0000895345-15-000161.txt : 20150527 0000895345-15-000161.hdr.sgml : 20150527 20150527162543 ACCESSION NUMBER: 0000895345-15-000161 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20150527 DATE AS OF CHANGE: 20150527 GROUP MEMBERS: SILLERMAN INVESTMENT CO III LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SFX Entertainment, INC CENTRAL INDEX KEY: 0001553588 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AMUSEMENT & RECREATION SERVICES [7900] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-87658 FILM NUMBER: 15892659 BUSINESS ADDRESS: STREET 1: 902 BROADWAY STREET 2: 15TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10010 BUSINESS PHONE: 646-561-6400 MAIL ADDRESS: STREET 1: 902 BROADWAY STREET 2: 15TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10010 FORMER COMPANY: FORMER CONFORMED NAME: SFX HOLDING Corp DATE OF NAME CHANGE: 20120705 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SILLERMAN ROBERT F X CENTRAL INDEX KEY: 0000940128 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: 150 EAST 58TH STREET CITY: NEW YORK STATE: NY ZIP: 10155 SC 13D/A 1 pr13da2-sfx_sillerman.htm pr13da2-sfx_sillerman.htm
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D
(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)

Under the Securities Exchange Act of 1934
(Amendment No. 2)*

SFX Entertainment, Inc.
(Name of Issuer)

Common Stock, $0.001 par value per share
(Title of Class of Securities)

784178303
(CUSIP Number)


Philip Richter
Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, NY 10004
(212) 859-8000
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

May 26, 2015
(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
 
 
 
 
CUSIP No.  784178303
 
Page 2 of 9 Pages


1
NAME OF REPORTING PERSON
 
Robert F.X. Sillerman
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
 
(a) £          (b) £
3
SEC USE ONLY
 
 
4
SOURCE OF FUNDS
 
PF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
 
£
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
United States
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
 
35,494,263
 
8
SHARED VOTING POWER
0
 
9
SOLE DISPOSITIVE POWER
 
35,494,263
 
10
SHARED DISPOSITIVE POWER
0
 
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   
 
35,494,263
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES   
 
£
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
37.4%
 
14
TYPE OF REPORTING PERSON
 
IN
 
 
 
 
 
 
CUSIP No.  784178303
 
Page 3 of 9 Pages
 
 
1
NAME OF REPORTING PERSON
 
Sillerman Investment Company III LLC
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
 
(a) o (b) o
3
SEC USE ONLY
 
 
4
SOURCE OF FUNDS
 
PF
 
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
 
£
6
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
 
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
 
29,960,263
8
SHARED VOTING POWER
 
0
9
SOLE DISPOSITIVE POWER
 
29,960,263
10
SHARED DISPOSITIVE POWER
 
0
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   
 
29,960,263
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES   
 
£
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.1%
 
14
TYPE OF REPORTING PERSON
 
OO
 
 
 
 
 
This Amendment No. 2 (this “Amendment No.2”) amends and supplements the Statement of Beneficial Ownership on Schedule 13D originally filed with the Securities and Exchange Commission on February 25, 2015 by Robert F.X. Sillerman and Sillerman Investment Company III LLC (“SIC”) with respect to the common stock, par value $0.001 per share (the “Common Stock”), of SFX Entertainment, Inc. (the “Company”), as amended by Amendment No. 1 thereto filed on March 5, 2015 (as so amended, the “Statement”).   Capitalized terms not defined in this Amendment No. 2 have the meaning ascribed to them in the Statement.


ITEM 3.                      SOURCE AND AMOUT OF FUNDS OR OTHER CONSIDERATIONS

The descriptions of the Merger Agreement and certain related documents set forth in Item 4 below are incorporated by reference in their entirety into this Item 3.

The Reporting Persons intend to fund the transactions contemplated by the Merger Agreement with a combination of cash on hand and third party financing.  The consummation of the Merger is not subject to a financing condition.


ITEM 4.                      PURPOSE OF TRANSACTION

Item 4 of this Amendment No. 2 is hereby amended and supplemented by adding the following:

On May 25, 2015, two affiliates of the Reporting Persons, SFXE Acquisition LLC (“Purchaser”) and SFXE Merger Sub Inc. (“Merger Sub” and, together with Purchaser, the “Purchaser Parties”), entered into an Agreement and Plan of Merger with the Company (the “Merger Agreement”), providing for the merger of Merger Sub with and into the Company (the “Merger”), with the Company as the surviving corporation in the Merger (the “Surviving Corporation”).

Pursuant to the Merger Agreement, at the effective time of the Merger (“Effective Time”), each share of Common Stock issued and outstanding immediately prior to the Effective Time (other than certain excluded shares and shares held by the Reporting Persons and their affiliates) will be converted into the right to receive $5.25 in cash, without interest (the “Cash Merger Consideration”), except that each person who is a record holder of shares of Common Stock prior to a specified election deadline will be entitled to make an election (a “Stock Election”) to receive, in lieu of the Cash Merger Consideration, one share of non-voting Class B common stock of the Surviving Corporation (the “Stock Merger Consideration” and, together with the Cash Merger Consideration, the “Merger Consideration”) pursuant to the election procedures set forth in the Merger Agreement.  Each share of Common Stock held by the Reporting Persons and their affiliates will be converted into the right to receive one share of voting Class A common stock of the Surviving Corporation.  If the number of record holders making valid Stock Elections (the “Stock Electing Holders”) exceeds 275, the 275 record holders in respect of which valid Stock Elections have been made (and not revoked) with respect to the greatest number of shares of Common Stock will receive the Stock Merger Consideration for the shares in respect to which Stock Elections have been made; the Stock Elections of the remaining Stock Electing Holders will be deemed withdrawn and their shares will be converted into the right to receive the Cash Merger Consideration.

The forms of the certificate of incorporation and bylaws of the Surviving Corporation are attached hereto as Exhibits 10.3 and 10.4 respectively and incorporated herein by reference.  Any stockholder of record who makes a Stock Election will be deemed to have agreed to be bound by the terms of a Stockholders’ Agreement with respect to the Surviving Corporation, which sets forth certain rights and obligations of holders of Class A common stock and holders of Class B common stock after the consummation of the Merger.  The form of the Stockholders’ Agreement is attached hereto as Exhibit 10.5 and incorporated herein by reference.

A special committee consisting solely of independent and disinterested members of the Company’s Board of Directors (the “Special Committee”) led the negotiations of the Merger Agreement with the Reporting Persons.  The Special Committee unanimously determined that the transactions contemplated by the Merger Agreement, including the Merger, are fair to the Company’s stockholders other than the Reporting Persons and their affiliates (such stockholders, the “Disinterested Stockholders”), and unanimously recommended that the Board of Directors of the Company (the “Company Board”) approve the Merger Agreement and the transactions contemplated thereby, including the Merger. Based on the Special Committee’s recommendation, the Company Board unanimously (with Mr. Sillerman abstaining) (i) determined that the transactions contemplated by the Merger Agreement, including the Merger, are fair to the Disinterested Stockholders, (ii) approved and declared advisable the Merger Agreement and the transactions contemplated therein, including the Merger, and (iii) resolved to recommend that the Company’s stockholders vote for the adoption of the Merger Agreement.

The closing of the Merger is subject to a non-waivable condition that the Merger Agreement be adopted by the affirmative vote of the holders of (x) at least a majority of all outstanding shares of Common Stock and (y) at least a majority of all outstanding shares of Common Stock held by Disinterested Stockholders (together, the “Company Stockholder Approval”).  Each party’s obligation to consummate the Merger is also subject to certain other customary conditions, including, among others, (i) the absence of any law or injunction prohibiting the consummation of the Merger, (ii) the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any applicable non-U.S. antitrust or competition-related laws, (iii) the accuracy of each party’s representations and warranties contained in the Merger Agreement (subject to certain materiality qualifiers), (iv) the other party’s compliance with its covenants and agreements contained in the Merger Agreement in all material respects and (v) the absence of a material adverse effect on the Company.  In addition, each party’s obligation to consummate the merger is subject to the receipt of an opinion from the financial advisor to the Special Committee to the effect that the Merger Consideration is fair, from a financial point of view, to the holders of Common Stock (other than the Reporting Persons and their affiliates and holders who validly exercise dissenters’ rights under Delaware law).

The Merger Agreement provides that during the period beginning on the date of the Merger Agreement and continuing until 12:01 a.m. (New York time) on July 10, 2015, the 45th calendar day after the date of the Merger Agreement (the “No-Shop Period Start Date”), the Company and its subsidiaries and their respective representatives may initiate, solicit and encourage any alternative acquisition proposals from third parties, provide nonpublic information to such third parties and participate in discussions and negotiations with such third parties regarding alternative acquisition proposals. Beginning on the No-Shop Period Start Date, the Company will become subject to customary “no shop” restrictions prohibiting the Company, its subsidiaries and their respective representatives from soliciting alternative acquisition proposals from third parties or providing information to or participating in discussions or negotiations with third parties regarding alternative acquisition proposals.  However, the Company may continue to engage in the foregoing activities with any third party that contacted the Company and made an alternative acquisition proposal prior to the No-Shop Period Start Date that the Special Committee has determined in good faith, after consultation with outside counsel and its financial advisors, constitutes or would reasonably be expected to lead to a superior proposal (each, an “Excluded Party”), but only for so long as such third party is an Excluded Party.

The Merger Agreement generally prohibits the Company Board from withdrawing or modifying its recommendation of the Merger Agreement and the Merger.  However, at any time prior to obtaining the Company Stockholder Approval, under certain specified circumstances consistent with its fiduciary duties, the Company Board may change its recommendation of the Merger and, if such change of recommendation is made in response to a superior proposal, the Company may also terminate the Merger Agreement to accept such superior proposal upon payment of a termination fee.

The Merger Agreement contains certain termination rights for the Company and Purchaser, including if the Merger is not completed on or before January 5, 2016, or if the Company Stockholder Approval is not obtained.

Upon termination of the Merger Agreement under specified circumstances, including a termination by Purchaser upon an adverse change of recommendation by the Company Board or a termination by the Company to accept a superior proposal, the Company will be required to pay Purchaser a termination fee of $15,500,000, unless the Company terminates the Merger Agreement to accept a superior proposal prior to the No-Shop Period Start Date, in which case the termination fee payable by the Company will be $7,800,000.  In addition, if the Merger Agreement is terminated by either the Company or the Purchaser because the Company Stockholder Approval is not obtained, the Company is required to reimburse the Reporting Persons and their affiliates for their actual, documented fees and expenses incurred in connection with the Merger Agreement, up to a maximum amount of $5,000,000.

