Document:

EXHIBIT 10.9

 

EMPLOYMENT AGREEMENT

 

Margery M. Harris

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is dated
as of January 3, 2005 (the “Effective Date”) by and between Texas Genco
LLC (the “Company”), Texas Genco Operating Services LLC, a wholly owned subsidiary
of the Company (the “Service Company”) and Margery M. Harris (the “Executive”).

 

WHEREAS, pursuant to a Transaction Agreement dated as
of July 21, 2004, the Company has agreed to, among other things, acquire
Texas Genco Holdings, Inc. (“TGH”), in a multi-step transaction; and

 

WHEREAS, as of the Effective Date, the Company desires
to employ Executive and to enter into an agreement embodying the terms of such
employment and Executive desires to accept such employment and enter into such
an agreement.

 

NOW, THEREFORE, in consideration of the premises and
mutual covenants herein and for other good and valuable consideration, the
parties agree as follows:

 

1.                                       Term of
Employment.  Subject to the
provisions of Section 8 of this Agreement, Executive shall be employed by
the Company for a period commencing on January 3, 2005 and ending on December 31,
2009 (the “Employment Term”); provided, however, that commencing with December 31,
2009 and on each December 31 thereafter (each an “Extension Date”), the
Employment Term shall be automatically extended for an additional one year
period, unless the Company or Executive provides the other party hereto at
least 60 days prior written notice before the next Extension Date that the
Employment Term shall not be so extended (“Notice of Nonrenewal”).

 

2.                                       Position.

 

a.                                       During the Employment Term,
Executive shall serve as the Senior Vice President, Human Resources of the
Company and of the Company’s significant subsidiaries.  In such position, Executive shall, subject to
any limitations or other directions determined from time to time by the Board
of Managers of the Company (the “Board”) or the Chief Executive Officer of the
Company (the “Chief Executive Officer”), have such duties and authority as are
consistent with the position of senior vice president of human resources of a
company (and subsidiaries) of similar size and nature.  Executive shall report directly to the Board
and Chief Executive Officer.

 

b.                                      During the Employment Term,
Executive will devote Executive’s full business time to the performance of
Executive’s duties hereunder and will not engage in any other business,
profession or occupation for compensation or otherwise which would conflict or
interfere with the rendition of such services either directly or indirectly,
without the prior written consent of the Board; provided that nothing
herein shall preclude Executive, subject to the prior approval of the Board,
from accepting appointment to or continuing to serve on any board of directors
or trustees of any business corporation or any charitable organization; provided,
further,

 

 

in each case, and in the
aggregate, that such activities do not conflict or interfere with the
performance of Executive’s duties hereunder or conflict with Section 9.

 

3.                                       Base Salary.  During the Employment Term, the Company shall
pay Executive a base salary at the annual rate of $270,000, payable in regular
installments in accordance with the Company’s usual payment practices.  Commencing in 2006, and annually thereafter,
the Board (or its Compensation Committee, as appropriate) shall review
Executive’s base salary in light of the performance of Executive and the
Company, and may, in its sole discretion, increase (but not decrease) such base
salary by an amount it determines to be appropriate.  Executive’s annual base salary, as in effect
from time to time, is hereinafter referred to as the “Base Salary.”

 

4.                                       Annual
Bonus.  During the Employment Term,
Executive shall be eligible to earn an annual bonus award in respect of each
fiscal year of the Company (or, for each of the first and last years of the
Employment Term, a pro rata bonus award based on the ratio that the number of
days of such fiscal year during the Employment Term bears to 365) (each an “Annual
Bonus”), in a target amount equal to 50% of Executive’s Base Salary (the “Target
Bonus”), with a maximum bonus opportunity of 100% (increasing in a linear
progression above 50% and up to 100% of Executive’s Base Salary), with no bonus
payable unless the Company achieves the threshold level of performance
established by the Board (for which the threshold bonus will be 16.5% of
Executive’s Base Salary), payable pursuant to the terms of the applicable
incentive compensation plan to be established by the Board as soon as
practicable after the Effective Date (the “Incentive Plan”).  Each Annual Bonus shall be payable promptly
following a determination by the Board (or a designated committee thereof) that
the applicable performance criteria have been satisfied, but in no event later
than 30 days after the audited consolidated financial statements for the
Company are prepared for each such fiscal year.

 

5.                                       Equity
Participation.  Executive will
be provided a confidential information memorandum (the “PPM”) regarding the
Equity Program and the Company will offer Executive the opportunity to invest
$100,000 in Units of the Company on the terms in the PPM and Equity Documents
(defined below) at a price of $5.00 per Unit. 
Subject to review of the PPM, Executive agrees to invest in the Company
and pay for such Units of the Company by March 15, 2005 (the “Purchase
Date”).  Executive’s equity participation
in the Company shall be subject to her review of the Confidential Information
Memorandum (the “PPM”), and shall be documented pursuant to the Texas Genco LLC
2004 Unit Plan (the “Unit Plan”), Management Unitholder’s Agreement, Unit
Option Agreements, Amended and Restated Limited Liability Company Agreement of
the Company, dated as of December 15, 2004 (the “LLC Agreement”), as
amended from time to time, each as executed by Executive, the Company, and its
members, as applicable, in such forms as are agreed to by the parties
(collectively, the “Equity Documents”). 
The Company and Executive each acknowledges that the terms and
conditions of the aforementioned Equity Documents govern Executive’s
acquisition, holding, sale or other disposition of Executive’s equity in the
Company, and all of Executive’s and the Company’s rights with respect thereto.

 

6.                                       Employee
Benefits.

 

a.                                       During the Employment Term, Executive
shall be entitled to (1) participation in the Company’s employee 401(k),
health and welfare benefit plans and all fringe

 

2

 

benefits and executive perquisites as in effect from time to time, (2) 20
paid vacation days per year and (3) sick leave, paid holidays and other
paid time off in accordance with the Company’s policies as in effect from time
to time (collectively “Employee Benefits”), on a basis no less favorable than
those benefits generally made available to other senior executives of the  Company or to the
Company’s employees generally.

 

7.                                       Business
Expenses.  During the
Employment Term, reasonable business expenses incurred by Executive in the
performance of Executive’s duties hereunder shall be reimbursed by the Company
in accordance with Company policies.

 

8.                                       Termination.  The Employment Term and Executive’s
employment hereunder may be terminated by either party at any time and for any
reason; provided that Executive will be required to give the Company at least
60 days advance written notice of any resignation of Executive’s
employment.  Notwithstanding any other
provision of this Agreement, the provisions of this Section 8 shall
exclusively govern Executive’s rights upon termination of employment with the
Company and its affiliates; provided, however, that Executive’s rights with
respect to her equity participation shall be governed solely by the Equity
Documents.

 

a.                                       By the Company For Cause or By
Executive Resignation Without Good Reason.

 

(i)  The Employment Term
and Executive’s employment hereunder may be terminated by the Company for Cause
(as defined below) and shall terminate automatically upon Executive’s
resignation without Good Reason (as defined in Section 8(c)); provided
that Executive shall be required to give the Company at least 60 days advance
written notice of a resignation without Good Reason.

 

(ii)  For purposes of this
Agreement, “Cause” shall mean (A) Executive’s willful and continued
failure substantially to perform Executive’s duties hereunder (other than as a
result of total or partial incapacity actually suffered by Executive as a
result of any illness or other disability) for a period of 15 days following
written notice by the Company to Executive of such failure (where such notice
specifically identifies the manner in which the Company believes Executive has
not substantially performed her duties), (B) Executive’s conviction of, or
plea of nolo  contendere to, a crime constituting (x) a felony
under the laws of the United States or any state thereof or (y) a misdemeanor
involving moral turpitude, (C) Executive’s willful malfeasance or willful
misconduct in connection with Executive’s duties hereunder or any willful act
or omission which is materially injurious to the financial condition or
business reputation of the Company or any of its subsidiaries or affiliates, (D) Executive’s
willful and material breach of the provisions of Sections 9 or 10 of this
Agreement; provided, however, that Executive shall not be terminated for Cause
under any of clauses (A), (C) or (D) above unless there shall have
been delivered to Executive a copy of a resolution duly adopted by the Board,
at a meeting of such Board (after reasonable notice to Executive and an
opportunity for Executive, together with her counsel, to be heard at such
meeting), finding that in the good faith opinion of the Board, Executive had
engaged in conduct of the type described in any of clauses (A), (C) or (D) above
and specifying the particulars thereof.

 

(iii)  If Executive’s
employment is terminated by the Company for Cause, or if Executive resigns
without Good Reason, Executive shall be entitled to receive:

 

(A)                              the Base Salary through the date of termination;

 

3

 

(B)                                any Annual Bonus earned but unpaid as of the date of
termination for any previously completed fiscal year;

 

(C)                                reimbursement for any unreimbursed business expenses
properly incurred by Executive in accordance with Company policy prior to the
date of Executive’s termination; and

 

(D)                               such
Employee Benefits, if any, as to which Executive may be entitled under the
employee benefit plans of the Company for Executive and her family (the amounts
described in clauses (A) through (D) hereof being referred to as the “Accrued
Rights”).

 

Following such termination of Executive’s employment
by the Company for Cause or resignation by Executive without Good Reason,
except as set forth in this Section 8(a)(iii),
and Sections 13 and 14 of this Agreement, Executive shall have no further
rights to any compensation or any other benefits under this Agreement;
provided, however, that Executive’s rights with respect to her equity
participation shall be governed solely by the Equity Documents.

 

b.                                      Disability or Death.

 

(i)  The Employment Term
and Executive’s employment hereunder shall terminate upon Executive’s death and
may be terminated by the Company if Executive becomes physically or mentally
incapacitated and is therefore unable for a period of six (6) consecutive
months or for an aggregate of nine (9) months in any twenty-four (24)
consecutive month period to perform Executive’s duties (such incapacity is
hereinafter referred to as “Disability”). 
Any question as to the existence of the Disability of Executive as to
which Executive and the Company cannot agree shall be determined in writing by
a qualified independent physician mutually acceptable to Executive and the
Company.  If Executive and the Company
cannot agree as to a qualified independent physician, each shall appoint such a
physician and those two physicians shall select a third who shall make such
determination in writing.  The
determination of Disability made in writing to the Company and Executive shall
be final and conclusive for all purposes of this Agreement.

