Robert F.X. Sillerman c/o CKX, Inc. 650 Madison Avenue New York, NY 10022
Exhibit
28
Execution
Copy
|
Xxxxxx
F.X. Sillerman
c/o
CKX, Inc.
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
|
CONFIDENTIAL
November
7, 2007
19X,
Inc.
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
The
purpose of this commitment letter is to set forth certain binding agreements
between 19X, Inc. (“19X” or
“you”), a Delaware corporation,
and me in connection
with the proposed acquisition by 19X (the
“Acquisition”) of 100% of the outstanding equity
interests of CKX, Inc. (“CKX”). In
connection with the Acquisition, the following financings will be undertaken
(together with the Acquisition, the “Transactions”):
(a) CKX will obtain the first priority senior secured credit facilities
described in the First Lien Term Sheet attached as an exhibit to the Debt
Commitment and Engagement Agreement (the “Letter
Agreement”) of even date herewith among Credit Suisse, Cayman
Islands Branch, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities
Inc. and Deutsche Bank Trust Company Americas, in an aggregate principal amount
of up to $450,000,000; (b) CKX will obtain the second priority senior
secured term loan facility described in the Second Lien Term Sheet attached
as
an exhibit to the Letter Agreement in an aggregate principal amount of up to
an
amount which is the lesser of (x) the product of Pro Forma EBITDA (as defined
in
Exhibit C of the Letter Agreement) multiplied by two (2) and (y) $200,000,000;
(c) 19X and/or its subsidiaries will issue subordinated unsecured notes or
senior preferred stock in an aggregate principal amount of up to
$200,000,000 (the “Notes”); and
(d) 19X will issue up to $750,000,000 in equity securities, consisting of (i)
$200,000,000 of common equity, par value $0.01 per share (the
“Common Stock”), issued to existing stockholders of
CKX and members of CKX’s management and/or their controlled affiliates (the
“Founder Shares”), including at least $150,000,000 of
Common Stock issued to Simon Xxxxxx Xxxxxx or one or more of his controlled
affiliates (“Xxxxxx”) and me and/or one or more of my
controlled affiliates, (ii) up to $100,000,000 of preferred equity issued to
investors or individuals identified by Xxxxxx and me (the “Founder
Preferred Shares”), (iii) up to $50,000,000 of preferred equity
issued to Credit Suisse Management LLC (“CS”) and/or
high net worth individuals, entities or other investors identified by CS (the
“CS Shares”), (iv) up to $50,000,000 of preferred
equity (together with the CS Shares, the “Investor
Shares”), issued to high net worth individuals, entities or other
investors identified by Deutsche Bank Investment Partners, Inc.
(“DB”), and (v) at least $350,000,000 of preferred
equity issued in a widely-distributed offering to bona-fide third party
purchasers (who are not Xxxxxxx Xxxxx & Co. (“Xxxxxxx
Xxxxx”), 19X, the Founders or affiliates thereof) identified by
Xxxxxxx Xxxxx (the “Merrill Shares,” and together with
the Investor Shares and the Founder Preferred Shares, the “Preferred
Shares,” and the Preferred Shares together with the Founder
Shares, the “Shares”).
1. Commitments.
In
connection with the foregoing, I am pleased to advise you of my commitment
to,
subject to the conditions set forth or referred to in this commitment letter
(this “Commitment Letter”), purchase at least
$100,000,000 of the Notes directly or through entities controlled by me on
terms
to be agreed by me and you. Such purchase may be funded through the
exchange of common stock of CKX
2. Syndication.
I
reserve
the right prior, to and/or after the purchase of the Notes, to syndicate all
or
a portion of my commitment with respect to the Notes to a group of banks,
financial institutions and other investors (together with me, the
“Purchasers”), identified by me that will become
parties to the definitive documentation for the purchase of the Notes (the
“Notes Documentation”); provided that,
notwithstanding my right to
syndicate the Notes and receive commitments
with respect thereto, I shall not be relieved of my commitment to purchase
such
Notes as a result of such syndication prior to the date of the sale of such
Notes under the Notes Documentation (the “Closing
Date”).
3. Conditions
Precedent.
