EX-10.37



 





Exhibit
10.37




FX REAL ESTATE AND ENTERTAINMENT INC.




March 3, 2008




19X, Inc.

650 Madison Avenue

15th Floor

New York, NY 10022




Dear Sirs,




     Reference is made to the (i) the License Agreement, dated as of June 1, 2007, by and between
Elvis Presley Enterprises, Inc., a Tennessee corporation (“EPE”) and subsidiary of CKX,
Inc., a Delaware corporation (“CKX”), and FX Luxury Realty, LLC, a Delaware limited
liability company (“FXLR”) and subsidiary of FX Real Estate and Entertainment, Inc., a
Delaware corporation (“FXRE”), as amended by Amendment No. 1 thereto, dated as of November
16, 2007 (the “License Agreement”), and (ii) the Agreement and Plan of Merger, dated as of
June 1, 2007, and as amended on August 1, 2007, September 27, 2007 and January 23, 2008, among 19X,
Inc., a Delaware corporation (“19X”), 19X Acquisition Corp., a Delaware corporation and
wholly owned subsidiary of 19X (“19X Acquisition”) and CKX (the “Merger
Agreement”), providing for the merger of 19X Acquisition with and into CKX with CKX as the
surviving corporation.




	 	1.	 	FXRE and 19X hereby agree that as of the Effective Time (as defined in the
Merger Agreement) 19X shall cause EPE, and FXRE shall cause FXLR, to enter into an
amendment to the License Agreement in the form attached hereto as Exhibit A (the
“Amendment”).
	 
	 	2.	 	19X hereby represents and warrants to FXRE, as follows:






	 	(a)	 	19X is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and has the
requisite corporate power and authority to execute and deliver this Letter
Agreement, and to carry out the transactions contemplated hereby and to
perform its obligations hereunder.
	 
	 	(b)	 	The execution, delivery and performance by 19X of this Letter
Agreement have been duly and validly authorized by the Board of Directors of
19X, and by a majority of the holders of its capital stock, and no other
corporate proceeding on the part of 19X is necessary for the consummation by
19X of the transactions contemplated hereby.
	 
	 	(c)	 	The execution, delivery and performance by 19X of this Letter
Agreement do not and will not contravene or conflict with the organizational
or governing documents of 19X. As of the Effective Time, the execution,
delivery and performance by 19X of





 









 











	 	 	 	this Letter Agreement will not contravene or conflict with the
organizational or governing documents of EPE, and 19X will have obtained
any consents and approvals and made any notifications required for the
execution, delivery and performance of the Amendment.






	 	(d)	 	This Letter Agreement has been duly and validly executed and
delivered by 19X and, assuming the due and valid execution and delivery by
FXRE, constitutes a legal, valid and binding obligation of 19X enforceable
against 19X in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting the enforcement of creditors’ rights generally.






	 	3.	 	FXRE hereby represents and warrants to 19X, as follows:






	 	(a)	 	FXRE is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and has the
requisite corporate power and authority to execute and deliver this Letter
Agreement, and to carry out the transactions contemplated hereby and to
perform its obligations hereunder.
	 
	 	(b)	 	The execution, delivery and performance by FXRE of this
Letter Agreement have been duly and validly authorized by the Board of
Directors of FXRE and no other corporate proceeding on the part of FXRE is
necessary for the consummation by FXRE of the transactions contemplated
hereby.
	 
	 	(c)	 	The execution, delivery and performance by FXRE of this
Letter Agreement do not and will not contravene or conflict with the
organizational or governing documents of FXRE.
	 
	 	(d)	 	This Letter Agreement has been duly and validly executed and
delivered by FXRE and, assuming the due and valid execution and delivery by
19X, constitutes a legal, valid and binding obligation of FXRE enforceable
against FXRE in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, moratorium, reorganization or similar
laws affecting the enforcement of creditors’ rights generally.






	 	4.	 	19X will indemnify, defend and hold harmless FXRE, and its consolidated
subsidiaries and their respective directors, officers, representatives and employees
from and against any and all losses, damages, penalties, fines, amounts paid in
settlement, costs and expenses (including reasonable and documented attorneys’ fees
and disbursements)(“Losses”) incurred or suffered by such parties that result
from, or that exist or arise due to any inaccuracy in, breach or alleged breach of any
representation or warranty





 









 











	 		 	of 19X in this Letter Agreement or any breach by 19X of any of its covenants or
obligations in this Letter Agreement. The foregoing indemnity is in addition to
any other remedies available to the indemnified parties at law or in equity.
	 