The Merger Agreement also provides that Purchaser will be required to pay the Company a reverse termination fee of $7,800,000 if the Merger Agreement is terminated because Purchaser fails to complete the Merger after the closing conditions are satisfied or fails to deliver financing commitments within 10 days following written request by the Special Committee (provided that the Special Committee may only make such request after the No-Shop Period Start Date); provided that the reverse termination fee will increase to $31,000,000 if such termination occurs following Purchaser’s delivery of its financing commitments.

In connection with the execution of the Merger Agreement, SIC has provided the Company with a limited guaranty in favor of the Company (the “Limited Guaranty”) guaranteeing Purchaser’s obligation to pay the reverse termination fee if such fee becomes payable by Purchaser to the Company pursuant to the Merger Agreement.

The foregoing descriptions of the Merger Agreement and the Limited Guaranty do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Merger Agreement and the Limited Guaranty, which are attached hereto as Exhibits 2.1 and 10.2 respectively and incorporated herein by this reference.

ITEM 5.                                INTEREST IN SECURITIES OF THE ISSUER

Item 5 of this Amendment No. 2 is hereby amended and restated as follows:

(a) (b)
As of May 26, 2015, Mr. Sillerman was the beneficial owner of, and held the sole power to vote or to direct the vote and sole power to dispose or to direct the disposition of, 35,494,263 shares of Common Stock, representing 37.4% of the outstanding shares of Common Stock.  These shares include:

 
1.
1,500,000 shares of Common Stock subject to stock options held by Mr. Sillerman that are currently exercisable or exercisable within sixty (60) days of May 26, 2015;

 
2.
29,960,263 shares of Common Stock, representing 32.1% of the outstanding shares of Common Stock, held by SIC (of which Mr. Sillerman is the sole member and manager and, in such capacity, holds the sole power to vote or to direct the vote and sole power to dispose or to direct the disposition of the shares of Common Stock held by SIC);

 
3.
1,333,000 shares of unvested restricted Common Stock held by Mr. Sillerman; and

 
4.
2,701,000 shares of Common Stock subject to certain nominee agreements described in Item 6 (each a “Nominee Agreement” and, collectively, the “Nominee Agreements”) with various stockholders of the Company (such stockholders, the “Beneficiaries”).  Each Nominee Agreement names Mr. Sillerman as the nominee with respect to the shares subject to such Nominee Agreement and gives him the exclusive right to (i) vote or abstain from voting such shares and (ii) make any and all dispositions with respect to such shares.

The percentages of the outstanding shares set forth above were calculated based on 93,309,305 shares of Common Stock outstanding as of May 26, 2015.

(c)
Upon the request of certain Beneficiaries, on March 25, 2015, Mr. Sillerman transferred 360,000 shares of Common Stock which were held in his name as the nominee under the Nominee Agreements to the Beneficiaries for no consideration.  As a result of these transfers, the transferred shares are no longer subject to the Nominee Agreements and Mr. Sillerman is no longer the beneficial owner of these shares.

As of May 26, 2015, except for the transfer described above, neither of the Reporting Persons has effected any transactions in the shares of Common Stock during the past 60 days.

(d)
With respect to the 29,960,263 shares of Common Stock held directly by SIC, as the sole member and manger of SIC, Mr. Sillerman has, as of May 26, 2015, the right to receive and the power to direct the receipt of dividends from, or the proceeds from the sale of, such shares.

With respect to the 2,701,000 shares of Common Stock that are the subject of the Nominee Agreements, as of May 26, 2015, the Beneficiaries have the right to receive and the power to direct the receipt of dividends (other than dividends in the form of additional shares of Common Stock, which will be held by Mr. Sillerman as the nominee) from, or the proceeds from the sale of, such shares.

(e)
Not applicable.
 
ITEM 6.
CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER

Item 6 is hereby amended and supplemented by adding the following:

The descriptions of the Merger Agreement and certain related documents set forth in Item 4 above are incorporated by reference in their entirety into this Item 6.

Concurrently with the execution and delivery of the Merger Agreement, the Reporting Persons entered into a Voting and Support Agreement with the Company (the “Voting Agreement”), pursuant to which the Reporting Persons have agreed to vote all of the shares of Common Stock owned by them in favor of the adoption of the Merger Agreement and the approval of the transactions contemplated thereby and against any other action or agreement that (i) would result in a breach of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement, (ii) could reasonably be expected to result in any of the conditions to the consummation of the Merger under the Merger Agreement not being fulfilled or (iii) is intended or would reasonably be expected to prevent, impede, frustrate, interfere with, delay, postpone or adversely affect the Merger and the other transactions contemplated by the Merger Agreement.

In addition, pursuant to the Voting Agreement, the Reporting Persons have agreed to vote all their shares in favor of any superior proposal that (i) provides for stockholders of the Company to receive at closing cash consideration in an amount, or freely tradable (unrestricted) securities listed on a national securities exchange with a trading value at the time of such transaction, in excess of 2.5% of the Cash Merger Consideration and (ii) is reasonably likely to be consummated within six months of the execution of a definitive agreement for (such superior proposal, an “Acceptable Transaction”).

The Voting Agreement will terminate at the Effective Time or, if earlier, the date of the termination of the Merger Agreement, except that if the Company enters into a definitive agreement for an Acceptable Transaction upon the termination of the Merger Agreement, the obligation of the Reporting Persons to vote in favor of such Acceptable Transaction will remain in effect until the earlier of (i) the consummation of the Acceptable Transaction and (ii) the six month anniversary of the execution of the definitive agreement relating to the Acceptable Transaction.

The foregoing description of the Voting Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Voting Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by this reference.

ITEM 7.
MATERIALS TO BE FILED AS EXHIBITS
   
Exhibit 2.1
Agreement and Plan of Merger, dated as of May 26, 2015, by and among the Company, Merger Sub and Purchaser (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-36119) filed by the Company on May 27, 2015)
   
Exhibit 10.1
Voting and Support Agreement, dated as of May 26, 2015, by and between the Company and the Reporting Persons (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36119) filed by the Company on May 27, 2015)
   
Exhibit 10.2
Limited Guaranty, dated as of May 26, 2015, by SIC in favor of the Company (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K (File No. 001-36119) filed by the Company on May 27, 2015)
   
Exhibit 10.3
Form of Certificate of Incorporation of the Surviving Corporation
   
Exhibit 10.4
Form of Bylaws of the Surviving Corporation
   
Exhibit 10.5
Form of Stockholders’ Agreement

 
 
 
 
Signature
 
 
After reasonable inquiry and to the best of its knowledge and belief, the undersigned certify that the information set forth in this Amendment No. 2 is true, complete and correct.

Dated:  May 27, 2015
 
  Robert F. X. Sillerman  
       
 
By:
/s/ Robert F. X. Sillerman  
       
       
       

  Sillerman Investment Company III LLC  
     
       
 
By:
/s/ Robert F. X. Sillerman  
       
  Name:  Robert F. X. Sillerman  
  Title:  Manager and Sole Member  
 
 
 
 
INDEX TO EXHIBITS

Exhibit Number
Description
   
Exhibit 2.1
Agreement and Plan of Merger, dated as of May 26, 2015, by and among the Company, Merger Sub and Purchaser (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-36119) filed by the Company on May 27, 2015)
 
Exhibit 10.1
Voting and Support Agreement, dated as of May 26, 2015, by and between the Company and the Reporting Persons (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36119) filed by the Company on May 27, 2015)
 
Exhibit 10.2
Limited Guaranty, dated as of May 26, 2015, by SIC in favor of the Company (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K (File No. 001-36119) filed by the Company on May 27, 2015)
 
Exhibit 10.3
Form of Certificate of Incorporation of the Surviving Corporation
 
Exhibit 10.4
Form of Bylaws of the Surviving Corporation
 
Exhibit 10.5
Form of Stockholders’ Agreement
 


EX-10.3 2 prex10_3.htm prex10_3.htm
 
 
Exhibit 10.3
 
 

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
SFX ENTERTAINMENT, INC.

ARTICLE I: NAME
 
The name of the corporation (the “Corporation”) is SFX Entertainment, Inc.
 
ARTICLE II: AGENT FOR SERVICE OF PROCESS
 
The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.  The name of the Corporation's registered agent at such address is The Corporation Trust Company.
 
ARTICLE III: PURPOSE
 
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “DGCL”).
 
ARTICLE IV: CAPITAL STOCK
 
4.1.           Authorized Stock.  The total number of shares of capital stock which the Corporation shall have the authority to issue is Two Hundred Million (200,000,000) shares, consisting of Fifty Million (50,000,000) shares of Class A Common Stock, par value $.0001 per share (“Class A Common Stock”), One Hundred Million (100,000,000) shares of Class B Common Stock, par value $.0001 per share (“Class B Common Stock”), and Fifty Million (50,000,000) shares of Preferred Stock, par value $.0001 per share (“Preferred Stock”).  The number of authorized shares of Class A Common Stock or Class B Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of capital stock representing a majority of the voting power of all the then-outstanding shares of capital stock of the Corporation entitled to vote thereon, irrespective of the provisions of Section 242(b)(2) of the DGCL.
 
4.2.           Designation of Additional Shares.
 
4.2.1         The Board of Directors of the Corporation (the “Board of Directors”) is authorized, subject to any limitations prescribed by the laws of the State of Delaware, by resolution or resolutions, to provide for the issuance of the shares of Preferred Stock in one or more series, and, by filing a certificate of designation pursuant to the applicable law of the State of Delaware (“Certificate of Designation”), to establish from time to time the number of shares to be included in each such series, to fix the designation, powers (including voting powers), preferences and relative, participating, optional or other rights, if any, of the shares of each such series and any qualifications, limitations or restrictions thereof, and to increase (but not above the total number of authorized shares of such class) or decrease (but not below the number of shares of such series then outstanding) the number of shares of any such series.  The number of authorized shares of Preferred Stock may also be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all the then-outstanding shares of capital stock of the corporation entitled to vote thereon, without a separate vote of the holders of the Preferred Stock or any series thereof, irrespective of the provisions of Section 242(b)(2) of the DGCL, unless a vote of any such holders is required pursuant to the terms of any Certificate of Designation designating a series of Preferred Stock.
 
4.2.2         Except as otherwise expressly provided in any Certificate of Designation designating any series of Preferred Stock pursuant to the foregoing provisions of this ARTICLE IV, any new series of Preferred Stock may be designated, fixed and determined as provided herein by the Board of Directors without approval of the holders of Common Stock or the holders of Preferred Stock, or any series thereof, and any such new series may have powers, preferences and rights, including, without limitation, voting powers, dividend rights, liquidation rights, redemption rights and conversion rights, senior to, junior to or pari passu with the rights of the Common Stock, the Preferred Stock, or any future class or series of Preferred Stock or Common Stock.
 
