EXECUTION COPY
SFX ENTERTAINMENT, INC.
CLASS A COMMON STOCK
(par value $.01 per share)
----------------
UNDERWRITING AGREEMENT
May 20, 1998
XXXXXXX, XXXXX & CO.
XXXXXX BROTHERS INC.
BEAR, XXXXXXX & CO. INC.
XXXXX & COMPANY
XXXXXX XXXXXXX & CO. INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
SFX Entertainment, Inc., a Delaware corporation (the "COMPANY"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "UNDERWRITERS") an
aggregate of 7,000,000 shares (the "FIRM SHARES") and, at the election of the
Underwriters, up to 1,050,000 additional shares (the "OPTIONAL SHARES") of
Class A Common Stock, par value $.01 per share (the "STOCK"), of the Company
(the Firm Shares and the Optional Shares that the Underwriters elect to
purchase pursuant to Section 2 hereof being collectively called the "SHARES").
1. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-50079) (the
"INITIAL REGISTRATION Statement") in respect of the Shares has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered to you, and, excluding exhibits thereto, to you for
each of the other Underwriters, have been declared effective by the Commission
in such form; other than a registration statement, if any, increasing the size
of the offering (a "RULE 462(B) REGISTRATION STATEMENT"), filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended (the "ACT"), which
became effective upon filing, no other document with respect to the Initial
Registration Statement has heretofore been filed with the Commission; and no
stop order suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration Statement,
if any, has been issued and no proceeding for that purpose has been initiated
or threatened by
the Commission (any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter called a
"PRELIMINARY PROSPECTUS;" the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the
Act to be part of the Initial Registration Statement at the time it was
declared effective or such part of the Rule 462(b) Registration Statement, if
any, became or hereafter becomes effective, each as amended at the time such
part of the Initial Registration Statement became effective, is hereinafter
collectively called the "REGISTRATION STATEMENT;" and such final prospectus, in
the form first filed pursuant to Rule 424(b) under the Act, is hereinafter
called the "PROSPECTUS;"
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder and do not and
will not, as of the applicable effective date as to the Registration Statement
and any amendment thereto, and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Xxxxxxx, Sachs & Co. expressly for use therein;
(d) None of the Company nor any of its subsidiaries has taken, nor
will any of them take, directly or indirectly, any action designed to, or that
could reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Shares to facilitate the sale and resale of
the Shares;
(e) None of the Company, its subsidiaries nor, to the knowledge of the
Company, any of the businesses to be acquired in the Pending Acquisitions (as
defined in the Prospectus) (collectively, the "ACQUISITION ENTITIES") have
sustained since the date of the latest audited financial statements included in
the Prospectus any material loss or interference with their businesses, taken
as a whole, from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any change in
the capital stock or long-term debt of the Company, any of its subsidiaries or,
to the knowledge of the Company, the Acquisition Entities or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial position,
stockholders' equity
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or results of operations of the Company, its subsidiaries and the Acquisition
Entities, otherwise than as set forth or contemplated in the Prospectus;
(f) The Company, its subsidiaries and, to the knowledge of the
Company, each of the Acquisition Entities have good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except as described in the Prospectus or where the failure to be so
qualified would not have a material adverse effect on the assets, liabilities,
results of operations, management, condition (financial or other), properties,
business or net worth of the Company and its direct and indirect subsidiaries,
taken as a whole (a "MATERIAL ADVERSE Effect"), and any real property and
buildings held under lease by the Company, its subsidiaries and, to the
knowledge of the Company, each of the Acquisition Entities are held by them
under valid, subsisting and enforceable leases, except as would not have a
Material Adverse Effect after giving effect to the Pending Acquisitions;
(g) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus, is and, after giving effect to the
Pending Acquisitions, will be duly registered and qualified to conduct its
business and is and, after giving effect to the Pending Acquisitions, will be
in good standing, in each jurisdiction or place where the nature of its
business requires such registration or qualification, except where the failure
to be so qualified would not have a Material Adverse Effect;
(h) Each subsidiary is a corporation duly organized, validly existing
and in good standing in the jurisdiction of its incorporation, with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus is, and after giving effect
to the Pending Acquisitions will be, duly registered and qualified to conduct
its business and is, and after giving effect to the Pending Acquisitions will
be, in good standing, in each jurisdiction or place where the nature of its
business requires such registration or qualification, except where the failure
to be so qualified would not have a Material Adverse Effect;
(i) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description of the Stock contained in the Prospectus; and
all of the issued shares of capital stock of each subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and free of any preemptive or similar rights, and (except for
directors' qualifying shares and except as set forth in the Prospectus) are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims and have been issued in compliance with all
applicable federal and state securities laws;
(j) The unissued Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus;
(k) The Company and each of its subsidiaries, as applicable, have full
corporate power and authority to enter into this Agreement and the acquisition
agreements relating to each of the Pending Acquisitions (the "ACQUISITION