	 	5.	 	FXRE will indemnify, defend and hold harmless 19X and its consolidated
subsidiaries and their respective directors, officers, representatives and employees
from and against any and all Losses incurred or suffered by such parties that result
from, or that exist or arise due to any inaccuracy in, breach or alleged breach of any
representation or warranty of FXRE in this Letter Agreement or any breach by FXRE of
any of its covenants or obligations in this Letter Agreement. The foregoing indemnity
is in addition to any other remedies available to the indemnified parties at law or in
equity.
	 
	 	6.	 	This Letter 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.
19X and FXRE irrevocably consent 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 Letter Agreement and irrevocably agree that all claims in
respect of such suit or proceeding shall be determined in such courts. 19X and FXRE
irrevocably waive the defense of an inconvenient forum to the maintenance of such suit
or proceeding. Service of process on 19X and FXRE mailed by first class mail shall be
deemed in every respect effective service of process upon 19X and FXRE, as the case
may be, in any such suit or proceeding. Nothing herein shall affect the right of 19X
and FXRE to serve process in any manner permitted by law.
	 
	 	7.	 	This Letter Agreement and the Exhibit 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.
	 
	 	8.	 	This Letter 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 Letter 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.





[Remainder of Page Intentionally Left Blank]




 









 








	 	 	 	 	 
	 	Very truly yours,





FX REAL ESTATE AND ENTERTAINMENT INC.

 	 
	 	By:  	/s/ Paul C. Kanavos
 	 
	 	 	Name:  	Paul C. Kanavos 	 
	 	 	Title:  	President 	 
	 



	 	 	 	 	 
	ACCEPTED AND AGREED TO AS
OF THE DATE SET FORTH ABOVE




19X, INC.

 	 
	By:  	/s/ Robert F.X. Sillerman
 	 
	Name:  	 	Robert F.X. Sillerman 	 
	Title:  	President 	 
	 




 









 








EXHIBIT A




Amendment No. 2 to License Agreement

between

Elvis Presley Enterprises, Inc.

and

FX Luxury Realty, LLC





     This Amendment No. 2 (“Amendment No. 2”) to the License Agreement by and between ELVIS
PRESLEY ENTERPRISES, INC., a Tennessee corporation, having its principal office at 3734 Elvis
Presley Boulevard, Memphis, Tennessee 38116 (“Licensor”), and FX LUXURY REALTY, LLC, a
Delaware limited liability company, having its principal office at 650 Madison Avenue, New York,
New York, 10022 (“Licensee”) (each, a “party” and collectively, the
“parties”), is made and effective as of ___with reference to the following recitals:



RECITALS




     WHEREAS, the parties entered into that certain License Agreement, dated as of June 1, 2007, as
amended by Amendment No. 1 thereto, dated as of November 16, 2007 (the “License
Agreement”); and



     WHEREAS, the parties wish to make certain amendments to the License Agreement pursuant to
Section 26.07 thereof.



     NOW, THEREFORE, for the consideration set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:


1. Amendment to Section 6.01 of the License Agreement. Section 6.01 is hereby amended by
deleting such section in its entirety and replacing it with the following:



“Section 6.01 Right to Construct First Memphis Hotel. (a) Licensor grants Licensee the
option to design, construct, and operate the first new hotel on or contiguous to the Graceland
property in Memphis, Tennessee from and after the date hereof either as part of the Masterplan or
otherwise (whether or not such hotel is an Elvis Presley-themed Hotel) (the “First Memphis
Hotel”). Licensee shall exercise said option in writing to Licensor within six (6) months from
the Effective Date, or Licensee shall lose the right to construct the First Memphis Hotel.



(b) Notwithstanding the valid exercise of such option by Licensee pursuant to paragraph (a) above,
Licensee shall lose its rights to construct the First Memphis Hotel and any Subsequent Memphis
Hotels unless (i) in the event there is a definitive Masterplan in effect, Licensee has delivered
written notice of its intent to proceed with the construction of the First Memphis Hotel and any
Subsequent Memphis Hotels specifically contemplated in such definitive Masterplan, (A) within 10
days of the date that such definitive Masterplan is agreed to and initialed by FX Real Estate and
Entertainment Inc. and 19X, Inc. and delivered to Licensee (an “Agreed Masterplan”), or
failing such agreement, (B) within 90 days of the date that 19X, Inc. delivers to FX Real Estate
and Entertainment Inc. and Licensee written notice of its intent to proceed with the Masterplan in
its sole discretion as permitted pursuant to the Call Agreement, dated February [ ], 2008 between
19X, Inc. and FX Real Estate and Entertainment Inc., along with a copy of the final form of such
definitive Masterplan (a “19X Masterplan”), and (ii) the construction of the


