of the required licensing fees, the Company shall have the right to cause the MAE License to become effective within twelve months of the Closing Date.

          5.5 Contribution and Sale Agreement Between Flag Leisure and the Company. Flag, Flag Leisure and the Company shall have executed and delivered that certain (x) sale agreement contemplated by clause (i) below and (y) contribution agreement described in clause (ii) below, pursuant to which:

     (i) Flag Leisure simultaneously with the Closing sells to the Company one hundred percent (100%) of the membership interests in RH1, LLC, a Nevada limited liability company (“RH1”) (and at such

-23-

time RH1 was, and as of the date hereof is, the record and beneficial owner of 418,294 Riv Shares and shares representing a 20/70 equity interest in Riv Acquisition Holdings, Inc., a Delaware corporation (“Riviera Acquisition”);

     (ii) Flag simultaneously with the Closing sells to the Company all of its membership interests in Flag Luxury Riviera LLC (“Flag Riviera”) (and at such time Flag Riviera was, and as of the date hereof is, the record and beneficial owner of 418,294 Riv Shares) and shares representing a 20/70 equity interest in Riviera Acquisition); and

     (iii) the Company (x) shall pay to Flag Leisure $12,548,820 in cash, and (y) shall pay to Flag $7,500,000 in cash.

          5.6 Contribution Agreement Between Flag and the Company. Flag and the Company shall have executed and delivered that certain contribution agreement relating to the Formation Transactions pursuant to which Flag contributed all of its direct and indirect membership interests in the Subsidiaries to the Company.

          5.7 Waiver of Rights Offering. Each of Purchaser and Flag (and the Designated Flag Members) shall have entered into a Waiver of Rights, on substantially the same terms and conditions contained in Exhibit F attached hereto, pursuant to which each of Purchaser and Flag waived the right to participate in the Rights Offering.

          5.8 Lock-Up Agreements. Each of Purchaser and Flag (and the Designated Flag Members) shall have executed and delivered to the Company a three (3) year Lock-Up Agreement, in substantially the form attached hereto as Exhibit G, with respect to their shares of voting securities of NEWCO Inc. (it being understood that, except for Robert F.X. Sillerman, no Lock-Up Agreement shall be effective with respect to any shares of common stock of NEWCO Inc. that were distributed to the stockholders of Purchaser as part of the Stockholder Distribution) and such Lock-Up Agreement shall become effective immediately upon the Reorganization and shall relate to the periods (i) from and after the Reorganization and prior to the consummation of the Rights Offering and (ii) from and after the Rights Offering.

          5.9 Consents. All consents and approvals of, and all filings and registrations with, governmental authorities and other third parties required in connection with the consummation of the transactions contemplated by this Agreement shall have been obtained or made by or on behalf of the Company, except for those the failure to obtain would not have a Company Material Adverse Effect.

          5.10 No Litigation or Legislation. There is no Action pending, or threatened in writing, which Purchaser determines, following the receipt of the advice from its outside counsel, would reasonably be expected to have a Company Material

-24-

Adverse Effect. No preliminary or permanent injunction or other Order shall have been issued that would make unlawful the consummation of the transactions contemplated by this Agreement, and consummation of the transactions contemplated by this Agreement shall not be prohibited or made illegal by any Law.

          5.11 Legal Opinion. The Company and Purchaser shall have received the favorable, written opinion of Greenberg, Traurig, LLP, counsel to Flag and the Company, with respect to the matters set forth in Schedule 5.11 hereof.

          5.12 Representations and Warranties of Principals. Each of Robert F.X. Sillerman, Brett Torino and Paul C. Kanavos shall have executed and delivered to Purchaser a representation letter, in form and substance reasonably satisfactory to Purchaser, containing the representations and warranties set forth in Schedule 5.12 hereof.

          5.13 Non-Foreign Status Affidavit. A non-foreign status affidavit in the form of Exhibit I attached hereto and incorporated herein by this reference, as required by Section 1445 of the Internal Revenue Code, executed by Flag, shall have been delivered to Purchaser.

ARTICLE VI.
CLOSING CONDITIONS OF THE COMPANY AND FLAG

          The obligation of the Company to issue and sell the membership interests to Purchaser and the obligations of Flag and the Company otherwise to consummate the transactions contemplated hereby shall be subject to the satisfaction or waiver by Purchaser of the following conditions precedent on and as of the Closing Date:

          6.1 Representations and Warranties of Purchaser. Each of the representations and warranties of Purchaser contained in this Agreement shall be true and correct in all material respect as of the date hereof and as of the Closing Date as though made on and as of the Closing Date (except that those representations and warranties which address matters only as of a specified date shall be true and correct as of such specified date).

          6.2 Obligations and Covenants of Purchaser. Purchaser shall have performed all obligations and agreements and complied with all covenants and conditions required by this Agreement and any document contemplated hereby to be performed by or complied with it prior to or at the Closing, in each case in all material respects.

          6.3 No Litigation or Legislation. There is no Action pending, or threatened in writing, which Flag determines, following the receipt of the advice from its outside counsel could reasonably be expected to have a Purchaser Material Adverse Effect. No preliminary or permanent injunction or other Order shall have been issued

-25-

that would make unlawful the consummation of the transactions contemplated by this Agreement, and consummation of the transactions contemplated by this Agreement shall not be prohibited or made illegal by any Law.

          6.4 Payment of the Purchase Price. Purchaser shall have delivered the Purchase Price to the Company.

          6.5 EPE License. The Company and EPE shall have executed and delivered the EPE License in substantially the form attached hereto as Exhibit B, and upon delivery of the required notice and payment of the required licensing fees, the Company shall have the right to cause the EPE License to become effective within twelve months of the Closing Date.

          6.6 MAE License. The Company and MAE LLC shall have executed and delivered the MAE License in substantially the form attached hereto as Exhibit C, and upon delivery of the required notice and payment of the required licensing fees, the Company shall have the right to cause the MAE License to become effective within twelve months of the Closing Date.

          6.7 Waiver of Rights Offering. Each of Purchaser and Flag (and the Designated Flag Members) shall have entered into a Waiver of Rights, on substantially the same terms and conditions contained in Exhibit F attached hereto, pursuant to which each of Purchaser and Flag (and the Flag Members in connection with the Mandatory Distribution) waived its right to participate in the Rights Offering.

          6.8 Lock-Up Agreements. Each of Purchaser and Flag (and the Designated Flag Members) shall have executed and delivered to the Company a three (3) year Lock-Up Agreement, in substantially the form attached hereto as Exhibit G, with respect to their shares of voting securities of NEWCO Inc. (it being understood that, except for Robert F.X. Sillerman (who shall be subject to a one (1) year lock-up regarding shares received in the Stockholder Distribution)), no Lock-Up Agreement shall be effective with respect to any shares of common stock of NEWCO Inc. that were distributed to the stockholders of Purchaser as part of the Stockholder Distribution) and such Lock-Up Agreement shall become effective immediately upon the Reorganization and shall relate to the periods (i) from and after the Reorganization and prior to the consummation of the Rights Offering and (ii) from and after the Rights Offering.

          6.9 Consents. All consents and approvals of, and all filings and registrations with, governmental authorities and other third parties required in connection with the consummation of the transactions contemplated by this Agreement shall have been obtained or made by or on behalf of the Company, except for those the failure to obtain would not have a Company Material Adverse Effect.