DOCUMENTS") (each, a "TRANSACTION DOCUMENT" and, collectively, the "TRANSACTION
DOCUMENTS"), and to carry out all the terms and provisions, as provided herein
and therein;
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(l) The execution and delivery of each of the Transaction Documents to
which the Company or any of its subsidiaries are a party have been duly
authorized by the Company and each of its subsidiaries party thereto and each
of such Transaction Documents which has been executed prior to or on the date
hereof has been duly executed and delivered by the Company and each of its
subsidiaries party thereto and is the legal, valid and binding agreement of the
Company and each of its subsidiaries party thereto (assuming it is a legal,
valid and binding agreement of the other parties thereto), enforceable against
the Company and each its subsidiaries party thereto in accordance with its
terms except to the extent that: (i) the same may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other laws now
or hereafter in effect relating to creditors' rights generally or by general
principles of equity whether asserted in an action at law or in equity; and
(ii) rights to indemnity and contribution hereunder may be limited by state or
federal securities laws;
(m) Except (i) as disclosed in the Prospectus, (ii) for approvals of
the lenders under the Credit Facility with respect to the Pending Acquisitions
(iii) for approvals under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 with respect to the Pending Acquisitions and (iv) as disclosed in the
Acquisition Documents relating to the Pending Acquisitions (including all
schedules and attachments) with respect to the Pending Acquisitions, the issue
and sale of the Shares by the Company, the execution, delivery and performance
of this Agreement by the Company, the execution, delivery and performance of
the other Transaction Documents, and the consummation by the Company and its
subsidiaries of the transactions contemplated hereby and thereby will not (A)
require any consent, approval, authorization or other order (which has not been
obtained) of any court, regulatory body, administrative agency or other
governmental body except such as may be required under the Securities Act,
securities regulatory bodies (including self-regulatory bodies), securities
exchanges or the securities or Blue Sky laws of the various states and under
the Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvement Act of 1976; (B) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company, or any of its subsidiaries; (C) require
any consent or approval (which has not been obtained) of the parties to, or
conflict with or constitute a breach of any of the terms or provisions of, or a
default under, any agreement or other instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
or their respective property is bound; (D) violate or conflict with any laws or
administrative regulations, rulings of court, decrees applicable to the
Company, any of its subsidiaries or their respective property; or (E) result in
the creation or imposition of any lien on any asset of the Company or any of
its subsidiaries, except, in the case of (A), (C), (D), or (E) above, such as
would not, either singly or in the aggregate, have a Material Adverse Effect or
prevent the Company from performing its obligations hereunder;
(n) Neither the Company, any of its subsidiaries nor, to the knowledge
of the Company, any of the Acquisition Entities is in violation of its
Certificate of Incorporation or By-laws or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound;
(o) The capital stock of the Company conforms in all material respects
to the description thereof contained in the Prospectus under the caption
"DESCRIPTION OF CAPITAL STOCK," and the statement contained under the caption
"AGREEMENTS RELATED TO THE PENDING ACQUISITIONS," insofar as they purport to
describe the provisions of the documents referred to therein, are accurate,
complete and fair in all material respects;
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(p) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company, any of its subsidiaries
or, to the knowledge of the Company, any of the Acquisition Entities is a party
or of which any property of the Company, any of its subsidiaries or any of the
Acquisition Entities is the subject which, if determined adversely to the
Company, any of its subsidiaries or any of the Acquisition Entities, would
individually or in the aggregate have a Material Adverse Effect on the Company,
its subsidiaries and the Acquisition Entities, taken as a whole and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(q) Except as disclosed in the Prospectus, there are no outstanding
(A) securities or obligations of the Company or any of its subsidiaries
convertible into or exchangeable for any capital stock of the Company, (B)
warrants, rights or options to subscribe for or purchase from the Company or
any of its subsidiaries any such capital stock or any such convertible or
exchangeable securities or obligations, or (C) obligations of the Company or
any of its subsidiaries to issue any shares of capital stock, any such
convertible or exchangeable securities or obligations, or any such warrants,
rights or options;
(r) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities owned or to be owned by such
person or to require the Company to include such securities in any securities
being registered pursuant to any registration statement filed by the Company
under the Securities Act;
(s) The Company is not and, after giving effect to the offering and
sale of the Shares, will not be (i) an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "INVESTMENT COMPANY ACT"), or
(ii) a "holding company" or a "subsidiary company" or an "affiliate" of a
holding company within the meaning of the Public Utility Holding Company Act of
1935, as amended;
(t) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes;
(u) The consolidated financial statements of the Company, each of its
subsidiaries and, to the knowledge of the Company, the Acquisition Entities
included in the Prospectus present fairly in all material respects the
financial position of the Company on a consolidated basis and of each of the
Acquisition Entities, respectively, and the results of operations and changes
in financial condition as of the dates and for the periods therein specified.
