EX-10.26



 





Exhibit 10.26



 




CKX FXLR STOCKHOLDER DISTRIBUTION TRUST I AGREEMENT




by and between




CKX, INC.




and




RICHARD G. CUSHING,




as Trustee acting on behalf and for the benefit of certain

CKX BENEFICIARIES



 




Dated as of June 18, 2007




 









 





	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page	 
	ARTICLE I	 	DEFINITIONS	 	 	1	 
	 
	 	 	1.01	 	 	Certain Terms Defined.	 	 	1	 
	ARTICLE II	 	     CREATION OF THE TRUST	 	 	2	 
	 
	 	 	2.01	 	 	Contribution of Assets to be held in Trust	 	 	2	 
	 
	 	 	2.02	 	 	Declaration of Trust	 	 	2	 
	 
	 	 	2.03	 	 	Incidents of Ownership	 	 	2	 
	 
	 	 	2.04	 	 	Purpose and Powers of the Trust	 	 	3	 
	 
	 	 	2.05	 	 	Title to Trust Assets	 	 	3	 
	ARTICLE III	 	     THE TRUSTEE	 	 	3	 
	 
	 	 	3.01	 	 	Generally.	 	 	3	 
	 
	 	 	3.02	 	 	Powers and Duties of the Trustee	 	 	3	 
	 
	 	 	3.03	 	 	Actions of the Trustee Binding on the Trust	 	 	5	 
	 
	 	 	3.04	 	 	Compensation of the Trustee.	 	 	5	 
	 
	 	 	3.05	 	 	Resignation and Removal of Trustee.	 	 	5	 
	 
	 	 	3.06	 	 	Effect of Resignation or Removal of the Trustee.	 	 	5	 
	ARTICLE IV	 	     PAYMENT OF COSTS	 	 	6	 
	ARTICLE V	 	     STANDARD OF CONDUCT, INDEMNIFICATION AND EXCULPATION	 	 	6	 
	 
	 	 	5.01	 	 	Limitation on Liability of the Trustee and Others	 	 	6	 
	 
	 	 	5.02	 	 	Indemnification.	 	 	6	 
	 
	 	 	5.03	 	 	Bond	 	 	7	 
	ARTICLE VI	 	     TRUST INTERESTS AND TRUST INTEREST HOLDERS	 	 	8	 
	 
	 	 	6.01	 	 	Trust Interests.	 	 	8	 
	 
	 	 	6.02	 	 	Limitations on Transferability of Trust Interests	 	 	8	 
	 
	 	 	6.03	 	 	Distributions	 	 	8	 
	 
	 	 	6.04	 	 	No Suits by Trust Interest Holders	 	 	8	 
	 
	 	 	6.05	 	 	List of Holders	 	 	8	 
	ARTICLE VII	 	     TAX MATTERS	 	 	8	 
	 
	 	 	7.01	 	 	Income Tax Status	 	 	8	 
	 
	 	 	7.02	 	 	Tax Returns and Reports	 	 	8	 






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	 	 	 	 	 	 	 	 	Page	 
	 
	 	 	7.03	 	 	Tax Identification Number; Withholding	 	 	9	 
	 
	 	 	7.04	 	 	Fiscal and Tax Year	 	 	9	 
	ARTICLE VIII	 	     TERM AND TERMINATION	 	 	9	 
	 
	 	 	8.01	 	 	Term	 	 	9	 
	 
	 	 	8.02	 	 	No Termination by CKX Beneficiaries	 	 	9	 
	 
	 	 	8.03	 	 	Continuance of Trust for Winding Up	 	 	9	 
	ARTICLE IX	 	     MISCELLANEOUS	 	 	9	 
	 
	 	 	9.01	 	 	Governing Law; Jurisdiction	 	 	9	 
	 
	 	 	9.02	 	 	Notices	 	 	9	 
	 
	 	 	9.03	 	 	Headings	 	 	10	 
	 
	 	 	9.04	 	 	Amendments and Waivers.	 	 	10	 
	 
	 	 	9.05	 	 	Meanings of Other Terms	 	 	10	 
	 
	 	 	9.06	 	 	Counterparts	 	 	10	 
	 
	 	 	9.07	 	 	Parties in Interest	 	 	10	 
	 
	 	 	9.08	 	 	Entire Agreement	 	 	10	 
	 
	 	 	9.09	 	 	Construction	 	 	10	 
	 
	 	 	9.10	 	 	Severability	 	 	11	 






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Schedule I — Initial Trustee Fees



Schedule II — CKX Beneficiaries




 









 







CKX FXLR STOCKHOLDER DISTRIBUTION TRUST I AGREEMENT




     This Agreement, dated as of June 18, 2007 (this “Agreement” or the “CKX FXLR Stockholder
Distribution Trust I Agreement”), is made by and between CKX, Inc. (“CKX”) and Richard G. Cushing,
as trustee (in such capacity, the “Trustee”) acting on behalf and for the benefit of the CKX
Beneficiaries (as defined below), for the purpose of establishing the Trust (as defined below).