-26-

ARTICLE VII.
OTHER COVENANTS

          7.1 Reorganization, Stockholder Distribution and Rights Offering. In connection with the Stockholder Distribution, the parties agree that Purchaser may, on not less than three (3) business days prior written notice, cause the Company and its members, and Flag, to take such preliminary steps as may be required to be in a position to effect the Reorganization and Mandatory Distribution in connection with the Stockholder Distribution; provided, that the Reorganization shall only be effective immediately prior to the Stockholder Distribution. Notwithstanding anything to the contrary contained herein, the parties agree to use their commercially reasonable efforts (i) to effect the Stockholder Distribution as soon as reasonably practicable after the date hereof and (ii) thereafter to effect the Rights Offering as soon as reasonably practicable following the Stockholder Distribution. In that regard, but subject to the foregoing, the parties hereto agree as follows:

          (a) Purchaser shall establish NEWCO Inc. as a corporation duly formed under the laws of the State of Delaware (the certificate of incorporation of which shall be substantially in the form of Exhibit D attached hereto);

          (b) Flag and Purchaser shall contribute to NEWCO Inc. their membership interests in the Company (except that Flag will not contribute to NEWCO Inc. the Flag Priority Interest) for shares of common stock of NEWCO Inc., issued on a ratable basis consistent with each such member’s membership interest in the Company as of such date (for the avoidance of doubt, the Flag Priority Interest shall remain outstanding pursuant to its terms set forth in the Operating Agreement);

          (c) Promptly following written notice from Purchaser to Flag (and in no event more than five (5) business days thereafter), (i) Flag shall take any and all such as action as is necessary or reasonably requested by Purchaser to effect the Mandatory Distribution and, in connection therewith and as a condition thereto, cause each Designated Flag Member to execute and deliver to Purchaser and the Company (x) a Waiver of Rights and Lock-Up Agreement executed by each of the Designated Flag Members (and such documents shall be executed by CKX only with respect to shares it holds on its own behalf and not shares to be distributed in the Stockholder Distribution) and (y) such other documents and instruments as Purchaser may reasonably request, and (ii) the parties shall take such actions as are necessary to cause each certificate representing such shares of common stock distributed in the Mandatory Distribution to bear a legend identifying that such shares are subject to the Waiver of Rights (except with respect to shares distributed in the Stockholder Distribution) and Lock-Up Agreement (which shall be for a period of one (1) year for all members of Flag other than the Designated Members (for which the Lock-Up Agreement shall be for a three (3) year period));

-27-

          (d) The parties shall take (and Flag shall cause the Flag Members to take) such other actions, and execute such documents and other instruments as Purchaser may reasonably request, to effectuate the Reorganization, all on the terms and conditions set for the herein;

          (e) Purchaser, and, if requested by Flag, the Designated Flag Members shall enter into a registration rights agreement that provides for one demand registration right for each Designated Flag Member with regards to a registration on Form S-3 and two piggy-back registration rights on equity registrations effected by NEWCO Inc. for equity offerings of stockholders of the Company (and not registrations in respect of Company shares only) , subject to underwriter lock-up and cut back provisions, and such other terms and conditions as are customary and are agreed to by the parties thereto.

          (f) The parties agree that any shares of common stock of NEWCO Inc. distributed by Flag in the Mandatory Distribution shall, at all applicable times, be subject to the Waiver of Rights and Lock-Up Agreement, provided that the lock-up period with respect to members of Flag who are not Designated Flag Members shall be one (1) year and not three (3) years, and stock certificates representing such shares shall bear a legend identifying the foregoing restrictions.

          (g) Notwithstanding anything herein to the contrary, Purchaser shall not be required to effect the Stockholder Distribution and the Company shall not be required to effect the Rights Offering until all applicable legal and regulatory requirements have been satisfied.

          7.2 Financial Statements and Other Information. In addition, in connection with the Stockholder Distribution and/or the Rights Offering or otherwise, each of the parties hereto agrees to the following:

          (a) The Company shall use commercially reasonable efforts to deliver to Purchaser no later than 45 days after the Closing Date, the audited financial statements of the Subject Entities for the fiscal year ended December 31, 2006 fiscal (collectively, such combined financial statements, together with the notes thereto (the “2006 Audited Financial Statements”), which will comply with the reporting requirements of the U.S. Securities and Exchange Commission (the “SEC”) under Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended, together with the rules and regulations of the SEC promulgated thereunder (the “Exchange Act”), together with an unqualified opinion of the Subject Entities’ independent accounting firm, Ernst & Young LLP, it being agreed that the cost of such audit shall be borne by the Company. The 2006 Financial Statements will be prepared in accordance with GAAP and Regulation S-X promulgated under the Exchange Act applied on a consistent basis throughout the period involved using the same accounting principles, practices, methodologies and policies used in preparing the 2005 Audited Financial Statements (except as may otherwise be required by GAAP or as may be expressly disclosed therein) and present fairly, in all material

-28-

respects, the financial position and operating results of the Subject Entities as of the dates and for the periods indicated therein.

          (b) The Company shall use commercially reasonable efforts to deliver to Purchaser no later than 45 days after the Closing Date interim unaudited financial statements of the Subject Entities for the period commencing after the 2006 Audited Financial Statements (the “Interim Financial Statements”). Such balance sheet and statements of income and cash flows shall be prepared from the books and records of the Subject Entities in accordance with GAAP and present fairly, in all material respects, the financial position and operating results of the Subject Entities as of the dates and for the periods indicated therein. At the request of Purchaser, the Company shall use commercially reasonable efforts to cause Ernst & Young LLP, the independent auditors of the Subject Entities , to provide any unqualified opinions, consents or customary comfort letters with respect to the financial statements of the Subject Entities, in each case addressed to Purchaser or its designee, so as to permit the use or disclosure thereof by Purchaser or the Company, as the case may be, in connection with (i) any filing or report required to be filed by it under the Exchange Act, (ii) any registration statement or other filing filed with the SEC or stock exchange with respect to the Stockholder Distribution and/or the Rights Offering, and (iii) any proxy statement, registration statement or other filing made by Purchaser with the SEC or any stock exchange with respect to any merger, sale or other business combination involving Purchaser.

          (c) The Company agrees to allow Purchaser’s accounting representatives the opportunity to review any such financial statements required and to allow such representatives reasonable access to records of the Company and its Subsidiaries and supporting documentation with respect to the preparation of such financial statements; provided, that such access shall not include any right to review the working papers of the independent auditors of the Subject Entities.

          (d) Purchaser may require the Company to engage an investment banker or financial advisor chosen by Purchaser with the reasonable consent of Flag (which consent shall not be unreasonably withheld, conditioned or delayed).

          (e) The parties hereto shall use commercially reasonable efforts to prepare and file any and all necessary documents with the SEC and any applicable stock exchange or quotation system, as contemplated hereby.

          (f) The parties hereto shall use commercially reasonable efforts to prepare and file any and all necessary documents required to cause the Stockholder Distribution and/or the Rights Offering to be completed in compliance with applicable states securities laws and any applicable stock exchange or quotation system, as contemplated hereby.

-29-

          (g) The parties hereto shall use commercially reasonable efforts to take any other actions necessary or desirable to expedite or facilitate the Stockholder Distribution and/or the Rights Offering, as contemplated hereby.