 

(ii)  Upon termination of
Executive’s employment hereunder for either Disability or death, Executive or
Executive’s estate (as the case may be) shall be entitled to receive:

 

(A)                              the
Accrued Rights; and

 

(B)                                a
lump sum payment of the pro rata portion (based upon the number of days in the
applicable fiscal year during which Executive was employed with the Company
through the date of such termination, relative to the number of days in the
applicable fiscal year) of any Annual Bonus, if any, that Executive would have
been entitled to receive pursuant to the Incentive Plan in respect of the
Fiscal Year in which such termination occurs, payable when such Annual Bonus
would have otherwise been payable had Executive’s employment not terminated,

 

Following Executive’s termination of employment due to
death or Disability, except as set forth in this Section 8(b)(ii), and Sections 13 and 14 of this Agreement, Executive
shall have no further rights to any compensation or any other benefits under
this Agreement; provided, however, that Executive’s rights with respect to her
equity participation shall be governed solely by the Equity Documents.

 

4

 

c.                                       By the Company Without Cause or
Resignation by Executive for Good Reason.

 

(i)  The Employment Term
and Executive’s employment hereunder may be terminated by the Company without
Cause or by Executive’s resignation for Good Reason.

 

(ii)  For purposes of this
Agreement, “Good Reason” shall mean (A) any material breach by the Company
of this Agreement, (B) any sustained diminution, other than in an
inconsequential or immaterial aspect, in Executive’s authority, title, duties
or responsibilities from those described in Section 2 hereof, (C) the
assignment to Executive of a material amount of different or additional duties
that are significantly inconsistent with Executive’s position, (D) a
merger or other business combination or a material divestiture of all or
substantially all of its assets, whereby the Company is no longer primarily in
the energy related business, or (E) the relocation of Executive, the
Company’s principal executive offices or all or substantially all of the
Company’s executive level employees without Executive’s consent, to any
location outside of the Houston, Texas metropolitan region.  Executive shall have the right to terminate
her employment for “Good Reason” by giving the Company notice in writing of the
reason for such termination and the Employment Term shall terminate on the date
of Executive’s termination of employment; provided that either of the
events described in this Section 8(c)(ii) shall constitute Good
Reason only if the Company fails to cure such event within 30 days after
receipt from Executive of written notice of the event which constitutes Good Reason;
provided, further, that “Good Reason” shall cease to exist for an
event on the 60th day following the later of its occurrence or
Executive’s knowledge thereof, unless Executive has given the Company written
notice thereof prior to such date. 
Executive’s failure to resign in connection with any event, or
occurrence, which constitutes Good Reason shall not be
deemed a waiver of any other event or occurrence thereafter which constitutes
Good Reason.

 

(iii)  If Executive’s
employment is terminated by the Company without Cause (other than by reason of
death or Disability) or if Executive resigns for Good Reason, Executive shall
be entitled to receive:

 

(A)                              the Accrued Rights;

 

(B)                                subject
to Executive’s continued compliance with the provisions of Sections 9 and 10, a
payment equal to the sum of (x) the Base Salary at the rate in effect
immediately prior to the Date of Termination (without regard to any decrease
which constitutes a breach of this Agreement as described in clause (A) of
Section 8(c)(ii) which is the basis for Executive’s resignation for
Good Reason) and (y) the Target Bonus for the year in which such termination
occurs, payable in equal monthly installments over the twelve (12) month period
commencing on the date of such termination; provided, however,
that the aggregate amount described in this subsection (B) shall be
reduced by any amounts owed by Executive to the Company and any amounts for any
loans, or funds advanced, to, Executive; provided, further, that
if, on or after a Change of Control (as defined in the LLC Agreement),
Executive’s employment is (or has previously been) terminated by the Company
without Cause (other than by death or Disability) or if Executive resigns (or
has previously resigned) for Good Reason, a lump sum amount equal to the
aggregate amount remaining payable under this subsection (B) shall,
as soon as practicable, but in no event later than 15 days, after the later of
the effective date of such termination

 

5

 

or such Change of Control, be paid to
Executive, subject to repayment unless Executive continues to comply with the
provisions of Sections 9 and 10; provided, that such repayment shall be
paid in a lump sum upon demand by the Company, and shall be in an amount equal
to the lump sum payment made pursuant to this subsection (B) multiplied
by a fraction, the numerator of which is the number of months the Executive
fails to comply with the provisions of Sections 9 or 10 during the first 12
months following the effective date of Executive’s termination of employment,
and the denominator of which is the number of monthly installments comprising
the lump sum payment which was paid to Executive; and

 

(C)                                subject
to Executive’s continued compliance with the provisions of Sections 9 and 10,
continuation of welfare benefits for Executive and her family (pursuant to the
same benefit plans as in effect for active executive employees of the  Company) (i) for a period through the
later of (x) the second anniversary of the date of such termination, or (y) the
date on which the Employment Term would have otherwise expired, or (ii) if
Executive commences receiving coverage under comparable welfare benefit plans
from any subsequent employer (“Comparable Coverage”) prior to the occurrence of
(x) or (y) of the preceding clause, through the date such Comparable Coverage
commences.

 

Following Executive’s termination of employment by the
Company without Cause (other than by reason of Executive’s death or Disability)
or by Executive’s resignation for Good Reason, except as set forth in this Section 8(c)(iii),
and Sections 13 and 14 of this Agreement, Executive shall have no further
rights to any compensation or any other benefits under this Agreement; provided,
however, that Executive’s rights with respect to her equity
participation shall be governed solely by the Equity Documents.

 

d.                                      Expiration
of Employment Term. 
In the event
either party delivers a Notice of Nonrenewal, unless Executive’s employment is
earlier terminated pursuant to paragraphs (a), (b) or (c) of this Section 8,
Executive’s termination of employment hereunder (whether or not Executive
continues as an employee of the Company thereafter) shall be deemed to occur on
the close of business on the next scheduled Extension Date and Executive shall
be entitled to receive the Accrued Rights (including, without limitation, her
full Annual Bonus for her final year of employment).  Following such termination of Executive’s
employment hereunder as a result of either party’s election not to extend the
Employment Term, except as set forth in this Section 8(d) and in
Sections 13 and 14, Executive shall have no further rights to any compensation
or any other benefits under this Agreement, and the Executive shall have no
further obligations under Section 9, provided, however, that Executive’s
rights with respect to her equity participation shall be governed solely by the
Equity Documents, and solely in respect of the Executive’s rights under the
Equity Documents: (i) if the Company delivers a Notice of Nonrenewal, and
Executive subsequently terminates her employment with the Company, Executive’s
employment shall be deemed terminated by Executive for Good Reason; and (ii) if
the Executive delivers a Notice of Nonrenewal, and Executive subsequently
terminates her employment with the Company, Executive’s employment shall be
deemed terminated by Executive without Good Reason.  For the avoidance of doubt, any changes set
forth in this Section 8(d) relating to the termination of Executive’s
employment by Executive after either party delivers a Notice of Nonrenewal
shall apply only for purposes of the Equity Documents, and shall have no
further effect on this Agreement. 
Notwithstanding the foregoing, if the

 

6

 

Company elects, in its sole discretion, that Section 9 shall apply
for a period of up to one year following Executive’s termination of employment
under this Section 8(d), Executive shall be paid one hundred fifty percent
(150%) of the Base Salary at the rate in effect immediately prior to the
termination of Executive’s employment for such 
period.  In order to make the
election described in the preceding sentence, the Company must deliver written
notice to Executive, at least 60 days prior to the end of the Term, which
explains that the Company has made such election and sets forth the period of
time that Section 9 shall continue to apply (and that Executive shall
continue to be paid 150% of the Base Salary).

 

e.                                       Notice of Termination.  Any purported termination of employment by
the Company or by Executive (other than due to Executive’s death) shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 12(h) hereof. 
For purposes of this Agreement, a “Notice of Termination” shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of employment under
the provision so indicated.

 

f.                                         Board/Committee Resignation.  Upon termination of Executive’s employment
for any reason, Executive agrees to resign, as of the date of such termination
and to the extent applicable, from the Board (and any committees thereof), and
any board of directors or managers (and any committees thereof) of any of the
Company’s affiliates.

 

g.                                      Payments
to Executive. 
Except where provided otherwise, all payments required to be made by the
Company to Executive under this Section 8 in connection with the
termination of Executive’s employment shall be payable within 15 days after the
effective date of such termination; provided, however, that nothing shall
affect or impair such rights as Executive shall have pursuant to the Equity
Documents.

 

9.                                       Non-Competition.

 

a.                                       Executive acknowledges and
recognizes the highly competitive nature of the businesses of the Company and
its subsidiaries and accordingly agrees as follows:

 

(1)                                                                                  During
the Employment Term and, except as provided in Section 8(d), for a period
of one year following the date Executive ceases to be employed by the Company
(the “Restricted Period”), Executive will not, whether on Executive’s own
behalf or on behalf of or in conjunction with any person, firm, partnership,
joint venture, association, corporation or other business organization, entity
or enterprise whatsoever (“Person”), directly or indirectly:

 

(i)                                     engage
in any business that competes with the business of the Company or its
subsidiaries (including, without limitation, businesses which the Company or
its subsidiaries have specific plans to conduct in the future and as to which
Executive is aware of such planning) in any geographical area that is within
100 miles of any geographical area where the Company or its subsidiaries
materially operates, produces, sells, leases, rents, licenses or otherwise
provides material products or services (a “Competitive Business”);

 

7

 

(ii)                                  enter
the employ of, or render any services to, any Person (or any division or
controlled or controlling affiliate of any Person) who or which engages in a
Competitive Business;

 

(iii)                               acquire
a financial interest in, or otherwise become actively involved with, any
Competitive Business, directly or indirectly, as an individual, partner,
shareholder, officer, director, principal, agent, trustee or consultant; or

 

(iv)                              interfere with, or attempt to interfere with, business
relationships (whether formed before, on or after the date of this Agreement)
between the Company or any of its subsidiaries and customers, clients, or
suppliers of the Company or its subsidiaries.