RECITALS




     WHEREAS, CKX presently holds 50% of the outstanding membership interests (the “FXLR
Interests”) in FX Luxury Realty, LLC, a Delaware limited liability company (“FXLR LLC”);



     WHEREAS, CKX declared a dividend consisting of 25% of the common shares in FX Luxury Real
Estate Inc., a Delaware corporation (“FXLRE Corp.”), payable to the CKX stockholders of record on
the record date to be determined by CKX in the future (the “Record Date”), which shares will be
acquired by contribution of the FXLR Interests to FXLRE Corp. prior to the distribution in
accordance with and pursuant to the terms of the Amended and Restated Operating Agreement for FXLR
LLC;



     WHEREAS, the Trust is formed for the benefit of those CKX Beneficiaries set forth in Schedule
II and to the extent of their interests set forth thereon (the “CKX Beneficiaries”);



     WHEREAS, the Record Date shall be the date that is ten days following the declaration of
effectiveness by the United States Securities and Exchange Commission of a registration statement
relating to such distribution, which date shall be ratified by a committee of the board of
directors of CKX established for such purpose, which committee shall also set the payment date at
such time;



     WHEREAS, CKX desires to transfer 9.5% of the FXLR Interests to the Trustee for the Trust
organized hereunder and hereby and for the Trustee to hold such FXLR Interests pending the
contribution (the “Contribution”) of such FXLR Interests to FXLRE Corp. in exchange for shares of
common stock of FXLRE Corp. (the “FX Luxury Stock”), and the transfer of such shares to the CKX
Beneficiaries following the effective date of a registration statement with respect to the FX
Luxury Stock; and



     WHEREAS, the Trustee by its execution of this Agreement (the “Initial Trustee”) has agreed to
perform the duties of Trustee hereunder subject to the terms, conditions, limitations, indemnities
and other provisions hereof.



     NOW, THEREFORE, in consideration of the premises and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:



ARTICLE I

DEFINITIONS




 









 







     1.01 Certain Terms Defined.



          For purposes of this Agreement, the following terms shall have the following meanings:




          “Agreement” has the meaning set forth in the Recitals hereto.




          “Costs” means all costs and expenses incurred by or on behalf of the Trustee in connection
with the administration of the Trust, including but not limited to the costs and expenses
contemplated in Section 3.02(b) hereof and any taxes contemplated in Section 7.01 hereof.




          “Date of Effectiveness” means the date the Securities and Exchange Commission declares the
Registration Statement to be effective. The Date of Effectiveness shall be conclusively determined
by the delivery to the Trustee of a written legal opinion of counsel as contemplated by Section
5.05 hereof.




          “Exchange Act” means the Securities Exchange Act of 1934, as amended.




          “Exculpated Parties” has the meaning set forth in Section 5.01 hereof.




          “Holder List” has the meaning set forth in Section 6.05 hereof.




          “Indemnification Advances” has the meaning set forth in Section 5.02(c) hereof.




          “Indemnification Costs” has the meaning set forth in Section 5.02(a) hereof.




          “Indemnified Parties” has the meaning set forth in Section 5.02(a) hereof.




          “Initial Trustee” has the meaning set forth in the Recitals hereto.




          “IRS” means the Internal Revenue Service of the United States of America.




          “Person” means an individual, corporation, partnership, limited liability company,
association, trust, joint venture, unincorporated organization or other entity.




          “Professionals” has the meaning set forth in Section 3.02(b)(vii) hereto.




          “Registration Statement” means a registration statement on Form S-1 or other applicable form
filed with the Securities and Exchange Commission to register, under the Securities Act of 1933,
the distribution of the FX Luxury Stock to the CKX Beneficiaries as contemplated by this Agreement.




          “Trust” means the trust organized hereunder and hereby, to be known as the “CKX FXLR
Stockholder Distribution Trust I,” and any constructive trusts relating thereto, established
pursuant to Section 301.7701-4(a) of the Regulations of the United States Department of the
Treasury and of which the CKX Beneficiaries are treated as the grantors and deemed owners and
established pursuant to this Agreement.




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          “Tax Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of
the Code shall include a reference to any amendatory or successor provision thereto.




          “Termination Date” has the meaning set forth in Section 8.01 hereof.




