DATE: July 18, 2007 TO: Tomorrow Foundation TELEPHONE: (212) 407-9145 FACSIMILE: (212) 872-1473 Attention: Robert F.X. Sillerman FROM: Derivatives Documentation TELEPHONE: 212-272-2711 FACSIMILE: 212-272-9857 SUBJECT: Equity Derivatives Confirmation...
Exhibit
23
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Bear,
Xxxxxxx & Co. Inc.
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
Tel
(000) 000-0000
xxx.xxxxxxxxxxx.xxx
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DATE:
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July
18, 2007
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TO:
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Tomorrow
Foundation
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TELEPHONE:
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(000)
000-0000
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FACSIMILE:
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(000)
000-0000
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Attention:
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Xxxxxx
X.X. Sillerman
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FROM:
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Derivatives
Documentation
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TELEPHONE:
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000-000-0000
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FACSIMILE:
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000-000-0000
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SUBJECT:
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REFERENCE
NUMBER(S):
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NY52736
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The
purpose of this letter agreement is to confirm the terms and conditions of
the
Transaction entered into on the Trade Date specified below (the "Transaction")
between Bear, Xxxxxxx International Limited (“Bear Xxxxxxx”) and Tomorrow
Foundation (“Counterparty”). This letter agreement
constitutes the sole and complete “Confirmation,” as referred to in the Master
Agreement specified below, with respect to this Transaction.
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1.
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The
parties agree to negotiate, execute and deliver an agreement in the
form
of the 1992 ISDA Master Agreement (Multicurrency—Cross Border) (the “Form
Master Agreement”), together with the schedule thereto and any other
related documents, each in form and substance as the parties shall
in good
faith agree (collectively, the “Executed Master Agreement”). In addition,
the parties agree that until execution and delivery of the Executed
Master
Agreement, a Form Master Agreement shall be deemed to have been executed
and delivered by the parties on the Trade Date of the first transaction
that by its terms is intended to be governed by a Master Agreement.
All
provisions contained in, or incorporated by reference to, the Form
Master
Agreement or the Executed Master Agreement (as applicable, the “Master
Agreement”) shall govern the Transaction referenced in this Confirmation,
except as expressly modified below. This Confirmation, together with
all
of the other documents confirming any and all Transactions entered
into
between us (regardless of which branch, if any, either of us has
acted
through) that by their terms are intended to be governed by this
particular Master Agreement, shall supplement, form a part of and
be
subject to the Master Agreement. For the avoidance of doubt, this
Master
Agreement does not govern the put option sold by the Counterparty
pursuant
to the transaction entered into on the Trade Date
hereof.
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This
Confirmation is subject to and incorporates the 2002 Equity Derivatives
Definitions (the “2002 Definitions”), as published by the International
Swaps and Derivatives Association, Inc. (“ISDA”).
In
the
event of any inconsistency between this Confirmation and the 2002 Definitions
or
the Master Agreement, this Confirmation shall prevail.
REGISTERED
IN ENGLAND NO. 1592029
Reference
Number: NY52736
Tomorrow
Foundation
July
18,
2007
Page of
2 of 7
2. The
terms of the particular Transaction to which this Confirmation relates
are as
follows
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General
Terms:
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Trade
Date:
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July
18, 2007
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Seller:
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Counterparty
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Buyer:
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Bear
Xxxxxxx
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Shares:
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The
common stock, $0.01 par value per share, of CKX Inc. (Exchange
Symbol:
CKXE)
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Number
of Shares:
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3,000,000
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Prepayment:
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Applicable
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Prepayment
Amount:
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USD
38,460,000 (Prepayment per Option USD 12.82)
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Prepayment
Date:
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July
20, 2007
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Variable
Obligation:
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Not
Applicable
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Exchange:
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The
NASDAQ Global Select Market of the Nasdaq Stock Market,
Inc
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Related
Exchange(s):
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All
Exchanges
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Clearance
System:
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Not
applicable: settlement will be by delivery of legended physical
certificates.
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Calculation
Agent:
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Bear
Xxxxxxx. Determinations and calculations by the Calculation Agent
hereunder shall be made after consultation with the Counterparty
and such
advisors as it shall designate, and shall be made in a commercially
reasonable manner
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Settlement
Terms:
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Physical
Settlement:
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Applicable
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Settlement
Currency:
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USD
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Settlement
Date:
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January
19, 2008
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Settlement
Method Election:
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Not
Applicable
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Applicability
of Section 9.11 of the 2002 Definitions:
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For
the avoidance of doubt, the provisions of Section 9.11 of the
2002
Definitions, relating to the requirement that the Counterparty
deliver
freely-transferable Shares, is not applicable to this Transaction
to the
extent (but only to the extent) required by the fact that the
Counterparty
at the Trade Date is and at the Settlement Date would be an “affiliate” of
the Issuer within the meaning of Rule 144 (“Rule 144”) promulgated under
the United States Securities Act of 1933, as amended (the “‘33
Act”).