 

(2)                                                                                  Notwithstanding
anything to the contrary in this Agreement, Executive may, directly or
indirectly own, solely as an investment, securities of any Person engaged in
the business of the Company or its subsidiaries which are publicly traded on a
national or regional stock exchange or on the over-the-counter market if
Executive (i) is not a controlling person of, or a member of a group which
controls, such Person and (ii) does not, directly or indirectly, own 5% or
more of any class of securities of such Person.

 

(3)                                                                                  During
the Restricted Period, Executive will not, whether on Executive’s own behalf or
on behalf of or in conjunction with any Person, directly or indirectly:

 

(i)                                     solicit
or encourage any employee of the Company or its subsidiaries to leave the
employment of the Company or its subsidiaries; or

 

(ii)                                  hire
any such employee who was employed by the Company or its subsidiaries as of the
date of Executive’s termination of employment with the Company or who left the
employment of the Company or its subsidiaries coincident with, or within one
year prior to or after, the termination of Executive’s employment with the
Company.

 

(4)                                                                                  During
the Restricted Period, Executive will not, directly or indirectly, solicit or encourage to cease to work with the Company or
its subsidiaries any consultant then under contract with the Company or its
subsidiaries.

 

b.                                      It is expressly understood and
agreed that although Executive and the Company consider the restrictions
contained in this Section 9 to be reasonable, if a final judicial
determination is made by a court of competent jurisdiction that the time or
territory or any other restriction contained in this Agreement is an
unenforceable restriction against Executive, the provisions of this Agreement
shall not be rendered void but shall be deemed amended to apply as to such
maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable.  Alternatively, if any court of competent
jurisdiction finds that any restriction contained in this Agreement is
unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.

 

8

 

10.                                 Confidentiality;
Intellectual Property.

 

a.                                       Confidentiality.

 

(i)  Executive
will not at any time (whether during or after Executive’s employment with the
Company) (x) retain or use for the benefit, purposes or account of Executive or
any other Person outside the Company; or (y) disclose, divulge, reveal,
communicate, share, transfer or provide access to any Person outside the
Company (other than its professional advisers who are bound by confidentiality
obligations), any non-public, proprietary or confidential information —including
without limitation trade secrets, know-how, research and development, software,
databases, inventions, processes, formulae, technology, designs and other
intellectual property, information concerning finances, investments, profits,
pricing, costs, products, services, vendors, customers, clients, partners,
investors, personnel, compensation, recruiting, training, advertising, sales,
marketing, promotions, government and regulatory activities and approvals — concerning
the past, current or future business, activities and operations of the Company,
its subsidiaries or affiliates and/or any third party that has disclosed or
provided any of same to the Company on a confidential basis (“Confidential
Information”) without the prior written authorization of the Board.

 

(ii)  “Confidential
Information” shall not include any information that is (a) generally known
to the industry or the public other than as a result of Executive’s breach of
this covenant or any breach of other confidentiality obligations by third
parties; (b) made legitimately available to Executive by a third party
without breach of any confidentiality obligation; or (c) required by law
to be disclosed; provided that Executive shall give prompt written
notice to the Company of such requirement, disclose no more information than is
so required, and cooperate with any attempts by the Company to obtain a
protective order or similar treatment.

 

(iii)  Upon termination of
Executive’s employment with the Company for any reason, Executive shall (x)
cease and not thereafter commence use of any Confidential Information or
intellectual property (including without limitation, any patent, invention,
copyright, trade secret, trademark, trade name, logo, domain name or other
source indicator) owned or used by the Company, its subsidiaries or affiliates;
(y) immediately destroy, delete, or return to the Company, at the Company’s
option, all originals and copies in any form or medium (including memoranda,
books, papers, plans, computer files, letters and other data) in Executive’s
possession or control (including any of the foregoing stored or located in
Executive’s office, home, laptop or other computer, whether or not Company
property) that contain Confidential Information or otherwise relate to the
business of the Company, its affiliates and subsidiaries, except that Executive
may retain only those portions of any personal notes, notebooks and diaries
that do not contain any Confidential Information; and (z) notify and fully
cooperate with the Company regarding the delivery or destruction of any other
Confidential Information of which Executive is or becomes aware.

 

b.                                      Intellectual Property.

 

(i)  If Executive creates,
invents, designs, develops, contributes to or improves any works of authorship,
inventions, intellectual property, materials documents or other work product
(including without limitation, research, reports, software, databases, systems,
applications, presentations, textual works, content or audiovisual materials) (“Works”)
either alone or with third parties, at any time during Executive’s employment
by the Company and within the scope of such employment and/or with the use of
any Company resources (“Company Works”), Executive shall promptly and fully
disclose same to the Company and hereby

 

9

 

irrevocably assigns, transfers
and conveys, to the maximum extent permitted by applicable law, all rights and
intellectual property rights therein (including rights under patent, industrial
property, copyright, trademark, trade secret, unfair competition and related
laws) to the Company to the extent ownership of any such rights does not vest
originally in the Company.

 

(ii)  Executive shall take
all requested actions and execute all requested documents (including any
licenses or assignments required by a government contract) at the Company’s
expense (but without further remuneration) to assist the Company in validating,
maintaining, protecting, enforcing, perfecting, recording, patenting or
registering any of the Company’s rights in the Company Works.  If the Company is unable for any other reason
to secure Executive’s signature on any document for this purpose, then
Executive hereby irrevocably designates and appoints the Company and its duly
authorized officers and agents as Executive’s agent and attorney in fact, to
act for and in Executive’s behalf and stead to execute any documents and to do
all other lawfully permitted acts in connection with the foregoing.

 

(iii)  Executive shall not
improperly use for the benefit of, bring to any premises of, divulge, disclose,
communicate, reveal, transfer or provide access to, or share with the Company
any confidential, proprietary or non-public information or intellectual
property relating to a former employer or other third party without the prior
written permission of such third party. 
Executive hereby indemnifies, holds harmless and agrees to defend the
Company and its officers, directors, partners, employees, agents and
representatives from any breach of the foregoing covenant.  Executive shall comply with all relevant
policies and guidelines of the Company, including regarding the protection of
confidential information and intellectual property and potential conflicts of
interest.  Executive acknowledges that
the Company may amend any such policies and guidelines from time to time, and
that Executive remains at all times bound by their most current version.

 

(iv)  The
provisions of Section 10 shall survive the termination of Executive’s
employment for any reason.

 

11.                                 Specific
Performance.  Executive
acknowledges and agrees that the Company’s remedies at law for a breach of any
of the provisions of Section 9 or Section 10 would be inadequate and
the Company would suffer irreparable damages as a result of such breach.  In recognition of this fact, Executive agrees
that, in the event of such a breach, in addition to any remedies at law, the
Company, without posting any bond, shall be entitled to cease making any
payments or providing any benefit otherwise required by this Agreement and
obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable
remedy which may then be available; provided, however, that if the Company does
not institute and prevail in an action to obtain such an equitable remedy,
the  Company shall re-pay and otherwise
reimburse Executive for the payments and benefits which the Company ceased
making or providing, and interest on such payments at the Company’s reference
lending rate with its principal bank lender. 
Notwithstanding anything contained in this Section 11, Executive’s
rights with respect to her equity participation shall be governed solely by the
Equity Documents.

 

10

 

12.                                 Miscellaneous.

 

a.                                       Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without regard to
conflicts of laws principles thereof.

 

b.                                      Entire Agreement/Amendments.  This Agreement contains the entire
understanding of the parties with respect to the employment of Executive by the
Company.  There are no restrictions,
agreements, promises, warranties, covenants or undertakings between the parties
with respect to the subject matter herein other than those expressly set forth
herein.  This Agreement may not be
altered, modified, or amended except by written instrument signed by the
parties hereto.  The Company may cause
the Service Company or another subsidiary to discharge the Company’s
obligations to Executive to make cash payments and provide benefits as set
forth in this Agreement (except with respect to any equity participation rights
pursuant to the Equity Documents), and any such discharge of the Company’s
obligations by the Service Company or another subsidiary shall not be deemed to
modify this Agreement.

 

c.                                       No Waiver.  The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party’s rights or deprive such party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Agreement.

 

d.                                      Severability.  In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.

 

e.                                       Assignment.  This Agreement, and
all of Executive’s rights and duties hereunder, shall not be assignable or
delegable by Executive or the Company, except as set forth below.  Any purported assignment or delegation by Executive
in violation of the foregoing shall be null and void ab initio and of no force and
effect.  This Agreement may be assigned
by the Company only to a Person which is a successor in interest to
substantially all of the business operations of the Company.  Upon such assignment, the rights and
obligations of the Company hereunder shall become the rights and obligations of
such successor Person.

 

f.                                         Successors; Binding Agreement.  This Agreement shall inure to the benefit of
and be binding upon personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.

 

g.                                      Set Off; Mitigation.  The Company’s obligation to pay Executive the
amounts provided and to make the arrangements provided hereunder shall not be
subject to set-off, counterclaim or recoupment, except for any amounts loaned
or advanced to Executive by the Company or its affiliates or otherwise as
provided in Section 8(c)(iii) hereof. 
Notwithstanding the foregoing, Executive shall not be required to
mitigate the amount of any payment provided for pursuant to this Agreement by
seeking other employment or otherwise and the amount of any payment provided
for pursuant to this Agreement shall not be reduced by any compensation earned
as a result of Executive’s other employment or otherwise.

 

h.                                      Notice.  For the purpose of this Agreement, notices
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered by hand or overnight
courier or three days after it has been mailed by United States registered
mail, return receipt requested, postage prepaid, addressed to

 

11

 

the respective addresses set forth
below in this Agreement, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.