 









 






First Memphis Hotel has begun by the later of twenty four (24) months from the effective date of
this Agreement or twelve (12) months after Licensor has made the land available for development of
the First Memphis Hotel or, if there is a definitive Agreed Masterplan or definitive 19X Masterplan
in effect, such later time as contemplated by such definitive Masterplan. Licensee shall not be
liable to Licensor for any damages as a result of not constructing the First Memphis Hotel or any
Subsequent Memphis Hotels, nor shall it have any other effect on this Agreement other than as set
forth in this Section 6.01(b) and Section 7.20(b).



(c) Licensor shall obtain and assign to Licensee fee title to the land for the First Memphis Hotel
unless there is a compelling reason that such fee title cannot be obtained and Licensee is advised
of such reason. If Licensor is unable to obtain fee title to the First Memphis Hotel land, then
Licensor shall obtain and assign to Licensee a lease to such land in form and substance reasonably
acceptable to Licensee, with a term that is not less than ninety- nine (99) years. Licensor shall
have the right to decide the location of the First Memphis Hotel in consultation with Licensee.
Licensor shall be solely responsible for removing any tenants located at any property in which the
First Memphis Hotel will be built, and the land shall not be considered “available for development”
as provided above until such tenants have been removed.”



2. Amendment to Section 6.03 of the License Agreement. Section 6.03 is hereby amended by
deleting such section in its entirety and replacing it with the following:



“Section 6.03. Subsequent Memphis Hotels. Provided Licensee has exercised the option and
constructed the First Memphis Hotel in accordance with Section 6.01, Licensor grants Licensee the
option to design, construct, and operate subsequent new hotels on or contiguous to the Graceland
property in Memphis, Tennessee from and after the date hereof either as part of the Masterplan or
otherwise (whether or not the hotels are an Elvis Presley-themed Hotel) (the “Subsequent
Memphis Hotels”). Licensee shall lose the right to construct the Subsequent Memphis Hotels
unless (i) in the event there is no definitive Masterplan in effect, Licensee exercises said option
in writing to Licensor within six (6) months from the opening of the First Memphis Hotel or (ii) in
the event that there is a definitive Agreed Masterplan or definitive 19X Masterplan in effect which
contemplates Subsequent Memphis Hotels, Licensee shall have delivered the notice contemplated by
Section 6.01(b)(i) in the time period specified in such section. If Licensee exercises said option,
and if the construction of the Subsequent Memphis Hotels have not begun by the later of twenty four
(24) months from the opening of the First Memphis Hotel or twelve (12) months after Licensor has
made the land available for development of the Subsequent Memphis Hotels or, if there is a
definitive Agreed Masterplan or definitive 19X Masterplan in effect, such later time as
contemplated by such definitive Masterplan, Licensee shall lose the right to construct the
Subsequent Memphis Hotels but shall not be liable to Licensor for any damages as a result of not
constructing the Subsequent Memphis Hotels nor shall it have any other effect on this Agreement
other than as set forth in this Section 6.03 and Section 7.20(b). Licensor shall have the right to
decide the location of any of the Subsequent Memphis Hotels in consultation with Licensee. Licensor
shall be solely responsible for removing any tenants located at any property in which the
Subsequent Memphis Hotels will be built, and the land shall not be considered “available for
development” as provided above until such tenants have been removed.”




2









 







