EXHIBIT 10.2
Date: January 2010
CKX, Inc. (1)
Simon Robert Fuller (2)
XIX Entertainment Limited (3)
Option Agreement
Relating to Shares in XIX Entertainment Limited

 

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TABLE OF CONTENTS
Page

             
1.
  Definitions     1  
 
           
2.
  Grant of Option     5  
 
           
3.
  Exercise of the Option     5  
 
           
4.
  Purchase Price     6  
 
           
5.
  Completion     7  
 
           
6.
  Prohibition on Disposal or Reorganisation     10  
 
           
7.
  Representation and Warranties; Covenants     11  
 
           
8.
  Access to Information     15  
 
           
9.
  Termination     16  
 
           
10.
  Miscellaneous     17  

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THIS OPTION AGREEMENT (this “Agreement”) is dated January 2010 and is made
BETWEEN:

(1)   CKX, Inc., a corporation organised under the laws of Delaware whose
principal place of business is 650 Madison Avenue, New York, NY 10022 (the
“Purchaser”);   (2)   SIMON ROBERT FULLER, an individual of 19 The Mall, East
Sheen, London SW14 (the “Seller”); and   (3)   XIX Entertainment Limited, a
company registered in England (company registration number 07113842) whose
registered office is at 12 New Fetter Lane, London, EC4A 1AG (the “Company”).

PRELIMINARY STATEMENT:
As of the date of this Agreement, the Seller owns one hundred percent (100%) of
the issued and outstanding equity interests in the Company (the “Shares”).
The Seller desires to grant the Purchaser, and the Purchaser desires to acquire
from the Seller, the option to purchase not less than ten percent (10%) and not
more than thirty three percent (33%) of the Shares owned by Seller pursuant to
the terms and conditions of this Agreement.
NOW IT IS HEREBY AGREED as follows:
1. Definitions

1.1   Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:

“Adjusted Enterprise Value” means (i) the aggregate purchase price paid by a
Third Party Investor in respect of a purchase of Shares, divided by (ii) the
quotient of (x) the number of Shares acquired by such Third Party Investor,
divided by (y) the total number of issued and outstanding Shares outstanding
immediately following such acquisition of Shares.
“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such Person.
“Agreement” has the meaning given such term in the preamble hereto.

 

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“Call Notice” has the meaning given such term in Section 3.1 of this Agreement.
“Change in Control” means, with respect to any Person, the acquisition, directly
or indirectly, of (i) beneficial ownership of voting securities representing 50%
or more of the total voting power of the equity securities of such Person by any
other Person or (ii) the power to manage such Person by any other Person..
“Change in Control Transaction” has the meaning given such term in Section 14.6
of this Agreement.
“CKX Common Stock” means common stock, par value $0.01 per share, of the
Purchaser.
“Company” has the meaning given to such term in the preamble to this Agreement.
“Completion” means the payment of the Purchase Price for the Option Shares in
accordance with Section 4 of this Agreement by the Purchaser and the delivery of
the Completion Documents by the Seller and the Purchaser, respectively.
“Completion Date” has the meaning given such term in Section 3.3 of this
Agreement.
“Completion Documents” means the documents required to be delivered under the
terms of this Agreement at Completion by the Seller and the Purchaser, including
the Shareholders’ Agreement.
“Consultancy Deed” means that certain consultancy deed between the Seller and 19
Entertainment Limited.
“Encumbrance” means any liens (including environmental and tax liens), pledges,
charges, security interests, restrictions, claims and other encumbrances of any
kind, including any restriction on the use, voting, transfer, receipt of income
or other exercise of any attributes of ownership.
“Enterprise Value” means £100,000,000.
“Excluded Projects” has the meaning given such term in the Shareholders’
Agreement.
“Exercise Date” means the date on which the Call Notice is deemed to have been
duly given in accordance with Section 3.1 hereof.

