19X, Inc.
Exhibit
21
19X,
Inc.
000
Xxxxxxx Xxxxxx
New
York,
New York 10022
June
1,
2007
Promenade
Trust
c/o
Provident Financial Management
0000
Xxxxx Xxxx Xxxxxxxxx, Xxxxx 000
Santa
Monica, California 90405-2955
Attention:
Xxxxx X. Xxxxxx
Dear
Xxxxx:
As
we
have been discussing, 19X, Inc. (“19x”) a company owned and controlled by Xxxxx
Xxxxxx and myself has reached an agreement to acquire CKX, Inc. (“CKX”) for cash
consideration of $13.75 per share. We will be financing the
transaction with a combination of approximately $950 million of debt and $600
million of equity. Xxxxx and I will be rolling over not less than
$150 million of our CKX common stock into common stock of 19X via a contribution
to the capital of 19X. In addition, I will be providing guarantees to
the organizations providing the financing for this transaction of approximately
an additional $150 million. Other members of senior management of CKX
will be rolling over a significant amount of their CKX equity into common stock
of 19X. We anticipate that this transaction will close in the fourth
quarter of 2007 (the “Closing”).
By
signing below, the parties acknowledge and agree that from and after the date
hereof until the later of the Closing or the termination of the transaction
contemplated above, 19X shall have the right to acquire 1,491,817 shares of
CKX
Series B Convertible Preferred Stock, par value $0.01 per share (the “Preferred
Stock”) currently owned by the Trust for cash consideration of
$22,824,800. 19X must exercise this right (or advise the Trust it
will not exercise such right) no later than 15 days prior to the anticipated
Closing (the “Option”). In the event that 19X does not exercise the
Option, the Trust shall have the right, exercisable for a period of seven (7)
days after 19X’s notice referenced in the prior sentence, to put the Preferred
Stock to 19X for $22,824,800 (the “Put”), which shall be paid in full, in cash,
on the Closing date.
In
the
event that 19X acquires the Preferred Stock pursuant to the Put, then the Trust
hereby agrees that, as a condition thereof, it shall contribute at the Closing
500,000 shares of common stock of CKX, currently owned by Trust, at the most
favorable exchange ratio offered to other parties who are contributing CKX
common stock for equity in 19X (but excluding equity type inducements if offered
in connection with employment), for the same class of stock as is issued to
me
and to Xxxxx Xxxxxx.
In
the
event that 19X acquires the Preferred Stock pursuant to the Option, then the
Trust shall have the right, but not the obligation, to contribute 500,000 shares
of common stock of CKX, currently owned by Trust, at the most favorable exchange
ratio offered to other parties who are contributing CKX common stock (but
excluding equity type inducements if offered in connection with employment),
for
the same class of stock as is issued to me and to Xxxxx Xxxxxx.
In
addition, you acknowledge that you have had a Director and Observer on the
Board
of Directors of CKX and have had access to all board materials in connection
with this transaction as well as other material, non-public information about
CKX.
Xxxxx,
we
truly appreciate all that the Trust has done to help ensure that this
transaction can get completed on terms that would also enable the Trust to
realize the liquidity event that it desires. This transaction simply
could not have taken place without your cooperation and this
agreement.
The
parties acknowledge that if the Closing does not occur by February 28, 2008,
this agreement shall terminate.
Very
truly yours
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19X,
Inc.
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By:
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/s/
Xxxxxx
X.X.
Xxxxxxxxx
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Xxxxxx
X.X. Sillerman
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Chairman
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Agreed
and Acknowledged
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The
Promenade Trust
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|
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By:
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/s/
Xxxxx Xxxxxx
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Xxxxx
Xxxxxx
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Trustee,
Promenade Trust
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