Document:

Exhibit 10.9

 

SFX Holding Corporation

430 Park Avenue, 6th Floor

New York, New York 10022

 

SUBSCRIPTION AGREEMENT

 

Adage Capital Management, L.P.

200 Clarendon Street

52nd Floor

Boston, MA 02116

 

Dear Sirs:

 

SFX Holding Corporation., a Delaware corporation (the “Company”), is hereby privately offering (this “Offering”) 2,000,000 shares (the “Shares”) of common stock, $0.001 par value per share, of the Company (the “Common Stock”) at an aggregate purchase price of $10,000,000 (the “Purchase Price”) to the undersigned, in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), provided by Rule 506 of Regulation D under the Securities Act.

 

1.                                      Subscription. Subject to the terms and conditions of this subscription agreement (“Subscription Agreement”), the undersigned (“Purchaser”) hereby agrees to be legally bound to purchase the Shares subscribed for hereunder, and promptly upon acceptance by the Company, Purchaser shall fulfill its subscription by paying the Purchase Price by wire transfer in immediately available funds to an account designated by the Company as consideration for the issuance by the Company of the Shares (the “Closing”).  Original certificates reflecting the Shares shall be provided to Purchaser following the Closing.

 

2.                                      Conditions to Subscription.  This subscription shall be deemed to be accepted by the Company only when it is signed by the Company.  Subscriber has executed and delivered this Subscription Agreement and hereby agrees to tender the Purchase Price at Closing in accordance with the terms hereof.  If this subscription is rejected by the Company in its sole and absolute discretion or because the Company terminates or cancels the Offering, this Subscription Agreement shall thereafter be of no further force or effect.

 

3.                                      Representations and Warranties of Purchaser. Purchaser hereby represents and warrants to, and agrees with, the Company as of the date Purchaser executes this Subscription Agreement, as follows:

 

(a)                                 (i)                                     Purchaser has received and has read and fully understands this Subscription Agreement.

 

(ii)                                  Purchaser acknowledges and understands that an investment in the Company will involve substantial risks.  Purchaser or its advisor(s) have had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Company concerning the Company and the Offering and all such questions have been answered to the full satisfaction of Purchaser.

 

(iii)                               No oral or written representations have been made other than as stated in this Subscription Agreement.

 

(iv)                              Purchaser has such knowledge and experience in financial, tax and business matters so as to enable it to utilize the information made available to it in connection with the Offering, to evaluate the merits and risks of an investment in the Shares and to make an informed decision with respect thereto; Purchaser acknowledges that there is a significant risk of loss of all or a portion of Purchaser’s investment in the Shares.

 

(v)                                 Purchaser is not subscribing for the Shares pursuant to a general solicitation or general advertisement by the Company.

 

 

(vi)                              The Shares are “restricted securities” as defined in Rule 144 under the Securities Act and have not been registered under the Securities Act or any state securities laws.  The Shares are highly illiquid.  Until the Registration Statement is declared effective, the Shares to be issued will not be registered under the Securities Act or any state securities laws and, thus, will not be freely tradable or eligible for resale, unless an exemption from the registration requirements of the Securities Act, including Rule 144, is available.  Purchaser will not be able to rely on Rule 144 to sell the Shares unless the sale complies with the conditions of that rule, including satisfaction of Purchaser’s holding period.  An active public market for the Company’s Common Stock may not develop or be sustained. In addition, the number of unrestricted shares of the Company in the public float may represent only a small percentage of the shares of Company Common Stock outstanding.

 

(b)                                 Purchaser is an “accredited investor” within the meaning of Rule 501(d), as promulgated under the Securities Act because (i) Purchaser is an organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership not formed for the specific purpose of acquiring the Shares, with total assets in excess of $5,000,000, or (ii) because Purchaser is an entity in which all of the equity owners are accredited investors.

 

(c)                                  Purchaser’s overall commitment to investments which are not readily marketable is not excessive in relation to its net worth.

 

(d)                                 (A)   Purchaser has all requisite power and authority to execute and deliver this Subscription Agreement, (B) the execution and delivery by Purchaser of this Subscription Agreement and the performance by it of its obligations hereunder have been duly authorized by all necessary action of Purchaser, (C) this Subscription Agreement has been duly and validly executed and delivered by Purchaser and constitutes legal, valid and binding obligations of Purchaser, and (D) this Subscription Agreement is enforceable against Purchaser in accordance with its terms, subject as to enforcement of remedies to applicable bankruptcy, insolvency, reorganization or similar laws affecting generally the enforcement of creditors’ rights and the relief of debtors.