 

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“Governmental Entity” means a federal, state or other governmental, regulatory
or administrative agency, court, department, commission, board, bureau, or other
authority or instrumentality, domestic or foreign.
“Independent Option” has the meaning given such term in Section 3.2 of this
Agreement.
“Independent Option Purchase Price” has the meaning given to such term in
Section 6.2 of this Agreement.
“Option” has the meaning given such term in Section 2.1 of this Agreement.
“Option Consideration Payment” has the meaning given such term in Section 2.1 of
this Agreement.
“Option Period” means the period between the date hereof and March 15, 2010.
“Option Shares” has the meaning given such term in Section 2.1 of this
Agreement.
“Organizational Documents” means the currently effective memorandum, articles of
association and any other organizational documents of the Company, each in the
form attached hereto as Exhibit A.
“Permitted Assignee” has the meaning given such term in Section 14.6 of this
Agreement.
“Person” means, any individual, corporation (including non-profit corporation),
general or limited partnership, limited liability company, joint venture,
association, joint stock company, trust, estate, unincorporated organization,
government or agency or political subdivision thereof or other entity.
“Projects” has the meaning given such term in the Shareholders’ Agreement.
“Purchase Price” means, as applicable, (i) the Third Party Investment Option
Purchase Price or (ii) the Independent Option Purchase Price.
“Purchaser” has the meaning given such term in the preamble hereto.
“Purchaser’s Certificate” has the meaning given such term in Section 5.4(c) of
this Agreement.
“Reorganisation” means, with respect to the Company, every allotment or issue of
Shares, share capital or equity securities by any means and every issue or grant
by way

 

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  of rights and every consolidation or sub-division or reduction of capital or
capital dividend or other reconstruction or adjustment relating to the equity
share capital (or any shares stock or securities derived therefrom) and any
amalgamation or reconstruction affecting the equity share capital (or any shares
stock or securities derived therefrom).       “Seller” has the meaning given
such term in the preamble hereto.       “Seller’s Certificate” has the meaning
given such term in Section 5.3(c) of this Agreement.       “Shareholders’
Agreement” means that certain Shareholders’ Agreement by and among the Seller,
the Purchaser, the Company and any other shareholders of the Company, in the
form attached hereto as Exhibit B and, in the event the Purchaser acquires less
than 25% of the issued and outstanding Shares of the Company as of the
Completion Date, the changes set forth in the footnotes thereto..       “Shares”
has the meaning given such term in the preliminary statement hereto.      
“Subsequent Third Party Investment” has the meaning given such term in Section
4.2(b)(v) of this Agreement.       “Third Party Investment” means the
acquisition of not less than five percent (5%) of the issued and outstanding
Shares by a Third Party Investor at a purchase price equal to or greater than
(i) the Enterprise Value multiplied by (ii) the percentage of issued and
outstanding Shares acquired.       “Third Party Investment Option” has the
meaning given such term in Section 3.1 of this Agreement.       “Third Party
Investment Option Purchase Price” has the meaning given to such term in
Section 6.1 of this Agreement.       “Third Party Investor” means a bona fide
third party purchaser who, on arms length terms, shall pay in cleared funds for
any acquired Shares.   1.2   Construction.

  (a)   For purposes of this Agreement, whenever the context requires the
singular number shall include the plural, and vice versa; the masculine gender
shall include the feminine and neuter genders; the feminine gender shall include
the masculine and neuter genders; and the neuter gender shall include masculine
and feminine genders.

 

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  (b)   The parties hereto agree that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not be
applied in the construction or interpretation of this Agreement.     (c)   As
used in this Agreement, the words “include” and “including,” and variations
thereof, shall not be deemed to be terms of limitation, but rather shall be
deemed to be followed by the words “without limitation.”     (d)   Except as
otherwise indicated, all references in this Agreement to “Sections” and
“Exhibits” are intended to refer to Sections of this Agreement and Exhibits to
this Agreement. The table of contents and headings contained in this Agreement
are for convenience of reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

2.   Grant of Option

2.1   In consideration of £500,000 paid on the date hereof in cash by the
Purchaser to the Seller (receipt whereof is hereby acknowledged) (the “Option
Consideration Payment”), the Seller hereby grants to the Purchaser an option
(the “Option”) to purchase from Seller on the terms set forth hereunder such
number of Shares as shall equal not less than ten percent (10%) and not more
than thirty three percent (33%) of the Shares then issued and outstanding
immediately following the Completion Date (the “Option Shares”), and the Seller
agrees that, upon receipt of a valid Call Notice from the Purchaser, the Seller
shall transfer and sell or cause to be transferred and sold to the Purchaser the
Option Shares for the applicable Purchase Price.   2.2   The Option Shares shall
be sold free from all Encumbrances and with all rights attached thereto at the
date hereof and of such exercise, and shall constitute thirty three (33%) of the
Shares then issued and outstanding immediately following the Completion Date in
the event that the maximum number of Option Shares are acquired as pursuant to
Clause 3 below.