Such financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise noted therein). The selected financial data set
forth under the captions "PROSPECTUS SUMMARY--SUMMARY CONSOLIDATED FINANCIAL
Data," in the Prospectus fairly present, on the basis stated in the Prospectus,
the information included. The other financial and statistical information and
data set forth in the Prospectus is, in all material respects, accurately
presented and prepared on a basis consistent with such financial statements and
the books and records of the Company, its subsidiaries and, to the knowledge of
the Company, the Acquisition Entities, as applicable. The unaudited pro forma
condensed combined financial statements and the related notes thereto included
in the Prospectus present fairly, as stated therein, the pro forma financial
position and results of operations at the respective dates and for the
respective
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periods indicated. The pro forma adjustments are factually supportable. All
adjustments necessary to fairly present this pro forma information have been
made;
(v) Each of (i) Ernst & Young LLP, (ii) Xxxxxx Xxxxxxxx LLP and (iii)
Price Waterhouse LLP, who have certified certain financial statements of the
Company, its subsidiaries and the Acquisition Entities, are each independent
public accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(w) Each of the Transaction Documents conforms in all material
respects to the respective statements relating thereto contained in the
Prospectus;
(x) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions which would be required to be
disclosed therein by Item 404 of Regulation S-K of the Commission and each
business relationship or related party transaction described therein is a fair
and accurate description of the relationships and transactions so described;
(y) None of the Company nor any of its subsidiaries, nor, to the
Company's knowledge, any of the Acquisition Entities or any director, officer,
agent, employee or other person associated with or acting on behalf of the
Company, any of its subsidiaries or the Acquisition Entities, has used any
corporate funds during the last five years for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; made
any unlawful payment to any foreign or domestic government official or employee
from corporate funds; violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment, except such as
would not have a Material Adverse Effect;
(z) Except as disclosed in the Prospectus, each of the Company, its
subsidiaries and, to the knowledge of the Company, the Acquisition Entities is
operating in material compliance with all (and has not violated any) laws,
regulations, administrative orders or rulings or court decrees applicable to it
or to any of its property (including without limitation those relating to
environmental, safety or similar matters, federal or state laws relating to the
hiring, promotion or pay of employees), except for violations which would not
have a Material Adverse Effect;
(aa) Except as, singly or in the aggregate, would not have a Material
Adverse Effect, (i) the Company and its subsidiaries, have (A) such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("PERMITS") as are necessary to own, lease and operate their
properties and to conduct their businesses as presently conducted, and (B)
fulfilled and performed all of their material obligations with respect to the
Permits, and (ii) no event has occurred that would allow, or after notice or
lapse of time would allow, revocation or termination of any Permit or that
would result in any other material impairment of the rights granted to the
Company or any of its subsidiaries under any Permit, and (iii) neither the
Company nor any of its subsidiaries has any reason to believe that any
governmental body or agency is considering limiting, suspending or revoking any
Permit;
(bb) The Company, its subsidiaries and, to the knowledge of the
Company, the sellers of each of the Acquisition Entities own or possess
adequate rights to use all material trademarks, service marks, tradenames,
trademark registrations, service xxxx registrations and copyrights necessary
for the conduct of their businesses, and to the Company's knowledge, the
conduct of their businesses will not conflict with, and neither the Company nor
any of its subsidiaries has received any notice of any claim of conflict with,
any such rights of others (except in any such case for any conflict that would
not have a Material Adverse Effect);
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(cc) Each of the Company, its subsidiaries and, to the knowledge of
the Company, the Acquisition Entities are in compliance in all material
respects with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined
in ERISA) for which the Company or any of its subsidiaries would have any
liability; none of the Company or its subsidiaries has incurred or expects to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Section 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "CODE"); and each "pension plan" for which the
Company or any of its subsidiaries would have any liability that is intended to
be qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification, except, in each case, as
would not have a Material Adverse Effect;
(dd) There is (i) no material unfair labor practice complaint pending
against the Company, any of its subsidiaries or, to the knowledge of the
Company, any of the Acquisition Entities, or, to the best knowledge of the
Company, threatened against any of them, before the National Labor Relations
Board or any state or local labor relations board, and no significant grievance
or significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company, any of its subsidiaries
or, to the knowledge of the Company, any of the Acquisition Entities, or, to
the best knowledge of the Company, threatened against any of them and (ii) no
material strike, labor dispute, slowdown or stoppage pending against the
Company, any of its subsidiaries or, to the best knowledge of the Company, any
of the Acquisition Entities nor, to the knowledge of the Company, threatened
against the Company, any of its subsidiaries or, to the knowledge of the
Company, any of the Acquisition Entities, except, in each case, as would not
have a Material Adverse Effect;
(ee) The Company and each of its subsidiaries has reviewed the effect
of Environmental Laws (as defined below) and the disposal of hazardous or toxic
