<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 16, 1998
REGISTRATION NO. 333-
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
SFX ENTERTAINMENT, INC.*
(Exact Name of Registrant as Specified in its Charter)
* A complete list of registrants is set forth on the following pages
<TABLE>
<S> <C> <C>
DELAWARE 7922 13-3977880
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
--------------
650 MADISON AVENUE, 16TH FLOOR
NEW YORK, NEW YORK 10022
(212) 838-3100
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
--------------
ROBERT F.X. SILLERMAN, EXECUTIVE CHAIRMAN
SFX ENTERTAINMENT, INC.
650 MADISON AVENUE, 16TH FLOOR
NEW YORK, NEW YORK 10022
(212) 838-3100
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
--------------
Copy of all Communications to:
HOWARD M. BERKOWER, ESQ.
BAKER & MCKENZIE
805 THIRD AVENUE, 30TH FLOOR
NEW YORK, NEW YORK 10022
(212) 751-5700
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING AGGREGATE OFFERING
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT(1) PRICE REGISTRATION FEE
- --------------------------------- -------------- ------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
9 1/8% Senior Subordinated
Notes due 2008 ................. $350,000,000 100% $350,000,000 $103,250
Guarantees of 9 1/8% Senior
Subordinated Notes due 2008..... $350,000,000 (2) (3)
</TABLE>
- ------------------------------------------------------------------------------
(1) Estimated pursuant to Rule 457(f) solely for purposes of calculating the
registration fee.
(2) No separate consideration was received for the guarantees.
(3) Pursuant to Rule 457(n), no separate fee is payable for the guarantees.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- ------------------------------------------------------------------------------
<PAGE>
TABLE OF REGISTRANTS
Unless specified otherwise, the mailing address and phone number of the
additional registrants is c/o SFX Entertainment, Inc., 650 Madison Avenue, 16th
Floor, New York, New York 10022; (212) 838-3100. The agent for service for the
additional registrants is Robert F.X. Sillerman, c/o SFX Entertainment, Inc.,
650 Madison Avenue, 16th Floor, New York, New York 10022. The primary standard
industry classification number for all registrants is 7922.
<TABLE>
<CAPTION>
STATE OR
OTHER JURISDICTION I.R.S. EMPLOYER
OF INCORPORATION IDENTIFICATION
NAME, ADDRESS AND TELEPHONE NUMBER OR ORGANIZATION NUMBER
- ------------------------------------------- -------------------- ----------------
<S> <C> <C>
SFX Entertainment, Inc. Delaware 13-3977880
AKG, Inc.(3) California 94-2628377
American Broadway, Inc.(1) Texas 76-0475585
Ardee Festivals N.J., Inc. New Jersey 13-3568617
Ardee Productions, Ltd. New York 13-2593666
Atlanta Concerts, Inc. Delaware 13-3969854
Beach Concerts, Inc. New York 13-3155946
BG Presents, Inc.(3) California Pending
BGP Acquisition, L.L.C. Delaware Pending
Bill Graham Enterprises, Inc.(3) California 94-1734238
Bill Graham Presents, Inc.(3) California 94-1650714
Bill Graham Management, Inc.(3) California 94-3129254
Broadway Concerts, Inc. New York 13-3748971
Cooley and Conlon Management Co. Georgia 58-1762653
Concerts, Inc.(2) Nevada 86-0871933
Conn Ticketing Company
Connecticut Amphitheater Development Connecticut 06-1450528
Corporation Connecticut 06-1416442
Connecticut Concerts, Incorporated Connecticut 13-3748975
Connecticut Performing Arts, Inc. Connecticut 06-1411118
Connecticut Performing Arts Partners Connecticut 06-1420929
Contemporary Group Acquisition Corp. Delaware 13-3991262
Contemporary Group, Inc.(4) Missouri 43-1701968
Contemporary Marketing, Inc.(4) Missouri 43-1248261
Contemporary Productions, Incorporated(4) Missouri 43-1243654
Contemporary Sports, Incorporated(4) Missouri 43-1245258
Deer Creek Amphitheater Concerts, Inc. Delaware 13-3951407
Deer Creek Amphitheater Concerts, L.P. Delaware 13-3951407
Delsener/Slater Enterprises, Ltd. New York 13-2560412
Dumb Deal, Inc. New York 13-2892073
Entertainment Performing Arts, Inc.(1) Texas 76-0297763
Exit 116 Revisited, Inc. New Jersey 13-3886101
Festival Productions, Inc.(1) Texas 74-1975839
Fillmore Corporation(3) Delaware 94-1687122
Fillmore Fingers, Inc.(3) California 94-2998317
FPI Concerts, Inc. Delaware 13-3933969
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
STATE OR
OTHER JURISDICTION I.R.S. EMPLOYER
OF INCORPORATION IDENTIFICATION
NAME, ADDRESS AND TELEPHONE NUMBER OR ORGANIZATION NUMBER
- --------------------------------------- -------------------- ----------------
<S> <C> <C>
GSAC Partners Delaware Pending
High Cotton, Inc. Georgia 58-1802140
In House Tickets, Inc. New York 13-3077977
Irving Plaza Concerts, Inc. Delaware 13-3938355
Murat Center Concerts, Inc. Delaware 13-3948205
Murat Center Concerts, L.P. Delaware 13-3951403
NOC, Inc. Connecticut 13-3738288
Northeast Ticketing Company Connecticut 06-1450528
Old PCI, Inc.(1) Texas 76-0392584
PACE AEP Acquisition, Inc.(1) Texas Pending
PACE Amphitheater Management, Inc.(1) Texas 76-0474961
PACE Amphitheaters, Inc.(1) Texas 76-0250531
PACE Bayou Place, Inc.(1) Texas 76-0543571
PACE Communications, Inc.(1) Texas 76-0545041
PACE Concerts GP, Inc.(1) Texas 76-0522081
PACE Concerts, Ltd.(1) Texas 76-0522083
PACE Entertainment Corporation(1) Texas 74-1545442
PACE Entertainment GP Corp.(1) Texas 76-0522082
PACE Entertainment Group, Ltd.(1) Texas 76-0522084
PACE Milton Keynes, Inc.(1) Texas 76-0412384
PACE Motor Sports, Inc.(1) Texas 74-1990536
PACE Music Group, Inc.(1) Texas 76-0108294
PACE Productions, Inc.(1) Texas 76-0287817
PACE Theatrical Group, Inc.(1) Texas 76-0235495
PACE Touring, Inc.(1) Texas 76-0406630
PACE U.K. Holding Corporation(1) Texas 76-0412383
PACE Variety Entertainment, Inc.(1) Texas 76-0546383
Pavilion Partners Delaware 76-0306688
PEC, Inc.(2) Nevada 86-0871934
Polaris Amphitheater Concerts, Inc. Delaware 13-3948206
PTG-Florida, Inc.(7) Texas 58-1812340
QN Corp. Connecticut Pending
SFX Broadcasting of the Midwest, Inc. Delaware 13-3950590
SFX Concerts, Inc. Delaware 13-3909179
SFX Network Group, L.L.C. Delaware Pending
SJS Entertainment Corporation(5) Pennsylvania 23-2828323
Shoreline Amphitheatre, Ltd.(3) California 94-2997795
Shoreline Amphitheatre Partners(3) California 94-2997214
SM/PACE, Inc.(1) Texas 74-1855786
Southeast Ticketing Company Connecticut 06-1450527
Southern Promotions, Inc. Georgia 58-1421506
Sunshine Concerts, L.L.C. Delaware 13-3951409
Sunshine Designs, Inc. Delaware 13-3948203
Sunshine Designs, L.P. Delaware 13-3951402
Suntex Acquisition, Inc. Delaware 13-3948208
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
STATE OR
OTHER JURISDICTION I.R.S. EMPLOYER
OF INCORPORATION IDENTIFICATION
NAME, ADDRESS AND TELEPHONE NUMBER OR ORGANIZATION NUMBER
- ------------------------------------ -------------------- ----------------
<S> <C> <C>
Suntex Acquisition, L.P. Delaware 13-3951401
The Album Network, Inc.(6) California 93-3297803
Touring Productions, Inc.(1) Texas 76-0161212
Tuneful Company, Inc.(1) Texas Pending
Westbury Music Fair, L.L.C. Delaware 13-3984613
Wolfgang Records(3) California 94-3223917
</TABLE>
- ----------
The mailing addresses and phone numbers for the indicated registrants are as
follows:
(1) 515 Post Oak Boulevard, Suite 300, Houston, Texas 77027; (713) 693-8600.
(2) 1325 Airmotive Way, Suite 130, Reno, Nevada 89502; (702) 322-2221.
(3) 260 Fifth Avenue, San Francisco, California 94142; (415) 541-0800.
(4) 1401 South Brentwood Boulevard, St. Louis, Missouri 63144; (314) 962-4000.
(5) 116 East 27th Street, 10th Floor, New York, New York 10016; (212) 679-3200.
(6) 120 North Victory Boulevard, 3rd Floor, Burbank, California 91502; (818)
955-4000.
(7) 100 South Biscayne Blvd., Suite 1200, Miami, Florida 33131; (305) 379-2700.
iii
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS
SUBJECT TO COMPLETION, DATED APRIL , 1998
[SFX ENTERTAINMENT, INC. LOGO]
OFFER TO EXCHANGE ITS
9 1/8% SENIOR SUBORDINATED NOTES DUE 2008, SERIES B
($350,000,000 PRINCIPAL AMOUNT)
FOR ANY AND ALL OF ITS OUTSTANDING
9 1/8% SENIOR SUBORDINATED NOTES DUE 2008, SERIES A
($350,000,000 PRINCIPAL AMOUNT OUTSTANDING)
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME
ON , 1998, UNLESS EXTENDED.
SFX Entertainment, Inc., a Delaware corporation (the "Company"), hereby
offers (the "Exchange Offer"), upon the terms and subject to the conditions set
forth in this Prospectus and the accompanying Letter of Transmittal (the
"Letter of Transmittal"), to exchange up to an aggregate principal amount of
$350,000,000 of its 9 1/8% Senior Subordinated Notes due 2008, Series B (the
"Exchange Notes"), which has been registered under the Securities Act of 1933,
as amended (the "Securities Act"), pursuant to a Registration Statement of
which this Prospectus is a part, for an equal principal amount of its
outstanding 9 1/8% Senior Subordinated Notes due 2008, Series A (the "Notes"),
in integral multiples of $1,000. The Exchange Notes will be senior subordinated
unsecured obligations of the Company and are substantially identical (including
principal amount, interest rate, maturity and redemption rights) to the Notes
for which they may be exchanged pursuant to the Exchange Offer, except that (i)
the offering and sale of the Exchange Notes has been registered under the
Securities Act and (ii) holders of Exchange Notes will not be entitled to
certain rights of holders under the Registration Rights Agreement, dated as of
February 11, 1998, among the Company, the Guarantors (as defined) and the
Initial Purchasers (as defined) of the Notes (the "Registration Rights
Agreement").
The Exchange Notes will be general unsecured obligations of the Company,
subordinate in right of payment to all existing and future Senior Debt (as
defined) of the Company. The Exchange Notes will be fully and unconditionally
guaranteed on a senior subordinated basis, jointly and severally, by certain of
the Company's subsidiaries (the "Guarantors"). As of December 31, 1997, after
giving pro forma effect to the Recent Acquisitions (as defined), the Note
Offering (as defined), borrowings under the Credit Facility (as defined; and
together with the Note Offering the "Financing") and the application of the net
proceeds from the Financing, the Spin-Off (as defined) and the Broadcasting
Merger (as defined), the Company would have had approximately $534.9 million of
indebtedness outstanding, of which $184.9 million would have been Senior Debt
(excluding letters of credit). The claims of holders of the Exchange Notes will
be effectively subordinated to the indebtedness and other liabilities of the
Company's Non-Guarantor Subsidiaries (as defined) through which the Company
conducts a portion of its operations, which indebtedness and other liabilities
were approximately $1.9 million on a pro forma basis as of December 31, 1997.
Based on interpretations by the staff of the Securities and Exchange
Commission (the "Commission") set forth in no-action letters issued to third
parties, the Company believes that the Exchange Notes issued pursuant to this
Exchange Offer in exchange for Notes may be offered for resale, resold and
otherwise transferred by a holder thereof (other than (i) a broker-dealer who
receives Exchange Notes in the Exchange Offer in respect of Notes that were
acquired by the broker-dealer as a result of market-making activities or other
trading activities or (ii) a person that is an affiliate of the Company within
the meaning of Rule 405 under the Securities Act), without compliance with the
registration and prospectus delivery provisions of the Securities Act,
provided, that the holder is acquiring the Exchange Notes in the ordinary
course of its business and is not participating, and had no arrangement or
understanding with any person to participate, in the distribution of the
Exchange Notes. However, the Commission has not considered the Exchange Offer
in the context of a no-action request and there can be no assurance that the
staff of the Commission would make a similar determination with respect to the
Exchange Offer as in such other circumstances. Holders of Notes wishing to
accept the Exchange Offer must represent to the Company, as required by the
Registration Rights Agreement, that such conditions have been met. Each
broker-dealer that receives the Exchange Notes for its own account in exchange
for the Notes, where such Notes were acquired by such broker-dealer as a result
of market-making activities or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Notes. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Notes received in exchange
for Notes where such Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Company has indicated
its intention to make this Prospectus (as it may be amended or supplemented)
available to any broker-dealer for use in connection with any such resale for a
period of 180 days after the Expiration Date. See "Plan of Distribution."
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF NOTES IN ANY JURISDICTION IN WHICH THE
EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
---------------
SEE "RISK FACTORS" BEGINNING ON PAGE 23 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY HOLDERS WHO TENDER NOTES IN THE EXCHANGE
OFFER.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is , 1998
<PAGE>
The Notes have been, and the Exchange Notes will be, issued under an
Indenture dated as of February 11, 1998 (the "Indenture"), among the Company,
the Guarantors and The Chase Manhattan Bank, as trustee (the "Trustee"). See
"Description of Exchange Notes." There will be no proceeds to the Company from
the Exchange Offer; however, pursuant to the Registration Rights Agreement, the
Company will bear certain offering expenses. No underwriter is being used in
connection with this Exchange Offer.
The Company will accept for exchange any and all Notes validly tendered or
prior to 5:00 p.m. New York City time, on , 1998, unless the Exchange
Offer is extended (the "Expiration Date"). Tenders of Notes may be withdrawn at
any time prior to 5:00 p.m., New York City time, on the Expiration Date;
otherwise such tenders are irrevocable. The Chase Manhattan Bank will act as
Exchange Agent with respect to the Notes (in such capacity, the "Exchange
Agent") in connection with the Exchange Offer. The Exchange Offer is not
conditioned upon any minimum principal amount of Notes being tendered for
exchange, but is otherwise subject to certain customary conditions. See "The
Exchange Offer--Conditions." Notes may be tendered only in integral multiples
of $1,000.
The Exchange Notes will bear interest from February 11, 1998, the date of
issuance of the Notes that are tendered in exchange for the Exchange Notes (or
the most recent Interest Payment Date (as defined herein) to which interest on
such Notes has been paid), at a rate equal to 9 1/8% per annum. Interest on the
Exchange Notes will be payable semi-annually on February 1 and August 1 of each
year, commencing August 1, 1998.
The Exchange Notes will be redeemable at the option of the Company, in
whole or in part, at any time on or after February 1, 2003, or earlier at the
option of the holders of Exchange Notes upon a Change of Control (as defined),
at the redemption prices set forth herein, plus accrued and unpaid interest,
thereon to the date of redemption. In addition, at any time prior to February
1, 2001, the Company may, in its discretion, redeem up to $122.5 million (equal
to 35% of the aggregate principal amount of the Notes originally issued) of the
Notes and the Exchange Notes at a redemption price equal to 109.125% of the
principal amount thereof, plus accrued and unpaid interest, to the date of
redemption, with the net cash proceeds of one or more offerings of common
equity of the Company; provided, that at least $227.5 million (equal to 65% of
the aggregate principal amount of the Notes originally issued) of the Notes and
the Exchange Notes remains outstanding immediately after each such redemption.
Upon the occurrence of a Change of Control, the Company will be required
to make an offer to repurchase the Exchange Notes at a price equal to 101% of
the principal amount thereof, plus accrued and unpaid interest, to the date of
repurchase. If a Change of Control were to occur, the Company may not have the
financial resources to repay all of its obligations under the Credit Agreement,
the Indenture and the other indebtedness that would become payable upon the
occurrence of such Change of Control. See "Risk Factors--Payment Upon a Change
of Control" and "Description of Exchange Notes."
The Notes were sold by the Company on February 11, 1998 in transactions
not registered under the Securities Act in reliance upon the exemption provided
in Section 4(2) thereof. A portion of the Notes were subsequently resold to
qualified institutional buyers in reliance upon Rule 144A under the Securities
Act. The remainder of the Notes were resold outside the United States in
reliance on Regulation S under the Securities Act. Accordingly, the Notes may
not be reoffered, resold or otherwise transferred in the United States unless
registered under the Securities Act or unless an applicable exemption from the
registration requirements of the Securities Act is available. The Exchange
Notes are being offered hereunder in order to satisfy certain obligations of
the Company under the Registration Rights Agreement. See "The Exchange Offer."
Prior to this Exchange Offer, there has been no public market for the
Notes. The Company does not intend to list the Exchange Notes on any securities
exchange or to seek approval for quotation through any automated quotation
system. There can be no assurance that an active market for the Exchange Notes
will develop. To the extent that a market for the Exchange Notes does develop,
the market value of the Exchange Notes will depend on a market conditions (such
as yields on alternative investments), general economic conditions, the
Company's financial condition and other conditions. Such conditions might cause
the Exchange Notes, to the extent that they are actively traded, to trade at a
significant discount from face value. See "Risk Factors--Absence of Public
Market."
2
<PAGE>
[SFX Broadcasting, Inc. ("Broadcasting" or "SFX Broadcasting"), parent
corporation of the Company, agreed to the merger of an affiliate (the "SFX
Buyer") of Hicks, Muse, Tate & Furst Incorporated (the "SFX Merger") into
Broadcasting, and to the spin-off of all the capital stock of the Company in a
pro rata distribution to certain stockholders of Broadcasting on a pro-rata
basis (the "Spin-Off"). The Exchange Offer is not conditioned upon the Spin-Off
or the SFX Merger.]
ANY NOTES NOT TENDERED AND ACCEPTED IN THE EXCHANGE OFFER WILL REMAIN
OUTSTANDING. TO THE EXTENT ANY NOTES ARE TENDERED AND ACCEPTED IN THE EXCHANGE
OFFER, A HOLDER'S ABILITY TO SELL UNTENDERED NOTES COULD BE ADVERSELY AFFECTED.
FOLLOWING CONSUMMATION OF THE EXCHANGE OFFER, THE HOLDERS OF NOTES WILL
CONTINUE TO BE SUBJECT TO THE EXISTING RESTRICTIONS UPON TRANSFER THEREOF AND
THE COMPANY WILL HAVE FULFILLED CERTAIN OF ITS OBLIGATIONS UNDER THE
REGISTRATION RIGHTS AGREEMENT. HOLDERS OF NOTES WHO DO NOT TENDER THEIR NOTES
GENERALLY WILL NOT HAVE ANY FURTHER REGISTRATION RIGHTS UNDER THE REGISTRATION
RIGHTS AGREEMENT OR OTHERWISE. SEE "THE EXCHANGE OFFER--CONSEQUENCES OF FAILURE
TO EXCHANGE."
The Exchange Notes issued pursuant to this Exchange Offer generally will
be issued in the form of Global Exchange Notes (as defined herein), which will
be deposited with, or on behalf of, The Depository Trust Company (the
"Depository" or "DTC") and registered in its name or in the name of Cede & Co.,
its nominee. Beneficial interests in the Global Exchange Notes representing the
Exchange Notes will be shown on, and transfers thereof will be effected
through, records maintained by the Depository and its participants.
Notwithstanding the foregoing, Notes held in certificated form will be
exchanged solely for Exchange Notes in certificated form. After the initial
issuance of the Global Exchange Notes, Exchange Notes in certificated form will
be issued in exchange for the Global Exchange Notes only on the terms set forth
in the Indenture. See "Description of Exchange Notes--Book-Entry, Delivery and
Form."
----------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITY
OTHER THAN THE EXCHANGE NOTES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY OF THE EXCHANGE NOTES TO ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE
DATE HEREOF.
UNTIL , 1998 (90 DAYS AFTER COMMENCEMENT OF THE EXCHANGE OFFER), ALL
DEALERS EFFECTING TRANSACTIONS IN THE EXCHANGE NOTES, WHETHER OR NOT
PARTICIPATING IN THE EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS.
3
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-4 under the Securities Act for the registration of the Exchange Notes offered
hereby (the "Registration Statement"). This Prospectus, which constitutes a
part of the Registration Statement, does not contain all of the information set
forth in the Registration Statement, certain items of which are contained in
exhibits and schedules to the Registration Statement as permitted by the rules
and regulations of the Commission. For further information with respect to the
Company or the Exchange Notes offered hereby, reference is made to the
Registration Statement, including the exhibits and financial statement
schedules thereto. With respect to each such document filed with the Commission
as an exhibit to the Registration Statement, reference is made to the exhibit
for a more complete description of the matter involved, and each such statement
shall be deemed qualified in its entirety by such reference.
The Company is presently subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports and other information with the Commission.
The Registration Statement, such reports and other information filed by the
Company can be inspected and copied at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and the regional
offices of the Commission located at 7 World Trade Center, New York, New York
10048 and 500 West Madison Street, 14th Floor, Chicago, Illinois 60661. Copies
of such materials may be obtained from the Public Reference Section of the
Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and
at its public reference facilities in New York, New York and Chicago, Illinois
at prescribed rates. The Company makes its filings with the Commission
electronically. The Commission maintains an Internet site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically, which information can be accessed at
http://www.sec.gov.
As a result of the offering of the Exchange Notes, each of the Guarantors
will become subject to the informational requirements of the Exchange Act. The
Company will fulfill its obligations with respect to such requirements by
filing periodic reports with the Commission on its own behalf or, in the case
of the Guarantors, by including information regarding the Guarantors in the
Company's periodic reports. In addition, the Company will send to each holder
of record of Exchange Notes copies of annual reports and quarterly reports
containing the information required to be filed under the Exchange Act which
reports, to the extent required by the Exchange Act, will contain financial
information that has been examined and reported upon by the Company's
independent public accountants. So long as the Company is subject to the
periodic reporting requirements of the Exchange Act, it is required to furnish
the information required to be filed with the Commission to the Trustee and the
holders of the Notes and the Exchange Notes. The Company has agreed that, even
if it is not required under the Exchange Act to furnish such information to the
Commission, it will nonetheless continue to furnish information that would be
required to be furnished by the Company by Section 13 of the Exchange Act to
the Trustee and the holders of the Notes or Exchange Notes as if it were
subject to such periodic reporting requirements.
4
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
SUMMARY ............................................................................ 10
The Company ....................................................................... 10
The Note Offering ................................................................. 16
The Exchange Offer ................................................................ 16
The Exchange Notes ................................................................ 18
Registration of Notes ............................................................. 19
Summary Consolidated Financial Data ............................................... 21
RISK FACTORS ....................................................................... 23
Risks Relating to the Exchange Notes .............................................. 23
Consequences of Failure to Exchange ............................................. 23
Absence of Public Market ........................................................ 23
Restrictions on Transfer ........................................................ 24
Substantial Leverage ............................................................ 24
Holding Company; Dependence on Subsidiaries ..................................... 25
Ranking ......................................................................... 25
Restrictions Imposed by the Company's Indebtedness .............................. 26
Fraudulent Conveyance ........................................................... 27
Potential Inability to Fund a Change of Control Offer ........................... 28
Company Specific Risks ............................................................ 28
Absence of Combined Operating History; Potential Inability to Integrate Acquired
Businesses ..................................................................... 28
Substantial Tax Payment Obligation .............................................. 28
Future Contingent Payments ........................................................ 29
Related to Recent Acquisitions .................................................. 29
Working Capital Adjustments ..................................................... 29
Other Indemnification Obligations ............................................... 30
Expansion Strategy; Need for Additional Capital ................................. 30
Control by Management ........................................................... 31
Dependence on Key Personnel ..................................................... 31
Potential Conflicts of Interest ................................................. 31
Rights to Purchase Certain Subsidiaries ......................................... 32
Economic Conditions and Consumer Tastes; Availability of Artists and Events ..... 33
Future Charges to Earnings ...................................................... 33
Competition ..................................................................... 34
Control of Venues ............................................................... 34
Regulatory Matters .............................................................. 34
THE EXCHANGE OFFER ................................................................. 35
Purpose of the Exchange Offer ..................................................... 35
Resale of the Exchange Notes ...................................................... 35
Terms of the Exchange Offer; Period for Tendering Notes ........................... 36
Procedures for Tendering Notes .................................................... 36
Acceptance of Notes for Exchange; Delivery of Exchange Notes ...................... 38
Book-Entry Transfer ............................................................... 38
Guaranteed Delivery Procedures .................................................... 39
Withdrawal Rights ................................................................. 39
Certain Conditions to the Exchange Offer .......................................... 40
Exchange Agent .................................................................... 41
</TABLE>
5
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<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Fees and Expenses .......................................................... 41
Accounting Treatment ....................................................... 41
Transfer Taxes ............................................................. 41
Regulatory Matters ......................................................... 41
Consequences of Exchanging Notes ........................................... 41
Consequence of Failure to Exchange ......................................... 42
Liquidated Damages ......................................................... 42
CAPITALIZATION .............................................................. 43
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS ................. 45
SELECTED CONSOLIDATED FINANCIAL DATA ........................................ 60
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS ....................................................... 62
1997 Acquisitions .......................................................... 62
Recent Acquisitions ........................................................ 63
Acquisition of PACE ........................................................ 63
Acquisition of Contemporary ................................................ 63
Acquisition of BGP ......................................................... 63
Acquisition of Network ..................................................... 64
Acquisition of Concert/Southern ............................................ 64
The Spin-Off and the SFX Merger ............................................ 64
Results of Operations ...................................................... 65
General .................................................................. 65
Concert Promotion/Venue Operation ........................................ 65
Theatrical ............................................................... 66
Motor Sports ............................................................. 67
Other Businesses ......................................................... 67
Seasonality ................................................................ 67
Historical Results ......................................................... 67
Year Ended December 31, 1997 Compared to the Year Ended December 31, 1996 68
Year Ended December 31, 1996 Compared to the Year Ended December 31, 1995 69
Liquidity and Capital Resources ............................................ 69
Historical Cash Flows ...................................................... 69
1997 Acquisitions .......................................................... 69
Recent Acquisitions ........................................................ 70
Future Contingent Payments ................................................. 70
Future Acquisitions ........................................................ 70
Spin-Off ................................................................... 71
Working Capital ............................................................ 71
Meadows Repurchase ......................................................... 72
Interest on Notes and Borrowings Under the Credit Facility ................. 72
Capital Expenditures ....................................................... 73
Future Charges to Earnings ................................................. 73
Year 2000 Compliance ....................................................... 73
Recent Accounting Pronouncements ........................................... 73
Sources of Liquidity ....................................................... 74
OVERVIEW OF THE LIVE ENTERTAINMENT INDUSTRY ................................. 76
Concert Promotion Industry ................................................. 76
Theatrical Industry ........................................................ 76
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Motor Sports Industry .............................................................. 77
BUSINESS ............................................................................ 78
General ............................................................................ 78
SFX Merger and the Spin-Off ........................................................ 78
1997 Acquisitions .................................................................. 79
Delsener/Slater .................................................................. 79
Meadows .......................................................................... 79
Sunshine Promotions .............................................................. 79
Recent Acquisitions ................................................................ 80
PACE ............................................................................. 80
Contemporary ..................................................................... 80
BGP .............................................................................. 81
Network .......................................................................... 81
Concert/Southern ................................................................. 81
The Company's Live Entertainment Activities ........................................ 81
Booking and Promotion ............................................................ 81
Production ....................................................................... 82
Venue Operations ................................................................. 84
Sponsorships and Advertising; Marketing and Other Services ....................... 87
Operating Strategy ................................................................. 88
Own and/or Operate Leading Live Entertainment Venues in Nation's Top 50 Markets .. 88
Maximize Related Revenue Opportunities ........................................... 88
Exploit Synergies of the Acquired Businesses ..................................... 89
Increase Use of Venues; Diversification of Acts and Venues ....................... 89
Innovative Event Marketing ....................................................... 89
Strict Cost Controls; Nationally Coordinated Booking, Marketing & Accounting ..... 89
Pursue Complementary Acquisition Opportunities ................................... 90
Properties ......................................................................... 90
Employees .......................................................................... 90
Litigation ......................................................................... 90
Potential Conflicts of Interest .................................................... 90
Seasonality ........................................................................ 91
Competition ........................................................................ 91
Regulatory Matters ................................................................. 92
Forward-Looking Statements ......................................................... 92
THE SPIN OFF ........................................................................ 93
Distribution Agreement ............................................................. 93
Manner of Effecting The Spin-Off ................................................. 93
Transfer and Assumption of Assets and Obligations ................................ 93
Transferred Employees ............................................................ 93
Working Capital .................................................................... 94
Release and Indemnification ........................................................ 96
Registration Statement and Consent Solicitation Documents .......................... 97
Related Agreements ................................................................. 97
Use of Names; Intellectual Property ................................................ 97
Termination of the SFX Merger Agreement ............................................ 97
Amendment or Modification .......................................................... 97
Tax Sharing Agreement .............................................................. 98
Employee Benefits Agreement ........................................................ 98
</TABLE>
7
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<TABLE>
<CAPTION>
PAGE
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<S> <C>
MANAGEMENT ...................................................................... 99
Directors and Executive Officers ............................................... 99
Audit Committee ................................................................ 102
Compensation Committee ......................................................... 102
Compensation Committee Interlocks and Insider Participation .................... 102
Stock Option Committee ......................................................... 102
Stock Option and Restricted Stock Plan ......................................... 102
Compensation of Directors ...................................................... 103
Executive Compensation ......................................................... 103
Employment Agreements and Arrangements With Certain Officers and Directors ..... 103
Becker Employment Agreement .................................................... 104
Possible Amendments to Delsener/Slater Employment Agreements ................... 105
PRINCIPAL STOCKHOLDERS .......................................................... 106
Possible Change in Control ..................................................... 107
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS .................................. 107
Potential Conflicts of Interest ................................................ 107
Employment Agreements .......................................................... 108
Assumption of Employment Agreements; Certain Change of Control Payments ........ 108
Indemnification of Mr. Sillerman ............................................... 109
Delsener/Slater Employment Agreements .......................................... 109
Relationship Between Howard J. Tytel and Baker & McKenzie ...................... 109
Arrangement Between Robert F.X. Sillerman and Howard J. Tytel .................. 109
Triathlon Fees ................................................................. 110
Agreements With SFX Broadcasting ............................................... 110
Common Stock Received in the Spin-Off .......................................... 110
Issuance of Stock to Holders of SFX Broadcasting's Options and SARs ............ 111
DESCRIPTION OF CREDIT FACILITY AND OTHER INDEBTEDNESS ........................... 111
Credit Facility ................................................................ 111
General ...................................................................... 111
Interest Rates; Fees ......................................................... 111
Mandatory Prepayments and Commitment Reductions .............................. 112
Collateral and Guarantees .................................................... 112
Events of Default ............................................................ 113
Other Indebtedness ............................................................. 114
DESCRIPTION OF THE NOTES ........................................................ 115
Ranking ........................................................................ 115
Subsidiary Guarantees .......................................................... 115
Optional Redemption ............................................................ 115
Change of Control .............................................................. 115
Certain Covenants .............................................................. 115
Exchange Offer; Registration Rights ............................................ 115
Transfer Restrictions .......................................................... 116
DESCRIPTION OF THE EXCHANGE NOTES ............................................... 116
General ........................................................................ 116
Principal, Maturity and Interest ............................................... 116
Subordination .................................................................. 117
Subsidiary Guarantees .......................................................... 118
</TABLE>
8
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<TABLE>
<CAPTION>
PAGE
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<S> <C>
Optional Redemption .......................................................... 119
Selection and Notice ......................................................... 119
Mandatory Redemption ......................................................... 120
Repurchase at the Option of Holders .......................................... 120
Change of Control .......................................................... 120
Asset Sales ................................................................ 121
Certain Covenants ............................................................ 122
Restricted Payments ........................................................ 122
Incurrence of Indebtedness and Issuance of Preferred Stock ................. 124
Limitation on Other Senior Subordinated Debt ............................... 125
Liens ...................................................................... 125
Sale and Leaseback Transactions ............................................ 125
Dividend and Other Payment Restrictions Affecting Subsidiaries ............. 126
Issuances and Sales of Equity Interests in Restricted Subsidiaries ......... 126
Merger, Consolidation or Sale of Assets .................................... 127
Transactions with Affiliates ............................................... 127
Additional Subsidiary Guarantees ........................................... 128
Payments for Consent ....................................................... 128
Business Activities ........................................................ 128
Reports .................................................................... 128
Events of Default and Remedies ............................................... 129
No Personal Liability of Directors, Officers, Employees and Stockholders ..... 130
Legal Defeasance and Covenant Defeasance ..................................... 130
Transfer and Exchange ........................................................ 131
Amendment, Supplement and Waiver ............................................. 131
Concerning the Trustee ....................................................... 132
Depository Procedures; Book Entry, Delivery and Form ......................... 132
Certificated Securities ...................................................... 133
Exchange of Certificated Notes for Book-Entry Notes ........................ 134
Same Day Settlement and Payment ............................................ 134
Registration Rights; Liquidated Damages ...................................... 134
Certain Definitions .......................................................... 136
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS OF THE
EXCHANGE OFFER AND AN INVESTMENT IN THE EXCHANGE NOTES ....................... 145
Exchange of Notes for Exchange Notes ......................................... 145
Stated Interest on Exchange Notes; Change of Control ......................... 145
Market Discount .............................................................. 145
Amortizable Bond Premium ..................................................... 146
Sale, Exchange and Retirement of Exchange Notes .............................. 146
Non-U.S. Holders ............................................................. 146
Information Reporting and Backup Withholding ................................. 147
PLAN OF DISTRIBUTION .......................................................... 148
LEGAL MATTERS ................................................................. 149
EXPERTS ....................................................................... 149
INDEX OF DEFINED TERMS ........................................................ 151
INDEX OF FINANCIAL STATEMENTS ................................................. F-1
</TABLE>
9
<PAGE>
SUMMARY
The following summary is qualified in its entirety by reference to the
more detailed information and consolidated financial statements, including the
notes thereto, appearing elsewhere in this Prospectus. Unless the context
requires otherwise: (i) the "Company" means SFX Entertainment, Inc. and its
subsidiaries, after giving effect to the Recent Acquisitions, including SFX
Concerts, Inc., formerly known as Delsener/Slater Enterprises, Ltd., and (ii)
"Broadcasting" or "SFX Broadcasting" means SFX Broadcasting, Inc., the parent
of the Company prior to the Spin-Off (as defined herein) and its subsidiaries.
Except as otherwise indicated, all information in this Prospectus assumes the
consummation of the Spin-Off (including recapitalizating the Company to
increase its authorized capital stock and to increase the number of outstanding
shares of Class A Common Stock, par value $.01 per share (the "Class A Common
Stock"), and Class B Common Stock, par value $.01 per share (the "Class B
Common Stock"), of the Company) and the Merger as described in "The Spin-Off,"
(the Class A Common Stock and the Class B Common Stock is collectively referred
to as the "Common Stock"). Industry data used throughout this Prospectus was
obtained from industry publications and has not been independently verified by
the Company. Each person is urged to read this Prospectus in its entirety.
THE COMPANY
The Company is a leading promoter and producer of, and operator of venues
for, live entertainment events. The Company believes that it owns and/or
operates the largest network of venues used principally for music concerts and
other live entertainment events in the United States, with 39 venues either
directly owned or operated under lease or exclusive booking arrangements in 21
of the top 50 markets, including nine amphitheaters in six of the top 10
markets. Through its large number of venues, its strong market presence and the
long operating histories of the Company and the businesses acquired pursuant to
the Recent Acquisitions and the 1997 Acquisitions (each as defined herein), the
Company operates an integrated franchise that promotes and produces a broad
variety of live entertainment events locally, regionally and nationally. During
1997, approximately 25 million people attended 9,100 events promoted and/or
produced by the Company and the businesses acquired in the Recent Acquisitions
(the "Acquired Businesses"), including approximately 3,880 music concerts,
4,850 theatrical shows and 188 specialized motor sports events. These events
included: (a) music concerts featuring artists such as The Rolling Stones,
Phish, Fleetwood Mac, Ozzy Osbourne and Alanis Morissette, (b) music festivals
such as Lollapalooza and the George Strait Country Music Festival, (c) touring
theatrical productions such as The Phantom of the Opera, Jekyll & Hyde, Rent
and The Magic of David Copperfield and (d) specialized motor sports events,
such as Truck Fest and American Motorcycle Association Supercross racing
events. On a pro forma basis giving effect to the 1997 Acquisitions and the
Recent Acquisitions, the Company would have had revenues and Adjusted EBITDA
(as defined) of $638.2 million and $77.3 million, respectively, for the year
ended December 31, 1997.
The Company's core business is the promotion and production of live
entertainment events, most significantly for concert and other music
performances in venues owned and/or operated by the Company and in third-party
venues. As promoter, the Company typically markets events and tours, sells
tickets, rents or otherwise provides event venues and arranges for local
production services (such as stage, set, sound and lighting). As producer, the
Company (a) creates tours for music concert, theatrical, specialized motor
sports and other events, (b) develops and manages Broadway-style touring
theatrical shows ("Touring Broadway Shows"), and develops specialized motor
sports and other live entertainment events. In connection with its live
entertainment events, the Company also derives related revenue streams,
including from the sale of corporate sponsorships and advertising, the sale of
concessions and the merchandising of a broad range of products. On a pro forma
basis giving effect to the 1997 Acquisitions and the Recent Acquisitions, the
Company's music and ancillary businesses would have comprised approximately
78%; theater would have comprised approximately 16%; and specialized motor
sports would have comprised approximately 6% of the Company's total net
revenues for the year ended December 31, 1997.
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<PAGE>
The Company has benefited from significant growth in the live
entertainment industry over the last 12 years. According to Amusement Business,
an entertainment industry journal, ticket sales for North American music
concert tours have grown at a 10.9% compound annual growth rate ("CAGR") since
1985, from approximately $321.7 million in 1985 to approximately $1,112.2
million in 1997. Box office receipts from Touring Broadway Shows and Broadway
shows in the United States have grown at a 11.7% CAGR since the 1986-1987
season, from $431.5 million to $1.3 billion in the 1996-1997 season, according
to Variety Magazine. The increasing popularity of specialized motor sports over
the last several years has coincided with and, in part, been due to the
increased popularity of other professional motor sports events such as
professional auto racing, including NASCAR, CART and Indy Car Racing.
VENUES
The Company believes that it owns and/or operate the largest number of
venues in the United States used principally for music concerts and other live
entertainment events. The following table summarizes the amphitheaters,
theaters and other venues owned and/or operated under lease or exclusive
booking arrangement by the Company:
<TABLE>
<CAPTION>
NUMBER OF TOTALS
MARKET NUMBER OF THEATERS AND TOTAL SEATING
MARKET RANK(1) AMPHITHEATERS(2) CLUBS(2) VENUES(2) CAPACITY
- ------------------------------------------ --------- ------------------ -------------- ----------- ------------------------
<S> <C> <C> <C> <C> <C>
New York--Northern New Jersey
--Long Island ........................... 1 2 2 4 37,570
Los Angeles--Riverside--Orange
County .................................. 2 2 -- 2 40,500(3)
San Francisco--Oakland--San Jose ......... 5 2 4 6 49,499(4)
Philadelphia--Wilmington
--Atlantic City ......................... 6 1 -- 1 25,000
Dallas--Fort Worth ....................... 9 1 -- 1 20,100
Houston--Galveston--Brazoria ............. 10 1 1 2 15,800
Atlanta .................................. 12 2 2 4 28,250
St. Louis ................................ 17 1 2 3 24,100
Phoenix--Mesa ............................ 18 1 -- 1 20,000
Pittsburgh ............................... 19 1 -- 1 22,500
Kansas City .............................. 24 1 2 3 30,000
Sacramento--Yolo ......................... 26 -- 1 1 N/A(4)
Indianapolis ............................. 28 1 1 2 23,700
Columbus ................................. 30 1 -- 1 20,000
Charlotte--Gastonia--Rock Hill ........... 32 1 -- 1 18,000
Hartford ................................. 36 1 -- 1 25,000
Rochester ................................ 39 1 -- 1 12,700
Nashville ................................ 41 1 -- 1 20,100
Oklahoma City ............................ 43 1 -- 1 9,000
Raleigh--Durham--Chapel Hill ............. 47 1 -- 1 20,000
West Palm Beach--Boca Raton .............. 50 1 -- 1 20,000
Reno ..................................... 119 1 -- 1 8,500
-- -- - ------------
Total ................................... 25 15 40 490,319(3),(4)
</TABLE>
- ----------
(1) Based on the July 1994 population of metropolitan statistical areas as
set forth in the 1996 Statistical Abstracts of the United States.
(2) Does not include venues in the 31 markets where the Company sells
subscriptions for Touring Broadway Shows. See "Business--The Company's
Live Entertainment Activities--Production."
(3) Additional seating of approximately 40,000 is available for certain
events.
(4) Club seating, which cannot be accurately determined because clubs
typically have either open or reserved seating for any given event, is
not reflected.
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<PAGE>
OPERATING STRATEGY
The Company's principal objectives are (a) to maximize revenue and cash
flow growth opportunities by being a leading promoter and producer of live
entertainment events and (b) to own and/or operate leading live entertainment
venues in the United States. The Company's specific strategies include the
following:
OWN AND/OR OPERATE LEADING LIVE ENTERTAINMENT VENUES IN NATION'S TOP 50 MARKETS
A key component of the Company's strategy is to own and/or operate a
network of leading live entertainment venues in the nation's top 50 markets.
The Company believes that this strategy will enable it to (a) utilize its
nationwide venue footprint, significant industry expertise and access to a
large aggregate audience to secure more events and distribute content on a
national scale, (b) sell additional products and maximize numerous other
related revenue sources, (c) position itself to produce national tours by
leading music performers in order to capture a greater percentage of revenues
from those tours and (d) encourage wider use by performers of the Company's
venues by providing centralized access to a nationwide network of venues. The
Company believes that it owns and/or operates the largest network of venues
used principally for music concerts and other live entertainment events in the
United States, with 39 venues either directly owned or operated under lease or
exclusive booking arrangements in 21 of the top 50 markets, including nine
amphitheaters in six of the top 10 markets.
MAXIMIZE RELATED REVENUE OPPORTUNITIES
The Company intends to enhance revenues and cash flows by maximizing
revenue sources arising from and related to its leadership position in the live
entertainment business. These related revenues comprised approximately 19% of
the Company's total revenues for the year ended December 31, 1997. Management
believes that these related revenue sources generally have higher margins than
promotion and production revenues and include, among others, (a) the sale of
corporate sponsorship, naming and other rights, concessions, merchandise,
parking and other products and services and (b) the sale of rights to advertise
to the Company's large aggregate national audience. Categories available for
sponsorship arrangements include the naming of the venue itself (e.g., the PNC
Bank Arts Center) and the designation of "official" event or tour sponsors,
concessions providers (e.g., beer and soda), credit card companies, phone
companies, film manufacturers and radio stations, among others. Sponsorship
arrangements can provide significant additional revenues at negligible
incremental cost, and many of the Company's venues currently have no
sponsorship arrangements in many of the available categories (including naming
rights). The Company also intends to maximize related revenues by developing
and exploiting intellectual property rights associated with (a) its production
of musical concert tours and themed events (such as regional music festivals)
and (b) branded characters created as an integral part of the content,
marketing and merchandising of certain motor sports events.
EXPLOIT SYNERGIES OF THE ACQUIRED BUSINESSES
The Company plans to maximize revenues by exploiting synergies among its
existing businesses and the Acquired Businesses. The Company believes that it
can utilize the best business practices of the respective Acquired Businesses
on a national scale. For example, the Atlanta-based regional Music Midtown
Festival, created and promoted by Concert/Southern Promotions (one of the
Acquired Businesses), is a highly successful music festival concept that drew
approximately 200,000 attendees in 1997; the Company believes that it can use
the event as a model for other markets. In addition, the Company believes that
the radio industry trade publications of Network (as defined herein, another of
the Acquired Businesses) will enable the Company to introduce new acts and new
musical releases to radio programming directors nationwide. This exposure can
enhance recorded music sales and, in turn, music concert attendance,
particularly for artists having relationships with the Company.
12
<PAGE>
INCREASE USE OF VENUES; DIVERSIFICATION OF ACTS AND VENUES
Typically, a venue is not utilized for many of the dates available for
live entertainment events in any given season. The Company believes that it
will be able to increase the utilization of its venues through its ability to
affect scheduling on a nationwide basis, its local knowledge, relationships and
expertise and its presentation of a variety of additional events, including
comedy acts, magic acts, motivational speeches, national figure skating and
gymnastics competitions and exhibitions and bull riding competitions, among
others. The Company believes that a diversified portfolio of performers, events
and venues reduces reliance on the commercial success of any one performer,
event or venue.
INNOVATIVE EVENT MARKETING
The Company plans to use innovative event marketing to increase
admissions, sponsorship and advertising revenues, and, to a limited extent,
average ticket prices at its venues. In particular, the Company believes that
it can increase the profitability of its venues by offering premium ticket
packages, including (a) season ticket packages that include amenities such as
preferred seating, VIP parking, waiter service, private club and/or "upscale"
concession menus, (b) subscription series packages allowing customers to
purchase tickets for a set of performances and (c) preferred seating, such as
box seating and VIP seating areas, which typically generate higher revenues per
seat. Moreover, the market research and audience demographics databases that
the Company acquired through certain of the Recent Acquisitions, when combined
with the Company's existing audience data collection efforts, will permit
highly-effective targeted marketing, such as direct-mail and subscription
series campaigns, which the Company believes will increase ticket pre-sales and
overall sales in a cost-efficient manner.
STRICT COST CONTROLS; NATIONALLY COORDINATED BOOKING, MARKETING & ACCOUNTING
The Company's senior management imposes strict financial reporting
requirements and expense budget limitations on all of its businesses, enabling
senior management to monitor the performance and operations of all of its
businesses, to eliminate duplicative administrative costs and to realize
expense savings. Moreover, the Company believes that its size will enable it to
achieve substantial economies of scale by (a) implementing a nationally
coordinated booking system (for contracting for and scheduling acts), while
continuing to utilize the substantial local expertise of the Company, (b)
establishing a centralized marketing team to exploit ancillary revenue streams
on local, regional and national levels, including from sponsorship, advertising
and merchandising opportunities, and (c) implementing a centralized accounting
system.
PURSUE COMPLEMENTARY ACQUISITION OPPORTUNITIES
The live entertainment business is characterized by numerous participants,
including booking agents, promoters, producers, venue owners and venue
operators, many of which are entrepreneurial, capital-constrained local or
regional businesses that do not achieve significant economies of scale from
their operations. The Company believes that the fragmented nature of the
industry presents attractive acquisition opportunities, and that its larger
size will provide it with improved access to the capital markets that will give
it a competitive advantage in implementing its acquisition strategy. Through
consolidation, the Company will be better able to coordinate negotiations with
performer and talent agents, addressing what the Company believes is a growing
desire among performers and talent agents to deal with fewer, more
sophisticated promoters. The Company intends to pursue additional strategic
acquisitions of (a) amphitheater and other live entertainment venues and (b)
local and regional promoters and producers of music concert, theatrical,
specialized motor sports and other live entertainment events. The Company may
also pursue acquisitions of other related or complementary venues or
businesses.
MANAGEMENT
Most of the Company's senior management team has worked together for a
number of years and has considerable experience in the radio broadcasting
industry. Senior management believes that this
13
<PAGE>
experience is directly transferable to the Company's live entertainment
operations, which it has managed since SFX Broadcasting's acquisition of
Delsener/Slater Enterprises, Ltd., a New York-based concert promotion company,
in January 1997. Senior management plans to continue to apply to its live
entertainment businesses many of the same operating strategies that it has
successfully utilized in the radio business, including a focus on revenue
maximization through the cultivation of sponsorship and advertising
relationships, cost containment and other strategies in order to maximize
revenue and cash flow growth. Moreover, senior management believes that the
Company will benefit from the consolidation of the live entertainment industry,
much as SFX Broadcasting benefited from the consolidation of the radio
broadcasting industry. The Company's senior management team, most of whom will
continue to act as senior management of SFX Broadcasting until consummation of
the SFX Merger, is comprised of Robert F. X. Sillerman, Executive Chairman,
Michael G. Ferrel, Chief Executive Officer, Brian Becker, Executive Vice
President, Howard J. Tytel, Executive Vice President and Thomas P. Benson,
Chief Financial Officer. The Company has entered into an employment agreement
with Mr. Becker and has reached agreements in principle with Messrs. Sillerman,
Ferrel, Tytel and Benson to enter into employment agreements with such
officers, which agreements will be effective upon the consummation of the SFX
Merger. See See "Risk Factors--Control by Management" and "--Dependence on Key
Personnel" and "Management."
FORMATION OF THE COMPANY
The Company was formed as a wholly-owned subsidiary of SFX Broadcasting in
December 1997 as the parent company of SFX Concerts, Inc. ("Concerts").
Concerts was formed by SFX Broadcasting to acquire and hold SFX Broadcasting's
live entertainment operations. In January 1997, Concerts entered the live
entertainment business with the acquisition of Delsener/Slater, a New
York-based concert promotion company. In March 1997, Concerts acquired a
37-year lease to operate the Meadows Music Theater ("Meadows"), a 25,000-seat
indoor/outdoor complex located in Hartford, Connecticut. In June 1997, Concerts
acquired Sunshine Promotions, Inc., a concert promoter in the Midwest, and
certain other related companies ("Sunshine Promotions" and, together with the
acquisitions of Delsener/Slater and the Meadows Music Theater lease, the "1997
Acquisitions").
In February and March of 1998, the Company completed its acquisitions of
PACE Entertainment Corporation ("PACE"); Contemporary Group ("Contemporary");
BG Presents, Inc. ("BGP"); Album Network, Inc., SJS Entertainment Corporation
and The Network 40 (collectively, "Network"); Concert/ Southern Promotions
("Concert/Southern") and certain related entities. The aggregate purchase price
of such acquisitions was approximately $442.1 million in cash, including repaid
debt and payments for working capital, $7.8 million in assumed debt and the
issuance of an aggregate of approximately 4.2 million shares of Class A Common
Stock. The acquisitions of PACE, Contemporary, BGP, Network and
Concert/Southern are collectively referred to herein as the "Recent
Acquisitions."
In February 1998, the Company completed the private placement of $350.0
million of Notes and borrowed $150.0 million under the Company's $300.0 million
senior credit facility (the "Credit Facility"). The offering of the Notes and
the borrowing under the Credit Facility are collectively referred to herein as
the "Financing." The proceeds of the Financing were used to consummate the
Recent Acquisitions.
THE SPIN-OFF AND THE SFX MERGER
SFX Broadcasting was formed in 1992 principally to acquire and operate
radio broadcasting stations. In August 1997, SFX Broadcasting entered into a
merger agreement (the "SFX Merger Agreement") pursuant to which it agreed to
merge (the "SFX Merger") with a subsidiary of Hicks, Muse Tate & Furst
Incorporated ("SFX Buyer"), and to spin-off the Company to certain stockholders
of SFX Broadcasting on a pro rata basis (the "Spin-Off"). The Spin-Off was
consummated on April , 1998. The Spin-Off separated the entertainment
business from SFX Broadcasting's radio broadcasting business and will enable
SFX Buyer to acquire only SFX Broadcasting's radio broadcasting business in the
SFX Merger. SFX Broadcasting has indicated that it expects the SFX Merger to be
completed in the second quarter of 1998.
14
<PAGE>
Prior to the Spin-Off, pursuant to the Distribution Agreement entered into
among the Company, SFX Broadcasting and SFX Buyer (the "Distribution
Agreement"), SFX Broadcasting contributed to the Company all of its assets
relating to the entertainment business. In addition, the Company, SFX
Broadcasting and SFX Buyer also entered into a tax sharing agreement (the "Tax
Sharing Agreement") and an employee benefits agreement (the "Employee Benefits
Agreement"). Each of these agreements provides for certain indemnification
obligations by the Company and SFX Broadcasting. Pursuant to the Distribution
Agreement, at the time of the SFX Merger, SFX Broadcasting will contribute any
positive Working Capital (as defined herein) to the Company. If Working Capital
is negative, the Company must pay the amount of the shortfall to SFX
Broadcasting. If the Company is required to make Working Capital payments to
SFX Broadcasting or if the Company is required to indemnify SFX Broadcasting,
there can be no assurance that the Company will have the funds to do so or that
it will have sufficient funds to conduct its operations after making the
required payments. See "Risk Factors--Substantial Tax Payment Obligation" and
"--Future Contingent Payments," "The Spin-Off" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources."
In the Spin-Off, shares of Common Stock were distributed pro rata to
holders on the Spin-Off record date of SFX Broadcasting's Class A common stock,
Class B common stock, Series D preferred stock and interests in SFX
Broadcasting's director deferred stock ownership plan, and shares were
placed in escrow to be issued upon the exercise of certain warrants of SFX
Broadcasting. See "The Spin-Off."
SUBSTANTIAL TAX PAYMENT OBLIGATION
Pursuant to the Tax Sharing Agreement, the Company is responsible for
certain taxes, including income taxes imposed with respect to income generated
by the Company for the periods prior to the Spin-Off and taxes resulting from
gain recognized in the Spin-Off. The Company believes that the amount of taxes
that it will be required to pay in connection with the Spin-Off will be
determined by reference to the trading price of the Common Stock on a date no
later than the first trading date following the Spin-Off. Increases or
decreases in the value of the Common Stock subsequent to such date will not
affect the tax liability. The Company will be allowed to offset any gain or
income by the net operating losses of SFX Broadcasting (including net operating
losses generated in the current year prior to the Spin-Off) which are available
to offset such gain or income. If the Common Stock were valued at $28.50 per
share for tax purposes (the last price of the Class A Common Stock (trading on
a when issued basis) on the over-the-counter market on April 9, 1998),
management estimates that the Company would be required to pay approximately
$101.0 million pursuant to such indemnity obligation. A substantial portion of
the proceeds from a pending offering of 5 million shares of the Company's Class
A Common Stock (the "Equity Offering") will be used to finance the tax
indemnity payment. Such payment will not result in any corresponding increase
in the Company's assets or cash flows. A registration statement in connection
with the Equity Offering was filed with the Commission on April 14, 1998. There
can be no assurance that the Company will be able to complete the Equity
Offering or obtain alternative financing on acceptable terms or at all. See
"Risk Factors--Substantial Tax Payment Obligation."
The address and telephone number of the Company's principal executive
offices are: 650 Madison Avenue, 16th Floor, New York, New York 10022; (212)
838-3100.
15
<PAGE>
THE NOTE OFFERING
THE NOTES................... The Notes were sold by the Company to the
Initial Purchasers on February 11, 1997, and were
subsequently resold to qualified institutional
buyers pursuant to Rule 144A under the Securities
Act and to certain persons in transactions
outside the United States in reliance on
Regulation S under the Securities Act.
REGISTRATION RIGHTS
AGREEMENT................... In connection with the Note Offering, the Company
entered into the Registration Rights Agreement,
which grants holders ("Holders") of the Notes
certain exchange and registration rights. The
Exchange Offer is intended to satisfy such
exchange and registration rights, which generally
terminate upon the consummation of the Exchange
Offer.
THE EXCHANGE OFFER
SECURITIES OFFERED.......... $350,000,000 aggregate principal amount of 9
1/8% Senior Subordinated Notes due February 1,
2008.
THE EXCHANGE OFFER.......... The Company is offering to exchange $1,000
principal amount of Exchange Notes for each
$1,000 principal amount of Notes that are
properly tendered and accepted. The issuance of
the Exchange Notes are intended to satisfy
certain obligations of the Company contained in
the Registration Rights Agreement. Subject to
certain conditions, a Holder of the Notes who
wishes to tender must transmit a properly
completed and duly executed Letter of Transmittal
to The Chase Manhattan Bank (the "Exchange
Agent") on or prior to the Expiration Date. For
procedures for tendering, see "The Exchange
Offer."
Based upon no-action letters issued by the staff
of the Commission to third parties, the Company
believes that the Exchange Notes issued pursuant
to the Exchange Offer in exchange for Notes may
be offered for resale, resold and otherwise
transferred by a holder thereof (other than any
holder which is an "affiliate" of the Company
within the meaning of Rule 405 under the
Securities Act or a holder that is a
broker-dealer who acquires Exchange Notes to
resell pursuant to Rule 144A or any other
available exemption under the Securities Act),
without compliance with the registration and
prospectus delivery provisions of the Securities
Act, provided that such Exchange Notes are
acquired in the ordinary course of such holders'
business and such holder is not participating,
does not intend to participate, and has no
arrangement with any person to participate in
the distribution of such Exchange Notes.
However, the Commission has not considered the
Exchange Offer in the context of a no-action
request and there can be no assurance that the
staff of the Commission would make a similar
determination with respect to the Exchange Offer
as in such other circumstances. Holders of Notes
wishing to accept the Exchange Offer must
represent to the Company that such conditions
have been met. Each broker-dealer that receives
Exchange Notes for its own account pursuant to
the Exchange Offer where it acquired the
16
<PAGE>
Notes exchanged for such Exchange Notes for its
own account as a result of market-making or
other trading activities, must acknowledge that
it will deliver a prospectus in connection with
the resale of such Exchange Notes.
REGISTRATION RIGHTS AGREEMENT;
TENDERS.................... The Notes were sold by the Company on February
11, 1998 to Lehman Brothers, Inc., Goldman Sachs
& Co., BNY Capital Markets and ING Barings
(collectively, the "Initial Purchasers") pursuant
to a Purchase Agreement dated February 5, 1998 by
and among the Company, the Subsidiary Guarantors,
and the Initial Purchasers (the "Purchase
Agreement"). Pursuant to the Purchase Agreement,
the Company, the Subsidiary Guarantors and the
Initial Purchasers entered into a Registration
Rights Agreement dated as of February 11, 1998
which grants the holders of the Notes certain
exchange and registration rights. See "The
Exchange Offer." This Exchange Offer is intended
to satisfy such rights, which terminate upon the
consummation of the Exchange Offer. The holders
of the Exchange Notes are not entitled to any
exchange or registration rights with respect to
the Exchange Notes. The Notes are subject to the
payment of liquidated damages ("Liquidated
Damages") under certain circumstances if the
Company and the Subsidiary Guarantors are not in
compliance with their obligations under the
Registration Rights Agreement. See "Description
of Notes--Registration Rights; Liquidated
Damages."
EXPIRATION DATE;
WITHDRAWAL.................. The Exchange Offer will expire at 5:00 p.m., New
York City time, on , 1998 (the
"Expiration Date") unless extended. The tender of
Notes pursuant to the Exchange Offer may be
withdrawn at any time prior to the Expiration
Date by sending a written notice of withdrawal to
the Exchange Agent. Any Notes so withdrawn will
be deemed not to have been validly tendered for
exchange for purposes of the Exchange Offer. Any
shares of Notes not accepted for exchange for any
reason will be returned without expense to the
tendering holder thereof as promptly as
practicable after the expiration or termination
of the Exchange Offer. See "The Exchange Offer."
CERTAIN CONDITIONS TO THE EXCHANGE
OFFER...................... The Exchange Offer is subject to certain
customary conditions, which may be waived by the
Company. See "The Exchange Offer--Certain
Conditions to the Exchange Offer."
FEDERAL INCOME
TAX CONSEQUENCES............ For Federal income tax purposes, the exchange
pursuant to the Exchange Offer should not result
in any income, gain or loss to the holders or the
Company. See "Certain Federal Income Tax
Considerations of the Exchange Offer and an
Investment in the Exchange Notes."
USE OF PROCEEDS............. There will be no proceeds to the Company from
the exchange pursuant to the Exchange Offer.
EXCHANGE AGENT.............. The Chase Manhattan Bank is serving as Exchange
Agent in connection with the Exchange Offer.
17
<PAGE>
THE EXCHANGE NOTES
The form and terms of the Exchange Notes are the same as the form and
terms of the Notes except that (i) the exchange will have been registered under
the Securities Act and therefore the Exchange Notes will not bear legends
restricting the transfer thereof, and (ii) holders of the Exchange Notes will
not be entitled to certain rights of holders of the Notes under the
Registration Rights Agreement, which rights will terminate upon the
consummation of the Exchange Offer. The Exchange Notes will evidence the same
debt as the Notes (which they replace) and will be entitled to the benefits of
the Indenture governing the Notes and the Exchange Notes. See "Description of
Exchange Notes" for further information and for definitions of certain
capitalized terms used below.
In the Exchange Offer, the Holders of Notes will receive Exchange Notes
with the same interest rate. The Exchange Notes issued in exchange for Notes
will accrue interest from February 11, 1998, the date of the issuance of the
Notes (the "Issue Date"). Holders whose Notes are accepted for exchange will be
deemed to have waived the right to receive any interest accrued on the Notes.
MATURITY DATE............... February 1, 2008
INTEREST PAYMENT DATES...... Interest on the Exchange Notes is payable
semi-annually on each February 1 and August 1,
commencing August 1, 1998.
RANKING..................... The Exchange Notes are general unsecured
obligations of the Company and are subordinated
in right of payment to all existing and future
Senior Debt of the Company. The Exchange Notes
rank pari passu with any future senior
subordinated indebtedness of the Company and rank
senior to all other subordinated indebtedness of
the Company. As of December 31, 1997, on a pro
forma basis after giving effect to the 1997
Acquisitions, Recent Acquisitions and Financing,
the Company would have had $534.9 million of
indebtedness outstanding, of which $184.9 million
would have been Senior Debt (excluding letters of
credit).
OPTIONAL REDEMPTION......... The Exchange Notes are redeemable, in whole or
in part, at the option of the Company on or after
February 1, 2003, at the redemption prices set
forth herein plus accrued and unpaid interest to
the date of redemption. In addition, until
February 1, 2001, the Company may, on any one or
more occasions, redeem up to $122.5 million
(equal to 35% of the aggregate principal amount
of Notes originally issued) of the Notes and the
Exchange Notes at the redemption price set forth
herein plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the
redemption date, with the net proceeds of an
offering of common equity; provided that at least
$227.5 million (equal to 65% of the aggregate
principal amount of Notes originally issued) of
the Notes and the Exchange Notes must remain
outstanding immediately after the occurrence of
each such redemption; and provided, further that
any such redemption shall occur within 75 days of
the date of closing of such offering of common
equity of the Company.
18
<PAGE>
CHANGE OF CONTROL........... Upon a Change of Control, each holder has the
right to require the Company to repurchase such
holder's Exchange Notes at a price equal to 101%
of the principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any,
to the date of the purchase.
SUBSIDIARY GUARANTEES....... The Company's payment obligations under the
Exchange Notes are jointly and severally
guaranteed on a senior subordinated basis (the
"Subsidiary Guarantees") by the current and
future domestic Restricted Subsidiaries (as
defined) of the Company, except for the
Non-Guarantor Subsidiaries. See "Description of
Exchange Notes--Subsidiary Guarantees."
CERTAIN COVENANTS........... The Indenture governing the Exchange Notes
contains certain covenants that limit the ability
of the Company and certain of its subsidiaries
to, among other things, incur additional
indebtedness, pay dividends or make certain other
restricted payments, consummate certain asset
sales, enter into certain transactions with
affiliates, incur indebtedness that is
subordinate in right of payment to any Senior
Debt and senior in right of payment o the
Exchange Notes, incur liens, impose restrictions
on the ability of a subsidiary to pay dividends
or make certain payments to the Company and its
subsidiaries, merge or consolidate with any other
person or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all
of the assets of the Company.
REGISTRATION OF NOTES
REGISTRATION................ If any Holder of Transfer Restricted Securities
(as defined in the Registration Rights Agreement)
notifies the Company on or prior to the 20th
Business Day following consummation of the
Exchange Offer that it (A) is prohibited by law
or Commission policy from participating in the
Exchange Offer or (B) may not resell the Exchange
Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and the
prospectus contained in the Exchange Offer
Registration Statement is not appropriate or
available for such resales or (C) is a broker-
dealer and owns Notes acquired directly from the
Company or an affiliate of the Company, the
Company and the Guarantors will use their best
efforts to file with the Commission a shelf
registration statement (the "Shelf Registration
Statement") to cover resales of the Notes by the
Holders thereof who satisfy certain conditions
relating to the provision of information in
connection with the Shelf Registration
Statement. Notwithstanding the foregoing, at any
time after Consummation (as defined in the
Registration Rights Agreement) of the Exchange
Offer, the Company and the Guarantors may allow
the Shelf Registration Statement to cease to be
effective and usable if (i) the Board of
Directors of the Company determines in good
faith that such action is in the best interests
of the Company, and the Company notifies the
Holders within a certain period of time
19
<PAGE>
after the Board of Directors makes such
determination or (ii) the prospectus contained
in the Shelf Registration Statement or the Shelf
Registration Statement contains an untrue
statement of a material fact required to be
stated therein or omits to state a material fact
necessary in order to make the statements
therein, in light of the circumstances under
which they were made, not misleading.
If (a) any Registration Statement required by
the Registration Rights Agreement to be filed
with the Commission is not filed on or prior to
the applicable filing deadline, (b) any such
Registration Statement has been declared
effective by the Commission on or prior to the
applicable effectiveness deadline (the
"Effectiveness Target Date"), (c) the Exchange
Offer has not been consummated within 30
Business Days after the Registration Statement
has first been declared effective by the
Commission or (d) any Registration Statement
required by the Registration Rights Agreement is
filed and declared effective but thereafter
ceases to be effective or fail to be usable for
its intended purpose without being succeeded
within two Business Days by a post-effective
amendment to such Registration Statement that
cures such failure and that is itself declared
effective within two Business Days of its filing
(each such event referred to in clauses (a)
through (d) above a "Registration Default"),
then, the Company will pay Liquidated Damages to
each Holder of Transfer Restricted Securities,
with respect to the first 90-day period
immediately following the occurrence of such
Registration Default in an amount equal to $0.05
per week or portion thereof per $1,000 in
principal amount of Notes constituting Transfer
Restricted Securities held by such Holder. The
amount of the Liquidated Damages will increase
by an additional $0.05 per week or portion
thereof per $1,000 in principal amount of Notes
constituting Transfer Restricted Securities with
respect to each subsequent 90-day period until
all Registration Defaults have been cured, up to
a maximum amount of Liquidated Damages of $0.50
per week per $1,000 in principal amount of Notes
constituting Transfer Restricted Securities. All
accrued Liquidated Damages will be paid by the
Company in cash on each Interest Payment Date,
as more fully described in the Indenture.
Following the cure of all Registration Defaults,
the accrual of Liquidated Damages will cease.
See "Description of the Exchange
Notes--Registration Rights; Liquidated Damages."
FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT SHOULD BE CONSIDERED IN
CONNECTION WITH AN INVESTMENT IN THE EXCHANGE NOTES, SEE "RISK FACTORS."
20
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The Summary Consolidated Financial Data of the Company includes the
historical financial statements of Delsener/Slater and affiliated companies,
the predecessor of the Company, for each of the four years ended December 31,
1996 and the historical financial statements of the Company for the year ended
December 31, 1997. The statement of operations data with respect to
Delsener/Slater for the year ended December 31, 1993 and the balance sheet data
as of December 31, 1993 and 1994 is unaudited. The financial information
presented below should be read in conjunction with the information set forth in
"Unaudited Pro Forma Condensed Combined Financial Statements" and the notes
thereto and the historical financial statements and the notes thereto of the
Company, the 1997 Acquisitions and the Recent Acquisitions included herein. The
financial information has been derived from the audited and unaudited financial
statements of the Company, the 1997 Acquisitions and the Recent Acquisitions.