 

(e)                                  Purchaser acknowledges:

 

(i)                                     Purchaser consents to the placement of the following legend on any certificate or other document evidencing the Shares:

 

THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND HAVE BEEN SOLD IN RELIANCE UPON EXEMPTIONS THEREFROM. THESE SECURITIES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING THESE SECURITIES UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM.

 

(ii)                                  The representations, warranties, and agreements of Purchaser contained herein shall survive the execution and delivery of this Subscription Agreement and the purchase of the Shares; and

 

(iii)                               In connection with any transfer or attempted transfer of Shares pursuant to an exemption from the registration requirements of the Act, the Company shall be permitted to require in its sole discretion an opinion of counsel reasonably satisfactory to the Company that such transfer is exempt from registration.

 

4.                                      Representations and Warranties of the Company. The Company hereby represents and warrants to, and agrees with, Purchaser as of the date the Company executes this Subscription Agreement, as follows:

 

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(a)                                 The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to conduct its business as currently conducted.

 

(b)                                 The Company has all requisite power and authority to execute, deliver and perform this Subscription Agreement and to carry out and consummate the transactions contemplated hereby. The execution, delivery and performance of this Subscription Agreement by the Company has been duly authorized by all requisite corporate action, and this Subscription Agreement has been duly executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject as to enforcement of remedies to applicable bankruptcy, insolvency, reorganization or similar laws affecting generally the enforcement of creditors’ rights and the relief of debtors.

 

(c)                                  The execution, delivery and performance of this Subscription Agreement by the Company will not violate, conflict with, result in any breach of, result in the creation of any lien, security interest, charge or encumbrance upon any of the properties, assets or outstanding shares of the Company or constitute a default under, any provision of law, any rule or regulation of any governmental authority, any judgment, decree or order of any court binding on the Company, or any of the unwaived terms, conditions or provisions under its Certificate of Incorporation or By Laws or any indenture, mortgage, lease, agreement or other instrument to which the Company is a party or by which it or any of its properties is bound or affected.

 

(d)                                 The Shares, when so issued, sold and delivered against payment therefor in accordance with the provisions of this Subscription Agreement, will be duly and validly issued, fully paid and nonassessable.  Neither the Company nor anyone acting on behalf of the Company has engaged in any general advertising or solicitation in contravention of the Securities Act for the offer and sale of the Shares or any other shares of Common Stock.  Assuming the accuracy of Purchaser’s representations contained in this Subscription Agreement, the offer, sale, issuance and delivery of the Shares are exempt from registration under the Securities Act and all action required to be taken prior to the offer or sale of the Shares has been taken under applicable state securities laws.

 

(e)                                  The operations of the Company are, and have been conducted at all times, in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened. Neither the Company nor, to the knowledge of the Company, any of its current officers, has on behalf of the Company or in connection with its business: (a) made any direct or indirect unlawful payments to any governmental officials or employees from corporate funds; or (b) violated or is in violation of in any material respect any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended.

 

(i)                                     The representations, warranties, and agreements of the Company contained herein shall survive the execution and delivery of this Subscription Agreement and the sale of the Shares.

 

5.                                      Confidentiality.  Each party, agrees that they will not disclose, or cause to be disclosed, the fact of the existence or contents of this Subscription Agreement, to any third person other than (a) their attorneys, accountants, employees, affiliates and representatives, (b) as required by law, rule or regulation (including in the Registration Statement), (c) as necessary to enforce this Subscription Agreement, (d) with respect to Purchaser to Purchaser’s direct and indirect investors and potential investors, or (e) in connection with capital raising efforts of the Company.

 

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6.                                      Notices. All notices hereunder shall be sufficient upon receipt for all purposes hereunder if in writing and delivered personally, sent by documented overnight delivery service or, to the extent receipt is confirmed, telecopy, telefax, or other electronic transmission service to the appropriate address or number (a) if to the Company, at the address set forth above, or (b) if to Purchaser, at the address set forth on the signature page hereof (or, in either case, to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 7).