 

If to the Company:

 

Texas Genco LLC

c/o Texas Genco Operating
Services LLC

12301 Kurland Avenue

Houston, Texas 77034

Telecopy:                                           (713) 945-3500

Attention:                                         Chief Legal
Officer

 

with a copy to

 

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Telecopy:                                           (212) 455-2502

Attention:                                         David J.
Sorkin

Brian M. Stadler

 

If to Executive:

 

To the most recent address of Executive set forth in the personnel
records of the Company.

 

i.                                          Executive Representation.  Executive hereby represents to the Company
that the execution and delivery of this Agreement by Executive and the
performance by Executive of Executive’s duties hereunder shall not constitute a
breach of, or otherwise contravene, the terms of any employment agreement or
other agreement or policy to which Executive is a party or otherwise bound.

 

j.                                          Cooperation.  Executive shall provide Executive’s
reasonable cooperation in connection with any action or proceeding (or any
appeal from any action or proceeding) which relates to events occurring during
Executive’s employment hereunder, but shall be done to the extent reasonably
possible in a manner as to reduce interference in Executive’s new position
after her employment hereunder ends.  The
Company shall reimburse Executive for any reasonable out of pocket expenses she
incurs in connection with such cooperation. 
This provision shall survive any termination of this Agreement.

 

k.                                       Withholding Taxes.  The Company may withhold from any amounts
payable under this Agreement such Federal, state and local taxes as may be
required to be withheld pursuant to any applicable law or regulation.

 

l.                                          Counterparts.  This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

 

12

 

13.                                 Excise
Taxes.

 

a.                                       If, after the Company becomes
taxable as a corporation for federal income tax purposes and the Company has
issued stock that is “readily tradeable on an established securities market” as
described in Section 280G of the Internal Revenue Code of 1986, as amended
(the “Code”), it shall be determined (as hereafter provided) that any payment,
benefit or distribution (or combination thereof) by the Company, any of its
affiliates, one or more trusts established by the Company for the benefit of
its employees, or any other person or entity, to or for the benefit of
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise pursuant to or by reason of any other
agreement, policy, plan, program or arrangement, including without limitation
any stock option, restricted stock award, stock appreciation right or similar
right, or the lapse or termination of any restriction on or the vesting or
exercisability of any of the foregoing (a “Payment”), would be subject to the
excise tax imposed by Section 4999 of the Code (or any successor provision
thereto) by reason of being “contingent on a change in ownership or effective
control or a change in the ownership of a substantial portion of the assets” of
the Company or an affiliate, within the meaning of Section 280G of the
Code (or any successor provision thereto) or to any similar tax imposed by
state or local law, or any interest or penalties with respect to such excise
tax (such tax or taxes, together with any such interest and penalties, are
hereafter collectively referred to as the “Excise Tax”), then the Company shall
make an additional payment (the “Gross-Up Payment”) to Executive such that,
after payment of all Excise Taxes and any other taxes payable in respect of
such Gross-Up Payment, Executive shall retain the same amount as if no Excise
Tax had been imposed.

 

b.                                      Subject to the provisions of Section 13(a) hereof,
all determinations required to be made under this Section 13, including whether
an Excise Tax is payable by Executive and the amount of such Excise Tax, shall
be made by the nationally recognized firm of certified public accountants (the “Accounting
Firm”) used by the Company prior to the change in control (or, if such Accounting
Firm declines to serve, the Accounting Firm shall be a nationally recognized
firm of certified public accountants selected by Executive).  The Accounting Firm shall be directed by the
Company or Executive to submit its preliminary determination and detailed
supporting calculations to both the Company and Executive within 15 calendar
days after the receipt of notice from Executive or the Company that there has
been a Payment, or any other such time or times as may be requested by the
Company or Executive.  If the Accounting
Firm determines that any Excise Tax is payable by Executive, the Company shall
make the Gross-Up Payment.  If the
Accounting Firm determines that no Excise Tax is payable by Executive, it
shall, at the same time as it makes such determination, furnish Executive with
an opinion that she has substantial authority not to report any Excise Tax on
her federal, state, local income or other tax return. Any determination by the
Accounting Firm shall be binding upon the Company and Executive absent a
contrary determination by the Internal Revenue Service or a court of competent
jurisdiction; provided, however, that no such determination shall
eliminate or reduce the Company’s obligation to provide any Gross-Up Payment
that shall be due as a result of such contrary determination.  As a result of the uncertainty in the
application of Section 4999 of the Code (or any successor provision
thereto) and the possibility of similar uncertainty regarding state or local
tax law at the time of any determination by the Accounting Firm hereunder, it
is possible that the amount of the Gross-Up Payment determined by the
Accounting Firm to be due to (or on behalf of) Executive was lower than the
amount actually due (the “Underpayment”). 
In the event that the Company exhausts its remedies pursuant to Section 13(d) below,
and Executive thereafter is required to make a payment of any Excise Tax, the

 

13

 

Accounting Firm shall determine the amount of the Underpayment that has
occurred as promptly as possible and notify the Company and Executive of such
calculations, and any such Underpayment (including the Gross-Up Payment to
Executive) shall be promptly paid by the Company to or for the benefit of
Executive within five (5) business days after receipt of such
determination and calculations. All fees and expenses of the Accounting Firm
shall be paid by the Company in connection with the calculations required by
this section.

 

c.                                       The federal, state and local
income or other tax returns filed by Executive (or any filing made by a
consolidated tax group which includes the Company) shall be prepared and filed
on a consistent basis with the determination of the Accounting Firm with
respect to the Excise Tax payable by Executive. 
Executive shall make proper payment of the amount of any Excise Tax, and
at the request of the Company, provide to the Company true and correct copies
(with any amendments) of her federal income tax return as filed with the
Internal Revenue Service and corresponding state and local tax returns, if
relevant, as filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing such payment.

 

d.                                      Executive shall notify the
Company in writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of any Gross-Up Payment.
Such notification shall be given as soon as practicable but no later than ten (10) business
days after Executive is informed in writing of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid. Executive shall not pay such claim prior to the
expiration of the thirty (30) day period following the date on which she gives
such notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies
Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive shall (w) give the Company any information which
is in Executive’s possession reasonably requested by the Company relating to
such claim, (x) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim
by an attorney reasonably selected by the Company, (y) cooperate with the
Company in good faith in order to effectively contest such claim, and (z) permit
the Company to participate in any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 13, the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and Executive agrees to prosecute such contest
to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, further, that if the Company directs
Executive to pay such claim and sue for a refund, the Company shall pay the amount
of such payment to Executive, and Executive shall use such amount received to
pay such claim, and the Company shall indemnify and hold Executive harmless, on
an after-tax basis, from any Excise Tax or income tax (including interest or

 

14

 

penalties with respect thereto) imposed with respect to such payment or
with respect to any imputed income with respect to such payment (including the
applicable Gross-Up Payment); provided, further, that if Executive is required
to extend the statute of limitations to enable the Company to contest such
claim, Executive may limit this extension solely to such contested amount. The
Company’s control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.

 

e.                                       If, after the receipt by
Executive of an amount paid or advanced by the Company pursuant to this Section 13,
Executive becomes entitled to receive any refund with respect to a Gross-Up
Payment, Executive shall (subject to the Company’s complying with the
requirements of Section 13(d)) promptly pay to the Company the amount of
such refund received (together with any interest paid or credited thereon after
taxes applicable thereto) (or, to the extent such payment would be deemed
prohibited by applicable law, shall be treated as a prepayment by the Company
of any amounts owed to Executive). If, after the receipt by Executive of an
amount advanced by the Company pursuant to Section 13(d), a determination
is made that Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify Executive in writing of its intent to
contest such denial of refund prior to the expiration of thirty (30) days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such payment made to Executive
thereunder shall offset, to the extent thereof, the amount of the Gross-Up
Payment required to be paid.

 

f.                                         The Company’s obligations under
this Section 13 shall survive any termination of Executive’s employment
with the Company, other than a termination by the Company for Cause.

 

14.                                 Indemnification.  During the Employment Term and thereafter,
the Company shall indemnify Executive to the fullest extent permitted by law
against any judgments, fines, amounts paid in settlement and reasonable expenses
(including attorneys’ fees) in connection with any claim, action or proceeding
(whether civil or criminal) against Executive as a result of Executive serving
as an officer or director of the Company or in any capacity at the request of
the Company, in or with regard to any other entity, employee benefit plan or
enterprise (other than arising out of Executive’s act of willful misconduct,
gross negligence, misappropriation of funds, fraud or breach of this
Agreement).  This indemnification shall
be in addition to, and not in lieu of, any other indemnification Executive
shall be entitled to pursuant to the LLC Agreement, the Company’s Certificate
of Incorporation or otherwise.  Following
Executive’s termination of employment, the Company shall continue to cover
Executive under the Company’s directors and officer’s insurance, if any, for
the period during which Executive may be subject to potential liability for any
claim, action or proceeding (whether civil or criminal) as a result of her
service as an officer or director of the Company or in any capacity at the
request of the Company, in or with regard to any other entity, employee benefit
plan or enterprise on the same terms such coverage was provided during the
Employment Term, at the highest level then maintained for any then current or
former officer.

 

[Signatures on next page.]

 

15

 

IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the day and year first above written.

 

 

	
   

  	
  Texas Genco LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thad Miller

  	
   

  
	
   

  	
  Name: Thad Miller

  	
   

  
	
   

  	
  Title: 

  	
  Chief Legal Officer and Executive Vice
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Texas Genco Operating Services LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thad Miller

  	
   

  
	
   

  	
  Name: Thad Miller

  	
   

  
	
   

  	
  Title:

  	
  Chief Legal Officer and Executive Vice
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Executive:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Margery M. Harris

  	
   

  
	
   

  	
  Margery M. Harris

  	
   

  
					

 

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Exhibit 10.29  

	 
	 	 

	BEAR, STEARNS & CO. INC.

383 Madison Avenue

New York, New York 10179	 	BEAR STEARNS CORPORATE

LENDING INC.

383 Madison Avenue

New York, New York 10179

 
 

CREDIT SUISSE
  Eleven Madison Avenue
  New York, NY 10010    
    

 
  LEHMAN COMMERCIAL PAPER INC.
  745 Seventh Avenue
  New York, New York 10019    
    

 
  THE BANK OF NEW YORK
  One Wall Street
  New York, New York 10286    
    

June 2,
2005 

Revolving Credit Facility

Commitment Letter

CKX, Inc.

