Document:

Exhibit 10.8

 

February 13, 2015

 

Mr. Robert F.X. Sillerman

Chairman and Chief Executive Officer

SFX Entertainment, Inc.

430 Park Avenue, 6th Floor

New York, NY 10022

 

INVESTMENT BANKING AGREEMENT

 

Dear Mr. Sillerman:

 

We are pleased to confirm our mutual understanding regarding the retention of White Oak Securities LLC (“White Oak”) by SFX Entertainment, Inc. and its subsidiaries, affiliates, beneficiaries, successors and assigns (collectively, the “Company”), subject to the terms and conditions of this agreement (the “Agreement”).

 

1.                                              Purpose of Engagement. White Oak will assist the Company as its non-exclusive agent in connection with debt capital market transactions (limited to, privately placed debt instruments (the “Transaction”). It is acknowledged and agreed that the decision to consummate a Transaction shall be in the Company’s sole and absolute discretion. The Company understands and agrees that (A) White Oak will act solely as the Company’s agent (on a reasonable efforts basis) in connection with the potential Transaction, and not as an underwriter or in any other similar capacity, and (B) this Agreement does not constitute a commitment by White Oak to provide any capital or other financial support whatsoever with respect to the potential Transaction or any other reason.

 

During the Term, White Oak shall provide the following ancillary services, in addition to any customary services provided by financial advisors in connection with non-public debt offerings:

 

a)                                     Review and provide analysis on all quarterly and annual financial statements of the Company and the associated sections of the Company’s current and periodic reports filed with the SEC;

 

b)                                     Review and provide analysis of the Company’s private placement memorandums and similar offering and marketing materials prepared in connection with any Transaction;

 

c)                                      On a quarterly basis, meet with executives, and if requested, the board of directors of the Company, to (i) evaluate and discuss the liquidity of the Company and its financial plans and forecasts, and (ii) report on the status and trends of the debt capital markets for companies of similar size;

 

d)                                     Work jointly with any other agents retained by the Company to facilitate Transactions.

 

During the Term, White Oak shall regularly report on the status of its duties to senior management of the Company. White Oak’s failure to meet with the Company and its employees and agents as required hereunder, following reasonable notice, shall be deemed a material breach of this Agreement.

 

 

2.                                              Term of Engagement. The term of our engagement hereunder shall be for a period commencing on the date hereof and expiring on the second anniversary from the date hereof (the “Term”). The provisions of Paragraph A of Exhibit A, which is attached hereto and incorporated herein, shall survive any termination or expiration of this Agreement.

 

3.                                              Compensation. In consideration for our services described above, White Oak shall be entitled to receive, and the Company agrees to pay White Oak, a cash fee equal to $825,000, payable as follows:

 

a)                                     $412,500 within ten business days of the date hereof;

 

b)                                     $103,125 within ten business days of the date hereof;

 

c)                                      $103,125 on July 31, 2015;

 

d)                                     $103,125 on January 29, 2016; and

 

e)                                      $103,125 on July 29, 2016.

 

No other compensation to White Oak shall be payable hereunder, unless otherwise agreed to in advance by the Company.

 

4.                                              Reimbursement of Expenses. The Company shall not be obligated to reimburse White Oak for its out-of-pocket expenses incurred by it in connection with the matters contemplated by this Agreement, unless otherwise agreed to in writing by the Company.

 

5.                                              White Oak Client Restriction. During the Term, White Oak shall not provide financial advisory services to any competitor of the Company without the Company’s written consent.

 

6.                                              White Oak Information. The Company understands and agrees that all advice (written or oral) given by White Oak to the Company in connection with White Oak’s engagement hereunder is intended solely for White Oak to provide services pursuant to this Agreement, and that no such advice shall be used, reproduced, disseminated, quoted or referred to at any time, in any manner or for any purpose, nor shall any public reference be made to White Oak except with White Oak’s prior written consent. Any financial advice, written or oral, given by White Oak is intended solely for the benefit and use of the senior management and the board of directors of the Company (solely in their capacity as such) in considering the matters to which this Agreement relates, and the Company agrees that such advice may not be disclosed publicly or made available to third parties without White Oak’s prior written consent.