          In furtherance of the foregoing, Flag, the Company and its Subsidiaries shall use commercially reasonable efforts to promptly provide Purchaser with any additional financial statements and other information concerning Flag, the Company and its Subsidiaries as reasonably requested by Purchaser in order to effect the Stockholder Distribution and/or Rights Offering. Furthermore, Flag, the Company and its Subsidiaries shall use all commercially reasonable efforts to, or shall use all commercially reasonable efforts to cause its representatives to, furnish as promptly as practicable to Purchaser such requested additional information. None of the information regarding Flag provided by Flag in writing specifically for inclusion in, or incorporation by reference into, (i) any filing or report required to be filed by Purchaser or the Company under the Exchange Act, (ii) any registration statement or other filing filed with the SEC or stock exchange with respect to the Stockholder Distribution and/or the Rights Offering, or (iii) any proxy statement, registration statement of other filing made by Purchaser or the Company with the SEC or any stock exchange with respect to any merger, sale of other business combination involving the Company or Purchaser will, in the case of any filing with the SEC pursuant to the Exchange Act, at the time such filing is made, in the case of any proxy statement and any amendment thereto, at the time of the mailing of such proxy statement, or in the case of any registration statement, at the time such registration statement becomes effective, contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. None of the information regarding Purchaser provided by Purchaser specifically for inclusion in, or incorporation by reference into, (i) any filing or report required to be filed by the Company under the Exchange Act, (ii) any registration statement or other filing filed with the SEC or stock exchange with respect to the Stockholder Distribution and/or the Rights Offering, or (iii) any proxy statement, registration statement of other filing made by the Company with the SEC or any stock exchange with respect to any merger, sale of other business combination involving the Company will, in the case of any filing with the SEC pursuant to the Exchange Act, at the time such filing is made, in the case of any proxy statement and any amendment thereto, at the time of the mailing of such proxy statement, or in the case of any registration statement, at the time such registration statement becomes effective, contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading.

This Section 7.2 shall survive the Closing.

-30-

          7.3 Use of Proceeds. The parties hereto hereby agree that, in connection with the consummation of the Formation Transactions and the other transactions contemplated by this Agreement, they shall cause the Company to make such payments, issue such equity interests, issue such notes and take such other actions as are set forth in Schedule 7.3 at the times set forth in such Schedule.

          7.4 Ordinary Course. Between the date hereof and the Closing Date and to the extent it has the power and authority to do so, the Company shall, and shall cause its Subsidiaries, to (i) operate each of their respective businesses, in all material respects, in good faith and in the ordinary course consistent with past practice, (ii) use all commercially reasonable efforts to preserve substantially intact each of their respective business organizations and retain the services of each of their respective key employees, (iii) use all commercially reasonable efforts to preserve the Project and each of their relationships with material customers, suppliers, sponsors, licensors and creditors, and (iv) use all commercially reasonable efforts to maintain and keep each of their properties and assets in as good repair and condition as at present, ordinary wear and tear excepted.

          7.5 Efforts to Close and Subsequent Transactions. Subject to the terms and conditions set forth in this Agreement, each of the parties hereto shall use commercially reasonable efforts to take all action and to do all things necessary, proper or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the conditions set forth in Articles V and VI).

          7.6 Tax Covenants.

          (a) Taxes. Flag shall pay, or shall cause to be paid, when due, and shall hold Purchaser and the Company harmless against, all Taxes imposed on or assessed against the Company or its Subsidiaries or the Project in connection with or attributable to activities and operations, or events occurring, on or prior to the Closing Date. In the case of any Taxes imposed on or assessed against the Company or its Subsidiaries with respect to a period that begins before and ends after the Closing Date (a “Straddle Period”), the amount of any Taxes based on or measured by income or receipts of the Company or its Subsidiaries, as applicable, for the period ending on or prior to the Closing Date shall be determined based on an interim closing of the books as of the close of business on the Closing Date, and any other Taxes for a Straddle Period that relates to the period ending on or prior to the Closing Date shall be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the taxable period ending on the Closing Date and the denominator of which is the number of days in such Straddle Period.

          (b) Transfer Taxes. The Company shall prepare or cause to be prepared, and shall file or shall cause to be filed, all necessary Tax Returns and other documentation with respect to all sales, use, transfer, real property transfer, recording,

-31-

gains, stock transfer, and other similar Taxes and fees including any filing and recording fees (“Transfer Taxes”) arising from the transactions contemplated in this Agreement (“Transactions”). If required by applicable Tax Law or requested by Purchaser, Flag shall join in the execution of any such Tax Returns and other documentation so long as they are reasonably acceptable to Flag. Flag and Purchaser shall equally pay all Transfer Taxes resulting solely from Purchaser’s purchase of the membership interests pursuant to this Agreement. For the avoidance of doubt, Flag shall pay all Transfer Taxes resulting from transactions entered into on, as of or prior to the Closing and from the formation of the Company.

          (c) Cooperation on Tax Matters. (i) The Company shall control any contest of Taxes relating to the Company, its Subsidiaries or the Project after the date hereof, whether such contest relates to Taxes attributable to periods before or after the Closing. Flag shall promptly notify Purchaser of any claim by any taxing authority for any Taxes that would be the responsibility of Flag if ultimately determined to be due under this Section 7.6 or as a result of a breach of any Flag representation, and shall provide such information and assistance as is reasonably necessary to assist the Company in connection with any proceeding relating to such claim

          (ii) Flag shall transfer to the Company all material books and records with respect to Tax matters pertinent to the Company, its Subsidiaries and the Project.

          (d) Treatment of Indemnity Payments. For all Tax purposes, Flag and Purchaser agree to treat, except as required by applicable Law, any indemnity payment as an adjustment to the Purchase Price.

          7.7 Certain Indemnification. From and after the Closing Date, the Company shall, and the parties hereto shall cause the Company to, (i) indemnify and hold harmless each individual who at the Closing Date is, or at any time prior to the Closing Date was, a director, officer or member of the Company or of a Subsidiary of the Company (each, an “Indemnitee” and, collectively, the “Indemnitees”) with respect to all claims, liabilities, losses, damages, judgments, fines, penalties, costs (including amounts paid in settlement or compromise) and expenses (including fees and expenses of legal counsel) in connection with any claim, suit, action, proceeding or investigation (whether civil, criminal, administrative or investigative), whenever asserted, based on or arising out of, in whole or in part, (A) the fact that an Indemnitee was a director, officer or member of the Company or such Subsidiary or (B) acts or omissions by an Indemnitee in the Indemnitee’s capacity as a director, officer, employee, member or agent of the Company or such Subsidiary or taken at the request of the Company or such Subsidiary (including in connection with serving at the request of the Company or such Subsidiary as a director, officer, employee, agent, trustee or fiduciary of another Person), in each case under (A) or (B), at, or at any time prior to, the Closing Date, to the fullest extent permitted under applicable Law, and (ii) assume all obligations of the Company and such

-32-

Subsidiaries to the Indemnitees in respect of indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the Closing Date as provided in the organizational documents of the Company such Subsidiaries as currently in effect.

          7.8 Certain Filings. Purchaser agrees that it will use commercially reasonable efforts to cooperate with the Company to allow the Company to make on a timely basis any filing or report required to be filed by the Company or any subsidiary under the Exchange Act with regard to the Riv Shares.