650 Madison Avenue, 16th Floor

New York, NY 10022 

Attention:
Mr. Robert F.X. Sillerman 

Ladies
and Gentlemen: 

        You
have advised Bear, Stearns & Co. Inc. ("Bear Stearns" or the "Lead
Arranger"), Bear Stearns Corporate Lending Inc. ("BSCL"), Credit Suisse ("Credit
Suisse"), Lehman Commercial Paper Inc. ("LCPI") and The Bank of New York
("BNY" and, together with the Lead Arranger, BSCL, Credit Suisse and LCPI, the "Commitment Parties")
that CKX, Inc., a Delaware corporation (the "Borrower") wishes to enter into a senior secured revolving credit facility in the amount of
$50.0 million (the "Revolving Credit Facility", and the consummation of the Revolving Credit Facility, the
"Financing"). No drawings will be made under the Revolving Credit Facility on the date the conditions to effectiveness of the Revolving Credit Facility
are met (the "Closing Date"). The Revolving Credit Facility will be used to finance the continuing operations of the Borrower and its subsidiaries and
to fund future acquisitions. 

        Bear
Stearns is pleased to advise you that it is willing to act as exclusive advisor, sole lead arranger and sole bookrunner for the Revolving Credit Facility. BSCL is pleased to advise
you that it is willing to act as administrative agent for the Revolving Credit Facility. Furthermore, each of BSCL, Credit Suisse, LCPI and BNY (each, a
"Lender") is pleased to advise you of its commitment, which shall be several and not joint, to provide (or to cause one of its subsidiaries or
affiliates to provide) a portion of the Revolving Credit Facility upon the terms and subject to the conditions set forth or referred to in this
commitment letter (the "Commitment Letter") and in the Summary of Terms and Conditions attached hereto as Exhibit A (the
"Term Sheet"), such portion to consist of $20.0 million in the case of BSCL, and $10.0 million in the case of each of Credit Suisse, LCPI
and BNY. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Term Sheet. 

        It
is agreed that (i) Bear Stearns will act as the sole and exclusive advisor, lead arranger and bookrunner in respect of the Revolving Credit Facility, (ii) BSCL will act
as sole and exclusive administrative agent in respect of the Revolving Credit Facility, and (iii) each of Bear Stearns and BSCL will, in their respective capacities, perform the duties and
exercise the authority customarily performed and exercised by it in such roles. You agree that no other agents, co-agents, lead arrangers 

 

or
bookrunners will be appointed, no other titles will be awarded and no compensation (other than that expressly contemplated by the Term Sheet) will be paid in connection with the Financing, unless
you and the Commitment Parties shall so agree. 

        You
agree promptly to prepare and provide to the Lead Arranger all information with respect to the Borrower and the Financing, including all financial information and projections (the
"Projections"), as we may reasonably request. You hereby represent and covenant that (a) all information other than the Projections (the
"Information") that has been or will be made available to the Commitment Parties by you or any of your representatives, is or will be, when furnished,
complete and correct in all material respects and does not or will not, when furnished and when taken together with all such Information, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made and (b) the
Projections that have been or will be made available to the Commitment Parties by you or any of your representatives have been or will be prepared in good faith based upon reasonable assumptions. You
understand that in arranging the Revolving Credit Facility we may use and rely on the Information and Projections without independent verification thereof. 

        As
consideration for the commitments and agreements of the Commitment Parties hereunder you agree to pay the nonrefundable fees set forth herein and in the Term Sheet, as and when
indicated therein. 

        Each
Commitment Party's commitments and agreements hereunder are subject to (a) our satisfaction that on or after the date hereof, there shall not have occurred or become known to
us any event, development, condition or circumstance that has had or could reasonably be expected to have a material adverse effect on the Financing or on the business, assets, property, condition
(financial or
otherwise), results of operations or prospects of the Borrower and its subsidiaries, taken as a whole, (b) our not becoming aware after the date hereof of any information or other matter
(including any matter relating to financial models and underlying assumptions relating to the Projections) affecting the Borrower or the Financing that in our judgment is inconsistent in a material
and adverse manner with any such information or other matter disclosed to us prior to the date hereof, (c) our reasonable satisfaction that after the date of this Commitment Letter and prior to
the consummation of the Revolving Credit Facility there shall be no offering, placement or arrangement of any debt securities or bank financing by or on behalf of the Borrower or any of its
affiliates, (d) the negotiation, execution and delivery of definitive documentation with respect to the Revolving Credit Facility satisfactory to such Commitment Party and its counsel,
(e) your compliance in all material respects with your covenants and agreements with us in respect of the Financing (including, without limitation, your covenants and agreements contained in
this Commitment Letter) and the correctness of your representations and warranties to us in connection therewith, and (f) the satisfaction of the other conditions set forth or referred to in
the Term Sheet. The terms and conditions of the Commitment Parties' commitments hereunder and of the Revolving Credit Facility are not limited to those set forth herein and in the Term Sheet. Those
matters that are not covered by the provisions hereof (including the immediately preceding paragraph hereof) and of the Term Sheet are subject to the approval and agreement of the Lead Arranger, the
Lenders and you. 

        You
agree (a) to indemnify and hold harmless each Commitment Party, its affiliates and their respective officers, directors, employees, attorneys, advisors, and agents (each, an
"Indemnified Person") as set forth in Annex A hereto and (b) to reimburse each Commitment Party and its affiliates on demand for all
out-of-pocket expenses (including due diligence expenses, consultant's fees and expenses, travel expenses, and reasonable fees, charges and disbursements of counsel, but
excluding corporate overhead and other non-out-of-pocket expenses) incurred in connection with the Financing and any related documentation (including this
Commitment Letter, the Term Sheet and the definitive financing documentation) or the administration, amendment, modification or waiver thereof. No 

2

 

Indemnified
Person shall be liable for any damages arising from the use by unauthorized persons of Information or other materials sent through electronic, telecommunications or other information
transmission systems that are intercepted by such persons or for any special, indirect, consequential or punitive damages on any theory of liability in connection with any act, omission, breach,
occurrence or event relating in any respect to the Financing. 

        You
acknowledge that each of Bear Stearns, Credit Suisse, LCPI and BNY and their respective affiliates (the terms "Bear Stearns", "Credit Suisse", "LCPI" and "BNY" as used below in this
paragraph being understood to include such affiliates) may be providing debt financing, equity capital or other services to other companies in respect of which you may have conflicting interests
regarding the Financing or otherwise. None of Bear Stearns, Credit Suisse, LCPI or BNY will use confidential information obtained from you by virtue of the Financing or its other relationships with
you in connection with the performance by Bear Stearns, Credit Suisse, LCPI or BNY of services for other companies, and none of Bear Stearns, Credit Suisse, LCPI or BNY will furnish any such
information to other companies. You also acknowledge that each of Bear Stearns, Credit Suisse, LCPI and BNY has no obligation to use in connection with the Financing, or to furnish to you,
confidential information obtained from other companies. 

        This
Commitment Letter shall not be assignable by you without the prior written consent of each Commitment Party (and any purported assignment without such consent shall be null and
void), is intended to be solely for the benefit of the signatory parties hereto and their permitted assigns and is not intended to confer any benefits upon, or create any rights in favor of any person
except the signatory parties hereto and the Indemnified Persons. This Commitment Letter may not be amended or waived except by an instrument in writing signed by you and each Commitment Party. This
Commitment Letter may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement. Delivery of an executed
signature page of this Commitment Letter by facsimile transmission or electronic photocopy (i.e. "pdf") shall be effective as delivery of a manually executed counterpart hereof. This Commitment Letter
is the only agreement that has been entered into among us with respect to the Revolving Credit Facility and sets forth the entire understanding of the parties with respect thereto. 

        In
the event that, on or prior to the 90th day after the consummation of the currently pending public equity offering of the Borrower (the "Pending
Offering"), the Financing has not yet been consummated, and you have not yet entered into a definitive commitment for a bank financing which has the effect of terminating the
commitments hereunder pursuant to the penultimate paragraph hereof, you agree to pay to BSCL an amount equal to 0.35% of the aggregate commitments hereunder on such 90th day, to be
distributed in part to Credit Suisse, LCPI and BNY, in proportion to their commitments under this Commitment Letter. 

        This
Commitment Letter is delivered to you on the understanding that neither this Commitment Letter, the Term Sheet nor any of their terms or substance shall be disclosed, directly or
indirectly, by you to any other person except (a) to your officers, agents, and advisors who are directly involved in the consideration of this matter or (b) as may be compelled in a
judicial or administrative proceeding or as otherwise required by law (in which case you agree to inform us promptly thereof). 

        The
compensation, reimbursement, indemnification and confidentiality provisions contained herein shall remain in full force and effect regardless of whether definitive financing
documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or any Lender's commitment hereunder;  provided, that your obligations under this Commitment
Letter, other than those arising under the third, fourth and ninth paragraphs hereof, shall
automatically terminate and be superseded by the provisions of the definitive documentation relating to the Revolving Credit Facility upon the initial funding thereunder, and you shall automatically
be released from all liability in connection therewith at such time. 

3

 

        This
Commitment Letter shall be governed by, and construed in accordance with, the laws of the State of New York. You hereby irrevocably submit to the non-exclusive
jurisdiction of any court of the State of New York located in the County of New York or the United States District Court
for the Southern District of the State of New York, or any appellate courts from any thereof, for the purpose of any suit, action or other proceeding arising out of this Commitment Letter or any of
the agreements or transactions contemplated hereby, which is brought by or against you and you (i) hereby irrevocably agree that all claims in respect of any such suit, action or proceeding may
be heard and determined in any such court and (ii) hereby agree not to commence any action, suit or proceeding relating to this Commitment Letter or any such other agreements or transactions
other than in such court except to the extent mandated by applicable law. You hereby waive any objection that you may now or hereafter have to the venue of any such suit, action or proceeding in any
such court or that such suit, action or proceeding was brought in an inconvenient court and agree not to plead or claim the same. You hereby acknowledge that you have been advised by counsel in the
negotiation, execution and delivery of this Commitment Letter and the other agreements and transactions contemplated hereby, that no Commitment Party has any fiduciary relationship with or fiduciary
duty to you or any other person arising out of or in connection with this Commitment Letter or any of the other agreements or transactions contemplated hereby and that no Commitment Party has been
retained to advise or has advised you or any other person regarding the wisdom, prudence or advisability of entering into or consummating the Transaction. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS COMMITMENT LETTER OR ANY OF THE OTHER AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM
RELATING THERETO. 