3.   Exercise of the Option   3.1   At any time following the consummation of a
Third Party Investment but prior to the expiration of the Option Period, the
Purchaser may exercise the Option (the “Third Party Investment Option”) by
delivering to the Seller a written notice of exercise (the “Call Notice”), which
notice shall be binding and irrevocable. The Seller shall give the Purchaser
prompt notice of any Third Party Investment, including prior notice of any
proposed completion date in respect of such investment, and copies of all
documents, instruments and deeds evidencing such investment.

 

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3.2   If the Third Party Investment has not occurred prior to February 28, 2010,
the Purchaser may exercise the Option (the “Independent Option”) at any time
during the remaining Option Period by delivering to the Seller a Call Notice,
which shall be binding and irrevocable.   3.3   The Call Notice shall specify
(i) the percentage, being not less than ten percent (10%) and not more than
thirty three (33%), of the issued and outstanding Shares (determined as of
completion) that the Purchaser intends to acquire hereunder (the “Purchased
Percentage”) and (ii) the date on which the exercise of the Option shall be
completed (the “Completion Date”), which date shall be not more than 60 days nor
less than 5 days after the date of such notice.   4.   Purchase Price   4.1  
Third Party Investment Option Purchase Price. The purchase price to be paid for
the Option Shares purchased pursuant to the Third Party Investment Option shall
be an amount equal to the Enterprise Value multiplied by the Purchased
Percentage (the “Third Party Investment Option Purchase Price”); provided,
however, that in the event a Third Party Investor acquires Shares prior to the
Purchaser’s exercise of the Option for a purchase price less than each Share’s
pro rata portion of the Enterprise Value, the Purchase Price paid by the
Purchaser for the applicable Option Shares pursuant to the Purchaser’s exercise
of the Option shall be an amount equal to the Adjusted Enterprise Value
multiplied by the Purchased Percentage.   4.2   Independent Option Purchase
Price.

  (a)   The purchase price to be paid for the applicable Option Shares purchased
pursuant to the Independent Option shall be an amount mutually agreed upon by
the Seller and the Purchaser within 5 days of the Exercise Date (the
“Independent Option Purchase Price”); provided, however, that in the event the
Seller and the Purchaser cannot mutually agree upon a purchase price within the
allotted period, the Independent Option Purchase Price shall be the fair market
value of the applicable Option Shares, as determined in accordance herewith.    
(b)   The fair market value of the applicable Option Shares shall be determined
as follows:

  (i)   The Seller and the Purchaser shall select a mutually acceptable
appraiser who shall determine the fair market enterprise value of the Company
and the resulting value of the applicable Option Shares.

 

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      (ii) If the Seller and the Purchaser are unable to agree upon an appraiser
within 3 days after the expiration of the period set forth in Section 4.2(a)
above, each party shall select an appraiser and provide written notice to the
other party within 5 days of the identity of the appraiser so selected by it,
which notice shall include the written agreement of such appraiser to serve in
that capacity. If both parties so select appraisers, such appraisers shall
within 20 days of their appointment provide written copies to both parties of
their appraisal.         (iii) If the difference between the two appraisals is
less than or equal to ten percent (10%) of the lower of the two appraisals, the
determination of fair market enterprise value shall be deemed to be the average
of the two appraisals.         (iv) If the difference between the two appraisals
is greater than ten percent (10%) of the lower of the two appraisals, then the
two appraisers shall jointly select a third appraiser. The third appraiser shall
be instructed and directed to select one of the appraisals as the most accurate
and appropriate appraisal, which selection shall then become final and binding
upon the Seller and the Purchaser.         (v) Notwithstanding the foregoing, if
after Completion Date of the consummation of the Independent Option and prior to
the first anniversary date of the date hereof, the Seller or the Company
consummates a sale of five percent (5%) or more of the then issued and
outstanding Shares at a purchase price per Share greater than the Independent
Option Price per Share (the “Subsequent Third Party Investment”, then the
Purchaser shall pay to the Seller, as additional purchase price, an amount equal
to the difference, on a per Share basis, between the price paid in respect of
the Subsequent Third Party Investment and the Independent Option Price (but in
no event shall the Purchaser be required to make any payment hereunder based on
an enterprise value associated with a Subsequent Third Party Investment that is
in excess of the Enterprise Value).         (vi) All costs and expenses of the
appraisers shall be borne by the Purchaser.