ARTICLE II

CREATION OF THE TRUST




     2.01 Contribution of Assets to be held in Trust. CKX hereby absolutely and irrevocably
grants, assigns, transfers, conveys and delivers, without representation, warranty or recourse, and
with no reversionary interest in CKX, to the Trustee, and its successors and assigns, to be held in
trust pursuant to the terms of this Agreement, all right, title and interest in and to the FXLR
Interests. CKX will claim no legal, equitable or beneficial interest in the FXLR Interests, and
will make no statement inconsistent with the complete transfer to the Trustee. There is no
agreement or course of conduct that is inconsistent with this transfer. CKX will disclose on its
financial statements the complete transfer of the FXLR Interests, and has received an opinion of
counsel that the FXLR Interests would not be property of CKX’s estate in the case of a bankruptcy
filing by or against CKX.



     2.02 Declaration of Trust. The Trustee hereby accepts such rights and properties assigned and
transferred to it, and the trust imposed upon it pursuant to this Agreement and the laws of the
State of New York, on behalf of and for the benefit of, and agrees to administer and manage the
Trust and to hold the FXLR Interests in trust for the sole benefit of, the CKX Beneficiaries in
their capacity as such in each case pursuant to, but only pursuant to, the terms, conditions,
limitations, indemnities and other provisions hereof.



     2.03 Incidents of Ownership. The CKX Beneficiaries shall be the sole beneficiaries of the
Trust, and the Trustee shall retain only such incidents of ownership as are necessary to undertake
the actions and transactions authorized herein on behalf of the CKX Beneficiaries.



2.04 Purpose and Powers of the Trust.




          (a) Purpose. The purpose of the Trust is to hold the FXLR Interests and, following the
Contribution, the FX Luxury Stock, pending the approval and effectiveness of a registration
statement pursuant to the Exchange Act, enabling the distribution of the FX Luxury Stock to the CKX
Beneficiaries, and to distribute the FX Luxury Stock to the CKX Beneficiaries as soon as
practicable thereafter.




          (b) Powers. Subject to the limitations expressly set forth in this Agreement, the Trust shall
have all powers necessary or appropriate to carry out its purposes, including those set forth in
Section 3.02 hereof.




          (c) Limitations on Powers.





     (i) The Trust shall not conduct, continue or engage in any trade or business,
except to the extent the Trustee would be deemed to engage in any such



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trade or business in performing the duties expressly required under the terms
of this Agreement.




     (ii) The Trustee shall have no authority to do any action other than as
expressly set forth herein.



     2.05 Title to Trust Assets. Title to the FXLR Interests and FX Luxury Stock shall be held in
the name of the Trustee. The sole interest of the CKX Beneficiaries in the Trust, the FXLR
Interests and the FX Luxury Stock shall be the rights and benefits given to such Persons under this
Agreement.



ARTICLE III

THE TRUSTEE




     3.01 Generally.



          (a) The Trustee, by its execution of this Agreement, is deemed to have accepted and undertaken
to discharge the duties of Trustee created by this Agreement in each case pursuant to, but only
pursuant to, the terms and conditions, limitations, indemnities, and other provisions hereof.




          (b) The Trustee shall maintain the principal office where the records relating to the Trust
are maintained in the County of New York, State of New York. The Trustee shall maintain books and
records in relation to the Trust in such detail and for such period of time as may be necessary to
enable it to make a full and proper accounting in respect thereof.




          (c) If the Trustee shall ever change its name or reorganize, reincorporate or merge with or
into or consolidate with any other entity, the Trust shall not be terminated or dissolved and shall
instead continue, and such Trustee shall be deemed to be a continuing entity and shall continue to
act as the Trustee hereunder with the same liabilities, duties, powers, rights, titles, discretions
and privileges as are herein specified for the Trustee, unless otherwise restricted by operation of
law or conflict of interest.




     3.02 Powers and Duties of the Trustee.



          (a) General. Subject to Article IV hereof, the Trustee shall take, and shall have full power
and authority to and shall take any and all actions necessary or appropriate to fulfill the purpose
of the Trust as set forth in this Agreement and to carry out the obligations of the Trustee as
expressly set forth in this Agreement, including:





     (i) holding legal title to the FXLR Interests and FX Luxury Stock and voting
the FXLR Interests and the FX Luxury Stock in a manner necessary to constitute a
quorum at any meeting of members or stockholders of FXLR LLC or FXLRE Corp.;
provided that to the extent permitted under applicable law and the operating
agreement of FXLR LLC and the Certificate of Incorporation and by-laws of FXLRE
Corp., the Trustee shall vote such shares in proportion to the vote of the other
members or stockholders;