4.3.           Rights of Class A Common Stock and Class B Common Stock
 
4.3.1         Equal Status.  Except as set forth in this ARTICLE IV, the Class A Common Stock and the Class B Common Stock (collectively, the “Common Stock”) shall have the same rights, powers and privileges and shall rank equally, share ratably and be identical in all respects as to all matters.
 
4.3.2         Voting Rights.  The holders of Class B Common Stock shall not be entitled to any voting rights in respect of such shares, except as required by law.  The holders of Class A Common Stock shall be entitled to one (1) vote per share in respect of such shares on all matters on which stockholders shall have the right to vote.
 
4.3.3         Dividends.  Shares of Class A Common Stock and Class B Common Stock shall be treated equally, identically and ratably, on a per share basis, with respect to any dividends or distributions as may be declared and paid from time to time by the Board of Directors out of any assets of the corporation legally available therefor; provided, however, that in the event a dividend is paid in the form of shares of Class A Common Stock or Class B Common Stock (or rights to acquire such shares), then holders of Class A Common Stock may receive shares of Class A Common Stock (or rights to acquire such shares, as the case may be) and holders of Class B Common Stock may receive shares of Class B Common Stock (or rights to acquire such shares, as the case may be), with holders of shares of Class A Common Stock and Class B Common Stock receiving, on a per share basis, an identical number of shares of Class A Common Stock or Class B Common Stock, as applicable.  Notwithstanding the foregoing, in the event a dividend is paid in the form of capital stock or other equity securities of any subsidiary of the Corporation or any other entity, the securities received by holders of Class A Common Stock and Class B Common Stock shall have the same rights, powers and privileges and shall rank equally, share ratably and be identical in all respects as to all matters, except that the securities received by holders of Class A Common Stock may have full voting rights and the securities received by holders of Class B Common Stock may have no voting right except as required by law, and any disparity in voting rights shall not be deemed a violation of this Section 4.3.3.
 
4.3.4         Liquidation.  Subject to the preferential or other rights of any holders of Preferred Stock then outstanding, upon the dissolution, liquidation or winding up of the Corporation, whether voluntary or involuntary, holders of Class A Common Stock and Class B Common Stock will be entitled to receive ratably all assets of the Corporation available for distribution to its stockholders.
 
4.3.5         Reclassification, Subdivision, Combination.  The Corporation shall not reclassify, subdivide or combine the Class A Common Stock or the Class B Common Stock, unless the Corporation reclassifies, subdivides or combines each of the Class A Common Stock and the Class B Common Stock on an equal per share basis.
 
4.3.6         Mergers, Consolidations, Etc.  In any merger, consolidation or business combination of the Corporation with or into another entity, whether or not the Corporation is the surviving entity, the consideration per share to be received by the holders of Class B Common Stock and the holders of the Class A Common Stock in such merger, consolidation or business combination shall be identical to that received by the holders of such other class; except that in any such transaction in which shares of capital stock are distributed, such shares may differ as to voting rights to the extent and only to the extent that the voting rights of the Class B Common Stock and Class A Common Stock differ as provided herein.
 
4.3.7         Conversion of Class B Common Stock.  Immediately prior to the consummation of any IPO, each share of Class B Common Stock shall be automatically, without further action by any holder thereof, converted into one share of Class A Common Stock.  For purposes of this Amended and Restated Certificate of Incorporation, “IPO” means the initial bona fide underwritten public offering and sale of Common Stock (or other equity securities of the Company or any subsidiary of the Company, or of any successor of the Company or any of its subsidiaries) pursuant to an effective registration statement (other than on Form S-4, S-8 or a comparable form) filed under the Securities Act of 1933, as amended.  The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of effecting the conversion of the shares of Class B Common Stock contemplated by this Section 4.3.7, such number of shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Class B Common Stock into shares of Class A Common Stock.
 
4.3.8         Redemption of Class B Common Stock.  At any time prior to the IPO, in the event the number of holders of record of Common Stock has exceeded 275 (the “Maximum Holder Number”), the Corporation may, upon the determination by the Board of Directors in its sole discretion, redeem all of the shares of Class B Common Stock held by the holders holding the lowest number of shares of Class B Common Stock so as to reduce the number of holders of record below the Maximum Holder Number.  The redemption price for any such redemption shall be equal to the then fair market value of the Class B Common Stock, which fair market value shall be determined by the Board of Directors based on the valuation of Class B Common Stock by a nationally recognized investment bank.  The Corporation shall deliver notice of any such redemption to the applicable holders of Class B Common Stock not less than thirty (15) days nor more than sixty (30) days prior to such redemption, stating the payment date, the redemption price, and the amount of Class B Common Stock to be redeemed.
 
ARTICLE V: BOARD OF DIRECTORS
 
5.1           Director Powers.  The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.  The Board of Directors may exercise all such authority and powers of the Corporation and do all such lawful acts and things as are not by statute or this Certificate of Incorporation directed or required to be exercised or done by the stockholders.
 
5.2           Vote by Ballot.  Election of directors need not be by written ballot unless required by the Bylaws of the Corporation.
 
5.3           Power to Amend Bylaws.  The Board of Directors is expressly authorized to adopt, amend or repeal the Bylaws of the Corporation.
 
ARTICLE VI: LIMITATION OF LIABILITIES; INDEMNIFICATION
 
6.1           Limitation of Liabilities.  A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director; provided, however, that the foregoing shall not eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit.  If the DGCL is hereafter amended to permit further elimination or limitation of the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended.  Any repeal or modification of this ARTICLE VI by the stockholders of the Corporation or otherwise shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification.
 
6.2           Indemnification.  To the fullest extent permitted by applicable law, this Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers, employees and other agents of this Corporation (and any other persons to which the DGCL permits this Corporation to provide indemnification) through bylaw provisions, agreements with such director, officer, employee or other agents, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the DGCL, subject only to limits created by applicable DGCL (statutory or non-statutory), with respect to actions for breach of duty to this Corporation, its stockholders, and others.  Any amendment, repeal or modification of this ARTICLE VI by the stockholders of the Corporation or otherwise shall not adversely affect any right or protection of a director, officer, agent, or other  person existing at the time of, or increase the liability of any director of this Corporation with respect to, any acts or omissions of such director, officer or agent occurring, or any cause of action, suit or claim, that but for this ARTICLE VI could accrue or arise, prior to, such amendment, repeal or modification or adoption of any inconsistent provision.
 
ARTICLE VII: MATTERS RELATING TO STOCKHOLDERS
 
7.1           Action by Written Consent of Stockholders.  Any action required to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded.  Delivery made to the Corporation’s registered office shall be made by hand or by certified or registered mail, return receipt requested.
 
7.2           Business Combination Statute.  The Corporation elects not to be governed by Section 203 of the DGCL.
 
ARTICLE VIII: CORPORATE OPPORTUNITY
 
8.1           The holders of Class A Common Stock, any of their Affiliates or any of their officers, directors, agents, stockholders, members, partners, Affiliates and subsidiaries (other than the Corporation and its subsidiaries), including in their capacity as a director or officer of the Corporation or its subsidiaries (the “Majority Parties”) may, and shall have no duty not to (i) carry on and conduct, whether directly or indirectly (including as a partner, member or joint venture of any person, as an officer, director or stockholder of any person, or as a participant in any syndicate, pool, trust or association) any business of any kind, nature or description, whether or not such business is competitive with or in the same or similar lines of business as the Corporation or any of its subsidiaries, (ii) do business with any client, customer, vendor or lessor of the Corporation or any of its subsidiaries, and (iii) make investments in any kind of property in which the Corporation or any of its subsidiaries may make investments.  To the fullest extent permitted by applicable law, the Corporation hereby renounces any interest or expectancy of the Corporation and its subsidiaries to participate in any business of any Majority Party, and waives any claim against any Majority Party and shall indemnify each Majority Party against any claim that such Majority Party is liable to the Corporation or its stockholders for breach of any fiduciary duty by reason of such Majority Party’s participation in any such business. As used herein, the term “Affiliate” as applied to any person, means any other person directly or indirectly controlling, controlled by, or under common control with, that person.  For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that person, whether through the ownership of voting securities (the ownership of more than 50% of the voting securities of an entity shall for purposes of this definition be deemed to be “control”), by contract or otherwise.
 
8.2           In the event that a Majority Party acquires knowledge of a potential transaction or matter which may constitute a corporate opportunity for both (x) a Majority Party and (y) the Corporation or any of its subsidiaries, the Majority Party shall not have any duty to offer or communicate information regarding such corporate opportunity to the Corporation or any of its subsidiaries.  To the fullest extent permitted by applicable Law, the Corporation hereby renounces any interest or expectancy of the Corporation or any of its subsidiaries in such corporate opportunity and waives any claim against each Majority Party and shall indemnify each Majority Party against any claim that such Majority Party is liable to the Corporation or its Stockholders for breach of any fiduciary duty by reason of the fact that such Majority Party (i) pursues or acquires any corporate opportunity for its own account or the account of any other person, (ii) directs, recommends, sells, assigns, or otherwise transfers such corporate opportunity to another person or (iii) does not communicate information regarding such corporate opportunity to the Corporation or its subsidiaries.
 
ARTICLE IX: CHOICE OF FORUM; LITIGATION COSTS
 
9.1           Choice of Forum.  Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be a state or federal court located within the State of Delaware, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. Any person or entity owning, purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this ARTICLE IX.
 
9.2           Foreign Action.  If any action the subject matter of which is within the scope of Section 9.1 immediately above is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section 8.6(a) immediately above (an “FSC Enforcement Action”) and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.
 
9.3           Litigation Costs.  Unless otherwise determined by a majority of the Board of Directors of the Corporation, in the event that (i) any stockholder (the “Claiming Party”) initiates or asserts any claim or counterclaim (each, a “Claim”) or joins, offers substantial assistance to or has a direct financial interest in any Claim against the Corporation or any of its stockholders (including any Claim purportedly filed on behalf of the Corporation or any of its stockholders) and (ii) the Claiming Party (or the third party that received substantial assistance from the Claiming Party or in whose Claim the Claiming Party had a direct financial interest) does not obtain a judgment on the merits that substantially achieves, in substance and amount, the full remedy sought, then each Claiming Party shall be jointly and severally liable for and pay to the Corporation or such stockholder all fees, costs and expenses (including, but not limited to, all attorneys’ fees and other litigation expenses) incurred by the Corporation or such stockholder in connection with such Claim, including any appeal relating thereto.
 