ARTICLE VIII.
INDEMNIFICATION

          8.1 Indemnification.

          (a) All of the representations and warranties made herein by any party shall survive any investigation made at any time by or on behalf of any other party hereto and shall survive the execution and delivery of this Agreement for a period of twelve (12) months from the Closing Date; provided, that with respect to the representations and warranties made in Section 2.7, such time period shall be extended to the end of the applicable statute of limitations (including any extension thereof) with respect to claims arising thereunder. Such representations and warranties contained herein are exclusive, and the parties hereto confirm that they have not relied upon any other representations, warranties, covenants and agreements as an inducement to enter into this Agreement or otherwise. No Claim for indemnification hereunder may be made after the date that is twelve (12) months from the Closing Date. Notwithstanding the foregoing, all Claims arising from the breach of any representations and warranties made in Section 2.7 may be made until ninety (90) days from the end of the applicable statute of limitations (including any extension thereof). Each party (the “Indemnifying Party”) agrees to indemnify and hold harmless the other parties and its affiliates and their respective officers, directors, agents, employees, subsidiaries, partners members and controlling persons (each, an “Indemnified Party”) to the fullest extent permitted by law from and against any and all losses, damages or expenses (including reasonable fees, disbursements and other charges of counsel incurred by the Indemnified Party in any action between the Indemnifying Party and the Indemnified Party or between the Indemnified Party and any third party or otherwise) (collectively, “Losses”) incurred by such Indemnified Party resulting or arising out of any breach of any representation or warranty by such party in this Agreement; provided, however, that the Indemnifying Party shall not be liable under Article VIII to an Indemnified Party for any amount paid in settlement of claims with the Indemnifying Party’s consent as provided herein. In connection with the obligation of the Indemnifying Party to indemnify for expenses as set forth above, the Indemnifying Party shall, upon presentation of appropriate invoices containing reasonable detail, reimburse each Indemnified Party for all such expenses (including reasonable fees, disbursements and other charges of counsel incurred by the Indemnified Party in any action between the Indemnifying

-33-

Party and the Indemnified Party or between the Indemnified Party and any third party) as they are incurred by such Indemnified Party, subject to the agreement by the Indemnified Party to reimburse the Indemnifying Party for such amounts if it is determined that the Indemnified Party was not entitled to be indemnified hereunder. No Claim for indemnification shall be made hereunder by a party unless and until the aggregate amount of Losses incurred by such party exceeds $750,000, and then only to the extent of any excess over such amount. The maximum liability of any party hereunder shall be $50 million. Any Claim against, and payments made by, Flag and the Company shall be aggregated for purposes of the foregoing two sentences.

          (b) For purposes of this Section 8.1, a “Claim” shall mean any action, suit, proceeding, claim, complaint, dispute, arbitration, hearing or investigation.

          8.2 Notification. Each Indemnified Party under this Article VIII shall, promptly after the receipt of notice of the commencement of any Claim against such Indemnified Party in respect of which indemnity may be sought from the Indemnifying Party under this Article VIII, notify the Indemnifying Party in writing of the commencement thereof. The omission by any Indemnified Party to so notify the Indemnifying Party of any such action shall not relieve the Indemnifying Party from any liability which it may have to such Indemnified Party under this Article VIII unless, and only to the extent that, such omission results in the Indemnifying Party’s loss of substantive rights or defenses. In case any such Claim shall be brought against any Indemnified Party, and it shall notify the Indemnifying Party of the commencement thereof, the Indemnifying Party shall be entitled to assume the defense thereof at its own expense, with counsel satisfactory to such Indemnified Party in its reasonable judgment; provided, however, that any Indemnified Party may, at its own expense, retain separate counsel to participate in such defense at its own expense. Notwithstanding the foregoing, in any Claim in which both the Indemnifying Party, on the one hand, and an Indemnified Party, on the other hand, are, or are reasonably likely to become, a party, such Indemnified Party shall have the right to employ separate counsel and to control its own defense of such Claim if, in the reasonable opinion of counsel to such Indemnified Party, either (x) one or more defenses are available to the Indemnified Party that are not available to the Indemnifying Party or (y) a conflict or potential conflict exists between the Indemnifying Party, on the one hand, and such Indemnified Party, on the other hand, that would make such separate representation advisable; provided, however, that the Indemnifying Party shall reimburse the Indemnified Parties for all of such fees and expenses of such counsel incurred in any action between the Indemnifying Party and the Indemnified Parties or between the Indemnified Parties and any third party, as such expenses are incurred, subject to the agreement by the Indemnified Party to reimburse the Indemnifying Party for such amounts if it is determined that the Indemnified Party was not entitled to be indemnified hereunder. The Indemnifying Party agrees that it will not, without the prior written consent of the Indemnified Party, settle, compromise or consent to the entry of any judgment in any pending or threatened Claim relating to the matters contemplated hereby (if any Indemnified Party is a party thereto or has been actually threatened to be made a party thereto) unless such settlement, compromise or consent

-34-

includes an unconditional release of each Indemnified Party from all liability arising or that may arise out of such Claim and such settlement does not impose injunctive or other equitable relief against the Indemnified Party. The Indemnifying Party shall not be liable for any settlement of any Claim effected against an Indemnified Party without its written consent, which consent shall not be unreasonably withheld (the withholding of any consent relating to a proposed settlement that imposes injunctive or other equitable relief against the Indemnified Party shall not be deemed unreasonable). The provisions of this Article VIII shall be the sole and exclusive remedy for any breach of any representation or warranty contained in this Agreement.

          8.3 Loss Calculation. In connection with calculating the amount of Losses that an Indemnified Party is entitled to recover under Section 8.1(a), (i) in calculating the amount of Losses incurred by Purchaser, Losses shall include the loss and/or diminution in value of Purchaser’s membership interest in the Company and (ii) except as contemplated by the foregoing clause (i) and clause (x)(B) of the definition of “Company Material Adverse Effect” under this Agreement, no party shall be liable for consequential, special, indirect, incidental, punitive, lost profit or other expectancy damages.

ARTICLE IX.
MISCELLANEOUS

          9.1 Press Releases; Confidentiality. Except to the extent required by applicable law, each of the Company, Flag, and Purchaser agrees that it will not issue any press release, advertisement or other public announcement with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the parties hereto, which consent may be granted or withheld in the sole discretion of any other party. The parties agree that this Agreement and the terms contained herein shall be kept confidential by the parties and their affiliates and agents except to the extent disclosure is required by applicable legal requirements, in which event the disclosing party shall immediately notify the other party of the requirement and the terms thereof prior to submission and the disclosing party shall cooperate to the maximum extent reasonably practicable to prevent or minimize the disclosure of such confidential information.

          9.2 Amendments and Waivers. No amendment or waiver of any provision of this Agreement shall be effective with respect to any party unless made in writing and signed by such party. Waiver by any party of any breach or failure to comply with any provision of this Agreement by any other party shall not be construed as, or constitute, a continuing waiver of such provision, or a waiver of any other breach of or failure to comply with any other provisions of this Agreement.

          9.3 Assignability. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Company, Flag or Purchaser, except that Purchaser may assign its rights, interests and

-35-

obligations hereunder to a wholly-owned subsidiary of Purchaser; provided that in any event Purchaser shall remain liable for all of its obligations hereunder.