4.3   Payment of Purchase Price.

    The Purchase Price payable to the Seller at Completion shall be delivered by
the Purchaser to the Seller in cash by wire transfer of immediately available
funds to an account set forth on written wire transfer instructions provided to
the Purchaser by the Seller at least two days prior to the Completion Date.

 

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5.   Completion

5.1   Completion. Unless otherwise mutually agreed in writing by the Seller and
the Purchaser, the Completion shall take place at the offices of Paul, Hastings,
Janofsky & Walker (Europe) LLP, having an address of Ten Bishops Square, London,
E1 6EG, United Kingdom, on the date specified in the Call Notice when all of the
conditions set forth in Section 5.2, 5.3, 5.4, 5.5 and 5.6 below have been
satisfied or waived.   5.2   Conditions to the Obligations of the Seller and the
Purchaser. The respective obligations of each of the Seller and the Purchaser to
effect the purchase of the Option Shares are subject to the conditions precedent
that (i) no injunction, order, decree or ruling issued by a Governmental Entity,
nor any statute, rule, regulation or executive order promulgated or enacted by
any Governmental Entity, shall enjoin, make illegal or otherwise materially
impair or restrict such assignment, assumption or consummation, as the case may
be, (ii) all required consents of any Governmental Entity or any other third
party required to be obtained in order to consummate the transactions
contemplated by this Agreement shall have been obtained and be in full force and
effect, and all required waiting periods and any extensions thereof, shall have
expired or been terminated and (iii) no action, suit, investigation or
proceeding by any Governmental Entity shall have been instituted or threatened
to restrain or prohibit or otherwise challenge the legality or validity of the
transactions contemplated by this Agreement.   5.3   Additional Conditions to
the Obligations of the Purchaser. The obligations of the Purchaser are subject
to fulfilment (or written waiver by the Purchaser) at or prior to the Completion
Date of each of the following conditions precedent:

  (a)   Representations and Warranties. The representations and warranties
contained in Section 7.1 hereof shall be true and correct in all material
respects as of the date of this Agreement and as of the Completion Date as
though made at and as of the Completion Date.     (b)   Performance of
Covenants. The Seller and the Company shall have duly performed and complied in
all material respects with each covenant and agreement required to be performed
or complied with by it under this Agreement, in each case, as and when required
to be performed or complied with by it prior to or on the Completion Date.    
(c)   Certificate of the Seller. The Seller shall have delivered to the
Purchaser a certificate signed by the Seller to the effect that each of the
conditions specified in Sections 5.3(a) and 5.3(b) of this Agreement has been
satisfied in all respects (the “Seller’s Certificate”).

 

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  (d)   Entrance into the Shareholders’ Agreement. The Seller shall have entered
into, and shall have caused the Company, any Third Party Investor and any other
shareholders of the Company to enter into, the Shareholders’ Agreement. The
Seller covenants with the Purchaser to procure such parties enter into the
Shareholders Agreement.     (e)   Completion Documents. The Purchaser shall have
received each of the Completion Documents to be delivered by the Seller at or
prior to the Completion.

5.4   Additional Conditions to the Obligations of the Seller. The obligations of
the Seller are subject to fulfilment (or written waiver by the Purchaser) at or
prior to the Completion Date of each of the following conditions precedent:

  (a)   Representations and Warranties. The representations and warranties
contained in Section 7.2 hereof shall be true and correct in all material
respects as of the date of this Agreement and as of the Completion Date as
though made at and as of the Completion Date.     (b)   Performance of
Covenants. The Purchaser shall have duly performed and complied in all material
respects with each covenant and agreement required to be performed or complied
with by it under this Agreement, in each case, as and when required to be
performed or complied with by it prior to or on the Completion Date.     (c)  
Certificate of the Purchaser. The Purchaser shall have delivered to the Seller a
certificate signed by an officer of the Purchaser to the effect that each of the
conditions specified in Sections 5.4(a) and 5.4(b) of this Agreement has been
satisfied in all respects (the “Purchaser’s Certificate”).     (d)   Entrance
into the Shareholders’ Agreement. The Purchaser shall have entered into the
Shareholders’ Agreement.     (e)   Completion Documents. The Seller shall have
received each of the Completion Documents to be delivered by the Purchaser at or
prior to the Completion.