ARTICLE X: AMENDMENT
 
10.1          Amendment.  The Corporation reserves the right to amend and repeal any provision contained in this Certificate of Incorporation in the manner from time to time prescribed by the laws of the State of Delaware.  All rights herein con­ferred are granted subject to this reservation.
 
 EX-10.4 3 prex10_4.htm prex10_4.htm
 
 
 
Exhibit 10.4
 
 
 
 
BYLAWS OF
 
SFX ENTERTAINMENT, INC.
 
Effective as of _______, 2015
 
ARTICLE I
 
Offices
 
SECTION 1.   Registered Office and Agent.  The registered office of the Corporation within the State of Delaware shall be c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle, 19801.  The registered agent of the Company for service of process at such address is The Corporation Trust Company.
 
SECTION 2.   Other Offices. The Corporation may also have an office or offices other than said registered office at such place or places, either within or without the State of Delaware, as the Board of Directors shall from time to time determine or the business of the Corporation may require.
 
ARTICLE II
 
Stockholders
 
SECTION 1.   Annual Meeting.  An annual meeting of stockholders shall be held for the election of directors at such date, time and place either within or without the State of Delaware as may be designated by the Board of Directors from time to time.  Any other proper business may be transacted at the annual meeting.
 
SECTION 2.   Special Meetings.  Special meetings of the stockholders, for any purpose or purposes prescribed in the notice of the meeting, may be called by the Board of Directors or the chief executive officer and shall be held at such place, on such date, and at such time as they or he or she shall fix.
 
SECTION 3.   Notice of Meetings.
 
(a)           Notice of all meetings of stockholders shall be given in writing or by electronic transmission in the manner provided by applicable law stating the place, if any, date and time of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise required by applicable law or the certificate of incorporation of the Corporation (the “Certificate of Incorporation”), such notice shall be given not less than ten (10), nor more than sixty (60), days before the date of the meeting to each stockholder of record entitled to vote at such meeting as of the record date for determining stockholders entitled to notice of the meeting.
 
(b)           When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than thirty (30) days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, notice of the place, if any, date, and time of the adjourned meeting and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, shall be given in conformity herewith.  At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting.
 
SECTION 4.   Quorum.
 
(a)           At any meeting of the stockholders, the holders of a majority of all of the shares of the stock entitled to vote at the meeting, present in person or by proxy, shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by applicable law.  Where a separate vote by a class or classes or series is required, a majority of the shares of such class or classes or series present in person or represented by proxy shall constitute a quorum entitled to take action with respect to that vote on that matter.
 
(b)           If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority of the shares of stock entitled to vote who are present, in person or by proxy, may adjourn the meeting to another place, if any, date, or time.
 
SECTION 5.   Organization.  Such person as the Board of Directors may have designated or, in the absence of such a person, the President of the Corporation or, in his or her absence, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or by proxy, shall call to order any meeting of the stockholders and act as chairman of the meeting.  In the absence of the Secretary of the Corporation, the secretary of the meeting shall be such person as the chairman of the meeting appoints.
 
SECTION 6.   Conduct of Business. The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seem to him or her in order.  The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting.
 
SECTION 7.   Proxies and Voting.
 
(a)           At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting.  Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this paragraph may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.
 
(b)           The Corporation may, and to the extent required by law, shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof.  The Corporation may designate one or more alternate inspectors to replace any inspector who fails to act.  If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting may, and to the extent required by law, shall, appoint one or more inspectors to act at the meeting.  Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability.  Every vote taken by ballots shall be counted by an inspector or inspectors appointed by the chairman of the meeting.
 
(c)           All elections shall be determined by a plurality of the votes cast, and except as otherwise required by law, all other matters shall be determined by a majority of the votes cast affirmatively or negatively.
 
SECTION 8.   List of Stockholders Entitled to Vote. A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in his or her name, shall be open to the examination of any such stockholder for a period of at least ten (10) days prior to the meeting in the manner provided by law.  The list of stockholders shall also be open to the examination of any stockholder during the whole time of the meeting as provided by law.  This list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.
 
SECTION 9.   Consent of Stockholders in Lieu of Meeting.
 
(a)           Any action required to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded.  Delivery made to the Corporation’s registered office shall be made by hand or by certified or registered mail, return receipt requested.
 
(b)           Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the date the earliest dated consent is delivered to the Corporation, a written consent or consents signed by a sufficient number of holders to take action are delivered to the Corporation in the manner prescribed in the first paragraph of this Section.  A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed to be written, signed and dated for the purposes of this Section to the extent permitted by law.  Any such consent shall be delivered in accordance with Section 228(d)(1) of the Delaware General Corporation Law.
 
(c)           Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.
 
ARTICLE III
 
Board of Directors
 
SECTION 1.   General Powers.  The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.  The Board of Directors may exercise all such powers and authority of the Corporation and do all such lawful acts and things as are not by applicable law, the Certificate of Incorporation, these Bylaws or any agreement on binding on the Corporation directed or required to be exercised or done by the stockholders.
 
SECTION 2.    Number and Term of Office. The number of directors constituting the initial Board of Directors shall be one.  Thereafter, the number of directors may be fixed, from time to time, by the affirmative vote of a majority of the entire Board of Directors or by action of the stockholders of the Corporation.  Any decrease in the number of directors shall be effective at the time of the next succeeding annual meeting of stockholders unless there shall be vacancies in the Board of Directors, in which case such decrease may become effective at any time prior to the next succeeding annual meeting to the extent of the number of such vacancies.  Directors need not be stockholders.  Except as otherwise provided by statute or these Bylaws, the directors (other than members of the initial Board of Directors) shall be elected at the annual meeting of stockholders.  Each director shall hold office until his successor shall have been elected and qualified, or until his death, or until he shall have resigned, or have been removed, as hereinafter provided in these Bylaws.
 
SECTION 3.   Removal. Any director may be removed, either with or without cause, at any time, by the holders of a majority of the voting power of the issued and outstanding capital stock of the Corporation entitled to vote at an election of directors.
 
SECTION 4.   Resignation. Any director of the Corporation may resign at any time by giving written notice of his resignation to the Corporation.  Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt.  Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
 
SECTION 5.   Vacancies. Any vacancy in the Board of Directors, whether arising from death, resignation, removal (with or without cause), an increase in the number of directors or any other cause, may be filled by the vote of a majority of the directors then in office, though less than a quorum, or by the sole remaining director or by the stockholders at the next annual meeting thereof or at a special meeting thereof.  Each director so elected shall hold office until his successor shall have been elected and qualified.
 
SECTION 6.   Regular Meetings. Regular meetings of the Board of Directors shall be held at such place or places, on such date or dates, and at such time or times as shall have been established by the Board of Directors and publicized among all directors.  A notice of each regular meeting shall not be required.
 
SECTION 7.   Special Meetings. Special meetings of the Board of Directors may be called by the Chairperson of the Board of Directors, the President or a majority of the directors then in office and shall be held at such place, on such date, and at such time as they or he or she shall fix.  Notice of the place, date, and time of each such special meeting shall be given to each director by whom it is not waived by mailing written notice not less than three (3) days before the meeting or by telegraphing or telexing or by facsimile or electronic transmission of the same not less than twenty-four (24) hours before the meeting.  Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.
 
SECTION 8.   Waiver of Notice and Presumption of Assent. Any member of the Board of Directors or any committee thereof who is present at any meeting shall be presumed to have waived notice except when such member participates for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting was not lawfully called or convened.
 
SECTION 9.   Quorum. At any meeting of the Board of Directors, a majority of the total number of the whole Board of Directors shall constitute a quorum for all purposes.  If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to another place, date, or time, without further notice or waiver thereof.
 
SECTION 10.  Participation in Meetings By Conference Telephone. Members of the Board of Directors, or of any committee thereof, may participate in a meeting of such Board of Directors or committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other and such participation shall constitute presence in person at such meeting.
 
SECTION 11.  Conduct of Business. At any meeting of the Board of Directors, business shall be transacted in such order and manner as the Board of Directors may from time to time determine, and all matters shall be determined by the vote of a majority of the directors present, except as otherwise provided herein or required by law.  Action may be taken by the Board of Directors without a meeting if all members thereof consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors.  Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
 
SECTION 12.  Compensation of Directors. Directors, as such, may receive, pursuant to resolution of the Board of Directors, fixed fees and other compensation for their services as directors, including, without limitation, their services as members of committees of the Board of Directors.
 
SECTION 13.  Chairperson of the Board. The Corporation may also have, at the discretion of the Board of Directors, a Chairperson of the Board of Directors who shall be elected from among its ranks and who shall have the power to preside at all meetings of the Board of Directors and have such other powers and duties as provided in these Bylaws and as the Board of Directors may from time to time prescribe. The Chairperson of the Board, as such, shall not be deemed to be an officer of the Corporation.
 
ARTICLE IV
 
Committees
 
SECTION 1.   Committees of the Board of Directors. The Board of Directors may from time to time designate committees of the Board of Directors, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board of Directors and shall, for those committees and any others provided for herein, elect a director or directors to serve as the member or members, designating, if it desires, other directors as alternate members who may replace any absent or disqualified member at any meeting of the committee.  In the absence or disqualification of any member of any committee and any alternate member in his or her place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may by unanimous vote appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member.
 
SECTION 2.   Conduct of Business. Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law.  Adequate provision shall be made for notice to members of all meetings; one-third (1/3) of the members shall constitute a quorum unless the committee shall consist of one (1) or two (2) members, in which event one (1) member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present.  Action may be taken by any committee without a meeting if all members thereof consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of the proceedings of such committee.  Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
 
ARTICLE V
 
Officers
 
SECTION 1.   Generally. The officers of the Corporation shall consist of a President, a Secretary, a Chief Financial Officer, and such other officers as may from time to time be appointed by the Board of Directors.  Officers shall be elected by the Board of Directors, which shall consider that subject at its first meeting after every annual meeting of stockholders.  Each officer shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal.  Any number of offices may be held by the same person.
 
SECTION 2.   President. The President shall be the chief executive officer of the Corporation.  Subject to the provisions of these Bylaws and to the direction of the Board of Directors, he or she shall have the responsibility for the general management and control of the business and affairs of the Corporation and shall perform all duties and have all powers which are commonly incident to the office of chief executive or which are delegated to him or her by the Board of Directors.  He or she shall have power to sign all stock certificates, contracts and other instruments of the Corporation which are authorized and shall have general supervision and direction of all of the other officers, employees and agents of the Corporation.
 