          9.4 Entire Agreement. This Agreement, the Exhibits and Schedules hereto constitute the entire agreement among the parties relating to the subject matter hereof and supersede any and all prior agreements or understandings with respect to the subject matter hereof.

          9.5 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered in person, by overnight courier or facsimile to the respective parties as follows:

If to Purchaser:

CKX, Inc.
650 Madison Avenue
16^th Floor
New York, New York 10022
Facsimile: 212-753-3188
Attention: Howard Tytel, Esq.

With a copy to:

Paul, Hasting, Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
Facsimile: 212-319-9040
Attention: William F. Schwitter, Jr.
                    Luke P. Iovine, III

If to Flag:

Flag Luxury Properties, LLC
650 Madison Avenue
15th Floor
New York, New York 10022
Facsimile: 212-750-3034
Attention: Mitchell Nelson, Esq.

If to the Company:

FX Luxury Realty, LLC
650 Madison Avenue
15th Floor
New York, New York 10022

-36-

Facsimile: 212-750-3034
Attention: Managing Member

or to such other address as the person to whom notice is given may have previously furnished to the other in writing in the manner set forth above (provided that notice of any change of address shall be effective only upon receipt thereof).

          9.6 Governing Law; Submission to Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard for principles of conflict of laws. Each of the Company, Flag, the Subsidiaries and Purchaser irrevocably consents to the exclusive jurisdiction of the Federal and state courts, located in New York County, New York, in any suit or proceeding based on or arising under this Agreement and irrevocably agree that all claims in respect of such suit or proceeding shall be determined in such courts. The Company, Flag and Purchaser irrevocably waive the defense of an inconvenient forum to the maintenance of such suit or proceeding. Service of process on the Company or Purchaser mailed by first class mail shall be deemed in every respect effective service of process upon the Company, Flag or Purchaser, as the case may be, in any such suit or proceeding. Nothing herein shall affect the right of the Company, Flag or Purchaser to serve process in any manner permitted by law.

          9.7 Waiver of Jury Trial. EACH OF THE COMPANY, FLAG AND PURCHASER ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY OR DISPUTE THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.7.

          9.8 Severability. If one or more of the provisions contained in this Agreement shall, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof.

-37-

          9.9 Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and assigns, and is not for the benefit of, and no provision hereof may be enforced by, any other person or entity.

          9.10 Descriptive Headings, etc. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. All references herein to “Articles,” “Sections” and “Paragraphs” shall refer to corresponding provisions of this Agreement unless otherwise expressly noted.

          9.11 Counterparts; Execution and Delivery by Facsimile. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. This Agreement may be executed and delivered by facsimile, with such delivery to be as effective as delivery of an originally executed counterpart hereof, followed promptly by delivery of an originally executed counterpart.

          9.12 Certain Definitions. Certain terms used in this Agreement are defined as follows:

          (a) The term “Action” shall mean any controversy, claim, action, litigation, arbitration, mediation or any other proceeding by or before any Governmental Entity, arbitrator, mediator or other Person acting in a dispute resolution capacity, or any investigation, subpoena or demand preliminary to any of the foregoing.

          (b) The term “affiliate,” or “Affiliate” as applied to any person, shall mean any other person directly or indirectly controlling, controlled by, or under common control with, that person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that person, whether through the ownership of voting securities, by contract or otherwise, and a person shall be deemed to control another person if the controlling person owns 15% or more of any class of voting securities (or other ownership interest) of the controlled person.

          (c) The term “business day” shall mean each day other than a Saturday, Sunday or a day on which commercial banks and national stock exchanges located in New York, New York are closed or authorized by law to close.

          (d) The term “Company Material Adverse Effect” means a Material Adverse Effect on the Company.

-38-

          (e) The term “Flag Material Adverse Effect” means a Material Adverse Effect (but only with respect to clause (y) of the definition thereof) on Flag.

          (f) The term “Governmental Entity” shall mean any arbitrator, court, judicial, legislative, administrative or regulatory agency, commission, department, board, bureau, body or other governmental authority or instrumentality or any Person exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, whether foreign, federal, state or local.

          (g) “knowledge” means, (i) with respect to the Company, Flag, or the Subsidiaries, the knowledge (after reasonable inquiry and investigation) of the Company’s, Flag’s, or the Subsidiaries’ managing member and senior executive officers and (ii) with respect to Purchaser, the knowledge (after reasonable inquiry and investigation) of Purchaser’s Chairman of the Board, President, Chief Executive Officer, Treasurer and Secretary.

          (h) The term “Law” shall mean any statute, law, ordinance, rule or regulation of any Governmental Entity.

          (i) The term “Material Adverse Effect” shall mean, (x) with respect to the Company, any state of facts, change, development, event, effect, condition or occurrence that, individually or in the aggregate, has had or would be reasonably likely to have a materially adverse effect on (A) the business, assets, properties, liabilities or condition (financial or otherwise) of such business or Person and its Subsidiaries, as applicable, taken as a whole, or (B) the value of Purchaser’s membership interest in the Company, or (y) that, directly or indirectly, prevents or materially impairs or delays the ability of such Person to perform its obligations under this Agreement; provided, however, that any adverse effect arising out of, resulting from or attributable to (i) an event or series of events or circumstances affecting (A) the United States or global economy generally or capital or financial markets generally, including changes in interest or exchange rates, (B) political conditions generally of the United States or any other country or jurisdiction in which such party or any of its subsidiaries operates or (C) any of the industries generally in which such party or any of its subsidiaries operates, except to the extent any of the foregoing have a disproportionate effect on the such Person as opposed to other person’s in the applicable industry, (ii) the negotiation, execution or the announcement of, the consummation of the transactions contemplated by this Agreement, or the performance of obligations under, this Agreement or the other documents contemplated by this Agreement, (iii) any changes in applicable Law or GAAP or the enforcement or interpretation thereof, (iv) any hostilities, acts of war, sabotage, terrorism or military actions, or any escalation or worsening of any such hostilities, act of war, sabotage, terrorism or military actions, (v) in the case of the Company or Flag, actions taken with Purchaser’s consent, (vi) in the case of Purchaser, actions taken with the Company’s or Flag’s consent, or (vii) any actions specifically permitted to be taken or omitted pursuant to this Agreement, shall not constitute or be deemed to contribute to a Material Adverse Effect, and otherwise

-39-

shall not be taken into account in determining whether a Material Adverse Effect has occurred or would be reasonably likely to occur.

          (j) The term “Order” shall mean any order, judgment, ruling, decree, writ, permit, license or other requirement of any Governmental Entity.

          (k) The term “Person” shall mean any individual or legal entity, including any partnership, joint venture, corporation, trust, unincorporated organization, limited liability company or Governmental Entity.

          (l) The term “Purchaser Material Adverse Effect” means a Material Adverse Effect (but only with respect to clause (y) of the definition thereof) on Purchaser.

          (m) Interpretation. When a reference is made in this Agreement to an Article, Section or Exhibit, such reference shall be to an Article or Section of, or an Exhibit to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” 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. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means, in the case of any agreement or instrument, such agreement or instrument as from time to time amended, modified or supplemented, including by waiver or consent and, in the case of statutes, such statutes as in effect on the date of this Agreement. References to a person are also to its permitted successors and assigns. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any Federal, state, local or foreign statute or law shall be deemed to also refer to any amendments thereto and all rules and regulations promulgated thereunder, unless the context requires otherwise.