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     (ii) (A) becoming a non-managing member of FXLR LLC, (B) executing the Second
Amended and Restated Operating Agreement of FXLR LLC and (C) assuming the
obligations, if any, of CKX as a former member of FXLR LLC;




     (iii) contributing the FXLR Interests to FXLRE Corp. in accordance with the
terms of the Amended and Restated Limited Liability Operating Agreement of FX Luxury
Realty, LLC;




     (iv) distributing the FX Luxury Stock to the CKX Beneficiaries on or promptly
following the Record Date, subject to receipt of the legal opinion of FXLRE Corp. as
contemplated in the definition hereof of the term Date of Effectiveness;




     (v) in the event no registration statement for the FX Luxury Stock becomes
effective by January 31, 2010, transferring the FXLR Interests or the FX Luxury
Stock to the Comptroller of State of New York; and




     (vi) to the extent required, filing an Internal Revenue Service Form 1041 with
a statement attached thereto providing items of income, gain, loss or deduction
realized with respect to the ownership of the FXLR Interests and names and
identifying information of the CKX Beneficiaries that are beneficiaries of the
Trust.



     (b) Other Powers and Duties. Without limiting the foregoing, the Trustee is expressly
authorized to and shall:




     (i) pay all costs and expenses incurred in connection with the administration
of the Trust, including but not limited to the fees and expenses of Professionals
(as defined below), (ii) taxes, bank charges, filing and registration fees, postage,
telephone, facsimile, copying and messenger costs and secretarial and administrative
costs attendant to the administration and maintenance of the Trust and the
responsibilities of the Trustee hereunder, (iii) the fees of the Trustee, and (iv)
any Indemnification Advances.




     (ii) execute any documents and take any other actions related to, or in
connection with, the acceptance of the transfer of the FXLR Interests and FX Luxury
Stock until termination of the Trust in accordance with this Agreement, and the
exercise of the Trustee’s powers granted herein;




     (iii) hold legal title to the FXLR Interests and FX Luxury Stock, and any and
all rights in or arising from the FXLR Interests or FX Luxury Stock, on behalf of
the Trust and for the benefit of the CKX Beneficiaries;




     (iv) protect and enforce the rights to the FXLR Interests and FX Luxury Stock
vested in the Trustee and the Trust by this Agreement by any method deemed
appropriate, including by judicial proceedings or pursuant to any



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applicable bankruptcy, insolvency, moratorium or similar law and general
principles of equity;




     (v) make all necessary filings in accordance with any applicable law, statute
or regulation, including, if necessary, any applicable securities laws, and, in
consultation with counsel, seek any advice or determination that may be necessary or
appropriate under such laws , provided that the Trustee shall not be obligated to
prepare the registration statement but shall only be required to cooperate to the
extent necessary and to the extent notified by counsel to FXLRE Corp.;




     (vi) pay all ordinary course expenses and make all other payments relating to
the Trust; and




     (vii) retain such law firms, accounting firms, experts, advisors, consultants,
investigators, appraisers, auctioneers or other professionals as it may deem
necessary (collectively, the “Professionals”), in its sole discretion on reasonable
terms and conditions of employment or retention, to aid in the performance of its
responsibilities pursuant to the terms of this Agreement, including the liquidation
and distribution of the FXLR Interests and FX Luxury Stock, provided, however, that
in no event shall the Trustee hire any one or more employees to the extent any such
hiring would result in the Trust engaging in or conducting, or being deemed to
engage in or conduct, a trade or business contrary to Section 2.04(c)(i) hereof.



          (c) No Obligation to Advance Funds. The Trustee shall have no obligation to advance its
individual funds for any purpose, and shall have no obligation to distribute to the CKX
Stockholders or any third party any property held or to be held by the Trustee or amounts paid to
or to be paid to the Trustee until such property is received or amounts are collected (as
applicable) by the Trustee.




          (d) No Duties Except as Specified in Agreement. The Trustee shall not have any duty or
obligation to manage, control, use, sell, dispose of or otherwise deal with the FX Luxury stock or
any other assets obtained by the Trust except as expressly provided by the terms of this Agreement.




     3.03 Actions of the Trustee Binding on the Trust. Any and all actions taken by the Trustee in
accordance with this Agreement shall be binding upon the Trust and the CKX Beneficiaries.



     3.04 Compensation of the Trustee.



     The compensation of the Initial Trustee shall be as set forth on Schedule I hereto.



     3.05 Resignation and Removal of Trustee.



          (a) The Trustee may resign at any point in time, such resignation to be effective upon the
appointment of a successor Trustee by the Trustee.




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          (b) The Trustee may not be removed except for its gross negligence or willful misconduct.