 

7.                                              Entire Agreement. This Agreement contains all of the understandings and agreements of the parties with respect to the subject matter discussed herein. All prior agreements pertaining to financial advisory services provided by White Oak to the Company, whether written or oral, are merged herein and shall be of no force or effect unless as expressly set forth herein.

 

2

 

We look forward to formalizing our business relationship. If the foregoing and the attached Exhibit A correctly set forth our agreement, please execute the enclosed copy of this letter in the space provided and return it to us.

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WHITE OAK SECURITIES LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Timothy J. Crowhurst
    
	
 
    	
Name:
    	
Timothy J. Crowhurst
    
	
 
    	
Title:
    	
Managing Member
    

 

Confirmed and agreed to this 13th day of February 2015

 

SFX ENTERTAINMENT, INC.

 

	
By:
    	
/s/ Richard Rosenstein
    	
 
    
	
Name:
    	
Richard Rosenstein
    	
 
    
	
Title:
    	
CFO
    	
 
    

 

3

 

EXHIBIT A

 

(A)                               Confidentiality. White Oak agrees that all non-public information pertaining to the prior, current or contemplated business of the Company is valuable and confidential assets of the Company. Such information shall include, without limitation, information relating to customer lists, bidding procedures, intellectual property, patents, trademarks, trade secrets, financing techniques and sources and such financial statements of the Company as are not available to the public. White Oak shall, and shall cause its officers, directors, employees, agents and members to, hold all such information in trust and confidence for the Company and not use or disclose any such information for other than the Company’s business. Such confidentiality does not apply (i) where such information is publicly available or later becomes publicly available other than through a breach of this Agreement, (ii) where such information is subsequently lawfully obtained by White Oak from a third party or parties, (iii) if such information is known to White Oak prior to the execution of this Agreement other than pursuant to an obligation of confidentiality or (iv) as may be required by law.

 

(B)                               Independent Contractor. It is expressly understood and agreed that White Oak shall, at all times, act as an independent contractor with respect to the Company and not as an employee or agent of the Company, and nothing contained in this Agreement shall be construed to create a joint venture, partnership, association or other affiliation, or like relationship, between the parties. It is specifically agreed that the relationship is and shall remain that of independent parties to a contractual relationship and that White Oak shall have no right to bind the Company in any manner. In no event shall either party be liable for the debts or obligations of the other except as otherwise specifically provided in this Agreement.

 

(C)                               Indemnification. If White Oak or any of its affiliates, or any of its or their respective directors, officers, members, employees, agents or controlling persons, if any (each of the foregoing, including White Oak, being an “Indemnified Person”), becomes involved in any capacity in any action, claim, proceeding or investigation brought or threatened by or against any person, including (without limitation) members of the Company, related to, arising out of or in connection with either our engagement or any matter referred to in the Agreement, the Company will promptly reimburse each such Indemnified Person for its reasonable legal and other expenses (including the cost of any investigation and preparation) as and when they are incurred in connection therewith. The Company also will indemnify and hold harmless each Indemnified Person against any and all losses, claims, damages, liabilities or expenses to which any Indemnified Person may become subject under any applicable federal or state law, or otherwise, related to, arising out of or in connection with our engagement under the Agreement, except to the extent that any such loss, claim, damage, liability or expense is found by a court of competent jurisdiction in a judgment that has become final in that it is no longer subject to appeal or review to have resulted primarily from such Indemnified Person’s gross negligence or bad faith of such Indemnified Person in performing the services that are the subject of the Agreement. The Company also agrees that no Indemnified Person shall have any liability (whether director or indirect, in contract or tort or otherwise) to the Company or any of its members or creditors related to, arising out of or in connection with our engagement under the Agreement except to the extent that any loss, claim, damage or liability is found by a court of competent jurisdiction in a judgment which has become final in that it is no longer subject to appeal or review to have resulted primarily from the bad faith or gross negligence of such Indemnified Person in performing the services that are the subject of the Agreement.