[signature page follows]

-40-

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed effective as of the date and year first above written.

FX LUXURY REALTY, LLC
By:	/s/ Paul C. Kanavos
	Name:	Paul C. Kanavos
	Title:	Chairman and Chief Executive Officer
FLAG LUXURY PROPERTIES, LLC
By:	/s/ Paul C. Kanavos
	Name:	Paul C. Kanavos
	Title:	Chairman and Chief Executive Officer
CKX, INC.
By:	/s/ Michael G. Ferrel
	Name:	Michael G. Ferrel
	Title:	President

EX-2.4

Exhibit 2.4

REPURCHASE AGREEMENT

          THIS REPURCHASE AGREEMENT (this “Agreement”) is made as of June 1, 2007, by and among, FX LUXURY REALTY, LLC, a Delaware limited liability company (the “Company”), CKX, Inc., a Delaware corporation (“CKX”), Flag Luxury Properties, LLC, a Delaware limited liability company (“Flag”), Robert F.X. Sillerman (“Sillerman”), Brett Torino (“Torino”), Paul C. Kanavos (“Kanavos” and together with Flag (but subject to Section 4(d)(iii) hereof), Sillerman, Torino and Kanavos, collectively, the “Flag Parties”). Reference is made to that certain Membership Interest Purchase Agreement (the “Purchase Agreement”), dated as of June 1, 2007, by and among the Company, CKX, and Flag. Capitalized terms used herein, but not defined herein, shall have the meanings ascribed to them in the Purchase Agreement.

          WHEREAS, each of CKX and the Flag Parties are the beneficial or record owners (the “Members”) of limited liability company membership interests in the Company in the aggregate amount set forth next to such Member’s name on Exhibit A attached hereto (the “Interests”);

          WHEREAS, pursuant to the Purchase Agreement, the Company, CKX and Flag agreed to effect the Reorganization by, among other things (i) establishing NEWCO Inc. and (ii) requiring all members of the Company to contribute to NEWCO Inc. certain of their Interests in the Company for shares of common stock of NEWCO Inc;

          WHEREAS, pursuant to the Purchase Agreement, as soon as reasonably practical following the Reorganization, CKX has agreed to effect the Stockholder Distribution;

          WHEREAS, pursuant to the Purchase Agreement, following the Reorganization, Flag has agreed to effect the Mandatory Distribution; and

          WHEREAS, this Agreement provides the terms and conditions under which all or a portion of the Flag Parties’ (and in certain cases, CKX’s) Interests (or following the Reorganization, the Members’ capital stock of NEWCO Inc.) shall be subject to mandatory repurchase by the Company.

          NOW, THEREFORE, in consideration of these premises and the mutual covenants and agreements set forth herein, the parties hereto agree as follows:

     1. Addition of NEWCO Inc. As soon as reasonably practical following the effectiveness of the Reorganization, the Members shall cause NEWCO Inc. to agree to be bound by the terms and conditions of this Agreement, as if it were a party to this Agreement on the date hereof, by signing and delivering a customary joinder agreement (a “Joinder”)

     2. Repurchase Right.

          (a) In the event that no Termination Event (as defined below) shall have occurred prior to the second anniversary of the date upon which the Stockholder Distribution occurs (the “Anniversary Date”), then each of the Flag Parties shall offer, and the Company or NEWCO Inc., as the case may be, shall purchase (the “Repurchase”), on a pro rata basis based on the Flag

1

Parties’ respective ownership percentages, an aggregate number of Interests or shares of common stock of NEWCO Inc. (the “NEWCO Stock”), as the case may be, for an amount equal to $0.01 per Interest or share, such that, following such repurchase, the aggregate value of the Interests acquired pursuant to the Purchase Agreement or resulting NEWCO Stock, as the case may be (the “Purchased Securities”) shall not be less than $100,000,000 (the “Fair Market Value”), based on the average closing price per share of such NEWCO Stock for the 30-day period prior to the Anniversary Date and the Liquidity Test (as defined below) is satisfied, or if NEWCO Stock is not publicly traded or the Liquidity Test is not satisfied, the fair market value of such Purchased Securities as determined in writing (the “Appraisal Report”) by a nationally recognized independent appraisal firm to be selected by the parties to this Agreement (the “Appraiser”); provided, however, that in the event that the proposed transaction between 19X Acquisition Corp., a Delaware corporation (“19X”), and CKX, whereby 19X shall merge with and into CKX, with CKX being the surviving corporation in the merger (the “Merger”), shall become effective (or any similar transaction shall become effective), then (i) CKX shall become a Flag Party for all purposes of this Agreement and its Purchased Securities shall be subject to the Repurchase on a pro rata basis; (ii) the Fair Market Value for all purposes of this Agreement shall be reduced to $50,000,000; and (iii) the Purchased Securities shall include only the Interests acquired pursuant to the Purchase Agreement or resulting NEWCO Stock, as the case may be, that are the subject of the Stockholder Distribution. Notwithstanding the foregoing, each of the Flag Parties shall have the option, in their sole and absolute discretion, to contribute cash to NEWCO Inc. in lieu of redeeming NEWCO Stock as set forth above.

          (b) The Repurchase Right shall not become effective with respect to the Interests or NEWCO Stock until the Anniversary Date.

          (c) Each of the parties to this Agreement shall have ten days from the date the Appraisal Report is received to object to the valuation contained in the Appraisal Report by providing notice in writing to each of the other parties hereto. In the event any party objects to the valuation report, the parties hereto shall select another nationally recognized independent Appraiser to conduct a subsequent appraisal and the valuation shall be the average of both valuations. The Company shall pay the costs and expenses of any Appraiser appointed pursuant to this Agreement.

          (d) The parties hereto hereby agree that any determination made under this Agreement, including, but not limited to, the amount of Interests or shares of NEWCO Stock subject to the Repurchase or as to the occurrence of a Termination Event, shall be made in good faith and in the reasonable judgment of the Board of Directors of the Company subject to the consent of the Flag Parties (such consent not to be unreasonably withheld). In the event that the Board of Directors of the Company and the Flag Parties cannot agree on any matter, then such matter shall be promptly referred to an independent third party that is an expert in the subject matter of the dispute and is mutually agreed to by the Board of Directors of the Company and the Flag Parties. The Company shall pay the costs and expenses of any such third party expert.