     3.06 Effect of Resignation or Removal of the Trustee.



          (a) The resignation, removal, incompetence, bankruptcy or insolvency of the Trustee shall not
operate to terminate the Trust created by this Agreement or to revoke any existing agency created
pursuant to the terms of this Agreement or invalidate any action theretofore taken by the Trustee.




          (b) If a successor Trustee is not appointed, the Trustee shall petition a court with
jurisdiction to appoint a successor Trustee, and such court shall appoint such successor and make
any amendments to this Agreement as may be required in connection with the appointment of such
successor Trustee.




          (c) Any successor Trustee appointed hereunder shall execute an instrument accepting its
appointment. Thereupon, such successor shall, without any further act, become vested with all the
obligations, duties, powers, rights, title, discretion and privileges of its predecessor in the
Trust with like effect as if originally named Trustee and enforce the rights of the Trust as the
holder of the FXLR Interests and FX Luxury Stock for the benefit of the CKX Beneficiaries.




          (d) The departing Trustee shall duly assign, transfer and deliver to the successor Trustee the
FXLR Interests or FX Luxury Stock and books and records relating to the Trust held or controlled by
such departing Trustee hereunder and shall, as reasonably requested by such successor, execute and
deliver an instrument or instruments conveying and transferring to such successor upon the trust
herein expressed all the obligations, duties, powers, rights, title, discretion and privileges of
such departing Trustee.




3.07 Limited Representations or Warranties.




          (a) The trustee makes no representation or warranty, express or implied, as to (i) the FXLR
Interests and FX Luxury Stock including their value, or their due authorization, valid issuance
full payment or non-assessability, (ii) the validity of the dividend declared by CKX with respect
thereto or the legality thereof under the Delaware General Corporation Law, (ii) the Trustee’s good
title to the FXLR Interests and FX Luxury Stock, except that on the date that the FX Luxury
Interests were delivered to the Trustee the Trustee shall have received whatever title was conveyed
to it by CKX and that the FX Luxury Stock shall be free of liens attributable to the Trustee it in
its individual capacity except as may be permitted hereunder, or (iv) the validity or
enforceability of the Operating Agreement applicable to FXLR LLC.




          (b) The Trustee makes no representation or warranty as to the validity, legality or
enforceability of this Agreement or any other document or instrument referred to herein or as to
the correctness of any statement contained in any thereof, except to the extent that any such
statement is expressly made herein or therein as a representation by the Trustee in its individual
capacity or as Trustee and except that the Trustee, in its individual capacity, hereby represents
and warrants that this Agreement has been executed and delivered by the Trustee and




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the Trustee, in its individual capacity, has the power and authority to execute, deliver and
perform this Agreement.




ARTICLE IV

PAYMENT OF COSTS




     4.01 Payment of Costs. The initial Trustee shall be responsible for the payment of Costs and
other expenses incurred by the Trust, and of any Costs and expenses incurred after resignation or
removal of the initial Trustee. The Trustee shall not be entitled to any reimbursement by the
Trust for any Costs or expenses pursuant to Section 4.01.



ARTICLE V

STANDARD OF CONDUCT, INDEMNIFICATION AND EXCULPATION




     5.01 Limitation on Liability of the Trustee and Others. Neither the Trustee nor any successor
Trustee (collectively, the “Exculpated Parties”) shall be liable for the act, default or misconduct
of any other party or for the Exculpated Party’s own acts, defaults or misconduct except for such
Exculpated Party’s own gross negligence or willful misconduct. The Trustee may, in connection with
the performance of its duties, and in its sole and absolute discretion, consult with the
Professionals, and shall not be liable for anything done or omitted or suffered to be done in
accordance with such advice or opinions. If the Trustee determines not to consult with any of the
Professionals, such determination shall not be deemed to impose any liability on the Trustee.



     5.02 Indemnification.



          (a) The Trust shall indemnify and hold harmless the Trustee and its agents, employees,
officers, directors, Professionals and principals in their capacity as such (collectively, the
“Indemnified Parties”) from and against any and all losses, claims, damages, liabilities or
expenses (including, without limitation, amounts paid in judgment, penalty or otherwise, fees and
expenses of counsel and other professionals (other than any costs of internal personnel), with
respect to claims on whatsoever theory (whether by way of third- or subsequent party complaint,
cross-claim, separate action or otherwise) by any Person to recover in whole or in part any
liability, direct or indirect, whether by way of judgment, penalty or otherwise, of any Person in
connection with, arising out of or which is in any way related to the distribution of the FX Luxury
Stock or the matters set forth in this Agreement except, with respect to any Indemnified Party, for
its own gross negligence or willful misconduct (the foregoing losses, claims, damages, liabilities
and expenses, collectively, “Indemnification Costs”).