5.5   Closing Deliveries by the Purchaser. At the Completion, the Purchaser
shall deliver to the Seller:

  (a)   the Purchase Price in accordance with Section 4 of this Agreement;

 

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  (b)   true and complete copies, certified by the Secretary of the Purchaser,
of the resolutions duly and validly adopted by the Board of Directors of the
Purchaser evidencing the authorization of the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby;     (c)
  the Purchaser’s Certificate in accordance with Section 5.4(c) of this
Agreement; and     (d)   such other documents and instruments reasonably
requested by the Seller in order to effect the transactions contemplated hereby.

5.6   Closing Deliveries by the Seller. At the Completion, the Seller shall
deliver to the Purchaser:

  (a)   the certificate or certificates evidencing the Option Shares, duly
endorsed in blank or accompanied by a duly executed stock or other transfer
power, which Option Shares shall be delivered free and clear of all
Encumbrances;     (b)   a receipt for the Purchase Price;     (c)   the Seller’s
Certificate in accordance with Section 5.3(c) of this Agreement;     (d)   all
documents, instruments and deeds required by the Shareholders Agreement; and    
(e)   such other documents and instruments reasonably requested by the Purchaser
in order to effect the transactions contemplated hereby.

6.   Prohibition on Disposal or Reorganisation   6.1   While the Option
entitling the Purchaser to purchase the Option Shares either pursuant to the
Third Party Investment Option or the Independent Option remains exercisable:

  (a)   the Seller shall not without the prior written consent of the Purchaser
sell, transfer or otherwise dispose of (including, without prejudice to the
generality of the foregoing, accept an offer made to all holders for the class
or classes of securities to which the Option Shares belong) or mortgage, charge,
pledge or otherwise encumber any of the Option Shares;     (b)   the Seller and
the Company shall ensure that no Reorganisation occurs; and

 

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  (c)   the Company shall not pay, or agree to pay, annual salary, bonus or
other compensation to the Seller in excess of £1 million; provided, however,
that nothing contained in this clause shall limit dividends distributable to the
Seller in accordance with the Shareholders’ Agreement.

6.2   It is hereby acknowledged that the Purchaser may in the Purchaser’s
discretion and with a view to protecting its interests hereunder file a stop
notice or notices in respect of the Option Shares.   7.   Representation and
Warranties; Covenants   7.1   Representations and Warranties of the Seller. As
of the date hereof and at the Completion Date, the Seller hereby represents and
warrants to the Purchaser that:

  (a)   Seller Authority. Each of the Seller and the Company has the full power,
authority and legal right to execute, deliver and perform his or its obligations
under this Agreement and to consummate the transactions contemplated herein.    
(b)   Enforceability; Binding Effect. This Agreement has been duly authorized
and validly executed and delivered by the Seller and the Company and constitutes
the valid and legally binding obligation of the Seller and the Company,
enforceable against the Seller and the Company in accordance with its terms and
conditions, except as may be limited by any bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar law affecting creditors’
rights and remedies generally and, with respect to the enforceability thereof,
by general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement
is sought in a proceeding at law or in equity)..     (c)   Non-contravention.
The execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby, by the Seller and the Company will not
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Seller or the Company is subject,
(ii) conflict with, result in a breach of, constitute a default under, result in
the acceleration, create in any party the right to accelerate, terminate,
modify, or cancel any agreement, contract, lease, license, instrument, or other
arrangement to which the Seller or the Company is a party or by which the Seller
or the Company is bound or to which any of the Seller’s or the Company’s assets
is subject, or (iii) require the Seller or the Company to

 

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      give any notice to, make any filing with, or obtain any authorization,
consent or approval of any third party.     (d)   Company Organization and
Corporate Power. The Company is a company registered in England with number
07113842, duly organized, validly existing and in good standing under the laws
of England. The Company has full power and authority to carry on the business in
which it is engaged and to own and use the properties owned and used by it.    
(e)   Title to the Shares. The Seller has good title to the Shares (including
the Option Shares), free and clear of any Encumbrances. The Shares (including
the Option Shares) have been duly authorized, validly issued and are fully paid
and non-assessable. The Shares constitute all of the issued and outstanding
equity securities of the Company, and neither the Company nor the Seller is
party to any agreement or is otherwise obligated to issues or sell any equity
securities of the Company to any Person.     (f)   Absence of Encumbrances.
Neither the Company nor the Seller have Encumbered, secured, mortgaged or
charged any of the Shares and none of the Shares are subject to any third party
rights.     (g)   Organizational Documents of the Company. The documents
attached hereto as Exhibit A are true and complete copies of the Organizational
Documents of the Company.     (h)   Assets and Liabilities; Contracts. The
Company has never traded, has no assets (save for its share capital) nor
liabilities (actual or contingent) and has entered into no contracts,
commitments or arrangements, save as set forth on Schedule 1 hereto or as
notified to the Purchaser from time to time prior to expiry of the Option Period
(it being the intention that the Company will commence trading from
January 2010).     (i)   Brokers’ Fees. Neither the Seller nor the Company has
any liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this Agreement
for which the Purchaser or the Company is or may become liable.     (j)  
Litigation. There are no actions, suits, investigations, or proceedings by or
before any Governmental Entity pending, or, to the Seller’s knowledge,
threatened against the Seller or the Company which in any manner challenges the
validity of this Agreement or any action taken by the Seller or the Company
pursuant to this Agreement or seeks to prevent, enjoin, alter or materially
delay any transaction contemplated hereby.

