EX-10.3



 




Exhibit 10.3



REPURCHASE AGREEMENT




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




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




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




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




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




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




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




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



     2. Repurchase Right.



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




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




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




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




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



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




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




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




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




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




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




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



     4. Transfers.



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




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




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




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




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



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



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



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



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



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



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



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



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



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



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



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



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



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



	 	 	 	 	 
	 	FX LUXURY REALTY, LLC

 	 
	 	 
/s/ Paul C. Kanavos	 
	 	Name:  	 Paul C. Kanavos	 
	 	Title:  	 Chairman and Chief Executive
Officer	 
	 
	 	CKX, INC.

 	 
	 	 /s/
Michael G. Ferrel	 
	 	Name:  	 Michael G. Ferrel	 
	 	Title:  	 President	 
	 
	 	FLAG LUXURY PROPERTIES, LLC

 	 
	 	 /s/
Paul C. Kanavos	 
	 	Name:  	 Paul C. Kanavos	 
	 	Title:  	 Chairman and Chief Executive
Officer	 
	 
	 	 	 
	 	 /s/
Robert F.X. Sillerman	 
	 	Robert F.X. Sillerman 	 
	 	 	 
	 
	 	 	 
	 	 /s/
Brett Torino	 
	 	Brett Torino 	 
	 	 	 
	 
	 	 	 
	 	 /s/
Paul C. Kanavos	 	 	 
	 	Paul C. Kanavos 	 
	 	 	 


[Repurchase Agreement]