SECTION 3.   Chief Financial Officer. The Chief Financial Officer shall have general supervision, direction and control of the financial affairs of the Corporation and shall have such other powers and duties as may be prescribed by the Board of Directors or these Bylaws. In the absence of a named treasurer, the Chief Financial Officer shall also have the powers and duties of the Treasurer as hereinafter set forth and shall be authorized and empowered to sign as treasurer in any case where such officer's signature is required.
 
SECTION 4    Vice President. In the absence of the President or in the event of the President's inability or refusal to act, the Vice President, or in the event there be more than one Vice President, the Vice President designated by the Board of Directors, or if no such designation is made, in order of their election, shall perform the duties of President and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice President shall perform such other duties as from time to time may be assigned to such Vice President by the President or the Board of Directors.
 
SECTION 5.   Treasurer. The Treasurer shall have the responsibility for maintaining the financial records of the Corporation.  He or she shall make such disbursements of the funds of the Corporation as are authorized and shall render from time to time an account of all such transactions and of the financial condition of the Corporation.  The Treasurer shall also perform such other duties as the Board of Directors may from time to time prescribe.  In the absence of a named chief financial officer, the Treasurer shall be deemed to be the Chief Financial Officer and shall have the powers and duties of such office as hereinabove set forth.
 
SECTION 6.   Secretary. The Secretary shall issue all authorized notices for, and shall keep minutes of, all meetings of the stockholders and the Board of Directors.  He or she shall have charge of the corporate books and shall perform such other duties as the Board of Directors may from time to time prescribe.
 
SECTION 7.   Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof.
 
SECTION 8.   Removal. Any officer of the Corporation may be removed at any time, with or without cause, by the Board of Directors.
 
SECTION 9.   Action with Respect to Securities of Other Corporations. Unless otherwise directed by the Board of Directors, the President or any officer of the Corporation authorized by the President shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders of or with respect to any action of stockholders of any other corporation in which this Corporation may hold securities and otherwise to exercise any and all rights and powers which this Corporation may possess by reason of its ownership of securities in such other corporation.
 
ARTICLE VI
 
Stock
 
SECTION 1.   Transfers of Stock. Transfers of stock shall be made only upon the transfer books of the Corporation kept at an office of the Corporation or by transfer agents designated to transfer shares of the stock of the Corporation.  Except where a certificate is issued in accordance with Section 4 of Article VI of these Bylaws, an outstanding certificate, if one has been issued, for the number of shares involved shall be surrendered for cancellation before a new certificate, if any, is issued therefor.
 
SECTION 2.   Record Date.
 
(a)           In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders, or to receive payment of any dividend or other distribution or allotment of any rights or to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of any meeting of stockholders, nor more than sixty (60) days prior to the time for such other action as hereinbefore described; provided, however, that if no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held, and, for determining stockholders entitled to receive payment of any dividend or other distribution or allotment of rights or to exercise any rights of change, conversion or exchange of stock or for any other purpose, the record date shall be at the close of business on the day on which the Board of Directors adopts a resolution relating thereto.
 
(b)           A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
 
(c)           In order that the Corporation may determine the stockholders entitled to consent to corporate action without a meeting, (including by telegram, cablegram or other electronic transmission as permitted by law), the Board of Directors may fix a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall be not more than ten (10) days after the date upon which the resolution fixing the record date is adopted.  If no record date has been fixed by the Board of Directors and no prior action by the Board of Directors is required by the Delaware General Corporation Law, the record date shall be the first date on which a consent setting forth the action taken or proposed to be taken is delivered to the Corporation in the manner prescribed by Article II, Section 9 hereof.  If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by the Delaware General Corporation Law with respect to the proposed action by consent of the stockholders without a meeting, the record date for determining stockholders entitled to consent to corporate action without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.
 
SECTION 3.   Lost, Stolen or Destroyed Certificates. In the event of the loss, theft or destruction of any certificate of stock, another may be issued in its place pursuant to such regulations as the Board of Directors may establish concerning proof of such loss, theft or destruction and concerning the giving of a satisfactory bond or bonds of indemnity.
 
SECTION 4.   Regulations. The issue, transfer, conversion and registration of certificates of stock shall be governed by such other regulations as the Board of Directors may establish.
 
ARTICLE VII
 
Notices
 
SECTION 1.   Notices. If mailed, notice to stockholders shall be deemed given when deposited in the mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation.  Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders may be given by electronic transmission in the manner provided in Section 232 of the Delaware General Corporation Law.
 
SECTION 2.   Waivers. A written waiver of any notice, signed by a stockholder or director, or waiver by electronic transmission by such person, whether given before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such person.  Neither the business nor the purpose of any meeting need be specified in such a waiver.
 
ARTICLE VIII
 
Miscellaneous
 
SECTION 1.   Facsimile Signatures. In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.
 
SECTION 2.   Corporate Seal. The Board of Directors may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary.  If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary or Assistant Treasurer.
 
SECTION 3.   Reliance upon Books, Reports and Records. Each director, each member of any committee designated by the Board of Directors, and each officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board of Directors so designated, or by any other person as to matters which such director or committee member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.
 
SECTION 4.   Fiscal Year. The fiscal year of the Corporation shall be as fixed by the Board of Directors.
 
SECTION 5.   Time Periods. In applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.
 
ARTICLE IX
 
Indemnification of Directors and Officers
 
SECTION 1.   Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, including, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director or an officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, or trustee of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer or trustee, or in any other capacity while serving as a director, officer or trustee, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by Delaware law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including, without limitation, court costs, attorneys’ fees, witness fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith; provided, however, that, except as provided in Section 3 of this ARTICLE IX with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation.
 
SECTION 2.   Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 1 of this ARTICLE IX, an indemnitee shall also have the right to be paid by the Corporation the expenses (including attorney’s fees) incurred in defending any such proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that, , an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Section 2 or otherwise.
 
SECTION 3.   Right of Indemnitee to Bring Suit. If a claim under Section 1 or 2 of this ARTICLE IX is not paid in full by the Corporation within sixty (60) days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim.  If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit.  In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law.  Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit.  In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this ARTICLE IX or otherwise shall be on the Corporation.
 
SECTION 4.   Non-Exclusivity of Rights. The rights to indemnification and to the advancement of expenses conferred in this ARTICLE IX shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Corporation’s Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise.  The Corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the Delaware General Corporation Law or any other applicable law.
 
SECTION 5.   Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law.
 
SECTION 6.   Indemnification of Employees and Agents of the Corporation. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.
 
SECTION 7.   Nature of Rights. The rights conferred upon indemnitees in this ARTICLE IX shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer or trustee and shall inure to the benefit of the indemnitee’s heirs, executors and administrators.  Any amendment, alteration or repeal of this ARTICLE IX that adversely affects any right of an indemnitee or its successors shall be prospective only and shall not limit or eliminate any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment, alteration or repeal.
 
SECTION 8.   Saving Clause. If this ARTICLE IX or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer to the full extent not prohibited by any applicable portion of this ARTICLE IX that shall not have been invalidated, or by any other applicable law.  If this ARTICLE IX shall be invalid due to the application of the indemnification provisions of another jurisdiction, then the Corporation shall indemnify each director and officer to the full extent under applicable law.
 
ARTICLE X
 
Amendments
 
These Bylaws may be amended or repealed by the Board of Directors at any meeting or by the stockholders at any meeting.
 
 EX-10.5 4 prex10_5.htm prex10_5.htm
 
 
 
Exhibit 10.5
 
 

 
_________________________________

STOCKHOLDERS’ AGREEMENT

_________________________________


by and among

SFX ENTERTAINMENT, INC.

SILLERMAN INVESTMENT COMPANY III LLC

and

the MINORITY STOCKHOLDERS party hereto




Dated as of ______, 2015


 

TABLE OF CONTENTS

Page

 
1.
Definitions
1
     
2.
Interpretation
1
     
3.
Restrictions on Transfer of Company Stock
2
     
4.
Drag-Along Rights
3
     
5.
Right of First Refusal
5
     
6.
Board of Directors
6
     
7.
Legend
7
     
8.
Conflicting Agreement
7
     
9.
Information Rights
7
     
10.
Corporate Opportunities
7
     
11.
Confidentiality
8
     
12.
Further Assurances
9
     
13.
Amendment
9
     
14.
Successors and Assigns
9
     
15.
Notices
10
     
16.
No Third-party Beneficiaries
11
     
17.
Governing Law
11
     
18.
Submission to Jurisdiction
11
     
19.
Waiver of Jury Trial
12
     
20.
Entire Agreement
12
     
21.
Severability
12
     
22.   
Counterparts
12
     
23.
Specific Performance
12
     
24.
Lockup
13
     
25.
Termination
13
     
Schedule I - List of Stockholders
19
 
 
 
 
 
SFX ENTERTAINMENT, INC.
STOCKHOLDERS’ AGREEMENT


This STOCKHOLDERS’ AGREEMENT (this “Agreement”) is dated as of ____, 2015, by and among SFX Entertainment, Inc., a Delaware corporation (the “Company”), Sillerman Investment Company III LLC (together with its Affiliates who hold Equity Securities, the “Majority Stockholder”) and the other the stockholders of the Company listed on the signature pages hereto or who became a party to this Agreement by executing a Form of Election (as defined in the Merger Agreement) or who become a party to this Agreement after the date hereof pursuant to the terms hereof or by executing and delivering a Joinder Agreement (a “Joinder Agreement”) in the form set forth on Exhibit A hereto (each, a “Minority Stockholder” and collectively with the Majority Stockholder, the “Stockholders”).
 
RECITALS
 
A.           The Stockholders and the Company wish to set forth certain agreements regarding their relationships and their rights and obligations with respect to the ownership and transfer of Company Stock.
 
B.           As of the date hereof, the Stockholders own the number of shares of Company Stock as is set forth on Schedule I hereto (as such Schedule may be updated from time to time as set forth herein).
 
NOW, THEREFORE, in consideration of the mutual promises and subject to the terms and conditions herein contained, and other good and valuable consideration had and received, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
 
1.           Definitions.  Capitalized and other terms used and not otherwise defined herein shall have their respective meanings as defined in Annex A hereto.
 
2.           Interpretation.
 
(a)           Unless the context clearly requires otherwise, the words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement.
 
(b)           The terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.
 
(c)           References herein to a specific Article, Section, Schedule, Exhibit or Annex shall refer, respectively, to Articles, Sections, Schedules, Exhibits or Annexes of this Agreement, unless the express context otherwise requires.
 