 

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7.2   Representations and Warranties of the Purchaser. As of the date hereof and
the Completion Date, the Purchaser hereby represents and warrants to the Seller
that:

  (a)   Organization; Good Standing. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.     (b)   Authorization. The Purchaser has all requisite power and
authority to execute and deliver, and to perform its respective obligations
under this Agreement, and this Agreement has been duly authorized by all
necessary action on the part of the Purchaser.     (c)   Binding Effect;
Enforceability. This Agreement has been duly executed and delivered by the
Purchaser and is the valid and binding obligation of the Purchaser, enforceable
against such party in accordance with its terms, except as may be limited by any
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar law affecting creditors’ rights and remedies generally and, with respect
to the enforceability thereof, by general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).     (d)  
Non-contravention. The execution and delivery of this Agreement, and the
consummation of the transactions contemplated hereby, by the Seller will not (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Seller is subject, (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration, create in any party the right to accelerate, terminate, modify, or
cancel any agreement, contract, lease, license, instrument, or other arrangement
to which the Purchaser is a party or by which the Purchaser is bound or to which
any of the Purchaser’s assets is subject, or (iii) require the Purchaser to give
any notice to, make any filing with, or obtain any authorization, consent or
approval of any third party.     (e)   Brokers’ Fees. The Seller has no
liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement for which
the Purchaser or the Company is or may become liable.     (f)   Litigation.
There are no actions, suits, investigations, or proceedings by or before any
Governmental Entity pending, or, to the Seller’s knowledge, threatened against
the Seller which in any manner challenges the validity of this Agreement or any
action taken by the Seller pursuant to this Agreement or

 

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        seeks to prevent, enjoin, alter or materially delay any transaction
contemplated hereby.

7.3   Covenants of the Seller and Purchaser. Each of the Seller, the Company and
the Purchaser 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.   7.4   Additional
Covenants of the Company (and the Seller on Behalf of the Company). For the
period commencing on the date hereof and ending on the first to occur of the
Completion Date or the Termination Date, the Company shall (and the Seller shall
cause the Company to) (i) conduct its business in the ordinary course,
consistent with normal practice and (ii) except as expressly required hereby and
except as otherwise consented to in advance in writing by the Purchaser (such
consent not to be unreasonably withheld or delayed):

  (a)   not make any material change in the nature and scope of the Business (as
defined in the Shareholders Agreement) including amalgamating or merging with
any other business or the sale, transfer or disposal of the whole or a
substantial part of the Business;     (b)   not create, allot or issue any
Shares or other securities in the capital of the Company, or grant any option or
rights to subscribe for or to convert any instrument into any such Shares or
securities (except in connection with a Third Party Investment contemplated
hereby and in a manner not in contravention of or conflict with the terms and
conditions of this Agreement);     (c)   not reduce, subdivide or consolidate
the share capital of the Company, or vary the rights attaching to any class of
shares in the capital of the Company, or redeem, purchase or otherwise acquire
any Shares or other securities of the Company;     (d)   not borrow or the incur
indebtedness in the form of borrowing (save for working capital introduced by
the Seller)     (e)   not guarantee, create a surety or indemnity in favour of
any person (other than in the ordinary course of business);     (f)   not
mortgage, charge or create any other form of encumbrance in respect of any of
the Company’s assets (other than in the ordinary course of business)or
undertaking;

 