The pro forma summary data for the year ended December 31, 1997 are derived
from the unaudited pro forma condensed combined financial statements, which, in
the opinion of management, reflect all adjustments necessary for a fair
presentation of the transactions for which such pro forma financial information
is given.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------
PREDECESSOR
------------------------------------------------
1997 (1)
PRO FORMA
1993 1994 1995 1996 1997 (UNAUDITED)
---------- ------------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue .................................... $46,526 $92,785 $47,566 $ 50,362 $ 96,144 $ 638,159
Operating expenses ......................... 45,635 90,598 47,178 50,686 83,417 568,607
Depreciation & amortization ................ 762 755 750 747 5,431 39,339
Corporate expenses (2) ..................... -- -- -- -- 2,206 4,206
------- ------- ------- -------- --------- ---------
Operating income (loss) .................... $ 129 $1,432 $ (362) $ (1,071) $ 5,090 $ 26,007
Interest expense ........................... (148) (144) (144) (60) (1,590) (47,296)
Other income ............................... 85 138 178 198 295 562
Equity income (loss) from investments ...... -- (9) 488 524 509 6,998
------- --------- ------- -------- --------- ---------
Income (loss) before income taxes .......... $ 66 $1,417 $ 160 $ (409) $ 4,304 $ (13,729)
Income tax provision ....................... (57) (5) (13) (106) (490) (3,500)
------- --------- ------- -------- --------- ---------
Net income (loss) .......................... $ 9 $1,412 $ 147 $ (515) $ 3,814 $ (17,229)
======= ======== ======= ======== =========
Accretion on temporary equity (3) .......... (3,300)
---------
Net loss applicable to common shares ....... $ (20,529)
=========
Net loss per common share (4) .............. $ (1.04)
=========
Weighted average common shares
outstanding (4) ........................... 20,300
=========
OTHER OPERATING DATA:
EBITDA (5) ................................. $ 891 $2,187 $ 388 $ (324) $ 10,521 $ 65,346
======= ======== ======= ======== ========= =========
Cash flow from:
Operating activities ...................... $2,959 $ (453) $ 4,214 $ 1,005
Investing activities ...................... -- -- (435) (73,296)
Financing activities ...................... (477) (216) (1,431) 78,270
Ratio of earnings to fixed charges (6) ..... 1.2x 4.6x 1.4x -- 2.5x --
</TABLE>
21
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS)
BALANCE SHEET DATA:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------------------------------
PREDECESSOR 1997
--------------------------------------------- PRO FORMA
1993 1994 1995 1996 1997 (UNAUDITED)(7)
--------- --------- --------- --------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Current assets ................. $1,823 $4,453 $3,022 $6,191 $ 11,220 $132,743
Property and equipment, net..... 4,484 3,728 2,978 2,231 59,685 192,482
Intangible assets, net ......... -- -- -- -- 60,306 431,820
Total assets ................... 6,420 8,222 6,037 8,879 146,942 809,170
Current liabilities ............ 4,356 3,423 3,138 7,973 21,514 101,573
Long-term debt, including
current portion ............... -- 1,830 -- -- 16,178 534,925
Temporary equity(3) ............ -- -- -- -- -- 16,500
Stockholders' equity ........... 6,420 2,969 2,900 907 102,144 126,810
</TABLE>
- ----------
(1) The Unaudited Pro Forma Statement of Operations Data for the year ended
December 31, 1997 are presented as if the Company had completed the 1997
Acquisitions, the Recent Acquisitions, the Financing, the Spin-Off and
the SFX Merger as of January 1, 1997.
(2) Corporate expenses are reduced by $1,794,000 for fees earned from
Triathlon Broadcasting Company ("Triathlon") for the year ended December
31, 1997. The right to receive such fees in the future was assigned to
the Company by SFX Broadcasting in connection with the Spin-Off. Future
fees may vary, above the minimum fee of $500,000, depending upon the
level of acquisition and financing activities of Triathlon. See "Certain
Relationships and Related Transactions--Triathlon Fees."
(3) The PACE acquisition agreement provides that each PACE seller shall have
an option (a "Fifth Year Put Option"), exercisable during a period
beginning on the fifth anniversary of the closing of the PACE Acquisition
and ending 90 days thereafter, to require the Company to purchase up to
one-third of the Class A Common Stock received by that PACE seller
(representing 500,000 shares in the aggregate) for a cash purchase price
of $33.00 per share. With certain limited exceptions, the Fifth Year Put
Option rights are not assignable by the sellers. The maximum amount
payable under all Fifth Year Put Options ($16,500,000) has been presented
as temporary equity on the pro forma balance sheet. See "Management's
Discussion and Analysis of Financial Conditions and Results of
Operations--Liquidity and Capital Resources."
(4) Includes 500,000 shares of the Class A Common Stock issued to the PACE
sellers in connection with the Fifth Year Put Option; these shares are
not included in calculating the net loss per common share.
(5) "EBITDA" is defined as earnings before interest, taxes, other income, net
equity income (loss) from investments and depreciation and amortization.
Although EBITDA is not a measure of performance calculated in accordance
with generally accepted accounting principals ("GAAP"), the Company
believes that EBITDA is accepted by the entertainment industry as a
generally recognized measure of performance and is used by analysts who
report publicly on the performance of entertainment companies.
Nevertheless, this measure should not be considered in isolation or as a
substitute for operating income, net income, net cash provided by
operating activities or any other measure for determining the Company's
operating performance or liquidity which is calculated in accordance with
GAAP.
There are other adjustments that could effect EBITDA but have not been
reflected herein. Had such adjustments been made, EBITDA as so adjusted
("Adjusted EBITDA") on a pro forma basis would have been approximately
$77,344,000 for the year ended December 31, 1997. These adjustments
include the elimination of duplicative staffing and general and
administrative expenses of $5,000,000 and include the Company's pro rata
share of income from investments in subsidiaries accounted for under the
equity method of $6,998,000 for the year ended December 31, 1997. While
management believes that such cost savings are achievable, the Company's
ability to fully achieve such cost savings is subject to numerous factors
certain of which may be beyond the Company's control.
(6) For purposes of computing the ratio of earnings to fixed charges,
"earnings" consists of earnings before income taxes, including equity
income (loss) from investments, net of distributions and fixed charges.
"Fixed charges" consists of interest on all indebtedness including
amortization of capitalized debt expenses and the portion of rents
representative of an interest factor. Earnings were insufficient
to cover fixed charges by $393,000 for the year ended December 31, 1996,
and $19,102,000 on a pro forma basis for the year ended December 31, 1997.
(7) The Unaudited Pro Forma Balance Sheet Data at December 31, 1997 are
presented as if the Company had completed the Recent Acquisitions, the
Financing, the Spin-Off and the SFX Merger as of December 31, 1997.
Retained earnings on a pro forma basis for the Financing, the
Recent Acquisitions, the Spin-Off and the SFX Merger have not been
adjusted for future charges to earnings which will result from the
issuance of stock and options granted to certain executive officers and
other employees of the Company or certain other costs. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources--Future Charges to Earnings."
22
<PAGE>
RISK FACTORS
Holders of Notes should carefully consider and evaluate the following risk
factors together with the other information set forth in this Prospectus before
making an investment in the Exchange Notes.
Certain statements, estimates, predictions and projections contained in
this Prospectus under "Summary," "Risk Factors," "Business" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations," in
addition to certain statements contained elsewhere in this Prospectus, are
"forward-looking statements" within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act. These forward-looking
statements are prospective, involving risks and uncertainties. While these
forward-looking statements, and any assumptions on which they are based, are
made in good faith and reflect the Company's current judgment regarding the
direction of its business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions or other
future performance suggested herein. Some important factors (but not
necessarily all factors) that could affect the Company's revenues, growth
strategies, future profitability and operating results, or that otherwise could
cause actual results to differ materially from those expressed in or implied by
any forward-looking statement, are discussed below as well as elsewhere in this
Prospectus. Holders of Notes are urged to carefully consider these factors in
connection with the forward-looking statements. The Company does not undertake
to release publicly any revisions to forward-looking statements that may be
made to reflect events or circumstances after the date of this Prospectus or to
reflect the occurrence of unanticipated events.
RISKS RELATING TO THE EXCHANGE NOTES
Consequences of Failure to Exchange
The Exchange Notes will be issued in exchange for Notes only after timely
receipt by the Exchange Agent of such Notes, a properly completed and duly
executed Letter of Transmittal and all other required documents. Therefore,
holders of Notes desiring to tender such Notes in exchange for Exchange Notes
should allow sufficient time to ensure timely delivery. Neither the Exchange
Agent nor the Company is under any duty to give notification of defects or
irregularities with respect to tenders of Notes for exchange. Holders of Notes
who do not exchange their Notes for Exchange Notes pursuant to the Exchange
Offer will continue to be subject to the restrictions on transfer of such Notes
as set forth in the legend thereon as a consequence of the issuance of the
Notes pursuant to exemption from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable state securities
laws. In general, the Notes may not be offered or sold, unless registered under
the Securities Act, except pursuant to an exemption from, or in a transaction
not subject to, the Securities Act and applicable state securities laws. In
addition, any holder of Notes who tenders in the Exchange Offer for the purpose
of participating in a distribution of the Exchange Notes will be required to
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction. Each broker-dealer
that receives Exchange Notes for its own account in exchange for Notes, where
such Notes were acquired by such broker-dealer as a result of market-making
activities or any other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Notes. See
"Plan of Distribution," "Description of Exchange Notes--Registration Rights;
Liquidated Damages" and "The Exchange Offer--Consequences of Failure to
Exchange."
Absence of Public Market
The Exchange Notes are being offered to the holders of the Notes. The
Notes were resold in February 1998 to qualified institutional buyers as defined
in Rule 144A of the Securities Act and pursuant to Regulation S of the
Securities Act and are trading in the Private Offering, Resale and Trading
through Automated Linkages (PORTAL) Market, the National Association of
Securities Dealers' screen based, automated market for trading of securities
eligible for resale under Rule 144A. The Exchange Notes are new securities for
which there currently is no market. Although the Initial Purchasers have
advised the Company that they currently intend to make a market in the Exchange
Notes, they are not obligated to do so and may discontinue such market making
at any time without notice. The Company does not
23
<PAGE>
currently intend to list the Exchange Notes on a national securities exchange
or to seek the admission thereof to trading in the National Association of
Securities Dealers Automated Quotation System. Accordingly, no assurance can be
given that an active market will develop for any of the Exchange Notes or as to
the liquidity of the trading market for any of the Exchange Notes. If a trading
market does not develop or is not maintained, holders of the Exchange Notes may
experience difficulty in reselling such Exchange Notes or may be unable to sell
them at all. If a market for the Exchange Notes develops, any such market may
be discontinued at any time. If a trading market develops for the Exchange
Notes, future trading prices of such Exchange Notes will depend on many
factors, including, among other things, prevailing interest rates, the
Company's results of operations and the market for similar securities.
Depending on prevailing interest rates, the market for similar securities and
other factors, including the financial condition of the Company, the Exchange
Notes may trade at a discount from their principal amount.
Restrictions on Transfer
The Notes were offered and sold by the Company in a private offering
exempt from registration pursuant to the Securities Act and have been resold
pursuant to Rule 144A and Regulation S under the Securities Act. As a result,
the Notes may not be reoffered or resold by purchasers except pursuant to an
effective registration statement under the Securities Act, or pursuant to an
applicable exemption from such registration, and the Notes are legended to
restrict transfer as aforesaid. Each Holder (other than any Holder who is an
affiliate or promoter of the Company) who duly exchanges Notes for Exchange
Notes in the Exchange Offer will receive Exchange Notes that are freely
transferable under the Securities Act. Holders of Notes who participate in the
Exchange Offer should be aware, however, that if they accept the Exchange Offer
for the purpose of engaging in a distribution, the Exchange Notes may not be
publicly reoffered or resold without complying with the registration and
prospectus delivery requirements of the Securities Act. As a result, each
Holder of Notes accepting the Exchange Offer will be deemed to have
represented, by its acceptance of the Exchange Offer, that it acquired the
Exchange Notes in the ordinary course of business and that it is not engaged
in, and does not intend to engage in, a distribution of the Exchange Notes. If
existing Commission interpretations permitting free transferability of the
Exchange Notes following the Exchange Offer are changed prior to consummation
of the Exchange Offer, the Company will use its best efforts to register the
Notes for resale under the Securities Act. See "Prospectus Summary--The
Exchange Offer" and "Description of Exchange Notes--Registration Rights;
Liquidated Damages."
The Notes currently may be sold pursuant to the restrictions set forth in
Rule 144A or Regulation S, or pursuant to another available exemption under the
Securities Act, without registration under the Securities Act. To the extent
that Notes are tendered and accepted in the Exchange Offer, the trading market
for the untendered and tendered but unaccepted Notes could be adversely
affected.
Substantial Leverage
The Company is, and after the Exchange Offer will continue to be, a highly
leveraged company. As of December 31, 1997, on a pro forma basis giving effect
to the Financing, the Recent Acquisitions and the Spin-Off, the Company's
consolidated indebtedness would have been approximately $534.9 million (of
which $350.0 million would have consisted of the Notes, and the balance would
have consisted of $150.0 million under the Credit Facility, $16.2 million in
pre-existing senior debt and $18.7 million of debt assumed pursuant to the
Recent Acquisitions), its temporary equity would have been approximately $16.5
million, and its stockholders' equity would have been approximately $126.8
million. On a pro forma basis for the Financing and the Recent Acquisitions,
the Company's ratio of total debt to total capitalization as of December 31,
1997 would have been .76 to 1, and its earnings would have been insufficient to
cover fixed charges by $19.1 million for the year ended December 31, 1997. See
"Unaudited Pro Forma Condensed Combined Financial Statements."
In addition, certain of the agreements relating to the Recent Acquisitions
provide for other purchase price adjustments and future contingent payments in
certain circumstances. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Recent Acquisitions." In addition,
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the Company may incur substantial additional indebtedness from time to time to
finance future acquisitions, for capital expenditures or for other purposes.
See"--Future Contingent Payments," "Capitalization" and "Unaudited Pro Forma
Condensed Combined Financial Statements."
The Company's ability to make scheduled payments of principal of, to pay
interest on, to pay Liquidated Damages, if any, on or to refinance its
indebtedness (including the Exchange Notes) as any such indebtedness becomes
due, or to fund planned capital expenditures, will depend on its future
financial performance, which, to a certain extent, is subject to general
economic, financial, competitive, legislative, regulatory and other factors
beyond its control, as well as the success of the Acquisition Businesses and
their integration into the Company's operations. There can be no assurance that
the Company will be able to make planned borrowings (including under the Senior
Credit Facility), that the Company's business will generate sufficient cash
flow from operations, or that future borrowings will be available in an amount
to enable the Company to service its debt (including the Exchange Notes) and to
make necessary capital or other expenditures. The Company may be required to
refinance a portion of the principal amount of its indebtedness prior to their
respective maturities. There can be no assurance that the Company will be able
to raise additional capital through the sale of securities, the disposition of
assets or otherwise for any refinancing. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources."
The degree to which the Company is and will be leveraged could have
material consequences to the holders of Exchange Notes, including, but not
limited to, (a) making it more difficult for the Company to satisfy its
obligations with respect to the Exchange Notes, (b) increasing the Company's
vulnerability to general adverse economic and industry conditions, (c) limiting
the Company's ability to obtain additional financing to fund future
acquisitions, working capital, capital expenditures and other general corporate
requirements, (d) requiring the dedication of a substantial portion of the
Company's cash flow from operations to the payment of principal of, and
interest on, its indebtedness, thereby reducing the availability of the cash
flow to fund working capital, capital expenditures or other general corporate
purposes, (e) limiting the Company's flexibility in planning for, or reacting
to, changes in its business and the industry and (f) placing the Company at a
competitive disadvantage to less leveraged competitors. In addition, the
Indenture and the Senior Credit Facility contain financial and other
restrictive covenants that will limit the ability of the Company to, among
other things, borrow additional funds. Failure by the Company to comply with
these covenants could result in an event of default that, if not cured or
waived, could have a material adverse effect on the Company's business,
financial condition and results of operations. Indebtedness incurred under the
Senior Credit Facility is secured by a pledge of the stock of its subsidiaries
and by liens on substantially all of its and its subsidiaries' tangible assets.
The degree to which the Company is leveraged could prevent it from repurchasing
all of the Exchange Notes tendered to it upon the occurrence of a Change of
Control. See "Description of the Credit Facility and Other Indebtedness" and
"Description of the Exchange Notes--Repurchase at Option of Holder--Change of
Control."
Holding Company; Dependence on Subsidiaries
The Company is a holding company with no significant assets other than the
stock of its subsidiaries. In order to meet its financial needs, the Company
will rely exclusively on repayments of interest and principal on intercompany
loans made by the Company to its operating subsidiaries and income from
dividends and other cash flows from such subsidiaries. There can be no
assurance that the operating subsidiaries of the Company will generate
sufficient net income to pay upstream dividends or cash flow to make payments
of interest and principal to the Company in respect of its intercompany loans.
Ranking
The Exchange Notes will be subordinated in right of payment to all current
and future Senior Debt of the Company and the Guarantors. However, the
Indenture provides that the Company will not, and will not permit any of the
Guarantors to incur or otherwise become liable for any indebtedness that is
subordinate or junior in right of payment to any Senior Debt and senior in any
respect in right of payment to the Notes, Exchange Notes or any of the
Subsidiary Guarantees. Upon any distribution to creditors of
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the Company in a liquidation or dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property, the holders of Senior Debt are entitled to be paid in
full in cash or Cash Equivalents (as defined) before any payment may be made
with respect to the Exchange Notes. In addition, the subordination provisions
of the Indenture provide that payments with respect to the Exchange Notes will
be blocked in the event of a payment default on Designated Senior Debt (as
defined) and may be blocked for up to 179 days each year in the event of
certain non-payment defaults on Designated Senior Debt. In the event of a
bankruptcy, liquidation or reorganization of the Company, holders of the
Exchange Notes will participate ratably with all holders of subordinated
indebtedness of the Company that is deemed to be of the same class as the
Exchange Notes, and potentially with all other general creditors of the
Company, based upon the respective amounts owed to each holder or creditor, in
the remaining assets of the Company. In any of the foregoing events, there can
be no assurance that there would be sufficient assets to pay amounts due on the
Exchange Notes. As a result, holders of Exchange Notes may receive less,
ratably, than the holders of Senior Debt. See "Description of the Exchange
Notes--Subordination."
The Company's obligations under the Exchange Notes will be subordinate and
junior in right of payment to all existing and future Senior Debt of the
Company. As of December 31, 1997, on a pro forma basis giving effect to the
Financing, the Recent Acquisitions, the Spin-Off and the SFX Merger, the
Company's consolidated indebtedness would have been approximately $534.9
million, of which approximately $184.9 million would have been Senior Debt,
including approximately $150.0 million of borrowings under the Credit
Facility. The Indenture permits the incurrence of substantial additional
indebtedness, including Senior Debt, by the Company and its subsidiaries in the
future. See "Description of the Exchange Notes."
The Exchange Notes will not be guaranteed by certain of the Company's
Subsidiaries (the "Non-Guarantor Subsidiaries"). For the period ended December
31, 1997, the Non-Guarantor Subsidiaries accounted for 2.9%, 5.0% and 11.0% of
the Company's revenues, EBITDA and assets, respectively, on a consolidated
basis. The Subsidiary Guarantees will be subordinated to the guarantees of
Senior Debt issued by the Guarantors under the Credit Facility. See
"Description of the Exchange Notes--Subsidiary Guarantees." The claims of
creditors (including trade creditors) of any Non-Guarantor Subsidiary will
generally have priority as to the assets of such subsidiaries over the claims
of the holders of the Exchange Notes. On a pro forma basis, as of December 31,
1997, giving effect to the Financing, the Recent Acquisitions, the Spin-Off and
the SFX Merger, the amount of liabilities of the Non-Guarantor Subsidiaries
would have been approximately $ million.
Restrictions Imposed by the Company's Indebtedness
The Indenture and the Credit Facility contain a number of
significant covenants that, among other things, restrict the ability of the
Company and its subsidiaries to dispose of assets, incur additional
indebtedness, repay other indebtedness, pay dividends, make certain investments
or acquisitions, repurchase or redeem capital stock, engage in mergers or
consolidations, or engage in certain transactions with subsidiaries and
affiliates and otherwise restrict corporate activities. These restrictions may
adversely affect the Company's ability to finance its future operations or
capital needs or to engage in other business activities that may be in the
interest of the Company. In addition, the Credit Facility requires the
Company to maintain compliance with certain financial ratios, such as a maximum
total leverage ratio, a maximum senior leverage ratio, a minimum fixed charges
ratio, a minimum pro forma interest expense ratio and a minimum debt service
ratio. The Company's ability to comply with these ratios and limits may be
affected by events beyond its control. A breach of any of these covenants or
the inability of the Company to comply with the required financial ratios or
limits could result in an event of default under the Credit Facility.
Such an event of default could permit the lenders to declare all borrowings
outstanding to be due and payable, to require the Company to apply all of its
available cash to repay its borrowings or to prevent the Company from making
debt service payments on the Exchange Notes, any of which would be an Event of
Default (as defined) under the Indenture. If the Company were unable to repay
any borrowings when due, the lenders could proceed against their collateral.
The Credit Facility requires the Company and its subsidiaries to grant
the lenders thereunder a continuing security
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interest in all of their tangible assets and in the capital stock of the
guaranteeing subsidiaries. If the Company's indebtedness were to be
accelerated, there can be no assurance that the assets of the Company would be
sufficient to repay its indebtedness in full. See "Description of Credit
Facility and Other Indebtedness."
Upon the occurrence of a Change of Control (as defined in the Indenture
and the Credit Facility), the Company will be required to offer to
repurchase the outstanding Notes and Exchange Notes and to repay the amounts
outstanding under the Credit Facility. There can be no assurance that
the Company will be able to obtain a waiver of these provisions or that
sufficient funds will be available at the time of any Change of Control to
refinance its indebtedness. The failure to either obtain waivers or refinance
its indebtedness will result in a material adverse effect to the Company's
business, results of operations and financial condition. See "--Substantial
Leverage," "Principal Stockholders" and "Description of Credit Facility and
Other Indebtedness."
Fraudulent Conveyance
There is no certainty that a court would find the facts relied on and the
judgments made by the Board of Directors of Broadcasting in determining that
Broadcasting was solvent at the time of, and after giving effect to, the
Spin-Off would be binding on creditors of Broadcasting or that a court would
reach the same conclusions as the Board of Directors of Broadcasting. If a
court in a lawsuit filed by an unpaid creditor or representative of unpaid
creditors, such as a trustee in bankruptcy, were to find that, at the time of
the Spin-Off was consummated or after giving effect thereto, Broadcasting (i)
was insolvent, (ii) was rendered insolvent by reason of the Spin-Off, (iii) was
engaged in a business or transaction for which the remaining assets of
Broadcasting constituted unreasonably small capital or (iv) intended to incur,
or believed it would incur, debts beyond its ability to pay as such debts
matured, then such court might void the Spin-Off (in whole or in part) as a
fraudulent conveyance and require those stockholders of the Company who
received shares in the Spin-Off to return such shares (in whole or in part) to
Broadcasting or require the Company to fund certain liabilities of Broadcasting
for the benefit of Broadcasting's creditors. If the assets of the Company were
recovered as fraudulent transfers by a creditor or trustee of Broadcasting, the
relative priority of right to payment between such Exchange Notes and any
fraudulent transfer claimant would be unclear and the Company could be rendered
insolvent. In addition, under applicable corporate law, a corporation generally
makes distributions to its stockholders only out of its surplus (net assets
minus capital) and not out of capital. The foregoing consequences would also
apply were a court to find that the Spin-Off was not made out of Broadcasting
surplus.
The Company believes that, in accordance with the facts examined in
connection with the Spin-Off, (i) Broadcasting, the Company and the Guarantors
were solvent at the time of the Spin-Off, and (ii) the Spin-Off was made
entirely out of Broadcasting's surplus in accordance with applicable law. There
can be no assurance, however, as to what standard a court would apply in making
such determinations or that a court would agree with the Company's or the
Guarantors' conclusions in this regard.
The Notes were issued to finance the cash consideration to be paid in the
Recent Acquisitions, to repay debt in connection with the Recent Acquisitions,
to pay certain related fees and expenses, to fund certain planned capital
expenditures during 1998, to make certain other payments and for general
corporate purposes. Management believes that the indebtedness of the Company
and the Guarantors represented by the Credit Facility and the Notes was
incurred for proper purposes and in good faith, and that after the consummation
of the Spin-Off and the Recent Acquisitions, the Company and the Guarantors was
solvent, did have sufficient capital for carrying on their respective
businesses and was able to pay their respective debts as they mature.
Notwithstanding management's belief, however, under federal and state
fraudulent transfer laws, if a court of competent jurisdiction in a suit by an
unpaid creditor or a representative of creditors (such as a trustee in
bankruptcy or a debtor-in-possession) were to find that, at the time of the
incurrence of such indebtedness, the Company were insolvent, were rendered
insolvent by reason of such incurrence, were engaged in a business or
transaction for which its remaining assets constituted unreasonably small
capital, intended to incur, or believed that it would incur, debts beyond its
ability to pay such debts as they matured, or intended to hinder, delay or
defraud its creditors, and that the indebtedness was incurred for less than
reasonably equivalent value, then such
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court could, among other things, (i) void all or a portion of the Company's or
the Guarantors' obligations to the Holders of the Notes or Exchange Notes, the
effect of which would be that the Holders of the Notes or Exchange Notes might
not be paid in full and/or (ii) subordinate the Company's or the Guarantors'
obligations to the Holders of the Notes or Exchange Notes to other existing and
future indebtedness of the Company and the Guarantors to a greater extent than
would otherwise be the case, the effect of which would be to entitle such other
creditors to which the Notes or Exchange Notes were not previously subordinated
to be paid in full before any payment could be made on the Notes or Exchange
Notes. See "--Substantial Leverage."
The measures of insolvency for purposes of the foregoing considerations
will vary depending upon the law applied in any proceeding with respect to the
foregoing. Generally, however, the Company or a Guarantor would be considered
insolvent if (i) the sum of its debts, including contingent liabilities, were
greater than the saleable value of all of its assets at a fair valuation or if
the present fair saleable value of its assets were less than the amount that
would be required to pay its probable liability on its existing debts,
including contingent liabilities, as they become absolute and mature or (ii) it
could not pay its debts as they become due.
Potential Inability to Fund a Change of Control Offer
Upon a Change of Control (as defined), the Company will be required to
offer to repurchase all outstanding Exchange Notes at 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
repurchase. However, there can be no assurance that sufficient funds will be
available at the time of any Change of Control to make any required repurchases
of Exchange Notes tendered or that restrictions in the Credit Facility will
allow the Company to make such required repurchases. Notwithstanding these
provisions, the Company could enter into certain transactions, including
certain recapitalizations, that would not constitute a Change of Control but
would increase the amount of debt outstanding at such time. See "Description of
the Exchange Notes--Repurchase at Option of Holders--Change of Control."
COMPANY SPECIFIC RISKS
Absence of Combined Operating History; Potential Inability to Integrate
Acquired Businesses
The business of the Company has been developed principally through the
acquisition of established live entertainment businesses, all of which have all
been acquired since January 1997. The Company consummated the 1997 Acquisitions
between January and June of 1997 and the Recent Acquisitions in February and
March of 1998. Prior to their acquisition by the Company, these acquired
companies operated independently. In addition, each of the Acquired Businesses
has significantly increased the size and operations of the Company. The
Unaudited Pro Forma Condensed Combined Financial Statements include the
combined operating results of the Acquired Businesses during periods when they
were not under common control or management, and therefore may not necessarily
be indicative of the results that would have been attained had the Company and
the Acquired Businesses operated on a combined basis during those periods. On a
pro forma basis, for the year ended December 31, 1997 and as of such date, the
Recent Acquisitions represented 85% of the Company's revenues and 82% of
assets. The Company's prospects should be considered in light of the numerous
risks commonly encountered in business combinations. Although the anticipated
management of the Company has significant experience in other industries, there
can be no assurance that the Company's management group will be able to
effectively integrate the Acquired Businesses. The Company's business,
financial condition and results of operations could be materially adversely
affected if the Company is unable to retain the key personnel that have
contributed to the historical performances of the Acquired Businesses or the
Company. See "--Dependence on Key Personnel" and "Business."
Substantial Tax Payment Obligation
Pursuant to the Tax Sharing Agreement, the Company is responsible for
certain taxes of SFX Broadcasting, including taxes imposed with respect to
income generated by the Company for the periods
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prior to the Spin-Off and taxes resulting from gain recognized in the Spin-Off.
The actual amount of the gain will be based on the excess of the value of the
Common Stock distributed in the Spin-Off over the tax basis of that stock.
The Company believes that the amount of taxes that it will be required to
pay in connection with the Spin-Off will be determined by reference to the
trading price of the Common Stock on a date no later than the first trading
date following the Spin-Off. Increases or decreases in the value of the Common
Stock subsequent to such date will not affect the tax liability. The Company
will be allowed to offset any gain or income by the net operating losses of SFX
Broadcasting (including net operating losses generated in the current year
prior to the Spin-Off) which are available to offset such gain or income. If
the Common Stock had a value of approximately $15 per share at the time of the
Spin-Off, management believes that no material indemnification payment would be
required. Such indemnification obligation would be approximately $4.0 million
at $16 per share and would increase by approximately $7.7 million for each
$1.00 increase above the per share valuation of $16. If the Common Stock were
valued at $28.50 per share (the last price of the Class A Common Stock (trading
on a when issued basis) on the over-the-counter market on April 9, 1998),
management estimates that the Company would have been required to pay
approximately $101.0 million pursuant to such indemnification obligation. The
Company expects that such payment will be due on or about June 15, 1998. Such
payment will not result in any corresponding increase in the Company's assets
or cash flows. The Company expects to use a substantial portion of the net
proceeds of the Equity Offering to fund the tax indemnity payment to SFX
Broadcasting. However, there can be no assurance that the Company will
successfully complete the Equity Offering or obtain alternative financing on
acceptable terms, if at all.
FUTURE CONTINGENT PAYMENTS
Related to Recent Acquisitions
Certain of the agreements relating to the Recent Acquisitions provide for
purchase price adjustments and other future contingent payments under certain
circumstances. The PACE acquisition agreement provides that each PACE seller
will have an option, exercisable for 90 days after the fifth anniversary of the
closing of the PACE acquisition, to require the Company to repurchase up to
500,000 shares of the Class A Common Stock received by that seller for $33.00
in cash per share (an aggregate of up to $1.5 million). Pursuant to the terms
of the Becker Employment Agreement (as defined herein), during the period
between December 12, 1999 and December 27, 1999, Mr. Becker, an Executive Vice
President, Director and a Member of the Office of the Chairman of the Company,
will have the option to, among other things, require the Company to purchase
any stock or portion thereof (including vested and unvested options) granted to
him by the Company and/or pay him an amount equal to the present value of the
compensation payable during the remaining term of his employment agreement. See
"Management--Employment Agreements and Arrangements with Certain Officers and
Directors." Moreover, pursuant to the Contemporary acquisition agreement, if
the average trading price of the 1,402,850 shares of Class A Common Stock
issued in the Contemporary acquisition is less than $13.33 during the 20 days
prior to the second anniversary of the Contemporary acquisition, the Company
will be required to pay one-half of such difference for each share held by the
sellers of Contemporary on such date. Pursuant to the Network acquisition
agreement, the Company has agreed to increase the purchase price for Network
based on Network's actual 1998 EBITDA (as defined in the acquisition agreement)
as follows: (a) by $4.0 million if the 1998 EBITDA equals or exceeds $9.0
million; (b) by an additional $4 for each $1 of additional 1998 EBITDA between
$9.0 million and $10.0 million; and (c) by an additional $6 for each $1 of
additional 1998 EBITDA between $10.0 million and $11.0 million. This contingent
consideration of up to $14.0 million is payable in shares of Class A Common
Stock or, in certain circumstances, in cash by no later than March 20, 1999.
Working Capital Adjustments
In addition, pursuant to the Distribution Agreement, the Company must pay
SFX Broadcasting any net negative Working Capital at the time of consummation
of the SFX Merger. Alternatively, SFX Broadcasting must pay to the Company any
net positive Working Capital. As of December 31, 1997, the
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Company estimates that Working Capital to be received by the Company would have
been approximately $3.0 million (excluding the Series E Adjustment, as defined
herein). The actual amount of Working Capital as of the closing of the SFX
Merger is likely to differ substantially from the amount as of December 31,
1997, and will be a function of, among other things, the operating results of
SFX Broadcasting through the date of the SFX Merger, the actual cost of
consummating the SFX Merger and the related transactions. SFX Broadcasting will
also incur certain other significant expenses prior to the consummation of the
SFX Merger that could reduce Working Capital, including the payment of
dividends and interest on SFX Broadcasting's debt, the Meadows Repurchase (as
defined herein) and the amount of any settlement paid by SFX Broadcasting in
connection with the shareholder litigation relating to the SFX Merger.
Moreover, Working Capital will be reduced by at least $2.1 million pursuant to
the Series E Adjustment. If the Company is required to make any such future
payments, there can be no assurance that the Company will have the funds to do
so or that it will have sufficient funds to conduct its operations after making
the required payments. See "--Substantial Leverage" and "--Restrictions Imposed
by the Company's Indebtedness," "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources," "Certain Relationships and Related Transactions--Indemnification of
Mr. Sillerman" and "Description of the Credit Facility and Other Indebtedness."
Other Indemnification Obligations
Pursuant to the Distribution Agreement, the Company has also agreed to
indemnify, defend and hold SFX Broadcasting and its subsidiaries harmless from
and against certain liabilities to which SFX Broadcasting or any of its
subsidiaries may be or become subject. These liabilities relate to the assets,
business, operations, employees (including under any employment agreement
assumed by the Company in the Spin-Off), debts or liabilities of the Company
and its subsidiaries. Although the Company does not anticipate that any
material liabilities for which it has agreed to indemnify SFX Broadcasting and
its subsidiaries will arise, it is possible that the Company will become
subject to these liabilities. Any of these liabilities may have a material
adverse effect on the Company's business, financial condition or results of
operations.
Concurrently with the execution of the SFX Merger Agreement, Mr. Sillerman
waived his right to receive indemnification from SFX Broadcasting, its
subsidiaries, SFX Buyer Sub and SFX Buyer, after the effective time of the SFX
Merger with respect to claims or damages relating to the SFX Merger Agreement
and the transactions contemplated thereby, except to the extent that SFX
Broadcasting can be reimbursed under the terms of its directors' and officers'
liability insurance. It is anticipated that the Company will indemnify (to the
extent permitted by law) Mr. Sillerman for any such claims or damages. In
addition, pursuant to Messrs. Sillerman's and Ferrel's existing employment
agreements with SFX Broadcasting (which will be assumed by the Company pursuant
to the Distribution Agreement), the Company will be obligated to indemnify them
(to the extent permitted by law) for one-half of the cost of any excise tax
that may be assessed against them for any change-of-control payments made to
them by SFX Broadcasting in connection with the SFX Merger. See "Certain
Relationships and Related Transactions--Assumption of Employment Agreements;
Certain Change of Control Payments" and "--Indemnification of Mr. Sillerman."
In addition, pursuant to the Tax Sharing Agreement, the Company is
required to indemnify SFX Broadcasting for certain taxes resulting from the
Spin-Off. See "--Substantial Tax Payment Obligation."
Expansion Strategy; Need for Additional Capital
The Company expects to pursue additional acquisitions of live
entertainment businesses in the future. However, it may be unable to identify
and acquire additional suitable businesses or obtain the financing necessary to
acquire the businesses. Future acquisitions by the Company could result in (a)
potentially dilutive issuance of equity securities, (b) the incurrence of
substantial additional indebtedness and/or (c) the amortization of expenses
related to goodwill and other intangible assets, any or all of which could
materially adversely affect the Company's business, financial condition and
results of operations. Acquisitions involve numerous risks, including
difficulties in the assimilation of the operations, technologies, services and
products of the acquired companies and the diversion of management's attention
from
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other business concerns. If any acquisition occurs, the Company's business,
financial condition and results of operations may be materially adversely
affected. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources--Future Acquisitions."
Each acquisition may also be subject to the prior approval of the
Company's lenders and financing for such acquisitions may be unavailable or
restricted by the terms of the Credit Facility and the Indenture.
Control by Management
Upon the consummation of the Equity Offering, Mr. Sillerman will
beneficially own approximately % of the total voting power of the Common
Stock, and all directors and executive officers together will beneficially own
approximately % of the total voting power of the Common Stock. Accordingly,
these persons will have substantial influence over the affairs of the Company,
including the ability to control the election of a majority of the Company's
Board of Directors (the "Board"), the decision whether to effect or prevent a
merger or sale of assets (except in certain "going private transactions") and
other matters requiring stockholder approval. Moreover, control by management
may have the effect of discouraging certain types of "change of control"
transactions. See "Principal Stockholders."
Upon consummation of the Spin-Off, Mr. Sillerman will beneficially own
shares of Class B Common Stock representing approximately % of the total
voting power of the Common Stock, which will allow him to exert substantial
control in the election of directors. Each share of Class B Common Stock
automatically converts into a share of Class A Common Stock upon (i) its sale,
gift, or other transfer, voluntary or involuntary, to a party that is not an
Affiliate (as defined in the Certificate of Incorporation) of Mr. Sillerman or
of the Company or (ii) upon the death of Mr. Sillerman, in the case of any
shares of Class B Common Stock held by Mr. Sillerman or any Affiliate of Mr.
Sillerman. The terms of the Certificate of Incorporation contemplate that,
absent an event of automatic conversion, the shares of Class B Common Stock
held by Mr. Sillerman could be transferred to a third-party without losing
their special voting rights.
Dependence on Key Personnel
The success of the Company depends substantially on the abilities and
continued service of certain of its (and its subsidiaries') executive officers
and directors. In particular, the Company will depend on the continued services
of Robert F.X. Sillerman, Michael G. Ferrel, Brian Becker, Howard J. Tytel and
Thomas P. Benson. Although many of these individuals generally have greater
experience in the radio broadcasting business than the live entertainment
industry, they do have significant expertise in selecting, negotiating and
financing acquisitions and in operating and managing public companies. In
addition, most of the Company's directors and executive officers are also
currently acting as directors and executive officers of SFX Broadcasting. Until
the consummation of the SFX Merger, these directors and executive officers can
be anticipated to expend substantial time and effort in managing the business
of SFX Broadcasting (which may detract from their performance with respect to
the Company). If the SFX Merger is not consummated, there can be no assurance
that the Company will be able to retain the services of these directors and
executive officers. The Company has entered into an employment agreement with
Mr. Becker and has reached agreements in principle with Messrs. Sillerman,
Ferrel, Tytel and Benson to enter into employment agreements, which agreements
will be effective upon consummation of the SFX Merger. See "--Potential
Conflicts of Interest" and "Management."
Furthermore, the operations of each of the Acquired Businesses are local
in nature and depend to a significant degree on the continued services of
between one to three individuals at each business. See "Management" and
"Certain Relationships and Related Transactions." The loss of any of these
individual's services could have a material adverse effect on the Company's
business, financial condition and results of operations.
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Potential Conflicts of Interest
Marquee is a publicly-traded company that, among other things, acts as
booking agent for tours and appearances for musicians and other entertainers.
Messrs. Sillerman and Tytel have an aggregate equity interest of approximately
8.8% in Marquee; Mr. Sillerman is the chairman of its board of directors, and
Mr. Tytel is one of its directors. The Company anticipates that, from time to
time, it will enter into transactions and arrangements (particularly, booking
arrangements) with Marquee and Marquee's clients. In any transaction or
arrangement with Marquee, Messrs. Sillerman and Tytel are likely to have
conflicts of interest as officers and directors of the Company. These
transactions or arrangements will be subject to the approval of a committee of
independent members of the boards of directors of each of the Company and
Marquee, except that booking arrangements in the ordinary course of business
will be subject to periodic review but not the approval of each particular
arrangement. Marquee also acts as a promoter of various sporting events and
sports personalities and the Company produces ice skating and gymnastics events
that may compete with events in which Marquee is involved. See "Certain
Relationships and Related Transactions--Potential Conflicts of Interest."
The Sillerman Companies, Inc. ("TSC"), an entity controlled by Mr.
Sillerman and in which Mr. Tytel also has an equity interest, provides
financial consulting services to Marquee and Triathlon. TSC's services are
provided by certain directors, officers and employees of the Company who are
not separately compensated for their services by TSC. Messrs. Sillerman and
Tytel have substantial equity interests in Triathlon. In any transaction,
arrangement or competition with Marquee or Triathlon, Messrs. Sillerman and
Tytel are likely to have conflicts of interest between their duties as officers
and directors of the Company, on the one hand, and their duties as directors of
Marquee and their interests in TSC, Marquee and Triathlon, on the other hand.
See "Certain Relationships and Related Transactions--Triathlon Fees."
In addition, prior to the consummation of the SFX Merger, Mr. Sillerman
and other members of the Company's management team will have management
obligations to both SFX Broadcasting and the Company that may cause them to
have conflicts of interest. See "Management" and "Certain Relationships and
Related Transactions--Potential Conflicts of Interest."
Rights to Purchase Certain Subsidiaries
Pursuant to the employment agreement entered into between Brian Becker and
the Company in connection with the PACE acquisition, Mr. Becker has the option,
exercisable within 15 days after February 25, 2000, to acquire the Company's
then existing motor sports line of business (or, if that line of business has
previously been sold, the Company's then existing theatrical line of business)
at its then fair market value. Mr. Becker's exercise of this option could have
a material adverse effect on the Company's business, financial condition and
results of operations. In addition, during the period between February 25, 1999
and February 25, 2000, Mr. Becker also has a right of first refusal under
certain circumstances to acquire the theatrical or motor sports line of
business at a price equal to 95% of the proposed purchase price. Mr. Becker's
right of first refusal may have the effect of discouraging potential bidders
for such lines of business from negotiating with the Company. See
"Management--Employment Agreements and Arrangements with Certain Officers and
Directors." On a pro forma basis giving effect to the Recent Acquisitions,
specialized motor sports would have comprised approximately 6%, and theater
would have comprised approximately 16%, of the Company's total net revenues for
the year ended December 31, 1997.
In addition, after the consummation of the Spin-Off or the SFX Merger, the
senior management of Concerts may have the right pursuant to their employment
agreements (a) to purchase the outstanding capital stock of Concerts (a
subsidiary of the Company holding a significant amount of the assets of the
Company) for Fair Market Value (as defined in their employment agreements) or
(b) to receive a cash payment equal to 15% of the amount by which the Fair
Market Value of Concerts exceeds the fixed payment portion of the cash purchase
price of the acquisition of Concerts, plus 20% interest thereon. The senior
management of Concerts and SFX Broadcasting have reached an agreement in
principle to waive the above rights in connection with the Spin-Off, the SFX
Merger and related transactions; however, there can be no assurance that the
rights will be waived on terms acceptable to SFX Broadcasting and the Company
or at all. In addition, although the Company is in the process of negotiating
amendments to
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these agreements, these and certain other rights described in the agreements
may continue to apply to transactions after, or unrelated to, the Spin-Off or
the SFX Merger. See "Certain Relationships and Related
Transactions--Delsener/Slater Employment Agreements."
The Company has also agreed that it will not sell all, or substantially
all, of BGP's assets prior to February 24, 2001 without offering the BGP
sellers the opportunity to purchase the assets on the same terms as those
included in any bona fide offer received by the Company from any third party.
BGP's right of first refusal may have the effect of discouraging potential
bidders for BGP's assets from negotiating with the Company.
Economic Conditions and Consumer Tastes; Availability of Artists and Events
The Company's operations are affected by general economic conditions and
consumer tastes. The demand for live entertainment tends to be highly sensitive
to consumers' disposable incomes, and thus a decline in general economic
conditions that generally reduces consumers' disposable incomes can, in turn,
materially adversely affect the Company's revenues. In addition, the
profitability of events promoted or produced by the Company is directly related
to the ancillary revenues generated by those events, and the ancillary revenues
decrease with lower attendance levels. The success of a music concert,
theatrical show or motor sports event depends on public tastes, which are
unpredictable and susceptible to change, and may also be significantly affected
by the number and popularity of competitive productions, concerts or events as
well as other forms of entertainment. It is impossible for the Company to
predict the success of any music concert, theatrical show or motor sports
event. In addition, decreased attendance, a change in public tastes or an
increase in competition could have a material adverse effect on the Company's
business, financial condition and results of operations.
The Company's success and ability to sell tickets (including
subscriptions) is also highly dependent on the availability of popular musical
artists, Touring Broadway Shows and specialized motor sports talent, among
other performers of live entertainment. The Company's and the Acquired
Businesses' results of operations have been adversely affected in periods where
fewer popular musical artists and/or popular theatrical productions were
available for presentation. There can be no assurance that popular musical
artists, theatrical shows or specialized motor sports talent will be available
to the Company in the future. The lack of availability of these artists and
productions could have a material adverse effect on the Company's business,
financial condition and results of operations.
Future Charges to Earnings
Consummation of the Recent Acquisitions will result in substantial charges
to earnings relating to interest expense and the recognition and amortization
of goodwill; these charges will increase the Company's losses or reduce or
eliminate its earnings, if any. As of December 31, 1997 the Company had
goodwill of approximately $60.3 million. This balance will substantially
increase in 1998 due to the Recent Acquisitions. Goodwill is being amortized
using the straight line method over 15 years. See "Unaudited Pro Forma
Condensed Combined Financial Statements" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources--Future Charges to Earnings."
The Company anticipates entering into employment agreements with certain
of its executive officers. In connection with these agreements, the Board, on
the recommendation of its Compensation Committee, agreed to sell the executive
officers an aggregate of 650,000 shares of Class B Common Stock and 90,000
shares of Class A Common Stock at a purchase price of $2.00 per share. The
shares will be issued on or about the Spin-Off distribution date. The Company
will record a non-cash compensation charge at the date of the sale equal to the
fair market value of the shares less the aggregate purchase price paid. In
addition, the Board, on the recommendation of its Compensation Committee, also
has approved the issuance of stock options exercisable for an aggregate of
245,000 shares of Class A Common Stock. The options will vest over five years
and will have an exercise price of $5.50 per share. The Company will record
non-cash compensation charges over the five-year exercise period to the extent
that the fair value of the underlying Class A Common Stock exceeds the exercise
price. These substantial non-cash charges
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to earnings will increase the Company's losses or reduce or eliminate its
earnings, if any. See "--Future Contingent Payments" and
"Management--Employment Agreements and Arrangements with Certain Officers and
Directors."
Competition
Competition in the live entertainment industry is intense, and competition
is fragmented among a wide variety of entities. The Company competes on a
local, regional and national basis with a number of large venue owners and
entertainment promoters for the hosting, booking, promoting and producing of
music concerts, theatrical shows, motor sports events and other live
entertainment events. Moreover, the Company's marketing and consulting
operations compete with advertising agencies and other marketing organizations.
The Company competes not only with other live entertainment events, including
sporting events and theatrical presentations, but also with non-live forms of
entertainment, such as television, radio and motion pictures. A number of the
Company's competitors have substantially greater resources than the Company.
Certain of the Company's competitors may also operate on a less leveraged
basis, and have greater operating and financial flexibility, than the Company.
In addition, many of these competitors also have long standing relationships
with performers, producers, and promoters and may offer other services that are
not provided by the Company. There can be no assurance that the Company will be
able to compete successfully in this market or against these competitors.
Control of Venues
The Company operates a number of its live entertainment venues under
leasing or booking agreements, and accordingly the Company's long-term success
will depend in part on its ability to renew these agreements when they expire
or terminate. There can be no assurance that the Company will be able to renew
these agreements on acceptable terms or at all, or that it will be able to
obtain attractive agreements with substitute venues. See "Business--The
Company's Live Entertainment Activities--Venue Operations."
Regulatory Matters
The business of the Company is not generally subject to material
governmental regulation. However, if the Company seeks to acquire or construct
new venue operations, its ability to do so will be subject to extensive local,
state and federal governmental licensing, approval and permit requirements,
including, among other things, approvals of state and local land-use and
environmental authorities, building permits, zoning permits and liquor
licenses. Significant acquisitions may also be subject to the requirements of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Other
types of licenses, approvals and permits from governmental or
quasi-governmental agencies might also be required for other opportunities that
the Company may pursue in the future. There can be no assurance that the
Company will be able to obtain the licenses, approvals and permits it may
require from time to time in order to operate its business.
The Company has real property relating to its business, consisting of fee
interests, leasehold interests and other contractual interests. The Company's
properties are subject to foreign, federal, state and local environmental laws
and regulations regarding the use, storage, disposal, emission, release and
remediation of hazardous and non-hazardous substances, materials or wastes,
including laws relating to noise emissions (which may affect, among other
things, the hours of operation of the Company's venues). Further, under certain
of these laws and regulations, the Company could be held strictly, jointly and
severally liable for the remediation of hazardous substance contamination at
its facilities or at third-party waste disposal sites, and could also be held
liable for any personal or property damage related to any contamination. The
Company believes that it is in substantial compliance with all of these laws
and regulations, and has performed preliminary environmental assessments of all
of the properties that are wholly-owned, without identifying material
environmental hazards. Although the level of future expenditures cannot be
determined with certainty, the Company does not anticipate, based on currently
known facts, that its environmental costs are likely to have a material adverse
effect on the Company's business, financial condition and results of
operations.
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THE EXCHANGE OFFER
The following discussion sets forth or summarizes what the Company
believes are the material terms of the Exchange Offer, including those set
forth in the Letter of Transmittal distributed with this Prospectus. This
summary is qualified in its entirety by reference to the full text of the
documents underlying the Exchange Offer, copies of which are filed as exhibits
to the Registration Statement of which this Prospectus is a part, and are
incorporated by reference herein.
PURPOSE OF THE EXCHANGE OFFER
The Notes were sold by the Company on February 11, 1998 to the Initial
Purchasers pursuant to the Purchase Agreement. The Initial Purchasers
subsequently placed the Notes with qualified institutional buyers in reliance
on Rule 144A under the Securities Act and in non-U.S. transactions pursuant to
Regulation S promulgated under the Securities Act. As a condition to the sale
of the Notes, the Company, the Subsidiary Guarantors and the Initial Purchasers
entered into the Registration Rights Agreement on February 11, 1998. Pursuant
to the Registration Rights Agreement, the Company agreed that, unless the
Exchange Offer is not permitted by applicable law or Commission policy, it
would (i) file with the Commission a Registration Statement under the
Securities Act with respect to the Exchange Notes within 75 days of such
agreement's execution, (ii) use its reasonable best efforts to cause such
Registration Statement to become effective under the Securities Act within 120
days and (iii) upon effectiveness of the Registration Statement, to commence
the Exchange Offer and maintain the effectiveness of the Registration Statement
and keep the Exchange Offer open for at least 20 business days. A copy of the
Registration Rights Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The Registration Statement of
which this Prospectus is a part is intended to satisfy certain of the Company's
obligations under the Registration Rights Agreement and the Purchase Agreement.
RESALE OF THE EXCHANGE NOTES
With respect to the Exchange Notes, based upon an interpretation by the
staff of the Commission set forth in certain no-action letters issued to third
parties, the Company believes that a holder (other than (i) a broker-dealer who
purchases such Exchange Notes directly from the Company to resell pursuant to
Rule 144A or any other available exemption under the Securities Act or (ii) any
such holder which is an "affiliate" of the Company within the meaning of Rule
405 under the Securities Act) who exchanges the Notes for the Exchange Notes in
the ordinary course of business and who is not participating, does not intend
to participate, and has no arrangement with any person to participate, in the
distribution of the Exchange Notes, will be allowed to resell the Exchange
Notes to the public without further registration under the Securities Act and
without delivering to the purchasers of the Exchange Notes a prospectus that
satisfies the requirements of Section 10 of the Securities Act. However, if any
holder acquires the Exchange Notes in the Exchange Offer for the purpose of
distributing or participating in the distribution of the Exchange Notes or is a
broker-dealer, such holder cannot rely on the position of the staff of the
Commission enumerated in certain no-action letters issued to third parties and
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction, unless an exemption
from registration is otherwise available. Each broker-dealer that receives
Exchange Notes for its own account in exchange for Notes, where such Notes were
acquired by such broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of
Exchange Notes received in exchange for Notes where such Notes were acquired by
such broker-dealer as a result of market-making or other trading activities.
Pursuant to the Registration Rights Agreement, the Company has agreed to make
this Prospectus, as it may be amended or supplemented from time to time,
available to broker-dealers for use in connection with any resale for a period
of 180 days after the Expiration Date. See "Plan of Distribution."
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TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING NOTES
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal (which together constitutes the
Exchange Offer), the Company will accept for exchange any and all Notes which
are properly tendered on or prior to the Expiration Date and not withdrawn as
permitted below. The Company will issue $1,000 principal amount of Exchange
Notes in exchange for each $1,000 principal amount of outstanding Notes
surrendered pursuant to the Exchange Offer. Notes may be tendered only in
integral multiples of $1,000. As used herein, the term "Expiration Date" means
5:00 p.m., New York City time, on , 1998; provided, however, that if the
Company, in its sole discretion, has extended the period of time for which the
Exchange Offer is open, the term "Expiration Date" means the latest time and
date to which the Exchange Offer is extended.
The form and terms of the Exchange Notes are the same as the form and
terms of the Notes except that (i) the exchange will be registered under the
Securities Act and hence the Exchange Notes will not bear legends restricting
their transfer and (ii) holders of the Exchange Notes will not be entitled to
the certain rights of holders of Notes under the Registration Rights Agreement,
which rights will terminate upon the consummation of the Exchange Offer. The
Exchange Notes will evidence the same debt as the Notes (which they replace)
and will be issued under, and be entitled to the benefits of, the Indenture,
which also authorized the issuance of the Notes, such that both series will be
treated as a single class of debt securities under the Indenture.
As of the date of this Prospectus, an aggregate of $350.0 million of the
Notes is outstanding. This Prospectus, together with the Letter of Transmittal,
is first being sent on or about , 1998, to all Holders of Notes known to the
Company. The Company's obligation to accept Notes for exchange pursuant to the
Exchange Offer is subject to certain conditions as set forth under "--Certain
Conditions to the Exchange Offer" below.
Holders of the Notes do not have any appraisal or dissenters' rights under
the Indenture in connection with the Exchange Offer. The Company intends to
conduct the Exchange Offer in accordance with the provisions of the
Registration Rights Agreement and the applicable requirements of the Securities
Act, the Exchange Act and the rules and regulations of the Commission
thereunder.
The Company expressly reserves the right, at any time or from time to
time, to extend the period of time during which the Exchange Offer is open, and
thereby delay acceptance for exchange of any Notes, by giving written notice of
such extension to the Holders thereof as described below. During any such
extension, all Notes previously tendered will remain subject to the Exchange
Offer and may be accepted for exchange by the Company. Any Notes not accepted
for exchange for any reason will be returned without expense to the tendering
Holder thereof as promptly as practicable after the expiration or termination
of the Exchange Offer.
The Company expressly reserves the right to amend or terminate the
Exchange Offer, and not to accept for exchange any Notes not theretofore
accepted for exchange, upon the occurrence of any of the conditions of the
Exchange Offer specified below under "--Certain Conditions to the Exchange
Offer." The Company will give written notice of any extension, amendment,
nonacceptance or termination to the Holders of the Notes as promptly as
practicable, such notice in the case of any extension to be issued by means of
a press release or other public announcement no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date.
PROCEDURES FOR TENDERING NOTES
The tender to the Company of Notes by a Holder thereof as set forth below
and the acceptance thereof by the Company will constitute a binding agreement
between the tendering Holder and the Company upon the terms and subject to the
conditions set forth in this Prospectus and in the accompanying Letter of
Transmittal. Except as set forth below, a Holder who wishes to tender Notes for
exchange pursuant to the Exchange Offer must transmit a properly completed and
duly executed Letter of Transmittal, including all other documents required by
such Letter of Transmittal, to the Exchange Agent at one of the addresses set
forth below under "Exchange Agent" on or prior to the Expiration Date. In
addition, either (i) certificates for such Notes must be received by the
Exchange Agent along with
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the Letter of Transmittal, or (ii) a timely confirmation of a book-entry
transfer (a "Book-Entry Confirmation") of such Notes, if such procedure is
available, into the Exchange Agent's account at The Depository Trust Company
(the "Book-Entry Transfer Facility") pursuant to the procedure for book-entry
transfer described below, must be received by the Exchange Agent prior to the
Expiration Date, or (iii) the Holder must comply with the guaranteed delivery
procedures described below.
THE METHOD OF DELIVERY OF NOTES, LETTERS OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF SUCH DELIVERY
IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED, WITH
RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTERS OF TRANSMITTAL OR SERIES A NOTES
SHOULD BE SENT TO THE COMPANY.
Any beneficial owner whose Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to
tender should contact such registered holder of Notes promptly and instruct
such registered holder of Notes to tender on behalf of the beneficial owner. If
such beneficial owner wishes to tender on its own behalf, such beneficial owner
must, prior to completing and executing the Letter of Transmittal and
delivering its Notes, either make appropriate arrangements to register
ownership of the Notes in such beneficial owner's name or obtain a properly
completed bond power from the registered holder of Notes. The transfer of
record ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the Notes surrendered for exchange
pursuant thereto is tendered (i) by a registered Holder of the Notes who has
not completed the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution (as defined herein below). In the event that signatures
on a Letter of Transmittal or a notice of withdrawal, as the case may be, are
required to be guaranteed, such guarantees must be by a firm which is a member
of a registered national securities exchange or a member of the National
Association of Securities Dealers, Inc. or by a commercial bank or trust
company having an office or correspondent in the United States (collectively,
"Eligible Institutions"). If Notes are registered in the name of a person other
than a signer of the Letter of Transmittal, the Notes surrendered for exchange
must be endorsed by, or be accompanied by a written instrument or instruments
of transfer or exchange, in satisfactory form as determined by the Company in
its sole discretion, duly executed by the registered Holder with the signature
thereon guaranteed by an Eligible Institution.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Notes tendered for exchange will be determined by
the Company in its sole discretion, which determination shall be final and
binding. The Company reserves the absolute right to reject any and all tenders
of any particular Notes not properly tendered or to not accept any particular
Notes which acceptance might, in the judgment of the Company or its counsel, be
unlawful. The Company also reserves the absolute right to waive any defects or
irregularities or conditions of the Exchange Offer as to any particular Notes
either before or after the Expiration Date (including the right to waive the
ineligibility of any Holder who seeks to tender Notes in the Exchange Offer).
The interpretation of the terms and conditions of the Exchange Offer as to any
particular Notes either before or after the Expiration Date (including the
Letter of Transmittal and the instructions thereto) by the Company shall be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of Notes for exchange must be cured within such
reasonable period of time as the Company shall determine. Neither the Company,
the Exchange Agent nor any other person shall be under any duty to give
notification of any defect or irregularity with respect to any tender of Notes
for exchange, nor shall any of them incur any liability for failure to give
such notification.
If the Letter of Transmittal is signed by a person or persons other than
the registered Holder or Holders of Notes, such Notes must be endorsed or
accompanied by appropriate powers of attorney, in either case signed exactly as
the name or names of the registered Holder or Holders that appear on the Notes.
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If the Letter of Transmittal or any Notes or powers of attorney are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and, unless waived by the
Company, proper evidence satisfactory to the Company of their authority to so
act must be submitted.
By tendering, each holder will represent to the Company that, among other
things, (i) the Exchange Notes to be acquired by the holder of the Notes in
connection with the Exchange Offer are being acquired by the holder in the
ordinary course of business of the holder, (ii) the holder has no arrangement
or understanding with any person to participate in the distribution of Exchange
Notes, (iii) the holder acknowledges and agrees that any person who is a
broker-dealer registered under the Exchange Act or is participating in the
Exchange Offer for the purposes of distributing the Exchange Notes must comply
with the registration and prospectus delivery requirements of the Securities
Act in connection with a secondary resale transaction of the Exchange Notes
acquired by such person and cannot rely on the position of the staff of the
Commission set forth in certain no-action letters, (iv) the holder understands
that a secondary resale transaction described in clause (iii) above and any
resales of Exchange Notes obtained by such holder in exchange for Notes
acquired by such holder directly from the Company should be covered by an
effective registration statement containing the selling security holder
information required by Item 507 or Item 508, as applicable, of Regulation S-K
of the Commission, and (v) the holder is not an "affiliate," as defined in Rule
405 of the Securities Act, of the Company. If the holder is a broker-dealer
that will receive Exchange Notes for its own account in exchange for Notes that
were acquired as a result of market-making activities or other trading
activities, the holder is required to acknowledge in the Letter of Transmittal
that it will deliver a prospectus in connection with any resale of such
Exchange Notes; however, by so acknowledging and by delivering a prospectus,
the holder will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
ACCEPTANCE OF NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES
Upon satisfaction or waiver of all of the conditions to the Exchange
Offer, the Company will accept, promptly after the Expiration Date, all Notes
properly tendered and will issue the Exchange Notes promptly after acceptance
of the Notes. See "--Certain Conditions to the Exchange Offer" below. For
purposes of the Exchange Offer, the Company shall be deemed to have accepted
properly tendered Notes for exchange when, as and if the Company has given oral
or written notice thereof to the Exchange Agent, with written confirmation of
any oral notice to be given promptly thereafter.
The Exchange Notes bear interest at a rate equal to 9 1/8% per annum.
Interest on the Exchange Notes is payable semi-annually on each February 1 and
August 1, commencing on August 1, 1998. Holders of Exchange Notes will receive
interest on August 1, 1998 from the date of initial issuance of the Notes.
Holders of Notes that are accepted for exchange will be deemed to have waived
the right to receive any interest accrued on the Notes.
In all cases, the issuance of Exchange Notes for Notes that is accepted
for exchange pursuant to the Exchange Offer will be made only after timely
receipt by the Exchange Agent of certificates for such Notes or a timely
Book-Entry Confirmation of such Notes into the Exchange Agent's account at the
Book- Entry Transfer Facility, a properly completed and duly executed Letter of
Transmittal and all other required documents. If any tendered Notes are not
accepted for any reason set forth in the terms and conditions of the Exchange
Offer, or if Notes are submitted for a greater amount than the Holder desires
to exchange, such unaccepted or non-exchanged Notes will be returned without
expense to the tendering Holder thereof (or, in the case of tendered by
book-entry procedures described below, such non exchanged Notes will be
credited to an account maintained with such Book-Entry Transfer Facility)
designated by the tendering Holder as promptly as practicable after the
expiration or termination of the Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with
respect to the Notes at the Book-Entry Transfer Facility for purposes of the
Exchange Offer within two business days after the date
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of this Prospectus, and any financial institution that is a participant in the
Book-Entry Transfer Facility's systems may make book-entry delivery of Notes by
causing the Book-Entry Facility to transfer such Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility in accordance with such
Book-Entry Transfer Facility's procedures for transfer. However, although
delivery of Notes may be effected through book-entry transfer at the Book-Entry
Transfer Facility, the Letter of Transmittal or facsimile thereof, with any
required signature guarantees and other required documents, must, in any case,
be transmitted to and received by the Exchange Agent at one of the addresses
set forth below under "--Exchange Agent" on or prior to the Expiration Date or
the guaranteed delivery procedures described below must be complied with.
GUARANTEED DELIVERY PROCEDURES
If a registered Holder of the Notes desires to tender such Notes and the
Notes is not immediately available, or time will not permit such Holder's Notes
or other required documents to reach the Exchange Agent before the Expiration
Date, or the procedure for book-entry transfer cannot be completed on a timely
basis, a tender may be effected if (i) the tender is made through an Eligible
Institution, (ii) prior to the Expiration Date, the Exchange Agent has received
from such Eligible Institution a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) and notice of Guaranteed Delivery,
substantially in the form provided by the Company (by telegram, telex,
facsimile transmission, mail or hand delivery), setting forth the name and
address of the Holder of the Notes and the amount of Notes, stating that the
tender is being made thereby and guaranteeing that within five New York Stock
Exchange ("NYSE") trading days after the date of execution of the Notice of
Guaranteed Delivery, the certificates for all physically tendered Notes, in
proper form for transfer, or a Book-Entry Confirmation, as the case may be, and
any other documents required by the Letter of Transmittal will be deposited by
the Eligible Institution with the Exchange Agent, and (iii) the certificates
for all physically tendered Notes, in proper form for transfer, or a Book-Entry
Confirmation, as the case may be, and all other documents required by the
Letter of Transmittal, are received by the Exchange Agent within five NYSE
trading days after the date of execution of the Notice of Guaranteed Delivery.
WITHDRAWAL RIGHTS
Tenders of Notes may be withdrawn at any time prior to the Expiration
Date. For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent at one of the addresses set forth below under
"Exchange Agent." Any such notice of withdrawal must specify the name of the
person having tendered the Notes to be withdrawn, identify the Notes to be
withdrawn (including the amount of such), and (where certificates for Notes
have been transmitted) specify the name in which such Notes is registered, if
different from that of the withdrawing Holder. If certificates for Notes have
been delivered or otherwise identified to the Exchange Agent, then, prior to
the release of such certificates the withdrawing Holder must also submit the
serial numbers of the particular certificates to be withdrawn and a signed
notice of withdrawal with signatures guaranteed by an Eligible Institution
unless such Holder is an Eligible Institution. If Notes have been tendered
pursuant to the procedure for book-entry transfer described above, any notice
of withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Notes and otherwise comply
with the procedures of such facility. All questions as to the validity, form
and eligibility (including time of receipt) of such notices will be determined
by the Company whose determination shall be final and binding on all parties.
Any Notes so withdrawn will be deemed not to have been validly tendered for
exchange for purposes of the Exchange Offer. Any Notes which has been tendered
for exchange but which is not exchanged for any reason will be returned to the
Holder thereof without cost to such Holder (or, in the case of Notes tendered
by book-entry transfer into the Exchange Agent's account at the Book-Entry
Transfer Facility pursuant to the book-entry transfer procedures described
above, such Notes will be credited to an account with such Book-Entry Transfer
Facility specified by the Holder) as soon as practicable after withdrawal,
rejection of tender or terminations of the Exchange Offer. Properly withdrawn
Notes may be retendered by following one of the procedures described under
"--Procedures for Tendering" above at any time on or prior to the Expiration
Date.
39
<PAGE>
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the Exchange Offer, the Company
shall not be required to accept for exchange, or to issue Exchange Notes in
exchange for, any Notes and may terminate or amend the Exchange Offer, if at
any time before the acceptance of such Notes for exchange or the exchange of
the Exchange Notes for such Notes, any of the following events shall occur:
(a) there shall be threatened, instituted or pending any action or
proceeding before, or any injunction, order or decree shall have been
issued by, any court or governmental agency or other governmental
regulatory or administrative agency or commission, (i) seeking to restrain
or prohibit the making or consummation of the Exchange Offer or any other
transaction contemplated by the Exchange Offer, or assessing or seeking any
damages as a result thereof, or (ii) resulting in a material delay in the
ability of the Company to accept for exchange or exchange some or all of
the Notes pursuant to the Exchange Offer; or any statute, rule, regulation,
order or injunction shall be sought, proposed, introduced, enacted,
promulgated or deemed applicable to the Exchange Offer or any other
transactions contemplated by the Exchange Offer by any government or
governmental authority, domestic or foreign, or any action shall have been
taken, proposed or threatened, by any government, governmental authority,
agency or court, domestic or foreign, that in the sole judgment of the
Company might directly or indirectly result in any of the consequences
referred to in clauses (i) or (ii) above or, in the sole judgment of the
Company might result in the holders of Exchange Notes having obligations
with respect to resales and transfers to Exchange Notes which are greater
than those described in the interpretation of the Commission referred to on
the cover page of this Prospectus, or would otherwise make it inadvisable
to proceed with the Exchange Offer; or
(b) there shall have occurred (i) any general suspension of or general
limitation on prices for, or trading in, securities on any national
securities exchange or in the over-the-counter market, (ii) any limitation
by any governmental agency or authority which may adversely affect the
ability of the Company to complete the transactions contemplated by the
Exchange Offer, (iii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or any
limitation by any governmental agency or authority which adversely affects
the extension of credit or (iv) a commencement of a war, armed hostilities
or other similar international calamity directly or indirectly involving
the United States, or, in the case of any of the foregoing existing at the
time of the commencement of the Exchange Offer, a material acceleration or
worsening thereof; or
(c) any change (or any development involving a prospective change) shall
have occurred or be threatened in the business, properties, assets,
liabilities, financial condition, operations, results of operations or
prospects of the Company and its subsidiaries taken as a whole that, in the
sole judgment of the Company, is or may be adverse to the Company, or the
Company shall have become aware of facts that, in the sole judgment of the
Company have or may have adverse significance with respect to the value of
the Notes or the Exchange Notes;
which, in the sole judgment of the Company in any case, and regardless of the
circumstances (including any action by the Company) giving rise to any such
condition, makes it inadvisable to proceed with the Exchange Offer and/or with
such acceptance for exchange or with such exchange. To the Company's knowledge
as of the date of this Prospectus none of the foregoing events has occurred.
