Holders of approximately half of the company's 40 millionoutstanding shares waived their right to participate in theoffering, but FXRE chairman and chief executive Robert F.X.Sillerman and the Huff Alternative Fund LP have agreed to purchaseshares that are not otherwise subscribed for the rights offering.As a result of the "backstop" agreements, the company expects tosell all of the shares being offered in the offering, resulting ingross proceeds of $98.7 million.

FX Real Estate and Entertainment owns 17.72 contiguous acres ofland on the southeast corner of Las Vegas Boulevard and HarmonAvenue, which it refers to as the Park Central site. InJuly, FX paid Africa-Israel Investments Ltd. $180 millionfor the 50% interest in the property it did not already own. Theproperty is currently occupied by a motel and several commercialand retail tenants. FXRE intends to pursue a hotel, casino,entertainment, retail, commercial and residential developmentproject on the site that would have an Elvis Presley theme.

FXRE previously entered into license agreements with ElvisPresley Enterprises Inc., an 85%-owned subsidiary of publiclytraded CKX Inc., and Muhammad Ali Enterprises LLC, an 80%-ownedsubsidiary of CKX, which allows it to use the intellectual propertyand certain other assets associated with Elvis Presley and MuhammadAli in the development of its real estate and other entertainmentattraction-based projects. The license agreement with Elvis PresleyEnterprises also grants FXRE the right to develop one or morehotels as part of the master plan of Elvis Presley Enterprises Inc.to redevelop the Graceland property and surrounding areas inMemphis.