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  (g)   not make any loan to any Person (other than in the ordinary course of
business, but in no event to any Director, officer or employee of the Company);
    (h)   not acquire any assets (other than in the ordinary course of
business);     (i)   not acquire shares, stocks, bonds, debentures, options or
other securities in respect of any other Person, or dispose of any such interest
(other than in the ordinary course of business);     (j)   not make or declare
any distribution or dividend;     (k)   not increase the remuneration or
benefits of any Director of the Company or connected person of any Director of
the Company, or establish any new profit-share, bonus or other incentive schemes
for Directors of the Company, shareholders or any of their Affiliates;     (l)  
not establish or amend any pension scheme in relation to the Company or grant
any pension rights to any Director of the Company or employee of the Company or
any dependents of a Director of the Company or employee of the Company;     (m)
  not enter into any contract (other than a service or employment contract in
respect of acting as Director of the Company) with a Director of the Company or
with a shareholder of the Company or a connected person (within the meaning of
Section 252 of the Companies Act 2006) of a Director of the Company;     (n)  
not apply for the listing of any shares or debt securities of the Company on any
recognised stock exchange or the trading of any of its shares or debt securities
on a regulated market (as defined by Section 1173(1) of the Companies Act 2006;
    (o)   not enter into or become bound by any transaction, contract, agreement
or arrangement with any Affiliate of the Company; and     (p)   not alter the
Company’s Organizational Documents.

7.5   The Seller covenants and agrees with the Purchaser that all Projects
created or undertaken by the Seller during the period commencing on the date
hereof and ending on the later of (i) the expiration of the Option Period or, if
the Option is exercised (ii) the Completion Date shall only be taken up through
the Company, except for the Excluded Projects. Notwithstanding the foregoing,
the Seller may, and shall, perform his obligations under the Consultancy Deed.

 

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8. Access to Information   8.1   During the Option Period the Seller will use
reasonable commercial endeavours to provide such information that the Purchaser
reasonably requests to the purposes of, inter alia, complying with relevant
regulations and statutes, and also for the purposes of obtaining relevant
consents and approvals.   9. Termination   9.1   Termination. This Agreement may
be terminated at any time prior to the Completion Date:

  (a)   by mutual agreement of the Seller and the Purchaser;     (b)  
automatically if the Purchaser has not delivered a Call Notice prior to the
expiration of the Option Period;     (c)   by the Seller if a material breach of
any provision of this Agreement has been committed by the Purchaser and such
breach has not been waived in writing by the Seller or cured by the Purchaser
within ten (10) days after receipt of written notice from the Seller requesting
such breach to be cured;     (d)   by the Purchaser if a material breach of any
provision of this Agreement has been committed by the Seller and such breach has
not been waived in writing by the Purchaser or cured by the Seller within ten
(10) days after receipt of written notice from the Purchaser requesting such
breach to be cured;     (e)   by the Purchaser if any of the conditions set
forth in Sections 5.2 and 5.3 have not been satisfied on or before the
Completion Date or if satisfaction of such a condition is or becomes impossible
(other than through the failure of the Purchaser to comply with its obligations
under this Agreement) and the Purchaser has not waived such condition in writing
on or before such time;     (f)   by Seller if any of the conditions set forth
in Sections 5.2 and 5.4 have not been satisfied on or before the Completion Date
or if satisfaction of such a condition is or becomes impossible (other than
through the failure of the Seller to comply with its obligations under this
Agreement) and the Seller has not waived such condition in writing on or before
such time; or     (g)   by the Seller on the one hand or the Purchaser on the
other hand, if any Governmental Entity shall have issued a final permanent order
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement, and

 

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      the time for appeal or petition for reconsideration of such order shall
have expired.

9.2   Notice of Termination. Any party desiring to terminate this Agreement
pursuant to this Section 9 shall give written notice of such termination to the
other party to this Agreement.   9.3   Effect of Termination. If this Agreement
is terminated, all further obligations of the parties or their respective
Affiliates shall be terminated without further liability of any party to the
other (except as set forth in Sections 10.2 and 10.11); provided, however, that
nothing herein shall relieve any party from liability for its fraudulent or
intentional misrepresentation, omission or breach of this Agreement.

In the event of any termination of this Agreement pursuant to Section 9, the
Purchaser shall not be entitled a refund of the Option Consideration Payment.