The foregoing conditions are for the sole benefit of the Company and may
be asserted by the Company regardless of the circumstances giving rise to any
such condition or may be waived by the Company in whole or in part at any time
and from time to time in its sole discretion. The failure by the Company at any
time to exercise any of the foregoing rights shall not be deemed a waiver of
any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time.
In addition, the Company will not accept for exchange any Notes tendered,
and no Exchange Notes will be issued in exchange for any such Notes, if at such
time any stop order shall be threatened or in effect with respect to the
Registration Statement of which this Prospectus constitutes a part.
40
<PAGE>
EXCHANGE AGENT
The Chase Manhattan Bank, the Trustee under the Indenture, has been
appointed as the Exchange Agent for the Exchange Offer. All executed Letters of
Transmittal should be directed to the Exchange Agent at the addresses set forth
below. Questions and requests for assistance, requests for additional copies of
this Prospectus or of the Letter of Transmittal and requests for Notices of
Guaranteed Delivery should be directed to the Exchange Agent addressed as
follows:
Delivery to: The Chase Manhattan Bank
By Mail, By Hand and Overnight Courier: By Facsimile:
Mr. Carlos Esteves (212) 638-9387
Corporate Trust-Securities Window
Room 234-North Building
55 Water Street Confirm by
New York, New York 10041 Telephone:
(212) 638-7380
DELIVERY OF A LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE
LISTED ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF
TRANSMITTAL.
FEES AND EXPENSES
The Company will not make any payment to brokers, dealers or others
soliciting acceptances of the Exchange Offer.
The estimated cash expenses to be incurred in connection with the Exchange
Offer will be paid by the company and are estimated in the aggregate to be
approximately $ .
ACCOUNTING TREATMENT
For accounting purposes, the Company will recognize no gain or loss as a
result of the Exchange Offer. The expenses of the Exchange Offer will be
amortized over the term of the Exchange Notes.
TRANSFER TAXES
Holders who tender their Notes for exchange will not be obligated to pay
any transfer taxes in connection therewith, except that Holders who instruct
the Company to register Exchange Notes in the name of, or request that Notes
not tendered or not accepted in the Exchange Offer be returned to, a person
other than the registered tendering holder will be responsible for the payment
of any applicable transfer tax thereon.
REGULATORY MATTERS
The Company is not aware of any governmental or regulatory approvals that
are required in order to consummate the Exchange Offer.
CONSEQUENCES OF EXCHANGING NOTES
Based upon no-action letters issued by the staff of the Commission to
third parties, the Company believes that Exchange Notes issued pursuant to the
Exchange Offer in exchange for Notes may be offered for resale, sold or
otherwise transferred by a Holder thereof (other than any Holder which is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act or a holder that is a broker-dealer who acquires Exchange Notes to resell
pursuant to Rule 144A or any other available exemption under the Securities
Act) without compliance with the registration and prospectus delivery
41
<PAGE>
provisions of the Securities Act, provided that such Exchange Notes are
acquired in the ordinary course of such Holder's business and such Holder is
not participating, does not intend to participate, and has no arrangement with
any person to participate, in the distribution of such Exchange Notes. However,
the Commission has not considered the Exchange Offer in the context of a
no-action letter and there can be no assurance that the staff of the Commission
would make a similar determination with respect to the Exchange Offer as in
such other circumstances. If any Holder is an affiliate of the Company, is
engaged in or intends to engage in or has any arrangement or understanding with
respect to the distribution of the Exchange Notes to be acquired pursuant to
the Exchange Offer, such Holder (i) could not rely on the relevant
determinations of the staff of the Commission and (ii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. Each broker-dealer that receives
Exchange Notes for its own account in exchange for Notes, where such Notes were
acquired by such broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. Pursuant to the Registration
Rights Agreement, the Company has agreed to make this Prospectus, as it may be
amended or supplemented from time to time, available to broker-dealers for use
in connection with any resale for a period of 180 days after the expiration
Date. Under certain circumstances, the Company may cause the Prospectus to not
be available for resale for a period of up to 30 days.
See "Plan of Distribution." In addition, to comply with the securities
laws of certain jurisdictions, if applicable, the Exchange Notes may not be
offered or sold unless it has been registered or qualified for sale in such
jurisdiction or an exemption from registration or qualification is available
ans is complied with. The Company has agreed to register or qualify the sale of
the Exchange Notes in such jurisdictions only in limited circumstances and
subject to certain conditions.
CONSEQUENCE OF FAILURE TO EXCHANGE
Participation in the Exchange Offer is voluntary. Holders of the Notes are
urged to consult their financial and tax advisors in making their own decisions
on what action to take.
The Notes which are not exchanged for the Exchange Notes pursuant to the
Exchange Offer will remain restricted securities. Accordingly, such Notes may
be resold only (i) to a person whom the seller reasonably believes is a
qualified institutional buyer (as defined in Rule 144A under the Securities
Act) in a transaction meeting the requirements of Rule 144A, (ii) in a
transaction meeting the requirements of Rule 144 under the Securities Act,
(iii) outside the United States to a foreign person in a transaction meeting
the requirements of Rule 904 under the Securities Act or (iv) in accordance
with another exemption from the registration requirements of the Securities Act
(and based upon an opinion of counsel if the Company so requests), (v) to the
Company or (vi) pursuant to an effective registration statement and, in each
case, in accordance with any applicable securities laws of any state of the
United States or any other applicable jurisdiction under certain circumstances,
the Company is required to file a Shelf Registration Statement. See
"Description of Notes--Registration Rights; Liquidated Damages."
LIQUIDATED DAMAGES
In the event of a Registration Default (as hereinafter defined), the
Company is required to pay liquidated damages. See "Description of
Notes--Registration Rights; Liquidated Damages."
42
<PAGE>
CAPITALIZATION
The following table sets forth, as of December 31, 1997, (a) the
historical capitalization of the Company, (b) the pro forma capitalization of
the Company to reflect the Financing and the Recent Acquisitions and Spin-Off
and (c) the pro forma capitalization of the Company to reflect the Financing,
the Recent Acquisitions, the Spin-Off, the SFX Merger and the issuance of the
stock described under "Management--Employment Agreements and Arrangements with
Certain Officers and Directors" and "Certain Relationships and Related
Transactions--Issuance of Stock to Holders of SFX Broadcasting's Options and
SARs." This information should be read in conjunction with the financial
statements and the related notes thereto included elsewhere herein.
<TABLE>
<CAPTION>
DECEMBER 31, 1997
-------------------------------------------------
(IN THOUSANDS)
PRO FORMA FOR
THE FINANCING,
RECENT
PRO FORMA FOR ACQUISITIONS,
THE FINANCING, SPIN-OFF AND
RECENT SFX
ACQUISITIONS AND MERGER(1)
ACTUAL SPIN-OFF (UNAUDITED)
---------- ------------------ ---------------
<S> <C> <C> <C>
CASH AND CASH EQUIVALENTS .................................... $ 5,979 $ 49,762 $ 52,728
======== ======== ========
DEBT:
Notes ........................................................ -- $350,000 $350,000
Credit Facility .............................................. -- 150,000 150,000
Other long-term debt ......................................... 16,178 34,924 34,924
-------- -------- --------
Total debt .................................................. $ 16,178 $534,924 $534,924
-------- -------- --------
TEMPORARY EQUITY(2): -- 16,500 16,500
STOCKHOLDERS' EQUITY(3):
Preferred Stock, $.01 par value, 1,000 shares authorized, none
issued and outstanding as of December 31, 1997 actual and pro
forma(4) .................................................... -- -- --
Class A Common Stock, $.01 par value, 1,000 shares authorized,
issued and outstanding as of December 31, 1997 actual,
approximately 18,600,000 issued and outstanding pro forma for
the Financing, Recent Acquisitions, Spin-Off and SFX
Merger(5) ................................................... -- -- 186
Class B Common Stock, $.01 par value, 1,000 shares authorized,
issued and outstanding as of December 31, 1997 actual and
approximately 1,700,000 shares issued and outstanding pro
forma for Financing, Recent Acquisitions, Spin-Off and SFX
Merger(5) ................................................... -- -- 17
Additional paid-in capital ................................... 98,330 120,030 122,793
Retained earnings(6) ......................................... 3,814 3,814 3,814
-------- -------- --------
Total stockholders' equity .................................. $102,144 $123,844 $126,810
-------- -------- --------
Total capitalization ........................................ $118,322 $675,268 $678,234
======== ======== ========
</TABLE>
- ----------
(1) The Distribution Agreement provides that SFX Broadcasting will transfer
any positive Working Capital in existence at the closing of the SFX
Merger to the Company, and that if Working Capital is negative at that
time, the Company will pay the amount of such shortfall to SFX
Broadcasting. As of December 31, 1997 the amount of positive Working
Capital would have been approximately $3.0 million (excluding the Series
E Adjustment) and such amount is reflected in the cash to be acquired by
the Company pursuant to the Distribution Agreement. The actual amount of
Working Capital as of the closing of the SFX Merger is likely to differ
substantially from the amount in existence on December 31, 1997, and will
be a function of, among other things, the operating results of SFX
Broadcasting through the date of the SFX Merger, the actual cost of
consummating the SFX Merger and the related transactions and other
obligations of SFX Broadcasting, including the payment of dividends and
interest on SFX Broadcasting's debt. See "Risk Factors--Future Contingent
Payments."
Includes the issuance of stock pursuant to the anticipated employment
agreements and the stock issued to the holders of SFX Broadcasting
options. See "Management--Employment Agreements and Arrangements with
Certain Officers and Directors" and "Certain Relationships and Related
Transactions--Issuance of Stock to Holders of SFX Broadcasting's Options
and SARs."
No adjustment has been made to reflect the Company's anticipated tax
indemnity payment to SFX Broadcasting for any taxes resulting from the
Spin-Off to the extent such taxes result from any gain on the
distribution. If the Company Common Stock were valued at $28.50 per share
for tax purposes (the last price of the Company Class A Common Stock
(trading on a when issued basis) on the over-the-counter market on April
9, 1998), management estimates that the Company would have been required
to pay approximately $101.0 million pursuant to such indemnification
obligation.
A substantial portion of the proceeds from a pending offering of 5
million shares of the Company's Class A Common Stock (the "Equity
Offering") will be used to finance the tax indemnity payment. Such
payment will not result in any corresponding increase in the Company's
assets or cash flows. A registration statement in connection with the
Equity Offering was filed with the Commission on April 14, 1998. There
can be no assurance that the Company will be able to complete the Equity
Offering or obtain alternative financing on acceptable terms or at all.
See "Risk Factors--Substantial Tax Payment Obligation."
(2) The PACE agreement provides that each PACE seller shall have a Fifth Year
Put Option, exercisable during a period beginning on February 25, 2003
and ending 90 days thereafter, to require the Company to purchase up to
one-third of the Class A Common Stock received by such PACE seller
(representing 500,000 shares in the aggregate) for a cash purchase price
of $33.00
43
<PAGE>
per share. With certain limited exceptions, the Fifth Year Put Option
rights are not assignable by the PACE sellers. The maximum amount payable
under the Fifth Year Put Option ($16.5 million) has been presented as
temporary equity on the pro forma balance sheet.
(3) SFX Broadcasting has indicated that it will recapitalize the Company
prior to the consummation of the Spin-Off which will allow for, among
other things, an increase in the number of authorized shares of Common
Stock.
(4) In February 1998, the Company amended its certificate of incorporation to
increase the number of authorized shares of preferred stock to 25,000,000
and issued 10 shares of preferred stock in connection with the
Contemporary acquisition. See "Description of Capital Stock--Preferred
Stock."
(5) Assumes that (a) an aggregate of 4,216,680 shares of Class A Common Stock
are issued pursuant to the Recent Acquisitions, (b) an aggregate of
793,633 shares of Class A Common Stock are issued to the holders of stock
options and SARs issued by SFX Broadcasting and (c) an aggregate of 90,000
shares of Class A Common Stock and 650,000 shares of Class B Common Stock
are issued pursuant to certain anticipated employment agreements. See
"Management--Employment Agreements and Arrangements with Certain Officers
and Directors" and "Certain Relationships and Related
Transactions--Issuance of Stock to Holders of SFX Broadcasting's Options
and SARs."
(6) Retained earnings on a pro forma basis for the Financing, the Recent
Acquisitions, the Spin-Off and the SFX Merger have not been adjusted for
future charges to earnings which will result from the issuance of stock
and options granted to certain executive officers and other employees of
the Company. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital
Resources--Future Charges to Earnings."
44
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following financial statements (the "Unaudited Pro Forma Condensed
Combined Financial Statements") and notes thereto contain forward-looking
statements that involve risks and uncertainties. The actual results of the
Company may differ materially from those discussed herein for the reasons
identified herein. The Company undertakes no obligation to publicly release the
result of any revisions to these forward-looking statements that may be made to
reflect any future events or circumstances.
In the opinion of management, all adjustments necessary to fairly present
this pro forma information have been made. The Unaudited Pro Forma Condensed
Combined Financial Statements are based upon, and should be read in conjunction
with, the historical financial statements of the Company and the 1997
Acquisitions and Recent Acquisitions and the respective notes to such financial
statements included herein. The pro forma information is based upon tentative
allocations of purchase price for the Recent Acquisitions, and does not purport
to be indicative of the results that would have been reported had such events
actually occurred on the date specified, nor is it indicative of the Company's
future results. Purchase accounting is based upon preliminary asset valuations,
which are subject to change.
The Unaudited Pro Forma Condensed Combined Balance Sheet at December 31,
1997 is presented as if the Company had completed the Financing, the Recent
Acquisitions, the Spin-Off and the SFX Merger as of December 31, 1997.
The Unaudited Pro Forma Condensed Combined Statement of Operations for the
year ended December 31, 1997 is presented as if the Company had completed the
1997 Acquisitions, the Financing, the Recent Acquisitions, the Spin-Off, and
the SFX Merger as of January 1, 1997.
The Unaudited Pro Forma Condensed Combined Financial Statements have been
prepared assuming that the approximately 4.2 million shares of the Class A
Common Stock will be issued in connection with certain of the Recent
Acquisitions and have been valued by the parties at $13.33 per share for
purposes of calculating the consideration given for the Recent Acquisitions.
Such valuation is based upon certain financial projections developed jointly by
the Company and the sellers.
In addition, the agreements relating to the Recent Acquisitions provide
for certain other purchase price adjustments and future contingent payments in
certain circumstances. See "Risk Factors--Future Contingent Payments" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."
The pro forma financial statements do not include the effect of certain
immaterial acquisitions.
45
<PAGE>
SFX ENTERTAINMENT, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
DECEMBER 31, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
SFX
ENTERTAINMENT
(ACTUAL)
I
---------------
<S> <C>
ASSETS:
Current assets ........ $ 11,220
Property and
equipment, net ....... 59,685
Intangible assets,
net .................. 60,306
Other assets .......... 15,731
TOTAL ASSETS .......... $146,942
========
LIABILITIES &
STOCKHOLDERS'
EQUITY:
Current liabilities ... $ 21,514
Deferred taxes ........ 2,817
Credit Facility ....... --
Notes ................. --
Other long-term
debt (including
current portion)...... 16,178
Other liabilities ..... 4,289
--------
Total liabilities ..... $ 44,798
Minority interest ..... --
Temporary equity....... --
Stockholders'
equity ............... 102,144
TOTAL LIABILITIES &
STOCKHOLDERS'
EQUITY ............... $146,942
========
<CAPTION>
PRO FORMA FOR THE RECENT ACQUISITIONS
------------------------------------------------------------------------------------------
PACE
AND CONCERT/
PAVILION CONTEMPORARY BGP NETWORK SOUTHERN PRO FORMA
ACQUISITIONS ACQUISITION ACQUISITION ACQUISITION ACQUISITION ADJUSTMENTS
II III IV V VI VII
-------------- -------------- ------------- ------------- ------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Current assets ........ $ (152,098) $ (63,107) $ (57,798) $ (50,279) $ (15,661) $ 2,966(a)
(42,500)(b)
Property and
equipment, net ....... 83,278 25,000 20,000 3,519 1,000 --
Intangible assets,
net .................. 129,387 76,019 50,866 65,781 14,961 10,000 (d)
24,500 (b)
Other assets .......... 38,114 755 4,100 316 298 (976)(c)
(6,213)(e)
---------- --------- --------- --------- --------- ----------
TOTAL ASSETS .......... $ 98,681 $ 38,667 $ 17,168 $ 19,337 $ 598 $ (12,223)
========== ========= ========= ========= ========= ==========
LIABILITIES &
STOCKHOLDERS'
EQUITY:
Current liabilities ... $ 56,705 $ 14,397 $ 7,051 $ 7,521 $ 598 $ (6,213)(e)
Deferred taxes ........ 970 -- 2,617 54 -- 10,000 (d)
Credit Facility ....... -- -- -- -- -- --
Notes ................. -- -- -- -- -- --
Other long-term
debt (including
current portion)...... 16,985 -- -- 1,762 -- --
Other liabilities ..... 1,479 5,570 -- -- -- --
---------- --------- --------- --------- --------- ----------
Total liabilities ..... $ 76,139 $ 19,967 $ 9,668 $ 9,337 $ 598 $ 3,787
Minority interest ..... 2,542 -- -- -- -- (976)(c)
Temporary equity....... 16,500 -- -- -- -- --
Stockholders'
equity ............... 3,500 18,700 7,500 10,000 -- 2,966 (a)
(18,000)(b)
---------- --------- --------- --------- --------- ----------
TOTAL LIABILITIES &
STOCKHOLDERS'
EQUITY ............... $ 98,681 $ 38,667 $ 17,168 $ 19,337 $ 598 $ (12,223)
========== ========= ========= ========= ========= ==========
<PAGE>
<CAPTION>
PRO FORMA FOR THE
FINANCING,
PRO FORMA THE RECENT
ADJUSTMENTS FOR ACQUISITIONS,
THE FINANCING THE SPIN-OFF AND
VIII THE SFX MERGER
----------------- ------------------
<S> <C> <C>
ASSETS:
Current assets ........ $ 500,000(a) $ 132,743(1)
Property and
equipment, net ....... -- 192,482
Intangible assets,
net .................. -- 431,820
Other assets .......... -- 52,125
TOTAL ASSETS .......... $ 500,000 $ 809,170
========== ============
LIABILITIES &
STOCKHOLDERS'
EQUITY:
Current liabilities ... $ -- $ 101,573
Deferred taxes ........ 16,458
Credit Facility ....... 150,000 (a) 150,000
Notes ................. 350,000 (a) 350,000
Other long-term
debt (including
current portion)...... -- 34,925
Other liabilities ..... -- 11,338
---------- ------------
Total liabilities ..... $ 500,000 $ 664,294
Minority interest ..... -- 1,566
Temporary equity....... -- 16,500
Stockholders'
equity ............... -- 126,810
TOTAL LIABILITIES &
STOCKHOLDERS'
EQUITY ............... $ 500,000 $ 809,170
========== ============
</TABLE>
- ----------
(1) Pursuant to the Tax Sharing Agreement, the Company will be responsible
for certain taxes resulting from the Spin-Off. The amount of the taxes to
be paid will be determined by the value of the Company's Common Stock no
later than the first trading day following the date of the Spin-Off. The
obligation would be approximately $4 million at a trading price of $16
per share and would increase by approximately $7.7 million for each $1
increase above a purchase value of $16. The amount to be paid (estimated
to be $101.0 million as of April 9, 1998) has not
been reflected herein and will result in a decrease in cash and a
decrease in stockholder's equity. The Company intends to fund any payment
under the Tax Sharing Agreement from the proceeds of the proposed Equity
Offering. See "Risk Factors--Substantial Tax Payment Obligation" and
"Management's Discussion and Analysis of Financial Condition and Results
of Operations."
46
<PAGE>
I. Reflects the consolidated historical balance sheet of the Company adjusted
to reflect the contribution by SFX Broadcasting to the Company's capital
primarily to complete the Recent Acquisitions. Only includes working capital
associated with the live business.
II. PACE AND PAVILION ACQUISITIONS
Reflects the PACE acquisition and the separate acquisitions of the
remaining two partners' interests in Pavilion Partners.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997 (IN THOUSANDS)
---------------------------------------------------------------------
PACE PAVILION PRO FORMA PACE
AS REPORTED AS REPORTED ADJUSTMENTS TOTAL
------------- ------------- -------------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Current assets ................................ $51,107 $21,058 $ (109,500)(a) $ (152,098)
(20,556)(a)
(9,752)(b)
(4,171)(b)
(27,500)(c)
(43,126)(e)
(13,675)(f)
(6,343)(f)
10,360 (g)
Property and equipment, net ................... -- 59,291 5,000 (a) 83,278
9,103 (b)
27,500 (c)
(17,616)(d)
Intangible assets, net ........................ 17,633 -- 111,754 (a) 129,387
Other assets .................................. 29,426 12,675 9,752 (b) 38,114
(3,987)(d)
(9,752)(d)
------- ------- ----------- ----------
Total Assets .................................. $98,166 $93,024 $ (92,509) $ 98,681
======= ======= =========== ==========
LIABILITIES & STOCKHOLDERS'
EQUITY:
Current liabilities ........................... $42,485 $11,134 $ 2,000(b) $ 56,705
2,932 (b)
(1,846)(d)
Deferred taxes ................................ 970 -- -- 970
Long-term debt (including current portion)..... 34,231 57,376 (20,556)(a) 16,985
6,624 (a)
(7,906)(d)
(43,126)(e)
(13,675)(f)
(6,343)(f)
10,360 (g)
Other liability ............................... -- 1,479 -- 1,479
------- ------- ----------- ----------
Total Liabilities ............................. $77,686 $69,989 $ (71,536) $ 76,139
Minority interest ............................. 1,110 1,432 -- 2,542
Temporary Equity .............................. 2,983 -- 16,500 (a) 16,500
(2,983)(a)
Stockholders' Equity .......................... 16,387 21,603 (16,387)(a) 3,500
20,000 (a)
(16,500)(a)
(21,603)(d)
------- ------- ----------- ----------
Total Liabilities & Stockholders' Equity ...... $98,166 $93,024 $ (92,509) $ 98,681
======= ======= =========== ==========
</TABLE>
(Footnotes on following page)
47
<PAGE>
- ----------
PRO FORMA ADJUSTMENTS:
(a) To reflect the PACE acquisition for $109,500,000 in cash, the
issuance of 1,500,000 shares of Class A Common Stock valued by the
parties at $20,000,000, the repayment of debt of $20,556,000, the
assumption of a capital lease and notes payable of $6,624,000, the
related increase in the fair value allocated to fixed assets of
$5,000,000; the related excess of the purchase price paid over the
fair value of net tangible assets of $111,754,000 and the
elimination of $2,983,000 of Temporary Equity and stockholder's
equity of $16,387,000. Pursuant to the terms of the PACE agreement,
additional consideration is required to be paid by the Company if
the deemed value of the Class A Common Stock is below $13.33 per
share at the time of the Spin-Off under certain circumstances.
The PACE agreement further provides that each PACE seller shall have
a Fifth Year Put Option, exercisable during a period beginning on
February 25, 2003 and ending 90 days thereafter, to require the
Company to purchase up to one-third of the Class A Common Stock
(500,000 shares) received by such PACE seller for a cash purchase
price of $33.00 per share. With certain limited exceptions, the
Fifth Year Put Option rights are not assignable by the PACE sellers.
The maximum amount payable under the Fifth Year Put Options
($16,500,000) has been presented as temporary equity on the pro
forma balance sheet.
(b) To reflect the acquisition of an additional 33.33% indirect interest
in Pavilion Partners from Viacom Inc. and certain of its affiliates
("Blockbuster") for $4,171,000 in cash, the assumption of $2,932,000
in current liabilities and the granting of naming rights of three
venues for a two-year period with an estimated value of $2,000,000,
which will be recognized as income over such two-year period, and
the related increase in the fair value allocated to fixed assets of
$9,103,000. Also reflects the purchase of a note receivable from
Blockbuster, due from Pavilion Partners, including accrued interest
of $9,752,000. The note is eliminated in consolidation with the
acquisition of Sony's interest in Pavilion Partners, as described
below.
(c) To reflect the acquisition of an additional 33.33% indirect interest
in Pavilion Partners from YM Corp. ("Sony") for $27,500,000 in cash.
(d) To eliminate PACE's equity method investment in Pavilion Partners
due to the Company's acquisition of 100% of Pavilion Partners and to
eliminate Pavilion Partners' historical equity. Also reflects the
elimination of the $7,906,000 intercompany notes receivable and
accrued interest of $1,846,000 acquired from Blockbuster.
(e) To reflect the repayment of Pavilion Partners' third party debt at
the closing of the Pavilion Partners acquisition.
(f) To reflect the pay down of debt prior to acquisition of $13,675,000
of PACE's debt and $6,343,000 of Pavilion Partners' debt.
(g) To reflect cash placed in escrow from the purchase price of the PACE
Acquisition to retire an Amphitheater loan in July 1998.
III. CONTEMPORARY ACQUISITION
Reflects the Contemporary acquisition and the separate acquisition of the
remaining 50% interest in Riverport Amphitheater Partners, a partnership that
owns an amphitheater in St. Louis, Missouri that is operated by Contemporary.
48
<PAGE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997 (IN THOUSANDS)
---------------------------------------------------------------------
RIVERPORT
CONTEMPORARY AMPHITHEATER PRO FORMA CONTEMPORARY
AS REPORTED PARTNERS ADJUSTMENTS ACQUISITION
-------------- -------------- ------------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Current assets ................................... $19,311 $ 284 $ (72,800)(a) $ (63,107)
(9,902) (b)
Property and equipment, net ...................... 2,813 11,189 10,998 (a) 25,000
Intangible assets, net ........................... -- -- 66,117 (a) 76,019
9,902 (b)
Other assets ..................................... 6,192 -- (5,437) (a) 755
------- ------- ---------- ---------
Total Assets ..................................... $28,316 $11,473 $ (1,122) $ 38,667
======= ======= ========== =========
LIABILITIES & STOCKHOLDERS'
EQUITY:
Current liabilities .............................. $14,240 $ 157 $ -- $ 14,397
Other long-term debt (including current
portion) ........................................ 1,814 443 (2,257) (a) --
Other Liabilities ................................ 5,570 -- -- 5,570
Total Liabilities ................................ 21,624 600 (2,257) 19,967
Stockholders' Equity ............................. 6,692 10,873 18,700 (a) 18,700
(17,565)(a)
------- ------- ---------- ---------
Total Liabilities & Stockholders' Equity ......... $28,316 $11,473 $ (1,122) $ 38,667
======= ======= ========== =========
</TABLE>
- ----------
PRO FORMA ADJUSTMENTS:
(a) To reflect the Contemporary acquisition for $72,800,000 in cash,
including the additional acquisition of the remaining 50% interest
in the Riverport Amphitheater Partners and the issuance of 1,402,851
shares of the Class A Common Stock valued by the parties at
$18,700,000, the related increase in the fair value allocated to
fixed assets of $10,998,000, the related excess of the purchase
price paid over the fair value of net tangible assets of
$66,117,000, and the adjustment to eliminate $2,257,000 of notes
payable, and stockholders' equity of $17,565,000, and to reflect the
elimination of Contemporary's $5,437,000 equity investment in
Riverport Amphitheather Partners. Pursuant to the Contemporary
agreement, the Company has eliminated Contemporary's historical
stockholders' equity and replaced it with the value of the equity
securities issued by the Company in connection with the Contemporary
acquisition.
Pursuant to the acquisition agreement, ten shares of preferred stock
of the Company were issued to the sellers. Such preferred stock is
to be converted into 1,402,851 shares of Class A Common Stock upon
consummation of the Spin-Off or, if the Spin-Off shall not have
occurred prior to July 1, 1998, such preferred stock is to be
redeemed at its fair market value, but in no event less than
$18,700,000. In addition, pursuant to the terms of the Contemporary
agreement, the Company has agreed to make certain payments to any
Contemporary sellers that own shares of Class A Common Stock on
February 24, 2000 if the average trading price of such stock on the
20-day period ending on such period is less than $13.33 per share.
(b) To reflect a net working capital adjustment of $9,902,000.
49
<PAGE>
IV. BGP ACQUISITION
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997 (IN THOUSANDS)
--------------------------------------------------
PRO FORMA BGP
AS REPORTED ADJUSTMENTS ACQUISITION
------------- ------------------- ------------
<S> <C> <C> <C>
ASSETS:
Current assets ................................... $14,966 $ (60,750)(a) $ (57,798)
(12,014)(b)
Property and equipment, net ...................... 8,905 11,095 (a) 20,000
Intangible assets, net ........................... 1,430 49,436 (a) 50,866
Other assets ..................................... 4,100 -- 4,100
------- ---------- ---------
Total Assets ..................................... $29,401 $ (12,233) $ 17,168
======= ========== =========
LIABILITIES & STOCKHOLDERS'
EQUITY:
Current liabilities .............................. $ 7,051 $ -- $ 7,051
Deferred taxes ................................... 2,617 -- 2,617
Other long-term debt (including current
portion) ........................................ 12,014 (12,014)(b) --
------- ---------- ---------
Total Liabilities ................................ 21,682 (12,014) 9,668
Stockholders' Equity ............................. 7,719 (7,719)(a) 7,500
7,500 (a)
------- ---------- ---------
Total Liabilities & Stockholders' Equity ......... $29,401 $ (12,233) $ 17,168
======= ========== =========
</TABLE>
- ----------
PRO FORMA ADJUSTMENTS:
(a) To reflect the BGP acquisition for $60,750,000 in cash and the
issuance of 563,000 shares of Class A Common Stock valued at
$7,500,000, the related increase in fair value allocated to fixed
assets of $11,095,000 and the related excess of the purchase price
paid over the fair value of net tangible assets of $49,436,000, and
the elimination of $7,719,000 of stockholders' equity.
(b) To reflect the repayment of BGP's long-term debt.
50
<PAGE>
V. NETWORK ACQUISITION
The Network acquisition consists of the separate acquisitions of Network
Magazine and SJS.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997 (IN THOUSANDS)
------------------------------------------------------------------
NETWORK
MAGAZINE SJS PRO FORMA NETWORK
AS REPORTED AS REPORTED ADJUSTMENTS ACQUISITION
------------- ------------- ------------------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Current assets ................................... $ 2,977 $3,340 $ (52,000)(a) $ (50,279)
(3,022)(b)
(1,574)(c)
Property and equipment, net ...................... 307 352 341 (a) 3,519
757 (b)
1,762 (c)
Intangible assets, net ........................... -- -- 63,516 (a) 65,781
2,265 (b)
Other assets ..................................... 292 24 -- 316
-------- ------ ---------- ---------
Total Assets ..................................... $ 3,576 $3,716 $ 12,045 $ 19,337
======== ====== ========== =========
LIABILITIES & STOCKHOLDERS'
EQUITY:
Current liabilities .............................. $ 3,371 $4,150 -- $ 7,521
Deferred taxes ................................... 54 -- -- 54
Long-term debt (including current
portion) ........................................ 1,574 -- (1,574)(c) 1,762
-------- ------ ---------- ---------
1,762 (c)
Total Liabilities ................................ 4,999 4,150 188 9,337
Stockholders' Equity ............................. (1,423) (434) 1,857 (a) 10,000
10,000 (a)
-------- ------ ---------- ---------
Total Liabilities & Stockholders' Equity ......... $ 3,576 $3,716 $ 12,045 $ 19,337
======== ====== ========== =========
</TABLE>
- ----------
PRO FORMA ADJUSTMENTS:
(a) To reflect the Network acquisition for $52,000,000 in cash and the
issuance of 750,188 shares of Class A Common Stock valued by the
parties at $10,000,000, the related increase in fair value allocated
to fixed assets of $341,000, and the related excess of the purchase
price paid over the fair value of net tangible assets of
$63,516,000, and the elimination of stockholders' deficiency of
$1,857,000.
(b) To reflect a net working capital adjustment of $1,765,000, costs to
purchase an office building of $757,000 and reimbursed sellers costs
of $500,000.
(c) To reflect the repayment of Network's long-term debt at closing and
assumption of a mortgage of $1,762,000.
51
<PAGE>
VI. CONCERT/SOUTHERN ACQUISITION
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997 (IN THOUSANDS)
--------------------------------------------------
CONCERT/
PRO FORMA SOUTHERN
AS REPORTED ADJUSTMENTS ACQUISITION
------------- ------------------- ------------
<S> <C> <C> <C>
ASSETS:
Current assets ................................... $1,247 $ (16,635)(a) $ (15,661)
(273)(b)
Property and equipment, net ...................... 342 658 (a) 1,000
Intangible assets, net ........................... -- 14,688 (a) 14,961
273 (b)
Other assets ..................................... 896 (598)(a) 298
------ ---------- ---------
Total Assets ..................................... $2,485 $ (1,887) $ 598
====== ========== =========
LIABILITIES & STOCKHOLDERS'
EQUITY:
Current liabilities .............................. $ 598 $ -- $ 598
------ ---------- ---------
Total Liabilities ................................ 598 -- 598
Stockholders' Equity ............................. 1,887 (1,887)(a) --
------ ---------- ---------
Total Liabilities & Stockholders' Equity ......... $2,485 $ (1,887) $ 598
====== ========== =========
</TABLE>
- ----------
PRO FORMA ADJUSTMENTS:
(a) To reflect the Concert/Southern acquisition for $16,635,000 in cash;
the related increase in fair value allocated to fixed assets of
$658,000, the related excess of the purchase price paid over the
fair value of net tangible assets of $14,688,000; the adjustments to
eliminate, stockholders' equity of $1,887,000 and a $598,000
investment in a non-entertainment affiliated entity not acquired by
the Company. Pursuant to the Concert/Southern agreement, the Company
eliminated Concert/Southern's historical combined stockholders'
equity and replaced it with the value of the equity securities to be
issued by the Company in connection with the Concert/Southern
acquisition.
(b) To reflect a net working capital adjustment of $273,000.
VII. PRO FORMA ADJUSTMENTS
(a) The Distribution Agreement provides that SFX Broadcasting will pay
any positive Working Capital in existence at the closing of the SFX
Merger to the Company, and that if Working Capital is negative at
that time, the Company will pay the amount of such shortfall to SFX
Broadcasting. As of December 31, 1997 the amount of positive Working
Capital would have been $2,966,000 (excluding the Series E
Adjustment) and such amount is reflected in the cash to be acquired
by the Company pursuant to the Distribution Agreement. The actual
amount of Working Capital as of the closing of the SFX Merger is
likely to differ substantially from the amount in existence on
December 31, 1997, and will be a function of, among other things,
the operating results of SFX Broadcasting through the date of the
SFX Merger and, actual cost of consummating the SFX Merger and the
related transactions. SFX Broadcasting will also incur certain other
significant expenses prior to the consummation of the SFX Merger
that could reduce Working Capital, including the payment of
dividends and interest on SFX Broadcasting's debt, the Meadows
Repurchase and the amount of any settlement paid by SFX Broadcasting
in connection with the SFX Merger shareholder litigation. Moreover,
Working Capital will be reduced by at least $2.1 million pursuant to
the Series E Adjustment.
(b) To reflect estimated costs associated with the Recent Acquisitions
and the Financing and the related transactions. Consists of
approximately (i) $6.0 million in fees and expenses in connection
with the Recent Acquisitions, (ii) $18.0 million in fees in
connection with the Spin-Off, the consent solicitations and other
required consents and (iii) $18.5 million of fees and expenses in
connection with the Financing. The information relataing to fees and
expenses is based on management's estimates, and may not be
indicative of, and are likely to vary from, the actual fees and
expenses incurred by the Company relating to the Offering, the
Financing, the Recent Acquisitions, the Spin-Off and the SFX Merger.
52
<PAGE>
(c) To reflect the consolidation of GSAC Partners (the entity which
operates the PNC Bank Arts Center) following the acquisition of the
remaining 50% ownership interest in GSAC currently owned by Pavilion
Partners.
(d) To reflect deferred taxes associated with differences between the
book and tax bases of assets and liabilities acquired.
(e) To eliminate acquisition cost paid by SFX Broadcasting prior to
December 31, 1997 and subsequently reimbursed by the Company.
VIII. PRO FORMA ADJUSTMENTS FOR THE FINANCING
(a) Represents borrowings to finance the Recent Acquisitions including
the Notes and borrowings under the Credit Facility.
53
<PAGE>
SFX ENTERTAINMENT, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PRO FORMA FOR THE 1997
ACQUISITIONS
-------------------------
SFX
ENTERTAINMENT PRO FORMA
(ACTUAL) ADJUSTMENTS
I II PRO FORMA
-------------- ------------- -----------
<S> <C> <C> <C>
Revenue ......................... $96,144 $14,243 $110,387
Operating expenses .............. 83,417 13,293 96,710
Depreciation & amortization...... 5,431 1,402 6,833
Corporate expenses (1) .......... 2,206 -- 2,206
------- ------- --------
Operating income (loss) ......... $ 5,090 $ (452) $ 4,638
Interest expense ................ 1,590 171 1,761
Other (income) expenses ......... (295) (1) (296)
Equity (income) loss from
investments .................... (509) -- (509)
------- -------- --------
Income/(loss) before income
tax expense .................... $ 4,304 $ (622) $ 3,682
Income tax expense (benefit)..... 490 -- 490
------- -------- --------
Net income (loss) ............... $ 3,814 $ (622) $ 3,192
======= ======== ========
Accretion on temporary
equity .........................
Net loss applicable to
common shares ..................
Net loss per common share .......
Weighted average common
shares outstanding (2) .........
<PAGE>
<CAPTION>
PRO FORMA FOR THE RECENT ACQUISITIONS
-----------------------------------------------------------------------------------------
PACE
AND CONCERT/
PAVILION CONTEMPORARY BGP NETWORK SOUTHERN PRO FORMA
ACQUISITIONS ACQUISITION ACQUISITION ACQUISITION ACQUISITION ADJUSTMENTS
III IV V VI VII VIII
-------------- -------------- ------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Revenue ......................... $275,800 $103,300 $105,553 $28,322 $14,797 $ --
Operating expenses .............. 251,950 91,220 96,630 19,577 12,520 --
Depreciation & amortization...... 6,030 1,320 1,027 351 79 23,699 (a)
Corporate expenses (1) .......... -- -- -- -- -- 2,000 (b)
-------- -------- -------- ------- ------- ----------
Operating income (loss) ......... $ 17,820 $ 10,760 $ 7,896 $ 8,394 $ 2,198 $ (25,699)
Interest expense ................ 6,772 266 917 195 -- (8,146)(c)
45,535 (c)
Other (income) expenses ......... 1,357 (357) (270) (78) (60) (862) (d)
Equity (income) loss from
investments .................... (7,399) -- -- -- 48 862 (d)
-------- -------- -------- ------- ------- ----------
Income/(loss) before income
tax expense .................... $ 17,090 $ 10,851 $ 7,249 $ 8,277 $ 2,210 $ 63,088
Income tax expense (benefit)..... 3,569 -- 1,687 (127) -- (2,373)(e)
-------- -------- -------- ------- ------- ----------
Net income (loss) ............... $ 13,521 $ 10,851 $ 5,562 $ 8,150 $ 2,210 $ (60,715)
======== ======== ======== ======= =======
Accretion on temporary
equity ......................... (3,300)(f)
----------
Net loss applicable to
common shares .................. $ (64,015)
==========
Net loss per common share .......
Weighted average common
shares outstanding (2) .........
<CAPTION>
PRO FORMA FOR
THE FINANCING, THE
RECENT ACQUISITIONS,
THE SPIN-OFF,
AND THE SFX MERGER
---------------------
<S> <C>
Revenue ......................... $ 638,159
Operating expenses .............. 568,607
Depreciation & amortization...... 39,339
Corporate expenses (1) .......... 4,206
---------
Operating income (loss) ......... $ 26,007
Interest expense ................ 47,296
Other (income) expenses ......... (562)
Equity (income) loss from
investments .................... (6,998)
---------
Income/(loss) before income
tax expense .................... $ (13,729)
Income tax expense (benefit)..... 3,500
---------
Net income (loss) ............... $ (17,229)
Accretion on temporary
equity ......................... (3,300)
---------
Net loss applicable to
common shares .................. $ (20,529)
=========
Net loss per common share ....... $ (1.04)
=========
Weighted average common
shares outstanding (2) ......... 20,300
=========
</TABLE>
- -------
(1) Net of fees from Triathlon of $1,794,000. These fees will vary, above the
minimum level of $500,000, based on the level of acquisition and
financing activities of Triathlon. Sillerman Communications Management
Corporation ("SCMC") previously assigned its rights to receive fees
payable under this agreement to SFX Broadcasting. Pursuant to the terms
of the Distribution Agreement, SFX Broadcasting assigned its rights to
receive such fees to the Company. Triathlon has previously announced that
it is exploring ways of maximizing stockholder value, including possible
sale to a third party. In the event that Triathlon were acquired by a
third party, there can be no assurance that the agreement would continue
for the remainder of its term.
(2) Includes 500,000 shares of Class A Common Stock to be issued to the PACE
sellers in connection with the Fifth Year Put Option; such shares are not
included in calculating the net loss per common share.
54
<PAGE>
NOTES TO PRO FORMA INCOME STATEMENT:
I. Represents the Company's actual operating results for the year ended
December 31, 1997.
EBITDA for the year ended December 31, 1997 was $10,521,000 and
$65,346,000 for the Company on an actual basis and a pro forma basis,
respectively. EBITDA is defined as earnings before interest, taxes, other
income, net, equity income (loss) from investments and depreciation and
amortization. Although EBITDA is not a measure of performance calculated
in accordance with GAAP, the Company believes that EBITDA is accepted by
the entertainment industry as a generally recognized measure of
performance and is used by analysts who report publicly on the performance
of entertainment companies. Nevertheless, this measure should not be
considered in isolation or as a substitute for operating income, net
income, net cash provided by operating activities or any other measure for
determining the Company's operating performance or liquidity which is
calculated in accordance with GAAP. Cash flows from operating, investing
and financing activities for the Company for the year ended December 31,
1997 were $1,005,000, ($73,296,000) and $78,270,000, respectively.
There are other adjustments that could affect EBITDA but have not been
reflected herein. Had such adjustments been made, Adjusted EBITDA on a pro
forma basis would have been approximately $77,344,000 for the year ended
December 31, 1997. The adjustments include the expected cost savings in
connection with the Recent Acquisitions associated with the elimination of
duplicative staffing and general and administrative expenses of
$5,000,000, and include equity income from investments of $6,998,000.
While management believes that such cost savings are achievable, the
Company's ability to fully achieve such cost savings is subject to
numerous factors, certain of which may be beyond the Company's control.
II. The Company acquired Delsener/Slater, the Meadows Music Theater and
Sunshine Promotions on January 2, 1997, March 20, 1997 and June 24, 1997,
respectively. These adjustments represent the operating results of the
Meadows Music Theater and Sunshine Promotions prior to their acquisitions
by the Company.
III. PACE AND PAVILION ACQUISITIONS
Reflects the PACE acquisition and the separate acquisitions of PACE's two
partners' interests in Pavilion Partners, a partnership that owns certain
amphitheaters operated by PACE.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997 (IN THOUSANDS)
-----------------------------------------------------------------
PACE
AND
PACE PAVILION PRO FORMA PAVILION
AS REPORTED AS REPORTED ADJUSTMENTS ACQUISITIONS
------------- ------------- ----------------- -------------
<S> <C> <C> <C> <C>
Revenue ....................................... $176,168 $ 98,632 $ 1,000(a) $275,800
Operating expenses ............................ 170,169 83,258 (1,477)(b) 251,950
Depreciation & amortization ................... 1,985 4,045 -- 6,030
Other expenses ................................ 1,139 -- (1,139)(c) --
-------- -------- --------- --------
Operating income .............................. $ 2,875 $ 11,329 $ 3,616 $ 17,820
Interest expense .............................. 2,384 4,388 -- 6,772
Other expenses ................................ 53 1,304 -- 1,357
Equity (income) loss from investments ......... (8,134) (1,831) 2,566 (d) (7,399)
-------- -------- --------- --------
Income before income tax expense .............. $ 8,572 $ 7,468 $ 1,050 $ 17,090
Income tax expense ............................ 3,569 -- -- 3,569
-------- -------- --------- --------
Net income .................................... $ 5,003 $ 7,468 $ 1,050 $ 13,521
======== ======== ========= ========
</TABLE>
55
<PAGE>
- ----------
PRO FORMA ADJUSTMENTS:
(a) To reflect non-cash revenue resulting from the Company granting
Blockbuster naming rights to three venues for two years for no
future consideration as part of its agreement to acquire
Blockbuster's indirect 33 1/3% interest in Pavilion.
(b) Reflects the elimination of $570,000 of certain officers' salaries
and bonuses which will not be paid under the Company's new
employment contracts and of $907,000 of non-recurring costs incurred
in connection with PACE's previously planned initial public
offering, which was canceled. The amount of the pro forma adjustment
to eliminate salaries and bonuses is based on the Company's
agreements with the affected employees that a bonus will not be paid
unless there is a significant improvement in the results of the PACE
acquisition. Accordingly, no such bonus is reflected in the pro
forma statement of operations as should PACE's results be at a
similar level to that in these pro forma statements of operations no
bonus would be paid, and the Company would not be contractually
obligated to pay a bonus.
(c) Reflects the elimination of non-recurring restricted stock
compensation to PACE executives.
(d) To eliminate PACE's income from its 33 1/3% equity investment in
Pavilion Partners.
IV. CONTEMPORARY ACQUISITION
Reflects the Contemporary acquisition and the separate acquisition of the
remaining 50% interest in Riverport Amphitheater Partners, a partnership that
owns an amphitheater in St. Louis, Missouri that is operated by Contemporary.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997 (IN THOUSANDS)
-------------------------------------------------------------------
CONTEMPORARY RIVERPORT PRO FORMA CONTEMPORARY
AS REPORTED AS REPORTED ADJUSTMENTS ACQUISITION
-------------- ------------- ------------------ -------------
<S> <C> <C> <C> <C>
Revenue ......................................... $ 89,053 $14,247 $ -- $103,300
Operating expenses .............................. 90,820 11,630 (11,230)(a) 91,220
Depreciation & amortization ..................... 541 779 -- 1,320
-------- ------- ---------- --------
Operating income (loss) ......................... $ (2,308) $ 1,838 $ 11,230 $ 10,760
Interest expense ................................ 192 74 -- 266
Other (income) expenses ......................... (117) (240) -- (357)
Equity (income) from investments ................ (1,002) -- 1,002 (b) --
-------- ------- ---------- --------
Income/(loss) before income tax expense ......... $ (1,381) $ 2,004 $ 10,228 $ 10,851
Income tax expense (benefit) .................... -- -- -- --
-------- ------- ---------- --------
Net income (loss) ............................... $ (1,381) $ 2,004 $ 10,228 $ 10,851
======== ======= ========== ========
</TABLE>
- ----------
PRO FORMA ADJUSTMENTS:
(a) Reflects the elimination of certain officers' salaries and bonuses
and other consulting expenses which will not be paid under the
Company's new employment and other contracts. The amount of the pro
forma adjustment to eliminate salaries and bonuses is based on the
Company's agreements with the affected employees that a bonus will
not be paid unless there is a significant improvement in the results
of Contemporary. Accordingly, no such bonus is reflected in the pro
forma statement of operations as should Contemporary's results be at
a similar level to that in these pro forma statements of operations
no bonus would be paid, and the Company would not be contractually
obligated to pay a bonus.
(b) Reflects the elimination of Contemporary's equity income in
Riverport Amphitheater Partners. Contemporary has acquired its
partners' 50% interest in this venture.
The Contemporary agreement provided for the issuance of shares of
preferred stock of the Company to the sellers. Such preferred stock is to be
converted into 1,402,851 shares of the Class A Common Stock upon consummation
of the Spin-Off or, if the Spin-Off shall not have occurred prior to July 1,
1998, such preferred stock is to be redeemed by the Company at its fair market
value, but in no event less than $18,700,000.
56
<PAGE>
V. BGP ACQUISITION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997 (IN THOUSANDS)
----------------------------------------------------
PRO FORMA BGP
AS REPORTED (A) ADJUSTMENTS ACQUISITION
----------------- ----------------- ------------
<S> <C> <C> <C>
Revenue ......................................... $105,553 $ -- $105,553
Operating expenses .............................. 99,958 (3,328)(b) 96,630
Depreciation & amortization ..................... 1,027 -- 1,027
-------- --------- --------
Operating income ................................ $ 4,568 $ 3,328 $ 7,896
Interest expense ................................ 917 -- 917
Other (income) expenses ......................... (270) -- (270)
-------- --------- --------
Income/(loss) before income tax expense ......... $ 3,921 $ 3,328 $ 7,249
Income tax expense (benefit) .................... 1,687 -- 1,687
-------- --------- --------
Net income ...................................... $ 2,234 $ 3,328 $ 5,562
======== ========= ========
</TABLE>
- ----------
PRO FORMA ADJUSTMENTS:
(a) Reflects BGP's operating results for the twelve months ended January
31, 1998.
(b) Reflects the elimination of certain officers' salaries and bonuses
and other consulting expenses which will not be paid under the
Company's new employment and other contracts. The amount of the pro
forma adjustment to eliminate salaries and bonuses is based on the
Company's agreements with the affected employees that a bonus will
not be paid unless there is a significant improvement in the results
of BGP. Accordingly, no such bonus is reflected in the pro forma
statement of operations as should BGP's results, once acquired by
the Company, be at a similar level to that in these pro forma
statements of operations no bonus would be paid, and the Company
would not be contractually obligated to pay a bonus.
VI. NETWORK ACQUISITION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997 (IN THOUSANDS)
--------------------------------------------------------------------
THE NETWORK
MAGAZINE SJS PRO FORMA NETWORK
AS REPORTED (A) AS REPORTED (A) ADJUSTMENTS ACQUISITIONS
----------------- ----------------- ------------------ -------------
<S> <C> <C> <C> <C>
Revenue ...................................... $16,274 $14,218 $ (2,170)(b) $28,322
Operating expenses ........................... 14,651 14,422 (2,170)(b) 19,577
(7,326)(a)
Depreciation & amortization .................. 224 127 351
------- ------- --------- -------
Operating income (loss) ...................... $ 1,399 $ (331) $ 7,326 $ 8,394
Interest expense, net ........................ 159 36 -- 195
Other (income) expenses ...................... -- (78) -- (78)
------- ------- --------- -------
Income/(loss) before income tax expense ...... $ 1,240 $ (289) $ 7,326 $ 8,277
Income tax expense (benefit) ................. -- (127) -- (127)
------- ------- --------- -------
Net income (loss) ............................ $ 1,240 $ (416) $ 7,326 $ 8,150
======= ======= ========= =======
</TABLE>
57
<PAGE>
- ----------
PRO FORMA ADJUSTMENTS:
(a) Reflects the elimination of certain officers' salaries and bonuses
which will not be paid under the Company's new employment contracts.
The amount of the pro forma adjustment to eliminate salaries and
bonuses is based on the Company's agreements with the affected
employees that a bonus will not be paid unless there is a
significant improvement in the results of the Network acquisitions.
Accordingly, no such bonus is reflected in the pro forma statement
of operations as should Network's results be at a similar level to
that in these pro forma statements of operations no bonus would be
paid, and the Company would not be contractually obligated to pay a
bonus.
(b) Reflects the elimination of transactions between Network Magazine
and SJS.
VII. CONCERT/SOUTHERN ACQUISITION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997 (IN THOUSANDS)
----------------------------------------------
CONCERT/
PRO FORMA SOUTHERN
AS REPORTED ADJUSTMENTS ACQUISITION
------------- --------------- ------------
<S> <C> <C> <C>
Revenue ....................................... $14,797 $ -- $14,797
Operating expenses ............................ 12,949 (429)(a) 12,520
Depreciation & amortization ................... 79 -- 79
------- ------- -------
Operating income .............................. $ 1,769 $ 429 $ 2,198
Other (income) expenses ....................... (60) -- (60)
Equity (income) loss from investments ......... 80 (32)(b) 48
------- ------- -------
Income before income tax expense .............. $ 1,749 $ 461 $ 2,210
Income tax expense (benefit) .................. -- -- --
------- ------- -------
Net income .................................... $ 1,749 $ 461 $ 2,210
======= ======= =======
</TABLE>
- ----------
PRO FORMA ADJUSTMENTS:
(a) Reflects the elimination of certain officers' salaries and bonuses
which will not be paid under the Company's new employment contracts.
The amount of the pro forma adjustment to eliminate salaries and
bonuses is based on the Company's agreements with the affected
employees that a bonus will not be paid unless there is a
significant improvement in the results of Concert/Southern.
Accordingly, no such bonus is reflected in the pro forma statement
of operations as should Concert/Southern's results be at a similar
level to that in these pro forma statements of operations no bonus
would be paid, and the Company would not be contractually obligated
to pay a bonus.
(b) Reflects the elimination of equity loss of a non-entertainment
affiliated entity which was not acquired by the Company.
VIII. PRO FORMA ADJUSTMENTS:
(a) Reflects the increase in depreciation and amortization resulting
from the preliminary purchase accounting treatment of the Recent
Acquisitions. The Company amortizes goodwill over 15 years.
(b) To record incremental corporate overhead charges associated with
incremental headquarters personnel and general and administrative
expenses that management estimates will be necessary as a result of
the Recent Acquisitions.
(c) Reflects interest expense associated with the Notes, the Credit
Facility and other debt and deferred compensation costs related to
Recent Acquisitions and elimination of $8,150,000 of historical
interest expense.
(d) To reclassify Delsener/Slater's equity income in the PNC Bank Arts
Center venue following the acquisition of Pavilion Partners which
owns the other 50% equity interest in the venue.
58
<PAGE>
(e) Represents an adjustment to the provision for their state and local
income taxes to reflect an approximate pro forma tax provision of
$3,500,000. The calculation treats all companies to be acquired
pursuant to the Pending Acquisitions as "C" Corporations. The tax
provision reflects the non-deductibility of approximately
$17,000,000 of goodwill amortization, and tax savings related to the
pro forma adjustments for the Financing.
(f) Represents the accretion on the Fifth Year Put Option issued to the
PACE sellers in connection with the PACE acquisition.
59
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The Selected Consolidated Financial Data of the Company includes the
historical financial statements of Delsener/Slater and affiliated companies,
the predecessor of the Company, for each of the four years ended December 31,
1996 and the historical financial statements of the Company for the year ended
December 31, 1997. The statement of operations data with respect to
Delsener/Slater for the year ended December 31, 1993 and the balance sheet data
as of December 31, 1993 and 1994 is unaudited. The financial information
presented below should be read in conjunction with the information set forth in
"Unaudited Pro Forma Condensed Combined Financial Statements" and the notes
thereto and the historical financial statements and the notes thereto of the
Company, the 1997 Acquisitions and the Recent Acquisitions included herein. The
financial information has been derived from the audited and unaudited financial
statements of the Company, the 1997 Acquisitions and the Recent Acquisitions.
The pro forma selected data for the year ended December 31, 1997 are derived
from the unaudited pro forma condensed combined financial statements, which, in
the opinion of management, reflect all adjustments necessary for a fair
presentation of the transactions for which such pro forma financial information
is given.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------
PREDECESSOR
------------------------------------------------
1997 (1)
PRO FORMA
1993 1994 1995 1996 1997 (UNAUDITED)
---------- ------------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue .................................... $46,526 $92,785 $47,566 $ 50,362 $ 96,144 $ 638,159
Operating expenses ......................... 45,635 90,598 47,178 50,686 83,417 568,607
Depreciation & amortization ................ 762 755 750 747 5,431 39,339
Corporate
expenses (2) .............................. -- -- -- -- 2,206 4,206
------- ------- ------- -------- --------- ---------
Operating income (loss) .................... $ 129 $1,432 $ (362) $ (1,071) $ 5,090 $ 26,007
Interest expense ........................... (148) (144) (144) (60) (1,590) (47,296)
Other income ............................... 85 138 178 198 295 562
Equity income (loss) from investments ...... -- (9) 488 524 509 6,998
------- --------- ------- -------- --------- ---------
Income (loss) before income taxes .......... $ 66 $1,417 $ 160 $ (409) $ 4,304 $ (13,729)
Income tax provision ....................... (57) (5) (13) (106) (490) (3,500)
------- --------- ------- -------- --------- ---------
Net income (loss) .......................... $ 9 $1,412 $ 147 $ (515) $ 3,814 $ (17,229)
======= ======== ======= ======== =========
Accretion on temporary equity (3) .......... (3,300)
---------
Net loss applicable to common shares ....... $ (20,529)
=========
Net loss per common share (4) .............. $ (1.04)
=========
Weighted average common shares
outstanding (4) ........................... 20,300
=========
OTHER OPERATING DATA:
EBITDA (5) ................................. $ 891 $2,187 $ 388 $ (324) $ 10,521 $ 65,346
======= ======== ======= ======== ========= =========
Cash flow from:
Operating activities ...................... $2,959 $ (453) $ 4,214 $ 1,005
Investing activities ...................... -- -- (435) (73,296)
Financing activities ...................... (477) (216) (1,431) 78,270
Ratio of earnings to fixed charges (6) ..... 1.2x 4.6x 1.4x -- 2.5x --
</TABLE>
60
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS)
BALANCE SHEET DATA:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------------------------------
PREDECESSOR 1997
--------------------------------------------- PRO FORMA
1993 1994 1995 1996 1997 (UNAUDITED)(7)
--------- --------- --------- --------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Current assets ................. $1,823 $4,453 $3,022 $6,191 $ 11,220 $132,743
Property and equipment, net..... 4,484 3,728 2,978 2,231 59,685 192,482
Intangible assets, net ......... -- -- -- -- 60,306 431,820
Total assets ................... 6,420 8,222 6,037 8,879 146,942 809,170
Current liabilities ............ 4,356 3,423 3,138 7,973 21,514 101,573
Long-term debt, including
current portion ............... -- 1,830 -- -- 16,178 534,925
Temporary equity(3) ............ -- -- -- -- -- 16,500
Stockholders' equity ........... 6,420 2,969 2,900 907 102,144 126,810
</TABLE>
- ----------
(1) The Unaudited Pro Forma Statement of Operations Data for the year ended
December 31, 1997 are presented as if the Company had completed the 1997
Acquisitions, the Recent Acquisitions, the Financing, the Spin-Off and
the SFX Merger as of January 1, 1997.
(2) Corporate expenses are reduced by $1,794,000 for fees earned from
Triathlon ("Triathlon") for the year ended December 31, 1997. The right
to receive such fees in the future is to be assigned to the Company by
SFX Broadcasting in connection with the Spin-Off. Future fees may vary,
above the minimum fee of $500,000, depending upon the level of
acquisition and financing activities of Triathlon. See "Certain
Relationships and Related Transactions--Triathlon Fees."
(3) The PACE acquisition agreement provides that each PACE seller shall have
an option, exercisable during a period beginning on the fifth anniversary
of the closing of the PACE Acquisition and ending 90 days thereafter, to
require the Company to purchase up to one-third of the Class A Common
Stock received by that PACE seller (representing 500,000 shares in the
aggregate) for a cash purchase price of $33.00 per share. With certain
limited exceptions, the Fifth Year Put Option rights are not assignable
by the sellers. The maximum amount payable under all Fifth Year Put
Options ($16,500,000) has been presented as temporary equity on the pro
forma balance sheet. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources."
(4) Includes 500,000 shares of the Class A Common Stock to be issued to the
PACE sellers in connection with the Fifth Year Put Option; these shares
are not included in calculating the net loss per common share.
(5) "EBITDA" is defined as earnings before interest, taxes, other income,
net equity income (loss) from investments and depreciation and
amortization. Although EBITDA is not a measure of performance calculated
in accordance with GAAP, the Company believes that EBITDA is accepted by
the entertainment industry as a generally recognized measure of
performance and is used by analysts who report publicly on the
performance of entertainment companies. Nevertheless, this measure should
not be considered in isolation or as a substitute for operating income,
net income, net cash provided by operating activities or any other
measure for determining the Company's operating performance or liquidity
which is calculated in accordance with GAAP.
There are other adjustments that could effect EBITDA but have not
been reflected herein. Had such adjustments been made, GAAP Adjusted
EBITDA on a pro forma basis would have been approximately
$77,344,000 for the year ended December 31, 1997. These adjustments
include the elimination of duplicative staffing and general and
administrative expenses of $5,000,000 and include the Company's pro
rata share of income from investments in subsidiaries accounted for
under the equity method of $6,998,000 for the year ended December
31, 1997. While management believes that such cost savings are
achievable, the Company's ability to fully achieve such cost savings
is subject to numerous factors certain of which may be beyond the
Company's control.
(6) For purposes of computing the ratio of earnings to fixed charges,
"earnings" consists of earnings before income taxes, including equity
income (loss) from investments, net of distribution and fixed charges.
"Fixed charges" consists of interest on all indebtedness including
amortization of capitalized debt expenses and the portion of rents
representative of an interest factor. Earnings were insufficient to cover
fixed charges by $393,000 for the year ended December 31, 1996, and
$19,102,000 on a pro forma basis for the year ended December 31, 1997.
(7) The Unaudited Pro Forma Balance Sheet Data at December 31, 1997 are
presented as if the Company had completed the Recent Acquisitions, the
Financing, the Spin-Off and the SFX Merger as of December 31, 1997.
Retained earnings on a pro forma basis for the Financing, the Recent
Acquisitions, the Spin-Off and the SFX Merger have not been adjusted for
future charges to earnings which will result from the issuance of stock
and options granted to certain executive officers and other employees of
the Company or certain other costs. See "Management's Discussion and
<PAGE>
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources--Future Charges to Earnings."
61
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of the financial condition and results of
operations of the Company should be read in conjunction with the consolidated
financial statements and related notes thereto. The following discussion
contains certain forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed herein. Factors that could cause or contribute to the differences are
discussed in "Risk Factors" and elsewhere in this Prospectus. The Company
undertakes no obligation to publicly release the results of any revisions to
these forward-looking statements that may be made to reflect any future events
or circumstances.
The performance of entertainment companies, such as the Company, is
measured, in part, by their ability to generate EBITDA. "EBITDA" is defined as
earnings before interest, taxes, other income, net equity income (loss) from
investments and depreciation and amortization. Although EBITDA is not a measure
of performance calculated in accordance with GAAP, the Company believes that
EBITDA is accepted by the industry as a generally recognized measure of
performance and is used by analysts who report publicly on the performance of
entertainment companies. Nevertheless, this measure should not be considered in
isolation or as a substitute for operating income, net income, net cash
provided by operating activities or any other measure for determining the
Company's operating performance or liquidity that is calculated in accordance
with GAAP.
The Company's core business is the promotion and production of live
entertainment events, most significantly for concert and other music
performances in venues owned and/or operated by the Company and in third-party
venues. In connection with all of its live entertainment events, the Company
seeks to maximize related revenue streams, including the sale of corporate
sponsorships, the sale of concessions and the merchandising of a broad range of
products. On a pro forma basis giving effect to the 1997 Acquisitions and the
Recent Acquisitions, the Company's music and ancillary businesses comprised
approximately 78%, theater comprised approximately 16% and specialized motor
sports comprised approximately 6% of the Company's total net revenues for the
year ended December 31, 1997.
Promotion of events involves booking talent, renting or providing the
event venue, marketing the event to attract ticket buyers and providing for
local services required in the production of the event such as security and
stage hands. Promoters generally receive revenues from the sale of tickets and
sponsorships. When an event is promoted at a venue owned or managed by the
promoter, the promoter also generally receives a percentage of revenues from
concessions, merchandising, parking and premium box seats. The Company earns
promotion revenues principally by promoting (a) music concerts, (b) Touring
Broadway Shows and (c) specialized motor sports events.
Production of events involves developing the event content, hiring
artistic talent and managing the actual production of the event (with the
assistance of the local promoter). Producers generally receive revenues from
guarantees and from profit sharing agreements with promoters, a percentage of
the promoters' ticket sales, merchandising, sponsorships, licensing and the
exploitation of other rights (including intellectual property rights) related
to the production. The Company earns revenues by producing (a) Touring Broadway
Shows, (b) specialized motor events and (c) other proprietary and
non-proprietary entertainment events.
1997 ACQUISITIONS
The Company entered the live entertainment business with SFX
Broadcasting's acquisition of Delsener/Slater, a New York-based concert
promotion company, in January 1997 for aggregate consideration of $27.6
million. Delsener/Slater has long-term leases or is the exclusive promoter for
many of the major concert venues in the New York City metropolitan area,
including the Jones Beach Amphitheater, a 14,000-seat complex located in
Wantagh, New York, and the PNC Bank Arts Center (formerly known as the Garden
State Arts Center), a 17,500-seat complex located in Holmdel, New Jersey. In
March 1997, Delsener/Slater acquired, for aggregate consideration of $23.8
million, companies which hold a 37-year lease to operate the Meadows Music
Theater, a 25,000-seat indoor/outdoor complex located in Hartford, Connecticut.
In June 1997, SFX Broadcasting acquired Sunshine Promotions, a concert promoter
in the
62
<PAGE>
Midwest, and certain other related companies for an aggregate consideration of
$61.5 million. As a result of the acquisition of Sunshine Promotions, the
Company owns the Deer Creek Music Theater, a 21,000-seat complex located in
Indianapolis, Indiana, the Polaris Amphitheater, a 20,000-seat complex located
in Columbus, Ohio, and has a long-term lease to operate the Murat Centre, a
2,700-seat theater and 2,200-seat ballroom located in Indianapolis, Indiana.
See "Certain Relationships and Related Transactions--Delsener/Slater Employment
Agreements."
RECENT ACQUISITIONS
In February 1998, the Company acquired PACE, Pavilion Partners,
Contemporary, BGP and Network and in March 1998, the Company acquired
Concert/Southern. See "Business--Recent Acquisitions."
ACQUISITION OF PACE
On February 25, 1998, the Company acquired all of the outstanding capital
stock of PACE (the "PACE Acquisition"). In connection with the PACE
Acquisition, the Company acquired 100% of Pavilion Partners, a partnership that
owns interests in 10 venues ("Pavilion"), one-third through the acquisition of
PACE and two-thirds through separate agreements between PACE and Blockbuster
and between PACE and Sony (the acquisition of such two-thirds interest, the
"Pavilion Acquisition"). The total consideration for the PACE Acquisition was
approximately $109.5 million in cash, the repayment of approximately $20.6
million of debt and the issuance of 1.5 million shares of Class A Common Stock.
The total consideration for the Pavilion Acquisition was approximately $90.6
million, comprised of $41.4 million in cash and the repayment of $43.1 million
of debt and the assumption of approximately $6.1 million of debt related to a
capital lease. The purchase price was financed from the proceeds of an offering
exempt from the registration requirements of the Securities Act of the Notes,
which was consummated on February 11, 1998 (the "Note Offering").
In connection with its acquisition of partnership interests in Lakewood
Amphitheater in Atlanta, Georgia and Starplex Amphitheater in Dallas, Texas,
PACE entered into a co-promotion agreement with its partner that contains a
provision that purports, under certain circumstances, to require PACE to
co-promote (and share one-half of the profits and losses) with such partnership
certain concerts which are presented by PACE or any of its affiliates in
another venue located in either Atlanta, Georgia or Dallas, Texas. However, the
Company acquired an interest in Chastain Park Amphitheater, also in Atlanta, in
the Concert Southern acquisition described below. The Company is currently
negotiating with the third party to waive this restrictive provision; however,
it is possible that the Company will be unable to obtain the waiver. In
management's view, this provision will not materially affect the business or
prospects of the Company.
ACQUISITION OF CONTEMPORARY
On February 27, 1998, the Company acquired Contemporary Group (the
"Contemporary Acquisition"). The Contemporary Acquisition involved the merger
of Contemporary International Productions Corporation with and into the
Company, the acquisition by a wholly-owned subsidiary of the Company of
substantially all of the assets, excluding certain cash and receivables, of the
remaining members of Contemporary and the acquisition of the 50% interest in
the Riverport Amphitheatre Joint Venture not owned by Contemporary. The total
consideration of the Contemporary Acquisition was approximately $72.8 million
in cash, a payment for working capital of $9.9 million, and the issuance of
1,402,850 shares of Class A Common Stock. The purchase price was financed by
the borrowings under the Credit Facility and with the proceeds of the Note
Offering.