        You
agree to deliver, at least five business days prior to the closing of the Revolving Credit Facility, to the Commitment Parties all documentation and other information required by
bank, securities or other regulatory authorities under applicable "know your customer" and anti-money laundering rules and regulations, including without limitation the USA PATRIOT Act. 

        If
the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms hereof and of the Term Sheet by returning to us executed counterparts hereof not later
than 5:00 p.m., New York City time, on June 6, 2005. The commitments and agreements of the Commitment Parties herein will automatically expire at 5:00 p.m., New York City time,
(a) on June 6, 2005 in the event we have not then received such executed counterparts in accordance with the immediately preceding sentence or (b) if such executed counterparts
are so received, on the earlier of: (i) the one year anniversary of the consummation of the Pending Offering, if the closing of the Financing has not then occurred and (ii) the date on
which the Borrower consummates, or (if earlier) enters into a definitive commitment from a financial institution (whether or not such financial institution is one of the Lenders hereunder) for, a bank
financing (A) in an aggregate principal amount equal to or greater than $50.0 million, and (B) with a tenor no shorter than that of the Revolving Credit Facility. Each Commitment
Party may terminate its commitments and agreements under this Commitment Letter at any time if any breach or default occurs in the performance of any of your obligations to any of the Commitment
Parties with respect to the Financing. 

4

 

        We
are pleased to have been given the opportunity to assist you in connection with this important financing. 

	 
	 	 
	 	 
	 	 

	 	 	 	 	Very truly yours,
	

BEAR, STEARNS & CO. INC.	
 	

BEAR STEARNS CORPORATE LENDING INC.
	

By:	
 	

/s/  RICHARD BRAM SMITH      
 Name: Richard Bram Smith

Title: Senior Managing Director	
 	

By:	
 	

/s/  VICTOR BULZACCHELLI      
 Name: Victor Bulzacchelli

Title: Vice President
	

CREDIT SUISSE,

Cayman Islands Branch	
 	

 	
 	

 
	

By	
 	

/s/  DOREEN BARR      
 Name: Doreen Barr

Title: Associate	
 	

 	
 	

 
	

By	
 	

/s/  S. WILLIAM FOX      
 Name: S. William Fox

Title: Director	
 	

 	
 	

 
	

LEHMAN COMMERCIAL PAPER INC.	
 	

 	
 	

 
	

By:	
 	

/s/  LAURIE R. PERPER      
 Name: Laurie R. Perper

Title: Senior Vice President	
 	

 	
 	

 
	

THE BANK OF NEW YORK	
 	

 	
 	

 
	

By:	
 	

/s/  MEHRASA RAYGANI      
 Name: Mehrasa Raygani

Title: Vice President	
 	

 	
 	

 
	

Accepted and agreed to

as of the date first

written above by:	
 	

 	
 	

 
	

CKX, INC.	
 	

 	
 	

 
	

By:	
 	

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

Title: Executive Vice President and

Chief Financial Officer	
 	

 	
 	

 

5

  

Annex A  

 
  Indemnification Provisions    
    

        Capitalized terms used and not otherwise defined herein are used with the meanings attributed thereto in the Commitment Letter dated June 2, 2005 (the
"Commitment Letter") from Bear, Stearns & Co. Inc., Bear Stearns Corporate Lending Inc., Credit Suisse, Lehman Commercial
Paper Inc. and The Bank of New York to CKX, Inc. (the "Indemnifying Party"), of which these Indemnification Provisions form an integral
part. 

        To
the fullest extent permitted by applicable law, the Indemnifying Party agrees that it will indemnify and hold harmless each of the Indemnified Persons from and against any and all
losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements and any and all actions, suits, proceedings and investigations in respect thereof and
any and all legal or other costs, expenses and disbursements in giving testimony or furnishing documents in response to a subpoena or otherwise (including, without limitation, the costs, expenses and
disbursements, as and when incurred, of investigating, preparing or defending any such action, proceeding or investigation (whether or not in connection with litigation in which any of the Indemnified
Persons is a party) and including, without limitation, any and all losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements, resulting from
any negligent act or omission of any of the Indemnified Persons), directly or indirectly, caused by, relating to, based upon, arising out of or in connection with (i) the Transaction,
(ii) the Commitment Letter or the Revolving Credit Facility, or (iii) any untrue statement or alleged untrue statement of a material fact contained in, or omissions or alleged omissions
in, information furnished by the Indemnifying Party or any of its subsidiaries or affiliates to any of the Indemnified Persons or any other person in connection with the Financing, the Commitment
Letter or the Revolving Credit Facility; provided, however, that, such indemnity agreement shall not
apply to any portion of any such loss, claim, damage, obligation, penalty, judgment, award, liability, cost, expense or disbursement to the extent it is found to have resulted from the gross
negligence or willful misconduct of such Indemnified Person. 

        These
Indemnification Provisions shall be in addition to any liability which the Indemnifying Party may have to the Indemnified Persons. 

        If
any action, suit, proceeding or investigation is commenced, as to which any of the Indemnified Persons proposes to demand indemnification, it shall notify the Indemnifying Parties
with reasonable promptness, provided, however, that any failure by any of the Indemnified Persons to so
notify the Indemnifying Party shall not relieve the Indemnifying Party from its obligations hereunder to the extent that the Indemnifying Party is not prejudiced by such failure. The Lead Arranger, on
behalf of the Indemnified Persons, shall have the right to retain counsel of its choice to represent the Indemnified Persons, and the Indemnifying Party agrees to pay the fees, expenses and
disbursement of such counsel, and such counsel shall, to the extent consistent with its professional responsibilities, cooperate with the Indemnifying Party and any counsel designated by the
Indemnifying Party. The Indemnifying Party shall be liable for any settlement of any claim against any of the Indemnified Persons made with its written consent, which consent shall not be unreasonably
withheld. Neither the Indemnifying Party nor any Indemnified Party shall, without the prior written consent of the other, settle or compromise any such claim, or permit a default or consent to the
entry of any judgment in respect thereof unless such settlement, compromise or consent includes, as an unconditional term thereof, the giving by the claimant to the Indemnifying Party and each
Indemnified Party of an unconditional and irrevocable release from all liability in respect of such claim. 

        In
order to provide for just and equitable contribution, if a claim for indemnification pursuant to these Indemnification Provisions is made but is found by a final judgment of a court
of competent jurisdiction (not subject to further appeal) that such indemnification may not be enforced in such case, even though the express provisions hereof provided for indemnification in such
case, then the 

Annex A-1

 

Indemnifying
Party, on the one hand, and the Indemnified Persons, on the other hand, shall contribute to the losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs,
expenses and disbursements to which the Indemnified Persons may be subject in accordance with the relative benefits received by the Indemnifying Party, on the one hand, and the Indemnified Persons, on
the other hand, and also the relative fault of the Indemnifying Party, on the one hand, and the Indemnified Persons, on the other hand, in connection with the statements, acts or omissions which
resulted in such losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements and the relevant equitable considerations shall also be considered.
No person found liable for a fraudulent misrepresentation shall be entitled to contribution from any other person who is not also found liable for such fraudulent misrepresentation. Notwithstanding
the foregoing, none of the Indemnified Persons shall be obligated to contribute any amount hereunder that exceeds the amount of fees previously received by such Indemnified Person pursuant to the
Commitment Letter. 

        Neither
the expiration or termination of any Lender's commitment under the Commitment Letter nor the funding or repayment of the loans under the Revolving Credit Facility shall affect
these Indemnification Provisions which shall remain operative and in full force and effect. 

Annex A-2

  

Exhibit A  

 
 

Revolving Credit Facility
  
    Summary of Terms and Conditions
  
    June 2, 2005    
    

        Capitalized terms used and not otherwise defined herein are used with the meanings attributed thereto in the Commitment Letter dated June 2, 2005 (the
"Commitment Letter") from Bear, Stearns & Co. Inc., Bear Stearns Corporate Lending Inc., Credit Suisse, Lehman Commercial
Paper Inc. and The Bank of New York to CKX, Inc., of which this Summary of Terms and Conditions forms an integral part. 

	 	I.	Parties	 	 
	

 	

 	

Borrower:	
 	

CKX, Inc. (the "Borrower").
	

 	

 	

Guarantors:	
 	

Each of the Borrower's direct and indirect present and future subsidiaries (the "Guarantors"; the Borrower and the Guarantors collectively, the "Credit Parties") other than Elvis Presley Enterprises, Inc., Elvis Presley Enterprises, LLC and any of their subsidiaries (collectively, the "Elvis Operating Companies"); provided, however, that any foreign
subsidiary of the Borrower with respect to which a guarantee granted thereby would, in the good faith judgment of the Borrower, result in material adverse tax consequences to the Borrower, shall not be required to be a Guarantor.
	

 	

 	

Sole Advisor, Lead Arranger and Sole Bookrunner:	
 	

Bear, Stearns & Co. Inc. (in such capacity, the "Lead Arranger").
	

 	

 	

Administrative Agent:	
 	

Bear Stearns Corporate Lending Inc. (in such capacity, the "Administrative Agent").
	

 	

 	

Lenders:	
 	

Initially, Bear Stearns Corporate Lending Inc., Credit Suisse, Lehman Commercial Paper Inc. and The Bank of New York, or in each case an affiliate or subsidiary thereof (collectively, the "Lenders").
	
II.	

 	

Terms of Revolving Credit Facility	
 	

 
	

 	
1.	