          (b) Promptly after receipt by an Indemnified Party of notice of the commencement of any action
referred to in Section 5.02(a) of this Agreement, such Indemnified Party shall give written notice
to the Trustee thereof, but the omission so to notify the Trustee will not relieve the Trust from
any liability that it may have to any Indemnified Party, except to the extent the Trust is actually
prejudiced thereby. The Trust shall have no liability for any cost or expense incurred by such
Indemnified Party prior to the notification to the Trustee of such action. In case any such action
is brought against an Indemnified Party, and it notifies the Trustee of the commencement thereof,
the Trustee on behalf of the Trust will be entitled to




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participate in, and to the extent that it may wish, to assume, the defense thereof, with
counsel reasonably satisfactory to the Indemnified Party, and after notice from the Trustee to such
Indemnified Party, the Trust shall not, except as hereinafter provided, be responsible for any
legal or other expenses subsequently incurred by the Indemnified Party in connection with the
defense thereof. In the event the Trustee assumes the defense of the action, the Indemnified Party
may retain separate counsel at its sole cost and expense (except that the Trustee shall be
responsible for the fees and expenses of such separate co-counsel to the extent the Indemnified
Party is advised, in writing by its counsel, that the counsel the Trustee has selected has a
conflict of interest). Such assumption of the defense shall not prejudice the right of the Trust
to claim at a later date that such third party action is not a proper matter for indemnification
pursuant to this Section 5.02. The Trust shall not be liable for any settlement of any such action
or proceeding effected without its written consent, but if settled with its written consent, or if
there be a final judgment for the plaintiff in any such action or proceeding, the Trust agrees to
indemnify and hold harmless such Indemnified Party from and against any loss or liability by reason
of such settlement or judgment.




          (c) To the extent the Trustee on behalf of the Trust has not assumed the defense of any action
referred to in Section 5.02(a), the Indemnified Parties shall be entitled to obtain advances
(“Indemnification Advances”) from the Trust to cover their expenses of defending themselves in any
action referred to in Section 5.02(a), provided, however, that the Indemnified Parties receiving
such advances shall repay the amounts so advanced to the Trust within 5 days after the entry of a
final order of any court of competent jurisdiction finding that such Indemnified Parties were not
entitled to any indemnity under the provisions of this Section 5.02.




     5.03 Bond. The Trustee shall not be obligated to post a bond hereunder.



     5.04 Survival of Indemnities. The indemnities contained in this Section 8.01 shall survive
the termination of this Agreement.



     5.05 Reliance; Agent; Advice of Counsel. The Trustee shall incur no liability in acting upon
any signature, instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper reasonably believed by it to be genuine and reasonably
believed by it to be signed by the proper party or parties. Without limiting the generality of the
foregoing, the Trustee may rely, and shall be entitled to require as a condition of its
distribution of the FX Luxury Stock as contemplated hereby, on an opinion of counsel to FXLRE Corp.
to the effect that a registration statement permitting the distribution of the FX Luxury Stock as
contemplated hereby is effective, that the distribution may be made as contemplated hereby without
violation of the Securities Act of 1933 and that the necessary qualifications for state and other
securities and blue sky laws have been received.



     5.06 Reliance on certificate of FXLRE Corp. As to any fact or matter the manner of
ascertainment of which is not specifically described herein, the Trustee may, absent actual
knowledge to the contrary, for all purposes hereof rely on a certificate, signed by any officer of
FXLRE Corp., as to such fact or matter, and such certificate shall constitute full protection to
the Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon.



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     5.07 Use of Agents by Trustee. In the administration of the trusts hereunder, the Trustee may
execute any of the trusts or powers hereof and perform its powers and duties hereunder directly or
through agents or attorneys and, at the expense of the Trust, consult with independent counsel,
accountants and other skilled persons to be selected and employed by it, and the Trustee shall not
be liable for anything done, suffered or omitted in good faith by it in accordance with the written
advice or opinion of any such counsel, accountants or other skilled persons appointed by it with
due care hereunder.



ARTICLE VI

TRUST INTERESTS AND

TRUST INTEREST HOLDERS




     6.01 Trust Interests.



          (a) The interests of the CKX Beneficiaries as beneficiaries of the Trust (the “Trust
Interests”) have been created pursuant to this Agreement.




          (b) The Trust Interests shall not be represented by any certificates and shall inure to the
benefits of the CKX Beneficiaries and their successors and assigns.




          (c) The CKX Beneficiaries shall not have any right to participate in the management of the
Trust.