     3. Termination Event. A “Termination Event” shall be deemed to have occurred in the event that:

2

          (a) the average closing price per share of publicly traded NEWCO Stock for any consecutive 30-day period following the date of the consummation of the Stockholder Distribution shall have been at least such price per share that attributes an aggregate value to the Purchased Securities of not less than the Fair Market Value; provided that there is trading volume that evidences sufficient liquidity during such period to support the determination that such per share price accurately reflects an attributable value to the Purchased Securities of not less than the Fair Market Value (the “Liquidity Test”);

          (b) NEWCO Inc. shall have consummated the Rights Offering or any other private placement or public offering of equity or equity-linked securities that reasonably provides an attributable pre-money value to the Purchased Securities of not less than the Fair Market Value;

          (c) NEWCO Inc. shall have received a standby purchase or other firm backstop arrangement (including, without limitation, the Back-Stop Arrangement), subject only to those terms and conditions customary for such an arrangement which are reasonably satisfactory to the board of directors of CKX, that effectively underwrites any of the securities offerings described in the foregoing clause (b);

          (d) if CKX breaches in any material respect, its obligations under the Purchase Agreement or any of the other agreements contemplated thereby or provided therein, which has a materially adverse effect on the Fair Market Value; or

          (e) a transaction is consummated the result of which is that NEWCO Inc. ceases to be subject to the registration and reporting requirements of the Securities Exchange Act of 1934, as amended, or if the Company or NEWCO Inc. becomes a party to a transaction involving a merger, consolidation, recapitalization, sale of stock or other similar transaction; provided that any such transaction either (i) provides an attributable pre-money value to the Purchased Securities of not less than the Fair Market Value or (ii) is approved by a majority of the stockholders of NEWCO Inc. who are unaffiliated with Flag, Sillerman, Torino and Kanavos.

Notwithstanding any provision herein to the contrary, no transaction of the type contemplated by clause (e) of this Section 3 shall be effected unless either of the two conditions contained in the proviso of such clause (e) is satisfied.

     4. Transfers.

          (a) Each of the Members agree that it will not, until the Anniversary Date, directly or indirectly, transfer any of its Interests or shares of capital stock of NEWCO Inc. except in accordance with the terms of this Agreement and any attempt by any Member to transfer the Interests or such shares not in accordance with the terms of this Agreement shall be null and void.

          (b) Each of the Members agree that, in addition to the other requirements imposed herein relating to transfer, until the Anniversary Date it will not transfer any of its Interests or shares of capital stock of NEWCO Inc. except (i) pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”) or (ii) pursuant to an exemption from the registration requirements under the Securities Act.

3

          (c) Notwithstanding any provision herein to the contrary, a Member may transfer at any time any or all of its Interests or shares of capital stock of NEWCO Inc. to a third party who signs and delivers a Joinder and thereby becomes party to this Agreement.

          (d) Notwithstanding any provision herein to the contrary, the transfer restrictions and this Section 4 shall not apply (i) to the Stockholder Distribution or any Purchased Securities distributed in the Stockholder Distribution, (ii) after the Anniversary Date to any Interests or shares of NEWCO Stock, except to the extent subject to the Repurchase (which the Board shall send a notice of as soon as reasonably practicable after the Anniversary Date) or (iii) to any transfer made in connection with the Mandatory Distribution. After the occurrence of the Mandatory Distribution, Flag shall, automatically and with no action on the part of any party hereto, no longer be a party to this Agreement.

     5. Legends. The parties hereto agree that each physical certificate representing the Interests or any shares of capital stock of NEWCO Inc. will bear restrictive legends that reference this Agreement and the transfer restrictions contained in Section 4 hereof.

     6. Specific Enforcement. It is agreed and understood that monetary damages would not adequately compensate an injured party for the breach of this Agreement by the other party hereto, that this Agreement shall be specifically enforceable, and that any breach or threatened breach of this Agreement shall be the proper subject of a temporary or permanent injunction or restraining order. The parties hereto waive any claim of defense that there is an adequate remedy at law for such breach or threatened breach.

     7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard for principles of conflict of laws.

     8. Waiver. No waiver of any provision of this Agreement shall be deemed or shall constitute a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver. The Company shall not grant any party hereto a waiver unless it grants a similar waiver to the other parties hereto.

     9. Partial Invalidity. The illegality, invalidity or unenforceability of any provision of this Agreement under the law of any jurisdiction shall not affect its or any other provision’s legality, validity or enforceability under the law of any jurisdiction.

     10. Entire Agreement. This Agreement, the Exhibits and Schedules hereto, together with the Purchase Agreement, constitute the entire agreement among the parties relating to the subject matter hereof and supersede any and all prior agreements or understandings with respect to the subject matter hereof.

     11. Amendments. This Agreement may not be amended, modified or supplemented except by a writing executed by each of the parties; provided, however, that neither this Agreement nor any provision hereof shall be amended, modified or supplemented if such amendment, modification or supplement adversely impacts the rights set forth herein of the holders of any publicly traded NEWCO Stock in a manner that is disproportionate to the adverse impact on the rights of the other holders of shares of NEWCO Stock.

4

     12. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. This Agreement may be executed and delivered by facsimile, with such delivery to be as effective as delivery of an originally executed counterpart hereof.

     13. Successors and Assigns; Third Party Beneficiaries. This Agreement shall inure to the benefit of, and be binding upon, the successors and assigns of the parties hereto. Each of the holders of shares of NEWCO Stock who received such stock as a distribution or dividend from CKX is intended as a third party beneficiary of this Agreement; provided that such benefit shall be limited solely to such holder’s right to (i) seek and enforce a remedy of specific performance to compel NEWCO Inc. and the board of directors of NEWCO Inc. to enforce and perform the provisions of this Agreement in accordance with the terms hereof or (ii) in the event that such remedy of specific performance is determined by a court of competent jurisdiction to be unavailable or is contested by the board of directors of NEWCO Inc., then seek monetary damages from NEWCO Inc.

     14. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered in person, by overnight courier or facsimile to the respective parties at the address shown on the books and records of the Company. The parties may change its address by giving written notice of such change to the other party in the manner provided in this Section.

     15. Mandatory Distribution. If the Mandatory Distribution does not occur, then the parties hereto shall agree on such reasonable modifications to this Agreement as are necessary to give effect to the intent of this Agreement that only the equity interests of the Company or NEWCO Inc. held by Sillerman, Kanavos and Torino are subject to the right to Repurchase and the other provisions set forth in this Agreement.

     16. Adjustments. Other than with respect to the transactions contemplated by this Agreement and the Purchase Agreement, in the event that, after the date hereof, the Company or NEWCO Inc. shall effect any stock dividends, splits, reverse splits, combinations, reclassifications or any similar events with respect to the Interests or NEWCO Stock, then the terms of this Agreement shall be appropriately adjusted for any such dividends, splits, reverse splits, combinations, reclassifications or such similar events so that the parties hereto retain their relative rights and obligations with respect to the Purchased Securities.

     17. Termination. This Agreement shall terminate upon the earliest to occur of (i) a Termination Event and (ii) the Anniversary Date, except to the extent necessary to allow the Company to exercise its rights pursuant to Section 2, in which case it shall terminate after the Company has exercised its rights in Section 2.

5

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first above written.

FX LUXURY REALTY, LLC
/s/ Paul C. Kanavos
Name:	Paul C. Kanavos
Title:	Chairman and Chief Executive Officer
CKX, INC.
/s/ Michael G. Ferrel
Name:	Michael G. Ferrel
Title:	President
FLAG LUXURY PROPERTIES, LLC
/s/ Paul C. Kanavos
Name:	Paul C. Kanavos
Title:	Chairman and Chief Executive Officer
/s/ Robert F.X. Sillerman
Robert F.X. Sillerman
/s/ Brett Torino
Brett Torino
/s/ Paul C. Kanavos
Paul C. Kanavos

[Repurchase Agreement]

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE
		CKX, INC.
	Media Contact:	Sean Cassidy
		212-981-5233
		Ed Tagliaferri
		212-981-5182

Robert F.X. Sillerman and Simon Fuller
to Take CKX Private and
Spin off Shares in Location-Based Entertainment Company
to Stockholders

CKX Stockholders to Receive $13.75 Per Share in Cash,
and Continued Participation in
Elvis Presley- and Muhammad Ali-Based Real Estate Projects

New York — June 1, 2007 CKX, Inc. (NASDAQ: CKXE), announced today that it entered into a series of transactions that will result in the sale of the Company at a price of $13.75 per share in cash and the distribution to CKX stockholders of shares in FX Luxury Realty, LLC, an affiliate of Robert F.X. Sillerman that has significant real estate interests in Las Vegas and has entered into licenses to use certain intellectual property rights of CKX associated with Elvis Presley and Muhammad Ali in the development of real estate and attraction based projects.