My
commitment hereunder is subject to: (a) the negotiation, execution
and delivery of Notes Documentation satisfactory to me and my counsel; and
(b)
compliance in all material respects by (i) all parties thereto with the terms
of
(1) the Letter Agreement, (2) the commitment letter and the fee letter related
thereto of even date herewith between CS and 19X pertaining to the CS Shares,
(3) the engagement letter of even date herewith among CS, DB and 19X pertaining
to the Investor Shares, (4) the engagement letter of even date herewith between
Xxxxxxx Xxxxx and 19X pertaining to the Merrill Shares, and (5) the commitment
letter among me, Xxxxxx and 19X of even date herewith pertaining to my and
Xxxxxx’x commitments with respect to the Founder Shares and the Founder
Preferred Shares, and (ii) you with the terms of this Commitment
Letter.
4. Indemnification.
You
agree
(a) to indemnify and hold harmless me and my agents, advisors, partners,
affiliates and successors and assigns (each, an “Indemnified
Person”) from and against any and all losses, claims, damages,
liabilities and expenses, joint or several, to which any such Indemnified Person
may become subject arising out of or in connection with this Commitment Letter,
the Transactions, the Notes or any related transaction or any claim, litigation,
investigation or proceeding relating to any of the foregoing, regardless of
whether any such Indemnified Person is a party thereto (and regardless of
whether such matter is initiated by a third party or by CKX or 19X or any of
their respective affiliates), and to reimburse each such Indemnified Person
upon
demand for any reasonable legal or other expenses incurred in connection with
investigating or defending any of the foregoing, provided that the
foregoing indemnity will not, as to any Indemnified Person, apply to losses,
claims, damages, liabilities or related expenses to the extent they are found
in
a final, non-appealable judgment of a court of competent jurisdiction to have
resulted primarily from the willful misconduct or gross negligence of such
Indemnified Person. Notwithstanding any other provision of this
Commitment Letter, no Indemnified Person shall be liable for any indirect,
special, punitive or consequential damages in connection with its activities
related to the Notes. You shall not be liable for any settlement of
any Proceeding effected without your prior written consent (which consent shall
not be unreasonably withheld or delayed),
but
if
settled with your prior written consent, or if there is a final judgment against
an Indemnified Person in any such Proceeding, you agree to indemnify and hold
harmless each Indemnified Person in the manner set forth above.
5. Assignments;
Amendments; Governing Law, Etc.
This
Commitment Letter shall not be assignable by you without my prior written
consent (and any attempted assignment without such consent shall be null and
void), is intended to be solely for the benefit of the parties hereto (and
Indemnified Persons), and is not intended to confer any benefits upon, or create
any rights in favor of, any person other than the parties hereto (and
Indemnified Persons). I may assign my commitment and rights hereunder
to one or more prospective Purchasers and, upon the funding by such Purchasers
of such commitments, I shall be released from the portion of my commitment
hereunder so assigned. This Commitment Letter may not be amended or
any provision hereof waived or modified except by an instrument in writing
signed by you and me. 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 counterpart of a signature page of this Commitment Letter by facsimile
transmission or electronic transmission (e.g. a “pdf” or “tif”) shall be
effective as delivery of a manually executed counterpart
hereof. Section headings used herein are for convenience of reference
only, are not part of this Commitment Letter and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Commitment Letter. This Commitment Letter supersedes all prior
understandings, whether written or oral, between us with respect to the
Notes. THIS COMMITMENT LETTER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
6. Jurisdiction.
Each
of
the parties hereto hereby irrevocably and unconditionally (a) submits, for
himself or itself and his or its property, to the exclusive jurisdiction of
any
New York State court or Federal court of the United States of America
sitting in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Commitment Letter or
the
transactions contemplated hereby, and agrees that all claims in respect of
any
such action or proceeding may be heard and determined only in such New York
State court or, to the extent permitted by law, in such Federal court, (b)
waives, to the fullest extent he or it may legally and effectively do so, any
objection which he or it may now or hereafter have to the laying of venue of
any
suit, action or proceeding arising out of or relating to this Commitment Letter
or the transactions contemplated hereby in any New York State court or in
any such Federal court, (c) waives, to the fullest extent permitted by law,
the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court, and (d) agrees that a final judgment in any such action
or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Service
of any process, summons, notice or document by registered mail addressed to
any
party hereto at the address provided for each of them in this Commitment Letter
shall be effective service of process against such party for any suit, action
or
proceeding brought in any such court.