(d)           Whenever the word “include,” “includes” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation,” unless clearly indicated otherwise.
 
(e)           The headings and titles in this Agreement are included for convenience of reference only and shall not limit or otherwise affect the meaning or interpretation of this Agreement.
 
(f)           Unless the context otherwise requires, any reference in this Agreement to gender includes all genders, and words imparting the singular number only, include the plural and vice versa.
 
3.           Restrictions on Transfer of Company Stock.
 
(a)           Prohibition Against Transfer of Company Stock. From the date hereof until the 12-month anniversary of the date hereof (the “Restricted Period”), without the consent of the Majority Stockholder, no Minority Stockholder may, directly or indirectly, sell, transfer, assign, donate, contribute, pledge, hypothecate, encumber or otherwise dispose of (any of the foregoing, a “Transfer”) any Company Stock, or any interest therein, except in accordance with this Section 3 or with the prior written consent of the Company.
 
(b)           From and after the Restricted Period, without the consent of the Majority Stockholder, no Minority Stockholder may Transfer any shares of Company Stock to any Person unless such Minority Stockholder is Transferring all of such Stockholder’s shares of Company Stock to the same Person.
 
(c)           Permitted Transfers.  Subject to Section 4(f), the provisions of Section 3(a) shall not apply to the following Transfers:
 
(i)           any Transfer by a Minority Stockholder of all of the shares of Company Stock held by such Minority Stockholder to one member of such Minority Stockholder’s Family Group or to one  Affiliate of such Minority Stockholder;
 
(ii)           any Transfer of Company Stock by a Minority Stockholder to the Company;
 
(iii)           any Transfer of Company Stock by a Minority Stockholder to any Person in connection with a merger, consolidation, acquisition, sale, exchange, recapitalization, reorganization, or similar transaction, in each case as approved by the Board; and
 
(iv)           any Transfer of Company Stock pursuant to Section 4;
 
(the transferee of any such Transfer being a “Permitted Transferee”); provided that the Minority Stockholder making the Transfer must first give the Company at least ten (10) days prior written notice of such Transfer, which notice must include the name and address of the Permitted Transferee and the number of shares of Company Stock to be Transferred.
 
(d)           General Restrictions. Any Transferee of Company Stock (other than, following an IPO, a Transferee of Company Stock in a Brokered Transaction) must agree in writing to become a party to, and to be bound by the provisions of, this Agreement by executing a Joinder Agreement (unless such transferee is already so bound). Any Transfer or attempted Transfer of any Company Stock in violation of any provision of this Agreement shall be null and void ab initio, and the Company shall not record such Transfer on its books or treat any purported, transferee of such Company Stock as the owner of such shares for any purpose.
 
4.           Drag-Along Rights.
 
(a)           If the Majority Stockholder, whether alone or in concert with any other Stockholder (the “Drag-Along Sellers”), proposes to Transfer any Company Stock (including pursuant to a merger), to any Person or Group that is not an Affiliate of the Majority Stockholder (a “Third Party Purchaser”) and such Company Stock constitutes 50% or more of the shares of Company Stock of the Company then held by the Drag-Along Sellers or their Affiliates, then the Drag-Along Sellers may require each other Stockholder (the “Dragged Stockholder”) to Transfer that percentage of its Company Stock equal to the percentage of the Company Stock held by the Drag-Along Sellers which is being Transferred to the Third Party Purchaser for the same per share consideration and otherwise on substantially the same terms and conditions as those received by the Drag-Along Sellers (the “Drag-Along Sale”).
 
(b)           The Drag-Along Sellers shall send written notice (the “Drag-Along Notice”) of the exercise of their rights pursuant to this Section 4 to each Dragged Stockholder setting forth the consideration per share of Company Stock to be paid pursuant to the Drag-Along Sale, the identity of the Third Party Purchaser and any other material terms and conditions of the transaction.  Each Dragged Stockholder, upon receipt of the Drag-Along Notice, shall be obligated to (i) vote its shares of Company Stock, if applicable, in favor of such Drag-Along Sale at any meeting of holders of Company Stock called to vote on or approve such Drag-Along Sale (or any written consent solicited for such purpose), (ii) participate in the Drag-Along Sale and Transfer all of its shares of Company Stock required to be Transferred pursuant to Section 4(a) to such Third Party Purchasers and (iii) otherwise take all necessary action, including, without limitation, to the extent applicable, expressly waiving any dissenter’s rights or rights of appraisal or similar rights, entering into an agreement reflecting the terms of the Drag-Along Sale, surrendering certificates, cooperating in obtaining any applicable Governmental Authorization and otherwise as reasonably required to assist the Drag-Along Sellers in the consummation of such Drag-Along Sale.  Any such Drag-Along Notice may be rescinded by the Drag-Along Sellers by delivering written notice thereof to each Dragged Stockholder.
 
(c)           Solely for purposes of Section 4(b)(i) and in order to secure the performance of each Stockholder’s obligations under Section 4(b)(i), each Stockholder hereby irrevocably appoints each other Stockholder that qualifies as a Drag-Along Proxy Holder (as defined below) the attorney-in-fact and proxy of such Stockholder (with full power of substitution) to vote or provide a written consent with respect to its Company Stock as described in this paragraph if, and only in the event that, such Stockholder fails to vote or provide a written consent with respect to its Company Stock in accordance with the terms of Section 4(b)(i) (each such Stockholder, a “Breaching Drag-Along Stockholder”) within three (3) days of a request for such vote or written consent.  Upon such failure, the Drag-Along Sellers shall have and are hereby irrevocably granted a proxy to vote or provide a written consent with respect to each such Breaching Drag-along Stockholder’s Company Stock for the purposes of taking the actions required by Section 4(b)(i) (such Drag-Along Sellers, a “Drag-Along Proxy Holder”).  Each Stockholder intends this proxy to be, and it shall be, irrevocable and coupled with an interest, and each Stockholder will take such further action and execute such other instruments as may be necessary to effectuate the intent of this proxy and hereby revoke any proxy previously granted by it with respect to the matters set forth in Section 4(b)(i) with respect to the Company Stock owned by such Stockholder.  Notwithstanding the foregoing, the conditional proxy granted by this Section 4(c) shall be deemed to be revoked upon the termination of this Section 4 in accordance with this Agreement.
 
(d)           The obligations of each Dragged Stockholder pursuant to Section 4(a) are subject to the satisfaction of the following conditions:
 
(i)           A Dragged Stockholder shall not be required to provide any representations or warranties in connection with the Drag-Along Sale other than representations and warranties concerning such Dragged Stockholder’s valid ownership of its shares of Company Stock free of all Encumbrances, and such Dragged Stockholder’s authority, power and right to enter into and consummate the Drag-Along Sale.
 
(ii)           In the event that the Drag-Along Sellers are required to provide representations, warranties or indemnities in connection with the Drag-Along Sale (other than representations, warranties or indemnities concerning the Drag-Along Sellers valid ownership of their shares of Company Stock free of all Encumbrances, and the Drag-Along Sellers authority, power and right to enter into and consummate the Drag-Along Sale without violating any other agreement) and the Drag-Along Sellers are required to indemnify the party or parties transacting with the Drag-Along Sellers in the Drag-Along Sale, then each Dragged Stockholder shall provide the same indemnity as the Drag-Along Sellers to the party or parties transacting with the Drag-Along Sellers in the Drag-Along Sale to the extent of the lesser of (A) its pro rata share of such indemnification payments (based upon the total consideration received by such Dragged Stockholder divided by the total consideration received by all sellers in such Drag-Along Sale) and (B) the total proceeds actually received by such Dragged Stockholder as consideration for its shares of Company Stock in such Drag-Along Sale.  In any such event, such liability shall be several and not joint with any other Person.
 
(e)           Each Dragged Stockholder shall use commercially reasonable efforts to secure any Governmental Authorization required to be obtained by such Dragged Stockholder and shall provide any information which may be needed from such Dragged Stockholder in connection therewith, to comply as soon as reasonably practicable with all applicable Laws and to take all such other actions and to execute such additional documents as are necessary or appropriate in order to consummate the Drag-Along Sale.
 
(f)           Notwithstanding anything in this Section 4 to the contrary, no Transfer by any Dragged Stockholder shall be permitted from the time that a Drag-Along Notice is received until the consummation or termination of such Drag-Along Sale (other than any Transfer by the Dragged Stockholders in such Drag-Along Sale).  For avoidance of doubt, the provisions of this Section 4 shall also apply to any shares of Company Stock acquired by or issued to any Stockholder after the date of this Agreement.
 
(g)           Any Drag-Along Sale may be structured as an auction and may be initiated by the delivery to the Company of a written notice that the Majority Stockholder has elected to initiate an auction sale procedure.  The Majority Stockholder and its Affiliates shall be entitled to take all steps reasonably necessary to carry out an auction of the Company, including selecting an investment bank, providing confidential information (pursuant to confidentiality agreements), selecting the winning bidder and negotiating the requisite documentation.  The Company and each Stockholder shall provide reasonable assistance at the cost of the Company with respect to these actions as reasonably requested by the Majority Stockholder and its Affiliates.
 
(h)           All costs and expenses incurred by any Dragged Stockholder in connection with the Drag-Along Sale shall be borne by such Dragged Stockholder.  Notwithstanding the foregoing, the Dragged Stockholders shall not be required to bear any costs and expenses of such Drag-Along incurred by the Drag-Along Sellers (it being understood that such expenses may be paid for by the Company).
 
(i)           For purposes of clarification, when used in this Section 4, the phrases “same per share consideration” and “equivalent terms and conditions” shall not include transaction, banking, monitoring or service fees or any other fees of a similar nature or other compensation for services paid to the Majority Stockholder or its Affiliates, whether in connection with such Drag-Along Sale or otherwise, whether in connection with such Drag-Along Sale or otherwise.
 
5.            Right of First Refusal.
 
(a)           If any Minority Stockholder (the “Transferring Stockholder”) proposes to Transfer any of its Company Stock following the Restricted Period to a Person other than a Permitted Transferee (a “Proposed Acquirer” and such Transfer, a “ROFR Sale”), then, prior to making the ROFR Sale, such Minority Stockholder shall give written notice (the “ROFR Notice”) to the Majority Stockholder of the ROFR Sale. The ROFR Notice shall include (i) the material terms and conditions of the ROFR Sale, including the number of shares of Company Stock proposed to be Transferred (the “ROFR Stock”), the name of the Proposed Acquirer and the proposed amount and form of consideration (the “ROFR Terms”) and (ii) an invitation to the Majority Stockholder to make an offer to acquire the ROFR Stock described in the ROFR Notice on the ROFR Terms (the “ROFR”).
 