ACQUISITION OF BGP
On February 24, 1998, the Company, through the Company's wholly-owned
subsidiary, BGP Acquisition, LLC acquired all of the outstanding capital stock
of BGP, for a total consideration of
63
<PAGE>
$60.8 million in cash, $12.0 million in repayment of debt, which amount was at
least equal to BGP's working capital (as defined in the acquisition agreement),
and 562,640 shares of Class A Common Stock (the "BGP Acquisition"). The
purchase price was financed from the proceeds of the Note Offering.
ACQUISITION OF NETWORK
On February 27, 1998, the Company and its wholly-owned subsidiary, SFX
Network Group, LLC ("SFX Network") acquired Network (the "Network
Acquisition"). In the Network Acquisition, the Company, through SFX Network,
acquired all of the outstanding capital stock of each of The Album Network,
Inc. and SJS and purchased substantially all of the assets and properties and
assumed substantially all of the liabilities and obligations of The Network 40,
Inc. The total purchase price was approximately $52.0 million cash, a payment
for working capital of $1.8 million, reimbursed seller's costs of $500,000, the
purchase of an office building and related property for approximately $2.5
million and the issuance of approximately 750,188 shares of Class A Common
Stock. The purchase price is subject to increase based on Network's actual 1998
EBITDA (as defined in the acquisition agreement) by $4.0 million if such EBITDA
equals or exceeds $9.0 million to $14 million if EBITDA is greater than $11
million, and is payable in stock, or in certain circumstances in cash, by no
later than March 20, 1999. The $2.5 million purchase of the office building and
related property used in connection with Network's business was comprised of
cash of $700,000 and the assumption of debt of $1.8 million. The purchase price
was financed by the borrowings under the Credit Facility. In connection with
the Network Acquisition, the selling stockholders were reimbursed working
capital (as defined in the acquisition agreement) in excess of $500,000.
ACQUISITION OF CONCERT/SOUTHERN
On March 4, 1998, the Company, through its wholly-owned subsidiary,
Concerts, acquired Concert/
Southern Promotions, a promoter of live music entertainment in the Atlanta
metropolitan area, for a total consideration of $16.9 million (including the
payments of the $1.6 million representing the present value of a deferred
purchase obligation and $300,000 for the working capital adjustment.) The
purchase price was financed by the borrowings under the Credit Facility.
The foregoing descriptions do not purport to be complete descriptions of
the terms of the acquisition agreements and are qualified by reference to the
acquisition agreements, copies of which are attached hereto as exhibits and
incorporated herein by reference. Pursuant to the acquisition agreements and
the agreements related thereto, the Company, (a) under certain circumstances,
may be required to repurchase shares of its Class A Common Stock or make
additional payments in connection therewith, (b) has granted certain rights of
first refusal certain of which are exercisable at 95% of the proposed purchase
price and (c) in connection with the PACE Acquisition, has granted Brian
Becker, the Executive Vice President, a Member of the Office of the Chairman,
and a director of the Company, the option to acquire, after the second
anniversary of the consummation of the PACE Acquisition, the Company's then
existing motor sports line of business (or, if that business has previously
been sold, the Company's then existing theatrical line of business) at its then
fair market value. See "Risk Factors--Future Contingent Payments" and "--Rights
to Purchase Certain Subsidiaries."
The Recent Acquisitions were accounted for using the purchase method of
accounting, and the intangible assets created in the purchase transactions will
generally be amortized against future earnings over a 15-year period. The
amount of amortization will be substantial and will continue to affect the
Company's operating results in the future. These expenses, however, do not
result in an outflow of cash by the Company and do not impact EBITDA.
THE SPIN-OFF AND THE SFX MERGER
SFX Broadcasting was formed in 1992 principally to acquire and operate
radio broadcasting stations. In August 1997, SFX Broadcasting agreed to merge
with a subsidiary of SFX Buyer, and to Spin-Off the Company to certain
stockholders of SFX Broadcasting on a pro rata basis. The Spin-Off was
consummated on April , 1998. The Spin-Off separated the entertainment
business from SFX
64
<PAGE>
Broadcasting's radio broadcasting business and will enable SFX Buyer to acquire
only SFX Broadcasting's radio broadcasting business in the SFX Merger. SFX
Broadcasting has indicated that it expects the SFX Merger to be completed in
the second quarter of 1998.
Prior to the Spin-Off, pursuant to the Distribution Agreement, SFX
Broadcasting contributed to the Company all of its assets relating to the
entertainment business. In addition, the Company, SFX Broadcasting and SFX
Buyer also entered into the Tax Sharing Agreement and the Employee Benefits
Agreement. Each of the agreements provides for certain indemnification
obligations by the Company and SFX Broadcasting. Pursuant to the Distribution
Agreement, at the time of the SFX Merger, SFX Broadcasting will contribute any
positive Working Capital to the Company. If Working Capital is negative, the
Company must pay the amount of the shortfall to SFX Broadcasting. if the
Company is required to make Working Capital payments to SFX Broadcasting or if
the Company is required to indemnify SFX Broadcasting, there can be no
assurance that the Company will have the funds to do so or that it will have
sufficient funds to conduct its operations after making the required payments.
See "Risk Factors--Substantial Tax Payment Obligation" and "--Future Contingent
Payments," "The Spin-Off" and "--Liquidity and Capital Resources."
In the Spin-Off, shares of Common Stock were distributed pro rata to
holders on the Spin-Off record date of SFX Broadcasting's Class A common stock,
Class B common stock, Series D preferred stock and interests in SFX
Broadcasting's director deferred stock ownership plan, and shares were
placed in escrow to be issued upon the exercise of certain warrants of SFX
Broadcasting. See "The Spin-Off."
RESULTS OF OPERATIONS
General
The Company's operations consist primarily of (a) concert promotion and
venue operation, (b) the promotion and production of theatrical events,
particularly Touring Broadway Shows, and (c) the promotion and production of
motor sports events. The Company and the Acquired Businesses also engage in
various other activities ancillary to their live entertainment businesses.
On a pro forma basis, after giving effect to the Recent Acquisitions, the
Company's revenues for the year ended December 31, 1997 would have been $638.1
million. The pro forma revenue is comprised of $527.8 million from the Recent
Acquisitions, of which the PACE and Pavilion Acquisitions represented 52%.
On a pro forma basis, after giving effect to the Recent Acquisitions,
operating expenses for the year ended December 31, 1997 would have been $568.6
million. Operating margins on a pro forma basis would have been 11%. Pro forma
operating expenses do not reflect the Company's expectation that it will be
able to achieve substantial economies of scale upon completion of the Recent
Acquisitions and reductions in operating expenses as a result of the
elimination of duplicative staffing and general and administrative expenses.
On a pro forma basis, after giving effect to the Recent Acquisitions, the
Company's net loss for the year ended December 31, 1997 would have been $17.2
million. Net loss per share, after accretion of the Fifth Year Put Option
issued in connection with the PACE Acquisition, would have been $1.04 for the
period. The pro forma operating results include the impact of significant
non-cash amortization expense arising from the Recent Acquisitions and interest
expense relating to the Financing.
As of December 31, 1997, on a pro forma basis after giving effect to the
Recent Acquisitions, the Company had net current assets of $132.7 million
(included in net current assets is cash and cash equivalents of $58.7 million),
property and equipment (principally concert venues) of $192.4 million,
intangible assets of $431.8 million and long-term debt of $534.9 million. The
long-term debt is comprised of $350.0 million of Notes, borrowings of $150.0
million under the Credit Facility and other debt obligations of $34.9 million.
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Concert Promotion/Venue Operation
The Company's concert promotion and venue operation business consist
primarily of the promotion of concerts and operation of venues primarily for
use in the presentation of musical events. The Company's primary source of
revenues from its concert promotion activities is from ticket sales at events
promoted by the Company. As a venue operator, the Company's primary sources of
revenue are sponsorships, concessions, parking and other ancillary services,
derived principally from events promoted by the Company.
Revenue from ticket sales is affected primarily by the number of events
the Company promotes, the average ticket price and the number of tickets sold.
The average ticket price depends on the popularity of the artist whom the
Company is promoting, the size and type of venue and the general economic
conditions and consumer tastes in the market where the event is being held.
Revenue and margins are also affected significantly by the type of contract
entered into with the artist or the artist's representative. Generally, the
promoter or venue operator will agree to pay the artist the greater of a
minimum guarantee or a profit sharing payment based on ticket revenue, less
certain show expenses. The promoter or venue operator assumes the financial
risk of ticket sales and is responsible for local production and advertising of
the event. However, in certain instances, the promoter agrees to accept a fixed
fee from the artist for its services, and the artist assumes all financial
risk. When the promoter or venue operator assumes the financial risk, all
revenue and expenses associated with the event are recorded. When the artist
assumes the risk, only the fee is recorded. As a result, operating margins
would be significantly greater for fee-based events as opposed to events for
which the Company assumes the risk of ticket sales, although profits per event
would tend to be lower. Operating margins can vary from period to period.
The Company's most significant operating expenses are talent fees,
production costs, venue operating expenses (including rent), advertising costs
and insurance expense. The booking of talent in the concert promotion business
generally involves contracts for limited engagements, often involving a small
number of performances. Talent fees depend primarily on the popularity of the
artist, the ticket price that the artist can command at a particular venue and
the expected level of ticket sales. Production costs and venue operating
expenses have substantial fixed cost components and lesser variable costs
primarily related to expected attendance.
Theatrical
The Company's theatrical operations are directed mainly towards the
promotion and production of Touring Broadway Shows, which generate revenues
primarily from ticket sales and sponsorships. The Company may also participate
in ancillary revenues, such as concessions and merchandise sales, depending on
its agreement with a particular local promoter/venue operator. Revenue from
ticket sales is primarily affected by the popularity of the production and the
general economic conditions and consumer tastes in the particular market and
venue where the production is presented. In order to reduce its dependency on
the success of any single touring production, the Company sells advance annual
subscriptions that provide the purchaser with tickets for all of the shows that
the Company intends to tour in the particular market during the touring season.
For the year ended December 31, 1997, on a pro forma basis approximately 34% of
ticket sales for Touring Broadway Shows presented by the Company were sold
through advance annual subscriptions. Subscriptions for Touring Broadway Shows
typically cover approximately two-thirds of the Company's break-even cost point
for those shows.
Principal operating expenses related to touring shows include talent,
rent, advertising and royalties. Talent costs are generally fixed once a
production is cast. Rent and advertising expense may be either fixed or
variable based on the arrangement with the particular local promoter/venue
operator. Royalties are generally paid as a percentage of gross ticket sales.
The Company also makes minority equity investments in original Broadway
productions, principally as a means to obtain rights for touring shows, and in
certain Touring Broadway Shows. These investments are accounted for using
either the equity method or the cost method of accounting, based on the
relative size of the investment. The Company monitors the recoverability of
these investments on a regular basis,
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and the Company may be required to take write-offs if the original production
closes or if the Company determines that the production will not recoup the
investment. The timing of any write-off could adversely affect operating
results in a particular quarter.
Motor Sports
The Company's motor sports activities consist principally of the promotion
and production of specialized motor sports, which generate revenues primarily
from ticket sales and sponsorships, as well as merchandising and video rights
associated with producing motor sports events. Ticket prices for these events
are generally lower than for theatrical or music concert events, generally
ranging from $5 to $30 in 1996. Revenue from these sources is primarily
affected by the type of event and the general economic conditions and consumer
tastes in the particular markets and venues where the events are presented.
Event-related revenues received prior to the event date are initially recorded
on the balance sheet as deferred revenue; after the event occurs, they are
recorded on the statement of operations as gross revenue. Expenses are
capitalized on the balance sheet as prepaid expenses until the event occurs.
Operating expenses associated with motor sports activities include talent,
rent, track preparation costs, security and advertising. These operating
expenses are generally fixed costs that vary based on the type of event and
venue where the event is held.
Under certain circumstances, the Company may be required to sell either
its motor sports or theatrical lines of business. See "Risk Factors--Rights to
Purchase Certain Subsidiaries."
Other Businesses
The Company's other principal businesses include (a) the production and
distribution of radio industry trade magazines, (b) the production of radio
programming content and show-prep material and (c) the provision of radio air
play and music retail research services. The primary sources of revenues from
these activities include (a) the sale of advertising space in its publications
and the sale of advertising time on radio stations that carry its syndicated
shows, (b) subscription fees for its trade publications and (c) subscription
fees for access to its database of radio play list and audience data. Revenues
generally vary based on the overall advertising environment and competition.
The Company also provides marketing and consulting services pursuant to
contracts with individual clients for specific projects. Revenues from and
costs related to these services vary based on the type of service being
provided and the incremental associated costs.
SEASONALITY
The Company's operations and revenues are largely seasonal in nature, with
generally higher revenue generated in the second and third quarters of the
year. For example, on a pro forma basis for the 1997 Acquisitions, the Company
generated approximately 68% of its revenues in the second and third quarters
for the twelve months ended December 31, 1997. The Company's outdoor venues are
primarily utilized in the summer months and do not generate substantial revenue
in the late fall, winter and early spring. Similarly, the musical concerts that
the Company promotes largely occur in the second and third quarters. To the
extent that the Company's entertainment marketing and consulting relate to
musical concerts, they also predominantly generate revenues in the second and
third quarters. Therefore, the seasonality of the Company's business causes
(and will probably continue to cause) a significant variation in the Company's
quarterly operating results. These variations in demand could have a material
adverse effect on the timing of the Company's cash flows and, therefore, on its
ability to service its obligations with respect to its indebtedness. However,
the Company believes that this variation may be somewhat offset with the
acquisition of typically non-summer seasonal businesses in the Recent
Acquisitions, such as motor sports (which is winter-seasonal) and Touring
Broadway Shows (which typically tour between September and May).
HISTORICAL RESULTS
The following analysis of the historical operations of the Company,
including the 1997 Acquisitions, but excluding the Recent Acquisitions,
includes, for comparative purposes, the historical operations of
Delsener/Slater (the Company's predecessor) for the years ended December 31,
1995 and 1996.
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Year Ended December 31, 1997 Compared to the Year Ended December 31, 1996
The Company's concert promotion revenue increased by 91% to $96.1 million
for the year ended December 31, 1997, compared to $50.4 million for the year
ended December 31, 1996, as a result of the acquisitions of Sunshine Promotions
and the Meadows Music Theater, which increased concert promotion revenue by
$45.5 million. On a pro forma basis, assuming the acquisitions had been
completed as of January 1, 1997, concert promotion revenue for the year ended
December 31, 1997 would have been $110.4 million.
Concert promotion operating expenses increased by 65% to $83.4 million for
the year ended December 31, 1997, compared to $50.6 million for the year ended
December 31, 1996, primarily as a result of the acquisitions of Sunshine
Promotions and the Meadows Music Theater, which increased concert operating
expenses revenue by $37.1 million, which was offset in part by decreased
officer salary expense paid to the former owners of Delsener/Slater. On a pro
forma basis, assuming that those acquisitions had been completed as of January
1, 1997, concert operating expenses would have been $96.7 million for the year
ended December 31, 1997.
Depreciation and amortization expense increased to $5.4 million for the
year ended December 31, 1997, compared to $747,000 for the year ended December
31, 1996, due to the inclusion of $2.6 million of depreciation and amortization
expense related to the acquisitions of Sunshine Promotions and the Meadows
Music Theater lease and the additional depreciation and amortization recorded
in 1997 related to the purchase of Delsener/Slater on January 2, 1997. In 1997,
the Company recorded the fixed assets of Delsener/Slater at fair value and
recorded an intangible asset equal to the excess of purchase price over the
fair value of net tangible assets of Delsener/Slater, which was amortized over
a 15 year period.
Corporate expenses were $2.2 million for the year ended December 31, 1997,
net of $1.8 million in fees received from Triathlon, compared to zero for the
year ended December 31, 1996. These expenses represent the incremental costs of
operating the Company's corporate offices, and therefore did not exist in 1996.
The fees receivable from Triathlon are based on consulting services provided by
or on behalf of SCMC, a private investment company in which Messrs. Sillerman
and Tytel have economic interests, that makes investments in and provides
financial consulting services to companies engaged in the media business. The
fees will fluctuate (above the minimum annual fee of $500,000) based on the
level of acquisition and financing activities of Triathlon. SCMC previously
assigned its rights to receive fees payable from Triathlon to SFX Broadcasting,
and SFX Broadcasting will assign its rights to receive the fees to the Company,
pursuant to the Distribution Agreement. Triathlon has previously announced that
it is exploring ways of maximizing stockholder value, including a possible sale
to a third party. If Triathlon is acquired by a third party, it is possible
that the consulting fees would not continue for the remainder of the
agreement's term. See "Certain Relationships and Related
Transactions--Triathlon Fees."
Operating income was $5.1 million for the year ended December 31, 1997,
compared to a loss of $1.1 million for the year ended December 31, 1996, due to
the results discussed above.
Interest expense, net of investment income, was $1.3 million in the year
ended December 31, 1997, compared to net interest income of $138,000 for the
year ended December 31, 1996, primarily as a result of assumption of additional
debt related to the acquisitions of the Meadows Music Theater and Sunshine
Promotions.
Equity income in unconsolidated subsidiaries decreased 3% to $509,000 from
$524,000.
Income tax expense increased to $490,000 for the year ended December 31,
1997, compared to $106,000 for the year ended December 31, 1996, primarily as a
result of higher operating income.
The Company's net income increased to $3.8 million for the year ended
December 31, 1997, as compared to a net loss of $515,000 for the year ended
December 31, 1996, due to the factors discussed above.
EBITDA increased to $10.5 million for the year ended December 31, 1997,
compared to a negative $324,000 for the year ended December 31, 1996, as a
result of the 1997 Acquisitions, the reduction in officers' salary expense and
improved operating results.
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Year Ended December 31, 1996 Compared to the Year Ended December 31, 1995
The Company's concert promotion revenue increased by 5.9% to $50.4 million
for the year ended December 31, 1996, compared to $47.6 million for the year
ended December 31, 1995, primarily as a result of an increase in concerts
promoted and an increase in ticket prices.
Concert promotion operating expenses increased by 7.2% to $50.6 million
for the year ended December 31, 1996, compared to $47.2 million for the year
ended December 31, 1995, primarily as a result of an increase in concert
activity.
Depreciation and amortization expense decreased slightly to $747,000 for
the year ended December 31, 1996, compared to $750,000 for the year ended
December 31, 1995.
The Company's operating loss was $1.1 million for the year ended December
31, 1996, compared to an operating loss of $362,000 for the year ended December
31, 1995, due to the results discussed above.
Interest income, net of interest expense, increased by 306% to $138,000
for the year ended December 31, 1996, compared to $34,000 for the year ended
December 31, 1995.
Equity income in unconsolidated subsidiaries increased 8% to $524,000 from
$488,000, primarily as result of the investment in the PNC Bank Arts Center,
offset by lower income from the Company's other equity investments.
The Company's state and local income tax expense increased to $106,000 for
the year ended December 31, 1996, compared to $13,000 for the year ended
December 31, 1995. This increase was primarily the result of the higher
operating income.
The Company's net loss was $515,000 for the year ended December 31, 1996,
compared to net income of $147,000 for the year ended December 31, 1995, due to
the factors discussed above.
EBITDA was a negative $324,000 for the year ended December 31, 1996,
compared to $388,000 for the year ended December 31, 1995, primarily as a
result of higher officers' salary expense partially offset by lower general and
administrative expenses.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal need for funds has been for acquisitions, working
capital needs, to make certain payments in connection with the Spin-Off and, to
a lesser extent, capital expenditures. The Company anticipates that its
principal sources of funds will be the proceeds from the proposed Equity
Offering, remaining proceeds from the Note Offering, borrowings under the
Credit Facility and cash flows from operations.
HISTORICAL CASH FLOWS
Net cash provided by operations was $1.0 million for the year ended
December 31, 1997.
Net cash used in investing activities for the year ended December 31, 1997
was $73.3 million. Cash used in investing activities in 1997 related primarily
to the acquisitions of Delsener/Slater, Sunshine and the Meadows and capital
expenditures.
Net cash provided by financing activities for the year ended December 31,
1997 was $78.3 million. For the year ended December 31, 1997, cash provided by
financing activities related primarily to the funding of the 1997 Acquisitions
by the Company.
1997 ACQUISITIONS
In 1997, SFX Broadcasting consummated the acquisitions of Delsener/Slater
($23.6 million in cash plus $4.0 million of deferred payments), certain
companies which own and operate the Meadows Music Theater ($0.9 million in cash
plus shares of SFX Broadcasting's Class A common stock with a value at that
time of approximately $7.5 million and the assumption of approximately $15.4
million of debt) and Sunshine Promotions ($53.9 million in cash plus $2.0
million in deferred payments, shares of SFX
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Broadcasting's Class A common stock with a value of approximately $4.0 million
and the assumption of $1.6 million of debt). The present value of the future
payments that the Company is required to pay in connection with the 1997
Acquisitions is approximately $6.2 million.
The foregoing includes a note in the original principal amount of $2.0
million, of which approximately $1.6 million is currently outstanding. Pursuant
to the SFX Merger Agreement, the Company is responsible for the payments owing
under the note, which by its terms accelerates upon the change of control of
SFX Broadcasting resulting from the consummation of the SFX Merger.
RECENT ACQUISITIONS
The aggregate purchase price of the Recent Acquisitions was approximately
$442.1 million in cash, including repayment of debt and payments for working
capital, $7.8 million of assumed debt and the issuance of approximately 4.2
million shares of the Common Stock. In addition, in February 1998, the Company
reimbursed SFX Broadcasting approximately $25.3 million for consent fees,
capital expenditures, and other expenses related to the Recent Acquisitions,
the Financing and the Spin-Off funded by SFX Broadcasting. The Company financed
the Recent Acquisitions with the proceeds of the Note Offering and $150.0
million in borrowings under the Credit Facility. The Company incurred
approximately $6.0 million in fees and expenses related to the Recent
Acquisitions.
FUTURE CONTINGENT PAYMENTS
Certain of the agreements relating to the Recent Acquisitions provide for
purchase price adjustments and other future contingent payments under certain
circumstances. The PACE acquisition agreement provides that each PACE seller
will have an option, exercisable for 90 days after the fifth anniversary of the
closing of the PACE acquisition, to require the Company to repurchase up to
500,000 shares of the Class A Common Stock received by that seller for $33.00
in cash per share (an aggregate of up to $1.5 million). Pursuant to the terms
of the Becker Employment Agreement (as defined herein), during the period
between December 12, 1999 and December 27, 1999, Mr. Becker, an Executive Vice
President, Director and a Member of the Office of the Chairman of the Company,
will have the option to, among other things, require the Company to purchase
any stock or portion thereof (including vested and unvested options) granted to
him by the Company and/or pay him an amount equal to the present value of the
compensation payable during the remaining term of his employment agreement. See
"Management--Employment Agreements and Arrangements with Certain Officers and
Directors." Moreover, pursuant to the Contemporary acquisition agreement, if
the average trading price of the 1,402,850 shares issued of Class A Common
Stock in the Contemporary acquisition is less than $13.33 during the twenty
days prior to the second anniversary of the Contemporary acquisition, the
Company will be required to pay one-half of such difference for each share held
by the sellers of Contemporary on such date. Pursuant to the Network
acquisition agreement, the Company has agreed to increase the purchase price
for Network based on Network's actual 1998 EBITDA (as defined in the
acquisition agreement) as follows: (a) by $4.0 million if the 1998 EBITDA
equals or exceeds $9.0 million; (b) by an additional $4 for each $1 of
additional 1998 EBITDA between $9.0 million and $10.0 million; and (c) by an
additional $6 for each $1 of additional 1998 EBITDA between $10.0 million and
$11.0 million. This contingent consideration of up to $14.0 million is payable
in shares of Class A Common Stock or, in certain circumstances, in cash by no
later than March 20, 1999. No assurance can be given that the Company will have
sufficient cash or other available sources of capital to make any or all of the
future or contingent payments described above. See "Risk Factors--Future
Contingent Payments."
FUTURE ACQUISITIONS
The Company intends to pursue additional expansion opportunities and
expects to continue to identify and negotiate with respect to substantial
acquisitions in the live entertainment business and related business, certain
of which may be consummated prior to the Spin-Off. However, the Company has not
yet entered into definitive agreements with respect to any of these
acquisitions and there can be no assurance that the Company will be able to
consummate any of such acquisitions. See "Risk Factors-- Expansion Strategy;
Need for Additional Funds."
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SPIN-OFF
Pursuant to the Tax Sharing Agreement, the Company is responsible for
certain taxes of SFX Broadcasting, including taxes imposed with respect to
income generated by the Company for the periods prior to the Spin-Off and taxes
resulting from gain recognized in the Spin-Off. See "The Spin-Off." The actual
amount of the indemnification gain will be based on the excess of the value of
the Common Stock distributed in the Spin-Off over the tax basis of that stock.
The Company believes that the amount of taxes that it will be required to pay
in connection with the Spin-Off will be determined by reference to the trading
price of the Common Stock on a date no later than the first trading date
following the Spin-Off. Increases or decreases in the value of the Common Stock
subsequent to such date will not affect the tax liability. The Company will be
allowed to offset any gain or income by the net operating losses of SFX
Broadcasting (including net operating losses generated in the current year
prior to the Spin-Off) which are available to offset such gain or income. If
the Common Stock had a value of approximately $15 per share at the time of the
Spin-Off, management believes that no material indemnification payment would be
required. Such indemnification obligation would be approximately $4.0 million
and would increase by approximately $7.7 million for each $1.00 increase above
the per share valuation of $16. If the Common Stock was valued at $28.50 per
share, (the last sales price of the Class A Common Stock (trading on a
when-issued basis) on the over the counter market on April 9, 1998), management
estimates that the Company would have been required to pay approximately $101.0
million pursuant to such indemnification obligation. The Company intends to use
a substantial portion of the net proceeds from the pending Equity Offering to
make such payment and expects that such payment will be due on or about June
15, 1998. There can be no assurance that the Company will be able to complete
the pending Equity Offering or obtain alternative financing on acceptable terms
or at all. Such payment will not result in any corresponding increase in the
Company's assets or cash flows. See "Risk Factors--Substantial Tax Payment
Obligation."
The Company also expects to incur approximately $18.0 million in fees and
expenses in connection with the Spin-Off which the Company anticipates funding
from its cash on hand. In addition, pursuant to the SFX Merger Agreement, the
Company has agreed to assume SFX Broadcasting's obligations under the
employment agreements of certain employees and senior management, including the
obligation to make change of control payments to Messrs. Sillerman, Ferrel and
Benson aggregating approximately $3.3 million, $1.5 million and $0.2 million,
respectively. The assumed obligations will also include the duty to indemnify
Messrs. Sillerman and Ferrel for one-half of any excise taxes that may be
assessed against them in connection with the change of control payments. It is
also anticipated that Mr. Sillerman's employment agreement with the Company
will provide for certain indemnities relating to the SFX Merger. See "Certain
Relationships and Related Transactions--Assumption of Employment Agreements;
Certain Change of Control Payments" and "--Indemnification of Mr. Sillerman."
In addition, pursuant to the Distribution Agreement, the Company will be
required to indemnify SFX Broadcasting and each of its directors, officers and
employees for any losses relating to the Company's assets and liabilities.
In addition, pursuant to the Distribution Agreement, the Company will
assume certain obligations of SFX Broadcasting, including two real estate
leases on its executive offices. Such leases provide for annual rent of
approximately $1.4 million. See "The Spin-Off--Distribution Agreement."
WORKING CAPITAL
As required by the Distribution Agreement, SFX Broadcasting contributed to
the Company all of its concert and other live entertainment assets. At that
time, the Company assumed all of SFX Broadcasting's liabilities relating to the
live entertainment businesses, along with certain other liabilities.
[Immediately after the Spin-Off, SFX Broadcasting contributed to the Company an
allocation of working capital in an amount estimated by SFX Broadcasting's
management to be consistent with the proper operation of SFX Broadcasting.] At
the time of the SFX Merger, SFX Broadcasting will pay its positive Working
Capital (if any) to the Company. If Working Capital is negative, then the
Company must pay the amount of the shortfall to SFX Broadcasting. As of
December 31, 1997, the Company estimates that Working Capital to be received by
the Company would have been approximately $3.0 million (excluding the Series E
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Adjustment and the tax liability on the Spin-Off). The actual amount of Working
Capital as of the closing of the SFX Merger is likely to differ substantially
from the amount as of December 31, 1997, and will be a function of, among other
things, the operating results of SFX Broadcasting through the date of the SFX
Merger, the actual cost of consummating the SFX Merger and the related
transactions. SFX Broadcasting will also incur certain other significant
expenses prior to the consummation of the SFX Merger that could reduce Working
Capital, including the payment of interests and dividends on SFX Broadcasting's
debt, approximately $8.3 million payable in connection with the Meadows
Repurchase and the amount of any settlement paid by SFX Broadcasting in
connection with the SFX Merger shareholder litigation. Working Capital will
also be reduced by at least $2.1 million pursuant to the Series E Adjustment.
In February 1998, the Company reimbursed SFX Broadcasting approximately $25.3
million for consent fees, capital expenditures and other acquisition related
fees previously funded by SFX Broadcasting. See "Risk Factors--Future
Contingent Payments," "--Meadows Repurchase" and "The Spin-Off-- Distribution
Agreement."
MEADOWS REPURCHASE
The Company may assume the obligation to exercise an option held by SFX
Broadcasting to repurchase 250,838 shares of SFX Broadcasting's Class A common
stock for an aggregate purchase price of $8.3 million (the "Meadows
Repurchase"). This option was granted in connection with the acquisition of the
Meadows Music Theater. If the option were exercised by SFX Broadcasting, the
exercise would result in a reduction of Working Capital by approximately $8.3
million. If the option were not exercised, Working Capital would decrease by
approximately $10.5 million.
INTEREST ON NOTES AND BORROWINGS UNDER THE CREDIT FACILITY
On February 11, 1998, the Company completed the private placement of
$350.0 million of 9 1/8% Senior Subordinated Notes. Interest is payable on the
Notes on February 1 and August 1 of each year. In addition, the Company
borrowed $150.0 million under the Credit Facility at an interest rate of
approximately 8.07%. See "--Sources of Liquidity."
The degree to which the Company is leveraged will have material
consequences to the Company. The Company's ability to obtain additional
financing in the future for acquisitions, working capital, capital
expenditures, general corporate or other purposes are subject to the covenants
contained in the instruments governing its indebtedness. A substantial portion
of the Company's cash flow from operations will be required to be used to pay
principal and interest on its debt and will not be available for other
purposes. The Indenture and the credit agreement with respect to the Credit
Facility (the "Credit Agreement") contain restrictive financial and operating
covenants, and the failure by the Company to comply with those covenants would
result in an event of default under the applicable instruments, which in turn
would permit acceleration of the debt under the instruments (and in some cases
acceleration of debt under other instruments that contain cross-default or
cross-acceleration provisions). The Company will be more vulnerable to economic
downturns and could also be limited in its ability to withstand competitive
pressures and in its flexibility in reacting to changes in its industry and
general economic conditions. These consequences are not exhaustive; the
Company's indebtedness could also have other adverse consequences. See "Risk
Factors--Substantial Leverage."
The Company's ability to make scheduled payments of principal of, to pay
interest on or to refinance its debt depends on its future financial
performance, which, to a certain extent, is subject to general economic,
financial, competitive, legislative, regulatory and other factors beyond its
control, as well as the success of the businesses to be acquired and the
integration of these businesses into the Company's operations. There can be no
assurance that the Company will be able to make planned borrowings (including
under the Credit Facility), that the Company's business will generate
sufficient cash flow from operations, or that future borrowings will be
available in an amount to enable the Company to service its debt and to make
necessary capital or other expenditures. The Company may be required to
refinance a portion of the principal amount of its indebtedness prior to their
respective maturities. There can be no assurance that the Company will be able
to raise additional capital through the sale of securities, the disposition of
assets or otherwise for any refinancing. See "Risk Factors."
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CAPITAL EXPENDITURES
Capital expenditures totaled $2.1 million in the year ended December 31,
1997. Capital expenditures in 1997 included cash paid for expansion and
renovations at the Jones Beach Amphitheater, improvements at other venues and
computer and other operating equipment. The Company expects that capital
expenditures in fiscal year 1998 will be substantially higher than current
levels, due to the planned capital expenditures of approximately $29.0 million
for 1998 at existing venues (including $17.0 million initially planned for the
expansion and renovation of the Jones Beach Amphitheater and $12.0 million
planned for the expansion and renovation of the PNC Bank Arts Center) and
capital expenditures requirements of the Acquired Businesses, including $12
million for the construction of a new amphitheater serving the Seattle,
Washington market. The Company expects to fund its capital expenditures from
its cash on hand.
FUTURE CHARGES TO EARNINGS
The Company anticipates entering into employment agreements with certain
of its executive officers before the Spin-Off. In connection with these
agreements, the Board, on the recommendation of its Compensation Committee,
agreed to sell to the executive officers an aggregate of 650,000 shares of
Class B Common Stock and 90,000 shares of Class A Common Stock at a purchase
price of $2.00 per share. The shares will be issued on or about the Spin-Off
Distribution Date. The Company will record a non-cash compensation charge at
the date of the sale equal to the fair market value of the shares less the
aggregate purchase price paid for such shares. See "Management--Employment
Agreements and Arrangements with Certain Officers and Directors."
In addition, the Board, on the recommendation of its Compensation
Committee, also has approved the issuance of stock options exercisable for an
aggregate of 252,500 shares of Class A Common Stock. The options will vest over
five years and will have an exercise price of $5.50 per share. The Company will
record non-cash compensation charges over the five-year exercise period to the
extent that the fair value of the underlying the Class A Common Stock exceeds
the exercise price less the aggregate purchase price.
Further, the consummation of the Recent Acquisitions and other future
acquisitions will result in substantial charges to earnings relating to
interest expense and the recognition and amortization of goodwill. As of
December 31, 1997, the Company's goodwill was approximately $60.3 million. This
balance will substantially increase in 1998 due to the Recent Acquisitions.
Goodwill is being amortized using the straight line method over 15 years.
YEAR 2000 COMPLIANCE
The Company has addressed the risks associated with Year 2000 compliance
with respect to its accounting and financial reporting systems and is in the
process of installing new accounting and reporting systems. These systems are
expected to provide better reporting, to allow for more detailed analysis, to
handle both the Recent and the 1997 Acquisitions and to be Year 2000 compliant.
The Company anticipates that the cost of implementing these systems will be
approximately $2.0 million. The Company is in the process of examining Year
2000 compliance issues with respect to its vendors and does not anticipate that
it will be subject to a material impact in this area.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures About Segments of An
Enterprise and Related Information" ("FAS 131"), which is effective for years
beginning after December 15, 1997. FAS 131 establishes standards for the way
that public business enterprises report information about operating segments in
annual financial statements and requires that those enterprises report selected
information about operating segments in interim financial reports. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. FAS 131 is effective for financial
statements for fiscal years beginning after December 15, 1997, and therefore
the Company will adopt the new requirements in 1998. Management has not yet
completed its review of FAS 131 but its adoption will not have a material
effect on the Company's statement of position or revenues, only on the
composition of its reportable segments.
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SOURCES OF LIQUIDITY
As of December 31, 1997, the Company's cash and cash equivalents totaled
$5.9 million. As a subsidiary of SFX Broadcasting, the Company has incurred
and, as a stand-alone entity, will continue to incur substantial amounts of
indebtedness. In February of 1998, the Company received net proceeds of $339.5
million from the Note Offering and borrowed $150.0 million under the Credit
Facility pursuant to the Financing. The proceeds from the Financing were used
to consummate the Recent Acquisitions, including the cash purchase price, debt
repayments, and working capital payments of approximately $442.1 million, and
to pay approximately $6.0 million of certain fees and expenses related to the
Recent Acquisitions. The Company's cash and cash equivalents as of April 13,
1998 were approximately $60.0 million. On a pro forma basis, after giving
effect to the Recent Acquisitions, the Spin-Off, the Financing and the SFX
Merger, the Company's working capital would have been approximately $31.2
million at December 31, 1997.
As of December 31, 1997, the Company's consolidated indebtedness would
have been approximately $534.9 million on a pro forma basis giving effect to
the Spin-Off, the Recent Acquisitions, the Financing and the SFX Merger
(assuming that the Spin-Off and the SFX Merger occur on the terms currently
contemplated). The total amount of the Company's indebtedness could increase
substantially if the Spin-Off does not occur on the terms currently
contemplated as described above. In addition, the Company may incur
indebtedness from time to time to finance acquisitions, for capital
expenditures or for other purposes. See "Risk Factors--Substantial Leverage."
The Credit Facility consists of a $150.0 million seven year reducing
revolving facility (the "Revolver") and a $150.0 million eight year term loan
(the "Term Loan"). The Company's ability to make significant borrowings under
the Credit Agreement will depend upon its ability to increase cash flows or to
acquire assets from its existing operations which generate significant cash
flows. Loans outstanding under the Credit Facility will bear interest, at the
Company's option, at 1.875 to 2.375 percentage points over LIBOR or the greater
of the Federal Funds rate plus 0.50% or BNY's prime rate. The interest rate
spreads on the Term Loan and the Revolver will be adjusted based on the
Company's Total Leverage Ratio (as defined in the Credit Agreement). The
Company will pay a per annum commitment fee on unused availability under the
Revolver of 0.50% to the extent that the Company's Leverage Ratio is greater
than or equal to 4.0 to 1.0, and 0.375% if such ratio is less than 4.0 to 1.0
and a per annum letter of credit fee equal to the Applicable LIBOR Margin (as
defined in the Credit Agreement) for the Revolver then in effect. The Revolver
and Term Loan contain provisions providing that, at its option and subject to
certain conditions, the Company may increase the amount of either the Revolver
or Term Loan by $50.0 million. The Revolver and Term Loan contain usual and
customary covenants, including limitations on (a) line of business, (b)
additional indebtedness, (c) liens, (d) acquisitions, (e) asset sales, (f)
dividends, repurchases of stock and other cash distributions, (g) total
leverage, (h) senior leverage and (i) ratios of Operating Cash Flow (as defined
in the Credit Agreement) to pro forma interest expense, debt service and fixed
charges. The Company's obligations under the Revolver and Term Loan are by
substantially all of its assets, including property, stock of subsidiaries and
accounts receivable and guaranteed by the Company's subsidiaries.
The Company will require additional financing to pay the anticipated tax
indemnification obligation to SFX Broadcasting (approximately $101.0 million
based on the trading price (on a when-issued basis) of the Class A Common Stock
on April 9, 1998), to make certain change of control payments to executive
officers ($5.0 million) and for general corporate purposes (approximately $26.5
million). The Company intends to finance these obligations with the proceeds
from the pending Equity Offering. A registration statement in connection with
the Equity Offering was filed with the Commission on April 14, 1998. There can
be no assurance that the Company will be able to complete the pending Equity
Offering or obtain alternative financing on acceptable terms or at all. See
"Risk Factors--Substantial Tax Payment Obligation."
The Company intends to pursue additional expansion opportunities and
expects to continue to identify and negotiate acquisitions in the live
entertainment business and related businesses. The Company is currently
negotiating with respect to certain acquisitions, which the Company intends to
fund from cash on hand, borrowings under the Credit Agreement or through
additional financings. However,
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the Company has not yet entered into definitive agreements with respect to any
of these acquisitions and there can be no assurance that the Company will be
able to consummate such acquisitions. See "Risk Factors--Expansion Strategy;
Need for Additional Funds" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources--Future Acquisitions."
Furthermore, certain agreements of the Company, including the Distribution
Agreement, the Tax Sharing Agreement, certain employment agreements and the
agreements relating to the Recent Acquisitions provide for tax and other
indemnities, purchase price adjustments and future contingent payments in
certain circumstances. There can be no assurance that the Company will have
sufficient sources of funds to make such payments should they come due. In
addition, consistent with its operating strategy, the Company intends to pursue
additional expansion opportunities and expects to continue to identify and
negotiate with respect to substantial acquisitions in the live entertainment
business. See "Risk Factors--Substantial Tax Payment Obligation,"
"--Substantial Leverage," "--Future Contingent Payments" and "--Restrictions
Imposed by the Company's Indebtedness," "Certain Relationships and Related
Transactions--Indemnification of Mr. Sillerman" and "Description of
Indebtedness."
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OVERVIEW OF THE LIVE ENTERTAINMENT INDUSTRY
CONCERT PROMOTION INDUSTRY
The concert promotion industry consists primarily of regional promoters
focused generally in one or two major metropolitan markets. According to
Amusement Business, industry gross box office receipts for North American
concert tours totaled $1,112.2 million in 1997, compared to $322 million in
1985, representing a compounded annual growth rate of approximately 10.9%. The
Company believes that overall increases in ticket sales during the last several
years are in part due to the increasing popularity of amphitheaters as live
entertainment venues, as well as an increasing number of tours that attract
older audiences who did not previously attend musical concerts.
Typically, in order to initiate a music concert or other live
entertainment event or tour, a booking agent contracts with a performer to
arrange a venue and date, or series of venues and dates, for the performer's
event. The booking agent in turn contacts a promoter or promoters in the
locality or region of the relevant venue or venues. The promoter markets the
event, sells tickets, rents or otherwise provides the event venue or venues,
and arranges for local production services (such as stage, set, sound and
lighting). In certain instances, particularly in connection with music
festivals, a promoter may also provide limited production services. Individual
industry participants, such as the Company, often perform more than one of the
booking, promotion and venue operation functions.
The booking agent generally receives a fixed fee for its services, or in
some cases, a fee based on the success of the event or events, in each case
from the artist. The promoter typically agrees to pay the performer the greater
of a guaranteed amount and a profit-sharing payment based on gross ticket
revenues, therefore assuming the risk of an unsuccessful event. The promoter
sets ticket prices and advertises the event in order to cover expenses and
generate profits. In the case of an unprofitable event, a promoter will
sometimes renegotiate a lower guarantee in order to mitigate the promoter's
losses (in a process known as "settlement"). In some instances, the promoter
agrees to accept a fee from the booking agent for the promoter's services, and
the booking agent bears the financial risk of the event.
A venue operator typically contracts with a promoter to rent its venue for
a specific event on a specific date or dates. The venue operator provides
services such as concessions, parking, security, ushers and ticket-takers, and
receives revenues from concessions, merchandise, sponsorships, parking and
premium box seats. A venue operator will typically receive (for each event it
hosts) a fixed fee or percentage of ticket sales for use of the venue, as well
as a fee representing between 40-50% of total concession sales from the vendors
and 10-25% of total merchandise sales from the performer.
Concert venues are generally comprised of stadiums (typically 32,000 seats
or more), amphitheaters or arenas (typically 5,000 to 32,000 seats), clubs
(typically less than 2,000 seats) and theaters (typically 100 to 5,000 seats).
Amphitheaters are generally outdoor venues that are used primarily in the
summer season. They have become increasingly popular venues for concerts
because the seating configuration is designed specifically for concert events,
often resulting in more available seats, fewer obstructed seats, better lines
of sight to the stage and superior acoustics. In addition, because they
typically cost less to construct, maintain and operate than traditional
multi-purpose stadiums and arenas, amphitheaters often are able to host
concerts and other events that would not be profitable in a stadium or arena.
THEATRICAL INDUSTRY
The audience for live professional theater has increased significantly in
the last two decades. According to Variety Magazine, gross ticket sales for the
entire industry of Touring Broadway Shows and Broadway shows have increased
from $431.5 million during the 1986-7 season to $1.3 billion during the 1996-7
season, a compounded annual growth rate of 11.7%. During this time, the number
of touring weeks and markets where Touring Broadway Shows could profitably be
presented have expanded. Sales for Touring Broadway Shows have grown as a
percentage of total industry gross ticket sales, from approximately 52% in the
1986-7 season to approximately 60% in the 1996-7 season. The growth of the
national theatrical industry had resulted, in part, from the development of
local subscription series for Touring Broadway Shows, the construction of new
performing arts centers with seating capacities of 2,500 or more in many
municipalities, and an increase in the quality of Touring Broadway Shows and in
the number of multiple-week engagements produced for presentation outside of
New York City. Touring
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Broadway Shows are typically revivals of previous commercial successes or
reproductions of theatrical shows currently playing on Broadway in New York
City ("Broadway Shows").
Live professional theater consists mainly of the production of existing
musical and dramatic works and the development of new works. In general,
musicals require more investment of time and capital than dramatic productions.
For an existing musical work (which is more likely to be presented as a Touring
Broadway Show), a period of 12 to 24 months typically elapses between the time
a producer acquires the theatrical stage rights and the date when the musical
is first performed before the public. During this time, a touring company is
assembled, and the show is readied for the road. By comparison, dramatic
productions typically have smaller production budgets, shorter pre-production
periods and lower operating costs, and tend to occupy smaller theaters for
shorter runs.
A producer of a Broadway Show or a Touring Broadway Show first acquires
the rights to the work from its owners, who typically receive royalty payments
in return. The producer then assembles the cast of the play, hires a director
and arranges for the design and construction of sets and costumes. The producer
of a Touring Broadway Show also must arrange transportation and schedule the
show with local promoters. The local promoter of a Touring Broadway Show, who
generally operates or has relationships with venues in individual markets,
provides all local services such as selling tickets, hiring local personnel,
buying advertising and paying a fixed guarantee (typically between $100,000 and
$400,000) to the producer of the show for each week that the show is presented.
The promoter is then entitled to recover the amount of the guarantee plus its
local costs from ticket revenues. Any remaining ticket revenues are shared by
the promoter and the producer, with the producer typically receiving
approximately 60% of the profits. Although Touring Broadway Shows are generally
substantially less expensive to produce than Broadway Shows, they may be
financed through a limited partnership with third-party investors who receive a
profit interest in the production. Often, investors in Touring Broadway Shows
will also invest in the underlying Broadway Show, in part to help secure
touring rights. After investors have received the complete return of their
investment, net profits are split between the limited partners and the show's
producer. The amount of net profits allocated to the show's producer, including
fees and royalties, varies somewhat, but is normally in the range of 50% after
certain profit participations are deducted. After certain net profits, a
producer may also receive a production fee and royalties. A typical Touring
Broadway Show requires 45 playing weeks with a weekly guarantee from the local
promoter of approximately $250,000 to recoup production and touring costs; more
elaborate touring productions with larger casts or sets, such as The Phantom of
the Opera or Miss Saigon, generally require significantly higher weekly
revenues and additional playing weeks in order to recoup production and touring
costs.
Tickets for Touring Broadway Shows often are sold through "subscription
series," which are pre-sold season tickets for a defined package of shows to be
presented in a given venue.
MOTOR SPORTS INDUSTRY
Specialized motor sports events make up a growing segment of the live
entertainment industry. This growth has resulted from additional demand in
existing markets and new demand in markets where new arenas and stadiums have
been built. The increasing popularity of specialized motor sports over the last
several years has coincided with (and, in part, been due to) the increased
popularity of other professional motor sports events, such as professional auto
racing (including NASCAR, CART and Indy Car Racing). A number of specialized
motor sports events are televised on several of the major television networks
and are also shown on television in markets outside of the United States.
In general, one to four motor sports events will be produced and presented
each year in a market, with larger markets hosting more performances. Stadiums
and arenas typically work with producers and promoters to manage the scheduling
of events to maximize each event's results and each season's revenues. The cost
of producing and promoting a typical single stadium event ranges from $300,000
to $600,000, and the cost of producing and presenting a typical single arena
event ranges from $50,000 to $150,000. Monster trucks, demolition derbies,
thrill acts, air shows and other motor sports concepts and events are typically
created and financed by third parties and hired to perform in an individual
event or season of events. As in other motor sports, corporate sponsorships and
television exposure are important financial components that contribute to the
success of a single event or season of events.
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BUSINESS
GENERAL
The Company is a leading promoter and producer of, and operator of venues
for, live entertainment events. The Company believes that it owns and/or
operates the largest network of venues used principally for music concerts and
other live entertainment events in the United States, with 39 venues either
directly owned or operated under lease or exclusive booking arrangements in 21
of the top 50 markets, including nine amphitheaters in six of the top 10
markets. Through its large number of venues, its strong market presence and the
long operating histories of the Company and the businesses acquired pursuant to
the 1997 Acquisitions and the Recent Acquisitions, the Company operates an
integrated franchise that promotes and produces a broad variety of live
entertainment events locally, regionally and nationally. During 1997,
approximately 25 million people attended 9,100 events promoted and/or produced
by the Company and the Acquired Businesses, including approximately 3,880 music
concerts, 4,850 theatrical shows and 188 specialized motor sports events. These
events included: (a) music concerts featuring artists such as The Rolling
Stones, Phish, Fleetwood Mac, Ozzy Osbourne and Alanis Morissette, (b) music
festivals such as the George Strait Country Music Festival, (c) touring
theatrical productions such as The Phantom of the Opera, Jekyll & Hyde, Rent
and The Magic of David Copperfield and (d) specialized motor sports events,
such as Truck Fest and American Motorcycle Association Supercross racing
events. On a pro forma basis giving effect to the 1997 Acquisition and the
Recent Acquisitions, the Company would have had revenues and Adjusted EBITDA of
$638.2 million and $77.3 million, respectively, for the year ended December 31,
1997.
The Company's core business is the promotion and production of live
entertainment events, most significantly for concert and other music
performances in venues owned and/or operated by the Company and in third-party
venues. As promoter, the Company typically markets events and tours, sells
tickets, rents or otherwise provides event venues and arranges for local
production services (such as stage, set, sound and lighting). As producer, the
Company (a) creates tours for music concert, theatrical, specialized motor
sports and other events, (b) develops and manages Touring Broadway Shows and
(c) develops specialized motor sports and other live entertainment events. In
connection with its live entertainment events, the Company also derives related
revenue streams, including from the sale of corporate sponsorships and
advertising, the sale of concessions and the merchandising of a broad range of
products. On a pro forma basis giving effect to the 1997 Acquisition and the
Recent Acquisitions, the Company's music and ancillary businesses would have
comprised approximately 78%; theater would have comprised approximately 16%;
and specialized motor sports would have comprised approximately 6% of the
Company's total net revenues for the year ended December 31, 1997.
The Company has benefited from significant growth in the live
entertainment industry over the last 12 years. According to Amusement Business,
an entertainment industry journal, ticket sales for North American music
concert tours have grown at a 10% CAGR since 1985, from approximately $321.7
million in 1985 to approximately $922.3 million in 1996. Box office receipts
from Touring Broadway Shows and Broadway shows in the United States have grown
at an 11.7% CAGR since the 1986-1987 season, from $431.5 million to $1.3
billion in the 1996-1997 season, according to Variety Magazine. The increasing
popularity of specialized motor sports over the last several years has
coincided with and, in part, been due to the increased popularity of other
professional motor sports events such as professional auto racing, including
NASCAR, CART and Indy Car Racing.
SFX MERGER AND THE SPIN-OFF
SFX Broadcasting was formed in 1992 principally to acquire and operate
radio broadcasting stations. In August 1997, SFX Broadcasting agreed to merge
with a subsidiary of SFX Buyer, and to Spin-Off the Company to certain
stockholders of SFX Broadcasting on a pro rata basis. The Spin-Off was
consummated on April , 1998. The Spin-Off separated the entertainment business
from SFX Broadcasting's radio broadcasting business and will enable SFX Buyer
to acquire only SFX Broadcasting's radio broadcasting business in the SFX
Merger. SFX Broadcasting has indicated that it expects the SFX Merger to be
completed in the second quarter of 1998.
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Prior to the Spin-Off, pursuant to the Distribution Agreement, SFX
Broadcasting contributed to the Company all of its assets relating to the
entertainment business. In addition, the Company, SFX Broadcasting and SFX
Buyer also entered into a Tax Sharing Agreement and the Employee Benefits
Agreement. Each of the agreements provides for certain indemnification
obligations by the Company and SFX Broadcasting. Pursuant to the Distribution
Agreement, at the time of the SFX Merger, SFX Broadcasting will contribute any
positive Working Capital to the Company. If Working Capital is negative, the
Company must pay the amount of the shortfall to SFX Broadcasting. If the
Company is required to make Working Capital payments to SFX Broadcasting or if
the Company is required to indemnify SFX Broadcasting, there can be no
assurance that the Company will have the funds to do so or that it will have
sufficient funds to conduct its operations after making the required payments.
See "Risk Factors--Future Contingent Payments," "The Spin-Off" and "--Liquidity
and Capital Resources."
In the Spin-Off, shares of Common Stock were distributed pro rata to
holders on the Spin-Off record date of SFX Broadcasting's Class A common stock,
Class B common stock, Series D preferred stock and interests in SFX
Broadcasting's director deferred stock ownership plan, and shares were placed
in escrow to be issued upon the exercise of certain warrants of SFX
Broadcasting. See "The Spin-Off."
1997 ACQUISITIONS
The Company was formed as a wholly-owned subsidiary of SFX Broadcasting in
December 1997 as the parent company of Concerts. Concerts was formed by SFX
Broadcasting in January of 1997 to acquire and hold SFX Broadcasting's live
entertainment operations.
Delsener/Slater
In January 1997, Concerts acquired Delsener/Slater, a leading concert
promotion company, for an aggregate consideration of approximately $27.6
million, including $2.9 million for working capital and the present value of
deferred payments of $3.0 million to be paid without interest over five years
and $1.0 million to be paid without interest over ten years. Delsener/Slater
has long-term leases or is the exclusive promoter for several of the major
concert venues in the New York City metropolitan area, including the Jones
Beach Amphitheater, a 14,000-seat complex located in Wantagh, New York, and the
PNC Bank Arts Center (formerly known as the Garden State Arts Center), a
17,500-seat complex located in Holmdel, New Jersey.
Meadows
In March 1997, Concerts acquired the stock of certain companies which own
and operate the Meadows, a 25,000-seat indoor/outdoor complex located in
Hartford, Connecticut for $900,000 in cash, 250,838 shares of SFX Broadcasting
Class A common stock with a value of approximately $7.5 million and the
assumption of approximately $15.4 million in debt.
The shares are subject to a put provision between the second and seventh
anniversary of the closing whereby the holder can put each share back to SFX
Broadcasting for the per share value of SFX Broadcasting as of the acquisition
closing date, as defined, less 10%. Additionally the shares may be called by
SFX Broadcasting at any time after the merger date and before the seventh
anniversary of the closing for an aggregate purchase price of $8.3 million. If
the option is not exercised, the Company will be required to pay approximately
$10.5 million pursuant to the Working Capital calculation. See "The
Spin-Off--Distribution Agreement--Working Capital" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources--Meadows Repurchase."
Sunshine Promotions
In June 1997, Concerts acquired the stock of Sunshine Promotions, one of
the largest concert promoters in the Midwest for $53.9 million in cash, $2.0
million payable over five years, shares of SFX Broadcasting Class A common
stock issued and issuable over a two year period with a value of approximately
$4.0 million and the assumption of approximately $1.6 million of debt. Sunshine
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Promotions owns the Deer Creek Music Theater, a 21,000-seat complex located in
Indianapolis, Indiana, and the Polaris Amphitheater ("Polaris"), a 20,000-seat
complex located in Columbus, Ohio, and has a long-term lease to operate the
Murat Centre, a 2,700-seat theater and 2,200-seat ballroom located in
Indianapolis, Indiana.
The cash portion of the 1997 Acquisitions was financed through capital
contributions from SFX Broadcasting.
RECENT ACQUISITIONS
In February and March of 1998, the Company completed its acquisitions of
PACE, Contemporary, BGP, Network, Concert/Southern and certain related
entities. The aggregate purchase price of the Recent Acquisitions was
approximately $442.1 million in cash including repaid debt and payments for
working capital, $7.8 million in assumed debt and the issuance of an aggregate
of approximately 4.2 million shares of Class A Common Stock. Following is a
brief description of the Acquired Businesses. The following descriptions are
not intended to be complete descriptions of the terms of the acquisition
agreements and are qualified by reference to the acquisition agreements, copies
of which are filed as exhibits hereto and are incorporated herein by reference.
See "Additional Information."
PACE
On February 25, 1998, the Company acquired all of the outstanding capital
stock of PACE for a total purchase price of $109.5 million in cash, the
repayment of $20.6 million of debt and the issuance of 1.5 million shares of
Class A Common Stock. PACE is one of the largest diversified promoters and
producers of live entertainment in the United States, having what the Company
believes to be the largest distribution network in each of its music concerts,
theatrical shows and motor sports events business segments. In connection with
the acquisition of PACE, the Company has obtained 100% of Pavilion Partners, a
partnership that owns interests in 10 of the 41 venues owned by the Company, by
acquiring one-third of Pavilion Partners through the acquisition of PACE and
the remaining two-thirds of Pavilion Partners from Sony and Blockbuster, for a
combined consideration of $90.6 million (comprised of cash of $41.4 million,
the repayment of $43.1 million of debt related to the two-thirds interest and
the assumption of $6.1 million of debt related to a capital lease). Under
certain circumstances, the Company may be required to sell either its motor
sports or theatrical lines of business. See "Management--Employment Agreements
and Arrangements with Certain Officers and Directors."
In connection with its acquisition of partnership interests in Lakewood
Amphitheater in Atlanta, Georgia and Starplex Amphitheater in Dallas, Texas,
PACE entered into a co-promotion agreement with its partner that contains a
provision that purports, under certain circumstances, to require PACE to
co-promote (and share one-half of the profits and losses) with such partnership
certain concerts which are presented by PACE or any of its affiliates in
another venue located in either Atlanta, Georgia or Dallas, Texas. However, the
Company acquired an interest in Chastain Park Amphitheater, also in Atlanta, in
the Concert Southern acquisition described below. The Company is currently
negotiating with the third party to waive this restrictive provision; however,
it is possible that the Company will be unable to obtain the waiver. In
management's view, this provision will not materially affect the business or
prospects of the Company.
Contemporary
On February 27, 1998, the Company acquired by merger and asset
acquisition, the music concert, live entertainment, event marketing,
computerized ticketing and related businesses of Contemporary and the 50%
interest in the Riverport Amphitheater Joint Venture not owned by Contemporary
for approximately $72.8 million in cash, a payment for working capital of $9.9
million, and the issuance of the 1,402,850 shares of Class A Common Stock.
Contemporary is a vertically-integrated live entertainment and special event
promoter and producer, venue operator and consumer marketer.
Contemporary is also one of the top special event sales promotion and
marketing companies in the country. Contemporary develops programs for national
consumer product companies and for demon-
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strating, sampling and selling products to consumers. Contemporary's clients
have included AT&T, CBS TV, Radio Shack, Coca Cola USA, Reebok, Nabisco and the
National Basketball Association.
BGP
On February 24, 1998, the Company acquired BGP for total consideration of
$60.8 million in cash, $12.0 million in repayment of debt, which amount was at
least equal to BGP's working capital (as defined in the acquisition agreement)
and the issuance of 562,640 shares of Class A Common Stock. BGP is one of the
oldest promoters and producers of live entertainment in the United States and
is the principal promoter of live entertainment in the San Francisco Bay area.
Network
On February 27, 1998, the Company acquired Album Network, Inc., SJS and
The Network 40 for a purchase price of $52.0 million in cash, a payment for
working capital of $1.8 million, reimbursed seller's costs of $500,000, the
purchase of an office building and related property for $2.5 million and the
issuance of 750,188 shares of Class A Common Stock upon consummation of the
Spin-Off. The $2.5 million purchase of the office building and related property
consists of cash of $700,000 and the assumption of debt of $1.8 million.
Network is engaged in music marketing, research and artist development
activities and is a publisher of trade magazines for radio broadcasters, music
retailers, performers and record industry executives.
Concert/Southern
On March 4, 1998, the Company acquired Concert/Southern for a total cash
purchase price of $16.9 million (including a working capital payment of
$300,000). Concert/Southern is a promoter of live entertainment in the Atlanta
metropolitan area.
THE COMPANY'S LIVE ENTERTAINMENT ACTIVITIES
The Company is engaged in (a) the booking, promotion and production of
live entertainment events and tours, (b) the ownership and/or operation of
concert and other entertainment venues and (c) the sale of corporate
sponsorships and advertising and provision of marketing and consulting services
to third-parties.
Booking and Promotion
The Company books and promotes music concert, theatrical, specialized
motor sports and other live entertainment events and tours such as music
festivals, comedy tours, figure skating shows, gymnastics tours, motivational
speaking tours and other special events. The Company books and promotes events
in a number of types of venues (including amphitheaters, theaters, clubs,
arenas and stadiums) that are owned and/or operated by the Company or by third
parties. See "--Venue Operations." The Company primarily promotes concerts
performed by newer groups having widespread popularity (e.g., Phish, Dave
Matthews and Hootie & the Blowfish) and by more established groups having
relatively long-standing and more stable bases of popularity (e.g., James
Taylor and Jimmy Buffett). The Company believes that its large distribution
network will enable it to set an aggregate guarantee for a series of shows,
mitigating the risk of loss associated with a single show. The Company also
believes that the market research and audience demographics database that it
acquired in the Recent Acquisitions, when combined with its existing audience
data collection efforts, will permit highly-effective, targeted marketing, such
as direct-mail and subscription series campaigns, which the Company believes
will increase ticket pre-sales and overall sales in a cost-efficient manner. In
addition, the Company's Capital Tickets retail distribution outlets and Dialtix
interactive, voice-response automated phone ticket order system are currently
operating in three markets. The Company believes that expanding the markets
where it can utilize its own ticketing sources will permit the Company to
promote its live entertainment events more effectively.
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The following table identifies artists whose events were recently promoted
by the Company or the Acquired Businesses:
<TABLE>
<S> <C> <C>
Aerosmith Elton John Phil Collins
Alabama Fleetwood Mac* Pink Floyd
Alanis Morissette James Taylor Phish
Bette Midler Jerry Seinfeld* R.E.M.
Billy Joel Jimmy Buffett Rod Stewart
Brooks & Dunn John Secada The Rolling Stones
Chris Rock* Live Seal
Clint Black Melissa Etheridge Sheryl Crow
Crosby, Stills & Nash Metallica Smashing Pumpkins
Dave Matthews Michael Bolton Stone Temple Pilots
Depeche Mode Ozzy Osbourne* Tim Allen*
The Eagles Pearl Jam Tina Turner
Earth, Wind & Fire Peter Gabriel U2
</TABLE>
* National tour produced.
Production
The Company is currently involved in the creation of tours for music
concert and other live entertainment events. The Company's production
activities include (a) the creation of tours for music concert, theatrical,
specialized motor sports and other live entertainment events, (b) the
development and management of Touring Broadway Shows and (c) the development of
specialized motor sports shows, proprietary characters and television
programming. The Acquired Businesses produce tours on a national or regional
basis and, in 1997, structured national tours for Fleetwood Mac and Ozzy
Osbourne, among others. The Company plans to increase its production of
national music tours. PACE (one of the Acquired Businesses) also produces
Touring Broadway Shows, acquiring the stage and touring rights from a show's
owner, assembling the touring cast, hiring a director and arranging for the
construction and design of sets and costumes. Touring Broadway Shows are
typically revivals of previous commercial successes or reproductions of
theatrical shows currently playing on Broadway in New York City. PACE also
produces and makes small investments (i.e., from approximately $150,000 to
$600,000) as a limited partner in the creation of a small number of original
Broadway Shows in exchange for obtaining touring rights and favorable
scheduling for those shows.
The Touring Broadway Show production and promotion industry is highly
fragmented. The Company believes it is the largest of six multiple-market
promoters of Touring Broadway Shows in the United States, and that the
remainder of the industry is made up of single-market promoters. The Company
competes with other producers and promoters to obtain presentation arrangements
with venues and performing arts organizations in various markets, including in
markets that have more than one venue suitable for presenting a Touring
Broadway Show. The Company's competitors, some of whom have also been partners
of PACE in certain theater investments from time to time, include a number of
New York-based production companies that also promote Touring Broadway Shows
and a number of regional promoters. On a pro forma basis giving effect to the
Recent Acquisitions, the Company would have had a producing interest or
investment in the following shows for 1997 and/or 1998:
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<TABLE>
<CAPTION>
SHOW TITLE TYPE THE COMPANY'S INVOLVEMENT
- ----------------------------- -------------------- --------------------------
<S> <C> <C>
Big Touring Production
Damn Yankees Touring Production
David Copperfield Touring Production
Death Trap Touring Production
Funny Girl Touring Production
Harmony Development Production
Jekyll & Hyde Broadway Production
Kiss of the Spiderwoman Touring Production
Man of La Mancha Touring Production
Smokey Joe's Cafe Touring Production
The Sound of Music Touring Production
West Side Story Touring Production
A Chorus Line Touring (US & UK) Investment
Annie Broadway Investment
Carousel Touring Investment
Cirque Ingenieux Touring Investment
Grease Broadway & Touring Investment
Chicago Broadway & Touring Investment
How to Succeed in Business Broadway & Touring Investment
Martin Guerre West End (UK) Investment
Rent Broadway & Touring Investment
Steel Pier Broadway Investment
Triumph of Love Broadway Investment
West Side Story Touring (UK) Investment
</TABLE>
The Company believes that there are approximately 50 domestic markets that
can provide the potential audience and gross ticket revenues for a full scale
Touring Broadway Show to be profitable, and an additional 50 markets where
smaller scale productions with shorter runs can be presented profitably. In
most of these cities, there are a limited number of venues that can accommodate
a Touring Broadway Show.
The Company currently sells subscription series for its Touring Broadway
Shows in the following 31 of the approximately 60 markets that maintain active
touring schedules:
<TABLE>
<S> <C> <C>
Atlanta, GA Long Beach, CA Palm Beach, FL
Austin, TX Louisville, KY Phoenix, AZ
Baltimore, MD Miami, FL Pittsburgh, PA
Chicago, IL Milwaukee, WI Portland, OR
Cincinnati, OH Minneapolis, MN San Antonio, TX
Columbus, OH Myrtle Beach, SC Seattle, WA
Dallas, TX Nashville, TN Tampa, FL
Ft. Lauderdale, FL New Orleans, LA Ottawa, Canada
Green Bay, WI Omaha, NE Edmonton, Canada
Houston, TX Orange County, CA
Indianapolis, IN Orlando, FL
</TABLE>
Subscriptions historically have covered two-thirds of PACE's break-even
point for Touring Broadway Shows. In 1997, PACE had approximately 220,000
subscribers for its Touring Broadway Shows.
The Company also produces motor sports events such as monster truck
events, tractor pulls, mud races, demolition derbies and motorcross races, and
design tracks and other elements for those events. Competition among producers
in the specialized motor sports industry is between three large companies
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and a number of smaller regional companies. The Company believes that it is the
largest participant in the industry, on a pro forma basis having produced 188
events in over 70 markets in 1997. The Company's two major specialized motor
sports competitors produce approximately 40 and 55 events each year,
respectively. The Company also competes with several regional specialized motor
sports companies, which each present only a small number of events, as well as
a number of local promoters that present only one or two events per year. See
"Risk Factors--Rights to Purchase Certain Subsidiaries."
In addition, the Company produces a variety of other forms of live
entertainment, including music festivals, radio programs, air shows, figure
skating shows, gymnastics tours, comedy tours, motivational speaking tours and
television programming based on certain of their events and other events.