          (d) Under no circumstances shall the CKX Beneficiaries be entitled to the distribution of any
portion of the FXLR Interests or any shares of the FX Luxury Stock prior to the declaration of
effectiveness of a registration statement for such shares.




     6.02 Limitations on Transferability of Trust Interests. The Trust Interests are not
transferable and may not be transferred or assigned.



     6.03 Distributions. The Trustee shall distribute the FX Luxury Stock to the CKX Beneficiaries
pro rata as set forth in Schedule II hereof on the date specified by CKX when establishing the
Record Date, provided, however, that if the Date of Effectiveness has not occurred prior to January
31, 2010, the FXLR Interests or FX Luxury Stock shall be transferred to the Comptroller of the
State of New York. Under no circumstances shall the Trustee be obligated to distribute any
fractional shares of the FX Luxury Stock. In the event that the Trustee is unable to locate any of
the CKX Beneficiaries to whom any distribution of FX Luxury Stock is due, after customary efforts
by the transfer agent of FXLRE Corp., such shares shall be transferred to the Comptroller of the
State of New York as unclaimed property.



     6.04 No Suits by Trust Interest Holders. No CKX Beneficiary shall have any right by virtue of
any provision of this Agreement to institute or participate in any action or proceeding at law or
in equity against any party other than the Trustee in order to enforce the provisions of this
Agreement.



ARTICLE VII

TAX MATTERS




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     7.01 Income Tax Status. Solely for income tax purposes, CKX shall be deemed to have
transferred the FXLR Interests to the CKX Beneficiaries and, thereupon, the CKX Beneficiaries shall
be deemed to have transferred the FXLR Interests to the Trust, and the Trust shall be treated as a
grantor trust and the CKX Beneficiaries shall be treated as the grantors and deemed owners of the
Trust.



     7.02 Tax Returns and Reports. In accordance with Treasury Regulations Section 1.671-4(a), the
Trustee shall cause to be prepared and filed, at the cost and expense of the Trust, an annual
information tax return (Form 1041) with the Internal Revenue Service, with a schedule attached
providing all items of income, deduction, and credit attributable to the Trust and the names and
identifying information of the CKX Beneficiaries that are beneficiaries of the Trust. The Trustee
shall be responsible for filing any applicable state and local tax returns for the Trust and shall
pay any taxes shown as due thereon.



     7.03 Tax Identification Number; Withholding. The Trustee may obtain from CKX the tax
identification number of any CKX Beneficiary and the Trustee may condition any distribution to any
CKX Beneficiary or other distributee upon receipt of such identification number or withhold a
portion of such distribution to the extent authorized or required by the Tax Code and Regulations
then in effect.



     7.04 Fiscal and Tax Year. The fiscal year and taxable year of the Trust shall be the calendar
year.



ARTICLE VIII

TERM AND TERMINATION




     8.01 Term. The existence of the Trust shall terminate upon the earliest of (i) the
distribution of all of the FX Luxury Stock to the CKX Beneficiaries in accordance with the terms
hereof, (ii) the transfer of all of the FXLR Interests or FX Luxury Stock to the Comptroller of the
State of New York in accordance with the terms hereof and (iii) July 1, 2010 (the “Termination
Date”).



     8.02 No Termination by CKX Beneficiaries. The Trust may not be terminated by the CKX
Beneficiaries.



     8.03 Continuance of Trust for Winding Up. After the termination of the Trust as provided in
Section 8.01 of this Agreement, and solely for the purpose of liquidating and winding up the
affairs of the Trust, the Trustee shall continue to act as Trustee until its duties hereunder have
been fully performed.



ARTICLE IX

MISCELLANEOUS




     9.01 Governing Law; Jurisdiction. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of New York applicable to agreements executed and
to be fully performed in the State of New York, without giving effect to any contrary result
otherwise required under applicable choice or conflict of law rules. Each of the parties hereto
hereby irrevocably consents and submits to the jurisdiction of the United



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States District Court for the Southern District of New York and the courts of the State of New
York located in New York County in connection with any action or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby, waives any objection to venue
in the United States District Court for the Southern District of New York and the courts of the
State of New York, New York County, and agrees that service of any summons, complaint, notice or
other process relating to such action or proceeding may be effected in the manner provided by
Section 9.02 hereof. In any action or proceeding arising out of or relating to this Agreement, the
parties irrevocably waive trial by jury.