(b)           The Majority Stockholder shall exercise the ROFR within ten (10) Business Days following receipt of the ROFR Notice by delivering written notice to the Transferring Stockholder indicating its desire to exercise the ROFR to acquire the ROFR Stock at a price per share at least equal to the amount specified in the ROFR Notice and on other terms consistent with the ROFR Terms.
 
(c)           If the Majority Stockholder does not exercise the ROFR within the ten (10) Business Day period specified in Section 5(b), then at the end of such period, the Transferring Holder shall be entitled for a period of sixty (60) days (but not thereafter without having first complied again with this Section 5), to Transfer the ROFR Stock to the Proposed Acquirer at the price and on the terms and conditions which are not more favorable to the Proposed Acquirer than the ROFR Terms.
 
6.             Board of Directors.
 
(a)           Composition of the Board. The Board of Directors of the Company (the “Board”) shall at all times include one independent director (the “Independent Director”). All of the directors (including the Independent Director) shall be designated by the Majority Stockholder (the “MS Designees”).  Each Stockholder then entitled to vote for the election of directors to the Board agrees that it shall vote all of its shares of Company Stock that are entitled to vote or execute proxies or written consents, as the case may be, and take or cause to be taken all other necessary actions, in order to ensure that the MS Designees are elected to the Board.
 
(b)           Removal.  Each proposal to remove from the Board any director shall be made by the Majority Stockholder, and only the Majority Stockholder, in a notice delivered to the Board signed by the Majority Stockholder requesting such removal.  As promptly as practicable, but in any event within five days of the Board’s receipt of such notice, the Company and the Stockholders shall take or cause to be taken such actions as may reasonably be required to cause the removal proposed in such notice, including voting all of their shares of Company Stock that are entitled to vote, or executing proxies or written consents, as the case may be, in favor of such removal.  Each Stockholder agrees that, if at any time it is entitled to vote for the removal of directors from the Board, it shall not vote any of its Company Stock in favor of the removal of any of director who shall have been designated pursuant to Section 6(a) or (c), unless the Majority Stockholder shall have delivered a notice of removal in accordance with this Section 6(b).
 
(c)           Vacancies.  If, as a result of death, disability, retirement, resignation or removal or an increase in the authorized number of directors or otherwise, there shall exist or occur any vacancy on the Board:
 
(i)           the Majority Stockholder, and only the Majority Stockholder, may designate another individual (the “Replacement Nominee”) to fill such vacancy and serve as a director on the Board by delivering to the Board a notice signed by the Majority Stockholder (including to fill a vacancy to serve as the Independent Director); and
 
(ii)           each Stockholder then entitled to vote for the election of directors to the Board agrees that it shall vote all of its shares of Company Stock that are entitled to vote or execute proxies or written consents, as the case may be, and take or cause to be taken all other necessary actions, in order to ensure that the Replacement Nominee be elected to the Board.
 
(d)           No Liability for Election of Recommended Director.  None of the parties hereto and no officer, director, stockholder, partner, employee or agent of any party makes any representation or warranty as to the fitness or competence of the nominee of any party hereunder to serve on the Board by virtue of such party’s execution of this Agreement or by the act of such party in nominating or voting for such nominee pursuant to this Agreement.
 
(e)           Certain Actions. None of the Company nor any of its Subsidiaries shall enter into any transaction, arrangement or agreement involving fair market consideration in excess of $3,000,000 with the Majority Stockholder or any of its Affiliates without the prior approval of the Board in accordance with the Bylaws (which approval must include the affirmative vote of the Independent Director); provided, that the approval of the Independent Director shall not be required in the event that a fairness opinion from an investment banking firm of national reputation with respect thereto is obtained and provided to the Board.
 
7.           Legend.  Each certificate evidencing Company Stock and each certificate issued in exchange for or upon the Transfer of any Company Stock (if such shares remain Company Stock as defined herein after such Transfer) shall be stamped or otherwise imprinted with a legend in substantially the following form:
 
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER, AND CERTAIN OTHER AGREEMENTS SET FORTH IN THE STOCKHOLDERS’ AGREEMENT, DATED AS OF ______, 2015, BY THE COMPANY AND THE PARTIES THERETO,  A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.”
 
The Company shall imprint such legend on certificates evidencing outstanding Company Stock. If any shares of Company Stock are Transferred to a Transferee pursuant to a Brokered Transaction following an IPO, the Company, upon the written request of such Transferee, will issue to such Transferee a new certificate evidencing such securities without the legend required by this Section 7 endorsed thereon.
 
8.           Conflicting Agreement.  Each Stockholder represents and warrants that it has not granted and is not a party to any proxy, voting trust or other agreement which is inconsistent with or conflicts with the provisions of this Agreement, and no Stockholder shall grant any proxy or become party to any voting trust or other agreement which is inconsistent with or conflicts with the provisions of this Agreement.
 
9.           Information Rights. The Company shall cause to be furnished to each Stockholder that owns more than 5% of the then issued and outstanding shares of Common Stock and, upon written request, to each other requesting Stockholder, within one hundred eighty (180) days after the closing of each fiscal year of the Company, the audited financial statements of the Company Group or, if later, promptly following the written request of any requesting Stockholder.
 
10.           Corporate Opportunities.
 
(a)           The Majority Stockholder, any of its Affiliates or any of its or their officers, directors, agents, stockholders, members, partners, Affiliates and subsidiaries (other than the Company and its Subsidiaries), including in their capacity as a director or officer of the Company or its Subsidiaries (the “Majority Parties”) may, and shall have no duty not to (i) carry on and conduct, whether directly or indirectly (including as a partner, member or joint venture of any Person, as an officer, director or stockholder of any Person, or as a participant in any syndicate, pool, trust or association) any business of any kind, nature or description, whether or not such business is competitive with or in the same or similar lines of business as the Company or any of its Subsidiaries, (ii) do business with any client, customer, vendor or lessor of the Company or any of its Subsidiaries, and (iii) make investments in any kind of property in which the Company or any of its Subsidiaries may make investments.  To the fullest extent permitted by applicable Law, the Company hereby renounces any interest or expectancy of the Company and its Subsidiaries to participate in any business of any Majority Party, and waives any claim against any Majority Party and shall indemnify each Majority Party against any claim that such Majority Party is liable to the Company or the Stockholders for breach of any fiduciary duty by reason of such Majority Party’s participation in any such business.
 
(b)           In the event that a Majority Party acquires knowledge of a potential transaction or matter which may constitute a corporate opportunity for both (x) a Majority Party and (y) the Company or any of its Subsidiaries, the Majority Party shall not have any duty to offer or communicate information regarding such corporate opportunity to the Company or any of its Subsidiaries.  To the fullest extent permitted by applicable Law, the Company hereby renounces any interest or expectancy of the Company or any of its Subsidiaries in such corporate opportunity and waives any claim against each Majority Party and shall indemnify each Majority Party against any claim that such Majority Party is liable to the Company or its Stockholders for breach of any fiduciary duty by reason of the fact that such Majority Party (i) pursues or acquires any corporate opportunity for its own account or the account of any other Person, (ii) directs, recommends, sells, assigns, or otherwise transfers such corporate opportunity to another Person or (iii) does not communicate information regarding such corporate opportunity to the Company or its Subsidiaries.
 
11.           Confidentiality.
 
(a)           Each Minority Stockholders agrees that he, she or it shall (and shall cause its Affiliates and its and their officers, directors, employees, partners, legal counsel, agents and representatives to) (collectively, the “Confidentiality Affiliates”) (i) hold confidential and not disclose (other than by a Stockholder to its Confidentiality Affiliates having a reasonable need to know in connection with the permitted purposes hereunder), without the prior written consent of the Company, all confidential or proprietary written, recorded or oral information or data (including research, developmental, engineering, manufacturing, technical, marketing, sales, financial, operating, performance, cost, business and process information or data, know how and computer programming and other software techniques) provided or developed by the Company or any of its Subsidiaries, another Stockholder or its Confidentiality Affiliates in connection herewith or with the business of the Company or any of its Subsidiaries, whether such confidentiality or proprietary status is indicated orally or in writing or in a context in which the Company or any of its Subsidiaries or the disclosing Stockholder or its Confidentiality Affiliates reasonably communicated, or the receiving Stockholder or its Confidentiality Affiliates should reasonably have understood, that the information should be treated as confidential, whether or not the specific words “confidential” or “proprietary” are used (“Confidential Information”) and (ii) use such Confidential Information only for the purposes of performing its obligations hereunder and carrying on the business of the Company and its Subsidiaries and monitoring its investment in the Company.
 
(b)           The obligations contained in Section 11(a) shall not apply, or shall cease to apply, to Confidential Information if or when, and to the extent that, such Confidential Information (i) was, or becomes through no breach of the receiving Stockholder’s obligations hereunder, known to the public, (ii) becomes known to the receiving Stockholder or its Confidentiality Affiliates from other sources under circumstances not involving any breach of any confidentiality obligation between such source and the disclosing Stockholder’s or discloser’s Confidentiality Affiliates or a third party, (iii) is independently developed by the receiving Stockholder or its Confidentiality Affiliates or (iv) is required to be disclosed by Law, governmental regulation or applicable legal process. The obligations contained in Section 11(a) shall (x) survive any termination of this Agreement pursuant to Section 24.
 
12.           Further Assurances.  Each of the parties hereto shall, and shall cause their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.
 
13.           Amendment.  Except as otherwise provided herein, no modification or amendment of any provision of this Agreement shall be effective against the Company or any Stockholder unless such modification or amendment is approved in writing (i) by the Company and (ii) the Majority Stockholder; provided, however, that no such modification or amendment shall be effective against any Minority Stockholder if such modification or amendment treats such Minority Stockholder disproportionately and adversely in any materially adverse respect from all other Minority Stockholders holding the same class or series of Equity Securities without such Minority Stockholder’s consent.  Notwithstanding the foregoing, (a) the Company may from time to time add additional holders of Equity Securities of the Company as parties to this Agreement with the consent of the Majority Stockholder and without the consent or additional signatures of the other Stockholders (and amend and/or restate the Agreement, including any Schedules, Exhibits or Annexes hereto, solely to reflect such additional holders), and upon the Company’s receipt of such additional holder’s executed signature pages hereto or Joinder Agreement, such additional holders shall be deemed to be a party hereto (as a Minority Stockholder or otherwise) and such additional signature pages shall be a part of this Agreement and (b) in the event that the ownership of any Stockholder changes for any reason, the Company may substitute, with the consent of the Majority Stockholder and without the consent or additional signatures of the other Stockholders, an updated Schedule I hereto reflecting such changes.  The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.
 