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Reference
Number: NY52736
Tomorrow
Foundation
July
18,
2007
Page of 3
of 7
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Share
Adjustments:
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Method
of Adjustments:
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Calculation
Agent Adjustment
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Potential
Adjustment Events:
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Notwithstanding
anything to the contrary contained in the 2002 Definitions, the previously
announced dividend consisting of 25 percent of the common equity
interests, on a fully diluted basis, in the business of FX Luxury
Realty
LLC (the “FXLR Spin”) will not constitute a Potential Adjustment Event and
the failure of the record date for such distribution to have occurred
prior to the Settlement Date will constitute a Potential Adjustment
Event.
As
such the parties acknowledge that the Buyer will never have beneficial
ownership of, nor the economic benefit from, the common equity interests
in the business of FX Luxury Realty LLC.
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Consequences
for Merger Events:
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Share-for-Share:
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Alternative
Obligation
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Share-for-Other:
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Alternative
Obligation
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Share-for-Combined:
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Alternative
Obligation
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Determining
Party:
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Bear
Xxxxxxx
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Modification
of Section 12.4(c) of the 2002 Definitions:
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The
provisions of Section 12.4(c) of this Transaction shall be modified
by
replacing the words “after the later” with the words “on the
earlier”.
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Status
of Going Private Transaction:
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For
the avoidance of doubt, the currently-announced going private transaction
with respect to the Issuer shall be a Merger Event for purposes of
this
Transaction.
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Tender
Offer:
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Applicable
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Consequences
of Tender Offers:
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Share-for-Share:
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Alternative
Obligation
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Share-for-Other:
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Alternative
Obligation
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Share-for-Combined:
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Alternative
Obligation
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Determining
Party:
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Bear
Xxxxxxx
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Nationalization,
Insolvency or Delisting:
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Cancellation
and Payment (Calculation Agent Determination)
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Determining
Party:
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Bear
Xxxxxxx
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Additional
Disruption Events:
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Reference
Number: NY52736
Tomorrow
Foundation
July
18,
2007
Page of 4
of 7
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Change
in Law:
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Applicable
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Failure
to Deliver:
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Applicable
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Insolvency
Filing:
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Applicable
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Hedging
Disruption Event:
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Not
Applicable
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Loss
of Stock Borrow:
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Not
Applicable
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Hedging
Party:
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Bear
Xxxxxxx
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Determining
Party:
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Bear
Xxxxxxx
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Non-Reliance:
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Applicable
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Agreements
and Acknowledgements Regarding Hedging Activities:
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Applicable
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Additional
Acknowledgements:
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Applicable
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Collateral
Provisions.
(a)
On or
before the Trade Date, Counterparty shall deliver to and at all times thereafter
maintain with Bear Xxxxxxx as collateral Shares in number equal to the Number
of
Shares (the “Share Collateral”). The Share Collateral shall be delivered free
and clear in certificated form registered in the name of the Buyer or its
designee, such certificates containing a customary ‘33 Act legend relating to
the status of the Share Collateral as restricted stock.
(b)
These
Collateral Provisions shall be deemed a security agreement, and notwithstanding
anything to the contrary contained in the Executed Agreement or this
Confirmation, these provisions shall be governed by the laws of the State
of New
York, without giving effect to the conflicts or choice of law provisions
thereof. The Counterparty hereby grants a first priority continuing
security interest in all Share Collateral provided hereunder and in any and
all
substitutions therefor, proceeds thereof and distributions thereon (together
with the Share Collateral, the “Collateral”). Notwithstanding the foregoing,
unless there is then an Event of Default or Potential Event of Default, upon
receipt of the shares of FX Luxury Realty LLC distributed in respect of the
Share Collateral, such shares of FX Luxury Realty LLC shall be released from
the
security interest created hereby. These Collateral Provisions constitute
a
Credit Support Document and the failure by a party to deliver or return
Collateral in accordance with these Collateral Provisions (if such failure
is
not remedied on or before the Local Business Day after notice of such failure
is
given to such party) shall constitute an Event of Default for purposes of
Section 5(a)(iii) of the Master Agreement with respect to such party. For
purposes of these Collateral Provisions, the term "Local Business Day" shall
have the meaning given such term in the Master Agreement, except that references
to a payment in clause (b) thereof will be deemed to include a delivery or
return of Collateral hereunder.
Additional
Provisions
Additional
Representations of the Counterparty. The Counterparty hereby represents and
warrants to Bear Xxxxxxx as of the Trade Date and as of any additional date
or
dates indicated below, as follows:
(a) the
Counterparty’s sale of the Shares hereunder is not "on the basis of" material
nonpublic information, within the meaning of Section 10b-5 of the United
States
Securities Exchange Act, as amended, and Rules 10b-5 and 10b5-1 promulgated
thereunder;
Reference
Number: NY52736
Tomorrow
Foundation
July
18,
2007
Page of 5
of 7
(b) as
to any Shares held as Share Collateral hereunder, the facts surrounding the
donation to the Counterparty of the Shares are such that they are deemed
to have
been acquired by the Counterparty when they were acquired by the donor for
purposes of calculating the Counterparty’s holding period of such Shares under
Rule 144;
(c) as
to any Shares held as Share Collateral hereunder, the donor of the Shares
to
Counterparty acquired such Shares more than two years prior to the Trade
Date;
(d) as
to any Shares held as Share Collateral hereunder, the Counterparty hereby
represents, as of each date from and including the Trade Date to and including
the Settlement Date that such Shares could be delivered in settlement of
this
Transaction without breach of any representation, warranty or covenant of
the
Counterparty hereunder, including those in Section 9.11 of the 2002 Definitions
(assuming lifting of the lien granted hereunder), except to the extent (but
only
to the extent) required by the fact that the Counterparty at the Trade Date
is
and at the Settlement Date would be an “affiliate” of the Issuer within the
meaning of Rule 144.