     9.02 Notices. Any notice or other communication required or permitted to be made under this
Agreement shall be in writing and shall be deemed to have been sufficiently given, for all
purposes, (i) at the time delivered personally by hand, (ii) when receipt is confirmed if delivered
by telex, facsimile or other telegraphic means or (iii) five (5) business days after being
deposited in the mail (postage prepaid), if sent by registered United States mail, return receipt
requested, postage prepaid:



	 	 	 	 	 	 	 
	 

	 	(a)
	 	if to the Trustee, to
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Richard G. Cushing, Esq.	 	 
	 

	 	 	 	c/o Troutman Sanders LLP	 	 
	 

	 	 	 	The Chrysler Building	 	 
	 

	 	 	 	405 Lexington Avenue	 	 
	 

	 	 	 	New York, New York 10174	 	 
	 

	 	 	 	Facsimile No.: (212) 704-6288	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	with a copy to	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Troutman Sanders LLP	 	 
	 

	 	 	 	The Chrysler Building	 	 
	 

	 	 	 	405 Lexington Avenue	 	 
	 

	 	 	 	New York, New York 10174	 	 
	 

	 	 	 	Facsimile No.: (212) 704-6288	 	 
	 

	 	 	 	Attn: Timothy I. Kahler, Esq.	 	 
	 
	 	 	 	 	 	 
	 

	 	(b)
	 	if to any CKX Beneficiary, to the last known business or residential
address of such CKX Beneficiary, as the case may be.	 	 






     9.03 Headings. The headings contained in this Agreement are solely for convenience of
reference and shall not affect the meaning or interpretation of this Agreement or of any term or
provision hereof.



     9.04 Amendments and Waivers.



          (a) Except as provided below, the Trustee may not amend, modify and supplement this Agreement
in any manner. The failure of any party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any party




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thereafter to enforce each and every such provision. No waiver of any breach of this
Agreement shall be held to constitute a waiver of any other or subsequent breach.




          (b) If, at any time during the term of this Agreement, the Trust is, in the reasonable good
faith judgment of the Trustee, reasonably likely to become subject to the reporting or registration
requirements of the Exchange Act, the Trustee may amend this Agreement to the extent necessary to
ensure that the Trust does not become subject to the reporting or registration requirements of the
Exchange Act.




     9.05 Meanings of Other Terms. Except where the context otherwise requires, words importing
the masculine gender include the feminine and the neuter, if appropriate, and words importing the
singular number include the plural number and vice versa.



     9.06 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but such counterparts shall together constitute but one and the
same instrument.



     9.07 Parties in Interest. Except as expressly provided herein with respect to the Exculpated
Parties and the Indemnified Parties, this Agreement shall not confer any rights or remedies upon
any person or entity other than the parties hereto and their respective permitted successors and
assigns.



     9.08 Entire Agreement. This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof, supersedes and is in full substitution for any
and all prior agreements and understandings among them relating to such subject matter, and no
party shall be liable or bound to the other party hereto in any manner with respect to such subject
matter by any warranties, representations, indemnities, covenants, or agreements except as
specifically set forth herein. Any Exhibits or Schedules to this Agreement are hereby incorporated
and made a part hereof and are an integral part of this Agreement.



     9.09 Construction. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rule of strict construction will be
applied against any party. Any references to any federal, state, local or foreign statute or law
will also refer to all rules and regulations promulgated thereunder, unless the context requires
otherwise. Unless the context otherwise requires: (a) a term has the meaning assigned to it by
this Agreement; (b) including means “including but not limited to”; (c) “or” is disjunctive but not
exclusive; (d) words in the singular include the plural, and in the plural include the singular;
(e) provisions apply to successive events and transactions; and (f) “$” means the currency of the
United States of America.



     9.10 Interpretation by the Trustee. The Trustee may interpret and construe any of the
provisions of this Agreement, insofar as the same may appear ambiguous or inconsistent with any
other provisions hereof, and any such construction by the Trustee in good faith shall be binding
upon the parties hereto and the CKX Beneficiaries.



     9.11 Severability. In the event that any one or more of the provisions contained in this
Agreement or in any other instrument referred to herein, shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law,



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such invalidity, illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument. Furthermore, in lieu of any such invalid or unenforceable
term or provision, the parties hereto intend that there shall be added as a part of this Agreement
a provision as similar in terms to such invalid or unenforceable provision as may be possible and
be valid and enforceable.



     IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement
to be duly executed by their respective officers or authorized representatives, effective as of the
date first above written.



	 	 	 	 	 	 	 
	 	 	CKX, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas P. Benson 
	 	 
	 

	 	 	 	Name: Thomas P. Benson	 	 
	 

	 	 	 	Title: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	TRUSTEE ACTING ON
BEHALF AND FOR THE BENEFIT OF THE CKX BENEFICIARIES	 	 
	 
	 	 	 	 	 	 
	 	 	RICHARD G. CUSHING	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Richard G. Cushing 
	 	 






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