Revolving Credit Facility	
 	

 
	

 	

 	

Type and Amount of Facility:	
 	

A $50.0 million, 364-day revolving credit facility (the "Revolving Credit Facility", and the loans thereunder, the "Revolving Credit Loans" or the
"Loans").
	

 	

 	

Availability:	
 	

The Revolving Credit Facility shall be available on a revolving basis during the period commencing on the Closing Date and ending on the 364th day thereafter (the "Revolving Credit Termination Date"). No Revolving Credit Loans may be drawn on the Closing Date.
	 	 	 	 	 

Exhibit A-1

 

	

 	

 	

Letters of Credit:	
 	

A portion of the Revolving Credit Facility not in excess of $10.0 million shall be available for the issuance of letters of credit (the "Letters of Credit") by a Lender to be selected by the Lead
Arranger (in such capacity, the "Issuing Lender"). No Letter of Credit shall have an expiration date after five business days prior to the Revolving Credit Termination Date.
	

 	

 	

 	
 	

Drawings under any Letter of Credit shall be reimbursed by the Borrower (whether with its own funds or with the proceeds of Revolving Credit Loans) within one business day. To the extent that the Borrower does not so reimburse the Issuing Lender, the
Lenders shall be irrevocably and unconditionally obligated to reimburse the Issuing Lender on a pro rata basis.
	

 	

 	

Swing Line Loans:	
 	

A portion of the Revolving Credit Facility not in excess of $5.0 million shall be available for swing line loans (the "Swing Line Loans") from a Lender to be selected by the Lead Arranger in consultation
with the Borrower (in such capacity, the "Swing Line Lender") on same-day notice. Any such Swing Line Loans will reduce availability under the Revolving Credit Facility on a dollar-for-dollar basis. Each
Lender shall acquire, under certain circumstances, an irrevocable and unconditional pro rata participation in each Swing Line Loan.
	

 	

 	

Maturity:	
 	

The Revolving Credit Termination Date.
	

 	

 	

Purpose:	
 	

The proceeds of the Revolving Credit Loans shall be used for general corporate purposes (including working capital) of the Borrower and its subsidiaries in the ordinary course of business and to fund future acquisitions.
	
III.	

 	

Certain Payment Provisions	
 	

 
	

 	

 	

Fees and Interest Rates:	
 	

As set forth on Annex I.
	

 	

 	

Optional Prepayments and Commitment Reductions:	
 	

Loans may be prepaid and commitments may be reduced by the Borrower in minimum amounts to be agreed upon, without premium or penalty (other than customary interest period breakage costs).
	
IV.	

 	

Collateral	
 	

The obligations of each Credit Party in respect of the Revolving Credit Facility shall be secured by a perfected first priority security interest in favor of the Administrative Agent in substantially all of each Credit Party's present and future
tangible and intangible assets (the "Collateral") (including, without limitation, goods, inventory, equipment, investments, payment receivables, deposit accounts, general intangibles, intellectual
property, real property and all of the capital stock of each of the Borrower's direct and indirect subsidiaries (which pledge, in the case of any foreign subsidiary, shall be limited to 65% of the voting capital stock and 100% of the non-voting
capital stock of such foreign subsidiary if it would, in the good faith judgment of the Borrower, result in material adverse tax consequences to the Borrower), except for those assets as to which the Administrative Agent shall determine in its sole
discretion that the costs of obtaining such a security interest are excessive in relation to the value of the security to be afforded thereby. In no event will the Collateral include any assets or property of the Elvis Operating Companies or their
respective subsidiaries.
	 	 	 	 	 

Exhibit A-2

 

	
V.	

 	

Certain Conditions	
 	

 
	

 	

 	

Initial Conditions:	
 	

The availability of the Revolving Credit Facility shall be conditioned upon the continuing satisfaction, on or before the first anniversary of the consummation of the Pending Offering, of conditions precedent usual for facilities and transactions of
this type, including, without limitation, the conditions set forth in Exhibit B, customary corporate and document delivery requirements, accuracy of representations and warranties, absence of defaults, prepayment events or creating of liens under
debt instruments or under the documentation with respect to the Revolving Credit Facility (the "Credit Documentation"), or any other material agreements as a result of the transactions contemplated
hereby, evidence of authority, and absence of litigation affecting the Financing (the date upon which all such conditions precedent shall be satisfied, the "Closing Date").
	

 	

 	

On-Going Conditions:	
 	

The making of each extension of credit shall be conditioned upon (a) the accuracy in all material respects of all representations and warranties in the Credit Documentation (including, without limitation, the material adverse change and litigation
representations) and (b) there being no default or event of default in existence at the time of, or after giving effect to the making of, such extension of credit. As used herein and in the Credit Documentation, a "material adverse change" shall mean
any event, development or circumstance that has had or would reasonably be expected to have a material adverse effect on (a) the Financing, (b) the business, assets, property, condition (financial or otherwise), results of operations or prospects of
the Borrower and its subsidiaries, taken as a whole, or (c) the validity or enforceability of any of the Credit Documentation or the rights and remedies of the Agents and the Lenders thereunder or the validity, perfection, or priority of the
Administrative Agent's liens upon any of the Collateral.
	
VI.	

 	

Certain Documentation Matters	
 	

The Credit Documentation shall contain representations, warranties, covenants and events of default customary for financings of this type with materiality thresholds to be determined, including, without limitation:
	

 	

 	

Representations and Warranties:	
 	

Organization and good standing; capitalization and subsidiaries; authorization and enforceability; other liens and other indebtedness; no conflicts; governmental regulations (including margin regulations); no defaults; no violation of law; absence of
litigations, proceedings, labor disputes, etc.; financial condition (including solvency matters) and ownership of properties; Investment Company Act and Hart-Scott-Rodino matters; environmental matters; creation and perfection of security interests;
status as senior debt; absence of material adverse change; absence of undisclosed liabilities; financial statements; full disclosure; tax matters and intellectual property matters.
	 	 	 	 	 

Exhibit A-3

 

	

 	

 	

Affirmative Covenants:	
 	

Delivery of financial statements, reports, accountants' letters, projections, officers' certificates and other information reasonably requested by any Lender; payment of other obligations; continuation of business and maintenance of existence and
material rights and privileges; compliance with laws and material contractual obligations; maintenance of property and insurance; maintenance of books and records; right of each of the Lenders to inspect property and books and records; notices of
defaults, litigation and other material events; compliance with environmental laws; regulatory and legal matters; and further assurances (including, without limitation, with respect to security interests in after-acquired property).
	

 	

 	

Financial Covenants:	
 	

Financial covenants consisting of minimum interest coverage, maximum total leverage (to be set at 4.0x initially), minimum EBITDA and minimum tangible net worth.
	

 	

 	

Negative Covenants:	
 	

Limitations (subject to exceptions to be agreed) on: indebtedness (including preferred stock of subsidiaries and stock redemption or purchase obligations); liens; guarantee obligations; mergers, acquisitions, consolidations, liquidations and
dissolutions; sales of assets (including a restriction on asset sales aggregating more than $15.0 million over the course of the Revolving Credit Facility); leases; dividends and other payments in respect of capital stock; capital expenditures;
investments, loans and advances; optional payments and modifications of subordinated debt instruments; transactions with affiliates; sale and leasebacks; changes in fiscal year; negative pledge clauses; restrictions on subsidiary dividends; changes
in lines of business; and issuances and sales of equity interests in subsidiaries.
	

 	

 	

Events of Default:	
 	

Nonpayment of principal when due; nonpayment of interest, fees or other amounts after a grace period to be agreed upon; material inaccuracy of representations and warranties; violation of covenants (subject, in the case of certain affirmative
covenants, to a grace period to be agreed upon); cross-default; bankruptcy and other insolvency events; certain ERISA events; material judgments; actual or asserted invalidity or repudiation of any guarantee or security document, subordination
provisions or security interest; lack of perfection or priority of security interests; and a change of control.
	

 	

 	

Voting:	
 	

Amendments and waivers with respect to the Credit Documentation shall require the approval of Lenders holding not less than a majority of the aggregate amount of the Revolving Credit Loans, participations in Letters of Credit and Swing Line Loans and
unused commitments under the Revolving Credit Facility (the "Required Lenders"), except that (a) the consent of each Lender directly affected thereby shall be required with respect to (i) reductions in
the amount or extensions of the scheduled date of maturity of any Loan, (ii) reductions in the rate of interest or any fee or extensions of any due date thereof, (iii) increases in the amount or extensions of the expiry date of any Lender's
commitment and (iv) modifications to the pro rata provisions of the Credit Documentation and (b) the consent of 100% of the Lenders shall be required with respect to (i) modifications to any of the
voting percentages and (ii) releases of any Guarantor not otherwise permitted to be released by the terms of the Credit Documentation or all or substantially all of the Collateral.
	 	 	 	 	 

Exhibit A-4

 

	

 	

 	

Assignments and Participations:	
 	

The Lenders shall be permitted to assign and sell participations in their Loans and commitments, subject, in the case of an assignment (other than an assignment (i) by the Administrative Agent (and its affiliates), or (ii) to another Lender or to an
affiliate of a Lender), to the consent of the Administrative Agent (which consent shall not be unreasonably withheld) and the Issuing Lender and, so long as no event of default is continuing, the Borrower which consent, in each case, shall not be
unreasonably withheld. In the case of partial assignments (other than to another Lender or to an affiliate of a Lender), the minimum assignment amount shall be $1,000,000 unless otherwise agreed by the Borrower and the Administrative Agent.
Participants shall have the same benefits as the Lenders with respect to yield protection and increased cost provisions so long as the Lender from which it purchased its participation would have such benefits. Voting rights of participants shall be
limited to those matters with respect to which the affirmative vote of the Lender from which it purchased its participation would be required as described under "Voting" above. Pledges of Loans in accordance with applicable law shall be permitted
without restriction. Promissory notes shall be issued under the Revolving Credit Facility only upon request.
	