substances, wastes, pollutants and contaminants on the business, assets,
operations and properties of the Company, each of the subsidiaries and each of
the Acquisition Entities, as applicable, and identified and evaluated
associated costs and liabilities (including, without limitation, any material
capital and operating expenditures required for clean-up, closure of properties
and compliance with Environmental Laws, all permits, licenses and approvals,
all related constraints on operating activities and all potential liabilities
to third parties). On the basis of such reviews, the Company has reasonably
concluded that such associated costs and liabilities would not have a Material
Adverse Effect. None of the Company, its subsidiaries or, to the knowledge of
the Company, the Acquisition Entities has violated any environmental, safety or
similar law or regulation applicable to it or its business or property relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"),
lacks any permit, license or other approval required of it under applicable
Environmental Laws or is violating any term or condition of such permit,
license or approval which could reasonably be expected to, either individually
or in the aggregate, have a Material Adverse Effect;
(ff) The Company, its subsidiaries and, to the knowledge of the
Company, the Acquisition Entities have filed all federal, state and local
income and franchise tax returns required to be filed through the date hereof
and have paid, or made adequate reserve or provision for the payment of, all
taxes shown as due thereon except in any case where such
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failure would not have a Material Adverse Effect, and the Company has no
knowledge of any tax deficiency that has had (or would have) a Material Adverse
Effect;
(gg) The Company and its subsidiaries (i) make and keep accurate books
and records and (ii) maintain internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance with
management's specific or general authorization, (B) transactions are recorded
as necessary to permit preparation of their consolidated financial statements
and to maintain accountability for their assets, (C) access to their assets is
permitted only in accordance with management's specific or general
authorization and (D) the reported accountability for their assets is compared
with existing assets at reasonable intervals;
(hh) None of the Company, its subsidiaries nor any agent thereof
acting on behalf of any of them has taken, and none of them will take, any
action that might cause this Agreement or the issuance of the Shares to violate
Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the
Board of Governors of the Federal Reserve;
(ii) The Company has delivered to the Underwriters true and correct,
executed copies of each Transaction Document that has been executed prior to
the date hereof and there have been no amendments, alterations, modifications
or waivers thereto or in the exhibits or schedules thereto other than those as
to which the Underwriters shall previously have been advised and shall not have
reasonably objected after being furnished a copy thereof; and
(jj) Other than as contemplated by the Transaction Documents and the
Prospectus, there is no broker, finder or other party that is entitled to
receive from the Company or any of its subsidiaries any brokerage or finder's
fee or other fee or commission as a result of any of the transactions
contemplated by any of the Transaction Documents.
Notwithstanding the foregoing, any exceptions to the representations
and warranties contained in the Acquisition Documents shall be deemed to be
included in the applicable representation or warranty contained in this
Agreement.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company,
at a purchase price per Share of $40.87, the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to issue and sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per Share set
forth in clause (a) of this Section 2, that portion of the number of Optional
Shares as to which such election shall have been exercised (to be adjusted by
you so as to eliminate fractional shares) determined by multiplying such number
of Optional Shares by a fraction, the numerator of which is the maximum number
of Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 1,050,000 Optional Shares, at the purchase price per Share
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to
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the Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Company otherwise agree in
writing, earlier than two or later than ten business days after the date of
such notice.
3. Upon the authorization by you of the release of the Firm Shares,
the several Underwriters propose to offer the Firm Shares for sale upon the
terms and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered
in such names as Xxxxxxx, Xxxxx & Co. may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by
or on behalf of the Company to Xxxxxxx, Sachs & Co. for the account of
such Underwriter, against payment by or on behalf of such Underwriter
of the purchase price therefor by wire transfer of Federal (same-day)
funds to the account specified by the Company to Xxxxxxx, Xxxxx & Co.
at least forty-eight hours in advance. The Company will cause the
certificates representing the Shares to be made available for checking
and packaging at least twenty-four hours prior to the Time of Delivery
(as defined below) with respect thereto at the office of Xxxxxxx,
Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"DESIGNATED OFFICE"). The time and date of such delivery and payment
shall be, with respect to the Firm Shares, 9:30 a.m., New York City
time, on May 27, 1998 or such other time and date as Xxxxxxx, Xxxxx &
Co. and the Company may agree upon in writing, and, with respect to
the Optional Shares, 9:30 a.m., New York time, on the date specified
by Xxxxxxx, Sachs & Co. in the written notice given by Xxxxxxx, Xxxxx
& Co. of the Underwriters' election to purchase such Optional Shares,
or such other time and date as Xxxxxxx, Sachs & Co. and the Company
may agree upon in writing. Such time and date for delivery of the Firm
Shares is herein called the "FIRST TIME OF DELIVERY," such time and
date for delivery of the Optional Shares, if not the First Time of
Delivery, is herein called the "SECOND TIME OF DELIVERY," and each
such time and date for delivery is herein called a "TIME OF DELIVERY."
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including
the cross receipt for the Shares and any additional documents
requested by the Underwriters pursuant to Section 7(j) hereof, will be
delivered at the offices of Xxxxx & XxXxxxxx, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (the "CLOSING LOCATION"), and the Shares will be
delivered at the Designated Office, all at such Time of Delivery. A
meeting will be held at the Closing Location at 5:00 p.m., New York
City time, on the New York Business Day next preceding such Time of
Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for
review by the parties hereto. For the purposes of this Section 4, "NEW
YORK BUSINESS DAY" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive
order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved, subject to
the requirements of applicable law and regulation, by you and to file
such Prospectus
9
pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution
and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus which shall be reasonably disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish you
with copies thereof; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus
or prospectus, of the suspension of the qualification of the Shares
for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request
by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information;
and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or
prospectus or suspending any such qualification, promptly to use its
best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under
the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Shares, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process
in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with copies of the Prospectus in
New York City in such quantities as you may reasonably request, and,
if the delivery of a prospectus is required at any time prior to the
expiration of nine months after the time of issue of the Prospectus in
connection with the offering or sale of the Shares and if at such time
any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during
such period to amend or supplement the Prospectus in order to comply
with the Act, to notify you and upon your request to prepare and
furnish without charge to each Underwriter and to any dealer in
securities as many copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time
nine months or more after the time of issue of the Prospectus, upon
your request but at the expense of such Underwriter, to prepare and
deliver to such Underwriter as many copies as you may request of an
amended or supplemented Prospectus complying with Section 10(a)(3) of
the Act;
(d) To make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the
10
Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not
be audited) complying with Section 11(a) of the Act and the rules and
regulations thereunder (including, at the option of the Company, Rule
158);
(e) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose
of, except as provided hereunder, any securities of the Company that
are substantially similar to the Shares, including but not limited to
any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially
similar securities (other than (i) as described in the Prospectus,
(ii) as may be issued in connection with the acquisition of Marquee,
and (iii) pursuant to employee stock option plans existing on, or upon
the conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement), without the prior
written consent of Xxxxxxx, Sachs & Co., which shall not be
unreasonably withheld;
(f) To furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders' equity and cash
flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the
end of each of the first three quarters of each fiscal year (beginning
with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of
the Company and its subsidiaries for such quarter in reasonable
detail;
(g) During a period of five years from the effective date of
the Registration Statement, to furnish to you copies of all reports or
other communications (financial or other) furnished to stockholders,
and to deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the
Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally or to the Commission);
(h) To use the net proceeds received by it from the sale of
the Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "USE OF PROCEEDS;"
(i) To use its best efforts to list for quotation the Shares
on the National Association of Securities Dealers Automated Quotations
National Market System ("NASDAQ") and;
(j) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the
Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act.
11
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
reasonable expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey (iv) all fees and expenses in connection with listing the
Shares on the NASDAQ; (v) the filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Shares; (vi) the cost of preparing stock certificates;
(vii) the cost and charges of any transfer agent or registrar; and (viii) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section. It
is understood, however, that, except as provided in this Section, and Sections
8 and 11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, stock transfer taxes on resale of any of
the Shares by them, and any advertising expenses connected with any offers they
may make.
7. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at each Time of Delivery, shall be subject, in their discretion,
to the condition that all representations and warranties and other statements
of the Company herein are, at and as of such Time of Delivery, true and
correct, the condition that the Company shall have performed all of its
obligations hereunder therefore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Company has elected to
rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective by 10:00 P.M., Washington, D.C. time, on the
date of this Agreement; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied
with to your reasonable satisfaction;
(b) Xxxxxx & Xxxxxxx, counsel for the Underwriters, shall
have furnished to you such written opinion or opinions, dated such
Time of Delivery, with respect to such matters as you may reasonably
request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon
such matters;
(c) Xxxxx & XxXxxxxx, counsel for the Company, shall have
furnished to you their written opinion (a draft of such opinion is
attached as Annex I hereto), dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
12
(i) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware with full corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Prospectus, is in good standing,
in each jurisdiction or place where the nature of its
business requires such registration or qualification, except
where the failure to be so qualified would not have a
material adverse effect on the assets, liabilities, results
of operations, management, condition (financial or other),
properties, business or net worth of the Company and its
direct and indirect subsidiaries, taken as a whole (a
"MATERIAL ADVERSE EFFECT");
(ii) Each subsidiary listed on Schedule III (the
"Subsidiaries") is validly existing and in good standing in
the jurisdiction of its formation, with full corporate or
analogous power and authority to own, lease and operate its
properties and to conduct its business as described in the
Prospectus, is duly registered and qualified to conduct its
business and is in good standing, in each jurisdiction or
place where the nature of its business requires such
registration or qualification, except where the failure to be
so qualified would not have a Material Adverse Effect;
(iii) The Company has an authorized capitalization
as set forth in the Prospectus and the Shares to be issued
and sold by the Company to the Underwriters pursuant to this
Agreement have been duly and validly authorized and, when
issued and delivered against payment therefor as provided in
this Agreement, will be duly and validly issued and fully
paid and non-assessable;
(iv) The Company and each of the Subsidiaries has
full power and authority to enter into this Agreement and the
acquisition agreements relating to each of the Pending
Acquisitions (the "ACQUISITION DOCUMENTS") (each a
"TRANSACTION DOCUMENT" and collectively the "TRANSACTION
DOCUMENTS"), and to carry out all the terms and provisions,
as provided herein and therein;
(v) The execution and delivery of each of the
Transaction Documents to which the Company or any of the
Subsidiaries are a party have been duly authorized by the
Company and each of the Subsidiaries party thereto and each
of such other Transaction Documents which has been executed
prior to or on the date hereof has been duly executed and
delivered by the Company and each of the Subsidiaries party
thereto and is the legal, valid and binding agreement of the
Company and each of the Subsidiaries party thereto (assuming
it is a legal, valid and binding agreement of the other
parties thereto), enforceable against the Company and each of
the Subsidiaries party thereto in accordance with its terms
except to the extent that: (i) the same may be limited by
bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other laws now or hereafter in
effect relating to creditors' rights generally or by general
principles of equity whether asserted in an action at law or
in equity; and (ii) rights to indemnity and contribution
hereunder may be limited by state or federal securities laws;
(vi) Except (i) as disclosed in the Prospectus, (ii)
for approvals of the lenders under the Credit Facility with
respect to the Pending Acquisitions, (iii) for approvals
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 with respect to the Pending Acquisitions and (iv) as
disclosed in the Acquisition
13
Documents relating to the Pending Acquisitions (including all
schedules and attachments) with respect to the Pending
Acquisitions, the issue and sale of the Shares, the
execution, delivery and performance of this Agreement by the
Company, the execution, delivery and performance by the
Company of the other Transaction Documents, and the
consummation by the Company and the Subsidiaries of the
transactions contemplated hereby and thereby will not (A) to
the knowledge of such counsel require any consent, approval,
authorization or other order (which has not been obtained) of
any court, regulatory body, administrative agency or other
governmental body except such as may be required under the
Securities Act, securities regulatory bodies (including
self-regulatory bodies), securities exchanges or the
securities or Blue Sky laws of the various states and under
the Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvement Act of 1976; (B)
conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of
the Company, or any of the Subsidiaries; (C) to the knowledge
of such counsel require any consent or approval (which has
not been obtained) of the parties to, or conflict with or
constitute a breach of any of the terms or provisions of, or
a default under, any agreement or other instrument to which
the Company or any of the Subsidiaries is a party or by which
the Company or any of the Subsidiaries or their respective
property is bound; (D) to the knowledge of such counsel
violate or conflict with any laws or administrative
regulations, rulings of court, decrees applicable to the
Company, any of the Subsidiaries or their respective
property; or (E) to the knowledge of such counsel result in
the creation or imposition of any lien, other than under the
Credit Facility, on any asset of the Company or any of the
Subsidiaries, except, in the case of (A), (C), (D), or (E)
above, such as would not, either singly or in the aggregate,
have a Material Adverse Effect or prevent the Company from
performing its obligations hereunder;
(vii) The capital stock of the Company conforms in
all material respects to the description thereof contained in
the Prospectus under the caption "DESCRIPTION OF CAPITAL
Stock," and the statement contained under the caption
"AGREEMENTS RELATED TO THE PENDING ACQUISITIONS" insofar as
they purport to describe the provisions of the documents
referred to therein, are accurate, complete and fair in all
material respects;
(viii) To such counsel's knowledge, other than as
set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of the Subsidiaries are a party or of which any property of
the Company or any of the Subsidiaries are the subject which,
if determined adversely to the Company, any of the
Subsidiaries would individually or in the aggregate have a
Material Adverse Effect; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(ix) The Company is not and, after giving effect to
the offering and sale of the Shares, will not be (i) an
"investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "INVESTMENT
COMPANY ACT"), or (ii) a "holding company" or a "subsidiary
company" or an "affiliate" of a holding company within the
meaning of the Public Utility Holding Company Act of 1935, as
amended;
14
(x) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made by
the Company prior to such Time of Delivery (other than the
financial statements and related schedules therein, as to
which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the Act and
the rules and regulations thereunder.