Venue Operations
The Company's revenues from its venue operations are derived primarily
from corporate sponsorships and advertising, concessions, merchandise, parking
and other related items. A venue operator will typically receive for each event
it hosts a fixed fee or percentage of ticket sales for use of the venue, as
well as a fee representing between 40-50% of total concession sales from the
vendors and 10-25% of total merchandise sales from the performer. As a venue
owner, the Company typically receives 100% of sponsorship and advertising
revenues. Since few artists will play in every available market during a tour,
the Company competes with venues in other markets for dates of popular national
tours. The favorable cost structure of amphitheaters and their ability to draw
fans is often an important factor in the decision of a performer to choose to
perform in an amphitheater market. In certain cities, the Company also competes
with other venues to promote an artist in that city. The Company believes that
it owns and/or operates the largest network of venues used principally for
music concerts and other live entertainment events in the United States, with
39 venues either directly owned or operated under lease or exclusive booking
arrangements in 21 of the top 50 markets, including 9 amphitheaters in 6 of the
top 10 markets. The following chart sets forth certain information with respect
to the venues that are owned and/or operated by the Company:
<TABLE>
<CAPTION>
TOTAL
TOTAL AVG. NO. OF SEATS
MARKET TYPE OF THE COMPANY'S SEATING ATTENDANCE EVENTS SOLD IN
MARKET AND VENUE RANK (1) VENUE INTEREST CAPACITY IN 1997 IN 1997 1997
- ---------------------------- ---------- -------------- -------------------- --------------- ------------ --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
New York--Northern New
Jersey--Long Island:
PNC Bank ArtsCenter
(formerly Garden
State Arts Center)
(Holmdel, NJ) ............ 1 amphitheater 22-year lease 17,500(2) 6,456 57 368,004
(expires October
31, 2017)
Jones Beach Marine
Amphitheater
(Wantagh, NY) ............ amphitheater 10-year license 14,400(2) 7,992 45 359,653
agreement (expires
December 31, 1999)
Roseland Theater .......... theater exclusive booking 3,200 2,614 41 107,174
agent
Westbury Music Fair
(Westbury, NY) ........... theater 43-year lease 2,870 2,198 148 325,348
(expires December
31, 2034)
Los Angeles--Riverside--
Orange County:
Glen Helen Blockbuster
Pavilion
(San Bernardino, CA) ..... 2 amphitheater 50% partnership 25,000(3) 7,736 15 116,033
interest in 25-year
lease (expires July
1, 2018)
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
TOTAL
TOTAL AVG. NO. OF SEATS
MARKET TYPE OF THE COMPANY'S SEATING ATTENDANCE EVENTS SOLD IN
MARKET AND VENUE RANK (1) VENUE INTEREST CAPACITY IN 1997 IN 1997 1997
- --------------------------------- ---------- -------------- ---------------------- ---------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Irvine Meadows
Amphitheater
(Irvine, CA) .................. amphitheater 50% partnership 15,500 9,852 11 108,369
interest in 20-year
lease (expires
February 28, 2017)
San Francisco--Oakland--
San Jose:
Shoreline Amphitheater ......... 5 amphitheater facility owned; land 22,000 12,600 40 504,013
leased for 35 years
(expires November
30, 2021)
Concord Pavilion ............... amphitheater 10-year exclusive 12,500 6,226 42 261,479
outside booking
agent (expires
December 31, 2005)
Greek Theater .................. theater 4-year lease 8,500 6,191 9 55,718
(expires October
31, 1998)
Warfield Theatre ............... theater 10-year lease 2,250 1,677 77 129,129
(expires May 31,
2008)
Fillmore Auditorium ............ theater 10-year lease 1,249 1,051 180 189,103
(expires August 31,
2007)
Punchline Comedy
Club .......................... club 5-year lease 175 97 422 41,138
(expires September
15, 2001)
Philadelphia--Wilmington--
Atlantic City:
Blockbuster/SONY
Music Entertainment
Centre on the
Waterfront .................... 6 amphitheater 31-year lease 25,000 8,973 54 484,528
(expires February 9,
2025)
Dallas--Ft. Worth:
Starplex Amphitheater .......... 9 amphitheater 32.5% partnership 20,500 8,799 35 307,981
interest in 31 year
lease (expires
December 31, 2028)
Houston--Galveston--
Brazoria:
Cynthia Woods Mitchell
Pavilion ...................... 10 amphitheater 15-year 13,000 8,381 35 293,350
management
contract (expires
December 31, 2009
Bayou Place
Performance Hall .............. theater 50% partnership 2,800 3,223 18 58,019
interest in 10-year
lease (expires
December 31, 2007)
Atlanta:
Lakewood
Amphitheater .................. 12 amphitheater 32.5% partnership 19,000 9,257 32 296,225
interest in 35-year
lease (expires
January 1, 2019)
Chastain Park
Amphitheater .................. amphitheater 10-year lease 7,000 5,777 28 161,755
(expires December
31, 2000)
Roxy Theater ................... theater 7-year lease 1,600 848 102 86,498
(expires March 31,
2004)
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
TOTAL
TOTAL AVG. NO. OF SEATS
MARKET TYPE OF THE COMPANY'S SEATING ATTENDANCE EVENTS SOLD IN
MARKET AND VENUE RANK (1) VENUE INTEREST CAPACITY IN 1997 IN 1997 1997
- --------------------------------- ---------- -------------- ---------------------- ---------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Cotton Club .................... theater 5-year lease 650 403 151 60,829
(expires June 12,
2000)
St. Louis:
Riverport Amphitheater ......... 17 amphitheater facility owned 21,000 10,531 42 442,302
American Theater ............... theater 10-year lease 2,000 1,510 24 36,236
(expires July 31,
2004)
Westport Playhouse ............. theater 1-year lease 1,100 880 15 13,196
(expires May 31,
1998)
Phoenix--Mesa:
Desert Sky Blockbuster
Pavilion (2) .................. 18 amphitheater 60-year lease 19,900 9,179 23 211,114
(expires June 30,
2049)
Pittsburgh:
Star Lake
Amphitheater .................. 19 amphitheater 45-year lease 22,500 12,361 42 519,182
(expires December
31, 2034)
Kansas City:
Sandstone
Amphitheater
(Kansas City, KS) ............. 24 amphitheater 10-year lease 18,000 8,109 32 259,488
(expires December
31, 2002)
Starlight Theater .............. theater annual exclusive 9,000 3,772 9 33,948
booking agent
contract (1998)
(renewal under
negotiation)
Memorial Hall .................. theater 1998 contract 3,000 1,910 11 21,014
renewal under
negotiation
Sacramento--Yolo:
Punchline Comedy
Club .......................... 26 club 9-year lease 245 355 90 31,834
(expires December
17, 1999)
Indianapolis:
Deer Creek Music
Center ........................ 28 amphitheater owned 21,000 11,348 42 476,617
Murat Centre ................... theater and 50-year lease 2,700 1,412 144 211,920
ballroom (expires August 31,
2045)
Columbus:
Polaris Amphitheater ........... 30 amphitheater owned 20,000 7,732 39 301,555
Charlotte--Gastonia--
Rock Hill:
Charlotte Blockbuster
Pavilion ...................... 32 amphitheater owned 18,000 8,592 34 292,135
Hartford:
Meadows Music
Theater ....................... 36 amphitheater facility owned; land 25,000 9,807 26 254,982
leased for 37 years
(expires September
13, 2034)
Rochester:
Finger Lakes
Amphitheater .................. 39 amphitheater co-promotion 12,700 6,123 15 91,845
agreement
Nashville:
Starwood Amphitheater .......... 41 amphitheater one-half ownership 17,000 8,208 25 205,204
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
TOTAL
TOTAL AVG. NO. OF SEATS
MARKET TYPE OF THE COMPANY'S SEATING ATTENDANCE EVENTS SOLD IN
MARKET AND VENUE RANK (1) VENUE INTEREST CAPACITY IN 1997 IN 1997 1997
- --------------------------- ---------- -------------- --------------------- ---------- ------------ --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Oklahoma City:
Zoo Amphitheater ......... 43 amphitheater year-to-year 9,000 6,412 4 25,648
exclusive booking
agent
Raleigh--Durham--
Chapel Hill:
Walnut Creek
Amphitheater ............ 50 amphitheater 66 2/3% partnership 20,000 10,498 40 419,919
interest in 40-year
lease (expires
October 31, 2030)
West Palm Beach--
Boca Raton:
SONY Music/Blockbuster
Coral Sky
Amphitheater ............ 50 amphitheater 75% partnership 20,000 11,244 26 292,340
interest in 10-year
lease (expires
January 4, 2005)
Reno:
Reno Hilton
Amphitheater ............ 119 amphitheater operating 8,500 3,420 19 64,983
agreement (renewal
under negotiation)
</TABLE>
- ----------
(1) Based on the July 1994 population of metropolitan statistical areas as
set forth in the 1996 Statistical Abstracts of the United States. Does
not include venues where the Company sells subscriptions for Touring
Broadway Shows.
(2) Assumes completion of current expansion projects, which are anticipated
to be completed by Summer 1998.
(3) Additional seating of approximately 40,000 is available for certain
events.
Because the Company operates a number of its venues under leasing or
booking agreements, the Company's long-term success will depend on its ability
to renew these agreements when they expire or terminate. There can be no
assurance that the Company will be able to renew these agreements on acceptable
terms or at all, or that it will be able to obtain attractive agreements with
substitute venues.
Sponsorships and Advertising; Marketing and Other Services
In order to maximize revenues, the Company actively pursues the sale of
local, regional and national corporate sponsorships, including the naming of
venues (e.g., the PNC Bank Arts Center) and the designation of "official" event
or tour sponsors, concessions providers (e.g., beer and soda), credit card
companies, phone companies, film manufacturers and radio stations, among
others. Sponsorship arrangements can provide significant additional revenues at
negligible incremental cost, and many of the Company's venues currently have no
sponsorship arrangements in many of the available categories (including naming
rights). The Company believes that the national venue network assembled through
the Recent Acquisitions will likely (a) attract a larger number of major
corporate sponsors and (b) enable the Company to sell national sponsorship
rights at a premium over local or regional sponsorship rights. The Company also
pursues the sale of corporate advertising at its venues, and believes that it
has substantial advertising space available (e.g., billboard space) that it has
not yet begun to utilize. The Company also believes that (a) its relationships
with advertisers will enable it to better utilize available advertising space
and (b) the aggregation of its audiences nationwide will create the opportunity
for advertisers to access a nationwide market.
The Company provides a variety of marketing and consulting services
derived from or complementary to their live entertainment operations, including
(a) local, regional and national live marketing programs and (b) subscription
or fee based radio and music industry data compilation and distribution. Live
marketing programs are generally specialized advertising campaigns designed to
promote a client's product or service by providing samples or demonstrations in
a live format, typically at malls and college campuses. For example,
Contemporary (one of the Acquired Businesses) presents live marketing events
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<PAGE>
on behalf of AT&T for the purposes of demonstrating the advantages of AT&T's
long distance service over that of its competitors. This program is in its
third year, and Contemporary is now the primary vendor for this service.
Additionally, the Company believes that Contemporary is one of the leading
producers of national mall touring events, producing over 65 events every year
in the country's top-rated shopping malls. These events, either in stores or
mall congregation areas, are designed to promote brand awareness and drive
follow-up sales. Contemporary recently had mall tour campaigns for Newsweek
magazine (the Newsweek Technology Tour) and for Radio Shack (The Rock and Roll
Hall of Fame/Radio Shack Tour). The Company believes that, along with mall
events, Contemporary is one of the industry leaders in events produced on
college campuses. Currently in its seventh year, the CBS College Tour will
appear at 40 colleges in the U.S. In addition to promoting the image of the CBS
Television Network, these tours also create value-added tie-in promotions and
marketing programs for the network's top advertisers. During each year,
Contemporary uses over 100 vehicles (including semi-trailer trucks, vans and
other vehicles) traveling nationwide in support of these programs, and draws on
over 1,000 independent marketing associates across the country with respect to
its marketing campaigns.
The Company is engaged in music marketing, research and artist development
activities, and is a publisher of trade magazines for radio broadcasters, music
retailers, performers and record industry executives. Each of the Company's
magazines focuses on research and insight common to a specific contemporary
radio format. The Company also provides radio airplay and music retail research
services to record labels, artist managers, retailers and radio broadcasters.
The Company gathers its information directly from nearly 1,100 radio
programmers and product buyers and in 1996 had more than 300 clients for these
services. Annual fees from these services during this period have ranged from
$2,500 to $250,000 per corporate client.
The Company, through Network (one of the Acquired Businesses), creates and
distributes network radio special events and live concert programming for over
400 music radio stations in the top 200 United States radio markets.
Additionally, the Company produces eight daily radio "show prep" services that
stations use to supplement in-house content production. In 1996, Network
delivered these services to approximately 1,100 radio stations in exchange for
commercial inventory or airtime, which in turn was sold to national network
advertisers. Network also provides consulting and entertainment marketing
services to corporate clients with music business interests.
OPERATING STRATEGY
The Company's principal objectives are (a) to maximize revenue and cash
flow growth opportunities by being a leading promoter and producer of live
entertainment events and (b) to own and/or operate leading live entertainment
venues in the United States. The Company's specific strategies include the
following:
Own and/or Operate Leading Live Entertainment Venues in Nation's Top 50
Markets
A key component of the Company's strategy is to own and/or operate a
network of leading live entertainment venues in the nation's top 50 markets.
The Company believes that this strategy will enable it to (a) utilize its
nationwide venue footprint, significant industry expertise and access to a
large aggregate audience to secure more events and distribute content on a
national scale, (b) sell additional products and maximize numerous other
related revenue sources, (c) position itself to produce national tours by
leading music performers in order to capture a greater percentage of revenues
from those tours and (d) encourage wider use by performers of the Company's
venues by providing centralized access to a nationwide network of venues. The
Company believes that it owns and/or operates the largest network of venues
used principally for music concerts and other live entertainment events in the
United States, with 39 venues either directly owned or operated under lease or
exclusive booking arrangements in 21 of the top 50 markets, including nine
amphitheaters in six of the top 10 markets.
Maximize Related Revenue Opportunities
The Company intends to enhance revenues and cash flows by maximizing
revenue sources arising from and related to its leadership position in the live
entertainment business. These related revenues
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<PAGE>
comprised approximately 19% of the Company's total revenues for the year ended
December 31, 1997. Management believes that these related revenue sources
generally have higher margins than promotion and production revenues and
include, among others, (a) the sale of corporate sponsorship, naming and other
rights, concessions, merchandise, parking and other products and services and
(b) the sale of rights to advertise to the Company's large aggregate national
audience. Categories available for sponsorship arrangements include the naming
of the venue itself (e.g., the PNC Bank Arts Center) and the designation of
"official" event or tour sponsors, concessions providers (e.g., beer and soda),
credit card companies, phone companies, film manufacturers and radio stations,
among others. Sponsorship arrangements can provide significant additional
revenues at negligible incremental cost, and many of the Company's venues
currently have no sponsorship arrangements in many of the available categories
(including naming rights). The Company also intends to maximize related
revenues by developing and exploiting intellectual property rights associated
with (a) its production of musical concert tours and themed events (such as
regional music festivals) and (b) branded characters created as an integral
part of the content, marketing and merchandising of certain motor sports
events.
Exploit Synergies of the Acquired Businesses
The Company plans to maximize revenues by exploiting synergies among its
existing businesses and the Acquired Businesses. The Company believes that it
can utilize the best business practices of the respective Acquired Businesses
on a national scale. For example, the Atlanta-based regional Music Midtown
Festival, created and promoted by Concert/Southern (one of the Acquired
Businesses), is a highly successful music festival concept that drew
approximately 200,000 attendees in 1997; the Company believes that it can use
the event as a model for other markets. In addition, the Company believes that
the radio industry trade publications of Network (another of the Acquired
Businesses) will enable the Company to introduce new acts and new musical
releases to radio programming directors nationwide. This exposure can enhance
recorded music sales and, in turn, music concert attendance, particularly for
artists having relationships with the Company.
Increase Use of Venues; Diversification of Acts and Venues
Typically, a venue is not utilized for many of the dates available for
live entertainment events in any given season. The Company believes that it
will be able to increase the utilization of its venues through its ability to
affect scheduling on a nationwide basis, its local knowledge, relationships and
expertise and its presentation of a variety of additional events, including
comedy acts, magic acts, motivational speeches, national figure skating and
gymnastics competitions and exhibitions and bull riding competitions, among
others. The Company believes that a diversified portfolio of performers, events
and venues reduces reliance on the commercial success of any one performer,
event or venue.
Innovative Event Marketing
The Company plans to use innovative event marketing to increase
admissions, sponsorship and advertising revenues, and, to a limited extent,
average ticket prices at its venues. In particular, the Company believes that
it can increase the profitability of its venues by offering premium ticket
packages, including (a) season ticket packages that include amenities such as
preferred seating, VIP parking, waiter service, private club and/or "upscale"
concession menus, (b) subscription series packages allowing customers to
purchase tickets for a set of performances and (c) preferred seating, such as
box seating and VIP seating areas, which typically generate higher revenues per
seat. Moreover, the market research and audience demographics databases that
the Company acquired through certain of the Recent Acquisitions, when combined
with the Company's existing audience data collection efforts, will permit
highly-effective targeted marketing, such as direct-mail and subscription
series campaigns, which the Company believes will increase ticket pre-sales and
overall sales in a cost-efficient manner.
Strict Cost Controls; Nationally Coordinated Booking, Marketing & Accounting
The Company's senior management imposes strict financial reporting
requirements and expense budget limitations on all of its businesses, enabling
senior management to monitor the performance and
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operations of all of its businesses, to eliminate duplicative administrative
costs and to realize expense savings. Moreover, the Company believes that its
size will enable it to achieve substantial economies of scale by (a)
implementing a nationally coordinated booking system (for contracting for and
scheduling acts), while continuing to utilize the substantial local expertise
of the Acquired Businesses, (b) establishing a centralized marketing team to
exploit ancillary revenue streams on local, regional and national levels,
including from sponsorship, advertising and merchandising opportunities, and
(c) implementing a centralized accounting system.
Pursue Complementary Acquisition Opportunities
The live entertainment business is characterized by numerous participants,
including booking agents, promoters, producers, venue owners and venue
operators, many of which are entrepreneurial, capital-constrained local or
regional businesses that do not achieve significant economies of scale from
their operations. The Company believes that the fragmented nature of the
industry presents attractive acquisition opportunities, and that its larger
size will provide it with improved access to the capital markets that will give
it a competitive advantage in implementing its acquisition strategy. Through
consolidation, the Company will be better able to coordinate negotiations with
performer and talent agents, addressing what the Company believes is a growing
desire among performers and talent agents to deal with fewer, more
sophisticated promoters. The Company intends to pursue additional strategic
acquisitions of (a) amphitheater and other live entertainment venues and (b)
local and regional promoters and producers of music concert, theatrical,
specialized motor sports and other live entertainment events. The Company may
also pursue acquisitions of other related or complementary venues or
businesses.
PROPERTIES
The Company's executive offices are located at 650 Madison Avenue, 16th
Floor, New York, New York 10022. In addition to the properties described in
"--The Company's Live Entertainment Activities--Venue Operations," the Company
leases office space in New York, New York; Austin and Houston, Texas; Atlanta,
Georgia; Chicago, Illinois; Indianapolis, Indiana; Miami, Florida;
Gaithersburg, Maryland; Santa Monica, California; Seattle, Washington; London,
England; and St. Louis, Missouri and owns office buildings in Burbank and San
Francisco, California. These properties are generally leased for terms of 1 to
10 years. See "The Spin-Off."
EMPLOYEES
As of March 31, 1998, the Company had approximately 950 full-time
employees. The Company will also, from time to time, hire or contract for
part-time or seasonal employees or independent contractors, although its
staffing needs will vary. Management believes that its relations with its
employees are good. A number of the employees to be retained by the Company are
covered by collective bargaining agreements. See "Management."
LITIGATION
Although the Company is involved in several suits and claims in the
ordinary course of business, it is not currently a party to any legal
proceeding that it believes would have a material adverse effect on its
business, financial condition or results of operations.
POTENTIAL CONFLICTS OF INTEREST
Marquee is a publicly-traded company that, among other things, acts as
booking agent for tours and appearances for musicians and other entertainers.
Messrs. Sillerman and Tytel have an aggregate equity interest of approximately
8.8% in Marquee; Mr. Sillerman is the chairman of its board of directors, and
Mr. Tytel is one of its directors. The Company anticipates that, from time to
time, it will enter into transactions and arrangements (particularly, booking
arrangements) with Marquee and Marquee's clients. In any transaction or
arrangement with Marquee, Messrs. Sillerman and Tytel are likely to have
conflicts of interest as officers and directors of the Company. These
transactions or arrangements will be subject
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to the approval of a committee of independent members of the boards of
directors of each of the Company and Marquee, except that booking arrangements
in the ordinary course of business will be subject to periodic review but not
the approval of each particular arrangement. Marquee also acts as a promoter of
various sporting events and sports personalities and the Company produces ice
skating and gymnastics events that may compete with events in which Marquee is
involved. See "Certain Relationships and Related Transactions--Potential
Conflicts of Interest."
TSC, an entity controlled by Mr. Sillerman and in which Mr. Tytel also has
an equity interest, provides financial consulting services to Marquee and
Triathlon. TSC's services are provided by certain directors, officers and
employees of SFX Broadcasting, who are anticipated to become directors,
officers and employees of the Company at the time of consummation of the SFX
Merger, and who are not separately compensated for their services by TSC.
Messrs. Sillerman and Tytel have substantial equity interests in Triathlon. In
any transaction, arrangement or competition with Marquee or Triathlon, Messrs.
Sillerman and Tytel are likely to have conflicts of interest between their
duties as officers and directors of the Company, on the one hand, and their
duties as directors of Marquee and their interests in TSC, Marquee and
Triathlon, on the other hand. See "Certain Relationships and Related
Transactions--Triathlon Fees."
In addition, prior to the consummation of the SFX Merger, Mr. Sillerman
and other members of the Company's management team will have management
obligations to both SFX Broadcasting and the Company that may cause them to
have conflicts of interest. See "Management" and "Certain Relationships and
Related Transactions--Potential Conflicts of Interest."
Pursuant to the employment agreement entered into between Brian Becker and
the Company in connection with the acquisition of PACE, Mr. Becker has the
option, exercisable within 15 days after the second anniversary of the
consummation of the PACE Acquisition, to purchase the Company's then existing
motor sports line of business (or, if that line of business has been sold, the
Company's then existing theatrical line of business) at its then fair market
value. Mr. Becker's option may present a conflict of interest in his role as a
director of the Company. See "Management--Employment Agreements and
Arrangements with Certain Officers and Directors."
SEASONALITY
The Company's operations and revenues are largely seasonal in nature, with
generally higher revenue generated in the second and third quarters of the
year. For example, on a pro forma basis for the 1997 Acquisitions, the Company
generated approximately 68% of its revenues in the second and third quarters
for the twelve months ending December 31, 1997. The Company's outdoor venues
are primarily utilized in the summer months and do not generate substantial
revenue in the late fall, winter and early spring. Similarly, the musical
concerts that the Company promotes largely occur in the second and third
quarters. To the extent that the Company's entertainment marketing and
consulting relate to musical concerts, they also predominantly generate
revenues in the second and third quarters. Therefore, the seasonality of the
Company's business causes (and will probably continue to cause) a significant
variation in the Company's quarterly operating results. These variations in
demand could have a material adverse effect on the timing of the Company's cash
flows and, therefore, on its ability to service its obligations with respect to
its indebtedness. However, the Company believes that this variation may be
somewhat offset with the acquisition of typically non-summer seasonal
businesses in the Recent Acquisitions, such as motor sports (which is
winter-seasonal) and Touring Broadway Shows (which typically tour between
September and May). See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
COMPETITION
Competition in the live entertainment industry is intense, and competition
is fragmented among a wide variety of entities. The Company competes on a
local, regional and national basis with a number of large venue owners and
entertainment promoters for the hosting, booking, promoting and producing of
music concerts, theatrical shows, motor sports events and other live
entertainment events. Moreover, the Company's marketing and consulting
operations compete with advertising agencies and other marketing organizations.
The Company and the Acquired Businesses compete not only with other live
entertain-
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ment events, including sporting events and theatrical presentations, but also
with non-live forms of entertainment, such as television, radio and motion
pictures. A number of the Company's competitors have substantially greater
resources than the Company. Certain of the Company's competitors may also
operate on a less leveraged basis, and have greater operating and financial
flexibility, than the Company. In addition, many of these competitors also have
long standing relationships with performers, producers, and promoters and may
offer other services that are not provided by the Company. There can be no
assurance that the Company will be able to compete successfully in this market
or against these competitors.
REGULATORY MATTERS
The business of the Company is not generally subject to material
governmental regulation. However, if the Company seeks to acquire or construct
new venue operations, its ability to do so will be subject to extensive local,
state and federal governmental licensing, approval and permit requirements,
including, among other things, approvals of state and local land-use and
environmental authorities, building permits, zoning permits and liquor
licenses. Significant acquisitions may also be subject to the requirements of
the Hart-Scott-Rodino Antitrust Improvement Act of 1976 ("HSR"), as amended.
Other types of licenses, approvals and permits from governmental or
quasi-governmental agencies might also be required for other opportunities that
the Company may pursue in the future. There can be no assurance that the
Company will be able to obtain the licenses, approvals and permits it may
require from time to time in order to operate its business.
FORWARD-LOOKING STATEMENTS
Many of the statements, estimates, predictions and projections contained
in this "Business" section of the Prospectus, in addition to certain statements
contained elsewhere in this Prospectus, are "forward-looking statements"within
the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act. These forward-looking statements are prospective, involving risks
and uncertainties. While these forward-looking statements, and any assumptions
on which they are based, are made in good faith and reflect the Company's
current judgment regarding the direction of its business, actual results will
almost always vary, sometimes materially, from any estimates, predictions,
projections, assumptions or other future performance suggested herein. Some
important factors (but not necessarily all factors) that could affect the
Company's revenues, growth strategies, future profitability and operating
results, or that otherwise could cause actual results to differ materially from
those expressed in or implied by any forward-looking statement, are discussed
under "Risk Factors" and elsewhere in this Prospectus. Stockholders are urged
to carefully consider these factors in connection with the forward-looking
statements. The Company does not undertake to release publicly any revisions to
forward-looking statements that may be made to reflect events or circumstances
after the date of this Prospectus or to reflect the occurrence of unanticipated
events.
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THE SPIN-OFF
For the purpose of effecting the Spin-Off and governing certain of the
relationships between the Company and SFX Broadcasting after the Spin-Off, the
Company, SFX Broadcasting and SFX Buyer have entered or will enter into the
various agreements described below. The material features of the Distribution
Agreement, the Tax Sharing Agreement and the Employee Benefits Agreement, are
summarized below. These agreements have been filed with the SEC as exhibits to
the Company's Registration Statement on Form S-4, File No. 333- (as
amended, the "Registration Statement") and the following descriptions are
qualified in their entirety by reference to the actual agreements.
DISTRIBUTION AGREEMENT
MANNER OF EFFECTING THE SPIN-OFF
Pursuant to the Distribution Agreement (a) shares of Class A Common
Stock were distributed to the holders of record on the Spin-Off Record Date of
SFX Broadcasting's Class A common stock, Series D preferred stock, interests in
SFX Broadcasting's director deferred stock ownership plan, (b) shares of
Class B Common Stock were distributed to the holders of record on the Spin-Off
Record Date of SFX Broadcasting's Class B Common Stock and (c) shares of
Class A Common Stock were placed in escrow for delivery to the holders of
certain warrants upon exercise of such warrants.
TRANSFER AND ASSUMPTION OF ASSETS AND OBLIGATIONS
Pursuant to the Distribution Agreement, at the time of the Spin-Off, the
Company assumed (a) certain of SFX Broadcasting's leases and employment
agreements, (b) debt and liabilities incurred by the Company or its
subsidiaries after the date of the SFX Merger Agreement in connection with
acquisitions and capital expenditures, (c) liabilities under an airplane lease,
(d) liabilities under an agreement pursuant to which TSC, a consulting company
of which Mr. Sillerman is the Chairman of the Board of Directors and Chief
Executive Officer, and of which Mr. Tytel is the Executive Vice President,
General Counsel and a Director, provides services to Triathlon and the right to
receive fees for such services provided to Triathlon and (e) any other debt and
liabilities that the Company deems appropriate. SFX Broadcasting is obligated
to use its commercially reasonable efforts to release the Company and its
subsidiaries from all other debt and accrued liabilities prior to the effective
time of the SFX Merger.
The Company is entitled to all of SFX Broadcasting's accounts receivable
relating to SFX Broadcasting's live entertainment business. SFX Broadcasting
transferred to the Company, prior to the Spin-Off:
o an airplane lease;
o fees payable by Triathlon for services provided by TSC;
o two real estate leases and assets located on the leased property;
o a note receivable relating to the sale of SFX Broadcasting's radio
stations operating in Myrtle Beach;
o the employment agreements of certain employees of SFX Broadcasting;
and
o all other assets used primarily by the Company.
The Company assumed all of SFX Broadcasting's and its subsidiaries' obligations
accruing after the date of the Spin-Off under the above agreements and in
connection with the transfer of assets and employees.
TRANSFERRED EMPLOYEES
SFX Broadcasting's senior management and certain other employees of SFX
Broadcasting will devote as much time as they deem reasonably necessary to
conduct the operations of the Company, while continuing to serve in their
present capacities with, and consistent with their obligations to, SFX
Broadcasting. At the time of consummation of the SFX Merger, the Company will
assume all obligations
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arising under any employment agreement or arrangement between SFX Broadcasting
or any of its subsidiaries and the employees who are transferred to the Company
other than rights, if any, under those employment agreements to receive options
after a change of control and all existing rights of indemnification. Messrs.
Dugan, Kramer and O'Grady have indicated that, if the SFX Merger Agreement is
terminated, they will promptly resign from their position as directors of the
Company, and the Board will appoint three new independent directors to serve
until the next annual meeting of the Company's stockholders. See "Management."
WORKING CAPITAL
Pursuant to the Distribution Agreement (and as required by the SFX Merger
Agreement), SFX Broadcasting's allocated $ million in working capital to
the Company. At least five business days before the consummation of the SFX
Merger, SFX Broadcasting must provide the Company with a good faith estimate of
Working Capital (as defined below) as of the date of consummation of the SFX
Merger (the "Estimated Working Capital"). If the Estimated Working Capital is a
positive number, then SFX Broadcasting must pay to the Company an amount equal
to the Estimated Working Capital at the time of consummation of the SFX Merger.
On the other hand, if the Estimated Working Capital is a negative number, then
the Company must pay to SFX Broadcasting an amount equal to the Estimated
Working Capital at the time of consummation of the SFX Merger.
As soon as practicable (and in any event within ninety days) after the SFX
Merger is consummated, SFX Broadcasting must deliver to the Company an audited
statement of Working Capital as of the date of consummation of the SFX Merger.
If the Company does not object to SFX Broadcasting's Working Capital statement
within fifteen days following delivery thereof, then the Working Capital
reflected on SFX Broadcasting's Working Capital statement will be the "Final
Working Capital." If the Company does so object, then the issues in dispute
will be submitted to a major national accounting firm for resolution and to
determine the "Final Working Capital."
On the third business day after the Final Working Capital is determined,
SFX Broadcasting or the Company, as the case may be, must pay to the other an
amount equal to the Final Working Capital, less the Estimated Working Capital
previously paid, together with interest on the absolute value of the difference
at an annual rate of 10% beginning on the date of consummation of the SFX
Merger and ending on the date of payment of the amount (the "Working Capital
Adjustment Amount"). However, if the Company notifies SFX Broadcasting prior to
the payment date that it wishes to have all or any portion of the Final Working
Capital (the "SFX Merger Consideration Adjustment") treated as an adjustment to
the consideration payable in connection with the SFX Merger, then the
consideration payable in connection with the SFX Merger will be increased by an
amount equal to the quotient of the SFX Merger Consideration Adjustment divided
by the fully diluted number of shares of SFX Broadcasting's common stock
outstanding immediately prior to the consummation of the SFX Merger, and SFX
Broadcasting must promptly distribute (a) the appropriate amount to the
appropriate holders, immediately prior to the consummation of the SFX Merger,
of SFX Broadcasting's common stock and Series D preferred stock, (b) upon
exercise, the appropriate amount to holders of options, warrants and unit
purchase options of SFX Broadcasting unexercised immediately prior to the
consummation of the SFX Merger and (c) the appropriate amount to holders of
options, warrants and unit purchase options of SFX Broadcasting who exercised
their securities on and after the consummation of the SFX Merger and prior to
the final payment date. If the Company elects to treat any portion of the Final
Working Capital as an SFX Merger Consideration Adjustment, then the Company
must pay SFX Broadcasting the difference, if any, between the SFX Merger
Consideration Adjustment and the Working Capital Adjustment Amount so that the
aggregate net amount to be paid or received (as the case may be) by SFX
Broadcasting is equal to the amount that would have been paid or received if
the SFX Merger Consideration Adjustment had not been made.
"Working Capital" means the sum of all current assets of SFX Broadcasting
and its consolidated subsidiaries minus the sum of all current liabilities of
SFX Broadcasting and its consolidated subsidiaries, as of the point in time
immediately prior to the consummation of the SFX Merger, adjusted (without
duplication) by:
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(a) increasing Working Capital by 50% (up to $1.0 million) of all
fees and expenses incurred by SFX Broadcasting in connection with
acquiring consents from holders of SFX Broadcasting's Series E
preferred stock and certain of its outstanding notes in
connection with the transactions contemplated by the SFX Merger
Agreement;
(b) increasing (if a positive number) or decreasing (if a negative
number) Working Capital by the product of (A) $75.00 (or any
other amount payable to holders of SFX Broadcasting's Class A
common stock) and (B) the difference between 15,589,083 less the
sum of the fully diluted number of shares of SFX Broadcasting
common stock outstanding immediately prior to the time of
consummation of the SFX Merger (excluding up to 250,838 shares of
SFX Broadcasting's common stock subject to a right of repurchase
granted by SFX Broadcasting in connection with an acquisition);
(c) reducing Working Capital by the difference between $84,554,649
less the sum of (A) the aggregate exercise price of all options,
warrants and unit purchase options of SFX Broadcasting
outstanding immediately prior to the SFX Merger consummation plus
(B) the aggregate exercise price of all warrants underlying unit
purchase options of SFX Broadcasting outstanding immediately
prior to the SFX Merger consummation plus (c) the aggregate base
price of all SARs of SFX Broadcasting outstanding immediately
prior to the SFX Merger consummation;
(d) reducing Working Capital by the product of (A) $42 and (B) up to
250,838 shares of SFX Broadcasting's common stock subject to a
right of repurchase by SFX Broadcasting granted in connection
with an acquisition (see "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and
Capital Resources--Meadows Repurchase");
(e) increasing Working Capital by all permitted radio-related
capital expenditures paid by SFX Broadcasting and its
subsidiaries after June 30, 1997 and immediately prior to the SFX
Merger consummation;
(f) decreasing Working Capital by all accrued capital expenditures
of SFX Broadcasting as of immediately prior to the SFX Merger
consummation (to the extent not reflected in current
liabilities);
(g) increasing Working Capital by accrued but not yet payable
dividends;
(h) except as required by clause (i) below, excluding from Working
Capital any liabilities attributable to indebtedness of SFX
Broadcasting;
(i) excluding from Working Capital any liabilities included in
clauses (i) through (iv) of clause (k) below;
(j) reducing Working Capital by unpaid costs, fees and expenses of
SFX Broadcasting arising out of, based on or that will arise from
the transactions contemplated by the SFX Merger Agreement (other
than as a result of actions taken by SFX Buyer Sub) (including
amounts relating to the termination of any employees, broker
fees, legal fees, accounting fees, advisory fees and fees
incurred in connection with third party consents, waivers and
amendments of creditors or holders of SFX Broadcasting's
preferred stock);
(k) reducing Working Capital by the amount of SFX Broadcasting's
Excess Debt (as defined below), if a positive number, or
increasing Working Capital by the amount of the Excess Debt, if a
negative number. "Excess Debt" means, as of immediately prior to
the consummation of the SFX Merger, the difference between the
sum of the following and $899.7 million:
(i) the difference between (A) indebtedness of SFX Broadcasting
and its subsidiaries, less (B) the difference between $70.0
million and any amounts (other than the reimbursement of
expenses) actually received by SFX Broadcasting and its
consolidated subsidiaries after August 24, 1997, under
agreements relating to the sale or local marketing
arrangement (the local marketing payments may not exceed
$30,000 per month) of its WVGO-FM and
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the sale or local marketing arrangement of its Jackson/Biloxi
radio stations, less (c) any indebtedness incurred to finance
acquisitions approved by Buyer of stock of or substantially
all of the assets of radio stations, less (D) interest
accrued as of immediately prior to the consummation of the
SFX Merger that is not then due and payable,
(ii) the aggregate merger consideration payable to holders of SFX
Broadcasting's Series C preferred stock (which SFX
Broadcasting anticipates will be $2.0 million),
(iii) the aggregate liquidation preference amount of SFX
Broadcasting's Series E preferred stock, and
(iv) environmental costs or liabilities accrued and not paid after
June 30, 1997, to the extent they exceed $100,000 in the
aggregate; and
(l) reducing Working Capital by the difference between (i) 142,032
times the higher of (A) the average of the last sales price of
SFX Broadcasting's Series E preferred stock during the 15
business days ending on the date of consummation of the SFX
Merger, or (B) the average of the last sales price of SFX
Broadcasting's Series E preferred stock during the 15 business
days preceding February 9, 1998 ($115.08), and (ii) $14,203,200
(the "Series E Adjustment").
Working Capital will not include any asset transferred to the Company or
any of its subsidiaries, any liability assumed by the Company or any liability
to which none of SFX Broadcasting or any of its subsidiaries is a party
immediately after the consummation of the SFX Merger. Any computation of
Working Capital should assume that the Spin-Off has been consummated. As of
December 31, 1997, Working Capital payable by SFX Broadcasting to the Company
would have been approximately $3.0 million (excluding the Series E Adjustment).
The actual amount of Working Capital as of the closing of the SFX Merger is
likely to differ substantially from the amount in existence as of December 31,
and will be a function of, among other things, the operating results of SFX
Broadcasting through the date of the SFX Merger, the actual cost of
consummating the SFX Merger and the related transactions and other obligations
of SFX Broadcasting, including the payment of dividends and interest on SFX
Broadcasting's debt, the Meadows Repurchase and the amount of any settlement
paid by SFX Broadcasting in connection with the SFX Merger shareholder
litigation. Moreover, Working Capital will be reduced by at least $2.1 million
pursuant to the Series E Adjustment. See "Risk Factors--Future Contingent
Payments" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources--Spin-Off."
RELEASE AND INDEMNIFICATION
Pursuant to the Distribution Agreement, SFX Broadcasting released the
Company and its subsidiaries and affiliates (other than SFX Broadcasting and
its subsidiaries) and all persons who at any time prior to the date of the
distribution of the Company's common stock in the Spin-Off (the "Spin-Off
Distribution Date") were stockholders, directors, agents or employees of the
Company or its subsidiaries from any and all claims arising from any acts or
events occurring or failing to occur or any conditions existing on or before
the Spin-Off Distribution Date (other than claims arising from transactions
contemplated by the Distribution Agreement, the SFX Merger Agreement and
certain related agreements). Similarly, the Company has agreed to release SFX
Broadcasting, its affiliates (other than the Company and its subsidiaries) and
all persons who at any time prior to the date of the Spin-Off were
stockholders, directors, agents or employees of SFX Broadcasting or its
subsidiaries from any and all claims arising from any acts or events occurring
or failing to occur or any conditions existing on or before the date of the
Spin-Off (other than claims arising from transactions contemplated by the
Distribution Agreement, the SFX Merger Agreement and certain related
agreements).
The Distribution Agreement requires the Company to indemnify, defend and
hold SFX Broadcasting and its subsidiaries (other than the Company and its
subsidiaries) and each of its directors, officers, employees and agents
harmless from and against any liabilities (other than income tax liabilities)
to which SFX Broadcasting or any of its subsidiaries (other than the Company
and its subsidiaries) may be or become subject that (a) relate to the assets,
business, operations, debts or liabilities of the Company and its subsidiaries
(including liabilities to be assumed by the Company as contemplated in the
Distribution
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Agreement and any liabilities arising under certain guarantees of SFX
Broadcasting in connection with the Recent Acquisitions), whether arising prior
to, concurrent with or after the Spin-Off or (b) result from a breach by the
Company or its subsidiaries of any representation, warranty, or covenant
contained in the Distribution Agreement or any related agreements.
The Distribution Agreement requires SFX Broadcasting to indemnify, defend
and hold the Company and its subsidiaries and each of its directors, officers,
employees and agents harmless from and against any liabilities (other than
income tax liabilities) to which the Company and its subsidiaries may be or
become subject that (a) relate to the assets, business, operations, debts or
liabilities of SFX Broadcasting or its subsidiaries (other than the Company and
its subsidiaries), whether arising prior to, concurrent with or after the
Spin-Off or (b) result from a breach by SFX Broadcasting or its subsidiaries
(other than the Company) of any representation, warranty, or covenant contained
in the Distribution Agreement or any related agreements.
The release and indemnification obligations contained in the Distribution
Agreement will survive the Spin-Off for a period of six years (and thereafter
as to any claims for indemnification asserted prior to the expiration of that
period).
REGISTRATION STATEMENT AND CONSENT SOLICITATION DOCUMENTS
The Company has represented to SFX Broadcasting that the registration
statement and the consent solicitation documents sent to the holders of certain
of SFX Broadcasting's securities did not, at the time it became effective or
was mailed, contain any untrue statement of a material fact or omit to state a
material fact required to be stated in order to make the statements in the
Registration Statement and the consent solicitation documents, in light of the
circumstances under which they were made, not misleading.
RELATED AGREEMENTS
SFX Broadcasting and the Company have agreed that any tax sharing
agreement to which they were parties were terminated as of the effective date
of the Spin-Off. In addition, pursuant to the Distribution Agreement, SFX
Broadcasting and the Company entered into the Tax Sharing Agreement and
Employee Benefits Agreement (as described below).
USE OF NAMES; INTELLECTUAL PROPERTY
At the closing of the SFX Merger, SFX Broadcasting will assign to the
Company or its designee the name "SFX," together with all causes of action and
the right to recover for past infringements of that name. As soon as
commercially practicable, but no later than six months from the consummation of
the SFX Merger, SFX Broadcasting must cease all use of the name "SFX" or other
trademarks, trade names or their identifiers owned by, licensed to, or
transferred pursuant to the Distribution Agreement to the Company.
TERMINATION OF THE SFX MERGER AGREEMENT
If the SFX Merger Agreement is terminated in accordance with its terms for
any reason, the boards of directors of SFX Broadcasting and the Company will
each appoint a committee of independent directors (none of whom will serve on
both boards of directors) to negotiate in good faith with respect to all
matters that they deem necessary to effectuate the separation of the affairs of
SFX Broadcasting and the Company, including the employment of employees to be
transferred to the Company pursuant to the Distribution Agreement. No
adjustments will be made to the initial allocation of working capital between
SFX Broadcasting and the Company if the SFX Merger Agreement is terminated in
accordance with its terms.
AMENDMENT OR MODIFICATION
SFX Broadcasting and the Company can only amend the Distribution Agreement
by written agreement with the consent of SFX Buyer (which may not be
unreasonably withheld).
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TAX SHARING AGREEMENT
Pursuant to the Tax Sharing Agreement, the Company has agreed to pay to
SFX Broadcasting the amount of the tax liability of SFX Broadcasting and the
Company combined, to the extent properly attributable to the Company for the
period up to and including the Spin-Off, and will indemnify SFX Broadcasting
for any tax adjustment made in subsequent years that relates to taxes properly
attributable to the Company during the period prior to and including the
Spin-Off. SFX Broadcasting, in turn, will indemnify the Company for any tax
adjustment made in years subsequent to the Spin-Off that relates to taxes
properly attributable to the SFX Broadcasting during the period prior to and
including the Spin-Off. The Company is also responsible for any taxes of SFX
Broadcasting resulting from the Spin-Off, including any income taxes but only
to the extent that such income taxes result from gain on the distribution that
exceeds the net operating losses of SFX Broadcasting and the Company available
to offset such gain (including net operating losses generated in the current
year prior to the Spin-Off).
The actual amount of the gain will be based on the excess of the value of
the Common Stock distributed on the date of the Spin-Off over the tax basis of
that stock. The Company believes that the value of the Common Stock for tax
purposes will be determined by no later than the first trading date following
the date the stock is distributed in the Spin-Off. Increases or decreases in
the value of the Common Stock subsequent to such date will not affect the tax
liability. If the Common Stock had a value of approximately $15 per share at
the time of the Spin-Off, management believes that no material indemnification
payment would be required. Such indemnification obligation would be
approximately $4.0 million at $16 per share and would increase by approximately
$7.7 million for each $1.00 increase above the per share valuation of $16. If
the Common Stock was valued at $28.50 per share (the last sales price of the
Class A Common Stock (trading on a when-issued basis) on the over the counter
market on April 9, 1998), management estimates that the Company would have been
required to pay approximately $101.0 million pursuant to such indemnification
obligation. The Company intends to use a substantial portion of the net
proceeds from the Offering to make such payment and expects that such payment
will be due on or about June 15, 1998. Such payment will not result in any
corresponding increase in the Company's assets or cash flows and, therefore,
purchasers of Class A Common Stock will experience substantial dilution. See
"Risk Factors--Substantial Tax Payment Obligation."
EMPLOYEE BENEFITS AGREEMENT
Pursuant to the Employee Benefits Agreement, SFX Broadcasting and the
Company have agreed to take all actions necessary or appropriate so that, as of
the Spin-Off or as soon as administratively feasible thereafter (but, in any
event, prior to the later of June 1, 1998 and the date of the SFX Merger), the
Company and its subsidiaries will no longer be participating employers and
sponsors of the 401(k), health, group term life insurance, long term disability
insurance and cafeteria plans maintained by SFX Broadcasting (collectively, the
"SFX Employee Benefit Plans"). The Employee Benefits Agreement also provides
for the treatment of the benefits under the SFX Employee Benefit Plans of
employees being transferred from SFX Broadcasting to the Company or who are
otherwise employed by the Company upon the Spin-Off. With respect to employees
transferred from SFX Broadcasting to the Company or who are otherwise employed
by the Company upon the Spin-Off, SFX Broadcasting will have sole
responsibility for retaining and discharging any claims that are incurred on or
prior to the date of their transfer (or, if later, when they cease to be
participants) under SFX Employee Benefit Plans that are not 401(k) plans. On or
prior to the Spin-Off, the Company will continue to pay premiums and
contributions under the SFX Employee Benefit Plans in accordance with its past
practices and procedures, except that any premiums and contributions for the
month in which the Spin-Off occurs and any month thereafter that employees of
the Company continue to participate in the plans shall be paid as soon as
practicable after that month and pro-rated. To the extent the account balances
under the 401(k) plan maintained by SFX Broadcasting of employees being
transferred from SFX Broadcasting to the Company or who are otherwise employed
by the Company upon the Spin-Off are not distributed, SFX Broadcasting and the
Company must take all actions necessary or appropriate to effect their transfer
to a 401(k) plan established by the Company.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
Pursuant to the Company's Certificate of Incorporation and By-laws, the
business of the Company is managed by the Board. The Board will conduct its
business through meetings of the board and its committees. The standing
committees of the Board are described below.
The By-laws of the Company authorize the Board to fix the number of
directors from time to time. The number of directors of the Company is ten. All
directors hold office until the next annual meeting of stockholders following
their election or until their successors are elected and qualified. Officers of
the Company are to be elected annually by the Board and serve at the Board's
discretion. In the election of directors, the holders of the Class A Common
Stock will be entitled by class vote, exclusive of all other stockholders, to
elect two-sevenths (rounded up) of the directors to serve on the Board, with
each share of the Class A Common Stock entitled to one vote.
Currently, the Board consists of the individuals who are currently serving
as directors of SFX Broadcasting and Brian Becker, who was appointed to the
Board upon the consummation of the PACE Acquisition. All of the individuals who
currently serve as directors of SFX Broadcasting will cease to be directors of
SFX Broadcasting at the time of the consummation of the SFX Merger. If the SFX
Merger Agreement is terminated, Messrs. Dugan, Kramer and O'Grady have
indicated that they will promptly resign from their positions as directors of
the Company, and the Board will appoint three new independent directors, to
serve until the next annual meeting of the stockholders of the Company. The
directors of the Company will hold office until the next annual meeting of
stockholders of the Company or until their successors are duly elected and
qualified.
All of the executive officers of the Company other than Mr. Becker (the
"Executive Officers") are currently responsible for the management of SFX
Broadcasting. It is anticipated that such Executive Officers will enter into
five year employment agreements with the Company that will be similar to their
existing employment agreements with SFX Broadcasting (except Mr. Armstrong who
will no longer serve as an executive officer of the Company, effective as of
September 1, 1998, in order to continue to pursue a career in radio
broadcasting). See "--Employment Agreements and Arrangements with Certain
Officers and Directors." These employment agreements will become effective
immediately at the time of consummation of the SFX Merger. During the period
following the Spin-Off and prior to the consummation of the SFX Merger, the
Executive Officers who currently serve as officers of SFX Broadcasting will
continue to devote as much time as they deem necessary to conduct the
operations of the Company consistent with their obligations to SFX
Broadcasting. If the Merger Agreement is terminated for any reason, such
Executive Officers will continue to perform services to both SFX Broadcasting
and the Company until SFX Broadcasting is able to hire suitable replacements
for these Executive Officers. If the SFX Merger Agreement is terminated, SFX
Broadcasting intends to seek another buyer for the radio broadcasting business.
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The Company and Messrs. Sillerman, Ferrel, Tytel and Benson have reached
agreements in principle that they will continue to serve as officers and
directors of the Company. See "Risk Factors--Dependence on Key Personnel." The
following table sets forth information as to the Directors and the Executive
Officers of the Company:
<TABLE>
<CAPTION>
AGE AS OF
POSITION(S) HELD WITH DECEMBER 31,
NAME SFX ENTERTAINMENT 1997
- ---------------------------------- ------------------------------------- -------------
<S> <C> <C>
Robert F.X. Sillerman ............ Director, Executive Chairman and 49
Member of the Office of the
Chairman
Michael G. Ferrel ................ Director, President, Chief 48
Executive Office and Member of
the Office of the Chairman
Brian Becker ..................... Director, Executive Vice President 41
and Member of the Office of the
Chairman
Howard J. Tytel .................. Director, Executive Vice President, 50
General Counsel, and Secretary
Thomas P. Benson ................. Director, Vice President and Chief 35
Financial Officer
Richard A. Liese ................. Director, Vice President and 47
Assistant General Counsel
D. Geoffrey Armstrong(1) ......... Director and Executive Vice 40
President
James F. O'Grady, Jr. ............ Director 69
Paul Kramer ...................... Director 65
Edward F. Dugan .................. Director 63
</TABLE>
- ----------
(1) While Mr. Armstrong will remain as a director of the Company, it is
anticipated that, effective as of September 1, 1998, he will no longer
serve as an executive officer of the Company in order to continue to
pursue a career in radio broadcasting.
ROBERT F.X. SILLERMAN has served as the Executive Chairman, a Member of
the Office of the Chairman and a Director of the Company since its formation in
December 1997. Mr. Sillerman also presently serves as the Executive Chairman of
SFX Broadcasting, having served in such capacity since July 1, 1995. From 1992
through June 30, 1995, Mr. Sillerman served as Chairman of the Board of
Directors and Chief Executive Officer of SFX Broadcasting. Mr. Sillerman is
Chairman of the Board of Directors and Chief Executive Officer of SCMC, a
private company that makes investments in and provides financial consulting
services to companies engaged in the media business, and of TSC, a private
company that makes investments in and provides financial advisory services to
media-related companies. Through privately held entities, Mr. Sillerman
controls the general partner of Sillerman Communications Partners, L.P., an
investment partnership. Mr. Sillerman is also the Chairman of the Board and a
founding stockholder of Marquee, a publicly-traded company organized in 1995,
which is engaged in various aspects of the sports, news and other entertainment
industries. Mr. Sillerman is also a founder and a significant stockholder of
Triathlon, a publicly-traded company that owns and operates radio stations in
medium and small-sized markets in mid-western and western United States. For
the last twenty years, Mr. Sillerman has been a senior executive of and
principal investor in numerous entities operating in the broadcasting business.
In 1993, Mr. Sillerman became the Chancellor of the Southampton campus of Long
Island University.
MICHAEL G. FERREL has been the President, Chief Executive Officer, a
Member of the Office of the Chairman and a Director of the Company since its
formation in December 1997. Mr. Ferrel also presently serves as the President,
Chief Executive Officer and a Director of SFX Broadcasting, having served in
such capacity since November 22, 1996. Mr. Ferrel served as President and Chief
Operating Officer of MMR, a wholly-owned subsidiary of SFX Broadcasting , and a
member of MMR's board of directors since MMR's inception in August 1992 and as
Co-Chief Executive Officer of MMR from January 1994 to January 1996, when he
became the Chief Executive Officer. From 1990 to 1993, Mr. Ferrel served as
Vice
100
<PAGE>
President of Goldenberg Broadcasting, Inc. the former owner of radio station
WPKX-FM, Springfield, Massachusetts, which was acquired by MMR in July 1993.
BRIAN E. BECKER has served as an Executive Vice President, a Member of the
Office of the Chairman and a Director of the Company since the consummation of
the PACE acquisition in February 1998. Mr. Becker has served as Chief Executive
Officer of PACE since 1994 and was appointed as President of PACE in 1996. He
first joined PACE as the Vice President and General Manager of PACE's
theatrical division at the time of that division's formation in 1982, and
subsequently directed PACE's amphitheater development efforts. He served as
Vice Chairman of PACE from 1992 until he was named its Chief Executive Officer
in 1994.
HOWARD J. TYTEL has served as an Executive Vice President, General
Counsel, Secretary and a Director of the Company since its formation in
December 1997. Mr. Tytel also presently serves as a Director, General Counsel,
Executive Vice President and Secretary of SFX Broadcasting, having served in
such capacity since 1992. Mr. Tytel is Executive Vice President, General
Counsel and a Director of SCMC and TSC and holds an economic interest in those
companies. Mr. Tytel is a Director and a founder of Marquee and a founder of
Triathlon. Mr. Tytel was a Director of Country Music Television from 1988 to
1991. From March 1995 until March 1997, Mr. Tytel was a Director of Interactive
Flight Technologies, Inc., a publicly-traded company providing computer-based
in-flight entertainment. For the last twenty years, Mr. Tytel has been
associated with Mr. Sillerman in various capacities with entities operating in
the broadcasting business. Since 1993, Mr. Tytel has been Of Counsel to the law
firm of Baker & McKenzie, which currently represents SFX Broadcasting, the
Company and other entities with which Messrs. Sillerman and Tytel are
affiliated, on various matters.
THOMAS P. BENSON has served as the Vice President, Chief Financial Officer
and a Director of the Company since its formation in December 1997. Mr. Benson
also presently serves as the Chief Financial Officer and a Director of SFX
Broadcasting, having served in such capacity since November 22, 1996. Mr.
Benson became the Vice President of Financial Affairs of SFX Broadcasting in
June 1996. He was the Vice President--External and International Reporting for
American Express Travel Related Services Company from September 1995 to June
1996. From 1984 through September 1995, Mr. Benson worked at Ernst & Young LLP
as a staff accountant, senior accountant, manager and senior manager.
RICHARD A. LIESE has served as a Vice President, Associate General Counsel
and a Director of the Company since its formation in December 1997. Mr. Liese
also presently serves as a Director, Vice President and Associate General
Counsel of SFX Broadcasting, having served in such capacity since 1995. Mr.
Liese has also been the Assistant General Counsel and Assistant Secretary of
SCMC since 1988. In addition, from 1993 until April 1995, he served as
Secretary of MMR.
D. GEOFFREY ARMSTRONG has been an Executive Vice President and a Director
of the Company since its formation in December 1997. It is anticipated that,
effective as of September 1, 1998, Mr. Armstrong will no longer serve as an
executive officer of the Company but will remain as a Director. Mr. Armstrong
also presently serves as the Chief Operating Officer and an Executive Vice
President of SFX Broadcasting, having served in such capacity since November
22, 1996. Mr. Armstrong has served as a Director of SFX Broadcasting since
1993. Mr. Armstrong became the Chief Operating Officer of SFX Broadcasting in
June 1996 and the Chief Financial Officer, Executive Vice President and
Treasurer of SFX Broadcasting in April 1995. Mr. Armstrong was Vice President,
Chief Financial Officer and Treasurer of SFX Broadcasting from 1992 until March
1995. He had been Executive Vice President and Chief Financial Officer of
Capstar, a predecessor of SFX Broadcasting, since 1989. From 1988 to 1989, Mr.
Armstrong was the Chief Executive Officer of Sterling Communications
Corporation.
JAMES F. O'GRADY, JR. has served as a Director of the Company since its
formation in December 1997. Mr. O'Grady also serves as a Director of SFX
Broadcasting. Mr. O'Grady has been President of O'Grady and Associates, a media
brokerage and consulting company, since 1979. Mr. O'Grady has been a Director
of Orange and Rockland Utilities, Inc. and of Video for Broadcast, Inc. since
1980 and 1991, respectively. Mr. O'Grady has been the co-owner of Allcom
Marketing Corp., a corporation that provides marketing and public relations
services for a variety of clients, since 1985, and has been Of Counsel to
Cahill and Cahill, Brooklyn, New York, since 1986. He also served on the Board
of Trustees of St. John's University from 1984 to 1996, and has served as a
Director of The Insurance Broadcast System, Inc. since 1994.
101
<PAGE>
PAUL KRAMER has served as a Director of the Company since its formation in
December 1997. Mr. Kramer also serves as a Director of SFX Broadcasting. Mr.
Kramer has been a partner in Kramer & Love, financial consultants specializing
in acquisitions, reorganizations and dispute resolution, since 1994. From 1992
to 1994, Mr. Kramer was an independent financial consultant. Mr. Kramer was a
partner in the New York office of Ernst & Young LLP from 1968 to 1992, and from
1987 to 1992 was Ernst & Young's designated Broadcasting Industry Specialist.
EDWARD F. DUGAN has served as a Director of the Company since its
formation in December 1997. Mr. Dugan also serves as a Director of SFX
Broadcasting. Mr. Dugan is President of Dugan Associates Inc., a financial
advisory firm to media and entertainment companies, which he founded in 1991.
Mr. Dugan was an investment banker with Paine Webber Inc., as a Managing
Director, from 1978 to 1990, with Warburg Paribas Becker Inc., as President,
from 1975 to 1978 and with Smith Barney Harris Upham & Co., as a Managing
Director, from 1961 to 1975.
AUDIT COMMITTEE
The Audit Committee will review (and report to the Board) on various
auditing and accounting matters, including the selection, quality and
performance of the Company's internal and external accountants and auditors,
the adequacy of its financial controls, and the reliability of financial
information reported to the public. The Audit Committee will also review
certain related-party transactions and potential conflict-of-interest
situations involving officers, directors or stockholders of the Company. The
members of the Audit Committee are Messrs. Kramer, O'Grady and Dugan.
COMPENSATION COMMITTEE
The Compensation Committee will review and make recommendations with
respect to certain of the Company's compensation programs and compensation
arrangements with respect to certain officers, including Messrs. Sillerman,
Ferrel, Tytel, Benson and Liese. The members of the Compensation Committee are
Messrs. Kramer, O'Grady and Dugan, none of whom is a current or former employee
or officer of SFX Broadcasting or the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of Messrs. Kramer, O'Grady and
Dugan. The Board has approved the issuance of shares of Class A Common Stock to
holders as of the Spin-Off Record Date of stock options or SARs of SFX
Broadcasting , whether or not vested. The issuance was approved to allow the
holders of these options and SARs to participate in the Spin-Off in a similar
manner to holders of SFX Broadcasting's Class A common stock. In connection
with this issuance, Messrs. Kramer, O'Grady and Dugan received 13,000, 13,000
and 3,000 shares of Class A Common Stock, respectively.
STOCK OPTION COMMITTEE
The Stock Option Committee will grant options, determine which employees
and other individuals performing substantial services to the Company may be
granted options and determine the rights and limitations of options granted
under the Company's plans. The members of the Stock Option Committee are
Messrs. Kramer, O'Grady and Dugan.
STOCK OPTION AND RESTRICTED STOCK PLAN
The Company's 1998 Stock Option and Restricted Stock Plan, provides for
the issuance of up to 2,000,000 shares of Class A Common Stock. The purpose of
the plan is to provide additional incentive to officers and employees of the
Company. Each option granted under the plan will be designated at the time of
grant as either an "incentive stock option" or a "non-qualified stock option."
The plan will be administered by the Stock Option Committee. The Board has
approved the issuance of stock options exercisable for an aggregate of 252,500
shares under the plan. See "--Employment Agreements and Arrangements with
Certain Officers and Directors."
102
<PAGE>
COMPENSATION OF DIRECTORS
Directors employed by the Company will receive no compensation for
meetings they attend. Each director not employed by the Company will receive a
fee of $1,500 for each Board meeting he attends, in addition to reimbursement
of travel expenses. Each non-employee director who is a member of a committee
will also receive $1,500 for each committee meeting he attends that is not held
in conjunction with a Board meeting. If the committee meeting occurs in
conjunction with a Board meeting, each committee member will receive an
additional $500 for each committee meeting he attends. In addition, the Company
will pay each director an annual retainer of $30,000, of which one-half will be
paid in cash and one-half will be paid in shares of the Class A Common Stock.
EXECUTIVE COMPENSATION
The Company did not pay any compensation to the current Executive Officers
in 1997. The Company anticipates that during 1998 its most highly compensated
executive officers will be Messrs. Sillerman, Ferrel, Becker and Tytel. See
"--Employment Agreements and Arrangements with Certain Officers and Directors."
It is anticipated that compensation for the Executive Officers and for
other executives will consist principally of base salary, an annual incentive
bonus opportunity and long-term stock-based incentive awards. All direct and
indirect remuneration of all Executive Officers and certain other executives
will be approved by the Compensation and Stock Option Committees.
It is anticipated that the Board will, after the Spin-Off, grant shares of
Class A Common Stock to holders as of the Spin-Off Record Date of stock options
or SARs of SFX Broadcasting, whether or not vested. See "Certain Relationships
and Related Transactions--Issuance of Stock to Holders of SFX Broadcasting's
Options and SARs."
EMPLOYMENT AGREEMENTS AND ARRANGEMENTS WITH CERTAIN OFFICERS AND DIRECTORS
The Company anticipates that it will enter into employment agreements with
all of the Executive Officers prior to the consummation of the Spin-Off (except
for Mr. Armstrong), and that the employment agreements (except for Mr. Becker's
employment agreement which is described below) will become effective
immediately after the consummation of the SFX Merger. It is anticipated that
the employment agreements will provide for annual base salaries of $500,000 for
Mr. Sillerman, $350,000 for Mr. Ferrel, $300,000 for Mr. Tytel and $235,000 for
Mr. Benson. Each executive officer is expected to receive a bonus to be
determined annually in the discretion of the Board, on the recommendation of
the Compensation Committee. Each employment agreement will be for a term of
five years, and unless terminated or not renewed by the Company or the
employee, the term will continue thereafter on a year-to-year basis on the same
terms existing at the time of renewal. It is anticipated that each of the
agreements will provide for payments and other benefits to be mutually agreed
upon, if the employee's employment terminates following a change of control.
In connection with entering into the employment agreements, the Board (on
the review and recommendation of the Compensation Committee) approved the
following sales of restricted stock: 500,000 shares of Class B Common Stock to
Mr. Sillerman, 150,000 shares of Class B Common Stock to Mr. Ferrel, 80,000
shares of Class A Common Stock to Mr. Tytel and 10,000 shares of Class A Common
Stock to Mr. Benson. The shares of restricted stock are to be sold to the
officers at a purchase price of $2.00 per share. For a period of three years
from issuance, the restricted stock may not be transferred and will be subject
to forfeiture if an unwaived event of default is called on certain
indebtedness, including the Notes and the debt to be incurred under the Credit
Facility. In addition, the Board (on the review and recommendation of the
Compensation Committee) also approved the issuance, effective upon consummation
of the Spin-Off, of the following stock options exercisable for shares of Class
A Common Stock: options to purchase 120,000 shares to Mr. Sillerman, options to
purchase 50,000 shares to Mr. Ferrel, options to purchase 40,000 shares to Mr.
Armstrong, options to purchase 25,000 shares to Mr. Tytel, options to purchase
10,000 shares to Mr. Benson and options to purchase 2,500 shares to each of
Messrs. Kramer, O'Grady and Dugan. The options will vest over five years and
will have an exercise price of $5.50 per share. See "Risk Factors--Future
Charges to Earnings."
103
<PAGE>
Until the closing date of the SFX Merger, the Executive Officers (other
than Mr. Becker) will continue to be employed by SFX Broadcasting (at SFX
Broadcasting's expense), but will devote as much time as they deem reasonably
necessary, consistent with their obligations to SFX Broadcasting, in support of
the Company on a basis consistent with the time and scope of services that they
devoted to the live entertainment business prior to the Spin-Off. Effective
immediately prior to the consummation of the SFX Merger, the Company will
assume all obligations arising under any employment agreement or arrangement
(written or oral) between SFX Broadcasting or any of its subsidiaries and the
Executive Officers, other than the rights, if any, of the Executive Officers to
receive options at the time of their termination following a change of control
of SFX Broadcasting (as defined in their respective employment agreements) and
all existing rights to indemnification. The Company will assume the obligation
to make change of control payments under Messrs. Sillerman's, Ferrel's and
Benson's existing employment agreements with SFX Broadcasting of approximately
$3.3 million, $1.5 million and $0.2 million, respectively. The Company will
also indemnify SFX Broadcasting and its subsidiaries from all obligations
arising under the assumed employment agreements or arrangements (except in
respect of the termination options and all existing rights to indemnification).
BECKER EMPLOYMENT AGREEMENT
As a condition to the execution of the PACE Agreement, the Company entered
into an employment agreement with the Chief Executive Officer and President of
PACE, Mr. Brian Becker (the "Becker Employment Agreement"). The Becker
Employment Agreement has a term of five years commencing on February 25, 1998.
Mr. Becker will continue as President and Chief Executive Officer of PACE. In
addition, for the term of his employment, Mr. Becker will serve as (a) a member
of the Company's Office of the Chairman, (b) an Executive Vice President of the
Company and (c) a director of each of PACE and the Company (subject to
shareholder approval). During the term of his employment, Mr. Becker will
receive (a) a base salary of $294,000 for the first year, $313,760 for each of
the second and third years and $334,310 for each of the fourth and fifth years
and (b) an annual bonus in the discretion of the Board.
The Company has agreed that it will not sell either the theatrical or
motor sports line of business of PACE prior February 25, 1999. If the Company
sells either line of business after the first anniversary, it has agreed not to
sell the other line of business prior to 15 days past the second anniversary of
the PACE Acquisition. The Becker Employment Agreement provides that Mr. Becker
will have a right of first refusal (the "Becker Right of First Refusal") if,
between the first and second anniversary of the PACE Acquisition, the Company
receives a bona fide offer from a third party to purchase all or substantially
all of either the theatrical or motor sports lines of business at a price equal
to 95% of the proposed purchase price. The Fifth Year Put Option (as defined in
the PACE acquisition agreement) will also be immediately exercisable as of such
closing. If that Mr. Becker does not exercise his right of first refusal and
either of the theatrical or motor sports line of business is sold, then he will
have an identical right of first refusal for the sale of the remaining line of
business beginning on the second anniversary of the PACE Acquisition and ending
six months thereafter. Mr. Becker will be paid an administrative fee of
$100,000 if he does not exercise his right of first refusal and the Company
does not consummate the proposed sale. Mr. Becker would thereafter retain all
rights to the Becker Right of First Refusal.
Beginning on the second anniversary of the date of the Becker Employment
Agreement
(December 12, 1999), Mr. Becker will have the option (the "Becker Second Year
Option"), exercisable within 15 days thereafter, to elect one or more of the
following: to (a) put any stock or portion thereof (including any vested and
unvested options to purchase stock) and/or any compensation to be paid to Mr.
Becker by the Company; (b) become a consultant to the Company for no more than
an average of 20 hours per week for the remainder of the term and with the same
level of compensation set forth in the Becker Employment Agreement; or (c)
acquire PACE's motor sports line of business (or, if that line of business was
previously sold, PACE's theatrical line of business) at its fair market value
as determined in the Becker Employment Agreement.
The Becker Employment Agreement may be terminated (a) by the Company for
Cause (as defined in the Becker Employment Agreement), (b) by the Company for
Mr. Becker's death or permanent disability or (c) by Mr. Becker at any time for
any reason or upon exercise of the Becker Second Year Option.
104
<PAGE>
In addition, Mr. Becker's employment may be terminated by the Company any
time in the Company's sole discretion or by Mr. Becker at any time following,
among other things, (a) failure to elect or re-elect Mr. Becker as a director
of the Company, (b) a reduction in Mr. Becker's base salary or in the formula
to calculate his bonus, (c) discontinuation of Mr. Becker's participation in
any stock option, bonus or other employee benefit plan, (d) prior to two years
and fifteen days after consummation of the PACE Acquisition, the sale of either
the motor sports or theatrical line of business to any person other than Mr.