 	

 	

Yield Protection:	
 	

The Credit Documentation shall contain customary provisions (a) protecting the Lenders against increased costs or loss of yield resulting from changes in reserve, tax, capital adequacy and other requirements of law and from the imposition of or
changes in withholding or other taxes and (b) indemnifying the Lenders for "breakage costs" incurred in connection with, among other things, any prepayment of a Eurodollar Loan (as defined in Annex I) on a day other than the last day of an interest
period with respect thereto.
	

 	

 	

Expenses and Indemnification:	
 	

All reasonable out-of-pocket costs and expenses of the Lenders and the Agents, including, without limitation, reasonable expenses incurred in connection with the due diligence of the Lenders associated with the preparation, execution, delivery and
administration of the Credit Documentation (including, without limitation, reasonable legal, auditing and accounting fees and expenses and excluding corporate overhead and other non out-of-pocket expenses) are to be paid by the Borrower. All
reasonable out-of-pocket expenses of the Agents and each of the Lenders incurred in connection with the waiver and/or amendment of the Credit Documentation (including, without limitation, legal, auditing and accounting fees and expenses and excluding
corporate overhead and other non out-of-pocket expenses) are to be paid by the Borrower. All out-of-pocket expenses of each the Agents and each of the Lenders incurred in connection with the enforcement of the Credit Documentation (including, without
limitation, legal, auditing and accounting fees and expenses and excluding corporate overhead and other non out-of-pocket expenses) are to be paid by the Borrower.
	 	 	 	 	 

Exhibit A-5

 

	

 	

 	

 	
 	

The Credit Documentation will provide that the Agents and the Lenders (and their affiliates and their respective officers, directors, employees, attorneys, advisors and agents) will have no liability for, and will be indemnified and held harmless
against, any loss, liability, cost or expense incurred in respect of the financing contemplated hereby or the use or the proposed use of proceeds thereof (except to the extent resulting from the gross negligence or willful misconduct of the
indemnified party).
	

 	

 	

Governing Law and Forum:	
 	

State of New York.
	

 	

 	

Counsel to the Lead Arranger:	
 	

Latham & Watkins LLP.

Exhibit A-6

  

Annex I  

 
 

Interest and Certain Fees    
    

	Interest Rate Options:	 	The Borrower may elect that the Loans comprising each borrowing bear interest at a rate per annum equal to: (a) the Base Rate plus the Applicable Margin; or (b) the Eurodollar Rate plus the Applicable Margin. As used
herein:
	

 	
 	

"Base Rate" means the higher of (i) the rate of interest publicly announced by the commercial bank selected by the Administrative Agent as its prime rate in effect at its principal office in New York
City (the "Prime Rate"), and (ii) the federal funds effective rate from time to time plus 0.5% per annum.
	

 	
 	

The per annum interest rate (the "Applicable Margin") for Eurodollar Loans (as defined below) will be LIBOR + 200 bps(1), increasing to LIBOR + 250 bps at any time when $25.0 million or more in aggregate
principal amount of Revolving Credit Loans, participations in Letters of Credit and Swing Line Loans are outstanding.
	

 	
 	

The Applicable Margin with respect to Base Rate Loans (as defined below) will be 100 basis points lower than the Applicable Margin with respect to Eurodollar Loans (as defined below).
	

 	
 	

"Eurodollar Rate" means the rate (adjusted for statutory reserve requirements for eurocurrency liabilities) at which eurodollar deposits for one, two, three or six months, as selected by the Borrower,
are offered in the interbank eurodollar market.
	

Interest Payment Dates:	
 	

In the case of Loans bearing interest based upon the Base Rate ("Base Rate Loans"), quarterly in arrears.
	

 	
 	

In the case of Loans bearing interest based upon the Eurodollar Rate ("Eurodollar Loans"), on the last day of each relevant interest period and, in the case of any interest period longer than three
months, on each successive date three months after the first day of such interest period.
	

Commitment Fees:	
 	

The Borrower shall pay a commitment fee calculated at the rate per annum of 0.35% on the average daily unused portion of the Revolving Credit Facility payable quarterly in arrears.

	(1)
	The
margins noted here assume each of the Lenders commits to provide the Revolving Credit Facility in the manner contemplated by the Commitment Letter, and that the Revolving Credit
Facility will therefore not be rated. 

Annex I-1

 

	Letter of Credit Fees:	 	The Borrower shall pay a commission on all outstanding Letters of Credit at a per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans on the face amount of each such Letter of Credit.
Such commission shall be shared ratably among the Lenders and shall be payable quarterly in arrears.
	

 	
 	

In addition to letter of credit commission, a fronting fee calculated at a rate per annum to be agreed upon by the Borrower and the Issuing Lender on the face amount of each Letter of Credit shall be payable quarterly in arrears to the Issuing Lender
for its own account. In addition, customary administrative, issuance, amendment, payment and negotiation charges shall be payable to the Issuing Lender for its own account.
	

Default Rate:	
 	

At any time when the Borrower is in default in the payment of any amount of principal due under the Revolving Credit Facility, the overdue principal payments shall bear interest at 2.0% per annum above the rate otherwise applicable thereto. Overdue
interest, fees and other amounts shall bear interest at 2.0% per annum above the rate applicable to Base Rate Loans.
	

Rate and Fee Basis:	
 	

All per annum rates shall be calculated on the basis of a year of 360 days (or 365/366 days, in the case of Base Rate Loans the interest rate payable on which is then based on the Prime Rate) for actual days elapsed.

Annex I-2

   Exhibit B  

        The
availability of the Revolving Credit Facility, in addition to the conditions set forth in Exhibit A, shall be subject to the satisfaction of the following conditions.
Capitalized terms used but not defined herein have the meanings given in the Commitment Letter dated June 2, 2005 (the "Commitment Letter") from
Bear, Stearns & Co. Inc., Bear Stearns Corporate Lending Inc., Credit Suisse, Lehman Commercial Paper Inc. and The Bank of New York to CKX, Inc. and said
Exhibit A. 

        (a)   Each
Credit Party shall have executed and delivered definitive Credit Documentation satisfactory to the Administrative Agent, and all conditions to the initial
borrowings thereunder shall have been satisfied. 

        (b)   The
Borrower shall have received at least $250.0 million in net cash proceeds of a public equity issuance, and a portion of such proceeds shall have been applied
to repay in full all outstanding indebtedness of the Borrower and its subsidiaries (other than an outstanding loan in the amount of $3.5 million to Priscilla Presley, which will remain
outstanding), and all commitments (if any) under such outstanding indebtedness shall have been terminated and all liens securing such outstanding indebtedness shall have been terminated, in each case
on terms and conditions satisfactory to the Administrative Agent 

        (c)   The
Commitment Parties shall have received all fees required to be paid, and all expenses for which invoices have been presented on or before the Closing Date. 

        (d)   All
governmental and third party approvals necessary or, in the discretion of the Administrative Agent, advisable in connection with the Financing and the continuing
operations of the Borrower and its subsidiaries (including shareholder approvals, if any) shall have been obtained and be in full force and effect, and all applicable waiting periods shall have
expired without any action being taken or threatened by any competent authority which would restrain, prevent or otherwise impose adverse conditions on the Financing. 

        (e)   The
Administrative Agent shall have received and the Commitment Parties shall be satisfied with (i) audited consolidated financial statements of the Borrower for
the three most recent fiscal years ended prior to the Closing Date as to which such financial statements are available and (ii) unaudited interim consolidated financial statements of the
Borrower for each quarterly period ended subsequent to the date of the latest financial statements delivered pursuant to clause (i) of this paragraph as to which such financial statements are
available, in each case, prepared in accordance with U.S. GAAP and Regulation S-X for a registration statement on Form S-1. 

        (f)    The
Administrative Agent shall have received and the Commitment Parties shall be satisfied with consolidating pro forma balance sheets and income statements of the
Borrower as of the date of the most recent consolidated quarterly balance sheet delivered pursuant to paragraph (e) above, adjusted to give effect to the consummation of the Financing as if
such transaction had occurred, in the case of the pro forma balance sheets, on such date and, in the case of the income statements, on the first day of the relevant period, prepared in accordance with
Regulation S-X for a registration statement on Form S-1. 

        (g)   The
Commitment Parties shall be satisfied that the pro forma consolidated EBITDA (to include corporate overhead expenses) of the Borrower for the four fiscal quarters
most-recently ended equaled at least $22.5 million from planned continuing operations, and the Borrower shall provide support for such calculation of a nature that is satisfactory
to the Commitment Parties (and, in any event, in accordance with the financial statements referenced in paragraph (e) above and Regulation S-X). 

        (h)   The
Administrative Agent shall have received the results of such lien searches as it may request in each relevant jurisdiction with respect to the Borrower and its
subsidiaries, and such 

Exhibit B-1

 

searches
shall reveal no liens on any of the assets of the Borrower or any of its subsidiaries except for liens permitted by the Credit Documentation or liens to be discharged on or prior to the
Closing Date pursuant to documentation satisfactory to the Administrative Agent. 

        (i)    All
documents and instruments required to perfect the Administrative Agent's first priority security interest in the Collateral to secure the obligations in respect of
the Revolving Credit Facility (including delivery of capital stock certificates and undated stock powers executed in blank) shall have been executed (if applicable) and be in proper form for filing. 

        (j)    The
Administrative Agent shall have received and the Commitment Parties shall be satisfied with a solvency certificate from the chief financial officer of the Borrower
which shall document the solvency of the Borrower and its subsidiaries after giving effect to the Financing and the other transactions contemplated hereby. 

        (k)   The
Commitment Parties shall have received such legal opinions (including opinions (i) from counsel to the Borrower and its subsidiaries and (ii) from such
special and local counsel as may be required by the Administrative Agent), documents and other instruments as are customary for transactions of this type or as the Administrative Agent may reasonably
request. 

Exhibit B-2

QuickLinks

CREDIT SUISSE Eleven Madison Avenue New York, NY 10010

LEHMAN COMMERCIAL PAPER INC. 745 Seventh Avenue New York, New York 10019

THE BANK OF NEW YORK One Wall Street New York, New York 10286

Indemnification Provisions

Revolving Credit Facility Summary of Terms and Conditions June 2, 2005

Interest and Certain Fees

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