 

(D)                               Amendment. No modification, waiver, amendment, discharge or change of this Agreement shall be valid unless the same is evidenced by a written instrument, executed by the party against which such modification, waiver, amendment, discharge, or change is sought.

 

(E)                                Notices. All notices, demands or other communications given hereunder shall be in writing and shall be deemed to have been duly given when delivered in person or transmitted by facsimile transmission or on the third calendar day after being mailed by United States registered or certified mail, return receipt requested, postage prepaid, to the addresses herein above first mentioned or to such other address as any party hereto shall designate to the other for such purpose.

 

4

 

(F)                                 Severability. The invalidity, illegality or unenforceability of any provision or provisions of this Agreement will not affect any other provision of this Agreement, which will remain in full force and effect, nor will the invalidity, illegality or unenforceability of a portion of any provision of this Agreement affect the balance of such provision. In the event that any one or more of the provisions contained in this Agreement or any portion thereof shall for any reason be held to be invalid, illegal or unenforceable in any respect, this Agreement shall be reformed, construed and enforced as if such invalid, illegal or unenforceable provision had never been contained herein.

 

(G)                               Construction; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. EACH OF WHITE OAK AND THE COMPANY HEREBY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING, SUIT OR CLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT.

 

Any controversy, dispute or claim arising out of or relating to this agreement or breach thereof or relating to your employment shall first be submitted to mediation in New York City administered by JAMS. If the parties are unsuccessful at resolving the dispute through mediation, the parties agree to binding arbitration in New York City administered by JAMS pursuant to its Streamlined Arbitration Rules and Procedures. The parties shall maintain the confidential nature of the mediation and arbitration proceedings, and the award, unless otherwise required by law or judicial decision. Judgment on the award may be entered in any court having jurisdiction.

 

(H)                              Binding Nature. The terms and provisions of this Agreement shall be binding upon and inure to the benefit of the parties, and their respective successors and assigns.

 

(I)                                   Counterparts. This Agreement may be executed in any number of counterparts, including facsimile signatures, which shall be deemed as original signatures. All executed counterparts shall constitute one Agreement, notwithstanding that all signatories are not signatories to the original or the same counterpart.

 

(J)                                   Attorneys’ Fees and Court Costs. If any party to this Agreement brings an action, directly or indirectly based upon this Agreement or the matters contemplated hereby against the other party, the prevailing party shall be entitled to recover, in addition to any other appropriate amounts, its reasonable costs and expenses in connection with such proceeding, including, but not limited to, reasonable attorneys’ fees and court costs.

 

(K)                              Change in Control. Upon any change in control of the Company, any unpaid amounts hereunder shall be accelerated and immediately due.

 

(L)                                No Fiduciary Duties. The Company represents that it is a sophisticated business enterprise that has retained White Oak for the limited purposes set forth in this Agreement, and the parties acknowledge and agree that their respective rights and obligations are contractual in nature. Each party disclaims any intention to impose fiduciary obligations on the other by virtue of the engagement contemplated by this Agreement.

 

5Exhibit 10.10

 

Sillerman Investment Company III LLC

 

March 16, 2015

 

The Board of Directors

SFX Entertainment, Inc.
 430 Park Ave., Sixth Floor
 New York, NY 10022

 

Dear Sirs:

 

Reference is made to the Credit Agreement, dated as of February 7, 2014, among SFX Entertainment, Inc. (the “Company”), the Lenders party thereto and Barclay’s Bank PLC, as administrative agent and collateral agent thereunder, as amended from time to time (the “Credit Agreement”).  Capitalized terms used but not defined in this letter shall have the respective meanings set forth in the Credit Agreement.