Becker (unless Mr. Becker elected not to exercise the Becker Right of First
Refusal (as defined below)), (e) the sale of all or substantially all of the
assets of PACE, (f) a change of control of the Company or (g) the failure by
the Company to contribute any acquired business (which derives a majority of
its revenues from either a theatrical or motor sports line of business) to
PACE. If Mr. Becker's employment is terminated, then, among other things, (a)
for the period from the date of termination until the fifth anniversary of the
closing of the PACE Acquisition, the Company must pay Mr. Becker the base
salary and any bonus to which he would otherwise be entitled and Mr. Becker
will be entitled to participate in any and all of the profit-sharing,
retirement income, stock purchase, savings and executive compensation plans to
the same extent he would otherwise have been entitled to participate, (b) for a
period of one year after the date of termination, the Company will maintain Mr.
Becker's life, accident, medical, health care and disability programs or
arrangements and provide Mr. Becker with use of the same office and related
facilities and (c) if the termination occurs prior to two years and 15 days
after consummation of the PACE Acquisition, Mr. Becker will retain the Becker
Second Year Option and the Becker Right of First Refusal.
Throughout the term of his employment and for a period of 18 months
thereafter, Mr. Becker has agreed not to, directly or indirectly, engage in any
activity or business that is directly competitive with the Company (or its
affiliates) or solicit any of its employees to leave the Company (or its
affiliates). However, these restrictions will not apply if Mr. Becker exercises
his rights, or the Company breaches its obligations, with respect to the Becker
Right of First Refusal or the Becker Second Year Option
The Company has agreed to indemnify, defend and hold Mr. Becker harmless
to the maximum extent permitted by law against expenses, including attorney's
fees, incurred in connection with the fact that Mr. Becker is or was an
officer, employee or director of the Company or any of its affiliates.
POSSIBLE AMENDMENTS TO DELSENER/SLATER EMPLOYMENT AGREEMENTS
Messrs. Delsener and Slater and the Company are in the process of
negotiating amendments to their employment agreements to reflect, among other
things, the changes to the Company's business as a result of the Recent
Acquisitions and the Spin-Off. Messrs. Delsener and Slater have agreed in
principle to waive any rights to repurchase (or to offer to repurchase)
Concerts, and any rights to receive a portion of the proceeds of a Return Event
(as defined in their employment agreements) that they might otherwise have in
connection with the SFX Merger or the Spin-Off. However, there can be no
assurance that Messrs. Delsener and Slater will waive these rights on terms
acceptable to the Company or that, if not so waived, neither Mr. Delsener nor
Mr. Slater will exercise these rights. These rights may continue to apply in
certain circumstances to transactions after, or unrelated to, the Spin-Off and
the SFX Merger. The Company also expects, in connection with the foregoing, to
negotiate mutually satisfactory amendments to certain of Messrs. Delsener's and
Slater's compensation arrangements, including bonus and profit-sharing
provisions. See "Risk Factors--Rights to Purchase Certain Subsidiaries" and
"Certain Relationships and Related Transactions--Delsener/Slater Employment
Agreements."
The Company and SFX Broadcasting have also entered into certain agreements
and arrangements with their officers and directors from time to time in the
past. See "Certain Relationships and Related Transactions."
105
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial
ownership of shares of Common Stock as of , 1998, as adjusted to give
effect to the Equity Offering (assuming no exercise of the over-allotment
option granted to the underwriters in the Equity Offering), with respect to (a)
each director of the Company, (b) each executive officers of the Company, (c)
the directors and executive officers of the Company as a group and (d) each
person known by the Company to own beneficially more than five percent of the
outstanding shares of any class of Common Stock.
<TABLE>
<CAPTION>
CLASS A CLASS B
COMMON STOCK(1) COMMON STOCK(1)
----------------------------------- ---------------------------------
PERCENT OF
NAME AND ADDRESS OF NUMBER OF PERCENT OF NUMBER OF PERCENT OF TOTAL VOTING
BENEFICIAL OWNER(2) SHARES CLASS SHARES CLASS POWER
- -------------------------------- -------------------- ------------ ------------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Directors and Executive
Officers:
Robert F.X. Sillerman ......... 1,332,630(3) % 1,524,168(4) 89.9% %
Michael G. Ferrel ............. 179,504(5) 172,869(6) 10.1%
Brian Becker .................. 29,402 -- --
Howard J. Tytel (8) ........... 137,891(7),(8) -- --
Thomas P. Benson .............. 19,000(9) -- --
Richard A. Liese .............. 9,500 -- --
D. Geoffrey Armstrong 161,800 -- --
James F. O'Grady, Jr. ......... 14,772 -- --
Paul Kramer ................... 15,922 -- --
Edward F. Dugan ............... 5,922 -- --
All directors and executive
officers as a group
(10 persons) .................. 1,906,343 % 1,697,037 100.0% %
</TABLE>
- ----------
* Less than 1%
(1) Does not include 2,000,000 shares reserved for issuance pursuant to the
Company's 1998 Stock Option and Restricted Stock Plan. In January 1998,
the Board approved the issuance of stock options for an aggregate of
252,500 shares of Class A Common Stock.
(2) Unless otherwise set forth above, the address of each stockholder is the
address of the Company, which is 650 Madison Avenue, 16th Floor, New
York, New York 10022. Pursuant to Rule 13d-3 of the Exchange Act, as used
in this table, (a) "beneficial ownership" means the sole or shared power
to vote, or to direct the disposition of, a security, and (b) a person is
deemed to have "beneficial ownership" of any security that the person has
the right to acquire within 60 days of , 1998. Unless noted
otherwise, (a) information as to beneficial ownership is based on
statements furnished to the Company by the beneficial owners, and (b)
stockholders possess sole voting and dispositive power with respect to
shares listed on this table. As of , 1998, there were issued and
outstanding shares of Class A Common Stock and shares
of Class B Common Stock.
(3) Includes (a) 8,949 shares of Class A Common Stock held by TSC; (b)
warrants held by SCMC to purchase an aggregate of 600,000 shares of Class
A Common Stock and (c) an option to acquire an aggregate of 537,185
shares of Class A Common Stock from a third party. If the 1,524,168
shares of Class B Common Stock to be held by Mr. Sillerman were included
in calculating his ownership of the Class A Common Stock, then Mr.
Sillerman would beneficially own 2,856,705 shares of Class A Common
Stock, representing approximately % of the class. Does not include
options to purchase an aggregate of 120,000 shares of Class A Common
Stock that are expected to be issued to Mr. Sillerman pursuant to his
anticipated employment agreement. See "Management--Employment Agreements
and Arrangements with Certain Officers and Directors."
(4) Includes 500,000 shares of Class B Common Stock that are expected to be
issued to Mr. Sillerman pursuant to his anticipated employment agreement.
See "Management--Employment Agreements and Arrangements with Certain
Officers and Directors."
106
<PAGE>
(5) If the 22,869 shares of Class B Common Stock held by Mr. Ferrel were
included in calculating his ownership of the Class A Common Stock, then
Mr. Ferrel would beneficially own 352,371 shares of Class A Common Stock,
representing approximately % of the class. Does not include options to
purchase an aggregate of 50,000 shares of Class A Common Stock that are
expected to be issued to Mr. Ferrel pursuant to his anticipated
employment agreement. See "Management--Employment Agreements and
Arrangements with Certain Officers and Directors."
(6) Includes 150,000 shares of the Class B Common Stock that are expected to
be issued to Mr. Ferrel pursuant to his anticipated employment agreement.
See "Management--Employment Agreements and Arrangements with Certain
Officers and Directors."
(7) In addition to the shares that Mr. Tytel beneficially owns, he has
economic interests in a limited number of shares beneficially owned by
Mr. Sillerman. These interests do not impair Mr. Sillerman's ability to
vote and dispose of those shares. See "Certain Relationships and Related
Transactions--Arrangement Between Robert F.X. Sillerman and Howard J.
Tytel."
(8) Mr. Tytel has an economic interest in SCMC and TSC, which together will
beneficially own an aggregate of 608,949 shares of Class A Common Stock,
although he does not have voting or dispositive power with respect to the
shares beneficially held by SCMC and TSC. See "Certain Relationships and
Related Transactions--Arrangement Between Robert F.X. Sillerman and
Howard J. Tytel." Does not include options to purchase an aggregate of
25,000 shares of Class A Common Stock that are expected to be issued to
Mr. Tytel pursuant to his employment agreement. See
"Management--Employment Agreements and Arrangements with Certain Officers
and Directors" and "Certain Relationships and Related
Transactions--Issuance of Stock to Holders of SFX Broadcasting's Options
and SARs."
(9) Does not include options to purchase an aggregate of 10,000 shares of
Class A Common Stock that are expected to be issued to Mr. Benson
pursuant to his employment agreement. See "Management--Employment
Agreements and Arrangements with Certain Officers and Directors" and
"Certain Relationships and Related Transactions--Issuance of Stock to
Holders of SFX Broadcasting's Options and SARs."
POSSIBLE CHANGE IN CONTROL
Mr. Sillerman has pledged an aggregate of 793,401 of his shares of Class B
Common Stock as collateral for a line of credit, under which Mr. Sillerman
currently has no outstanding borrowings. Mr. Sillerman continues to be entitled
to exercise voting and consent rights with respect to the pledged shares, with
certain restrictions. However, if Mr. Sillerman defaults in the payment of any
future loans extended to him under the line of credit, the bank will be
entitled to sell the pledged shares. Although the Class B Common Stock has 10
votes per share in most matters, the pledged shares will automatically convert
into shares of Class A Common Stock upon such a sale. Such a sale of the
pledged shares would reduce Mr. Sillerman's share of the voting power of the
Common Stock, and would therefore be likely to result in a change of control of
the Company. See "Risk Factors--Restrictions Imposed by the Company's
Indebtedness."
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
POTENTIAL CONFLICTS OF INTEREST
Marquee is a publicly-traded company that, among other things, acts as
booking agent for tours and appearances for musicians and other entertainers.
Messrs. Sillerman and Tytel have an aggregate equity interest of approximately
8.8% in Marquee; Mr. Sillerman is the chairman of its board of directors, and
Mr. Tytel is one of its directors. The Company anticipates that, from time to
time, it will enter into transactions and arrangements (particularly, booking
arrangements) with Marquee and Marquee's clients, and it may compete with
Marquee for specific concert promotion engagements. In addition, the Company
could in the future compete with Marquee in the production or promotion of
motor sports or other sporting events. These transactions or arrangements will
be subject to the approval of a committee of independent members of the board
of directors of each of the Company and Marquee, except that booking
arrangements in the ordinary course of business will be subject to periodic
review, but not approval of each particular arrangement.
TSC, an entity controlled by Mr. Sillerman and in which Mr. Tytel also has
an equity interest, provides financial consulting services to Marquee and
Triathlon. TSC's services are provided by certain directors,
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officers and employees of SFX Broadcasting, who are anticipated to become
directors, officers and employees of the Company at the time of consummation of
the SFX Merger, and who are not separately compensated for their services by
TSC. Messrs. Sillerman and Tytel have substantial equity interests in
Triathlon. In any transaction, arrangement or competition with Marquee or
Triathlon, Messrs. Sillerman and Tytel are likely to have conflicts of interest
between their duties as officers and directors of the Company, on the one hand,
and their duties as directors of Marquee and their interests in TSC, Marquee
and Triathlon, on the other hand. See "--Triathlon Fees."
Pursuant to the employment agreement entered into between Brian Becker and
the Company in connection with the acquisition of PACE, Mr. Becker has the
option, exercisable within 15 days after the second anniversary of the
consummation of the PACE Acquisition, to purchase the Company's then existing
motor sports line of business (or, if that line of business has been sold, the
Company's then existing theatrical line of business) at its then fair market
value. Mr. Becker's option may present a conflict of interest in his role as a
director of the Company. See "Management."
EMPLOYMENT AGREEMENTS
The Company anticipates that it will enter into employment agreements with
each member of its senior management (except for Mr. Armstrong), and that the
employment agreements (except for Mr. Becker's employment agreement) will
become effective immediately after the consummation of the SFX Merger. The
Company anticipates that the employment agreements will provide for annual base
salaries of $500,000 for Mr. Sillerman, $350,000 for Mr. Ferrel, $300,000 for
Mr. Tytel and $235,000 for Mr. Benson. In connection with entering into the
employment agreements, the Board (on the review and recommendation of the
Compensation Committee) approved the following sales of restricted stock:
500,000 shares of Class B Common Stock to Mr. Sillerman, 150,000 shares of
Class B Common Stock to Mr. Ferrel, 80,000 shares of Class A Common Stock to
Mr. Tytel and 10,000 shares of Class A Common Stock to Mr. Benson. The shares
of restricted stock are to be sold to the officers at a purchase of $2.00 per
share. For a period of three years from issuance, the restricted stock may not
be transferred and will be subject to forfeiture if an unwaived event of
default is called on certain indebtedness, including the Notes and the debt
incurred under the Credit Facility. In addition, the Board, on the
recommendation of its Compensation Committee, also has approved the issuance of
stock options exercisable for an aggregate of 252,500 shares of Class A Common
Stock. The options will vest over five years and will have an exercise price of
$5.50 per share. The Company will record non-cash compensation charges over the
five-year exercise period to the extent that the fair value of the underlying
Class A Common Stock of the Company exceeds the exercise price. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources--Future Charges to Earnings" and
"Management--Employment Agreements and Arrangements with Certain Officers and
Directors."
The Company has entered into an employment agreement with Mr. Becker who
serves as a Director, Member of the Office of the Chairman and Executive Vice
President. Mr. Becker's employment agreement provides for (a) an annual salary
of $294,000 for the first year, $313,760 for each of the second and third years
and $334,310 for each of the fourth and fifth years, (b) an annual bonus in the
discretion of the Board and (c) the other terms described in
"Management--Employment Agreements and Arrangements with Certain Officers and
Directors."
ASSUMPTION OF EMPLOYMENT AGREEMENTS; CERTAIN CHANGE OF CONTROL PAYMENTS
Pursuant to the terms of the Distribution Agreement, at the time of the
consummation of the SFX Merger, the Company will assume all obligations under
any employment agreement or arrangement (whether written or oral) between SFX
Broadcasting or any of its subsidiaries and any employee of the Company
(including Messrs. Sillerman and Ferrel), other than obligations relating to
Messrs. Sillerman's and Ferrel's change of control options and existing rights
to indemnification. These assumed obligations include the obligation to pay to
Messrs. Sillerman, Ferrel and Benson, after the termination of their employment
with SFX Broadcasting, cash payments aggregating approximately $3.3 million,
$1.5 million and $0.2 million, respectively. These payments will become due to
Messrs. Sillerman, Ferrel and Benson after the termination of their employment
with SFX Broadcasting following a change of control of SFX
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Broadcasting, pursuant to their employment agreements with SFX Broadcasting. In
addition, the Company's assumed obligations will include the duty to indemnify
Messrs. Sillerman and Ferrel (to the extent permitted by law) for one-half of
the cost of any excise tax that may be assessed against them for any
change-of-control payments made to them by SFX Broadcasting in connection with
the SFX Merger.
INDEMNIFICATION OF MR. SILLERMAN
On August 24, 1997, Mr. Sillerman entered into an agreement with SFX
Broadcasting, SFX Buyer and SFX Buyer Sub to waive his right to receive
indemnification (except to the extent covered by directors' and officers'
insurance) from SFX Broadcasting, its subsidiaries, SFX Buyer and SFX Buyer Sub
for claims and damages arising out of the SFX Merger and related transactions.
It is anticipated that, in any employment agreement with Mr. Sillerman, the
Company will agree to indemnify Mr. Sillerman for these claims and damages to
the fullest extent permitted by applicable law.
DELSENER/SLATER EMPLOYMENT AGREEMENTS
In connection with the Delsener/Slater Acquisition, SFX Broadcasting
entered into employment agreements in January 1997 with Ron Delsener and Mitch
Slater (collectively, the "Delsener/Slater Employment Agreements"), pursuant to
which each of Messrs. Delsener and Slater serve as co-Presidents and co-Chief
Executive Officers of Delsener/Slater. The employment agreements will continue
until December 31, 2001 unless terminated earlier by the Company for Cause (as
defined in the employment agreements) or voluntarily by Messrs. Delsener or
Slater.
After the consummation of the Spin-off or the SFX Merger, Messrs. Delsener
and Slater may have the right pursuant to their employment agreements (a) to
purchase the outstanding capital stock of Concerts (a subsidiary of the Company
holding a significant amount of the assets of the Company) for Fair Market
Value (as defined in their employment agreements) or (b) to receive a cash
payment equal to 15% of the amount by which the Fair Market Value of Concerts
exceeds the fixed payment portion of the cash purchase price of the acquisition
of Concerts, plus 20% interest thereon. The senior management of Concerts and
SFX Broadcasting have reached an agreement in principle to waive the above
rights in connection with the Spin-Off, the SFX Merger and related
transactions; however, there can be no assurance that the rights will be waived
on terms acceptable to SFX Broadcasting and the Company or at all. In addition,
although the Company is in the process of negotiating amendments to these
agreements, these and certain other rights described in the agreements may
continue to apply to transactions after, or unrelated to, the Spin-Off or the
SFX Merger.
Additionally, the Messrs. Delsener's and Slater's employment agreements
provide for certain annual bonus arrangements.
Management believes that no bonuses were earned in 1997 pursuant to such
arrangements. However, any bonuses that may accrue to Messrs. Delsener and
Slater in the future will not be available for the Company's use to service its
debt or for other purposes.
RELATIONSHIP BETWEEN HOWARD J. TYTEL AND BAKER & MCKENZIE
Howard J. Tytel, who is the Executive Vice President, General Counsel,
Secretary and a Director of the Company, is "of counsel" to the law firm of
Baker & McKenzie. Mr. Tytel is also an executive vice president, the general
counsel and a director of SFX Broadcasting. Baker & McKenzie serves as counsel
to SFX Broadcasting, the Company and certain other affiliates of Mr. Sillerman.
Baker & McKenzie compensates Mr. Tytel based, in part, on the fees it receives
from providing legal services to SFX Broadcasting, other affiliates of Mr.
Sillerman and other clients introduced to the firm by Mr. Tytel.
ARRANGEMENT BETWEEN ROBERT F.X. SILLERMAN AND HOWARD J. TYTEL
Since 1978, Messrs. Sillerman and Tytel have been jointly involved in
numerous business ventures, including SCMC, TSC, MMR, Triathlon, Marquee, SFX
Broadcasting and the Company. In consideration for certain services provided by
Mr. Tytel in connection with those ventures, Mr. Tytel has received from
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Mr. Sillerman either a minority equity interest in the businesses (with Mr.
Sillerman retaining the right to control the voting and disposition of Mr.
Tytel's interest) or cash fees in an amount mutually agreed upon. Although Mr.
Tytel has not been compensated directly by SFX Broadcasting (except for
ordinary fees paid to him in his capacity as a director), he receives
compensation from TSC and SCMC, companies controlled by Mr. Sillerman, as well
as from Mr. Sillerman personally, with respect to the services he provides to
various entities affiliated with Mr. Sillerman, including SFX Broadcasting. In
1997, these cash fees aggregated approximately $5.0 million, a portion of which
were paid from the proceeds of payments made by SFX Broadcasting to Mr.
Sillerman or entities controlled by Mr. Sillerman and the proceeds from Mr.
Sillerman's exercise for tax purposes of options granted to him by SFX
Broadcasting and subsequent sale of the underlying shares. It is anticipated
that, in connection with the consummation of the SFX Merger and certain related
transactions, Mr. Tytel will receive shares of the Company and cash fees from
TSC, SCMC and Mr. Sillerman personally in an amount to be determined in the
future. See "--Assumption of Employment Agreements; Certain Change of Control
Payments." It is also anticipated that Mr. Tytel will enter into an employment
agreement directly with the Company that will be effective at the time of
consummation of the SFX Merger. See "--Employment Agreements."
TRIATHLON FEES
SCMC, a corporation controlled by Mr. Sillerman and in which Mr. Tytel has
an equity interest, has an agreement to provide consulting and marketing
services to Triathlon, a publicly-traded company in which Mr. Sillerman is a
significant stockholder. Under the terms of the agreement, SCMC has agreed to
provide consulting and marketing services to Triathlon until June 1, 2005 for
an annual fee of $500,000, together with a refundable advance of $500,000 per
year against fees earned in respect of transactional investment banking
services. Fees paid by Triathlon for the years ended December 31, 1996 and
December 31, 1997 were $3,000,000 and $1,794,000, respectively. These fees will
vary (above the minimum annual fee of $500,000) depending on the level of
acquisition and financing activities of Triathlon. SCMC previously assigned its
rights to receive fees payable under this agreement to SFX Broadcasting.
Pursuant to the terms of the Distribution Agreement, SFX Broadcasting will
assign its rights to receive these fees to the Company. Triathlon has announced
that it is exploring ways of maximizing stockholder value, including possible
sale to a third party. If Triathlon were acquired by a third party, the
agreement might not continue for the remainder of its term.
AGREEMENTS WITH SFX BROADCASTING
The Company and SFX Broadcasting have entered into various agreements with
respect to the Spin-Off and related matters. For a description of the material
terms of these agreements, see "The Spin-Off."
In addition, SFX Broadcasting has guaranteed certain payments in
connection with the PACE Acquisition, the Contemporary Acquisition and the
Network Acquisition.
COMMON STOCK RECEIVED IN THE SPIN-OFF
In the Spin-Off, the holders of SFX Broadcasting's Class A common stock,
Series D preferred stock and Warrants (upon exercise) received shares of Class
A Common Stock, whereas Messrs. Sillerman and Ferrel, as the holders of SFX
Broadcasting's Class B common stock (which is entitled to ten votes per share
on most matters), received shares of Class B Common Stock. The Class A Common
Stock and Class B Common Stock have similar rights and privileges, except that
the Class B Common Stock differs as to voting rights generally to the extent
that SFX Broadcasting's Class A common stock and Class B common stock presently
differ. The issuance of the Class B Common Stock in the Spin-Off was intended
to preserve Messrs. Sillerman's and Ferrel's relative voting power after the
Spin-Off. Upon consummation of the Equity Offering, Mr. Sillerman will be
deemed to beneficially own approximately % of the combined voting power of
the Company and Messrs. Sillerman and Ferrel will be deemed to beneficially own
approximately % of the combined voting power of the Company. Accordingly, Mr.
Sillerman, alone and together with the Company's current directors and
executive officers, will generally be able to
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control the outcome of the votes of the stockholders of the Company on most
matters. The Company and Messrs. Sillerman and Ferrel have agreed in principle
that Messrs. Sillerman and Ferrel will continue to serve as officers and
directors of the Company. See "Principal Stockholders."
In addition, in August 1997, the board of directors of SFX Broadcasting
approved amendments to the SCMC Warrants (which represent the right to purchase
an aggregate of 600,000 shares of SFXBroadcasting's Class A common stock). The
SCMC Warrants had previously been issued to SCMC, an entity controlled by Mr.
Sillerman. The amendments memorialize the original intent of the directors of
SFX Broadcasting that SCMC receive the aggregate number of shares of Class A
Common Stock that it would have received if it had exercised the SCMC Warrants
immediately prior to the Spin-Off.
ISSUANCE OF STOCK TO HOLDERS OF SFX BROADCASTING'S OPTIONS AND SARS
On 1998, the Company issued shares of Class A Common Stock
to holders as of the Spin-Off record date of the stock options or SARs of SFX
Broadcasting, whether or not vested. The issuance was made to allow holders of
such options and SARs to participate in the Spin-Off in a manner similar to
holders of SFX Broadcasting's Class A common stock. Additionally, many of the
option and SAR holders have become officers, directors or employees of the
Company. The members of the Company's Board, other than Mr. Becker, received an
aggregate of shares pursuant to such issuance.
DESCRIPTION OF CREDIT FACILITY AND OTHER INDEBTEDNESS
CREDIT FACILITY
The following is a summary of the material terms of the Credit Facility.
This summary is not complete. It is subject to, and qualified in its entirety
by reference to, the Credit and Guarantee Agreement, which has been filed as an
exhibit hereto.
In February of 1998, the Company entered into the Credit Agreement which
established a $300.0 million of senior secured credit facilities. The Credit
Facility is comprised of (a) the $150.0 million eight-year Term Loan and (b)
the $150.0 million seven-year reducing Revolver. Borrowings under the Credit
Facility are secured by substantially all the assets of the Company, including
a pledge of the outstanding stock of substantially all of its subsidiaries, and
are guaranteed by substantially all of the Company's subsidiaries. On February
27, 1998, the Company borrowed $150.0 million pursuant to the Term Loan in
connection with the Recent Acquisitions. The Revolver and Term Loan contain
provisions providing that, at its option and subject to certain conditions, the
Company may increase the amount of either the Revolver or the Term Loan by
$50.0 million.
General
The Credit Facility provides for borrowings in a principal amount of up to
$300.0 million, subject to certain covenants and conditions. Borrowings under
the Credit Facility may be used by the Company to finance Permitted
Acquisitions (as defined in the Credit Agreement), for working capital and for
general corporate purposes. Up to $20.0 million of the Revolver will be
available for the issuance of standby letters of credit. Each Permitted
Acquisition must be in the same line of business (or other business incidental
or related thereto) as the Company and must have the prior written consent of
the Required Lenders (as defined in the Credit Agreement) if the cost of the
Permitted Acquisition exceeds $50.0 million.
Interest Rates; Fees
Loans outstanding under the Credit Facility will bear interest, at the
Company's option, at certain spreads over LIBOR or the greater of the Federal
Funds rate plus 0.50% or BNY's prime rate. The interest rate spreads on the
Term Loan and the Revolver will be adjusted based on the Company's Total
Leverage Ratio (as defined below). The Company will pay an annual commitment
fee on unused
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availability under the Revolver of 0.50% if the Company's Total Leverage Ratio
is greater than or equal to 4.0 to 1.0, and 0.375% if that ratio is less than
4.0 to 1.0. The Company will also pay an annual letter of credit fee equal to
the Applicable LIBOR Margin (as defined in the Credit Agreement) for the
Revolver then in effect.
Mandatory Prepayments and Commitment Reductions
Commitments to lend under the Revolver will be reduced in equal quarterly
installments commencing March 31, 2000 in annual percentages of the borrowings
under the Revolver as of December 31, 1999 according to the following schedule:
by 10.0% in 2000; by 15.0% in 2001; by 20.0% in 2002; by 25.0% in 2003; by
25.0% in 2004; and by the remaining 5.0% upon final maturity. The Term Loan
will be reduced by $1.0 million per year until final maturity, at which point
the remaining balance will be due and payable. Amounts outstanding under the
Credit Facility will be subject to, among others, the following mandatory
prepayments, which will also permanently reduce commitments: (a) 100.0% of the
net cash proceeds received from permitted Asset Sales (as defined in the Credit
Agreement), subject to standard reinvestment provisions; (b) 50.0% of Excess
Cash Flow (as defined in the Credit Agreement), calculated for each fiscal year
beginning with the year ending December 31, 2000; and (c) 50.0% of net proceeds
of any equity issuance, to the extent that the Total Leverage Ratio is greater
than or equal to 5.0 to 1.0.
Collateral and Guarantees
Each of the Company's present and future direct and indirect domestic
subsidiaries (the "Senior Guarantors") must provide guarantees under the Credit
Facility. In order to secure its obligations under the Credit Facility, the
Company and each of the Senior Guarantors must also grant to the lenders a
continuing security interest in all of their tangible assets (subject to
certain non-material exceptions), all of the capital stock of each Senior
Guarantor and not less than 66 2/3% of the capital stock of the Company's
present and future direct and indirect foreign subsidiaries.
The Credit Facility contains various covenants that, subject to certain
specified exceptions, restrict the Company's and its subsidiaries' ability to:
o incur additional indebtedness and other obligations;
o grant liens;
o consummate mergers, acquisitions, investments and asset dispositions;
o declare or pay Restricted Payments (as defined in the Credit
Agreement);
o declare or pay dividends, distributions and other prepayments or
repurchases of other indebtedness;
o amend certain agreements, including the Company's organizational
documents, the Notes, the Exchange Notes and the Indenture;
o make acquisitions and dispositions;
o engage in transactions with affiliates;
o engage in sale and leaseback transactions; and
o change lines of business.
The Credit Facility also includes covenants relating to compliance with ERISA,
environmental and other laws, payment of taxes, maintenance of corporate
existence and rights, maintenance of insurance and financial reporting. In
addition, the Credit Facility requires the Company to maintain compliance with
certain specified financial covenants relating to:
o a maximum ratio (the "Total Leverage Ratio") of (a) all outstanding
amounts under the Credit Facility and any other borrowed money and similar type
indebtedness (including capital lease obligations) of the Company and its
subsidiaries, on a consolidated basis ("Total Debt"), less cash and cash
equivalents in excess of $5.0 million, to (b) for the most recently completed
four fiscal quarters, (i) revenues less (ii)
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expenses (excluding depreciation, amortization other than capitalized
pre-production costs, interest expense and income tax expense), plus (iii)
non-recurring expense items or non-cash expense items mutually agreed upon by
the Company and the Required Lenders, plus (iv) the lesser of (A) the equity
income from Unconsolidated Investments (as defined in the Credit Agreement) and
(B) cash dividends and other cash distributions from Unconsolidated Investments
(however, the total amount determined under this clause (iv) will not exceed
10.0% of Operating Cash Flow before overhead) (the amount referred to in this
clause (b), "Operating Cash Flow"); Operating Cash Flow is to be adjusted to
reflect acquisitions and dispositions consummated during the calculation period
as if those transactions were consummated at the beginning of the period (with
adjustment, "Adjusted Operating Cash Flow");
o a maximum ratio (the "Senior Leverage Ratio") of (a) Total Debt less
the principal amount outstanding under the Notes and the Exchange Notes, less
cash and cash equivalents in excess of $5.0 million, to (b) Operating Cash
Flow;
o a minimum ratio (the "Pro Forma Interest Expense Ratio") of (a)
Adjusted Operating Cash Flow to (b) the sum of all interest expense and
commitment fees calculated for the four fiscal quarters following the
calculation quarter, giving effect to the Total Debt outstanding and the
interest rates in effect as of the date of the determination and the commitment
reductions and debt amortization scheduled during that period;
o a minimum ratio (the "Debt Service Ratio") of (a) Adjusted Operating
Cash Flow to (b) the sum of (i) the sum of all interest expense and commitment
fees calculated for the four fiscal quarters following the calculation quarter,
giving effect to the Total Debt outstanding and the interest rates in effect as
of the date of the determination and the commitment reductions and debt
amortization scheduled during that period and (ii) the scheduled current
maturities of Total Debt and current commitment reductions with respect to the
Revolver, each measured for the four fiscal quarters immediately succeeding the
date of determination; and
o a minimum ratio (the "Fixed Charges Ratio") of (a) the sum of
Operating Cash Flow to (b) the sum of, for the four most recently completed
fiscal quarters, the following paid during that period: (i) Interest Expense
(as defined in the Credit Agreement) plus the scheduled maturities of Total
Debt and current commitment reductions with respect to the Revolver, (ii) cash
income taxes, (iii) capital expenditures (excluding certain special capital
expenditures to be mutually agreed upon) and (iv) Unconsolidated Investments
(as defined in the Credit Agreement).
The Total Leverage Ratio may not at any time exceed (a) 6.75x from the
Credit Facility Closing Date to September 29, 1998, (b) 6.50x from September
30, 1998 to December 30, 1998, (c) 6.25x from December 31, 1998 to June 29,
1999, (d) 5.75x from June 30, 1999 to December 30, 1999, (e) 5.25x from
December 31, 1999 to December 30, 2000, (f) 4.50x from December 31, 2000 to
December 30, 2001 and (g) 3.75x on December 31, 2001 and thereafter.
The Senior Leverage Ratio may not at any time exceed (a) 3.50x from the
Credit Facility Closing Date to September 29, 1998, (b) 3.25x from September
30, 1998 to December 30, 1999, (c) 3.00x from December 31, 1999 to December 30,
2000 and (d) 2.50x on December 31, 2000 and thereafter.
The Pro Forma Interest Expense Ratio may not at the end of any fiscal
quarter be less than (a) 1.50x from the Credit Facility Closing Date to
December 31, 1998 and (b) 2.00x on January 1, 1999 and thereafter.
The Pro Forma Debt Service Ratio may not at any fiscal quarter end be less
than (a) 1.25x from the Credit Facility Closing Date to December 31, 1998 and
(b) 1.50x on January 1, 1999 and thereafter.
The Fixed Charges Ratio may not at any quarter end be less than 1.05x.
The Credit Facility will also prohibit prepayment of any subordinated
notes, including the Notes and the Exchange Notes.
Events of Default
The Credit Facility contains customary events of default, including
payment defaults, the occurrence of a Change of Control (as defined in the
Credit Agreement), the invalidity of guarantees or security
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documents under the Credit Facility, any Material Adverse Change (as defined in
the Credit Agreement), breach of any representation or warranty under the
Credit Facility and any cross-default to other indebtedness of the Company and
its subsidiaries. The occurrence of any event of default could result in
termination of the commitments to extend credit under the Credit Facility and
foreclosure on the collateral securing those obligations, each of which,
individually, could have a material adverse effect on the Company.
OTHER INDEBTEDNESS
In addition, the Company also has approximately $16.2 million of long-term
debt outstanding, which was incurred primarily in connection with the 1997
Acquisitions. See Note 5 to the Notes to the Consolidated Financial Statements
of the Company. The Company also assumed $18.7 million of debt in connection
with the Recent Acquisitions.
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DESCRIPTION OF THE NOTES
The following is a summary of the material terms contained in the
Indenture. This summary is not complete. It is subject to the terms of the
Indenture, which was filed as an exhibit to the Registration Statement. See
"Additional Information."
On February 11, 1998, the Company consummated the private placement of
$350.0 million in aggregate principal amount of Notes. The Notes bear interest
at an annual interest rate of 9 1/8%, and interest payments will be due
semi-annually, commencing August 1, 1998. The Notes will mature on February 1,
2008. The Notes do not contain any sinking fund provision.
RANKING
The Notes are general unsecured obligations of the Company, subordinate in
right to all Senior Debt (as defined in the Indenture), whether outstanding on
the date of the Indenture or thereafter incurred, of the Company and senior in
right of payment to or pari passu with all other indebtedness of the Company.
See "Capitalization."
SUBSIDIARY GUARANTEES
The Company's payment obligations under the Notes are jointly and
severally guaranteed by all of its current and future domestic subsidiaries,
with certain specified exceptions. The guarantees are subordinated in right of
payment to all existing and future Senior Debt of the Guarantors to the same
extent as the Notes are subordinated to Senior Debt of the Company.
OPTIONAL REDEMPTION
Except as noted below, the Notes are not redeemable at the Company's
option before February 1, 2003. Thereafter, the Notes will be subject to
redemption at any time at the option of the Company, in whole or in part, at
specified redemption prices plus accrued and unpaid interest and Liquidated
Damages (as defined in the Indenture), if any, thereon to the applicable
redemption date. In addition, at any time prior to February 1, 2001, the
Company may on any one or more occasions redeem up to 35.0% of the original
aggregate principal amount of Notes at a redemption price of 109.125% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of redemption, with the net proceeds of
one or more offerings of common equity of the Company. However, at least 65.0%
of the original aggregate principal amount of Notes must remain outstanding
immediately after each occurrence of redemption.
CHANGE OF CONTROL
After the occurrence of a Change of Control (as defined in the Indenture),
the Company will be required to make an offer to repurchase the Notes at a
price equal to 101% of their principal amount, together with accrued and unpaid
interest and Liquidated Damages, if any, to the date of purchase.
CERTAIN COVENANTS
The Indenture contains certain covenants that, among other things, limit
the ability of the Company and its subsidiaries to (a) incur additional
Indebtedness (as defined in the Indenture), (b) issue preferred stock, (c) pay
dividends, (d) make certain other restricted payments, (e) create certain Liens
(as defined in the Indenture), (f) enter into transactions with affiliates, (g)
sell assets of the Company or its Restricted Subsidiaries (as defined in the
Indenture), (h) issue or sell Equity Interests (as defined in the Indenture) of
the Company's Restricted Subsidiaries or (i) enter into mergers and
consolidations. In addition, under certain circumstances, the Company will be
required to offer to purchase the Notes at a price equal to 100.0% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, to the date of purchase, with the proceeds of certain Asset
Sales (as defined in the Indenture).
EXCHANGE OFFER; REGISTRATION RIGHTS
Pursuant to the Registration Rights agreement among the Company, the
Guarantors and the initial purchasers of the Notes, the Company and the
Guarantors must use their best efforts to file a registration
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statement with the Commission with respect to an offer to exchange the Notes
for a new issue of debt securities registered under the Securities Act, with
terms identical in all material respects to those of the Notes. If (a) this
exchange offer is not permitted by applicable law or (b) any holder of Transfer
Restricted Securities (as defined in the Indenture) notifies the Company that
(i) it is prohibited by law or Commission policy from participating in the
exchange offer, (ii) it may not resell the new issue of debt securities to be
acquired by it in the exchange offer to the public without delivering a
prospectus, and the prospectus contained in the registration statement is not
appropriate or available for those resales, or (iii) it is a broker-dealer and
holds Notes acquired directly from the Company or an affiliate of the Company,
then the Company and the Guarantors will be required to provide a shelf
registration statement to cover resales of the Notes by their holders. If the
Company and the Guarantors fail to satisfy these registration obligations, they
will be required to pay Liquidated Damages to the holders of Notes under
certain circumstances.
TRANSFER RESTRICTIONS
The Notes have not been registered under the Securities Act, and may not
be offered or sold except pursuant to an exemption from (or in a transaction
not subject to) the registration requirements of the Securities Act.
DESCRIPTION OF THE EXCHANGE NOTES
GENERAL
The Exchange Notes will be issued pursuant to the Indenture among the
Company, the Guarantors and The Chase Manhattan Bank, as trustee (in such
capacity, the "Trustee"). The terms of the Exchange Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The Exchange
Notes are subject to all such terms, and holders of Exchange Notes are referred
to the Indenture and the Trust Indenture Act for a statement thereof. The
following summary of the material provisions of the Indenture does not purport
to be complete and is qualified in its entirety by reference to the Indenture,
including the definitions therein of certain terms used below. Copies of the
Indenture are available as set forth under the caption "--Additional
Information." The definitions of certain terms used in the following summary
are set forth below under the caption "--Certain Definitions." For purposes of
this "Description of the Exchange Notes," the term "Company" refers only to SFX
Entertainment, Inc. and not to any of its Subsidiaries.
The Exchange Notes will be general unsecured obligations of the Company
and will be subordinated in right of payment to all existing and future Senior
Debt of the Company. See "--Subordination." On a pro forma basis giving effect
to the Financing, the Recent Acquisitions, the Spin-Off and the Merger, the
Company would have had $534.9 million of indebtedness outstanding, of which $
million would have been Senior Debt (excluding letters of credit) at December
31, 1997. The Indenture permits the incurrence of additional indebtedness,
including additional Senior Debt, subject to certain restrictions. See
"--Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock."
As of the date of the Indenture, all of the Company's Subsidiaries were
Restricted Subsidiaries. However, under certain circumstances, the Company will
be able to designate current or future Subsidiaries as Unrestricted
Subsidiaries. Unrestricted Subsidiaries will not be subject to many of the
restrictive covenants set forth in the Indenture. The Company's payment
obligations under the Exchange Notes will be jointly and severally guaranteed,
on a senior subordinated basis, by all of the Company's Restricted Subsidiaries
except for the Non-Guarantor Subsidiaries. See "--Subsidiary Guarantees" and
"Risk Factors--Risks Relating to the Exchange Notes--Substantial Leverage."
PRINCIPAL, MATURITY AND INTEREST
The Exchange Notes will be limited in aggregate principal amount to $350.0
million and will mature on February 1, 2008. Interest on the Exchange Notes
will accrue at the rate of 9 1/8% per annum and will be payable semi-annually
in arrears on February 1 and August 1 of each year, commencing on August 1,
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1998, to holders of record of the Exchange Notes on the immediately preceding
January 15 and July 15. Interest on the Exchange Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of original issuance. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months. Principal of and
premium, interest and Liquidated Damages, if any, on the Exchange Notes will be
payable at the office or agency of the Company maintained for such purpose
within the City and State of New York or, at the option of the Company, payment
of premium, interest and Liquidated Damages, if any, may be made by check
mailed to the holders of the Exchange Notes at their respective addresses set
forth in the register of holders of Exchange Notes; provided, that all payments
of principal, premium, interest and Liquidated Damages, if any, with respect to
Exchange Notes the holders of which have given wire transfer instructions to
the Company will be required to be made by wire transfer of immediately
available funds to the accounts specified by the holders thereof. Until
otherwise designated by the Company, the Company's office or agency in New York
will be the office of the Trustee maintained for such purpose. The Exchange
Notes will be issued in denominations of $1,000 and integral multiples thereof.
SUBORDINATION
The payment of principal of and premium, interest and Liquidated Damages,
if any, on the Exchange Notes will be subordinated in right of payment, as set
forth in the Indenture, to the prior payment in full in cash or Cash
Equivalents of all Senior Debt of the Company, whether outstanding on the date
of the Indenture or thereafter incurred.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, an
assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities, the holders of Senior Debt of the Company will be
entitled to receive payment in full in cash or Cash Equivalents of all
Obligations due in respect of such Senior Debt (including interest after the
commencement of any such proceeding at the rate specified in the applicable
Senior Debt) before the holders of Exchange Notes will be entitled to receive
any payment with respect to the Exchange Notes, and until all Obligations with
respect to Senior Debt are paid in full in cash or Cash Equivalents, any
distribution to which the holders of Exchange Notes would be entitled shall be
made to the holders of Senior Debt (except that holders of Exchange Notes may
receive Permitted Junior Securities and payments made from the trust described
under the caption "--Legal Defeasance and Covenant Defeasance").
The Company also may not make any payment upon or in respect of the
Exchange Notes (except in Permitted Junior Securities or from the trust
described under the caption "--Legal Defeasance and Covenant Defeasance") if
(i) a default in the payment of the principal of or premium or interest on any
Designated Senior Debt occurs and is continuing beyond any applicable period of
grace or (ii) any other default occurs and is continuing with respect to any
Designated Senior Debt that permits holders of the Designated Senior Debt as to
which such default relates to accelerate its maturity and the Trustee receives
a notice of such default (a "Payment Blockage Notice") from the Company or the
holders of such Designated Senior Debt. Payments on the Exchange Notes may and
shall be resumed (a) in the case of a payment default, upon the date on which
such default is cured or waived or has ceased to exist or such Designated
Senior Debt has been discharged or repaid in full in cash or Cash Equivalents
and (b) in case of a nonpayment default, the earlier of the date on which such
nonpayment default is cured or waived or 179 days after the date on which the
applicable Payment Blockage Notice is received or has ceased to exist or such
Designated Senior Debt has been discharged or repaid in full in cash or Cash
Equivalents, unless the maturity of any Designated Senior Debt has been
accelerated. No new period of payment blockage may be commenced unless and
until 360 days have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice. No nonpayment default that existed or was continuing
on the date of delivery of any Payment Blockage Notice to the Trustee shall be,
or be made, the basis for a subsequent Payment Blockage Notice unless such
default has been cured or waived for a period of at least 90 consecutive days.
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The Indenture further requires that the Company promptly notify holders of
Senior Debt if payment of the Exchange Notes is accelerated because of an Event
of Default.
As a result of the subordination provisions described above, in the event
of a liquidation or insolvency, holders of Exchange Notes may recover less
ratably than creditors of the Company who are holders of Senior Debt. On a pro
forma basis giving effect to the Financing, the Recent Acquisitions, the
Spin-Off and the Merger, the Company would have had $534.9 million of
indebtedness outstanding, of which $184.9 million would have been Senior Debt
(excluding letters of credit) at December 31, 1997. The Company will be able to
incur additional Senior Debt in the future, subject to certain limitations. See
"--Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock."
"Designated Senior Debt" means (i) any Indebtedness outstanding under the
Credit Facility and (ii) any other Senior Debt or Guarantor Senior Debt
permitted under the Indenture the principal amount of which is $25.0 million or
more and that has been designated by the Company as "Designated Senior Debt."
"Permitted Junior Securities" means Equity Interests in the Company or
debt securities of the Company or the relevant Guarantor that are subordinated
to all Senior Debt (and any debt securities issued in exchange for Senior Debt)
or Guarantor Senior Debt (and any debt securities issued in exchange for
Guarantor Senior Debt), as applicable, to substantially the same extent as, or
to a greater extent than, the Exchange Notes are subordinated to Senior Debt or
the Subsidiary Guarantees are subordinated to Guarantor Senior Debt, as
applicable, pursuant to the Indenture.
"Senior Debt" means (i) all Indebtedness outstanding under Credit
Facilities and all Hedging Obligations with respect thereto, (ii) any other
Indebtedness of the Company or any Guarantor permitted to be incurred under the
terms of the Indenture, unless the instrument under which such Indebtedness is
incurred expressly provides that it is on a parity with or subordinated in
right of payment to the Exchange Notes or the Subsidiary Guarantees and (iii)
all Obligations of the Company or any Guarantor with respect to the foregoing.
Notwithstanding anything to the contrary in the foregoing, Senior Debt does not
include (a) any liability for federal, state, local or other taxes owed or
owing by the Company, (b) any Indebtedness of the Company or any Guarantor to
any of its Subsidiaries or other Affiliates, (c) any trade payables or (d) any
Indebtedness that is incurred in violation of the Indenture; provided, that
Indebtedness under Credit Facilities will not cease to be Senior Debt if
borrowed based upon a written certificate from a purported officer of the
Company to the effect that such Indebtedness was permitted by the Indenture to
be incurred.
SUBSIDIARY GUARANTEES
The Company's payment obligations under the Exchange Notes will be jointly
and severally guaranteed by each of the Company's current and future domestic
Restricted Subsidiaries except for the Non-Guarantor Subsidiaries. See "Risk
Factors--Risks Relating to the Exchange Notes--Substantial Leverage." The
Subsidiary Guarantee of each Guarantor will be subordinated in right of payment
to all existing and future Senior Debt of such Guarantor to the same extent as
the Exchange Notes are subordinated to Senior Debt of the Company. See
"--Subordination." As of December 31, 1997, after giving pro forma effect to
the Financing and the Recent Acquisitions, the Guarantors would have had
approximately $ million of Guarantor Senior Debt outstanding ($ million of
which represented Indebtedness incurred pursuant to guarantees of the Credit
Facility and $16.5 million represented other Senior Debt). The Indenture
permits the Guarantors to incur additional indebtedness, including additional
Senior Debt, subject to certain restrictions. See "--Certain
Covenants--Incurrence of Indebtedness and Issuance of Preferred Stock." The
obligations of each Guarantor under its Subsidiary Guarantee will be limited so
as not to constitute a fraudulent conveyance under applicable law. See "Risk
Factors--Risks Relating to the Exchange Notes--Fraudulent Conveyance."
The Indenture provides that no Guarantor may consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person), another
corporation, Person or entity whether or not affiliated with such Guarantor
unless (i) subject to the provisions of the following paragraph, the Person
formed by or surviving any such consolidation or merger (if other than such
Guarantor) assumes all the
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obligations of such Guarantor pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the Exchange Notes, the
Indenture and the Registration Rights Agreement; (ii) immediately after giving
effect to such transaction, no Default or Event of Default exists; and (iii)
the Company would be permitted by virtue of the Company's pro forma Debt to
Cash Flow Ratio, immediately after giving effect to such transaction, to incur
at least $1.00 of additional Indebtedness pursuant to the Debt to Cash Flow
Ratio test set forth in the covenant described below under the caption
"--Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock."
The Indenture provides that in the event of a sale or other disposition of
all of the assets of any Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the capital stock of any
Guarantor, then such Guarantor (in the event of a sale or other disposition, by
way of such a merger, consolidation or otherwise, of all of the capital stock
of such Guarantor) or the corporation acquiring the property (in the event of a
sale or other disposition of all of the assets of such Guarantor) will be
released and relieved of any obligations under its Subsidiary Guarantee;
provided, that the Net Proceeds, if any, of such sale or other disposition are
applied in accordance with the applicable provisions of the Indenture. See
"--Repurchase at the Option of Holders--Asset Sales."
OPTIONAL REDEMPTION
The Exchange Notes will not be redeemable at the Company's option prior to
February 1, 2003. Thereafter, the Exchange Notes will be subject to redemption
at any time at the option of the Company, in whole or in part, upon not less
than 30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on February 1 of the
years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---------------------------------- -------------
<S> <C>
2003 ........................... 104.563%
2004 ........................... 103.042%
2005 ........................... 101.521%
2006 and thereafter ............ 100.000%
</TABLE>
Notwithstanding the foregoing, prior to February 1, 2001, the Company may,
on any one or more occasions, redeem up to $122.5 million (equal to 35% of the
aggregate principal amount of the Notes originally issued) of the Notes and the
Exchange Notes at a redemption price of 109.125% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the redemption date, with the net cash proceeds of an offering of
common equity of the Company (other than Disqualified Stock); provided, that
(i) at least $227.5 million (equal to 65% of the aggregate principal amount of
the Notes originally issued) of the Notes and the Exchange Notes remain
outstanding immediately after the occurrence of each such redemption (excluding
Notes and Exchange Notes held by the Company and its Subsidiaries) and (ii)
each such redemption shall occur within 75 days after the date of the closing
of any such offering of common equity of the Company.
SELECTION AND NOTICE
If less than all of the Exchange Notes are to be redeemed at any time,
selection of Exchange Notes for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Exchange Notes are listed, or, if the Exchange Notes are
not so listed, on a pro rata basis, by lot or by such method as the Trustee
shall deem fair and appropriate; provided, that no Exchange Notes of $1,000 or
less shall be redeemed in part. Notices of redemption shall be mailed by first
class mail at least 30 but not more than 60 days before the redemption date to
each holder of Exchange Notes to be redeemed at its registered address. Notices
of redemption may not be conditional. If any Exchange Note is to be redeemed in
part only, the notice of redemption that relates to such Exchange Note shall
state the portion of the principal amount thereof to be redeemed. A new
Exchange Note in principal amount equal to the unredeemed portion thereof will
be issued in the name
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of the holder thereof upon cancellation of the original Exchange Note. Exchange
Notes called for redemption become due on the date fixed for redemption. On and
after the redemption date, interest ceases to accrue on Exchange Notes or
portions of them called for redemption.
MANDATORY REDEMPTION
Except as set forth below under the caption "--Repurchase at the Option of
Holders," the Company is not required to make mandatory redemption or sinking
fund payments with respect to the Exchange Notes.
REPURCHASE AT THE OPTION OF HOLDERS
Change of Control
Upon the occurrence of a Change of Control, the Company will be obligated
to make an offer (a "Change of Control Offer") to each holder of Exchange Notes
to repurchase all or any part (equal to $1,000 or an integral multiple thereof)
of such holder's Exchange Notes at an offer price in cash equal to 101% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase (the "Change of Control
Payment"). Within ten days following a Change of Control, the Company will mail
a notice to each holder of Exchange Notes describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Exchange Notes on the date specified in such notice, which date shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date"), pursuant to the procedures
required by the Indenture and described in such notice. The Company will comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Exchange
Notes as a result of a Change of Control.
On the Change of Control Payment Date, the Company will, to the extent
lawful, (i) accept for payment all Exchange Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all
Exchange Notes or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Trustee the Exchange Notes so accepted together with an
Officers' Certificate stating the aggregate principal amount of Exchange Notes
or portions thereof being purchased by the Company. The Paying Agent will
promptly mail to each holder of Exchange Notes so tendered the Change of
Control Payment for such Exchange Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each holder
a new Exchange Note equal in principal amount to any unpurchased portion of the
Exchange Notes surrendered, if any; provided that each such new Exchange Note
will be in a principal amount of $1,000 or an integral multiple thereof. The
Indenture provides that, prior to complying with the provisions of this
covenant, but in any event within 90 days following a Change of Control, the
Company will either repay all outstanding Senior Debt or obtain the requisite
consents, if any, under all agreements governing outstanding Senior Debt to
permit the repurchase of Exchange Notes required by this covenant. The Company
will publicly announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Payment Date.
The Change of Control provisions described above will be applicable
whether or not any other provisions of the Indenture are applicable. Except as
described above with respect to a Change of Control, the Indenture does not
contain provisions that permit the holders of the Exchange Notes to require the
Company to repurchase or redeem the Exchange Notes in the event of a takeover,
recapitalization or similar transaction.
The Senior Credit Facility prohibits, and other future credit agreements
or other agreements relating to Senior Debt to which the Company becomes a
party may prohibit, the Company from purchasing any Exchange Notes following a
Change of Control and provide that certain change of control events with
respect to the Company would constitute a default thereunder. In the event a
Change of Control occurs at a time when the Company is prohibited from
purchasing Exchange Notes, the Company could seek the consent of its lenders to
the purchase of Exchange Notes or could attempt to refinance the borrowings
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that contain such prohibition. If the Company does not obtain such a consent or
repay such borrowings, the Company will remain prohibited from purchasing
Exchange Notes. The Company's failure to purchase tendered Exchange Notes
following a Change of Control would constitute an Event of Default under the
Indenture which, in turn, would constitute a default under the Senior Credit
Facility. In such circumstances, the subordination provisions in the Indenture
would likely restrict payments to the holders of Exchange Notes. See
"--Subordination."
The Company will not be required to make a Change of Control Offer
following a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in the Indenture applicable to a Change of Control Offer
made by the Company and purchases all Exchange Notes validly tendered and not
withdrawn under such Change of Control Offer.
Asset Sales
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the
Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value (evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee) of the assets or Equity
Interests issued or sold or otherwise disposed of and (ii) at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of cash; provided that the amount of (a) any liabilities (as shown
on the Company's or such Restricted Subsidiary's most recent balance sheet) of
the Company or such Restricted Subsidiary (other than contingent liabilities
and liabilities that are by their terms subordinated to the Exchange Notes or
any guarantee thereof) that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Company or such
Restricted Subsidiary from further liability, (b) any securities, notes or
other obligations received by the Company or such Restricted Subsidiary from
such transferee that are immediately converted by the Company or such
Restricted Subsidiary into cash (to the extent of the cash received) and (c)
escrowed cash that the Company reasonably believes will be released from escrow
within 365 days from the date of consummation of such Asset Sale, in each case
shall be deemed to be cash for purposes of this provision.
Notwithstanding the immediately preceding paragraph, the Company and its
Restricted Subsidiaries will be permitted to consummate an Asset Sale without
complying with such paragraph if (i) the Company or the applicable Restricted
Subsidiary, as the case may be, receives consideration at the time of such
Asset Sale at least equal to the fair market value of the assets or other
property sold, issued or otherwise disposed of (as evidenced by a resolution of
the Company's Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) and (ii) at least 75% of the consideration for such
Asset Sale constitutes a controlling interest in a Permitted Business,
long-term assets used or useful in a Permitted Business and/or cash or Cash
Equivalents; provided that any cash or Cash Equivalents received by the Company
or any of its Restricted Subsidiaries in connection with any Asset Sale
permitted to be consummated under this paragraph shall constitute Net Proceeds
subject to the provisions of the next succeeding paragraph.
Within 365 days of the receipt of any Net Proceeds from an Asset Sale, the
Company may apply such Net Proceeds, at its option, (i) to repay Senior Debt
under a Credit Facility (and to correspondingly reduce commitments with respect
thereto in the case of revolving borrowings) or (ii) to the acquisition of a
controlling interest in a Permitted Business, the making of a capital
expenditure or the acquisition of other long-term assets, in each case, used or
useful in a Permitted Business. Pending the final application of any such Net
Proceeds, the Company may temporarily reduce Senior Debt or otherwise invest
such Net Proceeds in any manner that is not prohibited by the Indenture. Any
Net Proceeds from Asset Sales that are not applied or invested as provided in
the first sentence of this paragraph will be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $10.0 million,
the Company will be required to make an offer to all holders of Exchange Notes
and all holders of other pari passu Indebtedness containing provisions similar
to those set forth in the Indenture with respect to offers to purchase or
redeem such other pari passu Indebtedness with the proceeds of sales of assets
(an "Asset Sale Offer") to purchase the maximum principal amount of Exchange
Notes and such other pari passu
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Indebtedness that may be purchased out of the Excess Proceeds at an offer price
in cash in an amount equal to 100% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the date
of purchase, in accordance with the procedures set forth in the Indenture and
in such other pari passu Indebtedness. To the extent that the aggregate amount
of Exchange Notes and such other pari passu Indebtedness tendered pursuant to
an Asset Sale Offer is less than the Excess Proceeds, the Company may use any
remaining Excess Proceeds for any purpose not otherwise prohibited by the
Indenture. If the aggregate principal amount of Exchange Notes and such other
pari passu Indebtedness surrendered by holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Exchange Notes and such other
pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of
an Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
CERTAIN COVENANTS
Restricted Payments
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly: (i) declare or pay
any dividend or make any other payment or distribution on account of the
Company's or any of its Restricted Subsidiary's Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation
involving the Company or any Restricted Subsidiary) or to any direct or
indirect holders of the Company's Equity Interests in their capacity as such
(other than dividends or distributions (a) payable in Equity Interests (other
than Disqualified Stock) of the Company or (b) to the Company or any Wholly
Owned Restricted Subsidiary of the Company); (ii) purchase, redeem or otherwise
acquire or retire for value (including, without limitation, in connection with
any merger or consolidation involving the Company) any Equity Interests of the
Company or any of its Restricted Subsidiaries or any direct or indirect parent
of the Company (other than any such Equity Interests owned by the Company or
any Restricted Subsidiary of the Company); (iii) make any payment on or with
respect to, or purchase, redeem, defease or otherwise acquire or retire for
value any Indebtedness of the Company or any Restricted Subsidiary that is
subordinated to the Exchange Notes or any guarantee of the Exchange Notes,
except a payment of interest or principal at Stated Maturity; or (iv) make any
Restricted Investment (all such payments and other actions set forth in clauses
(i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(a) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made
at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Debt to
Cash Flow Ratio test set forth in the first paragraph of the covenant
described below under caption "--Incurrence of Indebtedness and Issuance of
Preferred Stock;" and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of the Indenture (excluding Restricted Payments
permitted by clauses (ii), (iii) and (vi) of the next succeeding
paragraph), is less than the sum, without duplication, of (i) 50% of the
Consolidated Net Income of the Company for the period (taken as one
accounting period) from the beginning of the first fiscal quarter
commencing after the date of the Indenture to the end of the Company's most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such Consolidated
Net Income for such period is a deficit, less 100% of such deficit), plus
(ii) 100% of the aggregate net cash proceeds received by the Company as a
contribution to its common equity capital or from the issue or sale since
the date of the Indenture of Equity Interests of the Company (other than
Disqualified Stock) or from the issue or sale of Disqualified Stock or debt
securities of the Company that have been converted into such Equity
Interests (other than Equity Interests (or Disqualified Stock or
convertible debt securities) sold to a Subsidiary of the Company and other
than Disqualified Stock or convertible debt securities that have been
converted
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into Disqualified Stock), plus (iii) 50% of any dividends received by the
Company or a Wholly Owned Restricted Subsidiary after the date of the
Indenture from an Unrestricted Subsidiary of the Company, to the extent
that such dividends were not otherwise included in Consolidated Net Income
of the Company for such period, plus (iv) to the extent that any Restricted
Investment that was made after the date of the Indenture is sold for cash
or otherwise liquidated or repaid for cash, the lesser of (A) the cash
return of capital with respect to such Restricted Investment (less the cost
of disposition, if any) and (B) the initial amount of such Restricted
Investment.
The foregoing provisions will not prohibit (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at the date of
declaration such payment would have complied with the provisions of the
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any Equity Interests of the Company or subordinated Indebtedness
of the Company or any Guarantor in exchange for, or out of the net cash
proceeds of the substantially concurrent sale (other than to a Subsidiary of
the Company) of, other Equity Interests of the Company (other than any
Disqualified Stock); provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement, defeasance
or other acquisition shall be excluded from clause (c)(ii) of the preceding
paragraph; and, provided further, that no Default or Event of Default shall
have occurred and be continuing immediately after such transaction; (iii) the
defeasance, redemption, repurchase or other acquisition of subordinated
Indebtedness with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness; provided that no Default or Event of Default shall
have occurred and be continuing immediately after such transaction; (iv) the
payment of any dividend by a Restricted Subsidiary of the Company to the
holders of Equity Interests on a pro rata basis; (v) the repurchase, redemption
or other acquisition or retirement for value of any Equity Interests of the
Company or any Restricted Subsidiary of the Company held by any member of the
Company's (or any of its Restricted Subsidiaries') management or board of
directors pursuant to any management equity subscription agreement, stock
option agreement or other similar agreement; provided that the aggregate price
paid for all such repurchased, redeemed, acquired or retired Equity Interests
shall not exceed $250,000 in any twelve-month period and no Default or Event of
Default shall have occurred and be continuing immediately after such
transaction; and (vi) the repurchase, redemption or other acquisition or
retirement for value or payment made in respect of any Equity Interests of the
Company or any Restricted Subsidiary of the Company pursuant to any of the
agreements relating to the Recent Acquisitions, each as in effect on the date
of the Indenture; provided that no Default or Event of Default shall have
occurred and be continuing immediately after such transaction.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined in
good faith by the Board of Directors whose resolution with respect thereto
shall be delivered to the Trustee. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by the covenant "Restricted
Payments" were computed.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, the aggregate fair market value of all
outstanding Investments by the Company and its Restricted Subsidiaries in the
Subsidiary so designated will be deemed to be a Restricted Payment at the time
of such designation and will reduce the amount available for Restricted
Payments under the first paragraph of this covenant. Such designation will only
be permitted if such Restricted Payment would be permitted at such time and if
such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
Any such designation by the Board of Directors shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions. If, at any time, any
Unrestricted Subsidiary would fail to meet the definition of an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of the Indenture and any Indebtedness of such
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Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under the covenant described under the caption
"--Incurrence of Indebtedness and Issuance of Preferred Stock," the Company
shall be in default of such covenant). The Board of Directors of the Company
may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted under the covenant described
under the caption "--Incurrence of Indebtedness and Issuance of Preferred
Stock," calculated on a pro forma basis as if such designation had occurred at
the beginning of the four-quarter reference period and (ii) no Default or Event
of Default would be in existence immediately following such designation.
Incurrence of Indebtedness and Issuance of Preferred Stock
The Indenture provides that the Company will not, and will not permit any
of its Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness (including
Acquired Debt) or issue any shares of Disqualified Stock and will not permit
any of its Subsidiaries to issue any shares of preferred stock; provided,
however, that, so long as no Default or Event of Default has occurred and is
continuing, the Company may incur Indebtedness (including Acquired Debt) or
issue shares of Disqualified Stock and the Guarantors may issue shares of
preferred stock if, in each case, the Company's Debt to Cash Flow Ratio at the
time of incurrence of such Indebtedness or the issuance of such Disqualified
Stock or preferred stock, as the case may be, after giving pro forma effect to
such incurrence or issuance as of such date and to the use of the proceeds
therefrom as if the same had occurred at the beginning of the most recently
ended four full fiscal quarter period of the Company for which internal
financial statements are available, would have been no greater than (a) 7.0 to
1.0, if such incurrence or issuance is prior to December 31, 1999 or (b) 6.0 to
1.0 thereafter.
The provisions of the first paragraph of this covenant will not apply to
the incurrence of any of the following (collectively, "Permitted Debt"):
(i) the incurrence by the Company (and the guarantee thereof by
Guarantors) of Indebtedness and letters of credit under one or more Credit
Facilities in an aggregate principal amount at any time outstanding not to
exceed $400.0 million (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the Company
and the Guarantors thereunder), less the aggregate amount of all
repayments, optional or mandatory, of the principal of any term
Indebtedness under a Credit Facility that have been made since the date of
the Indenture and less the aggregate amount of all commitment reductions of
any revolving Indebtedness under a Credit Facility pursuant to clause (i)
of the third paragraph of the covenant described above under the caption
"--Repurchase at the Option of Holders--Asset Sales;"
(ii) the incurrence by the Company and the guarantee thereof by the
Guarantors of Indebtedness represented by the Exchange Notes and the
Subsidiary Guarantees;
(iii) the incurrence by the Company and its Restricted Subsidiaries of
the Existing Indebtedness;
(iv) the incurrence by the Company or its Restricted Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage financings
or purchase money obligations, in each case incurred for the purpose of
financing all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment used in the business of the
Company or such Restricted Subsidiary, in an aggregate amount not to exceed
$5.0 million at any time outstanding, including all Permitted Refinancing
Debt incurred pursuant to clause (v) below to refund, replace or refinance
any Indebtedness pursuant to this clause (iv);
(v) the incurrence by the Company or any of its Restricted Subsidiaries
of Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to refund, refinance or replace Indebtedness (other than
intercompany Indebtedness) that was permitted by the Indenture to be
incurred by the first paragraph of this covenant, or by clauses (ii),
(iii), (iv), (v), (vii) or (x) of this paragraph;
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(vi) the incurrence of Indebtedness between or among the Company and any
of its Restricted Subsidiaries; provided, however, that (a) if the Company
is the obligor on such Indebtedness, such Indebtedness is expressly
subordinated to the prior payment in full of all Obligations with respect
to the Exchange Notes and (b) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person
other than the Company or a Restricted Subsidiary, and any sale or other
transfer of any such Indebtedness to a Person that is not either the
Company or a Restricted Subsidiary, shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be;
(vii) the incurrence by the Company or any of its Restricted Subsidiaries
of Hedging Obligations that are incurred for the purpose of fixing or
hedging interest rate risk with respect to any floating rate Indebtedness
that is permitted by the terms of this Indenture to be outstanding;
(viii) the guarantee by the Company or any of the Guarantors of
Indebtedness that was permitted to be incurred by another provision of this
covenant;
(ix) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness ceases
to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Company that was not permitted by this clause (ix);
(x) the issuance of preferred stock by the Company pursuant to the
Contemporary Agreement, as in effect on the date of the Indenture; and
(xi) the incurrence by the Company or any of its Restricted Subsidiaries
of additional Indebtedness in an aggregate principal amount at any time
outstanding, including all Permitted Refinancing Indebtedness incurred
pursuant to clause (v) above to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (xi), not to exceed $10.0
million.
For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xi) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company shall, in its sole discretion, classify such item of Indebtedness in
any manner that complies with this covenant and such item of Indebtedness will
be treated as having been incurred pursuant to only one of such clauses or
pursuant to the first paragraph hereof. Accrual of interest, the accretion of
accreted value, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms and the payment of dividends on
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an
issuance of Disqualified Stock for purposes of this covenant.
Limitation on Other Senior Subordinated Debt
The Indenture provides that (i) the Company will not directly or
indirectly incur any Indebtedness that is subordinate or junior in right of
payment to any Senior Debt and senior in any respect in right of payment to the
Exchange Notes and (ii) no Guarantor will incur any Indebtedness that is
subordinate or junior in right of payment to its Guarantor Senior Debt and
senior in any respect in right of payment to such Guarantor's Subsidiary
Guarantee.
Liens
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or suffer to exist any Lien securing Indebtedness or trade payables on
any asset now owned or hereafter acquired, or any income or profits therefrom
or assign or convey any right to receive income therefrom, except Permitted
Liens.
Sale and Leaseback Transactions
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, enter into any sale and leaseback
transaction; provided that the Company and the
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Guarantors may enter into a sale and leaseback transaction if (i) the Company
or such Guarantor could have (a) incurred Indebtedness in an amount equal to
the Attributable Debt relating to such sale and leaseback transaction pursuant
to the Debt to Cash Flow Ratio test set forth in the first paragraph of the
covenant described above under the caption "--Incurrence of Indebtedness and
Issuance of Preferred Stock" and (b) incurred a Lien to secure such
Indebtedness pursuant to the covenant described above under the caption
"--Liens," (ii) the gross cash proceeds of such sale and leaseback transaction
are at least equal to the fair market value (as determined in good faith by the
Board of Directors and set forth in an Officers' Certificate delivered to the
Trustee) of the property that is the subject of such sale and leaseback
transaction and (iii) the transfer of assets in such sale and leaseback
transaction is permitted by, and the proceeds of such transaction are applied
in compliance with, the covenant described above under the caption
"--Repurchase at the Option of Holders--Asset Sales."