 

7.                                      Counterparts.  This Subscription Agreement may be executed through the use of separate signature pages or in any number of counterparts, and each of such counterparts shall, for all purposes, constitute one agreement binding on all of the parties, notwithstanding that all parties are not signatories to the same counterpart.  Execution and/or delivery by facsimile or electronic means shall constitute an original signature for all purposes.

 

8.                                      Applicable Law. The internal laws of the State of New York (without giving effect to any choice or conflict of law provision or rule (whether of the State of York or any other jurisdiction) that would cause the application of laws of any other jurisdiction) shall govern all matters arising out of or relating to this Subscription Agreement, including its validity, interpretation, construction, performance and enforcement.  Any action or proceeding arising out of or relating to this Subscription Agreement must be brought in the courts of the State of New York, New York County, or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of New York.  Each of the parties knowingly, voluntarily and irrevocably submits to the exclusive jurisdiction of each such court in any such action or proceeding and waives any objection it may now or hereafter have to venue or to convenience of forum. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS SUBSCRIPTION AGREEMENT, OR ANY TRANSACTIONS CONTEMPLATED HEREBY.  EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST IT IN ACCORDANCE WITH THIS SECTION AND FURTHER WAIVES ANY CLAIM BASED ON FORUM NON CONVENIENS.

 

9.                                      Disclosure Notices.

 

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. PURCHASERS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS SUBSCRIPTION AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

 

10.                               Assignment.  Any assignment by either party of its rights and obligations under this Subscription Agreement shall require the prior written consent of the other party hereto.

 

11.                               Group Status.  Nothing contained in this Subscription Agreement shall in any way be construed as Purchaser acting in concert or as a group with any other person with respect to the purchase, disposition or voting of securities or otherwise.

 

[SUBSCRIPTION PAGE FOLLOWS]

 

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SUBSCRIPTION PAGE

 

IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement this 28th day of December, 2012.

 

	
Shares   being purchased:
    	
 
    	
2,000,000   shares
    
	
Purchase   Price:
    	
 
    	
$10,000,000
    

 

Wire Transfer Purchase Price to:

 

Bank:

 

 

ABA:

Account #:

Account Name:

Reference:  SFX Holding Corporation Subscription

 

TYPE OF OWNERSHIP (INITIAL ONE)

 

	
x
    	
PARTNERSHIP   (Please include a
    	
o
    	
TRUST   (Please include name
    
	
 
    	
copy   of the statement of partnership
    	
 
    	
of   trust, name of trustee, date trust
    
	
 
    	
agreement   authorizing signature).
    	
 
    	
was   formed and copy of the trust
    
	
 
    	
 
    	
 
    	
agreement   or other authorization)
    
	
 
    	
 
    	
 
    	
 
    
	
o
    	
CORPORATION
    	
o
    	
LIMITED   LIABILITY COMPANY
    
	
 
    	
 
    	
 
    	
 
    
	
o
    	
INDIVIDUAL
    	
o
    	
OTHER   (Please include type of entity below)
    

 

	
Adage   Capital Partners, L.P.
    	
 
    
	
Please   print exact name (registration) that Purchaser
    	
 
    
	
desires   on records of the Company
    	
 
    
	
 
    	
 
    
	
200   Clarendon Street, 52nd Floor
    	
 
    
	
Boston,   MA 02116
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Telephone
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Fax   Number
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Social   Security or Taxpayer I.D. Number
    	
 
    
	
 
    	
 
    
	
DE
    	
 
    
	
State   of Organization, if applicable
    	
 
    

 

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PARTNERSHIPS

 

If the subscriber is a PARTNERSHIP, complete the following and sign in the space provided:

 

The undersigned hereby represents and warrants that the undersigned is a general partner of the partnership named below (“Partnership”), and has been duly authorized by the Partnership to acquire the Shares and that he has all requisite authority to acquire such Shares.

 

The undersigned represents and warrants that each of the above representations or agreements or understandings set forth herein applies to that Partnership and he is authorized by such Partnership to execute this Subscription Agreement.

 

	
January 7,   2013
    	
 
    	
Adage   Capital Partners, L.P.
    