14.           Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, and their respective successors and permitted assigns. Subject to compliance with the provisions of this Agreement, each Stockholder shall, at any time and without the consent of any other party hereto, have the right to assign all or part of its rights and obligations under this Agreement to any Person to whom such Stockholder Transfers all or any portion of its Company Stock in compliance with this Agreement.  Any Person acquiring Company Stock that is required or permitted by the terms of this Agreement to become a party hereto shall (unless already bound hereby) execute a Joinder Agreement and shall thenceforth be a “Stockholder” for all purposes under this Agreement.
 
15.           Notices.  All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 15):
 
if to the Company:
 
SFX Entertainment, Inc.
902 Broadway, 15th Floor
New York, New York 10010
Attention:  ______________
Fax No.:  (646) 417-7393

with a copy to:

Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, New York 10004
Attention: Philip Richter, Esq.
Fax: 212-859-4000
Telephone: 212-859-8763
Email: philip.richter@friedfrank.com
 
if to the Majority Stockholder:
 
Sillerman Investment Company III LLC
902 Broadway
New York, NY 10010
Attention: Robert F. X. Sillerman
Fax No.: ___________________
with a copy to:

Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, New York 10004
Attention: Philip Richter, Esq.
Fax: 212-859-4000
Telephone: 212-859-8763
Email: philip.richter@friedfrank.com

If to a Minority Stockholder: The address set forth under each name on Schedule I.

16.           No Third-party Beneficiaries.  Except as otherwise expressly set forth herein, including Section 10 hereof, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
 
17.           Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of Laws of any jurisdiction other than those of the State of Delaware.
 
18.           Submission to Jurisdiction.  ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF DELAWARE IN EACH CASE LOCATED IN THE STATE OF DELAWARE AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY'S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. IN THE EVENT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT BROUGHT BY A MINORITY STOCKHOLDER AGAINST THE COMPANY OR THE MAJORITY STOCKHOLDER IN WHICH THE MINORITY STOCKHOLDER DOES NOT OBTAIN A JUDGMENT ON THE MERITS THAT SUBSTANTIALLY ACHIEVES, IN SUBSTANCE AND AMOUNT, THE FULL REMEDY SOUGHT, THE MINORITY STOCKHOLDER SHALL BE LIABLE AND PAY TO THE PREVAILING PARTY ALL FEES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEY’S FEES AND OTHER LITIGATION EXPENSES) INCURRED BY THE COMPANY OR THE MAJORITY STOCKHOLDER IN CONNECTION WITH SUCH SUIT, ACTION OR PROCEEDING, INCLUDING ANY APPEAL THEREFROM.
 
19.           Waiver of Jury Trial.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 19.
 
20.           Entire Agreement.  This Agreement together with the annexes and exhibits hereto constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.
 
21.           Severability.  If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
 
22.           Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, email of scanned copies or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
 
23.           Specific Performance.  The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity. Each party hereby waives any requirement for the securing or posting of any bond in connection with such remedy.
 
24.           Lockup.  Each Minority Stockholder agrees, if and to the extent requested in writing by the managing underwriter(s) of any underwritten public offering effected by the Company, to enter into a customary lock-up provision and lock-up letter agreements with the managing underwriter(s), containing customary terms and exceptions, including a 180 day lock up period for an IPO.
 
25.           Termination.  This Agreement shall terminate on the earlier to occur of (a) consummation of a Drag-Along Sale and (b) the mutual written consent of (i) the Company, and (ii) the Majority Stockholder.  Immediately prior to the consummation of an IPO, the provisions of this Agreement set forth in Sections 3 (other than 3(d)), 4, 5, 6, 8 and 9 shall be terminated.  The rights and obligations of a Stockholder under this Agreement shall terminate at such time as such Stockholder no longer owns any shares of Company Stock.
 
 
 
 
 
Annex A – Defined Terms
 
“Affiliate” as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person.  For the purposes of this definition “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities (the ownership of more than 50% of the voting securities of an entity shall for purposes of this definition be deemed to be “control”), by contract or otherwise.
 
“Agreement” shall have the meaning set forth in the preamble.
 
“Board” shall have the meaning set forth in Section 6(a).
 
“Breaching Drag-Along Stockholder” shall have the meaning set forth in Section 4(c).
 
“Brokered Transaction” means a Transfer of Company Stock in compliance with Rule 144 under the Securities Act but only pursuant to a “brokered transaction” (as defined in clauses (1) and (2) of paragraph (g) of such rule as in effect on the date hereof).
 
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, New York, New York.
 
“Bylaws” shall have the meaning set forth in Section 11.
 
“Class A Common Stock” means the Company’s authorized shares of Class A Common Stock, par value $0.0001 per share, and any stock into which such common stock may hereafter be converted, changed or reclassified.
 
“Class B Common Stock” means the Company’s authorized shares of Class B Common Stock, par value $0.0001 per share, and any stock into which such common stock may hereafter be converted, changed or reclassified.
 
“Common Stock” means the Company’s authorized shares of Class A Common Stock and/or Class B Common Stock, as applicable, and any stock into which such common stock may hereafter be converted, changed or reclassified.
 
“Company” shall have the meaning set forth in the preamble.
 
“Company Group” shall mean the Company and any of its Subsidiaries or Affiliates.
 
“Company Stock” means, from time to time, (i) any Common Stock held by a Stockholder and (ii) any other Equity Securities of the Company held by a Stockholder.
 
“Drag-Along Notice” shall have the meaning set forth in Section 4(b).
 
“Drag-Along Proxy Holder” shall have the meaning set forth in Section 4(c).
 
“Drag-Along Sale” shall have the meaning set forth in Section 4(a).
 
“Drag-Along Sellers” shall have the meaning set forth in Section 4(a).
 
“Dragged Stockholder” shall have the meaning set forth in Section 4(a).
 
“Encumbrance” means any lien, mortgage, lease, easement, servitude, levy, right of way, charge, pledge, security interest, covenant, condition, restriction or other encumbrance of any kind, or any conditional sale contract, title retention contract or other contract or agreement creating any of the foregoing.
 
“Equity Securities” means any (i) capital stock of any class or series, (ii) options, warrants or other securities convertible into or exercisable or exchangeable for such capital stock, (iii) options, warrants or other securities convertible into or exercisable or exchangeable for such securities described in clause (ii), or (iv) any other rights to acquire, directly or indirectly, such capital stock.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated thereunder.
 
“Family Group” means any given Stockholder, along with any trust, foundation or similar entity controlled by such Stockholder, the only beneficiaries of which, or a corporation, partnership or limited liability company, the only stockholders, limited and/or general partners or members, as the case may be, of which, include only such Stockholder, such Stockholder’s parents, such Stockholder’s spouse, such Stockholder’s descendents (whether natural or adopted), and spouses of such Stockholder’s descendants.
 
“Government Entity” means any federal, state, local, municipal, county or other governmental, quasi-governmental, administrative or regulatory authority, body, agency, court, tribunal, commission or other similar entity and any self-regulatory organization (including in each case any branch, department or official thereof).
 
“Governmental Authorization” means any approval, consent, license, permit, waiver or other authorization issued, granted, given or otherwise made available by or under, or any filing or other notice made to, any Government Entity or pursuant to any Law.
 
“Group” means two or more Persons who agree to act together for the purpose of acquiring, holding, voting or disposing of Stock.

“Independent Director” shall have the meaning set forth in Section 6(a).

“IPO” means the initial bona fide underwritten public offering and sale of Common Stock (or other Equity Securities of the Company or any Subsidiary of the Company, or of any successor of the Company or any of its Subsidiaries) pursuant to an effective registration statement (other than on Form S-4, S-8 or a comparable form) filed under the Securities Act.
 
“Joinder Agreement” shall have the meaning set forth in the preamble.
 
“Law” means any law, statute, ordinance, rule, regulation, code, judgment, decree, order, award, decision, injunction, settlement, process, ruling, subpoena, verdict or Governmental Authorization (in each applicable case, whether temporary, preliminary or permanent) enacted, issued, promulgated, enforced or entered into by a Government Entity.
 
“Majority Party” shall have the meaning set forth in Section 10(a).
 
“Majority Stockholder” shall have the meaning set forth in the preamble.
 
“Merger Agreement” shall mean the Agreement and Plan of Merger dated as of May 26, 2015 by and among the Company, SFXE Acquisition LLC, a Delaware limited liability company, and SFXE Merger Sub Inc., a Delaware corporation.
 
“MS Designee” shall have the meaning set forth in Section 6(a).
 
“Minority Stockholders” shall have the meaning set forth in the preamble.
 
“Permitted Transferee” shall have the meaning set forth in Section 3(b).
 
“Person” means any individual, firm, company, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental body or other entity of any kind.
 
“Proposed Acquirer” shall have the meaning set forth in Section 5(a).

“Replacement Nominee” shall have the meaning set forth in Section 6(c).

“Restricted Period” shall have the meaning set forth in Section 3(a).

“ROFR” shall have the meaning set forth in Section 5(a).

“ROFR Notice” shall have the meaning set forth in Section 5(a).

“ROFR Sale” shall have the meaning set forth in Section 5(a).

“ROFR Stock” shall have the meaning set forth in Section 5(a).

“ROFR Terms” shall have the meaning set forth in Section 5(a).

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder.

“Stockholders” shall have the meaning set forth in the preamble and shall include their respective successors and permitted assigns.
 
“Subsidiary” means, with respect to any Person, any corporation or other entity of which a majority of the capital stock or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar function at the time directly or indirectly owned by such Person.
 
“Third Party Purchaser” shall have the meaning set forth in Section 4(a).
 
“Transfer” shall have the meaning set forth in Section 3(a).
 
“Transferred Stockholder” shall have the meaning set forth in Section 5(a).
 

*     *     *     *
 
 
 
 
 
IN WITNESS WHEREOF, the parties hereto have executed this Stockholders’ Agreement on the day and year first above written.
 
SFX ENTERTAINMENT, INC.


By: _________________________________
      Name:
      Title:


SILLERMAN INVESTMENT COMPANY III LLC


By: _________________________________
      Name:
      Title:


[ADDITIONAL SIGNATURE PAGES TO COME]
 
 
 
 
 
SCHEDULE I

List of Stockholders
 

Stockholder
(Address)
Class A Common Stock
Class B Common Stock
     
     
     
     
     
     
     

 
 
 
 
Exhibit A - Joinder
 
 
 
 
 
Exhibit B – Certificate of Incorporation
 
 
 
 
 
Exhibit C - Bylaws