 

Sillerman Investment Company III LLC (“SIC”) hereby commits (the “Commitment”) to make available cash collateral in an aggregate amount of up to $31.5 million (the “Maximum Cash Collateral Amount”) to secure the repayment of principal and interest on Revolving Loans made to the Company under the Credit Agreement on the terms set forth in Exhibit A attached hereto.

 

The Commitment and the other agreements reflected in this letter are being provided to the Company to allow it to access Revolving Loans should the Company need to do so to fund its working capital needs.  This will also afford the Company with flexibility to fully evaluate the proposal reflected in the letter previously delivered by SIC’s sole member, Robert F.X. Sillerman, to the Board and for the Board to explore alternative transactions.

 

In the event that the documentation of the cash collateral arrangement and the required amendment to the Credit Agreement are not completed in a timely fashion to meet the cash flow needs of the Company, SIC will provide in the form of newly issued equity or otherwise the amount so needed up to the Maximum Cash Collateral Amount on mutually acceptable and commercially reasonable terms.  To the extent that such cash flow needs are met with a loan, such loan will be due no sooner than April 1, 2016.

 

This Commitment and the other agreements being made by SIC in this letter are subject to the approval of the Special Committee of the Board.  The agreements reflected herein are subject to compliance with applicable law and the Company’s debt instruments.

 

No legal obligation with respect to this Commitment or the other agreements made by SIC in this letter shall arise unless and until this letter has been duly countersigned and delivered by the Company and the Company has paid SIC a commitment fee of $630,000 in cash (2% of the $31.5 million Maximum Cash Collateral Amount).  Until the Company countersigns this

 

 

letter, SIC may withdraw it at any time.  I have retained the law firm Fried, Frank, Harris, Shriver & Jacobson LLP as my counsel in connection herewith.

 

I am available at your convenience to discuss any aspect of this letter.

 

 

	
 
    	
Sincerely,
    
	
 
    	
 
    
	
 
    	
SILLERMAN   INVESTMENT COMPANY III LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Robert F.X.   Sillerman
    
	
 
    	
Robert F.X.   Sillerman
    

 

 

ACCEPTED AND AGREED AS OF March 16, 2015:

 

	
SFX   ENTERTAINMENT, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Richard   Rosenstein
    	
 
    
	
By: Richard   Rosenstein
    	
 
    
	
Title: CFO
    	
 
    

 

2

 

EXHIBIT A

 

Summary of Terms and Conditions

 

Reference is made to the Credit Agreement, dated as of February 7, 2014, among SFX Entertainment, Inc. (the “Company”), the Lenders party thereto and Barclay’s Bank PLC, as administrative agent and collateral agent thereunder, as amended from time to time (the “Credit Agreement”).  Capitalized terms used but not defined in this Exhibit A shall have the respective meanings set forth in the Credit Agreement.

 

Set forth below is a summary of the principal terms and conditions for Sillerman Investment Company III LLC (“SIC”) to make available cash collateral in an aggregate amount of up to $31.5 million to secure the repayment of up to $31.5 million in principal and interest on Revolving Loans made to the Company under the Credit Agreement.  If any payments or other actions that must be processed by a bank are scheduled to occur on a weekend or non-bank business day, such payment or action must be completed on the prior bank business day.

 

	
Cash Collateral Commitment:
    	
SIC will from time to time during   the Commitment Period, at the request of the Company, deposit in a cash   collateral account (the “Cash Collateral Account”) cash amounts to secure the repayment of principal and interest on   Revolving Loans to be made to the Company under the Credit Agreement pursuant   to draws made by the Company under its Credit   Agreement during the Commitment Period (defined below) up to the Commitment Amount.  In   no event shall SIC be required to deposit cash in the Cash Collateral Account   if after giving effect to such deposit the total amount deposited and not yet   returned to SIC would exceed the Commitment Amount (defined below) then in   effect. 
    
	
 
    	
 
    
	
Commitment Amount:
    	
$31.5 million, subject to adjustment with respect to Extension Periods   as described below under “Commitment Period.”
    