Dividend and Other Payment Restrictions Affecting Subsidiaries
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary to (i)(a) pay dividends or make any
other distributions to the Company or any of its Restricted Subsidiaries (1) on
its Capital Stock or (2) with respect to any other interest or participation
in, or measured by, its profits, or (b) pay any indebtedness owed to the
Company or any of its Restricted Subsidiaries, (ii) make loans or advances to
the Company or any of its Restricted Subsidiaries or (iii) transfer any of its
properties or assets to the Company or any of its Restricted Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of (a)
Existing Indebtedness as in effect on the date of the Indenture, (b) the Senior
Credit Facility and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings thereof, and
any other agreement governing or relating to Senior Debt, provided, that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings and other agreements are no more
restrictive with respect to such dividend and other payment restrictions than
those contained in the Senior Credit Facility, (c) the Indenture, the Notes,
the Exchange Notes and the Subsidiary Guarantees, (d) applicable law, (e) any
instrument governing Indebtedness or Capital Stock of a Person acquired by the
Company or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness was incurred in connection
with or in contemplation of such acquisition), which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so acquired;
provided that, in the case of Indebtedness, such Indebtedness was permitted by
the terms of the Indenture to be incurred, (f) by reason of customary
non-assignment provisions in leases entered into in the ordinary course of
business and consistent with past practices, (g) purchase money obligations for
property acquired in the ordinary course of business that impose restrictions
of the nature described in clause (iii) above on the property so acquired, (h)
Permitted Refinancing Indebtedness; provided that the restrictions contained in
the agreements governing such Permitted Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced, (i) secured Indebtedness otherwise permitted to be incurred
pursuant to the provisions of the covenant described above under the caption
"--Liens" that limits the right of the debtor to dispose of the assets securing
such Indebtedness, (j) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements and other
similar agreements entered into in the ordinary course of business and (k)
restrictions on cash or other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business.
Issuances and Sales of Equity Interests in Restricted Subsidiaries
The Indenture provides that the Company (i) will not, and will not permit
any Restricted Subsidiary of the Company to, transfer, convey, sell, lease or
otherwise dispose of any Equity Interests in any Restricted Subsidiary of the
Company to any Person (other than the Company or a Restricted Subsidiary of the
Company), unless (a) such transfer, conveyance, sale, lease or other
disposition is of all the Equity Interests in such Restricted Subsidiary and
(b) the cash Net Proceeds, if any, from such transfer,
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conveyance, sale, lease or other disposition are applied in accordance with the
covenant described above under the caption "--Repurchase at the Option of
Holders--Asset Sales," and (ii) will not permit any Restricted Subsidiary of
the Company to issue any of its Equity Interests (other than, if necessary,
shares of its Capital Stock constituting directors' qualifying shares) to any
Person other than to the Company or a Restricted Subsidiary of the Company
except as permitted pursuant to the covenant described above under the caption
"--Incurrence of Indebtedness and Issuance of Preferred Stock.
Merger, Consolidation or Sale of Assets
The Indenture provides that the Company may not consolidate or merge with
or into (whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially
all of its properties or assets in one or more related transactions, to another
corporation, Person or entity unless (i) the Company is the surviving
corporation or the entity or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia; (ii) the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company) or the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Exchange Notes, the Indenture and the
Registration Rights Agreement pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee; (iii) immediately after such
transaction no Default or Event of Default exists; and (iv) except in the case
of a merger of the Company with or into a Wholly Owned Restricted Subsidiary of
the Company, the Company or the entity or Person formed by or surviving any
such consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made will, both immediately prior to and immediately after giving pro
forma effect thereto as if such transaction had occurred at the beginning of
the applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth
in the first paragraph of the covenant described above under the caption
"--Incurrence of Indebtedness and Issuance of Preferred Stock."
Transactions with Affiliates
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each of the foregoing, an
"Affiliate Transaction"), unless (i) such Affiliate Transaction is on terms
that are no less favorable to the Company or such Restricted Subsidiary than
those that would have been obtained in a comparable transaction by the Company
or such Restricted Subsidiary with an unrelated Person and (ii) the Company
delivers to the Trustee (a) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate consideration in excess
of $1.0 million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (i) above and that such Affiliate Transaction has been approved by a
majority of the members of the Board of Directors that are disinterested as to
such Affiliate Transaction and (b) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, an opinion as to the fairness to the Company of such
Affiliate Transaction from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing; provided that (1)
any employment agreement entered into by, and any compensation paid by, the
Company or any of its Restricted Subsidiaries, in each case, approved by the
Compensation Committee, (2) transactions between or among the Company and/or
its Restricted Subsidiaries, (3) fees and compensation paid to members of the
Board of Directors of the Company and of its Restricted Subsidiaries in their
capacity as such, to the extent such fees and compensation are reasonable,
customary and consistent with past practices and the issuance of shares of the
Company to the Directors who were holders of options or stock appreciation
rights in Broadcasting as of the Spin-Off record date, whether or not vested,
(4) fees and compensation paid to, and indemnity provided on behalf of,
officers, directors or
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employees of the Company or any of its Restricted Subsidiaries, as determined
by the Board of Directors of the Company or of any such Restricted Subsidiary,
to the extent such fees and compensation are reasonable, customary and
consistent with past practices, (5) the transactions specifically contemplated
by the Merger Agreement, the agreements relating to the Recent Acquisitions or
by instruments referred to in any such agreements, in each case, as the same
are in effect on the date of the Indenture, (6) the Spin-Off Transactions, (7)
the transactions specifically contemplated by the Delsener/Slater Employment
Agreements, in each case as in effect on the date of the Indenture, (8) the
Meadows Repurchase and the Series E Preferred Repurchase; provided that the
Company receives either (x) a cash payment from Broadcasting or Broadcasting
Buyer or an Affiliate thereof at or prior to the date of the Merger at least
equal to the aggregate amount expended by the Company in the Meadows Repurchase
and the Series E Preferred Repurchase less $3.0 million or (y) an increase in
favor of the Company in the Working Capital Adjustment (including the avoidance
of a decrease) contemplated by the Merger Agreement in an amount at least equal
to the aggregate amount expended by the Company in the Meadows Repurchase and
the Series E Preferred Repurchase less $3.0 million or (z) any combination
thereof adding up to an amount at least equal to the aggregate amount expended
by the Company in the Meadows Repurchase and the Series E Preferred Repurchase
less $3.0 million and (9) any Restricted Payment that is permitted by the
provisions of the Indenture described above under the caption "--Restricted
Payments," in each case, shall not be deemed to be Affiliate Transactions.
Additional Subsidiary Guarantees
The Indenture provides that if the Company or any of its Restricted
Subsidiaries shall acquire or create another domestic Restricted Subsidiary
after the date of the Indenture (other than the Non-Guarantor Subsidiaries), or
any domestic Unrestricted Subsidiary shall become a Restricted Subsidiary of
the Company, then such Subsidiary shall execute a Subsidiary Guarantee of the
Exchange Notes and deliver an opinion of counsel, in accordance with the terms
of the Indenture.
Payments for Consent
The Indenture provides that neither the Company nor any of the Company's
Subsidiaries will, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any holder of
any Exchange Notes for or as an inducement to any consent, waiver or amendment
of any of the terms or provisions of the Indenture or the Exchange Notes unless
such consideration is offered to be paid or is paid to all holders of the
Exchange Notes that consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.
Business Activities
The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business other than Permitted Businesses, except to such extent
as would not be material to the Company and its Restricted Subsidiaries taken
as a whole.
Reports
The Indenture provides that, whether or not required by the rules and
regulations of the Commission, so long as any Exchange Notes are outstanding,
the Company will furnish to the holders of Exchange Notes (i) all quarterly and
annual financial information that would be required to be contained in a filing
with the Commission on Forms 10-Q and 10-K if the Company was required to file
such Forms, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" that describes the financial condition and
results of operations of the Company and its consolidated Subsidiaries (showing
in reasonable detail, either on the face of the financial statements or in the
footnotes thereto and in Management's Discussion and Analysis of Financial
Condition and Results of Operations, the financial condition and results of
operations of the Company and its Restricted Subsidiaries separate from the
financial information and results of operations of the Unrestricted
Subsidiaries of the Company) and, with respect to the annual information only,
a report thereon by the Company's certified independent accountants and (ii)
all current reports that would be required to be filed
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with the Commission on Form 8-K if the Company was required to file such
reports, in each case, within the time periods specified in the Commission's
rules and regulations. In addition, following the consummation of the Exchange
Offer, whether or not required by the rules and regulations of the Commission,
the Company will file a copy of all such information and reports with the
Commission for public availability within the time periods specified in the
Commission's rules and regulations (unless the Commission will not accept such
a filing) and make such information available to securities analysts and
prospective investors upon request. In addition, the Company will agree that,
for so long as any Exchange Notes remain outstanding, they will furnish to the
holders of the Exchange Notes and to securities analysts and prospective
investors, upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.
EVENTS OF DEFAULT AND REMEDIES
The Indenture provides that each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest on, or
Liquidated Damages, if any, with respect to, the Exchange Notes (whether or not
prohibited by the subordination provisions of the Indenture), (ii) default in
payment when due of the principal of or premium, if any, on the Exchange Notes
(whether or not prohibited by the subordination provisions of the Indenture);
(iii) failure by the Company or any Restricted Subsidiary to comply with the
provisions described under the captions "--Repurchase at the Option of
Holders--Change of Control" or "--Certain Covenants--Merger, Consolidation or
Sale of Assets;" (iv) failure by the Company or any Restricted Subsidiary for
30 days after written notice by the Trustee or the holders of at least 25% in
principal amount of the then outstanding Notes and Exchange Notes to comply
with the provisions described under the captions "--Repurchase at the Option of
Holders--Asset Sales," "--Certain Covenants--Restricted Payments" or "--Certain
Covenants--Incurrence of Indebtedness and Issuance of Preferred Stock;" (v)
failure by the Company or any Restricted Subsidiary for 60 days after written
notice by the Trustee or the holders of at least 25% in principal amount of the
then outstanding Notes and Exchange Notes to comply with any of its other
agreements in the Indenture or the Exchange Notes; (vi) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or guarantee now exists or is created after the date of the
Indenture, which default (a) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness prior to the expiration of
the grace period provided in such Indebtedness on the date of such default (a
"Payment Default") or (b) results in the acceleration of such Indebtedness
prior to its express maturity and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $10.0 million or more; (vii) failure
by the Company or any of its Restricted Subsidiaries to pay final judgments
aggregating in excess of $10.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days; (viii) except as permitted by the
Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to
be unenforceable or invalid or shall cease for any reason to be in full force
and effect or any Guarantor, or any Person acting on behalf of any Guarantor,
shall deny or disaffirm its obligations under its Subsidiary Guarantee; and
(ix) certain events of bankruptcy or insolvency with respect to the Company or
any of the Company's Restricted Subsidiaries that constitutes a Significant
Subsidiary or any group of Restricted Subsidiaries of the Company that, taken
together, would constitute a Significant Subsidiary.
If any Event of Default occurs and is continuing, the Trustee or the
holders of at least 25% in principal amount of the then outstanding Notes and
Exchange Notes may declare all the Notes and Exchange Notes to be due and
payable immediately. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, with respect
to the Company, any Restricted Subsidiary of the Company that constitutes a
Significant Subsidiary or any group of Restricted Subsidiaries of the Company
that, taken together, would constitute a Significant Subsidiary, all
outstanding Notes and Exchange Notes will become due and payable without
further action or notice. Holders of the Notes or the Exchange Notes may not
enforce the Indenture or the Exchange Notes except
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as provided in the Indenture. Subject to certain limitations, holders of a
majority in principal amount of the then outstanding Notes and Exchange Notes
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from holders of the Notes and the Exchange Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have
had to pay if the Company then had elected to redeem the Exchange Notes
pursuant to the optional redemption provisions of the Indenture, an equivalent
premium shall also become and be immediately due and payable to the extent
permitted by law upon the acceleration of the Exchange Notes. If an Event of
Default occurs prior to February 1, 2003 by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the
intention of avoiding the prohibition on redemption of the Exchange Notes prior
to such date, then the premium specified in the Indenture shall also become
immediately due and payable to the extent permitted by law upon the
acceleration of the Exchange Notes.
The holders of a majority in aggregate principal amount of the Notes and
Exchange Notes then outstanding by notice to the Trustee may on behalf of the
holders of all of the Notes and the Exchange Notes waive any existing Default
or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Notes and the Exchange Notes.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee or stockholder of the Company or any
Guarantor, as such, shall have any liability for any obligations of the Company
or any Guarantor under the Exchange Notes, the Subsidiary Guarantees, the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each holder of Exchange Notes by accepting a
Exchange Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Exchange Notes. Such waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the Commission that such a waiver is against public policy.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Notes and Exchange Notes
and to have each Guarantor's obligation discharged with respect to its
Subsidiary Guarantee ("Legal Defeasance") except for (i) the rights of holders
of outstanding Notes and Exchange Notes to receive payments in respect of the
principal of and premium, interest and Liquidated Damages, if any, on the Notes
and the Exchange Notes when such payments are due from the trust referred to
below, (ii) the Company's obligations with respect to the Notes and the
Exchange Notes concerning issuing temporary Notes or Exchange Notes,
registration of Notes or Exchange Notes, mutilated, destroyed, lost or stolen
Notes or Exchange Notes and the maintenance of an office or agency for payment
and money for security payments held in trust, (iii) the rights, powers,
trusts, duties and immunities of the Trustee, and the Company's obligations in
connection therewith and (iv) the Legal Defeasance provisions of the Indenture.
In addition, the Company may, at its option and at any time, elect to have the
obligations of the Company and each Guarantor released with respect to certain
covenants that are described in the Indenture ("Covenant Defeasance") and
thereafter any omission to comply with such obligations shall not constitute a
Default or Event of Default with respect to the Notes and the Exchange Notes.
In the event Covenant Defeasance occurs, certain events (not including
non-payment, bankruptcy, receivership, rehabilitation and insolvency events)
described under the caption "Events of Default" will no longer constitute an
Event of Default with respect to the Notes and the Exchange Notes.
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In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company must irrevocably deposit with the Trustee, in trust, for the
benefit of the holders of the Notes and the Exchange Notes, cash in U.S.
dollars, non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized firm
of independent public accountants, to pay the principal of and premium,
interest and Liquidated Damages, if any, on the outstanding Notes and Exchange
Notes on the stated maturity or on the applicable redemption date, as the case
may be, and the Company must specify whether the Notes and the Exchange Notes
are being defeased to maturity or to a particular redemption date; (ii) in the
case of Legal Defeasance, the Company shall have delivered to the Trustee an
opinion of counsel in the United States reasonably acceptable to the Trustee
confirming that (a) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or (b) since the date of the
Indenture, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such opinion of counsel shall
confirm that, the holders of the outstanding Notes and Exchange Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Legal Defeasance had not occurred; (iii) in the case of Covenant
Defeasance, the Company shall have delivered to the Trustee an opinion of
counsel in the United States reasonably acceptable to the Trustee confirming
that the holders of the outstanding Notes and Exchange Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Covenant Defeasance had not occurred; (iv) no Default or Event of
Default shall have occurred and be continuing on the date of such deposit
(other than a Default or Event of Default resulting from the borrowing of funds
to be applied to such deposit) or insofar as Events of Default from bankruptcy
or insolvency events are concerned, at any time in the period ending on the
91st day after the date of deposit; (v) such Legal Defeasance or Covenant
Defeasance will not result in a breach or violation of, or constitute a default
under any material agreement or instrument (other than the Indenture) to which
the Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries is bound; (vi) the Company shall have delivered to the
Trustee an opinion of counsel to the effect that after the 91st day following
the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; (vii) the Company shall have delivered to the
Trustee an Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the holders of Notes or Exchange Notes
over the other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others; and
(viii) the Company shall have delivered to the Trustee an Officers' Certificate
and an opinion of counsel, each stating that all conditions precedent provided
for relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.
TRANSFER AND EXCHANGE
A holder may transfer or exchange Exchange Notes in accordance with the
Indenture. The Registrar and the Trustee may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company is not required to transfer or exchange
any Exchange Note selected for redemption. Also, the Company is not required to
transfer or exchange any Exchange Note for a period of 15 days before a
selection of Exchange Notes to be redeemed. The registered holder of a Exchange
Note will be treated as the owner of it for all purposes.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next two succeeding paragraphs, the Indenture,
the Notes, the Exchange Notes and the Subsidiary Guarantees may be amended or
supplemented with the consent of the holders of at least a majority in
principal amount of the Notes and the Exchange Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes and Exchange Notes), and any
existing default or compliance with any provision
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of the Indenture, the Notes, the Exchange Notes or the Subsidiary Guarantees
may be waived with the consent of the holders of a majority in principal amount
of the then outstanding Notes and Exchange Notes (including consents obtained
in connection with a tender offer or exchange offer for Notes and Exchange
Notes).
Without the consent of each holder affected, an amendment or waiver may
not (with respect to any Exchange Notes held by a non-consenting holder): (i)
reduce the principal amount of Exchange Notes whose holders must consent to an
amendment, supplement or waiver, (ii) reduce the principal of or change the
fixed maturity of any Exchange Note or alter the provisions with respect to the
redemption of the Exchange Notes (other than provisions relating to the
covenants described above under the caption "--Repurchase at the Option of
Holders"), (iii) reduce the rate of or change the time for payment of interest
on any Exchange Note, (iv) waive a Default or Event of Default in the payment
of principal of or premium, interest or Liquidated Damages, if any, on the
Exchange Notes (except a rescission of acceleration of the Exchange Notes by
the holders of at least a majority in aggregate principal amount of the
Exchange Notes and a waiver of the payment default that resulted from such
acceleration), (v) make any Exchange Note payable in money other than that
stated in the Exchange Notes, (vi) make any change in the provisions of the
Indenture relating to waivers of past Defaults or the rights of holders of
Exchange Notes to receive payments of principal of or premium, interest or
Liquidated Damages, if any, on the Exchange Notes, (vii) waive a redemption
payment with respect to any Exchange Note (other than a payment required by one
of the covenants described above under the caption "--Repurchase at the Option
of Holders"), (ix) release any Guarantor from its Subsidiary Guarantee or (x)
make any change in the foregoing amendment and waiver provisions. In addition,
any amendment to the provisions of Article 10 of the Indenture (which relate to
subordination) will require the consent of the holders of at least 75% in
aggregate principal amount of the Notes and the Exchange Notes then outstanding
if such amendment would adversely affect the rights of holders of Notes and
Exchange Notes.
Notwithstanding the foregoing, without the consent of any holder of
Exchange Notes, the Company, a Guarantor (with respect to a Subsidiary
Guarantee or the Indenture to which it is a party) and the Trustee may amend or
supplement the Indenture, the Exchange Notes or any Subsidiary Guarantee to
cure any ambiguity, defect or inconsistency, to provide for uncertificated
Exchange Notes in addition to or in place of certificated Exchange Notes, to
provide for the assumption of the Company's or any Guarantor's obligations to
holders of Exchange Notes in the case of a merger or consolidation or sale of
substantially all of the Company's assets, to make any change that would
provide any additional rights or benefits to the holders of Exchange Notes or
that does not adversely affect the legal rights under the Indenture of any such
holder or to comply with requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage in
other transactions; however, if it acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the Commission for permission
to continue or resign.
The holders of a majority in principal amount of the then outstanding
Notes and Exchange Notes will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee, subject to certain exceptions. The Indenture provides that in case an
Event of Default shall occur (which shall not be cured), the Trustee will be
required, in the exercise of its power, to use the degree of care of a prudent
man in the conduct of his own affairs. Subject to such provisions, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request of any holder of Notes or Exchange Notes, unless such
holder shall have offered to the Trustee security and indemnity satisfactory to
it against any loss, liability or expense.
DEPOSITORY PROCEDURES; BOOK-ENTRY, DELIVERY AND FORM
All of the Notes were initially be issued in the form of two Global Notes
(the "Global Notes"). The Global Notes were deposited on February 11, 1998
with, or on behalf of, The Depository Trust Company
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(the "Depositary") and registered in the name of Cede & Co., as nominee of the
Depositary (such nominee being referred to herein as the "Global Note Holder").
Exchange Notes which will be issued in exchange for the Notes will be issued in
the form of one Global Note (the "Exchange Global Note") and deposited with, or
on behalf of the depositary and registered in the name of the Global Note
Holder.
The Depositary is a limited-purpose trust company that was created to hold
securities for its participating organizations (collectively, the
"Participants" or the "Depositary's Participants") and to facilitate the
clearance and settlement of transactions in such securities between
Participants through electronic book-entry changes in accounts of its
Participants. The Depositary's Participants include securities brokers and
dealers (including the Initial Purchasers), banks and trust companies, clearing
corporations and certain other organizations. Access to the Depositary's system
is also available to other entities such as banks, brokers, dealers and trust
companies (collectively, the "Indirect Participants" or the "Depositary's
Indirect Participants") that clear through or maintain a custodial relationship
with a Participant, either directly or indirectly. Persons who are not
Participants may beneficially own securities held by or on behalf of the
Depositary only thorough the Depositary's Participants or the Depositary's
Indirect Participants.
The Company expects that pursuant to procedures established by the
Depositary (i) upon deposit of the Global Exchange Note, the Depositary will
credit the accounts of Participants designated by the Exchange Agent with
portions of the principal amount of the Exchange Global Note and (ii) ownership
of the Exchange Notes evidenced by the Exchange Global Note will be shown on,
and the transfer of ownership thereof will be effected only through, records
maintained by the Depositary (with respect to the interests of the Depositary's
Participants), the Depositary's Participants and the Depositary's Indirect
Participants. Prospective purchasers are advised that the laws of some states
require that certain persons take physical delivery in definitive form of
securities that they own. Consequently, the ability to transfer Exchange Notes
evidenced by the Exchange Global Note will be limited to such extent. For
certain other restrictions on the transferability of the Exchange Notes, see
"Notice to Investors."
So long as the Global Note Holder is the registered owner of any Notes,
the Global Note Holder will be considered the sole Holder under the Indenture
of any Notes evidenced by the Global Notes and the Global Exchange Note.
Beneficial owners of Notes evidenced by the Global Notes and the Global
Exchange Note will not be considered the owners or Holders thereof under the
Indenture for any purpose, including with respect to the giving of any
directions, instructions or approvals to the Trustee thereunder. Neither the
Company nor the Trustee has any responsibility or liability for any aspect of
the records of the Depositary or for maintaining, supervising or reviewing any
records of the Depositary relating to the Notes.
Payments in respect of the principal of, premium, if any, interest and
Liquidated Damages, if any, on any Notes registered in the name of the Global
Note Holder on the applicable record date will be payable by the Trustee to or
at the direction of the Global Note Holder in its capacity as the registered
Holder under the Indenture. Under the terms of the Indenture, the Company and
the Trustee may treat the persons in whose names Notes, including the Global
Notes, are registered as the owners thereof for the purpose of receiving such
payments. Consequently, neither the Company nor the Trustee has or will have
any responsibility or liability for the payment of such amounts to beneficial
owners of Notes. The Company believes, however, that it is currently the policy
of the Depositary to immediately credit the accounts of the relevant
Participants with such payments, in amounts proportionate to heir respective
holdings of beneficial interests in the relevant security as shown on the
records of the Depositary. Payments by the Depositary's Participants and the
Depositary's Indirect Participants to the beneficial owners of Notes will be
governed by standing instructions and customary practice and will be the
responsibility of the Depositary's Participants or the Depositary's Indirect
Participants.
CERTIFICATED SECURITIES
Subject to certain conditions, any person having a beneficial interest in
the Global Notes and the Global Exchange Note may, upon request to the Trustee,
exchange such beneficial interest for Notes in the form of a definitive
registered certificate ("Certificated Securities"). Upon any such issuance, the
Trustee is required to register such Certificated Securities in the name of,
and cause the same to be
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delivered to, such person or persons (or the nominee of any thereof) except
that all certificated Notes would be subject to transfer restriction legend
requirements. In addition, if (i) the Company notifies the Trustee in writing
that the Depositary is no longer willing or able to act as a depositary and the
Company is unable to locate a qualified successor within 90 days or (ii) the
Company, at its option, notifies the Trustee in writing that it elects to cause
the issuance of Notes in the form of Certificated Securities under the
Indenture, then, upon surrender by the Global Note Holder of its Global Notes
and the Global Exchange Note, Notes in such form will be issued to each person
that the Global Note Holder and the Depositary identify as being the beneficial
owner of the related Notes.
Neither the Company nor the Trustee will be liable for any delay by the
Global Note Holder or the Depositary in identifying the beneficial owners of
Notes and the Company and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the Global Note Holder or the
Depositary for all purposes.
Exchange of Certificated Notes for Book-Entry Notes
Exchange Notes issued in certificated form may not be exchanged for
beneficial interests in any Global Note unless the transferor first delivers to
the Trustee a written certificate (in the form provided in the Indenture) to
the effect that such transfer will comply with the appropriate transfer
restrictions applicable to such Notes. See "Notice to Investors."
Same Day Settlement and Payment
The Indenture requires that payments in respect of the Notes represented
by the Global Note (including principal, premium, if any, interest and
Liquidated Damages, if any) be made by wire transfer of immediately available
funds to the accounts specified by the Global Note Holder. With respect to
Certificated Securities, the Company will make all payments of principal,
premium, if any, interest and Liquidated Damages, if any, by wire transfer of
immediately available funds to the accounts specified by the Holders thereof
or, if no such account is specified, by mailing a check to each such Holder's
registered address. The Notes represented by the Global Notes are eligible to
trade in the PORTAL Market and to trade in the Depositary's Same-Day Funds
Settlement System, and any permitted secondary market trading activity in Notes
will, therefore, be required by the Depositary to be settled in immediately
available funds. The Company expects that secondary trading in the Certificated
Securities will also be settled in immediately available funds.
Because of time zone differences, the securities account of a Euroclear or
Cedel participant purchasing an interest in a Global Note from a Participant in
DTC will be credited, and any such crediting will be reported to the relevant
Euroclear or Cedel participant, during the securities settlement processing day
(which must be a business day for Euroclear and Cedel) immediately following
the settlement date of DTC. DTC has advised the Company that cash received in
Euroclear or Cedel as a result of sales of interests in a Global Note by or
through a Euroclear or Cedel participant to a Participant in DTC will be
received with value on the settlement date of DTC but will be available in the
relevant Euroclear or Cedel cash account only as of the business day for
Euroclear or Cedel following DTC's settlement date.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
On February 11, 1998, the Company, the Subsidiary Guarantors and the
Initial Purchasers entered into the Registration Rights Agreement. Pursuant to
the Registration Rights Agreement, the Company and the Subsidiary Guarantors
agreed to file with the Commission the Registration Statement of which this
Prospectus is a part on the appropriate form under the Securities Act with
respect to the Exchange Notes. Upon the effectiveness of this Registration
Statement, the Company will offer to the Holders of Notes pursuant to the
Exchange Offer who are able to make certain representations the opportunity to
exchange their Notes for Exchange Notes. If (i) the Company and the Subsidiary
Guarantors are not required to file this Registration Statement or permitted to
consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy or (ii) any Holder of Notes notifies the
Company within 20 business days following consummation of the Exchange Offer
that (A) it is prohibited by law or Commission policy from participating in the
Exchange Offer or (B) that it may not
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resell the Exchange Notes acquired by it in the Exchange Offer to the public
without delivering a prospectus and the prospectus contained in this
Registration Statement is not appropriate or available for such resales or (C)
that it is a broker-dealer and owns Notes acquired directly from the Company or
an affiliate of the Company, the Company and the Subsidiary Guarantors will
file with the Commission a shelf registration statement pursuant to Rule 415
under the Securities Act (the "Shelf Registration Statement") to cover resales
of the Notes by the Holders thereof who satisfy certain conditions relating to
the provision of information in connection with the Shelf Registration
Statement. The Company and the Subsidiary Guarantors will use their reasonable
best efforts to cause the applicable registration statement to be declared
effective as promptly as possible by the Commission. For purposes of the
foregoing, "Note" means each Note until (i) the date on which such Note has
been exchanged by a person other than a broker-dealer for a New Note in the
Exchange Offer, (ii) following the exchange by a broker-dealer in the Exchange
Offer of a Note for a Exchange Note, the date on which such Exchange Note is
sold to a purchaser who receives from such broker-dealer on or prior to the
date of such sale a copy of the prospectus contained in this Registration
Statement, (iii) the date on which such Note has been effectively registered
under the Securities Act and disposed of in accordance with the Shelf
Registration Statement or (iv) the date on which such Note is distributed to
the public pursuant to Rule 144 under the Securities Act.
The Registration Rights Agreement provides that (i) the Company and the
Subsidiary Guarantors will file this Registration Statement with the Commission
on or prior to 75 days of executing the Registration Rights Agreement, (ii) the
Company and the Subsidiary Guarantors will use their reasonable best efforts to
have the Exchange Offer Registration Statement declared effective by the
Commission on or prior to 120 days of executing the Registration Rights
Agreement, (iii) unless the Exchange Offer would not be permitted by applicable
law or Commission policy, the Company and the Subsidiary Guarantors will
commence the Exchange Offer and use their reasonable best efforts to issue on
or prior to [30 business days] after the date on which the Exchange Offer
Registration Statement was declared effective by the Commission, Exchange Notes
in exchange for all Notes tendered prior thereto in the Exchange Offer and (iv)
if obligated to file the Shelf Registration Statement, the Company and the
Subsidiary Guarantors will use their best efforts to file the Shelf
Registration Statement with the Commission on or prior to 30 days after such
filing obligation arises and to cause the Shelf Registration to be declared
effective by the Commission on or prior to 90 days after such filing and to
cause the Shelf Registration Statement to be continuously effective for up to
two years or such earlier time as such Notes have been sold pursuant to such
Shelf Registration Statement. The Company may cause the Shelf Registration
Statement to not be available for up to 120 days during the three-year period,
but in no event for more than 45 consecutive days or for more than 60 days in
any calendar year. If (a) the Company and the Subsidiary Guarantors fail to
file any of the Registration Statements required by the Registration Rights
Agreement on or before the date specified for such filing, (b) any of such
Registration Statements is not declared effective by the Commission on or prior
to the date specified for such effectiveness (the "Effectiveness Target Date"),
(c) the Company and the Subsidiary Guarantors fail to Consummate the Exchange
Offer within 30 business days of the Effectiveness Target Date with respect to
this Registration Statement, or (d) the Shelf Registration Statement or the
Exchange Offer Registration Statement is declared effective but thereafter
ceases to be effective or usable in connection with resales of Notes during the
periods specified in the Registration Rights Agreement (each such event
referred to in clauses (a) through (d) above a "Registration Default"), then
the Company will pay Liquidated Damages to each Holder of Notes, with respect
to the first 90-day period immediately following the occurrence of such
Registration Default in an amount equal to $.05 per week per $1,000 principal
amount of Notes held by such Holder. The amount of the Liquidated Damages will
increase by an additional $.05 per week per $1,000 principal amount of Notes
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of Liquidated Damages of $.50 per week
per $1,000 principal amount of Notes. All accrued Liquidated Damages will be
paid by the Company on each interest payment date to the Global Note Holder by
wire transfer of immediately available funds or by federal funds check and to
Holders of Certificated Securities by wire transfer to the accounts specified
by them or by mailing checks to their registered addresses if no such accounts
have been specified. Following the cure of all Registration Defaults, the
accrual of Liquidated Damages will cease.
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Holders of Notes will be required to make certain representations to the
Company (as described in the Registration Rights Agreement) in order to
participate in the Exchange Offer and will be required to deliver information
to be used in connection with the Shelf Registration Statement and to provide
comments on the Shelf Registration Statement within the time periods set forth
in the Registration Rights Agreement in order to have their Notes included in
the Shelf Registration Statement and benefit from the provisions regarding
Liquidated Damages set forth above.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as
any other capitalized terms used herein for which no definition is provided.
"Acquired Business" means each of the businesses acquired by the Company
pursuant to the Recent Acquisitions.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the Voting Stock of a Person shall be
deemed to be control.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback), excluding sales of services and ancillary products in the ordinary
course of business consistent with past practices (provided, that the sale,
lease, conveyance or other disposition of all or substantially all of the
assets of the Company and its Restricted Subsidiaries taken as a whole will be
governed by the provisions of the Indenture described above under the caption
"--Repurchase at the Option of Holders--Change of Control" and/or the
provisions described above under the caption "--Certain Covenants--Merger,
Consolidation or Sale of Assets" and not by the provisions of the Asset Sale
covenant) and (ii) the issue or sale by the Company or any of its Subsidiaries
of Equity Interests of any of the Company's Subsidiaries, in the case of either
clause (i) or (ii), whether in a single transaction or a series of related
transactions (a) that have a fair market value in excess of $5.0 million or (b)
for net proceeds in excess of $5.0 million. Notwithstanding the foregoing: (i)
a transfer of assets by the Company to a Wholly Owned Restricted Subsidiary or
by a Wholly Owned Restricted Subsidiary to the Company or to another Wholly
Owned Restricted Subsidiary, (ii) an issuance of Equity Interests by a Wholly
Owned Restricted Subsidiary to the Company or to another Wholly Owned
Restricted Subsidiary, (iii) the transfer of obsolete equipment in the ordinary
course of business, (iv) the sale and leaseback of any assets within 90 days of
the acquisition of such assets and (v) a Restricted Payment that is permitted
by the covenant described above under the caption "--Certain
Covenants--Restricted Payments" will not be deemed to be Asset Sales.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
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"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than six
months from the date of acquisition, (iii) certificates of deposit and
eurodollar time deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case with any domestic commercial bank having
capital and surplus in excess of $500.0 million and a Thompson Bank Watch
Rating of "B" or better, (iv) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clauses
(ii) and (iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above and (v) commercial paper having
the highest rating obtainable from Moody's Investors Service, Inc. or Standard
& Poor's Corporation and in each case maturing within six months after the date
of acquisition and (vi) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (i)--(v) of this
definition.
"Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than the Spin-Off
or by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole to any "person" (as such term is used in Section
13(d)(3) of the Exchange Act) other than the Principal or a Related Party of
the Principal, (ii) the adoption of a plan relating to the liquidation or
dissolution of the Company, (iii) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of
which is that any "person" (as defined above), other than the Principal and his
Related Parties, becomes the "beneficial owner" (as such term is defined in
Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has
the right to acquire, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition), directly or
indirectly, of Voting Stock of the Company having more than 35% of the combined
voting power of all classes of Voting Stock of the Company then outstanding or
(iv) the first day on which a majority of the members of the Board of Directors
of the Company are not Continuing Directors.
"Compensation Committee" means a committee of at least two members of the
board of directors of the Company, a majority of whom are (i) independent
directors elected by the holders of Class A Common Stock of the Company and
(ii) not interested in the particular transactions being approved.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus, without
duplication, (i) an amount equal to any extraordinary loss plus any net loss
realized in connection with an Asset Sale, to the extent such losses were
deducted in computing such Consolidated Net Income, plus (ii) provision for
taxes based on income or profits of such Person and its Restricted Subsidiaries
for such period, to the extent that such provision for taxes was deducted in
computing such Consolidated Net Income, plus (iii) consolidated interest
expense of such Person and its Restricted Subsidiaries for such period, whether
paid or accrued and whether or not capitalized (including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), to the extent that any such expense was deducted in computing
such Consolidated Net Income, plus (iv) depreciation expense for such period,
to the extent the same was deducted in computing such Consolidated Net Income,
plus (v) all amortization expense and other non-cash expenses (excluding any
such non-cash expense to the extent that it represents an accrual of or reserve
for cash expenses in any
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future period) for such period, to the extent the same was deducted in
computing such Consolidated Net Income, plus (vi) unusual and nonrecurring
charges paid or accrued in 1997 or 1998 (including, but not limited to, legal,
accounting, investment banking, severance, termination, non-compete and consent
fees) relating to the Merger Agreement, the Spin-Off, the Recent Acquisitions
and transactions related thereto, minus (vii) non-cash items increasing such
Consolidated Net Income for such period, minus (viii) except to the extent
already deducted in computing Consolidated Net Income for such period,
preproduction expenses and investments in theatrical productions incurred or
made during such period by the Company or any Restricted Subsidiary as set
forth in the Company's Consolidated Statement of Cash Flows, plus (ix) any cash
return of capital paid to the Company or a Restricted Subsidiary during such
period associated with a preproduction expense or investment in theatrical
productions to the extent the same was deducted pursuant to clause (viii) above
in computing Consolidated Cash Flow for such period or a prior period, in each
case, on a consolidated basis and determined in accordance with GAAP.
"Consolidated Indebtedness" means, with respect to any Person as of any
date of determination, the sum, without duplication, of (i) the total amount of
Indebtedness and Attributable Debt of such Person and its Restricted
Subsidiaries, plus (ii) the total amount of Indebtedness and Attributable Debt
of any other Person, to the extent that such Indebtedness or Attributable Debt
has been guaranteed by the referent Person or by one or more of its Restricted
Subsidiaries or is secured by a Lien on assets of the referent Person or any of
its Restricted Subsidiaries, plus (iii) the aggregate liquidation value of all
Disqualified Stock of such Person and all preferred stock of Restricted
Subsidiaries of such Person, in each case, determined on a consolidated basis
in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person that
is not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof, (ii) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded, (iv) the cumulative effect of a change in accounting
principles shall be excluded and (v) the Net Income (but not loss) of any
Unrestricted Subsidiary shall be excluded, whether or not distributed to the
Company or one of its Restricted Subsidiaries.
"Contemporary Agreement" means the agreement by the Company to acquire The
Contemporary Group, dated as of December 12, 1997, and the agreements related
thereto, each as in effect on the date of the Indenture.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of the Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"Credit Facility" or "Credit Facilities" means one or more debt facilities
(including, without limitation, the Senior Credit Facility) or commercial paper
facilities with banks or other institutional lenders providing for revolving
credit loans, term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow
from such lenders against such receivables) or letters of credit, in each case,
as amended, restated, modified, renewed, refunded, replaced or refinanced in
whole or in part from time to time. Indebtedness under Credit Facilities
outstanding on the date on which Notes are first issued and authenticated under
the Indenture shall be deemed to have been incurred on such date in reliance on
the exception provided by clause (i) of the definition of Permitted Debt.
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"Debt to Cash Flow Ratio" means, with respect to any Person as of any date
of determination (the "Calculation Date"), the ratio of (a) the Consolidated
Indebtedness of such Person as of such date to (b) the Consolidated Cash Flow
of such Person for the four most recent full fiscal quarters ending immediately
prior to such date for which internal financial statements are available,
determined on a pro forma basis after giving effect to all acquisitions and
dispositions of assets made by such Person and its Restricted Subsidiaries from
the beginning of such four-quarter period through and including such date of
determination (including any related financing transactions) as if such
acquisitions and dispositions had occurred at the beginning of such
four-quarter period. For purposes of making the computation referred to above,
(i) acquisitions that have been made by such Person or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be deemed to have occurred on the first day of the four-quarter reference
period and Consolidated Cash Flow for such reference period shall be calculated
without giving effect to clause (iii) of the proviso set forth in the
definition of Consolidated Net Income, and (ii) the Consolidated Cash Flow
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses disposed of by the Company or any of its
Restricted Subsidiaries prior to the Calculation Date, shall be excluded.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Delsener/Slater Employment Agreements" means (i) the employment agreement
dated January 2, 1997, among Broadcasting, Delsener/Slater Enterprises, Inc.
and Mitch Slater and (ii) the employment agreement dated January 2, 1997 among
Broadcasting, Delsener/Slater Enterprises, Inc. and Ron Delsener, in each case
as in effect on the date of the Indenture.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the date that is 91 days after the date on
which the Exchange Notes mature, provided, however, that any Capital Stock that
would constitute Disqualified Stock solely because the holders thereof have the
right to require the Company to repurchase such Capital Stock upon the
occurrence of a Change of Control or an Asset Sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Issuer
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with the covenant described above
under the caption "--Certain Covenants--Restricted Payments."
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Existing Indebtedness" means Indebtedness in existence on the date of the
Indenture (other than Indebtedness under Credit Facilities), until such
Indebtedness is repaid.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit and reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any Person, the obligations
of such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
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"Indebtedness" means, with respect to any Person without duplication, (i)
any indebtedness of such Person, whether or not contingent, in respect of
borrowed money or evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect thereof) or
banker's acceptances or representing Capital Lease Obligations or the balance
deferred and unpaid of the purchase price of any property or representing any
Hedging Obligations, except any such balance that constitutes an accrued
expense or trade payable, if and to the extent any of the foregoing
indebtedness (other than letters of credit and Hedging Obligations) would
appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, (ii) all indebtedness of others secured by a Lien on any
asset of such Person (whether or not such indebtedness is assumed by such
Person) and (iii) to the extent not otherwise included, the guarantee by such
Person of any indebtedness of any other Person. The amount of any Indebtedness
outstanding as of any date shall be (i) the accreted value thereof, in the case
of any Indebtedness issued with original issue discount, and (ii) the principal
amount thereof, together with any interest thereon that is more than 30 days
past due, in the case of any other Indebtedness.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Subsidiary of the Company sells or otherwise disposes of
any Equity Interests of any direct or indirect Subsidiary of the Company such
that, after giving effect to any such sale or disposition, such Person is no
longer a Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Subsidiary not sold or disposed of in an
amount determined as provided in the third paragraph of the covenant described
above under the caption "--Certain Covenants--Restricted Payments."
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Meadows Repurchase" means the transfer by Broadcasting to the Company of
an option to repurchase, and the purchase by the Company, of up to 250,838
shares of Class A Common Stock of Broadcasting for $33.00 per share, pursuant
to an option granted in connection with the Agreement of Merger, dated February
12, 1997, by and among Broadcasting, NOC Acquisition Corp., CAPCO Acquisition
Corp., QN Acquisition Corp., Nederlander of Connecticut, Inc., Connecticut
Amphitheater Development Corporation, QN Corp., Connecticut Performing Arts,
Inc. and Connecticut Performing Arts Partners and the stockholders of
Nederlander of Connecticut, Inc., Connecticut Amphitheater Development
Corporation and QN Corp. listed on the signature pages thereto and the transfer
of such stock to Broadcasting prior to the Broadcasting Merger.
"Merger Agreement" means the Agreement and Plan of Merger dated as of
August 24, 1997, that provides for the Broadcasting Merger and all transactions
and agreements specifically contemplated thereby or by instruments referred to
therein, each as in effect on the date of the Indenture.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b)
the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary gain (but not loss),
together with any related provision for taxes on such extraordinary gain (but
not loss).
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"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that were the subject of such Asset
Sale and any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP.
"Non-Guarantor Subsidiaries" means Walnut Creek Amphitheater Partnership
and Coral Sky Amphitheater Partnership.
"Non-Recourse Debt" means Indebtedness: (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise) or (c) constitutes the lender; (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Exchange Notes being offered hereby) of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and (iii) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company or any of
its Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Pace Agreement" means the agreement by the Company to acquire PACE
Entertainment Corporation (including the Agreements relating to the Sony
Acquisition and the Blockbuster Acquisition to acquire a 100% interest in
Pavilion Partners), dated December 12, 1997 and the agreements related thereto,
each as in effect on the date of the Indenture.
"Pace Acquisition Facility" means the agreement by the Company, pursuant
to the Pace Agreement, to provide to PACE Entertainment Corporation up to an
aggregate of $25.0 million to be used to fund certain acquisitions, as in
effect on the date of the Indenture.
"Permitted Business" means the live entertainment business and any
business reasonably similar, complementary, ancillary or related thereto,
including the Recent Acquisitions.
"Permitted Investments" means (i) any Investment in the Company or in a
Guarantor; (ii) any Investment in Cash Equivalents; (iii) any Investment by the
Company or any Restricted Subsidiary of the Company in a Person engaged in a
Permitted Business, if (a) as a result of, or concurrently with, such
Investment such Person becomes a Guarantor or (b) as a result of, or
concurrently with, such Investment such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Guarantor; or (c) the
Company or a Guarantor has entered into a binding agreement to acquire such
Person or all or substantially all of the assets of such Person, which
agreement is in effect on the date of such Investment, and such Person becomes
a Guarantor or such transaction is consummated, in each case within 180 days of
the date of such Investment; (iv) any Restricted Investment made as a result of
the receipt of non-cash consideration from an Asset Sale that was made pursuant
to and in compliance with the covenant described above under the caption
"--Repurchase at the Option of Holders--Asset Sales;" (v) any obligations or
shares of Capital Stock received in connection with or as a result of a
bankruptcy, workout or reorganization of the issuer of such obligations or
shares of Capital Stock; (vi) any Investment received involuntarily; (vii) any
acquisition of assets solely in exchange for the issuance of Equity Interests
(other than Disqualified Stock) of the Company; (viii) any Investment made
under the Pace Acquisition Facility pursuant to the Pace Agreement as in effect
on the date of the Indenture; (ix) Investments owned by any of the Acquired
Businesses as of the date such Acquired Business is acquired; (x) other
Investments in Persons engaged
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in Permitted Businesses (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken together with
all other Investments made pursuant to this clause (x) that are at the time
outstanding, not to exceed 5% of Total Tangible Assets; (xi) the consummation
of the Recent Acquisitions; (xii) the Meadows Repurchase and the Series E
Preferred Repurchase; provided that the Company receives either (x) a cash
payment from Broadcasting or Broadcasting Buyer or an Affiliate thereof at or
prior to the date of the Merger at least equal to the aggregate amount expended
by the Company in the Meadows Repurchase and the Series E Preferred Repurchase
less $3.0 million or (y) an increase in favor of the Company in the Working
Capital Adjustment (including the avoidance of a decrease) contemplated by the
Merger Agreement in an amount at least equal to the aggregate amount expended
by the Company in the Meadows Repurchase and the Series E Preferred Repurchase
less $3.0 million or (z) any combination thereof adding up to an amount at
least equal to the aggregate amount expended by the Company in the Meadows
Repurchase and the Series E Preferred Repurchase less $3.0 million; and (xiii)
other Investments in any Person (measured on the date each such Investment was
made and without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (xiii) that
are at the time outstanding, not to exceed $4.0 million.
"Permitted Liens" means (i) Liens securing Senior Debt that was permitted
by the terms of the Indenture to be incurred; (ii) Liens in favor of the
Company or any of its Restricted Subsidiaries; (iii) Liens on property of a
Person existing at the time such Person is merged into or consolidated with the
Company or any Restricted Subsidiary of the Company; provided that such Liens
were not incurred in contemplation of such merger or consolidation and do not
extend to any assets other than those of the Person merged into or consolidated
with the Company; (iv) Liens on property existing at the time of acquisition
thereof by the Company or any Restricted Subsidiary of the Company, provided,
that such Liens were in existence prior to the contemplation of such
acquisition; (v) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (vi) Liens existing on the date of
the Indenture; (vii) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded, provided,
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor and (viii) Liens incurred in
the ordinary course of business of the Company or any Restricted Subsidiary of
the Company with respect to obligations that do not exceed $2.0 million at any
one time outstanding.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries or any Disqualified Stock of the Company
issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund other Indebtedness of the Company
or any of its Restricted Subsidiaries; provided that: (i) the principal amount
(or accreted value or liquidation preference, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount of (or accreted
value, if applicable), plus accrued interest on, the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses incurred in connection therewith); (ii) such Permitted
Refinancing Indebtedness has a final maturity date later than the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is pari passu with the Exchange Notes, such Permitted Refinancing
Indebtedness is pari passu with or subordinated in right of payment to the
Exchange Notes or is Disqualified Stock; (iv) if the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded is subordinated
in right of payment to the Exchange Notes, such Permitted Refinancing
Indebtedness is subordinated in right of payment to the Exchange Notes on terms
at least as favorable to the holders of Exchange Notes as those contained in
the documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded or is Disqualified Stock; and (v) such
Indebtedness is incurred either by the Company or by the Restricted Subsidiary
that is the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded, or such Disqualified Stock is issued by the
Company, as applicable.
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"Principal" means Robert F.X. Sillerman.
"Related Party" with respect to the Principal means (i) any spouse or
immediate family member of the Principal or (ii) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners, owners
or Persons beneficially holding an 80% or more controlling interest of which
consist of the Principal and/or such other Persons referred to in the
immediately preceding clause (i).
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Senior Credit Facility" means that certain credit agreement to be entered
into by and among the Company, the Guarantors, the lenders party thereto, The
Bank of New York, as Administrative Agent, Lehman Commercial Paper Inc. and
Goldman Credit Partners L.P., each as Co-Agents, as contemplated by that
certain commitment letter by and among the Company, the Guarantors, The Bank of
New York, as Arranger, and Lehman Brothers Inc. and Goldman, Sachs & Co., each
as Co-Arrangers, each as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time.
"Series E Preferred Repurchase" means the purchase by the Company of up to
$14.2 million in liquidation preference of 12 5/8% Series E Cumulative
Exchangeable Preferred Stock due October 31, 2006 of Broadcasting and the
dividend or other transfer of such stock to Broadcasting prior to the
Broadcasting Merger.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Spin-Off" means the distribution of the common stock of the Company pro
rata to the holders of SFX Broadcasting, Inc. or other disposition pursuant to,
or as permitted by, the Merger Agreement of all the capital stock and assets of
the Company and its Subsidiaries.
"Spin-Off Transaction" means the Spin-Off, the Merger Agreement and
related transactions described or referred to in the Offering Memorandum of the
Company dated February 5, 1998.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations
to repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a
combination thereof).
"Total Tangible Assets" means, as of any date, (i) the total consolidated
assets of the Company and its Restricted Subsidiaries, as set forth on the
Company's most recently available internal consolidated balance sheet, minus
(ii) the total consolidated intangible assets of the Company and its Restricted
Subsidiaries, as set forth on such consolidated balance sheet.
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary: (a) has no
Indebtedness other than Non-Recourse Debt; (b) is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time from Persons who are
not Affiliates of the Company; (c) is a Person with respect to which neither
the Company nor any of its Restricted
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Subsidiaries has any direct or indirect obligation (1) to subscribe for
additional Equity Interests or (2) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results; (d) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of its
Restricted Subsidiaries; and (e) has at least one director on its board of
directors that is not a director or executive officer of the Company or any of
its Restricted Subsidiaries and has at least one executive officer that is not
a director or executive officer of the Company or any of its Restricted
Subsidiaries.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.
"Working Capital Adjustment" has the meaning assigned to such term in the
Merger Agreement.
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CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS OF THE EXCHANGE
OFFER AND AN INVESTMENT IN THE EXCHANGE NOTES
The following summary describes the material U.S. federal income tax
consequences of the exchange of Notes for Exchange Notes and ownership of the
Exchange Notes to holders of Exchange Notes as of the date hereof. As used
herein, a "U.S. Holder" means a holder of an Exchange Note that is a citizen or
resident of the United States, a corporation, a partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, an estate the income of which is subject to U.S. federal
income taxation regardless of its source, or a trust which is subject to the
supervision of a court within the United States and the control of a U.S.
fiduciary as described in Section 7701(a)(30) of the Internal Revenue Code of
1986 (the "Code"). A "Non-U.S. Holder " is a holder of a note that is not a
U.S. Holder. Except where noted, it deals only with Exchange Notes held as
capital assets and does not deal with special situations, such as those of
dealers in securities or currencies, financial institutions, life insurance
companies, persons holding Exchange Notes as part of a hedging or conversion
transaction or a straddle or holders of Exchange Notes whose "functional
currency" is not the U.S. dollar. Furthermore, the discussion below is based
upon the provisions of the Code, and regulations, rulings and judicial
decisions thereunder as of the date hereof, and such authorities may be
repealed, revoked or modified so as to result in federal income tax
consequences different from those discussed below. In addition, except as
otherwise indicated, the following does not consider the effect of any
applicable foreign, state or local or other tax laws or estate or gift tax
considerations. Persons considering the Exchange Offer and the ownership or
disposition of Exchange Notes should consult their own tax advisors concerning
the federal income tax consequences in light of their particular situations, as
well as any consequences arising under the laws of any other taxing
jurisdiction.
EXCHANGE OF NOTES FOR EXCHANGE NOTES
The issuance of the Exchange Notes to holders of the Notes pursuant to the
terms set forth in this Prospectus should not constitute an exchange for
federal income tax purposes. Consequently, no gain or loss would be recognized
by holders of the Notes upon receipt of the Exchange Notes, and ownership of
the Exchange Notes will be considered a continuation of ownership of the Notes.
For purposes of determining gain or loss upon the subsequent sale or exchange
of the Exchange Notes, a holder's basis in the Exchange Notes should be the
same as such holder's basis in the Notes exchanged therefor. A holder's holding
period for the Exchange Notes should include the Holder's holding period for
the Notes exchanged therefor. The issue price and other tax characteristics of
the Exchange Notes should be identical to the issue price and other tax
characteristics of the Notes exchanged therefor.
STATED INTEREST ON EXCHANGE NOTES; CHANGE OF CONTROL
Except as set forth below, interest on an Exchange Note will generally be
taxable to a U.S. Holder as ordinary income from domestic sources at the time
it is paid or accrued in accordance with the U.S. Holder's method of accounting
for tax purposes.
The Company intends to take the position that the possibility that a U.S.
Holder will acquire the option to require the Company to purchase such holder's
Exchange Notes at 101% of the principal amount thereof described in
"Description of the Exchange Notes--Change of Control" (the "Change of Control
Put Option"), is remote, and does not give rise to any original issue discount
for United States federal income tax purposes. Thus, the Company intends to
take the position that the Change of Control Put Option, if exercised, will
give rise to an increase in the amount realized on the Exchange Note. The
Internal Revenue Service ("IRS") may take a different position, however, which
could affect the timing of the U.S. Holder's income with respect to the Change
of Control Put Option.
MARKET DISCOUNT
If a U.S. Holder purchases an Exchange Note for an amount that is less
than its stated redemption price at maturity, the amount of the difference will
be treated as "market discount" for federal income tax purposes, unless such
difference is less than a specified de minimis amount. Under the market
discount
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rules, a U.S. Holder will be required to treat any principal payments on, or
any gain on the sale, exchange, retirement or other disposition of, a Exchange
Note as ordinary income to the extent of the market discount that has not
previously been included in income and is treated as having accrued on such
Exchange Note at the time of such payment or disposition. In addition, the U.S.
Holder may be required to defer, until the maturity of the Exchange Note or its
earlier disposition in a taxable transaction, the deduction of all or a portion
of the interest expense on any indebtedness incurred or continued to purchase
or carry such Exchange Note.
Any market discount will be considered to accrue ratably during the period
from the date of acquisition to the maturity date of the Exchange Note, unless
the U.S. Holder elects to accrue on a constant interest method. A U.S. Holder
of an Exchange Note may elect to include market discount in income currently as
it accrues (on either a ratable or constant interest method), in which case the
rule described above regarding deferral of interest deductions will not apply.
This election to include market discount in income currently, once made,
applies to all market discount obligations acquired on or after the first
taxable year to which the election applies and may not be revoked without the
consent of the IRS.
AMORTIZABLE BOND PREMIUM
A U.S. Holder that purchases a Exchange Note for an amount in excess of
the sum of all amounts payable on the Exchange Note after the purchase date
other than stated interest will be considered to have purchased the Exchange
Note at a "premium." A U.S. Holder generally may elect to amortize the premium
over the remaining term of the Exchange Note on a constant yield method. The
amount amortized in any year will be treated as a reduction of the U.S.
Holder's interest income from the Exchange Note. Bond premium on an Exchange
Note held by a U.S. Holder that does not make such an election will decrease
the gain or increase the loss otherwise recognized on disposition of the
Exchange Note. The election to amortize premium on a constant yield method,
once made, applies to all debt obligations held or subsequently acquired by the
electing U.S. Holder on or after the first day of the first taxable year to
which the election applies and may not be revoked without the consent of the
IRS.
SALE, EXCHANGE AND RETIREMENT OF EXCHANGE NOTES
A U.S. Holder's tax basis in an Exchange Note will, in general, be the
U.S. Holder's cost therefor, increased by market discount previously included
in income by the U.S. Holder and reduced by any amortized premium. Upon the
sale, exchange, retirement or other disposition of a Exchange Note, a U.S.
Holder will recognize gain or loss equal to the difference between the amount
realized upon the sale, exchange, retirement or other disposition and the tax
basis of the Exchange Note. Except as described above with respect to market
discount, such gain or loss will be capital gain or loss and will be long-term
capital gain or loss if at the time of sale, exchange, retirement or other
disposition the Exchange Note has been held for more than one year. Net capital
gain recognized by an individual from the sale, exchange or retirement of a
Exchange Note that has been held more than 18 months will generally be subject
to tax at a rate not to exceed 20%. Net capital gain recognized by an
individual from the sale, exchange or retirement of a Exchange Note that has
been held for more than 12 months but not for more than 18 months will be
subject to tax at a rate not to exceed 28%. The deductibility of capital losses
is subject to limitations.
NON-U.S. HOLDERS
Under present U.S. federal income and estate tax law, and subject to the
discussion below concerning backup withholding:
(a) no withholding of U.S. federal income tax will be required with
respect to the payment by the Company or any paying agent of principal,
premium, if any, or interest in respect of an Exchange Note owned by a
Non-U.S. Holder (the "Portfolio Interest Exception"), provided (i) that the
beneficial owner does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the Company entitled
to vote within the meaning of section 871(h)(3) of the Code and the
regulations thereunder, (ii) the beneficial owner is not a controlled
foreign
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corporation that is related to the Company through stock ownership, (iii)
the beneficial owner is not a bank whose receipt of interest on an Exchange
Note is described in section 881(c)(3)(A) of the Code and (iv) the
beneficial owner satisfies the statement requirement (described generally
below) set forth in section 871(h) and section 881(c) of the Code and the
regulations thereunder;
(b) no withholding of U.S. federal income tax will be required with
respect to any gain or income realized by a Non-U.S. Holder upon the sale,
exchange, retirement or other disposition of an Exchange Note; and
(c) an Exchange Note beneficially owned by an individual who at the time
of death is a Non-U.S. Holder will not be subject to U.S. federal estate
tax as a result of such individual's death, provided that such individual
does not actually or constructively own 10% or more of the total combined
voting power of all classes of stock of the Company entitled to vote within
the meaning of section 871(h)(3) of the Code and provided that the interest
payments with respect to such Exchange Note would not have been, if
received at the time of such individual's death, effectively connected with
the conduct of a U.S. trade or business by such individual.
To satisfy the requirement referred to in (a)(iv) above, the beneficial
owner of such Exchange Note, or a financial institution holding the Exchange
Note on behalf of such owner, must provide, in accordance with specified
procedures, a paying agent of the Company with a statement to the effect that
the beneficial owner is not a U.S. person. Pursuant to current temporary
Treasury regulations, these requirements will be met if (i) the beneficial
owner provides his name and address, and certifies, under penalties of perjury,
that he is not a U.S. person (which certification may be made on an Internal
Revenue Service Form W-8 (or successor form)) or (ii) a financial institution
holding the Exchange Note on behalf of the beneficial owner certifies, under
penalties of perjury, that such statement has been received by it and furnishes
a paying agent with a copy thereof.
If a Non-U.S. Holder cannot satisfy the requirements of the Portfolio
Interest Exception described in (a) above, payments on an Exchange Note made to
such Non-U.S. Holder will be subject to a 30% withholding tax unless the
beneficial owner of the Exchange Note provides the Company or its paying agent,
as the case may be, with a properly executed (i) IRS Form 1001 (or successor
form) claiming an exemption from withholding under the benefit of a tax treaty
or (ii) IRS Form 4224 (or successor form) stating that interest paid on the
Exchange Note is not subject to withholding tax because it is effectively
connected with the beneficial owner's conduct or trade or business in the
United States. Recently issued regulations, effective for payments made after
December 31, 1999, have changed to some extent the documentation requirements
discussed above. Non-U.S. Holders are advised to consult their own tax advisors
to discuss the effect of these regulations in light of such Holders'
situations.
If a Non-U.S. Holder is engaged in a trade or business in the United
States and payment on an Exchange Note is effectively connected with the
conduct of such trade or business, the Non-U.S. Holder, although exempt from
the withholding tax discussed above, will be subject to U.S. federal income tax
on such payment on a net income basis in the same manner as if it were a U.S.
Holder. In addition, if such holder is a foreign corporation, it may be subject
to a branch profits tax equal to 30% of its effectively connected earnings and
profits for the taxable year, subject to adjustments. For this purpose, such
payment on an Exchange Note will be included in such foreign corporation's
earnings and profits.
Any gain or income realized upon the sale, exchange, retirement or other
disposition of an Exchange Note generally will not be subject to U.S. federal
income tax unless (i) such gain or income is effectively connected with a trade
or business in the United States of the Non-U.S. Holder, or (ii) in the case of
a Non-U.S. Holder who is an individual, such individual is present in the
United States for 183 days or more in the taxable year of such sale, exchange,
retirement or other disposition, and certain other conditions are met.
INFORMATION REPORTING AND BACKUP WITHHOLDING
In general, information reporting requirements will apply to payments on
an Exchange Note and to the proceeds of sale of a Exchange Note made to U.S.
Holders other than certain exempt recipients (such as corporations). A 31%
backup withholding tax will apply to such payments if the U.S. Holder fails to
provide a taxpayer identification number or certification of foreign or other
exempt status or fails to report in full dividend and interest income.
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No information reporting or backup withholding will be required with
respect to payments made by the Company or any paying agent to Non-U.S. Holders
if a statement described in (a)(iv) under "--Non-U.S. Holders" has been
received and the payor does not have actual knowledge that the beneficial owner
is a U.S. persons.
In addition, backup withholding and information reporting will not apply
if payments on an Exchange Note are paid or collected by a foreign office of a
custodian, nominee or other foreign agent on behalf of the beneficial owner of
such Exchange Note, or if a foreign office of a broker (as defined in
applicable Treasury regulations) pays the proceeds of the sale of an Exchange
Note to the owner thereof. If, however, such nominee, custodian, agent or
broker is, for U.S. federal income tax purposes, a U.S. person, a controlled
foreign corporation or a foreign person that derives 50% or more of its gross
income for certain periods from the conduct of a trade or business in the
United States, such payments will be subject to information reporting (but not
backup withholding), unless (i) such custodian, nominee, agent or broker has
documentary evidence in its records that the beneficial owner is not a U.S.
person and certain other conditions are met or (ii) the beneficial owner
otherwise establishes an exemption. Temporary Treasury regulations provide that
the Treasury is considering whether backup withholding will apply with respect
to payments of principal, interest or the proceeds of a sale that are not
subject to backup withholding under the current regulations.
Payments on an Exchange Note paid to the beneficial owner of an Exchange
Note by a U.S. office of a custodian, nominee or agent, or the payment by the
U.S. office or a broker of the proceeds of sale of an Exchange Note, will be
subject to both backup withholding and information reporting unless the
beneficial owner provides the statement referred to in (a)(iv) above and the
payor does not have actual knowledge that the beneficial owner is a U.S. person
or otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against such holder's U.S. federal income tax liability
provided the required information is furnished to the IRS.
The Treasury Department has issued final regulations regarding the backup
withholding and information reporting rules discussed above. In general, the
final regulations, which are generally effective for payments made after
December 31, 1999, subject to certain transition rules, do not alter the
substantive withholding and information reporting requirements but unify
current forms and procedures.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Notes where such Notes were acquired as a result of market-making
activities or other trading activities. The Company has agreed that, for a
period of 180 days after the Registration Statement is declared effective, it
will make this Prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale. In addition, until 90
days after commencement of the Exchange Offer, all dealers effecting
transactions in the Exchange Notes may be required to deliver a Prospectus.
The Company will not receive any proceeds from any sales of the Exchange
Notes by broker-dealers. Exchange Notes received by broker-dealers for their
own account pursuant to the Exchange Offer may be sold from time to time in one
or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Notes or a
combination of such methods of resale, or negotiated prices. Any such resale
may be made directly to the purchaser or to or through brokers or dealers who
may receive compensation in the form of commissions or concessions from any
such broker-dealer and/or the purchasers of any such Exchange Notes. Any
broker-dealer that resells the Exchange Notes that were received by it for its
own account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of Exchange Notes and any commissions or concessions received by
any such persons may be deemed to be
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underwriting compensation under the Securities Act. The Letter of Transmittal
states that, by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Registration Statement is declared
effective, the Company will promptly send additional copies of this Prospectus
and any amendment or supplement to this Prospectus to any broker-dealer that
requests such documents in the Letter of Transmittal. The Company has agreed to
pay certain expenses incident to the Exchange Offer, other than commission or
concessions of any brokers or dealers, and will indemnify the holders of the
Exchange Notes (including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act.
By acceptance of this Exchange Offer, each broker-dealer that receives
Exchange Notes for its own account pursuant to the Exchange Offer agrees that,
upon receipt of notice from the company of the happening of any event which
makes any statement in the Prospectus untrue in any material respect or which
requires the making of any changes in the Prospectus in order to make the
statements therein not misleading (which notice the Company agrees to deliver
promptly to such broker-dealer), such broker-dealer will suspend use of the
Prospectus until the Company has amended or supplemented the Prospectus to
correct such misstatement or omission and has furnished copies of the amended
or supplemental Prospectus to such broker-dealer.
LEGAL MATTERS
The validity of the Exchange Notes offered hereby will be passed upon for
the Company by Baker & McKenzie, New York, New York. Howard J. Tytel, who is an
executive officer and director of and has an equity interest in the Company,
and who has an equity interest in SFX Broadcasting, TSC and SCMC and is an
executive officer and director of those entities, is Of Counsel to Baker &
McKenzie. See "Management," "Principal Stockholders" and "Certain Relationships
and Related Transactions."
EXPERTS
The consolidated financial statements of the Company as of December 31,
1997, and for the year ended December 31, 1997; the consolidated financial
statements of Delsener/Slater Enterprises, Ltd. and Affiliated Companies
(Predecessor) as of December 31, 1996, and for the years ended December 31,
1995 and 1996; the consolidated financial statements of PACE Entertainment
Corporation and Subsidiaries as of September 30, 1996, and for the years ended
September 30, 1996 and 1995; the combined financial statements of Contemporary
Group as of December 31, 1996 and 1997, and for the years ended December 31,
1996 and 1997; the combined financial statements of SJS Entertainment
Corporation as of December 31, 1996 and 1997, and for the years ended December
31, 1996 and 1997; the combined financial statements of The Album Network, Inc.
and Affiliated Companies as of September 30, 1996 and 1997, and for the years
ended September 30, 1996 and 1997; the consolidated financial statements of BG
Presents, Inc. and Subsidiaries as of January 31, 1997 and 1998; and for the
years ended January 31, 1996, 1997 and 1998; and the combined financial
statements of Concert/Southern Promotions and Affiliated Companies as of
December 31, 1997, and for the year ended December 31, 1997, included in the
Prospectus and Registration Statement of the Company have been audited by Ernst
& Young LLP, independent auditors, as set forth in their reports thereon
appearing elsewhere herein, and are included in reliance on such reports given
on the authority of such firm as experts in accounting and auditing.
Arthur Andersen LLP, independent public accountants, audited the following
financial statements (as set forth in their reports thereon appearing elsewhere
herein and in the Registration Statement), each appearing in this Prospectus
and the Registration Statement: the combined financial statements of
Connecticut Performing Arts, Inc. and Connecticut Performing Arts Partners as
of December 31, 1995 and 1996, and for the years ended December 31, 1995 and
1996; the combined financial statements of Deer Creek Partners, L.P. and Murat
Centre, L.P. as of December 31, 1995 and 1996, and for the years ended December
31, 1995 and 1996; the consolidated financial statements of PACE Entertainment
Corporation and Subsidiaries as of September 30, 1997, and for the year ended
September 30, 1997; the consolidated financial statements of Pavilion Partners
as of September 30, 1997, and for the year ended September 30,
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1997; the financial statements of Riverport Performing Arts Centre, Joint
Venture as of December 31, 1997 and 1996 and for the years ended December 31,
1997 and 1996, which are included in reliance on such reports given on the
authority of such firm as experts in accounting and auditing.
The financial statements of Pavilion Partners for the year ended October
31, 1995, for the eleven months ended September 30, 1996 and as of September
30, 1996 included in this Prospectus and the Registration Statement have been
so included in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
The Board expects to appoint Ernst & Young LLP as the Company's
independent auditors to audit the Company's consolidated financial statements.