7. Waiver
of Jury Trial.
EACH
OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM
BROUGHT
BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THIS COMMITMENT
LETTER.
8. Confidentiality.
This
Commitment Letter is delivered to you on the understanding that neither this
Commitment Letter nor its terms or substance shall be disclosed, directly or
indirectly, to any other person without my prior approval, except (a) to
your officers, directors, employees, attorneys, accountants and advisors on
a
confidential and need-to-know basis or (b) as required by applicable law or
compulsory legal process (in which case you agree to inform me promptly thereof
prior to such disclosure); provided that you may disclose this
Commitment Letter and the contents hereof (i) to CKX and its officers,
directors, employees, attorneys, accountants and advisors on a confidential
and
need-to-know basis, (ii) in any proxy materials, reports or registration
statement of 19X, CKX or FX Real Estate and Entertainment Inc.
(“FXRE”) or any of their affiliates required to be
filed with the Securities and Exchange Commission and (iii) in any prospectus
or
other offering memorandum relating to the Shares or other securities to be
issued or distributed by 19X, CKX or FXRE.
Notwithstanding
anything herein to the contrary, any party to this Commitment Letter (and any
employee, representative or other agent of such party) may disclose to any
and
all persons, without limitation of any kind, the tax treatment and tax structure
of the transactions contemplated by this Commitment Letter and all materials
of
any kind (including opinions or other tax analyses) that are provided to such
party relating to such tax treatment and tax structure, except that (i) tax
treatment and tax structure shall not include the identity of any existing
or
future party (or any affiliate of such party) to this Commitment Letter, and
(ii) no party shall disclose any information relating to such tax treatment
and
tax structure to the extent nondisclosure is reasonably necessary in order
to
comply with applicable securities laws. For this purpose, the tax
treatment of the transactions contemplated by this Commitment Letter is the
purported or claimed U.S. Federal income tax treatment of such transactions
and
the tax structure of such transactions is any fact that may be relevant to
understanding the purported or claimed U.S. Federal income tax treatment of
such
transactions.
9. Surviving
Provisions.
The
indemnification, confidentiality, syndication, jurisdiction, governing law
and
waiver of jury trial provisions contained herein shall remain in full force
and
effect regardless of whether definitive financing documentation shall be
executed and (other than in the case of the syndication provisions) delivered
and notwithstanding the termination of this Commitment Letter or my commitment
hereunder; provided that your obligations under this Commitment Letter,
other than those relating to confidentiality (which shall remain in full force
and effect), shall, to the extent covered by the Notes Documentation,
automatically terminate and be superseded by the applicable provisions contained
in the Notes Documentation upon the occurrence of the Closing Date.
10. Acceptance
and Termination.
If
the
foregoing correctly sets forth my agreement with you, please indicate your
acceptance of the terms of this Commitment Letter by returning to me an executed
counterpart hereof not later than 5:00 p.m., New York City time, on
November 9, 2007. My commitment hereunder will expire automatically
and without further action or notice and without further obligation to you
at
such time in the event that I have not received such executed counterpart
in
accordance
with the immediately preceding sentence. This Commitment Letter will become
a
binding commitment on me only after it has been duly executed and delivered
by
you in accordance with the first sentence of this Section 10. In the
event that the Closing Date does not occur on or before 5:00 p.m., New York
City
time, on July 31, 2008 (or such earlier date as the Agreement and Plan of
Merger, dated as of June 1, 2007, by and among CKX, Merger Sub (as defined
in
the Letter Agreement) and 19X, as amended on August 1, 2007 and September 27,
2007, shall have been terminated or the transactions contemplated thereby shall
have been consummated), then this Commitment Letter and my commitment hereunder
shall automatically terminate without further action or notice and without
further obligation to you unless I, in my discretion, agree to an
extension.
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| Very truly yours, | ||||
|
|
Xxxxxx
F. X. Sillerman
|
|||
Accepted
and agreed to as of
the
date
first above written:
19X,
Inc.
By _________________________
Name:
Title:
