PHJ&W DRAFT
8/13/99
SFX ENTERTAINMENT, INC.
CLASS A COMMON STOCK
(par value $.01 per share)
INTERNATIONAL UNDERWRITING AGREEMENT
August __, 1999
BEAR, XXXXXXX INTERNATIONAL LIMITED
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
SOCIETE GENERALE SA
BANCBOSTON XXXXXXXXX XXXXXXXX INTERNATIONAL LIMITED
PRUDENTIAL-BACHE SECURITIES (U.K.) INC.
As Representatives of the several
International Managers named in
Schedule I hereto,
c/o Bear, Xxxxxxx International Limited
Xxx Xxxxxx Xxxxxx
Xxxxxx X00 0XX
Xxxxxx Xxxxxxx
and
c/x Xxxxxx Brothers International (Europe)
Xxx Xxxxxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Ladies and Gentlemen:
SFX Entertainment, Inc., a Delaware corporation (the "COMPANY"), proposes
to sell, pursuant to the terms of this Agreement, to the several underwriters
named in Schedule I hereto (the "INTERNATIONAL MANAGERS," or, each, an
"INTERNATIONAL MANAGER"), an aggregate of ____________ shares of Class A Common
Stock, $.01 par value (the "COMMON STOCK") of the Company. The aggregate of
shares so proposed to be sold is hereinafter referred to as the "INTERNATIONAL
FIRM STOCK." The Company also proposes to sell to the International Managers,
upon the terms and conditions set forth in Section 2 hereof, up to an additional
__________ shares of Common Stock (the
"INTERNATIONAL OPTIONAL STOCK") solely to cover over-allotments in connection
with the sale of the International Firm Stock. The International Firm Stock and
the International Optional Stock are hereinafter collectively referred to as the
"INTERNATIONAL STOCK." Bear, Xxxxxxx International Limited ("BEAR, XXXXXXX"),
Xxxxxx Brothers International (Europe) ("XXXXXX"), Xxxxxx Xxxxxxx & Co.
International Limited, Societe Generale SA, BancBoston Xxxxxxxxx Xxxxxxxx
International Limited and Prudential-Bache Securities (U.K.) Inc. are acting as
representatives of the several International Managers and in such capacity are
hereinafter referred to as the "INTERNATIONAL REPRESENTATIVES."
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "U.S. UNDERWRITING AGREEMENT") providing
for the sale to the several underwriters named in Schedule II hereto (the "U.S.
UNDERWRITERS," or, each, a "U.S. UNDERWRITER"), of an aggregate of _________
shares of Common Stock of the Company. The aggregate of ________ shares so
proposed to be sold is hereinafter referred to as the "U.S. FIRM STOCK." The
Company also proposes to sell to the U.S. Underwriters, upon the terms and
conditions set forth in Section 2 thereof, up to an additional _____ shares of
Stock (the "U.S. OPTIONAL STOCK"). The U.S. Firm Stock and the U.S. Optional
Stock are hereinafter collectively referred to as the "U.S. STOCK." Bear,
Xxxxxxx & Co. Inc., Xxxxxx Brothers Inc., Xxxxxx Xxxxxxx & Co. Incorporated, XX
Xxxxx Securities and Prudential Securities Incorporated are acting as
representatives of the several U.S. Underwriters and in such capacity are
hereinafter referred to as the "U.S. REPRESENTATIVES." The respective closings
under this Agreement and the U.S. Underwriting Agreement are hereby expressly
made conditional upon one another.
The International Managers and U.S. Underwriters are hereinafter
collectively referred to as the "UNDERWRITERS." The International Stock and the
U.S. Stock are hereinafter collectively referred to as the "STOCK." The
International Firm Stock and the U.S. Firm Stock are hereinafter collectively
referred to as the "FIRM STOCK." The International Optional Stock and the U.S.
Optional Stock are hereinafter referred to as the "OPTIONAL STOCK." Two forms of
prospectus are to be used in connection with the offering and sale of shares of
Common Stock contemplated by the foregoing, one relating to the U.S. Stock and
the other relating to the International Stock. The latter form of prospectus
will be identical to the former except for certain substitute pages as included
in the registration statement and amendments thereto. Reference hereinto any
prospectus, whether in preliminary or final form, and whether as amended or
supplemented, shall include both the U.S. and the international versions
thereof.
The Company understands that the International Managers and the U.S.
Underwriters will concurrently enter into an agreement between the U.S. and
international underwriting syndicates of even date herewith (the "AGREEMENT
BETWEEN U.S. UNDERWRITERS AND INTERNATIONAL MANAGERS") providing for the
coordination of certain transactions among the U.S. Underwriters and
International Managers and that, pursuant thereto and subject to the conditions
set forth therein, the U.S. Underwriters may
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purchase from the International Managers a portion of the International Stock or
sell to the International Managers a portion of the U.S. Stock. The Company
understands that any such purchases and sales between the U.S. Underwriters and
the International Managers shall be governed by the Agreement Between U.S.
Underwriters and International Managers and shall not be governed by the terms
of this Agreement or the U.S. Underwriting Agreement.
The Company understands that the International Managers propose to make a
public offering of the International Stock as soon as the International
Representatives deem advisable after this Agreement has been executed and
delivered.
1. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the several International Managers that:
(a) A registration statement on Form S-3 (File No. 333-84371),
including all amendments thereto (the "INITIAL REGISTRATION STATEMENT"), in
respect of the Stock has (i) been filed with the Securities and Exchange
Commission (the "COMMISSION") thereunder and (ii) 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 (other than documents
specifically incorporated by reference therein) with respect to the Initial
Registration Statement has heretofore been filed with the Commission; and (iv)
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 documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Act 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) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will
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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 Bear, Xxxxxxx and Xxxxxx expressly for use
therein;
(c) 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 Stock to facilitate the sale and resale of the Stock;
(d) Except as described in the Prospectus, neither the Company nor its
subsidiaries has sustained since the date of the latest audited financial
statements included in the Prospectus any material loss or interference with
their respective 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 material change in the capital stock or long term debt (other than
borrowings in the ordinary course of business) of the Company or any of its
subsidiaries, or any material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, otherwise than
as set forth or contemplated in the Prospectus;
(e) To the Company's knowledge, as of the date hereof, the
representations and warranties in the Apollo Acquisition Agreement when made (or
as of any date deemed made) (the "ACQUISITION AGREEMENT") are true and correct
in all material respects;
(f) The Company and its subsidiaries have good and marketable title in
fee simple to all real property and marketable title to all personal property
owned by them, in each case free and clear of all liens, encumbrances and
defects except as (i) described in the Prospectus (ii) as permitted under the
Senior Credit Facility or (iii) where the failure to have such title would not
reasonably be expected to have a material adverse effect on the financial
condition or results of operations 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 and its subsidiaries are
held by them under valid, subsisting and enforceable leases, except as would not
have a Material
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Adverse Effect after giving effect to the Apollo Acquisition ("APOLLO")(the
"PENDING ACQUISITION");
(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 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 reasonably be expected to have
a Material Adverse Effect;
(h) Each Significant Subsidiary (as defined in Regulation S-X of the
Securities Act) 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 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 reasonably be expected to 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,
free of any pre-emptive or similar rights and conform to the description of the
capital 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, except as set
forth in the Prospectus, free of any preemptive or similar rights, and, except
as set forth in the Prospectus or the Registration Statement 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 of stock to be issued and sold by the Company
to the International Managers hereunder have been duly and validly authorized
and, when issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non assessable, free of any
preemptive or similar rights and will conform to the description of the Stock
contained in the Prospectus;
(k) The Company or its subsidiaries, as applicable, have full corporate
power and authority to enter into the Underwriting Agreements and the
Acquisition Agreement and to carry out all the terms and provisions, as provided
herein and therein;
(l) The execution and delivery of each of the Underwriting Agreements
and the Acquisition Agreement have been duly authorized by the Company
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and the Underwriting Agreements and the Acquisition Agreement are enforceable
against the Company in accordance with their respective 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 or the public policy underlying such laws;
(m) Except (i) as disclosed in the Prospectus and (ii) as disclosed in
the Acquisition Agreement (including all schedules and attachments), the issue
and sale of the Stock by the Company, the execution, delivery and performance of
the Underwriting Agreements by the Company, and 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 of the United
States of America; (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, reasonably be expected to have a Material Adverse Effect or prevent
the Company from performing its obligations hereunder or under the U.S.
Underwriting Agreement;
(n) Neither the Company, nor any of its subsidiaries is in violation of
its Certificate of Incorporation, By-laws or similar organizational documents 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 which would
reasonably be expected to have a Material Adverse Effect or prevent the Company
from performing its obligations hereunder or under the U.S. Underwriting
Agreement;
(o) The statements contained under the caption "AGREEMENTS RELATED TO
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;
6
(p) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company, or any of its
subsidiaries is a party or of which any property of the Company, or any of its
subsidiaries is subject which would individually or in the aggregate reasonably
be expected to have a Material Adverse Effect, and, to the best of the Company's
knowledge, no such proceedings have been threatened by governmental authorities
or 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 of the Company, any
convertible or exchangeable securities or obligations, or any 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 by such person or to
require the Company to include such securities in 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 Stock, 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 and its
subsidiaries included in the Prospectus present fairly in all material respects
the financial position of the Company on a consolidated basis 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 in all
material respects, on the basis stated in the Prospectus, the information
included. The other financial, numerical and statistical information and data
7
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, and its subsidiaries, as applicable. The unaudited
pro forma condensed combined financial statements and the related notes thereto
included in the Prospectus present fairly, as stated therein, in all material
respects the pro forma consolidated financial position and results of operations
of the Company at the respective dates and for the respective 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, (iii)
PricewaterhouseCoopers LLP, (iv) Deloitte & Touche and (v) Xxxxx Partnership,
who have certified certain financial statements of the Company, its subsidiaries
and/or the entities to be acquired in the Pending Acquisitions, are each
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(w) 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;
(x) Except as disclosed in the Prospectus, each of the Company and its
subsidiaries is operating in material compliance with all 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 reasonably
be expected to have a Material Adverse Effect;
(y) Except as, singly or in the aggregate, would not reasonably be
expected to 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 knowledge that any governmental body or agency is
considering limiting, suspending or revoking any Permit;
(z) The Company and its subsidiaries 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
8
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 reasonably be expected to have a Material Adverse
Effect);
(aa) Each of the Company, and its subsidiaries 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;
(bb) There is (i) no material unfair labor practice complaint pending
against the Company, any of its subsidiaries 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 material grievance or
material arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company, or any of its
subsidiaries 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 or any of its subsidiaries nor, to the knowledge of the
Company, threatened against the Company or any of its subsidiaries, except, in
each case, as would not reasonably be expected to have a Material Adverse
Effect;
(cc) 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
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 reasonably be expected to have a Material Adverse Effect. None of the
Company or its subsidiaries 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
9
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, in any case, would
reasonably be expected to, either individually or in the aggregate, have a
Material Adverse Effect;
(dd) Each of the Company, and its subsidiaries has 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 failure
would not reasonably be expected to 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;
(ee) 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 Stock to violate 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;
(ff) The Company has delivered to the International Managers true and
correct, executed copies of each Acquisition Agreement 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 International Managers shall previously have been
advised and shall not have reasonably objected after being furnished a copy
thereof;
(gg) The Company's present intention is to use the net proceeds
received by it from the sale of the Stock pursuant to this Agreement in the
manner specified in the Prospectus under the caption "USE OF PROCEEDS"; and
(hh) The Company and its subsidiaries are implementing a comprehensive
program to analyze and address the risk that the computer hardware and software
used by them may be unable to recognize and properly execute date-sensitive
functions involving certain dates prior to and any dates after December 31,
1999, and, except as disclosed in the Prospectus, reasonably believe that such
risk will be remedied on a timely basis without material expense and will not
have a material adverse effect upon the financial condition and results of
operations of the Company and its subsidiaries taken as a whole.
(ii) Since the end of its last fiscal year the Company has filed with
the Commission all documents required to have been filed by the Company pursuant
to the Securities Exchange Act of 1934, as amended. Each such document, when
filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act 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 light of the circumstances under
which they were made, not misleading.
10
(jj) Neither the Company nor, to the knowledge of the Company, any of
its officers, directors, partners, employees or affiliates has, directly or
indirectly, given or agreed to give on behalf of the Company any money, gift or
similar benefit (other than legal price or services concessions to customers) to
any customer, supplier, employee or agent of a customer or supplier, official or
employee of any governmental agency (domestic or foreign), instrumentality of
any government (domestic or foreign) or other person who was, is or is
reasonably likely to be in a position to help or hinder the business of the
Company (or assist the Company in connection with any actual or proposed
transaction) which would reasonably be expected to subject the Company to any
damage or penalty in any civil, criminal or governmental litigation or
proceeding (domestic or foreign), which would reasonably be expected to have a
Material Adverse Effect.
Notwithstanding the foregoing, any exceptions to the representations
and warranties contained in the Acquisition Agreements shall be deemed to be
included in the applicable representation or warranty contained in this
Agreement.
2. Purchase by, and Sale and Delivery to, International Managers. Subject
to the terms and conditions herein set forth, the Company agrees to issue and
sell to each of the International Managers, and each of the International
Managers agrees, severally and not jointly, to purchase from the Company, at a
purchase price per share of $_____, the number of shares of International Firm
Stock set forth opposite the name of such International Manager in Schedule I
hereto and (b) in the event and to the extent that the International Managers
shall exercise the election to purchase International Optional Stock as provided
below, the Company agrees to issue and sell to each of the International
Managers, and each of the International Managers 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 shares of
International Optional Stock 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 shares of International Optional Stock by a fraction,
the numerator of which is the maximum number of shares of International Optional
Stock which such International Manager is entitled to purchase as set forth
opposite the name of such International Manager in Schedule I hereto and the
denominator of which is the maximum number of International Optional Stock that
all of the International Managers are entitled to purchase hereunder.
The Company hereby grants to the International Managers the right to
purchase at their election up to _________ shares of International Optional
Stock, 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 Stock. Any such
election to purchase Optional Stock may be exercised only by written notice from
you to the Company, given within a period of 30 calendar days after the date of
this Agreement, setting forth the aggregate number of shares of International
Optional Stock to be purchased and the date on which such shares of Optional
Stock are to be delivered, as determined by you but in no event
11
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 three or
later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the shares of
International Firm Stock, the several International Managers propose to offer
the International Firm Stock for sale upon the terms and conditions set forth in
the Prospectus.
4. Time of Delivery. (a) The International Stock to be purchased by each
International Manager hereunder, in definitive form, and in such authorized
denominations and registered in such names as Bear, Xxxxxxx and Xxxxxx may
request upon at least forty-eight hours' prior notice to the Company shall be
delivered by or on behalf of the Company to Bear, Xxxxxxx and Xxxxxx for the
account of such International Manager, against payment by or on behalf of such
International Manager of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Company to Bear, Xxxxxxx and
Xxxxxx at least forty-eight hours in advance. The Company will cause the
certificates representing the International Stock to be made available for
checking and packaging at least twenty-four hours prior to Delivery (as defined
below) with respect thereto at the office of Bear, Xxxxxxx International
Limited, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and Xxxxxx Brothers
International (Europe), 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (each a
"DESIGNATED OFFICE"). The time and date of such delivery and payment shall be,
with respect to the International Firm Stock, 9:30 a.m., New York City time, on
August ____, 1999, or such other time and date as Bear, Xxxxxxx, Xxxxxx and the
Company may agree upon in writing, and, with respect to the International
Optional Stock, 9:30 a.m., New York time, on the date specified by Bear, Xxxxxxx
and Xxxxxx in the written notice given by Bear, Xxxxxxx and Xxxxxx of the
International Managers' election to purchase such International Optional Stock,
or such other time and date as Bear, Xxxxxxx, Xxxxxx and the Company may agree
upon in writing. Such time and date for delivery of the International Firm Stock
is herein called the "FIRST TIME OF DELIVERY," such time and date for delivery
of the International Optional Stock, 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 Stock and any additional documents requested by the
International Managers pursuant to Section 7(j) hereof, will be delivered at the
offices of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "CLOSING LOCATION"), and the Stock will be delivered at a
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
12
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. Covenants and Agreements of the Company. The Company covenants and
agrees with the several International Managers:
(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 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 Stock 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 Stock for offering and sale under the
securities laws of such U.S. 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 Stock, 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 12:00 noon., 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 International Managers 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 Stock and if at such time any
13
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 International Managers 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 International Managers is required to
deliver a prospectus in connection with sales of any of the Stock at any time
nine months or more after the time of issue of the Prospectus, upon your request
but at the expense of such International Managers, to prepare and deliver to
such International Managers as many copies as you may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) During the period beginning on the date hereof and continuing to
and including the date 90 days after the date of the Prospectus, not to (A)
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder, any shares of Stock or any securities of the Company that are
substantially similar to the Stock, 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
acquisitions of Apollo, (iii) as may be issued in connection with the
acquisitions other than Apollo provided that the persons to whom such securities
are issued agree not to publicly resell such securities during such 90-day
period, and (iv) pursuant to employee and/or director stock option plans
existing on the date of this agreement, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of the date hereof or
granted pursuant to such existing employee or director stock option plans), or
(B) after the date hereof, waive any provision in the Apollo Acquisition
Agreement restricting the transfer of the securities to be issued thereunder, in
either case without the prior written consent of each of Bear, Xxxxxxx and
Xxxxxx acting together, which shalt not be unreasonably withheld;
(e) To use its best efforts to list for quotation the Stock on the New
York Stock Exchange ("NYSE"); and
(f) 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.
14
6. Payment of Expenses. The Company covenants and agrees with the several
International Managers 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 Stock 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 International Managers and dealers; (ii) the cost of
printing or copying any Agreement among International Managers, 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 Stock; (iii) all expenses in connection with the qualification
of the Stock for offering and sale under state securities laws as provided in
Section 3(b) hereof, including the reasonable fees and disbursements of counsel
for the International Managers in connection with such qualification and in
connection with the Blue Sky Survey (iv) all fees and expenses in connection
with listing the Stock on the NYSE; (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 Stock; (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, 9 and 13 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 Stock by them, and any advertising expenses connected with
any offers they may make.
7. Conditions of International Managers' Obligations. The obligations of
the International Managers hereunder, as to the Stock 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 been filed 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;
15
(b) Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, 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) Winston & Xxxxxx, special counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery,
substantially in the form of Exhibit A, attached hereto.
(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, (iii) PricewaterhouseCoopers LLP, (iv) Deloitte &
Touche and (v) Xxxxx Partnership 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 material 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 material change in the capital stock or long-term debt (other
than borrowing in the ordinary course of business) of the Company or any of its
subsidiaries or any material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, 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 Stock being delivered at such
Time of Delivery on the terms and in the manner contemplated in the Prospectus;
(f) 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 New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the NYSE; (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
clauses (i), (ii), (iii) or (iv), in the judgment of the International
Representatives, makes it
16
impracticable or inadvisable to proceed with the public offering or the delivery
of the Stock being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(g) The Stock to be sold at such Time of Delivery shall have been duly
listed for quotation on the NYSE;
(h) The Company has obtained and delivered to the Underwriters executed
copies of an agreement from the stockholders listed on Schedule III hereto,
substantially in the form set forth as Exhibit B;
(i) 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;
(j) The Company shall have furnished or caused to be furnished to you
at such Time of Delivery certificates of officers of the Company reasonably
satisfactory to you as to the accuracy, in all material respects, of the
representations and warranties of the Company herein at and as of such Time of
Delivery, as to the performance by the Company, in all material respects, 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.
8. Indemnity. (a) The Company agrees to indemnify and hold harmless each
International Manager and each person, if any, who controls any International
Manager within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act against any and all losses, liabilities, claims, damages and
expenses whatsoever as incurred (including but not limited to attorneys' fees
and any and all expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation) to which they or any of them may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, as originally filed or any amendment
thereof, or any related Preliminary Prospectus or the Prospectus, or in any
supplement thereto or amendment thereof, 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;
provided, however, that the Company will not be liable in any such case (i) to
the extent but only to the extent that any such loss, liability, claim, damage
or expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written
17
information furnished to the Company by or on behalf of any International
Manager expressly for use therein and (ii) with respect to any preliminary
prospectus or preliminary prospectus supplement to the extent that any such
loss, claim, damage or liability results from the fact that an International
Manager sold Stock to a person as to whom it shall be established that there was
not sent or given, at or prior to written confirmation of such sale, a copy of
the final prospectus or prospectus supplement as then amended or supplemented in
any case where such delivery is required by the Securities Act if the Company
has previously furnished copies thereof in sufficient quantity to such
International Manager and with sufficient time to effect a delivery, and the
loss, claim, damage or liability of the International Managers results from an
untrue statement or omission of a material fact contained in the preliminary
prospectus or preliminary prospectus supplement which was corrected in the
prospectus or prospectus supplement as then amended, and such correction would
have cured the defect giving rise to such loss, claim, damage or liability. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have, including under this Agreement.
(b) Each International Manager severally, and not jointly, agrees to
indemnify and hold harmless the Company, each of the directors of the Company,
each of the officers of the Company who shall have signed the Registration
Statement, and each other person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, against any and all losses, liabilities, claims, damages and expenses
whatsoever as incurred (including but not limited to attorneys' fees and
expenses incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or Litigation), joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in
either Registration Statement, as originally filed or any amendment thereof, or
any related preliminary prospectus, preliminary prospectus supplement or
prospectus, or in any amendment thereof 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 any
such loss, liability, claim, damage or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any International
Manager expressly for use therein; provided, however, that in no case shall any
International Manager be liable or responsible for any amount in excess of the
underwriting discount applicable to the Stock purchased by such International
Manager hereunder. This indemnity will be in addition to any Liability which any
International Manager may otherwise have, including under this Agreement.
18
(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 each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve the indemnifying party from any
liability which it may have under this Section 8, except to the extent that the
indemnifying party has been prejudiced in any material respect by such failure
or from any liability that it may have otherwise). In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying parties
in connection with the defense of such action, (ii) the indemnifying parties
shall not have employed counsel to have charge of the defense of such action
within a reasonable time after notice of commencement of the action, or (iii)
such indemnified party or parties shall have been advised by counsel that there
may be defenses available to it or them which are different from or additional
to those available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties. Anything in
this Subsection to the contrary notwithstanding, an indemnifying party shall not
be liable for any settlement of any claim or action effected without its written
consent; provided, however, that such consent was not unreasonably withheld.
9. Contribution. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 8 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company and the International
Managers shall contribute to the aggregate losses, claims, damages, liabilities
and expenses of the nature contemplated by such indemnification provision
(including any investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claims asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company any contribution received by
the Company from persons, other than the International Managers, who may also be
liable for contribution, including persons who control the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, officers of the Company who signed the Registration Statement and directors
of the Company) as incurred to which the Company and one or more of the
International Managers may be
19
subject, in such proportions as is appropriate to reflect the relative benefits
received by the Company and the International Managers from the offering of the
Stock or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 8 hereof, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company and the International Managers in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
International Managers on the other hand shall be deemed to be in the same
proportion as (x) the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
and (y) the underwriting discounts and commissions received by the International
Managers, respectively, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault of the Company and the International
Managers 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
or the International Managers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the International Managers agree that it would not be
just and equitable if contribution pursuant to this Section 8 were determined by
pro rata allocation (even if the International Managers 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. Notwithstanding
the provisions of this Section 9, (i) in no case shall any International Manager
be liable or responsible for any amount in excess of the underwriting discount
applicable to the Stock purchased by such International Manager hereunder, and
(ii) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. Notwithstanding
the provisions of this Section 9 and the preceding sentence, no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the Stock underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such International Manager has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. For purposes
of this Section 9, each person, if any, who controls an International Manager
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act shall have the same rights to contribution as such International
Manager, and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of this Section 9. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for
20
contribution may be made against another party or parties, notify each party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 9 or
otherwise, except to the extent the contributing party has been prejudiced in
any material respect by such failures. No party shall be Liable for contribution
with respect to any action or claim settled without its consent; provided,
however, that such consent was not unreasonably withheld.
10. Default by a International Manager. (a) If any International Manager or
International Managers shall default in its or their obligation to purchase
International Firm Stock or International Optional Stock hereunder, and if the
shares of International Firm Stock or International Optional Stock with respect
to which such default relates do not (after giving effect to arrangements, if
any, made by you pursuant to subsection (b) below) exceed in the aggregate 10%
of the total number of shares of International Firm Stock or International
Optional Stock, the shares of International Firm Stock or International Optional
Stock to which the default relates shall be purchased by the non-defaulting
International Managers in proportion to the respective proportions which the
numbers of International Firm Stock set forth opposite their respective names in
Schedule I hereto bear to the aggregate number of International Firm Stock set
forth opposite the names of the non-defaulting International Managers.
(b) In the event that such default relates to more than 10% of the
total number of shares of International Firm Stock or International Optional
Stock, as the case may be, you may in your discretion arrange for yourself or
for another party or parties including any non-defaulting International Manager
or International Managers who so agree) to purchase such International Firm
Stock or International Optional Stock, as the case may be to which such default
relates on the terms contained herein. In the event that within five calendar
days after such a default you do not arrange for the purchase of the
International Firm Stock or International Optional Stock, as the case may be, to
which such default relates as provided in this Section 10, this Agreement or, in
the case of a default with respect to the International Optional Stock, the
obligations of the International Managers to purchase and to sell the
International Optional Stock shall thereupon terminate, without liability on the
part of International Managers with respect thereto (except in each case as
provided in Section 5, 7(a) and 8 hereof), but nothing in this Agreement shall
relieve a defaulting International Manager or International Managers of its or
their liability, if any, to the Company or the other International Managers for
damages occasioned by its or their default hereunder.
(c) In the event that the International Firm Stock or International
Optional Stock to which the default relates are to be purchased by the
non-defaulting International Managers, or are to be purchased by another party
or parties as aforesaid, shall have the right to postpone the Closing Date, as
the case may be, for a period not exceeding five business days in order to
effect whatever changes may thereby be made
21
necessary in the Registration Statement or the Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly any
amendment or supplement to the Registration Statement or the Prospectus which,
in the opinion of International Managers' Counsel, may thereby be made necessary
or advisable. The term "International Manager" as used in this Agreement shall
include any party substituted under this Section 9 with like effect as if it had
originally been a party to this Agreement with respect to such International
Firm Stock and International Optional Stock.
11. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the International Managers and the
Company contained in this Agreement, including the agreements contained in
Section 5, the indemnity agreements contained in Section 8 and the contribution
agreements contained in Section 9, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any International
Manager or any controlling person thereof or by or on behalf of the Company, any
of its officers and directors, or any controlling person of the Company, and
shall survive delivery of and payment for the Stock to and by the International
Managers. The representations contained in Section 1 and the agreements
contained in Sections 6, 8, 9, 12(d) and 15 hereof shall survive the termination
of this Agreement, including termination pursuant to Section 10 or 12 hereof.
12. Effective Date of Agreement; Termination. (a) This Agreement shall
become effective upon the execution and delivery of a counterpart hereof by each
of the parties hereto.
(b) The International Managers shall have the right to terminate this
Agreement at any time prior to the applicable Time of Delivery or the
obligations of the International Managers to purchase the International Optional
Stock at any time prior to the Applicable Time of Delivery, as the case may be,
if on or prior to such date, (i) the Company shall have failed, refused or been
unable to perform in any material respect any agreement on its part to be
performed hereunder, (ii) any other condition to the obligations of the
International Managers hereunder as provided in Section 7 is not fulfilled when
and as required in any material respect, (iii) in the reasonable judgment of the
International Managers any change or development having a Material Adverse
Effect shall have occurred since the respective dates as of which information is
given in the Prospectus, other than as set forth in the Prospectus, (iv) any
downgrading shall have 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 Securities
Act, or any 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, or (v)(A) any domestic or international event
or act or occurrence has materially disrupted, or in the opinion of the
International Managers will in the immediate future materially disrupt, the
market for the Company's securities or for securities in general; or (B) trading
in securities generally on the NYSE
22
or quotations on the Nasdaq shall have been suspended or materially limited, or
minimum or maximum prices for trading shall have been established, or maximum
ranges for prices for securities shall have been required, on such exchange, or
by such exchange or other regulatory body or governmental authority having
jurisdiction; or (C) a banking moratorium shall have been declared by federal or
state authorities, or a moratorium in foreign exchange trading by major
international banks or persons shall have been declared; or (D) there is an
outbreak or escalation of armed hostilities involving the United States on or
after the date hereof, or if there has been a declaration by the United States
of a national emergency or war, the effect of which shall be, in the
International Managers' judgment, to make it inadvisable or impracticable to
proceed with the offering, sale and delivery of the International Firm Stock or
the International Optional Stock, as the case may be, on the terms and in the
manner contemplated by the Prospectus; or (E) there shall have been such a
material adverse change in general economic, political or financial conditions
or if the effect of international conditions on the financial markets in the
jurisdictions in which the International Firm Stock or International Optional
Stock may be offered or sold such as, in the International Managers' judgment,
makes it inadvisable or impracticable to proceed with the offering, sale and
delivery of the International Firm Stock or the International Optional Stock, as
the case may be, on the terms and in the manner contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 12 shall be by
telephone, telex, telegraph or telephonic facsimile, confirmed in writing by
letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (other than pursuant to Section 10(b) or 12(b) hereof), or if
the sale of the Stock provided for herein is not consummated because any
condition to the obligations of the International Managers set forth herein is
not satisfied (other than the condition set forth in Section 7(b)) or because of
any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof, the Company will, subject
to demand by the International Managers, reimburse the International Managers
for all out-of-pocket expenses (including the fees and expenses of their
counsel), incurred by the International Managers in connection herewith.
(ii) If this Agreement shall be terminated pursuant to Section 10
hereof, the Company shall not then be under any liability to any International
Manager except as provided in Sections 6 and 8 hereof.
13. Notices. In all dealings hereunder, you shall act on behalf of each of
the International Managers, and the parties hereto shall be entitled to act and
rely upon any statement, request, notice or agreement on behalf of any
International Manager made or given by you jointly or by Bear, Xxxxxxx
International Limited and Xxxxxx Brothers International (Europe) on behalf of
you as the representatives. All statements, requests,
23
notices and agreements hereunder shall be in writing, and if to the
International Managers shall be delivered or sent by mail, telex or facsimile
transmission to you as the representatives in care of Bear, Xxxxxxx
International Limited, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX, Xxxxxx Xxxxxxx,
Attention: Registration Department and Xxxxxx Brothers International (Europe),
Xxx Xxxxxxxxx, Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx, 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 a International Manager
pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such International Manager at its address set forth in
its International Managers' 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.
14. Parties. This Agreement shall be binding upon, and inure solely to the
benefit of, the International Managers, the Company and, to the extent provided
in Sections 8 and 9 hereof, the officers and directors of the Company and each
person who controls the Company or any International Manager, 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 U.S. Stock from any International Manager
shall be deemed a successor or assign by reason merely of such purchase.
15. 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.
16. Applicable Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
principles of conflict of laws. The Company hereby irrevocably agrees that any
legal action, suit, or proceedings against it with respect to any of its
obligations, liabilities or any other matter under or arising out of or in
connection with this Agreement or for recognition or enforcement of any judgment
rendered in any such action, suit or proceedings may be brought in any state or
federal court in New York and, by execution and delivery of this Agreement, the
Company hereby irrevocably accepts and submits to the non-exclusive jurisdiction
of each of the aforesaid courts in personam generally and unconditionally with
respect to any such action, suit, or proceeding for itself and in respect of any
of their property. The Company further agrees that final judgment against it in
any action, suit or proceeding referred to herein shall be conclusive and may be
enforced in any other jurisdiction, within or outside the United States, by suit
on the judgment, a certified or exemplified copy of each shall be conclusive
evidence of the fact and of the amount of its obligations and liabilities.
24
In addition, the Company hereby irrevocably and unconditionally waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions, suits or proceedings arising out of or in connection with
this Agreement brought in any of the aforesaid courts, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim that any
such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.
The Company hereby appoints _______________ as its authorized agent and hereby
appoints ___________ as its authorized agent (in each case, an "AUTHORIZED
AGENT") upon which process may be served in any action based on this Agreement
that may be instituted in any state or federal court in New York by any
Underwriter or by any person controlling any Underwriter. The Company represents
to each Underwriter that it has notified _______ and _________ respectively, of
such appointments and that _________ and _________ respectively, have accepted
the same in writing. Such appointments shall be irrevocable for a period of five
years from and after the First Closing Date unless and until a successor
Authorized Agent shall be appointed and such successor shall accept such
appointment for the remainder of such five-year period. The Company will notify
each Underwriter in writing of the appointment. The Company will take any and
all action, including the filing of any and all documents and instruments, that
may be necessary to continue such appointment or appointments in full force and
effect as aforesaid. Service of process upon the applicable Authorized Agent (or
its successor) and written notice of such service to the Company by mail to the
address for the Company specified pursuant to Section 14, shall be deemed in
every respect effective service of process upon the Company. In addition to any
other method of service of process upon applicable law, service of process by
notice sent registered mail return receipt requested or delivered, by courier or
otherwise, to the address for the Company specified pursuant to Section 14,
shall be deemed in every respect effective service of process upon the Company.
17. Counterparts. This Agreement may be signed in two (2) or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us.
Very truly yours,
SFX ENTERTAINMENT, INC.
By:_______________________________
Name:
Title:
25
Accepted as of the date first above written.
BEAR, XXXXXXX INTERNATIONAL LIMITED
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
SOCIETE GENERALE SA
BANCBOSTON XXXXXXXXX XXXXXXXX INTERNATIONAL LTD
PRUDENTIAL-BACHE SECURITIES (U.K.) INC.
As Representatives of the several International
Managers
BEAR, XXXXXXX INTERNATIONAL LIMITED
By:_____________________________________
Name:
Title:
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
By:_____________________________________
Name:
Title:
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
By:_____________________________________
Name:
Title:
SOCIETE GENERALE SA
By:_____________________________________
Name:
Title:
BANCBOSTON XXXXXXXXX XXXXXXXX INTERNATIONAL LTD
By:_____________________________________
26
Name:
Title:
PRUDENTIAL-BACHE SECURITIES (U.K.) INC.
By:_____________________________________
Name:
Title:
27
SCHEDULE I
NUMBER OF
SHARES OF
TOTAL NUMBER OF INTERNATIONAL
SHARES OF OPTIONAL
INTERNATIONAL STOCK TO BE
FIRM PURCHASED
STOCK TO BE IF MAXIMUM
INTERNATIONAL MANAGER PURCHASED OPTION EXERCISED
---------------------------------------------------------- ----------------- -----------------
Bear, Xxxxxxx International Limited....................
Xxxxxx Brothers International (Europe).................
Xxxxxx Xxxxxxx & Co. International Limited.............
Societe Generale.......................................
BancBoston Xxxxxxxxx Xxxxxxxx International Ltd
Prudential-Bache Securities (U.K.) Inc.................
----------------- -----------------
TOTAL.............................................
================= =================
28
SCHEDULE II
NUMBER OF SHARES OF
TOTAL NUMBER OF U.S. OPTIONAL
SHARES OF STOCK TO BE
U.S. FIRM PURCHASED
STOCK TO BE IF MAXIMUM OPTION
U.S. UNDERWRITER PURCHASED EXERCISED
-------------------------------------------------- ----------------- -----------------
Bear, Xxxxxxx & Co. Inc..........................
Xxxxxx Brothers Inc..............................
XX Xxxxx Securities Corporation..................
Xxxxxx Xxxxxxx & Co. Incorporated................
BancBoston Xxxxxxxxx Xxxxxxxx Inc................
Prudential Securities Incorporated...............
----------------- -----------------
TOTAL.......................................
================= =================
29
SCHEDULE III
List of required Lock-Up Letters
1. Xxxxxx F.X. Sillerman
2. Xxxxxxx X. Xxxxxx
3. Xxxxx X. Xxxxxx
4. Xxxxx Xxxx
5. Xxxxxx X. Xxxxx
6. Xxxxxx X. Xxxxxx
7. Xxxxxxx X. Xxxxx
8. D. Xxxxxxxx Xxxxxxxxx
9. Xxxxx X. X'Xxxxx, Xx.
10. Xxxx Xxxxxx
11. Xxxxxx X. Xxxxx
12. Xxxx X. Xxxxxx
13. Xxxx X. Xxxxx
[May be revised]
30
EXHIBIT A
August __, 1999
Bear, Xxxxxxx & Co. Inc.
Xxxxxx Brothers Inc.,
As Representatives
for each of the several
U.S. Underwriters
Bear, Xxxxxxx International Limited
Xxxxxx Brothers International (Europe)
As Representatives
for each of the several
International Managers
Ladies and Gentlemen:
We have acted as special counsel to SFX Entertainment, Inc., a Delaware
corporation (the "COMPANY"), in connection with the offer and sale of 7,500,000
shares (the "SHARES") of the Company's Class A Common Stock, par value $.01 per
share (the "COMMON STOCK"). Of the 7,500,000 shares of Common Stock being issued
and sold, (i) [_________] shares are being sold pursuant to the Underwriting
Agreement dated August __, 1999 (the "U.S. UNDERWRITING AGREEMENT"), among the
Company and the several Underwriters named in Schedule I hereto (the "U.S.
UNDERWRITERS") and (ii) _____ shares are being sold pursuant to the Underwriting
Agreement dated August __, 1999 (the "INTERNATIONAL UNDERWRITING AGREEMENT" and,
together with the U.S. Underwriting Agreement, the "UNDERWRITING AGREEMENTS"),
among the Company and the several International Managers named in Schedule II
hereto (the "INTERNATIONAL MANAGERS").
This opinion letter is being furnished to you pursuant to Section ____
of each of the Underwriting Agreements. Capitalized terms used but not defined
herein shall have the meanings set forth in the Underwriting Agreements.
In connection with this opinion letter, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Registration Statement on Form S-3 (File No. 333-84371)
relating to the offering of the Shares, as filed with the Securities and
Exchange Commission (the "COMMISSION") on August __, 1999 under the Securities
Act of 1933, (as so amended, the "REGISTRATION
STATEMENT"); (ii) the final prospectus dated August __, 1999 relating to the
Shares offered and sold in the United States and Canada in the form filed with
the Commission on August __, 1999 (such final prospectus, including documents
incorporated by reference therein, being hereinafter referred to as the "U.S.
PROSPECTUS"); (iii) the final prospectus dated August __, 1999 relating to the
Shares offered and sold outside of the United States and Canada in the form
filed with the Commission on August __, 1999 (such final prospectus, including
documents incorporated by reference therein, being hereinafter referred to as
the "INTERNATIONAL PROSPECTUS" and, together with the U.S. Prospectus, the
"PROSPECTUSES"); (iv) the certificate of incorporation or certificate of
formation and limited liability company agreement, in each case as applicable,
of the Company and each of the subsidiaries of the Company listed on Schedule
III hereto (the "LISTED SUBSIDIARIES"), each as currently in effect; (v) the
By-Laws of the Company and each of the Listed Subsidiaries, each as currently in
effect; (vi) certain resolutions adopted by the Board of Directors of the
Company and a Special Committee thereof relating to, among other things, the
issuance and the sale of the Shares; and (vii) execution copies of the
Underwriting Agreements. We have also examined originals or copies, certified or
otherwise identified to our satisfaction, of such records of the Company and
such certificates of public officials, certificates of officers or
representatives of the Company and others, and such other agreements, documents,
instruments, certificates and records as we have deemed necessary or appropriate
as a basis for the opinions set forth below.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and the validity and binding effect thereof. As to any
facts material to the opinions expressed herein which we did not independently
establish or verify, we have relied upon oral and written statements and
representations of officers and other representatives of the Company and others.
Members of our firm are admitted to the bar in the State of New York,
and we do not express any opinion as to the laws of any other jurisdiction other
than the General Corporation Law of the State of Delaware and the Delaware
Limited Liability Company Act and the federal laws of the United States of
America to the extent referred to specifically herein.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is 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 Prospectuses. The Company is duly qualified to do
business and is in
2
good standing as a foreign corporation in each jurisdiction in which the nature
of its business requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the business, results of
operations or the condition (financial or otherwise) of the Company and its
direct and indirect subsidiaries, taken as a whole (a "MATERIAL ADVERSE
EFFECT").
2. Each Listed Subsidiary is validly existing and in good standing in
the jurisdiction of its organization indicated on Schedule III hereto, with full
corporate or limited liability company power, as applicable, and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectuses, except where the failure to be in good standing would not
have a Material Adverse Effect.
3. The Company has the authorized capitalization set forth in the
Prospectuses, and the Shares to be issued and sold by the Company to the U.S.
Underwriters and the International Managers pursuant to the Underwriting
Agreements have been duly and validly authorized and, when duly countersigned by
the Company's transfer agent and registrar and issued and delivered in
accordance with the provisions of the Underwriting Agreements, will be duly and
validly issued and fully paid and non-assessable. The Shares conform to the
description of the Common Stock in the Prospectuses.
4. The Underwriting Agreements have been duly authorized, executed, and
delivered by the Company, are legally valid and binding obligations of the
Company, and are enforceable against the Company in accordance with their terms,
except that (a) the enforceability thereof may be subject to (i) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws, now or hereafter in effect, relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity) and (b) Federal and state
securities laws or the public policy underlying such laws may limit the right to
indemnity and contribution thereunder. No consent, authorization, approval,
order, license, certificate, or permit of or from, or declaration or filing
with, any Federal, state, local or other governmental authority or any court or
other tribunal is required by the Company for the execution, delivery, or
performance of the Underwriting Agreements by the Company (except filings under
the Act and with the New York Stock Exchange which have been made and consents,
authorizations, permits, orders and other matters required by the National
Association of Securities Dealers, Inc. or under "blue sky" or state securities
laws, as to which we express no opinion).
5. Except as disclosed in the Prospectuses, the execution, delivery and
performance of the Underwriting Agreements by the Company and the issuance and
sale of the Shares thereunder, will not (A) conflict with or constitute a breach
of any of
3
the terms or provisions of, or a default under, the certificate of incorporation
or by-laws of the Company or of the certificate of incorporation or certificate
of formation and limited liability company agreement, as applicable, or by-laws
of any of the Listed Subsidiaries; (B) to our knowledge, 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 of the Company filed as an exhibit to the
Registration Statement pursuant to Item 601(b)(10) of Regulation S-K under the
Act; (C) to our knowledge, violate or conflict with any law of the United States
of America or the State of New York applicable to the Company, any of the Listed
Subsidiaries or their respective property (provided that we express no opinion
on the rules or regulations of the National Association of Securities Dealers,
Inc. or the "blue sky" or state securities laws of any state or foreign
jurisdiction), except, in the case of clauses (B) and (C) above, such as would
not, either singly or in the aggregate, have a Material Adverse Effect or
prevent the Company from performing its obligations pursuant to the Underwriting
Agreements.
6. The statements contained in the Prospectuses under the caption
"Description of Capital Stock", insofar as they purport to describe the
provisions of the documents referred to therein, are accurate, complete and fair
in all material respects.
7. To our knowledge, other than as set forth in the Prospectuses, there
are no legal or governmental proceedings pending to which the Company or any of
the Listed Subsidiaries is a party or to which any property of the Company or
any of the Listed Subsidiaries is subject which would reasonably be expected
to have a Material Adverse Effect.
8. 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 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.
9. To our knowledge, the Registration Statement has been declared
effective by the Commission and no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission. The Registration Statement,
as of its effective date, and the Prospectuses, as of their respective dates
(other than the financial statements, schedules and other financial and
accounting information included in or excluded from the Registration Statement
or the Prospectuses, as to which we express no opinion), comply as to form in
all material respects with the requirements of the Act and the rules and
regulations of the Commission thereunder. The documents specifically
incorporated by reference in the Prospectuses prior to the date hereof (other
than the financial statements, schedules and other
4
financial and accounting information included therein or excluded therefrom, as
to which we express no opinion) at the time they were filed with the Commission,
complied as to form in all material respects with the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder.
In addition, we have participated in conferences with officers and
representatives of the Company, representatives of the independent public
accountants of the Company and representatives of the U.S. Underwriters and the
International Managers and their counsel at which the contents of the
Registration Statement, the Prospectuses and related matters were discussed and,
although we are not passing upon and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectuses and have made no independent check or
verification thereof except for those made under the caption "Description of
Capital Stock" in the Prospectuses (to the extent referred to in paragraph 6
hereof), on the basis of the foregoing, no facts have come to our attention that
have led us to believe that (i) the Registration Statement, at the time it
became effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading (other than the information omitted therefrom
in reliance on Rule 430A under the Act) or (ii) either of the Prospectuses, as
of their respective dates and as of the date hereof, contained an untrue
statement of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, except that we express no opinion or belief as
to the financial statements, schedules and other financial, accounting and
statistical information included in or excluded from the Registration Statement
or the Prospectuses.