3. Addition of new Section 7.20. The following new Section 7.20 shall be added to the
License Agreement:



“Section 7.20 Reduction in Royalties. (a) Notwithstanding anything herein to the contrary,
including Section 7.12 hereof, if, as of the twelve month period ending as of the last month end
prior to the date that is seven years and six months after the Effective Time (as defined under the
Agreement and Plan of Merger, dated as of June 1, 2007, and as amended on August 1, 2007, September
27, 2007 and January 23, 2008, among 19X, Inc., 19X Acquisition Corp. and CKX, Inc.) (the
“Measurement Date”), Licensor and its Affiliate, Elvis Presley Enterprises, LLC and their
consolidated subsidiaries, have not achieved OIBDAN (operating income before depreciation,
amortization and non-cash compensation) for fiscal year 2013 of $125,496,000 (“Target
OIBDAN”) based upon the audited consolidated financial statements for such entities for the
twelve month period ended as of the Measurement Date prepared at the expense of Licensor promptly
following the Measurement Date (provided that Licensor shall not be required to prepare such
audited consolidated financial statements if Licensor agrees in writing as of the Measurement Date
that the Target OIBDAN has not been achieved), the royalty payments payable by Licensee hereunder,
including any Guaranteed Minimum Royalties, shall be reduced by an aggregate of $50,000,000 (the
“Reduction”). The Reduction shall be applied ratably over a three year period to royalty
payments due to Licensor after the end of the 94th month following the Effective Time,
provided that, for so long as the Series B Investor (as defined in the Shareholders
Agreement, dated February 7, 2005, between Licensor, the Promenade Trust, EPE Holding Corporation
and Sports Entertainment Enterprises, Inc.) or its successors or permitted assigns owns 15% of the
issued and outstanding equity interests of Licensor, each such royalty payment to which such
ratable portion of the Reduction is applied shall be reduced by no more than 85% of the amount that
would otherwise be due if the Reduction were not in effect. Licensor shall be responsible for the
payment of any amounts required to be paid to the Promenade Trust with respect to its share of the
royalties hereunder, including any additional amounts required to compensate the Promenade Trust
for the Reduction. The parties agree to cooperate in good faith and use their commercially
reasonable efforts to structure the Reduction in a tax efficient manner, including with respect to
any additional payments required to be made to the Promenade Trust.



(b) If Licensee has exercised its option pursuant to Sections 6.01 and 6.03 hereof with respect to
the First Memphis Hotel and Subsequent Memphis Hotels contemplated by a definitive Agreed
Masterplan or 19X Masterplan in effect as of the Measurement Date, the Reduction shall be
conditioned upon Licensee using commercially reasonable efforts to proceed with the development and
construction of such First Memphis Hotel and Subsequent Memphis Hotels in accordance with and as
contemplated by such definitive Masterplan and in the time periods contemplated by such definitive
Masterplan then in effect, provided that 19X, Inc. has used commercially reasonably efforts
to develop the non-hotel portion of such definitive Masterplan then in effect in the time periods
contemplated by such definitive Masterplan, and provided further that if there is
no definitive Agreed Masterplan or 19X Masterplan in effect at such time or if there is a
definitive Agreed Masterplan or 19X Masterplan in effect at such time but Licensee has not
exercised its option with respect to the First Memphis Hotel and Subsequent Memphis Hotels
contemplated by such definitive Masterplan pursuant to Sections 6.01 and 6.03 hereof, this clause
(b) shall not apply.”




3









 







4. Effect of Amendment. Except as expressly set forth in this Amendment No. 2, the License
Agreement shall remain in full force and effect as originally written, and shall constitute the
legal, valid, binding and enforceable obligation of the parties thereto.



5. Governing Law. This Amendment No. 2 and the obligations of the parties hereunder shall
be construed and enforced in accordance with the laws of the State of Tennessee, excluding any
conflicts of law rule or principle which might refer such construction to the laws of another state
or country. Each party hereby (i) submits to personal jurisdiction in the State of Tennessee for
the enforcement of this Agreement and (ii) waives any and all personal rights under the law of any
state or country to object to jurisdiction within the State of Tennessee for the purposes of
litigation to enforce this Agreement.



6. Execution in Counterparts. This Amendment No. 2 may be executed in two or more
counterparts, each of which shall be considered an original instrument, but all of which shall be
considered one and the same agreement, and shall become binding when one or more counterparts have
been signed by each of the parties hereto and delivered to the parties. Copies of executed
counterparts transmitted by facsimile or other electronic transmission shall be considered original
executed counterparts for the purposes of this Amendment No. 2, provided that receipt of copies of
such counterparts is confirmed. Originals of any counterparts transmitted by facsimile or other
electronic transmission shall be promptly provided to the other parties hereto.




[Remainder of page intentionally left blank]




4









 





EXHIBIT A



     IN WITNESS WHEREOF, the parties have caused this Amendment No. 2 to be executed by their
authorized representatives on the date set forth above.



	 	 	 	 	 
	 	“LICENSOR”



ELVIS PRESLEY ENTERPRISES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	“LICENSEE”



FX LUXURY REALTY, LLC

 	 
	 	By:  	    FX Real Estate and Entertainment Inc.,
 	 
	 	 	Managing Member 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[Amendment No. 2 to License Agreement]