10. Miscellaneous   10.1   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 the Seller:
Simon Robert Fuller
19 The Mall
East Sheen, London, SW14 7EN
Facsimile: +44 207 228 3649
With a copy to:
Andy Stinson,
33 Ransome’s Dock,
35-37 Parkgate Road,
London, SW11 4NP
Facsimile: +44 207 228 3649
If to the Purchaser:
CKX, Inc.
650 Madison Avenue

 

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New York, New York 10022
Facsimile: 1-212-421-3998
With a copy to:
Paul, Hastings, Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
Facsimile: 212-319-4090
Attention: William F. Schwitter, Esq.
                  Luke P. Iovine, III, Esq.
Paul, Hastings, Janofsky & Walker LLP
Ten Bishops Square
Eighth Floor
London, E1 6EG
United Kingdom
Facsimile: 44-20-3023-5109
Attention: Ronan O’Sullivan
If to the Company:
XIX Entertainment limited
12 New Fetter Lane
London, EC4A 1AG
Attention: Company Secretary
Facsimile: +44 207 556 1212
With a copy to:
Andy Stinson,
33 Ransome’s Dock,
35-37 Parkgate Road,
London, SW11 4NP
Facsimile: +44 207 228 3649
or to such other address or facsimile number as such party shall have specified
in a written notice given to the other party hereto in the manner set forth
above.

 

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10.2   Press Releases; Confidentiality. Except to the extent required by
applicable law or legal process or applicable rules of a stock exchange or
national market system, each of the Seller and the Purchaser agree 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 party hereto, which consent may be granted or
withheld in the sole discretion of the other party. The parties hereto hereby
agree that this Agreement and the terms contained herein shall be kept
confidential by the parties hereto and their Affiliates and agents except to the
extent disclosure is required by applicable law or legal process or applicable
rules of a stock exchange or national market system, in which event the
disclosing party shall promptly 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. Each party shall be entitled to
reveal the contents of this Agreement to its professional advisors and the
Seller may disclose this Agreement on a confidential basis to any prospective
Third Party Investor.   10.3   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.   10.4   Assignability. Neither this
Agreement nor any right, remedy, obligation or liability arising hereunder or by
reason hereof shall be assignable by the Seller or the Purchaser; provided,
however, that the Purchaser may assign its rights, remedies, obligations and
liabilities arising hereunder (i) to a purchaser of the 19 Entertainment Limited
group of companies or substantially all of their business or assets and (ii) to
any Affiliate of CKX, Inc. (a “Permitted Assignee”); provided, further, that
this Agreement may not be further directly or indirectly assigned in connection
with a transaction that results in a Change in Control of the Permitted Assignee
(a “Change in Control Transaction”) to a third party that is not (or following
such Change of Control, will not be) an Affiliate of the Purchaser, unless the
transaction would constitute a sale contemplated by clause (i) above.   10.5  
Entire Agreement. This Agreement (including 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.   10.6   Specific Performance. Each party hereto
acknowledges and agrees that the other party may be irreparably damaged if any
provision of this Agreement is not performed in

 

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    accordance with its terms or otherwise is breached. Accordingly, each party
agrees that the other party shall be entitled to seek injunctive relief, subject
to a determination by a court of competent jurisdiction, to prevent any such
failure of performance or breach and to enforce specifically this Agreement and
any of the terms and provisions hereof.   10.7   Governing Law; Submission to
Jurisdiction.

  (a)   This Agreement shall be governed by English law.     (b)   The parties
hereto hereby agree that the courts of England have exclusive jurisdiction to
settle any disputes which may arise out of or in connection with this Agreement
(including as to formation, enforceability, validity or interpretation) and
submit to the jurisdiction of such courts and agree that accordingly any suit,
action or proceeding arising out of or in connection with this Agreement may be
brought in such courts.

10.8   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.   10.9   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. No rights shall arise in favour
of any party who is not a party to this Agreement under the Contracts (Rights of
Third Parties) Act of 1999.   10.10   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.   10.11   Expenses. Except as expressly provided in this
Agreement, each of the parties hereto shall bear its own costs and expenses
(including legal, accounting and investment banking fees and expenses) incurred
in connection with this Agreement and the transactions contemplated hereby.

[Signature Page Follows]

 

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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.

     
 
  /s/ Simon Robert Fuller
 
   
 
  Simon Robert Fuller
 
   
 
  CKX, Inc.
 
   
 
  /s/ Robert F.X. Sillerman
 
   
 
  Name: Robert F.X. Sillerman
 
  Title:   Chairman and Chief Executive Officer
 
   
 
  XIX ENTERTAINMENT LIMITED
 
   
 
  /s/ Simon Robert Fuller
 
   
 
  Name:  Simon Robert Fuller
 
  Title:    Authorized Signatory

 

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Schedule 1
Assets and Liabilities; Contracts