The foregoing opinions are subject to the following assumptions,
qualifications and limitations:
(A) We have relied, as to matters of fact, to the extent we deemed
proper, on certificates of responsible officers of the Company and the Listed
Subsidiaries and public officials.
(B) Any statement or opinion set forth herein that is qualified by the
phrase "to our knowledge" or any similar phrase, is intended to indicate that,
during the course of our limited 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 any lawyer who has
devoted substantive attention to the subject transaction and who is still
currently employed by or a partner of Winston & Xxxxxx. We have not undertaken
any independent investigation to determine the accuracy of any such statement or
opinion and no inference as to our knowledge of any matters bearing on the
accuracy of any such statement or opinion should be drawn from the fact of our
representation of the Company.
5
(C) In rendering opinions involving a concept of materiality, we have
relied exclusively in such determination on officers of the Company.
(D) We express no opinion as to compliance of the Registration
Statement, the Prospectuses or the documents incorporated by reference into the
Prospectuses with Rule 421 of the Act.
This opinion letter is as of the date hereof and we undertake no, and
disclaim any, obligation to advise you of any changes in any matter set forth
herein. This opinion letter is furnished to you solely for your benefit in
connection with the closing under the Underwriting Agreements occurring today
and is not to be used, circulated, quoted or otherwise referred to for any other
purpose without our express prior written consent.
6
EXHIBIT B
LOCK UP LETTER AGREEMENT
August _____, 1999
SFX ENTERTAINMENT, INC.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
BEAR, XXXXXXX & CO. INC.
XXXXXX BROTHERS INC.
XXXXXX XXXXXXX & CO. INCORPORATED
XX XXXXX SECURITIES CORPORATION
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
PRUDENTIAL SECURITIES INCORPORATED
As Representatives of the
several Underwriters
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
c/x Xxxxxx Brothers Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
BEAR, XXXXXXX INTERNATIONAL LIMITED
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
SOCIETE GENERALE SA
BANCBOSTON XXXXXXXXX XXXXXXXX INTERNATIONAL LTD
PRUDENTIAL-BACHE SECURITIES (U.K.) INC.
As Representatives of the
several International Managers
c/o Bear, Xxxxxxx International Limited
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
c/x Xxxxxx Brothers International (Europe)
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands that Bear, Xxxxxxx & Co. Inc., Xxxxxx
Brothers Inc., Xxxxxx Xxxxxxx & Co. Incorporated, XX Xxxxx Securities
Corporation, BancBoston Xxxxxxxxx Xxxxxxxx Inc., and Prudential Securities
Incorporated, as the U.S. representatives of the several U.S. underwriters, and
Bear, Xxxxxxx International Limited, Xxxxxx Brothers International (Europe),
Xxxxxx Xxxxxxx & Co. International Limited, Societe Generale SA, BancBoston
Xxxxxxxxx Xxxxxxxx International Ltd, and Prudential-Bache Securities (U.K.)
Inc., as the lead managers (together with the U.S. representatives, the
"REPRESENTATIVES") of the several International Managers (together with the U.S.
underwriters, the "UNDERWRITERS"), propose to enter into a U.S. underwriting
agreement (the "U.S. UNDERWRITING AGREEMENT") and an international underwriting
agreement (the "INTERNATIONAL UNDERWRITING AGREEMENT"), respectively, with SFX
Entertainment, Inc. (the "COMPANY") providing for the public offering by the
Underwriters, including the Representatives, of Class A Common Stock, par value
$.01 per share (the "CLASS A COMMON STOCK"), of the Company (the "PUBLIC
OFFERING"). Capitalized terms not defined herein shall have the meaning given
them in the U.S. Underwriting Agreement.
In consideration of the Underwriters' agreement to purchase and
undertake the Public Offering of the Company's Class A Common Stock and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the undersigned agrees that, without the prior written consent of Bear, Xxxxxxx
& Co., Inc. and Xxxxxx Brothers Inc., he, she or it will not, without the prior
written consent of Bear, Xxxxxxx & Co. Inc. and Xxxxxx Brothers Inc., during the
period commencing on the date hereof and ending 60 days after the date of the
Prospectus, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option to contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of the Class A Common Stock, the Company's Class B Common
Stock, par value $.01 per share (the "CLASS B COMMON STOCK" and, together with
the holders of the Class A Common Stock, the "COMMON STOCK"), or any securities
convertible into or exercisable or exchangeable for Common Stock or any right to
acquire Common Stock, or (ii) enter into any swap or similar agreement that
transfers, in whole or in part, the economic risk of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing provisions shall not apply to (i) exercise of options
or warrants, (ii) transfers, without consideration, of the Common Stock or any
securities convertible into, or exercisable or exchangeable for Common Stock to
family members or to one or more trusts established for the benefit of the
undersigned or one or more family members, provided that the transferee executes
and delivers to Bear, Xxxxxxx & Co. Inc. and Xxxxxx Brothers Inc., an agreement
whereby the transferee agrees to be bound by all of the foregoing terms and
provisions, (iii) the conversion of Class B Common Stock into Class A Common
Stock, or (iv) the pledge of Common Stock to secure obligations of the
undersigned or his family members or any trust established for the undersigned
or one or more family members, provided that the pledgee is notified of the
restrictions contained herein.
In addition, the undersigned agrees that the Company may, and that the
undersigned will, (i) with respect to any shares of Common Stock for which the
undersigned is
the record holder, cause the transfer agent for the Company to note
stop-transfer instructions with respect to such shares of Common Stock
consistent with the foregoing paragraph on the transfer books and records of the
Company and (ii) with respect to any shares of Common Stock for which the
undersigned is the beneficial holder but not the record holder, cause the record
holder of such shares of Common Stock to cause the transfer agent for Company to
note stop-transfer instructions with respect to such shares of Common Stock
consistent with the foregoing paragraph on the transfer books and records of the
Company.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this letter agreement,
and that, upon request, the undersigned will execute any additional documents
necessary or desirable in connection with the enforcement hereof. All authority
herein conferred or agreed to be conferred shall survive the death or incapacity
of the undersigned and any obligations of the undersigned shall be binding upon
the heirs, personal representatives, successors, and assigns of the undersigned.
Very truly yours,
___________________________________
___________________________________
(Name - Please Type)
___________________________________
___________________________________
___________________________________
(Address)
___________________________________
(Social Security or Taxpayer I.D. No.)