	
 
    	
 
    
	
Commitment Period:
    	
The period (the “Commitment Period”) from the date hereof through the   first anniversary of the date hereof (the “Initial Commitment Period”);   provided that prior to the end of any expiring Commitment Period, the   Commitment Period may be extended for a time period (each such extended   period an “Extension Period”) and for a Commitment Amount to be determined by   SIC in its sole discretion and approval of the Board. At the end of the   Commitment Period, all cash on deposit in the Cash Collateral Account shall   be returned to SIC, unless otherwise agreed. If at the end of any expiring   Commitment Period, any cash shall have been previously deposited in the Cash   Collateral Account and not returned to SIC, whether because it was drawn to   repay bank loans or otherwise, there shall be an Extension Period in effect   with respect to an amount no less than the amount of cash previously   deposited and not yet returned and such Extension 
    

 

 

	
 
    	
Period shall be for a period not less than 90 days (or such less period   as shall be determined by SIC in its sole discretion).  To the extent that any amounts in the Cash   Collateral Account are drawn to pay amounts due to SFX lenders, such amounts   shall be deemed to be a loan to the Company and the Company shall be required   to reimburse SIC on demand for such drawings on demand and SIC shall be   entitled to subrogation to the rights of such lenders (subject to the terms   of the agreements governing the Cash Collateral Account).  
    
	
 
    	
 
    
	
Extension Fee:
    	
If at the end of any expiring Commitment Period, the Commitment Period   is extended for an Extension Period as described above under “Commitment   Period,” the Company shall pay to SIC on the first day of the applicable   Extension Period a fee of (a) 4%, multiplied by (b) the Commitment   Amount with respect to such Extension Period, multiplied by (c) the   number of days in such Extension Period divided by 360.
    
	
 
    	
 
    
	
Cash Collateral Fee; Interest: 
    	
With respect to any cash on deposit in the Cash Collateral Account, the   Company shall pay SIC a fee (a “Cash Collateral Fee”) at a rate per annum   equal to 12% of the amount of cash then on deposit, computed on the daily   amount of cash on deposit in the Cash Collateral Account. The Cash Collateral   Fee will be payable quarterly in arrears on the last business day of each of   March, June, September and December, commencing on the first such date   after the date hereof on which cash is first deposited in the Cash Collateral   Account.

 

In addition, the Company will pay interest to SIC at a rate per annum   equal to the Applicable Rate on the amount of cash deposited in the Cash   Collateral Amount that is foreclosed upon and not repaid to SIC by the   Company (the “Unrepaid Foreclosed Cash”) and on the amount of any unpaid fees   and accrued and unpaid interest (“Unpaid Compensation”).  The “Applicable Rate” shall be 13% with   respect to the first 360 days for which there is any Unrepaid Foreclosed Cash   or Unpaid Compensation; provided that the Applicable Rate shall increase by   2% with respect to each 360 day period thereafter.  The interest on Unrepaid Foreclosed Cash   and Unpaid Fees will be due and payable quarterly in arrears on the last   business day of each of March, June, September and December, commencing   on the first such date after the date hereof on which there is any Unrepaid   Foreclosed Cash or Unpaid Fees.    Interest shall be computed based on a 360 day year.
    

 

2

 

	
Fees and Expenses:
    	
The Company will pay the reasonable costs and expenses, including   reasonable legal fees, of SIC and Mr. Sillerman in connection with the   negotiation and documentation of the cash collateral arrangement and related   agreements and continuing costs and expenses related to (including indemnification   obligations under) cash collateral arrangements, related agreements and   administration of this agreement.
    
	
 
    	
 
    
	
Other:
    	
Other terms and conditions as mutually agreed by the Company and SIC in   definitive transaction documents.

 

The terms, and consummation of the cash collateral arrangement will be   subject to compliance with applicable law and the Company’s debt instruments   (including the Credit Agreement).
    

 

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00244-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00244-of-00352.parquet"}]]