Such counsel shall also state that they have
participated in conferences with officers and other
representatives of the Company and the Subsidiaries,
representatives of the independent public accountants of the
Company and the Subsidiaries and representatives of and
counsel for the Underwriters at which the contents of the
Registration Statement and the Prospectus and related matters
were discussed and, although such counsel has not undertaken
to investigate or verify independently, and does not assume
any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration
Statement and the Prospectus, on the basis of the foregoing,
no information has come to such counsel's attention that
causes such counsel to believe that the Registration
Statement (except as to (a) financial statements, including
the notes thereto, (b) statistical data and (c) other
financial information (including, without limitation, the pro
forma financial information, as to which such counsel express
no opinion)), on the effective date thereof (or any amendment
thereof made prior to the date hereof, as of the date of such
amendment), contained an untrue statement of a material fact
or omitted to state a material fact necessary in order to
make the statements therein not misleading, or that the
Prospectus (except as to (a) financial statements, including
the notes thereto, (b) statistical data and (c) other
financial information, (including, without limitation, the
pro forma financial information, as to which we express no
opinion), as of its date or the date hereof contained or
contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and the
subsidiaries and public officials. Such counsel may also state that in
rendering such opinion, any statement or opinion set forth therein
that is qualified by the phrase "to our knowledge" or any similar
phrase, is intended to indicate that, during the course of such
counsel's representation of the Company in the subject transaction, no
information that would give actual knowledge of the inaccuracy of such
statement or opinion has come to the attention of the lawyer who has
worked on matters on behalf of the Company and who is still currently
employed by or a member of Xxxxx & XxXxxxxx. Further, such counsel may
state that Xxxxxx X. Xxxxx, a Director, Executive Vice President,
Secretary and General Counsel of the Company and Executive Vice
President, General Counsel and Secretary of SFX Broadcasting, Inc.
("BROADCASTING") and Executive Vice President and General Counsel of
Sillerman Communications Management Corporation, Inc. ("SCMC") and The
Sillerman Companies, Inc. ("TSC") and a Director of The Marquee Group,
Inc. ("MARQUEE"), is of Counsel to Xxxxx & XxXxxxxx, and that no
assumption should be made that Xxxxx & XxXxxxxx is privy to
information and knowledge which is available to and known by Xx. Xxxxx
in his capacities with the Company, Broadcasting, SCMC, TSC and
Marquee. Such counsel may further state that they have not undertaken
any independent investigation to
15
determine the accuracy of such statement or opinion and no inference
as to their knowledge of any matters bearing on the accuracy of any
such statement or opinion should be drawn from the fact of their
representation of the Company.
(d) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
such Time of Delivery, (i) Ernst & Young LLP, (ii) Xxxxxx Xxxxxxxx LLP
and (iii) Price Waterhouse LLP shall have furnished to you a letter or
letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you;
(e) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference with
its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have
been any change in the capital stock or long-term debt of the Company
or any of its subsidiaries or any change, or any development involving
a prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company or its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in Clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares being delivered at such Time of Delivery on the terms and in
the manner contemplated in the Prospectus;
(f) The Company shall have entered into each of the
Transaction Documents, the form and substance of each of which shall
be reasonably acceptable to the Underwriters (provided that any
Transaction Document that was entered into and delivered to each of
the Underwriters and their counsel prior to the date of this Agreement
shall be deemed acceptable to the Underwriters) in form and substance
for purposes of this Section (7), and the Underwriters shall have
received counterparts, conformed as executed, thereof and of all other
documents and agreements entered into in connection therewith. There
shall exist at and as of the Closing Date, after giving effect to the
transactions contemplated by this Agreement and the other Transaction
Documents, no conditions that would constitute a default (or an event
that with notice or the lapse of time, or both, would constitute a
default) under any of the other Transaction Documents or that would
have a Material Adverse Effect on the Company's ability to consummate
the Pending Acquisitions as described in the Prospectus. Each
Transaction Document shall be in full force and effect.