Additional
Covenant of Bear Xxxxxxx. Xxxx Xxxxxxx agrees that it will not dispose of
the Shares delivered hereunder until the common equity interests in the business
of FX Luxury Realty LLC have been distributed by the Issuer or it determines
such distribution will not occur.
Agency.
Counterparty acknowledges that Bear, Xxxxxxx & Co. Inc. (“BS&C”)
has acted as agent for Counterparty solely for the purposes of arranging
this
Transaction with its Affiliate, Bear Xxxxxxx and has acted as agent for Bear
Xxxxxxx (without accepting any liability for Bear Xxxxxxx'x performance or
non-performance of Bear Xxxxxxx'x obligations under the Transaction) in
connection with the execution of this Confirmation on Bear Xxxxxxx'x behalf.
This Confirmation is being provided by BS&C in such capacity. Upon your
written request, BS&C will furnish you with the time at which this
Transaction was entered into. Bear Xxxxxxx is not a member of the Securities
Investor Protection Corporation.
Eligible
Contract Participant. Each party represents that it constitutes an
"eligible contract participant" as such term is defined in Section 1(a)12
of the
Commodity Exchange Act, as amended.
Payment
Date Netting. The parties agree that subparagraph
(ii) of Section 2(c) of the Master Agreement will not apply to any Transactions
that are or will be governed by the Master Agreement. Thus all amounts payable
on the same date in the same currency in respect of all Transactions shall
be
netted.
Credit
Support Document and Credit Support Provider. The parties agree that Mr.
Xxxxxx X.X. Sillerman shall be a Credit Support Provider with respect to
the
Counterparty and the Guaranty of event date herewith of the obligations of
the
Counterparty hereunder shall be a Credit Support Document with respect to
the
Counterparty.
Governing
Law. The laws of New York (without giving effect to any provision thereof
that might require application of the law of another jurisdiction).
Termination
Currency. USD shall be the Termination
Currency.
Transfer. Bear
Xxxxxxx may transfer its rights and obligations under this Transaction, in
whole
or in part, to any of its Affiliates without Counterparty’s
consent.
Measure
of Damages. Second Method and Loss shall apply.
Contact
information. For purposes of the Master Agreement (unless otherwise
specified in the Executed Master Agreement), the addresses for notice to
the
parties shall be:
(a)
Counterparty
Reference
Number: NY52736
Tomorrow
Foundation
July
18,
2007
Page of 6
of 7
Tomorrow
Foundation
000
Xxxxxxx Xxxxxx
16th
Floor
New
York,
NY 10022-1029
(b)
Bear Xxxxxxx:
Bear,
Xxxxxxx International Limited
One
Canada Square
London,
England
Attention:
Legal Department
with
a
copy to:
Bear,
Xxxxxxx & Co. Inc.
000
Xxxxxxx Xxxxxx
New
York,
NY 10179
Attention:
Xxxxxxx X’Xxxxxxx
This
Confirmation may be executed in several counterparts, each of which shall
be
deemed an original but all of which together shall constitute one and the
same
instrument.
Counterparty
hereby agrees to check this Confirmation and to confirm that the foregoing
correctly sets forth the terms of the Transaction by signing in the space
provided below and returning to Bear Xxxxxxx a facsimile of the fully-executed
Confirmation to 000-000-0000. For inquiries regarding U.S.
Transactions, please contact Fenaba Addo by telephone at
000-000-0000. For all other inquiries please contact
Xxxxxxx O’Dea by telephone at 000-0-000-0000.
Originals will be provided for your execution upon your request.
Reference
Number: NY52736
Tomorrow
Foundation
July
18,
2007
Page of 7
of 7
We
are
very pleased to have executed this Transaction with you and we look forward
to
completing other transactions with you in the near future.
Very
truly yours,
BEAR,
XXXXXXX INTERNATIONAL LIMITED
By:
/s/ Xxxxxxx X’Xxxxxxx
Name:
Xxxxxxx
X’Xxxxxxx
Title: Authorised
Signatory
Counterparty,
acting through its duly authorized signatory, xxxxxx agrees to, accepts and
confirms the terms of the foregoing as of the Trade Date.
TOMORROW
FOUNDATION
By: /s/
Xxxxxx X. X. Sillerman
Name:
Xxxxxx X. X. Sillerman
Title:
Trustee