	
Date
    	
Name   of Partnership
    
	
 
    	
(Please   type or print)
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Dan Lehan
    
	
 
    	
Name:   Dan Lehan
    
	
 
    	
Title:   COO
    

 

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COMPANY’S ACCEPTANCE

 

This Subscription Agreement is only accepted as so acknowledged in writing by the Company.

 

ACCEPTED as to 2,000,000 Shares:

 

SFX Holding Corporation:

 

 

	
By:   
    	
/s/   Shelly Finkel
    	
 
    
	
Name: Shelly Finkel
    	
 
    
	
Title:   President
    	
 
    
	
 
    	
 
    
	
Date:   January 8, 2013
    	
 
    

 

7Exhibit 10.10

 

October 28, 2012

 

Baron Capital

767 Fifth Avenue

49th Floor

New York, New York 10153

 

Re:                             Put Option Letter Agreement

 

Dear Ladies and Gentlemen,

 

This letter when countersigned by you constitutes our agreement that, pursuant to (i) the Assignment and Assumption Agreement dated as of June 21, 2012 between SFX Holding Corporation (“SFX”) and SFX Entertainment Inc. and acknowledged and agreed to by BAMCO, Inc. on behalf of Baron Small Cap Fund (“Baron”), (ii) the Share Exchange Agreement dated as of June 21, 2012 between SFX, SFX Entertainment Inc. and Baron, and (iii) the Subscription Agreement dated June 6, 2012 between SFX Entertainment Inc. and Baron (the “Subscription Agreement”), which was terminated by Baron on October 28, 2012, Baron will promptly fund $5,000,000 to purchase 1,250,000 shares (the “Additional Shares”) of SFX common stock. The parties agree that the proceeds received by SFX with respect to the Additional Shares are being used to fund the formation of the joint venture with ID&T.

 

SFX further agrees that:

 

(A) If SFX does not have a registration statement covering the resale of Baron’s common stock declared effective by the SEC by January 15, 2013, Baron will be permitted to require SFX to each month repurchase up to 10% of the total number of shares originally issued under the Subscription Agreement and this letter that continue to be held by Baron at the original issuance price thereof. Baron shall be entitled to sell such shares to SFX for ten consecutive months starting February 15, 2013 on the terms provided in the previous sentence.

 

(B) If the public offering price of the first primary offering of common stock by SFX or by Baron in a resale secondary offering is less than $4.00 per share, then SFX will issue additional shares to Baron so that Baron following such issuance (and taking into account the 2,500,000 shares issued to it under the Subscription Agreement and this letter) owns an amount of shares equal to the quotient of (($4.00 per share) multiplied by (the number of shares then held by Baron)) divided by the public offering price per share.

 

(C) If, prior to the effectiveness of the registration statement referred to in paragraph (A), SFX sells common stock to repay $10,000,000 of advances from Robert F.X. Sillerman to fund the formation of the joint venture with ID&T and such common stock is priced at less than $4.00 per share, then SFX will issue additional shares to Baron so that Baron following such issuance (and taking into account the 2,500,000 shares issued to Baron under the Subscription Agreement and this letter) owns an amount of shares equal to the quotient of

 

 

(($4.00 per share) multiplied by (the number of shares then held by Baron)) divided by such price per share.

 

This letter shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.  Each party may not assign this letter or any rights or obligations hereunder without the prior written consent of the other party. All questions concerning the construction, validity, enforcement and interpretation of this Letter Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.

 

If this letter accurately sets forth your understanding of the terms with respect to the matters discussed above, please so indicate by executing a copy of this letter below and returning the executed copy to us.  After receipt of your confirmation, we will provide wiring instructions to deliver the purchase price with respect to the 1,250,000 shares to be purchased pursuant to this letter.

 

 

	
 
    	
Sincerely,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SFX   HOLDING CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Robert F.X. Sillerman
    
	
 
    	
 
    
	
 
    	
Robert   F.X. Sillerman
    
	
 
    	
Chairman   and CEO
    
	
 
    	
SFX   Holding Corporation
    

 

 

	
Acknowledged   and Agreed:
    
	
 
    
	
BAMCO, Inc.   on behalf of its investment
    
	
advisory   client, Baron Small Cap Fund
    
	
 
    
	
 
    
	
By   
    	
/s/   Patrick Patalino
    	
 
    
	
Name: Patrick Patalino
    	
 
    
	
Title:   General Counsel

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