(g) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization," as that term
is defined by the Commission for purposes of Rule 436(g)(2) under the
Act, and (ii) no such organization shall have publicly announced that
it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities;
(h) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the
16
New York Stock Exchange or on NASDAQ; (ii) a suspension or material
limitation in trading in the Company's securities on NASDAQ; (iii) a
general moratorium on commercial banking activities declared by either
Federal or New York, State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if
the effect of any such event specified in this Clause (iv) in the
judgment of the Representatives makes it impracticable or inadvisable
to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(i) The Shares to be sold at such Time of Delivery shall have
been duly listed for quotation on NASDAQ;
(j) The Company has obtained and delivered to the
Underwriters executed copies of an agreement from the stockholders
listed on Schedule II hereto, substantially to the effect set forth in
Subsection 5(e) hereof in the form previously specified by you;
(k) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
(l) (i) The Company shall have filed with the Commission a
rescission offer registration statement on Form S-1 relating to the
shares of Stock to be issued pursuant to the Pending Acquisitions,
(ii) the Commission shall have declared such rescission offer
registration statement to be effective and (iii) the Company shall
have consummated such rescission offer; and
(m) The Company shall have furnished or caused to be
furnished to you at such Time of Delivery certificates of officers of
the Company satisfactory to you as to the accuracy of the
representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a), (e) and (g)
of this Section and as to such other matters as you may reasonably
request.
(n) The Company shall have furnished to you a letter, in form
and substance satisfactory to you, to the effect that the Company will
not waive any provisions of the Xxx Xxx Agreement or any agreement
associated therewith that provides for a customary "lock-up" period
without the prior written consent of Xxxxxxx, Sachs & Co.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any
17
Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Xxxxxxx, Xxxxx
& Co. expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through Xxxxxxx, Sachs & Co. expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Shares.
18
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this subsection
(d) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above
in this subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such
19
Shares, then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to
you to purchase such Shares on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you have so arranged
for the purchase of such Shares, or the Company notifies you that it has so
arranged for the purchase of such Shares, you or the Company shall have the
right to postpone such Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person
had originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company shall
have the right to require each non-defaulting Underwriter to purchase the
number of shares which such Underwriter agreed to purchase hereunder at such
Time of Delivery and, in addition, to require each non-defaulting Underwriter
to purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Company to sell the
Optional Shares) shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company, except for the expenses to be
borne by the Company and the Underwriters as provided in Section 6 hereof and
the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof; but, if for any other reason,
any Shares are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company
shall then be under no further liability to any Underwriter except as provided
in Sections 6 and 8 hereof.
20
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to you as the representatives in care of Xxxxxxx,
Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail to the
address of the Company set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
[Signature page(s) follow]
21
If the foregoing is in accordance with your understanding, please sign
and return to us counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Underwriters and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
SFX ENTERTAINMENT, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President
Underwriting signature page(s)
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
By /s/ Xxxxxxx, Sachs & Co.
---------------------------
(Xxxxxxx, Xxxxx & Co.)
Xxxxxx Brothers Inc.
By: /s/ Xxxx Xxxxxx
--------------------------
Name: Xxxx Xxxxxx
Title:
Bear, Xxxxxxx & Co. Inc.
By: /s/ Xxxxxxx Xxxxxx
---------------------------
Name: Xxxxxxx Xxxxxx
Title: Senior Managing Director
Xxxxx & Company
By: /s/ Xxxx X. Xxxxxx
---------------------------
Name: Xxxx X. Xxxxxx
Title:
Xxxxxx Xxxxxxx & Co. Incorporated
By: /s/ Xxxxxxxx X. Knee
---------------------------
Name: Xxxxxxxx X. Knee
Title: Principal
Prudential Securities Incorporated
By: /s/ Xxxx-Xxxxxx Canfin
--------------------------
Name: Xxxx-Xxxxxx Canfin
Title: Managing Director
On behalf of each of the Underwriters
Underwriting signature page(s)
SCHEDULE I
NUMBER OF
OPTIONAL SHARES
TOTAL NUMBER OF TO BE PURCHASED
FIRM SHARES IF MAXIMUM
TO BE PURCHASED OPTION EXERCISED
UNDERWRITER
Xxxxxxx, Sachs & Co.................................................... 1,750,000 262,500
Xxxxxx Brothers Inc.................................................... 1,750,000 262,500
Bear, Xxxxxxx & Co. Inc................................................ 875,000 131,250
Xxxxx & Company........................................................ 875,000 131,250
Xxxxxx Xxxxxxx & Co. Incorporated...................................... 875,000 131,250
Prudential Securities Incorporated..................................... 875,000 131,250
--------- ---------
TOTAL......................................................... 7,000,000 1,050,000
========= =========
Schedule I
SCHEDULE II
List of required Lock-Up Letters
1. Xxxxxx F.X. Sillerman
2. Xxxxxxx X. Xxxxxx
3. Xxxxx Xxxxxx
4. Xxxxxx X. Xxxxx
5. Xxxxxx X. Xxxxxx
6. Xxxxxxx X. Xxxxx
7. D. Xxxxxxxx Xxxxxxxxx
8. Xxxxx X. X'Xxxxx, Xx.
9. Xxxx Xxxxxx
10. Xxxxxx X. Xxxxx
Schedule II