The sale transaction and distribution of shares in FX Luxury Realty are intended to allow CKX stockholders to receive a cash return on their CKX investment while continuing to share directly in the exploitation of CKX’s Elvis Presley and Muhammad Ali assets through FX Luxury Realty’s real estate projects, which are expected to include Elvis Presley- and Muhammad Ali-themed attractions as well as FX Luxury Realty’s other real estate ventures.

As a result of the merger transaction and the FX Luxury Realty stock distribution, CKX stockholders will receive the $13.75 cash merger consideration and a share of stock in FX Luxury Realty for each share of CKX common stock that they hold.

The sale of CKX will be accomplished through a merger with 19X, Inc., a private company owned and controlled by Mr. Sillerman, Chairman and Chief Executive Officer of CKX, and Simon R. Fuller, a director of CKX and the Chief Executive Officer of 19 Entertainment Limited, a wholly-owned subsidiary of CKX. 19X has informed CKX that it expects to finance the acquisition of CKX through a combination of equity and debt financing, with Mr. Sillerman and Mr. Fuller, as well as other members of senior management, providing a substantial portion of the equity commitment.

1

The merger agreement contains a 45-day “go-shop” provision pursuant to which CKX will, acting through a special committee of independent directors and its financial advisor, solicit competing proposals. During the “go shop” period no termination fee would be payable to 19X. The merger agreement does not contain a financing contingency. Mr. Sillerman, Mr. Fuller and members of senior management have agreed to vote their shares in favor of certain competing offers that the special committee deems more favorable, from a financial point of view.

Commenting on the series of transactions, Mr. Sillerman said, “After two successful years of developing and exploiting the assets we have acquired, during which time we have seen tremendous year over year growth, we have come to realize that there is a substantial opportunity to capitalize on the Elvis Presley and Muhammad Ali assets in real estate and location-based attractions. However, the pursuit of these opportunities would require a significant investment of capital, which could hinder our ability to grow the core area of our business and which is not consistent with the business plan that we have always described to our stockholders. As a result, we thought it best to provide our stockholders a capital realization opportunity as well as the opportunity to participate in a new public company that will develop real estate and location-based projects that exploit CKX’s iconic intellectual property content. We believe that the transactions that we announced today accomplish that goal.”

Mr. Fuller added, “I am extremely proud of what we have accomplished and am looking forward so much to continuing to work with Bob building the amazing assets that we have in Idol, Elvis Presley, Muhammad Ali and the Beckhams. I believe this transaction provides the best way to maximize the value we have created.”

Also on June 1, 2007, CKX acquired 50 percent of FX Luxury Realty LLC for cash consideration of $100 million. The distribution by CKX to its stockholders of half of CKX’s interests in FX Luxury Realty is a condition to the closing of the merger transaction.

FX Luxury Realty is co-owned by Flag Luxury Properties LLC, a real estate development company and an affiliate of Mr. Sillerman. FX Luxury Realty indirectly owns 50 percent of approximately 18 contiguous acres of land on Las Vegas Boulevard in Las Vegas, Nevada and has entered into a binding agreement to acquire the other 50 percent of this property for $180 million. FX Luxury Realty intends to pursue a retail, hotel, casino, commercial and residential development project on the Las Vegas property. Additionally, FX Luxury Realty is part of a control group that owns approximately 13 percent of Riviera Holdings Corporation (AMEX: RIV), a company that owns and operates the Riviera Hotel & Casino in Las Vegas, and has recently made an offer to the board of directors of Riviera Holdings Corp of $34 per share for the remaining outstanding shares of Riviera Holdings Corp common stock.

Simultaneous with making the investment in FX Luxury Realty, CKX, though its subsidiaries Elvis Presley Enterprises, Inc. and Muhammad Ali Enterprises LLC, entered into license agreements with FX Luxury Realty granting FX Luxury Realty the right to use certain intellectual property rights associated with Elvis Presley and Muhammad Ali

2

in the development of real estate and attraction-based projects, including Elvis Presley-themed hotels, casinos and lounges and Muhammad Ali-themed hotels and retreat centers.

All of these transactions were approved by a unanimous vote of the independent members of CKX’s board of directors who serve on a special committee of the board of directors. Houlihan, Lokey, Howard & Zukin acted as financial advisor to the special committee and has issued an opinion to the CKX board of directors stating that the merger consideration is fair to unaffiliated CKX stockholders from a financial point of view and that the investment in FX Luxury Realty is fair to unaffiliated CKX stockholders from a financial point of view.

19X was advised by Credit Suisse on this transaction.

For more detailed information on the transactions see our Current Report on Form 8-K, which was filed today and may be obtained at the Company’s website at www.ckx.com as well as at the SEC’s web site at www.sec.gov.

About CKX, Inc.

CKX, Inc. is engaged in the ownership, development and commercial utilization of entertainment content. To date, the Company has focused on acquiring globally recognized entertainment content and related assets, including the rights to the name, image and likeness of Elvis Presley, the operations of Graceland, the rights to the name, image and likeness of Muhammad Ali and proprietary rights to the IDOLS television brand, including the American Idol series in the United States and local adaptations of the IDOLS television show format which, collectively, air in over 100 countries around the world. CKX plans to continue to make strategic acquisitions of, or partner or align with, companies or individuals that control various forms of established entertainment content, which may include intellectual property rights in music, film, television programming, written works and characters, rights to names, images and likenesses, video games, corporate brands and other related assets. For more information about CKX, Inc., visit its corporate website at www.ckx.com.

This communication is being made in respect of the proposed merger transaction involving CKX and 19X. In connection with the proposed merger, CKX will file with the Securities and Exchange Commission (SEC) a proxy statement and a Rule 13e-3 transaction statement on Schedule 13e-3. BEFORE MAKING A VOTING DECISION ABOUT THE PROPOSED TRANSACTION INVESTORS AND SECURITY HOLDERS ARE STRONGLY ADVISED TO READ THE PROXY STATEMENT, THE SCHEDULE 13e-3 AND OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders may obtain a free copy of the proxy statement, the Schedule 13e-3 and other documents filed by CKX (when available) at the SEC’s Web site at http://www.sec.gov. The proxy statement, the Schedule 13e-3 and such other documents may also be

3

obtained for free by directing such request to CKX, Inc. Investor Relations, 650 Madison Avenue, New York, New York 10022 or on the Company’s website at http://www.ckx.com.

CKX and its directors, executive officers and certain other members of its management and employees may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the proposed merger. Information regarding the interests of the CKX’s participants in the solicitation will be included in the proxy statement relating to the proposed merger when it becomes available.

###

4