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<PAGE>
INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
TERM PAGE
- ------------------------------------------- -----------
<S> <C>
1997 Acquisitions ......................... 14
Acquired Businesses ....................... 10
Adjusted EBITDA ........................... 22
Adjusted Operating Cash Flow .............. 113
Asset Sale Offer .......................... 121
Becker Employment Agreement ............... 104
Becker Right of First Refusal ............. 104
Becker Second Year Option ................. 104
BGP ....................................... 14
BGP Acquisition ........................... 64
Board ..................................... 31
Book-Entry Confirmation ................... 37
Book-Entry Transfer Facility .............. 37
Broadcasting .............................. 10
Broadway Shows ............................ 77
CAGR ...................................... 11
Change of Control Offer ................... 120
Change of Control Payment ................. 120
Change of Control Payment Date ............ 120
Class A Common Stock ...................... 10
Class B Common Stock ...................... 10
Commission ................................ 1
Common Stock .............................. 10
Company ................................... 10
Concerts .................................. 14
Concert/Southern .......................... 14
Contemporary .............................. 14
Contemporary Acquisition .................. 63
Credit Agreement .......................... 72
Credit Facility ........................... 14
Debt Service Ratio ........................ 113
Delsener/Slater Employment
Agreements ............................. 109
Depository ................................ 3
Designated Senior Debt .................... 118
Distribution Agreement .................... 15
DTC ....................................... 3
EBITDA .................................... 22
Effectiveness Target Date ................. 20
Eligible Institutions ..................... 37
Employee Benefits Agreement ............... 15
Equity Offering ........................... 15
Estimated Working Capital ................. 94
Exchange Act .............................. 4
Exchange Agent ............................ 16
Exchange Notes ............................ 1
Exchange Offer ............................ 1
Executive Officers ........................ 99
Expiration Date ........................... 17
FAS 131 ................................... 73
Fifth Year Put Option ..................... 22
Financing ................................. 1
Fixed Charges Ratio ....................... 113
GAAP ...................................... 22
Guarantors ................................ 1
Holders ................................... 16
HSR ....................................... 92
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TERM PAGE
- ------------------------------------------- -----------
<S> <C>
Indenture ................................. 2
Initial Purchasers ........................ 17
Issue Date ................................ 18
Letter of Transmittal ..................... 1
Liquidated Damages ........................ 17
Meadows ................................... 14
Meadows Repurchase ........................ 72
Network ................................... 14
Network Acquisition ....................... 64
Non-Guarantor Subsidiaries ................ 26
Note Offering ............................. 63
Notes ..................................... 1
NYSE ...................................... 39
PACE ...................................... 14
PACE Acquisition .......................... 63
Pavilion .................................. 63
Pavilion Acquisition ...................... 63
Payment Blockage Notice ................... 117
Permitted Debt ............................ 124
Permitted Junior Securities ............... 118
Polaris ................................... 80
Pro Forma Interest Expense Ratio .......... 113
Purchase Agreement ........................ 17
Recent Acquisitions ....................... 14
Registration Default ...................... 20
Registration Rights Agreement ............. 1
Registration Statement .................... 93
Revolver .................................. 74
Securities Act ............................ 1
Senior Debt ............................... 118
Senior Guarantors ......................... 112
Senior Leverage Ratio ..................... 113
Series E Adjustment ....................... 96
SFX Broadcasting .......................... 10
SFX Buyer ................................. 14
SFX Employee Benefit Plans ................ 98
SFX Merger ................................ 14
SFX Merger Agreement ...................... 14
SFX Merger Consideration
Adjustment ............................. 94
SFX Network ............................... 64
Shelf Registration Statement .............. 19
Spin-Off .................................. 14
Spin-Off Distribution Date ................ 96
Subsidiary Guarantees ..................... 19
Sunshine Promotions ....................... 14
Tax Sharing Agreement ..................... 15
Term Loan ................................. 74
Total Debt ................................ 112
Total Leverage Ratio ...................... 112
Touring Broadway Shows .................... 10
Triathlon ................................. 22
Trust Indenture Act ....................... 116
Trustee ................................... 116
TSC ....................................... 32
Working Capital Adjustment Amount 94
</TABLE>
151
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
SFX ENTERTAINMENT, INC.
Reports of Independent Auditors............................................................ F-4
Consolidated Balance Sheets as of December 31, 1997 and 1996 (Predecessor) ............... F-6
Consolidated Statements of Operations for the years ended December 31, 1997, 1996
(Predecessor) and 1995 (Predecessor) ..................................................... F-7
Consolidated Statements of Cash Flows for the years ended December 31, 1997, 1996
(Predecessor) and 1995 (Predecessor) ..................................................... F-8
Notes to Consolidated Financial Statements................................................. F-9
CONNECTICUT PERFORMING ARTS, INC. AND CONNECTICUT PERFORMING ARTS PARTNERS
Report of Independent Public Accountants................................................... F-23
Combined Balance Sheets as of December 31, 1995 and 1996................................... F-24
Combined Statements of Operations for the years ended December 31, 1995
and 1996.................................................................................. F-25
Combined Statements of Shareholders' and Partners' Equity (Deficit) for the years ended
December 31, 1995 and 1996................................................................ F-26
Combined Statements of Cash Flows for the years ended December 31, 1995 and 1996 ......... F-27
Notes to Combined Financial Statements..................................................... F-28
DEER CREEK PARTNERS, L.P. AND MURAT CENTRE, L.P.
Report of Independent Public Accountants .................................................. F-36
Combined Balance Sheets as of December 31, 1995 and 1996................................... F-37
Combined Statements of Operations and Partners' Equity (Deficit) for the years ended
December 31, 1995 and 1996................................................................ F-39
Combined Statements of Cash Flows for the years ended December 31, 1995
and 1996.................................................................................. F-40
Notes to Combined Financial Statements..................................................... F-41
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
Report of Independent Public Accountants .................................................. F-47
Report of Independent Auditors............................................................. F-48
Consolidated Balance Sheets as of September 30, 1996 and 1997 and December 31, 1997
(unaudited) .............................................................................. F-49
Consolidated Statements of Operations for the years ended September 30, 1995, 1996 and
1997 and the three months ended December 31, 1996 and 1997 (unaudited) ................... F-50
Consolidated Statements of Shareholders' Equity for the years ended September 30, 1995,
1996 and 1997 and the three months ended December 31, 1997 (unaudited) ................... F-51
Consolidated Statements of Cash Flows for the years ended September 30, 1995, 1996 and
1997 and the three months ended December 31, 1996 and 1997 (unaudited) ................... F-52
Notes to Consolidated Financial Statements................................................. F-53
PAVILION PARTNERS
Report of Independent Public Accountants .................................................. F-67
Report of Independent Accountants ......................................................... F-68
Consolidated Balance Sheets as of September 30, 1996 and 1997 and December 31, 1997
(unaudited) .............................................................................. F-69
F-1
<PAGE>
PAGE
---------
Consolidated Statements of Income for the year ended October 31, 1995, eleven months ended
September 30, 1996, the year ended September 30, 1997 and the three months ended December
31, 1996 and 1997 (unaudited) ............................................................ F-70
Consolidated Statements of Partners' Capital for the year ended October 31, 1995, eleven
months ended September 30, 1996, the year ended September 30, 1997 and the three months
ended December 31, 1997 (unaudited) ...................................................... F-71
Consolidated Statements of Cash Flows for the year ended October 31, 1995, eleven months
ended September 30, 1996, the year ended September 30, 1997 and the three months ended
December 31, 1996 and 1997 (unaudited) ................................................... F-72
Notes to Consolidated Financial Statements ................................................ F-73
CONTEMPORARY GROUP
Report of Independent Auditors ............................................................ F-82
Combined Balance Sheets as of December 31, 1996 and 1997 .................................. F-83
Combined Statements of Operations for the years ended December 31, 1996 and 1997 ......... F-84
Combined Statements of Cash Flows for the years ended December 31, 1996 and 1997 ......... F-85
Combined Statements of Stockholders' Equity for the years ended December 31, 1996 and 1997 F-86
Notes to Combined Financial Statements .................................................... F-87
RIVERPORT PERFORMING ART CENTRE, JOINT VENTURE
Report of Independent Public Accountants .................................................. F-91
Balance Sheets as of December 31, 1997 and 1996 ........................................... F-92
Statements of Income and Changes in Partners' Equity for the years ended December 31, 1997
and 1996 ................................................................................. F-93
Statements of Cash Flows for the years ended December 31, 1997 and 1996 .................. F-94
Notes to Financial Statements ............................................................. F-95
SJS ENTERTAINMENT CORPORATION
Report of Independent Auditors ............................................................ F-98
Combined Balance Sheets as of December 31, 1996 and 1997 .................................. F-99
Combined Statements of Operations and Retained Earnings for the years ended December 31,
1996 and 1997 ............................................................................ F-100
Combined Statements of Cash Flows for the years ended December 31, 1996 and 1997 ......... F-101
Notes to Combined Financial Statements .................................................... F-102
THE ALBUM NETWORK, INC. AND AFFILIATED COMPANIES
Report of Independent Auditors ............................................................ F-106
Combined Balance Sheets as of September 30, 1996 and 1997 ................................. F-107
Combined Balance Sheet as of December 31, 1997 (unaudited) ................................ F-108
Combined Statements of Operations and Stockholders' Deficit for the years ended September
30, 1996 and 1997 ........................................................................ F-109
Combined Statements of Operations and Stockholders' Deficit for the three months ended
December 31, 1997 (unaudited) ............................................................ F-110
Combined Statements of Cash Flows for the years ended September 30, 1996 and 1997 ......... F-111
Combined Statements of Cash Flows for the three months ended December 31, 1997 (unaudited) F-112
Notes to Combined Financial Statements .................................................... F-113
F-2
<PAGE>
PAGE
---------
BG PRESENTS, INC. AND SUBSIDIARIES
Report of Independent Auditors ............................................................ F-117
Consolidated Balance Sheets as of January 31, 1997 and 1998 ............................... F-118
Consolidated Income Statements for the years ended January 31, 1996, 1997 and 1998 ........ F-119
Consolidated Statements of Cash Flows for the years ended January 31, 1996, 1997 and 1998 F-120
Consolidated Statements of Stockholders' Equity for the years ended January 31, 1996, 1997
and 1998 ................................................................................. F-121
Notes to Consolidated Financial Statements ................................................ F-122
CONCERT/SOUTHERN PROMOTIONS AND AFFILIATED COMPANIES
Report of Independent Auditors ............................................................ F-128
Combined Balance Sheet as of December 31, 1997 ............................................ F-129
Combined Statement of Operations for the year ended December 31, 1997 ..................... F-130
Combined Statement of Cash Flows for the year ended December 31, 1997 ..................... F-131
Combined Statements of Stockholders' Equity for the year ended
December 31, 1997 ........................................................................ F-132
Notes to Combined Financial Statements .................................................... F-133
</TABLE>
F-3
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors
SFX Entertainment, Inc.
We have audited the accompanying consolidated balance sheet of SFX
Entertainment, Inc. as of December 31, 1997, and the related consolidated
statements of operations and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of SFX Entertainment, Inc. at December 31, 1997, and the consolidated results
of their operations and their cash flows for the year then ended, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
March 5, 1998
F-4
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Delsener/Slater Enterprises, Ltd.
We have audited the accompanying consolidated balance sheet of
Delsener/Slater Enterprises, Ltd. and Affiliated Companies as of December 31,
1996, and the related consolidated statements of operations and cash flows
for each of the two years in the period ended December 31, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Delsener/Slater Enterprises, Ltd. and Affiliated Companies at December
31, 1996, and the consolidated results of their operations and their cash
flows for each of the two years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
October 2, 1997
F-5
<PAGE>
SFX ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
PREDECESSOR
1997 1996
---------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents .............................................. $ 5,979 $5,253
Accounts receivable .................................................... 3,831 159
Prepaid expenses and other current assets .............................. 1,410 779
-------- --------
Total current assets .................................................... 11,220 6,191
Property and equipment, net ............................................. 59,685 2,231
Deferred acquisition costs .............................................. 6,213 --
Goodwill, net ........................................................... 60,306 --
Investment in unconsolidated subsidiaries ............................... 937 458
Note receivable from employee ........................................... 900 --
Other assets ............................................................ 7,681 --
-------- --------
Total assets ............................................................ $146,942 $8,880
======== ========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable and accrued expenses................................... $ 2,715 $6,078
Deferred revenue ....................................................... 3,603 18
Income taxes payable ................................................... 1,707 --
Due to stockholder ..................................................... -- 1,877
Due to SFX Broadcasting ................................................ 11,539 --
Current portion of long-term debt ...................................... 923 --
Current portion of deferred purchase consideration ..................... 1,950 --
-------- --------
Total current liabilities ............................................... 22,437 7,973
Long-term debt, less current portion .................................... 15,255 --
Deferred purchase consideration, less current portion ................... 4,289 --
Deferred income taxes ................................................... 2,817 --
Commitment and contingencies ............................................
Shareholder's equity:
Capital to be contributed by SFX Broadcasting ........................... 98,330 --
Preferred Stock, $.01 par value, 1,000 shares authorized, none issued
and outstanding ........................................................ -- --
Class A common stock, $.01 par value, 1,000 shares authorized, issued
and outstanding ........................................................ -- --
Class B common stock, $.01 par value, 1,000 shares authorized, issued
and outstanding ........................................................ -- --
Combined stockholder's equity--predecessor .............................. -- 907
Retained earnings ....................................................... 3,814 --
-------- --------
Total shareholder's equity .............................................. 102,144 907
-------- --------
Total Liabilities and shareholder's Equity .............................. $146,942 $8,880
======== ========
</TABLE>
See accompanying notes.
F-6
<PAGE>
SFX ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
PREDECESSOR PREDECESSOR
1997 1996 1995
-------- ----------- -------------
<S> <C> <C> <C>
Concert revenue........................................ $96,144 $50,362 $47,566
OPERATING EXPENSES:
Cost of concerts ..................................... 83,417 50,686 47,178
Depreciation and amortization ........................ 5,431 747 750
Corporate expenses, net of Triathlon fees of $1,794
in 1997 ............................................. 2,206 -- --
-------- ----------- -------------
$91,054 $51,433 $47,928
-------- ----------- -------------
Income (loss) from operations ......................... 5,090 (1,071) (362)
Investment income ..................................... 295 198 178
Interest expense ...................................... (1,590) (60) (144)
Equity in pretax income of unconsolidated subsidiaries 509 524 488
-------- ----------- -------------
Income (loss) before provision for income taxes ...... $ 4,304 $ (409) $ 160
Provision for income taxes ............................ 490 106 13
-------- ----------- -------------
Net income (loss)...................................... $ 3,814 $ (515) $ 147
======== =========== =============
</TABLE>
See accompanying notes.
F-7
<PAGE>
SFX ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
PREDECESSOR PREDECESSOR
1997 1996 1995
---------- ------------- -------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) .................................... $ 3,814 $ (515) $ 147
Adjustment to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation of property and equipment .............. 2,686 746 750
Amortization of goodwill............................. 2,745 -- --
Equity in pretax income of unconsolidated
subsidiaries, net of distributions received ........ (479) 16 2
Deferred income taxes............................... (427) -- --
Changes in operating assets and liabilities, net of
amounts acquired:
Accounts receivable................................. (923) (159) 384
Prepaid expenses and other current assets .......... 419 (649) 374
Other assets........................................ (275) -- --
Accounts payable and accrued expenses............... (325) 4,759 (1,326)
Income taxes payable................................ 917 -- --
Deferred revenue.................................... (7,147) 16 (784)
---------- ------------- -------------
Net cash provided by (used in) operating activities . $ 1,005 $ 4,214 $ (453)
INVESTING ACTIVITIES:
Purchase of concert promotion businesses, net of
cash acquired ...................................... (71,213) -- --
Investment in GSAC Partnership ...................... -- (435) --
Purchase of property and equipment .................. (2,083) -- --
---------- ------------- -------------
Net cash used in investing activities ................ (73,296) (435) --
---------- ------------- -------------
FINANCING ACTIVITIES:
Capital to be contributed by SFX Broadcasting ...... 79,093 -- --
Payment of debt ..................................... (823) -- --
Proceeds from issuance of common stock and capital
contributions ...................................... -- 152 --
Loan from stockholder ............................... -- 47 --
Distributions paid .................................. -- (1,630) (216)
---------- ------------- -------------
Net cash provided by (used in) financing activities . 78,270 (1,431) (216)
Net increase in cash and cash equivalents ............ 5,979 2,348 (669)
Cash and cash equivalents at beginning of period .... -- 2,905 3,574
---------- ------------- -------------
Cash and cash equivalents at end of period .......... $ 5,979 $ 5,253 $ 2,905
========== ============= =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest ............................... $ 1,504 $ 60 $ 144
========== ============= =============
Cash paid for income taxes ........................... $ -- $ 106 $ 13
========== ============= =============
</TABLE>
SUPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
o Issuance of equity securities, including deferred equity security issuance
and assumption of debt in connection with certain acquisitions (see Note
1).
o Agreements to pay future cash consideration in connection with certain
acquisitions (see Note 1).
o The balance sheet includes certain assets and liabilities which have been
or will be contributed by SFX Broadcasting to the Company prior to the
Spin-Off.
See accompanying notes.
F-8
<PAGE>
SFX ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BASIS OF PRESENTATION
SFX Entertainment, Inc. ("SFX" or the "Company") was formed as a
wholly-owned subsidiary of SFX Broadcasting, Inc. ("SFX Broadcasting") in
December 1997 and as the parent company of SFX Concerts, Inc ("Concerts").
Concerts was formed in January of 1997 to acquire and hold SFX Broadcasting's
live entertainment operations. During 1997, the Company made several
acquisitions as described below. The Company had no substantive operations
until its acquisition of Delsener/Slater Enterprises, Ltd. and Affiliated
Companies ("Delsener/Slater" or the "Predecessor") in January 1997, and
Delsener/Slater is considered the Company's predecessor for financial
reporting purposes.
Delsener/Slater
In January 1997, SFX Broadcasting acquired Delsener/Slater, a leading
concert promotion company, for an aggregate consideration of approximately
$27,600,000, including $2,900,000 for working capital and the present value
of deferred payments of $3,000,000 to be paid without interest over five
years and $1,000,000 to be paid without interest over ten years.
Delsener/Slater has long-term leases or is the exclusive promoter for seven
of the major concert venues in the New York City metropolitan area, including
the Jones Beach Amphitheater, a 14,000-seat complex located in Wantagh, New
York, and the PNC Bank Arts Center (formerly known as the Garden State Arts
Center), a 17,500-seat complex located in Holmdel, New Jersey.
Meadows
In March 1997, the Company acquired the stock of certain companies which
own and operate the Meadows Music Theater (the "Meadows"), a 25,000-seat
indoor/outdoor complex located in Hartford, Connecticut for $900,000 in cash,
250,838 shares of SFX Broadcasting Class A Common Stock with a value of
approximately $7,500,000 and the assumption of approximately $15,400,000 in
debt.
The Company may assume the obligation to exercise an option held by SFX
Broadcasting to repurchase 250,838 shares of SFX Broadcasting's Class A
Common Stock for an aggregate purchase price of $8.3 million (the "Meadows
Repurchase"). This option was granted in connection with the acquisition of
the Meadows Music Theater. If the option were exercised by SFX Broadcasting,
the exercise would result in a reduction of Working Capital as defined in the
Spin-Off (see below) by approximately $8.3 million. If the option were not
exercised, Working Capital would decrease by approximately $10.5 million.
Sunshine Promotions
In June 1997, the Company acquired the stock of Sunshine Promotions, Inc.
and certain other related Companies ("Sunshine Promotions"), one of the
largest concert promoters in the Midwest, for $53,900,000 in cash, of which
$2,000,000 is payable over five years, 62,792 shares of SFX Broadcasting
Class A Common Stock issued with a value of approximately $2,000,000, shares
of SFX Broadcasting stock issuable over a two year period with a value of
approximately $2,000,000 and the assumption of approximately $1,600,000 of
debt. The shares of stock to be issued in the future are classified as
deferred purchase consideration on the balance sheet. Sunshine Promotions
owns the Deer Creek Music Theater, a 21,000-seat complex located in
Indianapolis, Indiana, and the Polaris Amphitheater, a 20,000-seat complex
located in Columbus, Ohio, and has a long-term lease to operate the Murat
Centre (the "Murat"), a 2,700-seat theater and 2,200-seat ballroom located in
Indianapolis, Indiana. Pursuant to the Broadcasting Merger Agreement, the
Company is responsible for the payments owing under the Sunshine note, which
by its terms accelerates upon the change in control of SFX Broadcasting
resulting from the consummation of the Broadcasting Merger.
The Delsener/Slater, Meadows, and Sunshine Promotions acquisitions are
collectively referred to herein as the "Completed Acquisitions." The cash
portion of the Completed Acquisitions were financed
F-9
<PAGE>
SFX ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
through capital contributions from SFX Broadcasting and were accounted for
under the purchase method of accounting. The purchase prices have been
preliminarily allocated to the assets acquired and are subject to change.
The accompanying consolidated financial statements as of December 31, 1997
include the accounts of Delsener/Slater, Sunshine Promotions, the Meadows,
and certain assets and liabilities which have been or will be contributed by
SFX Broadcasting to the Company prior to the Spin-Off (as defined herein)
under the terms of the Broadcasting Merger (as defined herein) Agreement.
Operating results for the Completed Acquisitions are included herein from
their respective acquisition dates. Operating results associated with the
assets and liabilities to be contributed are included herein. SFX
Broadcasting provides various administrative services to the Company. It is
SFX Broadcasting's policy to allocate these expenses on the basis of direct
usage. In the opinion of management, this method of allocation is reasonable
and allocated expenses approximate what the Company would have incurred on a
stand-alone basis. Intercompany transactions and balances among these
companies have been eliminated in consolidation.
The following unaudited pro forma summary represents the consolidated
results for the years ended December 31, 1997 and 1996 as if the Completed
Acquisitions had occurred at the beginning of such year after giving effect
to certain adjustments, including amortization of goodwill and interest
expense on the acquisition debt. These pro forma results have been included
for comparative purposes only and do not purport to be indicative of what
would have occurred had the acquisition been made as of that date or of
results which may occur in the future (in thousands).
<TABLE>
<CAPTION>
PRO FORMA
(UNAUDITED)
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------- -----------------
<S> <C> <C>
Revenues..... $110,387 $104,784
Net income .. $ 734 $ 2,668
</TABLE>
Pending Spin-Off
In August 1997, SFX Broadcasting agreed to the merger (the "Broadcasting
Merger Agreement") among SBI Holdings, Inc. (the "Buyer"), SBI Radio
Acquisition Corporation, a wholly-owned subsidiary of the Buyer, and SFX
Broadcasting (the "Broadcasting Merger") and to the spin-off of the Company
to the shareholders of SFX Broadcasting (the "Spin-Off"). The Spin-Off is
subject to certain conditions, including, among others: (i) the satisfaction
of the Board of Directors of SFX Broadcasting that SFX Broadcasting's surplus
would be sufficient to permit the Spin-Off under Delaware law, (ii) the
acceptance for listing or trading of the Class A Common Stock of the Company,
subject to official notice of issuance, on the American Stock Exchange or
Nasdaq Stock Market, (iii) receipt of all necessary third party consents to
the Spin-Off, and (iv) receipt of necessary SFX Broadcasting stockholder
approvals. On March 26, 1998, the Company's stockholders approved the
Spin-off.
At or prior to the Spin-Off, pursuant to the terms of the Spin-Off, SFX
Broadcasting will contribute to the Company all of its concert and other live
entertainment assets along with an allocation of working capital in an amount
estimated by management of SFX Broadcasting to be consistent with the proper
operation of SFX Broadcasting, and the Company will assume all of SFX
Broadcasting's liabilities pertaining to the live entertainment businesses,
as well as certain other liabilities including the obligation to make change
of control payments to certain employees of SFX Broadcasting of approximately
$5,000,000 as well as the obligation to indemnify one-half of certain of
these employees' excise tax. At the time of the Broadcasting Merger, SFX
Broadcasting will contribute its positive Working Capital (as defined in the
Broadcasting Merger Agreement) to the Company. If Working Capital is
negative, the Company must pay the amount of the shortfall to SFX
Broadcasting. As of December 31, 1997, SFX Broadcasting had advanced
approximately $11,539,000 to the Company for use in connection with certain
F-10
<PAGE>
SFX ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
acquisitions and capital expenditures. This obligation and other costs
subsequently incurred in connection with the Spin-Off were reimbursed in
February 1998 with the proceeds from the Senior Subordinated Notes (see Note
2). SFX Broadcasting may advance additional amounts to the Company prior to
the consummation of the Spin-Off.
Prior to the Spin-Off, SFX Broadcasting and the Company will enter into a
tax sharing agreement. Under the tax sharing agreement, the Company will
agree to pay to SFX Broadcasting the amount of the tax liability of SFX
Broadcasting and the Company combined, to the extent properly attributable to
the Company for the period up to and including the Spin-Off, and will
indemnify SFX Broadcasting for any tax adjustment made in subsequent years
that relates to taxes properly attributable to the Company during the period
prior to and including the Spin-Off. SFX Broadcasting, in turn, will
indemnify the Company for any tax adjustment made in years subsequent to the
Spin-Off that relates to taxes properly attributable to the SFX Broadcasting
during the period prior to and including the Spin-Off. The Company also will
be responsible for any taxes of SFX Broadcasting resulting from the Spin-Off,
including any income taxes but only to the extent that the income taxes
result from the gain on the distribution that exceeds the net operating
losses of SFX Broadcasting and the Company available to offset such gain
including net operating losses generated in the current year prior to the
Spin-Off.
The actual amount of the gain will be based on the excess of the value of
the Company's Common Stock on the date of the Spin-Off over the tax basis of
that stock. The Company believes that the value of the Company's Common Stock
for tax purposes will be determined by no later than the first trading day
following the date on which the Company's Common Stock is distributed in the
Spin-Off. Increases or decreases in the value of the Company's Common Stock
subsequent to such date will not effect the tax liability. If the Company's
Common Stock had a value of approximately $15 per share at the time of the
Spin-Off, management believes that no material indemnification payment would
be required. Such indemnification obligation would be approximately $4.0
million at $16 per share and would increase by approximately $7.7 million for
each $1.00 increase above the per share valuation of $16. If the Company's
Common Stock was valued at $24 1/2 per share, (the last sales price of the
Company's Class A Common Stock (trading on a when-issued basis) on the over
the counter market on March 27, 1998), management estimates that the Company
would have been required to pay approximately $70.0 million pursuant to such
indemnification obligation. The Company expects that such indemnity payment
will be due on or about June 15, 1998.
2. RECENT ACQUISITIONS AND FINANCING
On February 11, 1998, SFX completed the private placement of $350.0
million of 9 1/8% Senior Subordinated Notes (the "Notes") due 2008. Interest
is payable on the Notes on February 1 and August 1 of each year.
On February 26, 1998 the Company executed a Credit and Guarantee Agreement
(the "Credit Agreement") which established a $300.0 million senior secured
credit facility comprised of (i) a $150.0 million eight-year term loan (the
"Term Loan") and (ii) a $150.0 million seven-year reducing revolving credit
facility. Loans outstanding under the Credit Facility bear interest, at the
Company's option, at 1.875 to 2.375 percentage points over LIBOR or the
greater of the Federal Funds rate plus 0.50% or BNY's prime rate. The
interest rate spreads on the Term Loan and the Revolver will be adjusted
based on the Company's Total Leverage Ratio (as defined in the Credit
Agreement). The Company will pay a per annum commitment fee on unused
availability under the Revolver of 0.50% to the extent that the Company's
Leverage Ratio is greater than or equal to 4.0 to 1.0, and 0.375% if such
ratio is less than 4.0 to 1.0 and a per annum letter of credit fee equal to
the Applicable LIBOR Margin (as defined in the Credit Agreement) for the
Revolver then in effect. The Revolver and Term Loan contain provisions
providing that, at its option and subject to certain conditions, the Company
may increase the amount of either the Revolver or Term Loan by $50.0 million.
Borrowings under the Credit Agreement are secured by substantially all of the
assets of the Company, including a pledge of the outstanding stock of
F-11
<PAGE>
SFX ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
substantially all of its subsidiaries and guaranteed by all of the Company's
subsidiaries. On February 27, 1998, the Company borrowed $150.0 million under
the Term Loan. Together with the proceeds from the Notes, the proceeds from
the Term Loan were used to finance the Recent Acquisitions (as defined
below.)
On February 24, 1998, the Company acquired all of the outstanding capital
stock of BG Presents ("BGP"), one of the oldest promoters of, and
owner-operators of venues for, live entertainment in the United States, and a
leading promoter in the San Francisco Bay area (the "BGP Acquisition"), for
total consideration of approximately $80,300,000 (including the repayment of
$12,000,000 in BGP debt and the issuance upon the Spin-Off of 562,640 shares
of common stock of the Company valued by the parties at $7,500,000). The
sellers of BGP provided net working capital (as defined in the acquisition
agreement) at the closing in an amount equal to or greater than long-term
debt.
On February 25, 1998, the Company acquired all of the outstanding capital
stock of PACE Entertainment Corporation ("PACE"), one of the largest
diversified producers and promoters of live entertainment in the United
States, having what the Company believes to be the largest distribution
network in the United States in each of its music, theater and specialized
motor sports businesses (the "PACE Acquisition"), for total consideration of
approximately $150,100,000 (including issuance upon the Spin-Off of 1,500,000
shares of the Company's common stock valued by the parties at $20,000,000 and
assumption of approximately $20,600,000 of debt). Under the terms of the
agreement, additional cash consideration would be required if the deemed
value of the Company's common stock was less than $13.33 per share as a
result of changes in the consummation of acquisitions. In related
transactions, the Company acquired, for total consideration of $90,600,000
comprised of $41,400,000 in cash, the repayment of approximately $43,100,000
of debt and the assumption of approximately $6,100,000 of debt related to a
capital lease, the 66 2/3% ownership interests of Blockbuster Entertainment
Corporation and Sony Music Entertainment, Inc. in Amphitheater Entertainment
Partnership, a partner of PACE in the Pavilion Partners venue partnership. As
a result, the Company owns 100% of Pavilion Partners.
The PACE acquisition agreement further provides that each seller of PACE
shall have an option, exercisable during a period beginning on the fifth
anniversary of the closing of the PACE acquisition and ending 90 days
thereafter, to require the Company to purchase up to one-third of the PACE
consideration stock received by such PACE seller for a cash purchase price of
$33.00 per share. With certain limited exceptions, these option rights are
not assignable by the PACE sellers.
Under the terms of an employment agreement to be entered into by the
Company with an officer of PACE, the officer will have the right, two years
from the date of the acquisition, to purchase PACE's motor sports division at
fair value. If the motor sports division has been sold by the Company, the
officer would be entitled to purchase PACE's theatrical division for the fair
value.
On February 27, 1998, the Company acquired the Contemporary Group
("Contemporary"), a fully-integrated live entertainment and special event
promoter and producer, venue owner and operator and consumer marketer, for
total consideration of approximately $101,400,000 comprised of $72,800,000 in
cash, a payment for working capital of approximately $9,900,000 and the
issuance upon the Spin-Off of 1,402,850 shares of common stock of the Company
valued by the parties at $18,700,000. (the "Contemporary Acquisition"). The
Contemporary Acquisition involved the merger of Contemporary International
Productions Corporation with and into the Company, the acquisition by a
wholly owned subsidiary of the Company of substantially all of the assets,
excluding certain cash and receivables, of the remaining members of
Contemporary and the acquisition by Contemporary of the 50% interest in the
Riverport Amphitheater Joint Venture not owned by Contemporary. If any of the
Contemporary sellers owns any shares of the Company's Class A Common Stock
received in the Contemporary Acquisition on the second anniversary of the
closing date and the average trading price of such stock over the 20-day
period ending on such anniversary date is less than $13.33 per share, then
the Company will make a one-time cash payment to each individual holding any
such shares that is equal to the product of (i) the
F-12
<PAGE>
SFX ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
quotient of the difference between (A) the actual average trading price per
share over such 20-day period and (B) $13.33 divided by two, multiplied by
(ii) the number of shares of Class A Common Stock of the Company received by
such individual in the Contemporary Acquisition and owned as of such
anniversary date.
On February 27, 1998, the Company acquired the Network Magazine Group
("Network Magazine"), a publisher of trade magazines for the radio
broadcasting industry, and SJS Entertainment Corporation ("SJS"), an
independent creator, producer and distributor of music-related radio
programming, services and research which it exchanges with radio broadcasters
for commercial air-time sold, in turn, to national network advertisers (the
"Network Acquisition"), for total consideration of approximately $66,800,000
comprised of $52,000,000 in cash, a payment for working capital of
approximately $1,800,000, reimbursed sellers costs of $500,000, the purchase
of an office building and property for $2,500,000 and the issuance upon the
Spin-Off of 750,188 shares of common stock of the Company valued by the
parties at $10,000,000. The $2,500,000 purchase of the office building and
property is comprised of cash of approximately $700,000 and the assumption of
debt of approximately $1,800,000. The Company is also obligated to pay the
sellers an additional payment in common stock or, at the Company's option,
cash based on future operating results, as defined, generated on a combined
basis by Network Magazine and SJS in 1998, up to a maximum of $14,000,000. In
the Network Acquisition, the Company, through a wholly owned subsidiary,
acquired all of the outstanding capital stock of each of The Album Network,
Inc. and SJS Entertainment Corporation and purchased substantially all of the
assets and properties and assumed substantially all of the liabilities and
obligations of the Network 40, Inc.
On March 4, 1998, the Company acquired Concert/Southern Promotions
("Concert/Southern"), a promoter of live music events in the Atlanta, Georgia
metropolitan area (the "Concert/Southern Acquisition"), for total cash
consideration of approximately $16,900,000, which includes a $300,000 payment
for working capital.
The PACE Acquisition, the Contemporary Acquisition, the Network
Acquisition, the BGP Acquisition and the Concert/Southern Acquisition are
collectively referred to herein as the "Recent Acquisitions."
Each of the Recent Acquisition agreements other than Concert/Southern
provide that, should the Spin-Off not occur prior to July 1, 1998, the
sellers may require the Company to repurchase the shares of the Company's
common stock issued to the sellers for $13.33 each.
3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Cash and Cash Equivalents
The Company considers all investments purchased with a maturity of three
months or less to be cash equivalents. Included in cash and cash equivalents
at December 31, 1997 is $1,235,000 of cash which has been deposited in a
separate account and will be used to fund committed capital expenditures at
PNC Bank Arts Center.
PROPERTY AND EQUIPMENT
Land, buildings and improvements and furniture and equipment are stated at
cost. Depreciation is provided on a straight-line basis over the estimated
useful lives of the assets as follows:
<TABLE>
<CAPTION>
<S> <C>
Buildings and improvements ....7-40 years
Furniture and equipment ........ 5-7 years
</TABLE>
Leasehold improvements represent the capitalized costs to renovate the
Jones Beach Theatre. The costs to renovate the theatre included permanent
seats, a new stage and lavatory facilities. These costs are being amortized
over the term of the lease.
F-13
<PAGE>
SFX ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Goodwill
Goodwill represents the excess of the purchase price over the fair market
value of the assets purchased in the Completed Acquisitions and is net of
accumulated amortization of $2,745,000. Goodwill is being amortized using the
straight-line method over 15 years. Management reviews the carrying value of
goodwill against anticipated cash flows on a non-discounted basis to
determine whether the carrying amount will be recoverable.
Other Assets
Other assets includes $4,928,000 of costs associated with acquiring the
right to receive fees from Triathlon Broadcasting Company ("Triathlon"), an
affiliate, for certain financial consulting, marketing and administrative
services provided by the Company to Triathlon. Under the terms of the
agreement, the Company has agreed to provide consulting and marketing
services to Triathlon for an annual fee of $500,000, together with a
refundable advance of $500,000 per year against fees to be earned in respect
of transactional investment banking services. These fees, which are recorded
as a reduction of corporate, general and administrative expenses, will
fluctuate based upon the level of acquisition and financing activity of
Triathlon. The cost of acquiring the fees is being amortized over the term of
the agreement which expires on June 1, 2005. Triathlon has announced its
intention to enhance shareholder value through a sale. The Company's
management believes that the capitalized cost of acquiring the right to
receive fees from Triathlon is recoverable.
Revenue Recognition
The Company's operations and revenues are largely seasonal in nature, with
generally higher revenue generated in the second and third quarters of the
year. The Company's outdoor venues are primarily utilized in the summer
months and do not generate substantial revenue in the late fall, winter and
early spring. Similarly, the musical concerts that the Company promotes
largely occur in the second and third quarters. To the extent that the
Company's entertainment marketing and consulting relate to musical concerts,
they also predominantly generate revenues in the second and third quarters.
Revenue from ticket sales is recognized upon occurrence of the event.
Advance ticket sales are recorded as deferred revenue until the event occurs.
Risks and Uncertainties
Accounts receivable are due principally from ticket companies and venue
box offices. These amounts are typically collected within 20 days of a
performance. Generally, management considers these accounts receivable to be
fully collectible; accordingly, no allowance for doubtful accounts is
required. Certain other accounts receivable, arising from the normal course
of business, are reviewed for collectibility and allowances for doubtful
accounts are recorded as required. Management believes that no allowance for
doubtful accounts is required at December 31, 1996 or 1997.
The agreement governing the partnership through which PACE holds its
interest in the Lakewood Amphitheater in Atlanta, Georgia contains a
provision that purports to restrict PACE and its affiliates from directly or
indirectly owning or operating another amphitheater in Atlanta. In
management's view, this provision will not materially affect the business or
prospects of the Company. However, the Company acquired an interest in the
Chastain Park Amphitheater, also in Atlanta, in the Concert/Southern
acquisition. The Company intends to seek a waiver.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
F-14
<PAGE>
SFX ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Advertising Costs
Advertising costs are expensed as incurred and approximated $7,109,000,
$4,896,000 and $2,687,000 in 1997, 1996, and 1995, respectively.
Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes". This
statement requires a company to recognize deferred tax assets and liabilities
for the expected future tax consequences of events that have been recognized
in a company's financial statements or tax returns. Under this method,
deferred tax assets and liabilities are determined based on the difference
between the financial statement carrying amounts and the tax bases of assets
and liabilities.
The Company calculates its tax provision on a separate company basis.
Reclassification
Certain amounts in 1995 and 1996 have been reclassified to conform to the
1997 presentation.
4. CONNECTICUT DEVELOPMENT AUTHORITY ASSISTANCE AGREEMENT
On September 12, 1994, the Connecticut Development Authority ("CDA")
entered into a non-recourse assistance agreement with the Meadows whereby the
CDA provided grant funds for the construction and development of the Meadows
through the issuance of State of Connecticut General Fund Obligation Bonds
("GFO Bonds"). The Meadows received bond proceeds of $8,863,000. Pursuant to
such agreement, the annual tax revenues derived from the operation of the
amphitheater are utilized to satisfy the annual service requirements under
the GFO Bonds. In the event that annual tax revenues derived from the
operation of the amphitheater do not equal annual service requirements under
the GFO Bonds, the Company must deposit the lesser of the operating
shortfall, as defined, or 10% of the annual service under the GFO Bonds. An
operating shortfall has not existed since the inception of the CDA. The GFO
Bonds mature on October 15, 2024 and have an average coupon rate of 6.33%.
Annual service requirements, including interest, on the GFO Bonds for each of
the next five years and thereafter are as follows (in thousands):
<TABLE>
<CAPTION>
<S> <C>
1998.......... $ 739
1999 ......... 737
2000 ......... 739
2001 ......... 740
2002 ......... 741
Thereafter ... 16,399
--------
$20,095
========
</TABLE>
The assistance agreement requires an annual Meadows attendance of at least
400,000 for each of the first three years of operations. It will not be
considered an event of default if the annual Meadows attendance is less than
400,000 provided that no operating shortfall exists for that year or if an
operating shortfall exists such amount has been deposited by the Company. If
there is an event of default, the CDA may foreclose on the construction
mortgage loan (see Note 5). If the amphitheater's operations are relocated
outside of Connecticut during the ten year period subsequent to the beginning
of the assistance agreement or during the period of the construction mortgage
loan, the full amount of the grant funds plus a penalty of 5% must be repaid
to the State of Connecticut.
F-15
<PAGE>
SFX ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. LONG-TERM DEBT
The Predecessor did not have any long-term debt as of December 31, 1996.
As of December 31, 1997, the company's long-term debt, which is recorded at
present value, consisted of the following (in thousands):
<TABLE>
<CAPTION>
<S> <C>
Meadows CDA Mortgage Loan........... $ 7,411
Meadows Concession Agreement Loans 5,872
Meadows CDA Construction Loan ..... 700
Murat notes payable ................ 790
Meadows note payable ............... 694
Polaris note payable ............... 221
Capital lease obligations .......... 490
-------
16,178
Less current portion................ 923
-------
$15,255
=======
</TABLE>
Meadows CDA Mortgage Loan
On September 12, 1994, the CDA entered into a construction mortgage loan
agreement for $7,685,000 with the Meadows. The purpose of the loan was to
finance a portion of the construction and development of the Meadows. The
loan agreement contains substantially the same covenants as the CDA
assistance agreement (see Note 4). The mortgage loan bears interest at 8.73%
and is payable in monthly installments of principal and interest. The
mortgage loan matures on October 15, 2019.
The loan is collateralized by a lien on the Meadows' assets. The loan is
secured by an irrevocable standby letter of credit issued by the Company in
the amount of $785,000.
Meadows Concession Agreement Loans
In connection with the Meadows' concession agreement, the concessionaire
loaned the Meadows $4,500,000 in 1995 to facilitate the construction of the
amphitheater. Principal and interest at the rate of 7.5% per annum on the
note is payable via withholdings of the first $31,299 from each monthly
concession commission payment. As of December 31, 1997, the outstanding
balance was $4,343,000.
During 1995, the concessionaire loaned the Meadows an additional
$1,000,000. This loan bears interest at a rate of 9.75% per annum and is
payable via withholdings of an additional $11,900 of principal, plus
interest, from each monthly concession commission payment through December
20, 2002. As of December 31, 1997, the outstanding balance was $679,000.
The concession agreement also required the Company to supply certain
equipment to the concessionaire at the Company's expense. The cost of the
equipment purchased by the concessionaire was converted to a note payable for
$884,000. The note bears interest at the rate of 9.25% per annum and provides
for monthly principal and interest payments of $10,185. However, the Company
is not required to make any principal or interest payments to the extent that
5% of receipts, as defined, in any month are less than the amount of the
payment due. As of December 31, 1997, the outstanding balance was $850,000.
Meadows CDA Construction Loan
In March 1997, the Meadows entered into a $1,500,000 loan agreement with
the CDA of which $1,000,000 was funded in March 1997. Principal payments of
$150,000 are due on July 1 and October 1 of each year commencing July 1, 1997
through October 1, 2001. The note bears interest at the rate of 8.9% per
annum through February 1, 1998, and thereafter at the index rate, as defined,
plus 2.5%. In addition,
F-16
<PAGE>
SFX ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
the Meadows is required to make principal payments in an amount equal to 10%
of the annual gross revenue, as defined, in excess of $13,000,000 on or
before the March 1 following each calendar year commencing March 1, 1998. In
1997, gross revenues did not exceed the defined threshold and thus no
principal payment was made on March 1, 1998.
Murat Notes Payable
The Company has two loans payable to the Massachusetts Avenue Community
Development Corporation (MAC), an $800,000 non-interest bearing note and a
$1,000,000 note. Principal payments on the non-interest bearing note are the
lesser of $0.15 per Murat ticket sold during fiscal year or remaining net
cash flow, as defined. Interest on the other note is calculated annually and
is equal to the lesser of (1) $0.10 per Murat ticket sold during the fiscal
year, (2) prime plus 1% or (3) remaining net cash flow, as defined. Interest
and principal on the $1,000,000 note is payable at the lesser of $0.10 per
Murat ticket sold during fiscal year or remaining net cash flow, as defined.
Provisions of the $800,000 note payable requires the Murat to continue
making payments after the principal has been paid down equal to the lesser of
$0.15 per Murat ticket sold during the fiscal year or remaining cash flow.
These payments are to be made to a not-for-profit foundation and will be
designated for remodeling and upkeep of the theatre.
Meadows Note Payable
Under the terms of a Meadows ticket and sales agreement, a vendor loaned
the Company $824,500 and pays the Company an annual fee of $140,000 for nine
years commencing in March 1996. Proceeds from the annual fee are used by the
Company to make the annual principal and interest payments.
Polaris Note Payable
In 1994, a concessionaire advanced Sunshine Promotions $500,000 to be used
in the construction of the Polaris Amphitheater. The advance is interest free
and is payable in annual installments of $25,000 beginning in 1994 for a
period of 20 years.
Capital Lease Obligations
The Company has entered into various equipment leases. Interest on the
leases range from 6.5% to 18.67%.
Principal maturities of the long-term debt, notes payable and capital
lease obligations over the next five years as of December 31, 1997 are as
follows (in thousands):
<TABLE>
<CAPTION>
LONG-TERM DEBT
AND CAPITAL LEASE
NOTES PAYABLE OBLIGATIONS
-------------- ---------------
<S> <C> <C>
1998.... $756 $167
1999 ... 782 157
2000 ... 611 113
2001 ... 541 53
2002.... $537 --
</TABLE>
F-17
<PAGE>
SFX ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. PROPERTY AND EQUIPMENT
The Company's property and equipment as of December 31, 1997 and 1996
consisted of the following (in thousands):
<TABLE>
<CAPTION>
PREDECESSOR
1997 1996
--------- -------------
<S> <C> <C>
Land...................... $ 8,752 --
Building and
improvements............. 44,364 --
Furniture and equipment .. 6,503 $ 131
Leasehold improvements ... 2,676 6,726
-------- -------------
62,295 6,857
Accumulated depreciation . (2,610) (4,626)
-------- -------------
$59,685 $ 2,231
======== =============
</TABLE>
7. INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES
The Company is a 49% partner in a general partnership which subleases a
theater located in New York City. Income associated with the promotion of
concerts at this theater is recorded as concert revenue. Any such promotion
revenue recognized reduces the Company's share of the partnership's profits.
The Company is also a one-third partner in GSAC Partners, a general
partnership through which it shares in the income or loss of the PNC Bank
Arts Center at varying percentages based on the partnership agreement. The
Company records these investments on the equity method. In connection with
the PACE Acquisition, the Company agreed to purchase the interest in GSAC
Partners that it did not already own and in 1998 completed the purchase.
Thus, the financial position and operations of GSAC Partners will be
consolidated into those of the Company beginning in 1998.
The following is a summary of the unaudited financial position and results
of operations of the Company's equity investees (GSAC Partners in 1997 and
1996 only) as of and for the years ended December 31, 1997, 1996 and 1995 (in
thousands):
<TABLE>
<CAPTION>
PREDECESSOR PREDECESSOR
1997 1996 1995
--------- ------------- -------------
<S> <C> <C> <C>
Current assets.......................... $ 2,818 $ 756 $ 214
Property, plant and equipment .......... 1,427 239 122
Other assets ........................... 239 819 --
--------- ------------- -------------
Total assets............................ $ 4,484 $ 1,814 $ 336
========= ============= =============
Current liabilities..................... $ 1,621 $ 1,534 $ 264
Partners' capital ...................... 2,863 280 72
--------- ------------- -------------
Total liabilities and partners'
capital................................ $ 4,484 $ 1,814 $ 336
========= ============= =============
Revenue................................. $20,047 $16,037 $4,058
Expenses................................ 17,074 14,624 2,954
--------- ------------- -------------
Net income.............................. $ 2,973 1,413 $1,104
========= ============= =============
</TABLE>
The equity income recognized by the Company represents the appropriate
percentage of investment income less amounts reported in concert revenues for
shows promoted by the Company at these theaters. Such concert revenues of
unconsolidated subsidiaries was approximately $97,000, $205,000 and $110,000
for the years ended December 31, 1997, 1996 and 1995, respectively.
F-18
<PAGE>
SFX ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
8. INCOME TAXES
The provisions for income taxes for the years ended December 31, 1997,
1996 and 1995 are summarized as follows (in thousands):
<TABLE>
<CAPTION>
PREDECESSOR PREDECESSOR
1997 1996 1995
-------- --------------- ---------------
<S> <C> <C> <C>
CURRENT:
Federal ...... -- -- --
State ........ $420 $106 $13
DEFERRED:
Federal ...... -- -- --
State ........ 70 -- --
-------- --------------- ---------------
Total ........ $490 $106 $13
======== =============== ===============
</TABLE>
No Federal income taxes were provided in 1997 as a result of the Company's
inclusion in the consolidated federal income tax return with SFX
Broadcasting. If the Company had filed on a stand alone basis, its federal
tax provision would have been approximately $2,050,000, consisting of
$1,760,000 in current taxes and approximately $290,000 of deferred taxes. The
Predecessor had no Federal tax provision in 1996 or 1995 by virtue of the
status of its profitable included companies as S Corporations. State income
taxes were provided to the extent that S Corporation status was not
recognized.
Deferred income taxes reflect the tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The significant
components of the Company's deferred tax asset and liabilities as of December
31, 1997 are as follows (in thousands):
<TABLE>
<CAPTION>
<S> <C>
Deferred tax assets:
Deferred compensation....... $ 783
Deferred tax liabilities:
Depreciable assets ......... $3,600
------
Net deferred tax liability $2,817
======
</TABLE>
The Predecessor had no deferred tax liabilities as of December 31, 1996.
The acquisition of the Meadows resulted in the recognition of deferred tax
liabilities of approximately $3,200,000 under the purchase method of
accounting. These amounts were based upon the excess of the financial
statement basis over the tax basis in assets, principally fixed assets. The
acquisition of Delsener/Slater resulted in the recognition of deferred tax
assets of approximately $1,200,000 under the purchase method of accounting.
These amounts were based upon the excess of the financial statements basis
over the tax basis in assets, principally deferred compensation.
F-19
<PAGE>
SFX ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
At December 31, 1997, 1996, and 1995 the effective rate varies from the
statutory Federal income tax rate as follows (in thousands):
<TABLE>
<CAPTION>
PREDECESSOR
----------------
1997 1996 1995
-------- -------- ------
<S> <C> <C> <C>
Income taxes at the statutory rate .................... $ 1,463 $(139) $ 54
Effect of Subchapter S status ......................... -- 139 (54)
Nondeductible amortization ............................ 800 -- --
Travel and entertainment .............................. 20 -- --
Effect of consolidated return loss .................... (2,283) -- --
State and local income taxes (net of Federal benefit) 490 106 13
-------- -------- ------
Total provision ....................................... $ 490 $ 106 $ 13
======== ======== ======
</TABLE>
9. COMMITMENTS, CONTINGENCIES AND OTHER MATTERS
Pursuant to the terms of the Spin-Off, upon the consummation of the
Broadcasting Merger, the Company will assume all obligations under any
employment agreements or arrangements between SFX Broadcasting and any
employee of the Company.
While the Company is involved in several suits and claims in the ordinary
course of business, the Company is not now a party to any legal proceeding
that the Company believes would have a material adverse effect on its
business.
The Company's operating leases includes primarily leases with respect to
venues, office space and land. Total rent expense was $2,753,000 , $875,000
and $835,000 for the years ended December 31, 1997, 1996 and 1995,
respectively. The lease terms range from 3 to 37 years. Prior to the
Spin-Off, the Company will enter into contracts with certain officers and
other key employees. No such contracts existed in 1997. The future minimum
payments for all noncancelable operating leases and employee agreements with
initial terms of one year or more are as follows (in thousands):
<TABLE>
<CAPTION>
OPERATING EMPLOYMENT
LEASES AGREEMENTS
----------- ------------
<S> <C> <C>
1998 ................ $ 3,366 $1,900
1999 ................ 3,823 1,864
2000 ................ 1,648 1,624
2001 ................ 1,666 1,534
2002 ................ 1,678 300
2003 and thereafter 14,117 --
----------- ------------
$26,298 $7,222
=========== ============
</TABLE>
The Company has committed to expansion projects at the Jones Beach Theater
and PNC Bank Arts Center and, in connection with the BGP Acquisition, for the
construction of a new amphitheater in the Seattle, Washington market. The
Jones Beach Theater and PNC Bank Arts Center expansions are expected to be
completed in June 1998 and to cost approximately $15,000,000 and $10,500,000,
respectively. As of December 31, 1997, approximately $1,018,000 and
$1,500,000, respectively, of these costs have been incurred. The new
amphitheater in Seattle is expected to cost $10,000,000 and is expected to be
completed in the spring of 1999.
As of December 31, 1997 and 1996, outstanding letters of credit for
$1,110,000 and $400,000, respectively, were issued by banks on behalf of the
Company as security for loans and the rental of theaters.
F-20
<PAGE>
SFX ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
In connection with the acquisition of Delsener/Slater, SFX Broadcasting
entered into an employment agreement with each of Ron Delsener and Mitch
Slater pursuant to which each of Messrs. Delsener and Slater serve as
Co-President and Co-Chief Executive Officer of Delsener/Slater. Each of the
employment agreements continues until December 31, 2001 unless terminated
earlier by the Company for cause or voluntarily by Mr. Delsener or Mr.
Slater.
In certain cases, Messrs. Delsener and Slater have rights to purchase the
outstanding capital stock of Delsener/Slater for fair market value as defined
in their employment agreements.
Additionally, in the case of a return event, as defined, which may be
deemed to include the Spin-Off, the Broadcasting Merger and related
transactions, Messrs. Delsener and Slater have the right to receive a portion
of the excess of the proceeds of the return event over a fixed amount
determined in reference to the original purchase price for Delsener/Slater,
all as calculated pursuant to the Delsener and Slater employment agreements.
Management believes that, with respect to the Spin-Off, the Broadcasting
Merger and related transactions, no payment will accrue to Mr. Delsener or
Mr. Slater pursuant to their employment agreements.
The employment agreements further provide that Messrs. Delsener and Slater
shall be paid annual bonuses determined with reference to Delsener/Slater
profits, as defined, for the immediately preceding year. Management believes
that no such bonus was earned for the year ended December 31, 1997.
Messrs. Delsener and Slater and the Company are in the process of
negotiating amendments to their employment agreements to reflect, among other
things, the changes to the business of the Company as a result of the Recent
Acquisitions and the Spin-Off, and each of Messrs. Delsener and Slater have
agreed in principle to waive any rights which may accrue in connection with
the Broadcasting Merger or the Spin-Off. The Company also expects, in
connection with the foregoing, to negotiate mutually satisfactory amendments
to certain of Messrs. Delsener's and Slater's compensation arrangements,
including bonus and profit sharing provisions.
10. RELATED PARTY TRANSACTIONS
The Company's Executive Vice President, General Counsel and Director is Of
Counsel to the law firm of Baker & McKenzie. Baker & McKenzie serves as
counsel to the Company in certain matters. Baker & McKenzie compensates the
executive based, in part, on the fees it receives from providing legal
services to the Company and other clients originated by the executive. In
1997, the Company incurred fees of approximately $2,948,000 for legal
services related to the Recent Acquisitions. Such fees were funded by SFX
Broadcasting on behalf of the Company. In February 1998, the Company
reimbursed SFX Broadcasting for these fees.
Due to stockholder represents the balance due to Mr. Delsener on his
advances to renovate the Jones Beach Theatre (the "Jones Beach Loan") and the
PNC Bank Arts Center (the "PNC Loan"). Delsener /Slater paid interest at 8%
per annum on the Jones Beach Loan, which was repaid in May 1996. The PNC
Loan, which was originated in 1996 was repaid in connection with the
acquisition of Delsener/Slater by SFX Broadcasting in 1997 (See Note 1).
11. CAPITAL STOCK
Prior to the Spin-Off, the Company will amend and restate its certificate
of incorporation to, among other things, increase its authorized capital
stock and will issue to SFX Broadcasting, in exchange for the issued and
outstanding shares of the Company's Common Stock held by SFX Broadcasting,
the number of shares of the Company's Common Stock necessary to consummate
the Spin-Off.
Subject to the approval of shareholders of SFX Broadcasting, holders of
the Company's Class A Common Stock will be entitled to one vote and holders
of the Company's Class B Common Stock will be
F-21
<PAGE>
SFX ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
entitled to ten votes on all matters submitted to a vote of shareholders
except for (a) the election of directors, (b) with respect to any "going
private" transaction involving the Chairman and (c) as otherwise provided by
law.
The Board of Directors has the authority to issued preferred stock and
will assign the designations and rights at the time of issuance.
12. DEFINED CONTRIBUTION PLAN
The Company sponsors a 401(k) defined contribution plan in which most
full-time employees are eligible to participate. The Plan presently provides
for discretionary employer contributions. There were no contributions in
1997.
13. SUBSEQUENT EVENTS
During January 1998, the Board of Directors and SFX Broadcasting, as sole
stockholder, approved and adopted a stock option and restricted stock plan
providing for the issuance of restricted shares of the Company's Class A
Common Stock and options to purchase shares of the Company's Class A Common
Stock totaling up to 2,000,000 shares.
During January 1998, in connection with certain executive officers
entering into employment agreements with the Company, the Board of Directors,
upon recommendation of the Compensation Committee, approved the sale of an
aggregate of 650,000 shares of the Company's Class B Common Stock and 90,000
shares of the Company's Class A Common Stock to certain executive officers
for a purchase price of $2.00 per share. Such shares will be issued on or
about the effective date of the Spin-Off. A substantial non-cash charge to
earnings will be recorded by the Company at the time of the Spin-Off based on
then fair value of such shares.
In addition, the Board, upon recommendation of the Compensation Committee,
has approved the issuance of stock options exercisable for 245,000 shares of
the Company's Class A Common Stock. The options will vest over five years and
will have an exercise price of $5.50 per share. The Company will record
non-cash compensation charges over the five-year period to the extent that
the fair value of the Company's Class A Common Stock exceeds the exercise
price.
Further, the Board of Directors has approved the issuance of shares of the
Company's Class A Common Stock to holders of stock options or stock
appreciation rights ("SARs") of SFX Broadcasting as of the Spin-Off record
date, whether or not vested. The issuance was approved to allow such holders
of these options or SARs to participate in the Spin-Off in a similar manner
to holders of SFX Broadcasting's Class A Common Stock. Additionally, many of
the option holders will become officers, directors and employees of the
Company.
F-22
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of Connecticut Performing Arts, Inc. and
the Partners of Connecticut Performing Arts Partners:
We have audited the accompanying combined balance sheets of Connecticut
Performing Arts, Inc. and Connecticut Performing Arts Partners (collectively,
the Company) as of December 31, 1995 and 1996, and the related combined
statements of operations, shareholders' and partners' equity (deficit) and
cash flows for the years then ended. These combined financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Company as of
December 31, 1995 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
March 21, 1997
F-23
<PAGE>
CONNECTICUT PERFORMING ARTS, INC. AND
CONNECTICUT PERFORMING ARTS PARTNERS
COMBINED BALANCE SHEETS
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
----------------------------
1995 1996
------------- -------------
<S> <C> <C>
ASSETS:
Current assets:
Cash ........................................................... $ 63,061 $ 6,778
Accounts receivable............................................. 192,382 152,205
Accounts receivable--related party.............................. 124,700 226,265
Prepaid interest ............................................... 54,982 54,279
Prepaid insurance .............................................. 69,797 87,869
Other current assets ........................................... 21,156 60,784
Deposit ........................................................ -- 110,000
Subscription receivable ........................................ 100 100
------------- -------------
Total current assets ......................................... 526,178 698,280
------------- -------------
Plant and equipment:
Building and building improvements ............................. 14,127,632 14,208,153
Furniture, fixtures and equipment .............................. 1,899,041 1,973,911
Leasehold improvements ......................................... 1,221,069 1,224,071
------------- -------------
17,247,742 17,406,135
Less: Accumulated depreciation and amortization ................ (408,897) (1,620,297)
------------- -------------
16,838,845 15,785,838
------------- -------------
Other assets:
Deferred costs, net of accumulated amortization of $165,300 and
$503,766 in 1995 and 1996, respectively ....................... 2,453,553 2,115,087
Deposit ........................................................ 110,000 --
Other .......................................................... -- 2,332
------------- -------------
Total other assets ........................................... 2,563,553 2,117,419
------------- -------------
$19,928,576 $18,601,537
============= =============
LIABILITIES AND SHAREHOLDERS' AND PARTNERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable ............................................... $ 915,280 $ 908,986
Accrued expenses ............................................... 1,356,132 655,207
Deferred income ................................................ 679,476 737,440
Notes payable .................................................. 1,100,000 1,450,000
Current portion of long-term debt and capital lease obligations 493,362 824,800
------------- -------------
Total current liabilities .................................... 4,544,250 4,576,433
------------- -------------
Long-term debt and capital lease obligations,
less current portion .......................................... 13,398,700 13,982,196
------------- -------------
COMMITMENTS AND CONTINGENCIES
(Notes 2, 4, 5, 6, 9 and 10)
Shareholders' and Partners' Equity (Deficit):
Shareholders' equity--
Common stock................................................... 1,000 1,000
Series A Preferred Stock....................................... 1,346,341 1,372,174
Series B Preferred Stock....................................... 1,250,000 1,250,000
Accumulated deficit............................................ (273,114) (1,999,823)
Partners' equity (deficit)...................................... (338,601) (580,443)
------------- -------------
Total shareholders' and partners' equity (deficit) .......... 1,985,626 42,908
------------- -------------
$19,928,576 $18,601,537
============= =============
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
F-24
<PAGE>
CONNECTICUT PERFORMING ARTS, INC. AND
CONNECTICUT PERFORMING ARTS PARTNERS
COMBINED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1996
-------------- -------------
<S> <C> <C>
Operating revenues:
Concert revenue ............... $ 6,830,681 $ 8,122,797
Cost of concerts .............. (5,524,043) (6,191,777)
-------------- -------------
1,306,638 1,931,020
Ancillary income .............. 1,431,577 2,052,592
-------------- -------------
2,738,215 3,983,612
-------------- -------------
Operating expenses:
General and administrative .... 3,068,162 3,080,914
Depreciation and amortization 574,197 1,549,894
Other ......................... 20,046 33,577
-------------- -------------
3,662,405 4,664,385
-------------- -------------
Loss from operations......... (924,190) (680,773)
Other income (expense):
Interest income................ 428,869 30,015
Interest expense............... (509,225) (1,274,660)
-------------- -------------
Loss before income taxes ... (1,004,546) (1,925,418)
Provision for income taxes ... 10,796 17,300
-------------- -------------
Net loss .................... $(1,015,342) $(1,942,718)
============== =============
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
F-25
<PAGE>
CONNECTICUT PERFORMING ARTS, INC. AND
CONNECTICUT PERFORMING ARTS PARTNERS
COMBINED STATEMENTS OF SHAREHOLDERS'
AND PARTNERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
SHAREHOLDERS' EQUITY (DEFICIT)
-------------------------------------- PARTNERS'
COMMON PREFERRED ACCUMULATED EQUITY
STOCK STOCK DEFICIT (DEFICIT)
-------- ------------ -------------- -----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1994............ $1,000 $2,500,000 $ (32) $ 500,000
Accretion of Series A Preferred
Stock................................ -- 96,341 (96,341) --
Net loss.............................. -- -- (176,741) (838,601)
-------- ------------ -------------- -----------
Balance, December 31, 1995............ 1,000 2,596,341 (273,114) (338,601)
Accretion of Series A Preferred
Stock................................ -- 25,833 (25,833) --
Net loss.............................. -- -- (1,700,876) (241,842)
-------- ------------ -------------- -----------
Balance, December 31, 1996............ $1,000 $2,622,174 $(1,999,823) $(580,443)
======== ============ ============== ===========
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
F-26
<PAGE>
CONNECTICUT PERFORMING ARTS, INC. AND
CONNECTICUT PERFORMING ARTS PARTNERS
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1995 1996
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net loss ............................................... $ (1,015,342) $ (1,942,718)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Depreciation and amortization ......................... 574,197 1,549,894
Loss on disposal of equipment ......................... -- 1,031
Changes in operating assets and liabilities:
Accounts receivable ................................... (192,382) 40,177
Accounts receivable--related party .................... -- (101,565)
Prepaid expenses and other assets ..................... (143,703) (59,329)
Accounts payable ...................................... -- (6,294)
Accrued expenses ...................................... 505,199 150,008
Deferred income ....................................... 679,476 57,964
--------------- ---------------
Net cash provided by (used in) operating activities . 407,445 (310,832)
--------------- ---------------
Cash flows from investing activities:
Purchases of plant and equipment ...................... (23,242,858) (159,452)
Grant proceeds......................................... 7,680,161 --
Deferred start-up costs ............................... (264,975) --
Accounts receivable--related party..................... 827,170 --
Accounts payable....................................... (438,350) --
--------------- ---------------
Net cash used in investing activities ............... (15,438,852) (159,452)
--------------- ---------------
Cash flows from financing activities:
Proceeds from borrowings on notes payable and
long-term debt ....................................... 13,943,316 1,278,068
Repayments of notes payable, long-term debt and
capital lease obligations............................. (176,917) (864,067)
Proceeds from sales of common and preferred stock ..... 900 --
--------------- ---------------
Net cash provided by financing activities ........... 13,767,299 414,001
--------------- ---------------
Net decrease in cash ................................... (1,264,108) (56,283)
Cash, beginning of year ................................ 1,327,169 63,061
--------------- ---------------
Cash, end of year....................................... $ 63,061 $ 6,778
=============== ===============
Supplemental Disclosures:
Cash Paid For--
Interest............................................... $ 554,342 $ 1,108,291
=============== ===============
Income taxes........................................... $ 10,796 $ 17,300
=============== ===============
Noncash Transactions--
Capital lease obligations.............................. $ 59,479 $ --
=============== ===============
Series A Preferred Stock accretion..................... $ 96,341 $ 25,833
=============== ===============
Conversion of accrued expense for equipment purchase
to note payable....................................... $ -- $ 850,933
=============== ===============
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
F-27
<PAGE>
CONNECTICUT PERFORMING ARTS, INC. AND
CONNECTICUT PERFORMING ARTS PARTNERS
NOTES TO COMBINED FINANCIAL STATEMENTS
1. OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Operations --
Connecticut Performing Arts, Inc. (the Company) and Connecticut Performing
Arts Partners (the Partnership) were incorporated and formed, respectively,
in 1993 pursuant to the laws of the State of Connecticut. The Company's
shareholders and the Partnership's partners are Nederlander of Connecticut,
Inc. and Connecticut Amphitheater Development Corporation. The Company's
shareholders and the Partnership's partners changed in March 1997 (see Note
10). The Company and Partnership are engaged in the ownership and operation
of an amphitheater in Hartford, Connecticut. The construction of the
amphitheater commenced in December 1994 and amphitheater operations commenced
in July 1995.
Principles of combination --
The combined financial statements include the accounts of the Company and
the Partnership after elimination of intercompany accounts and transactions.
Use of estimates in the preparation of financial statements --
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Plant and equipment --
Plant and equipment is carried at cost. Major additions and betterments
are capitalized, while replacements, maintenance and repairs which do not
extend the lives of the assets are charged to operations as incurred. Upon
the disposition of plant and equipment, any resulting gain or loss is
recognized in the statement of operations as a component of income.
The Company received grant funds from the City of Hartford and Connecticut
Development Authority related to the construction of the amphitheater (see
Note 4). Such amounts have been accounted for as a reduction in the cost of
the amphitheater.
Depreciation of plant and equipment is provided for, commencing when such
assets become operational, using straight-line and accelerated methods over
the following estimated useful lives:
<TABLE>
<CAPTION>
USEFUL LIVES
----------------------
<S> <C>
Building and building improvements .... 39 years
Furniture, fixtures and equipment ..... 4-7 years
Leasehold improvements ................. Shorter of asset
life or lease term
</TABLE>
Effective January 1, 1996, the Company and Partnership adopted Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" which had no
effect upon adoption. This statement requires that long-lived assets and
certain identifiable intangible assets to be held and used by an entity be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.
F-28
<PAGE>
CONNECTICUT PERFORMING ARTS, INC. AND
CONNECTICUT PERFORMING ARTS PARTNERS
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
1. OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:--(Continued)
Deferred costs --
Deferred costs consist of start-up costs being amortized over a period of
5 years and deferred financing costs being amortized over the term of the
related debt (24 years and 4 months). As of December 31, 1995 and 1996
deferred costs were as follows:
<TABLE>
<CAPTION>
1995 1996
------------ ------------
<S> <C> <C>
Deferred start-up .............. $1,452,669 $1,452,669
Deferred financing ............. 1,166,184 1,166,184
------------ ------------
2,618,853 2,618,853
Less: Accumulated amortization (165,300) (503,766)
------------ ------------
$2,453,553 $2,115,087
============ ============
</TABLE>
Deposit --
The deposit represents a deposit held by the City of Hartford related to
an employment agreement between the Partnership and the City of Hartford for
priority hiring of Hartford residents and utilization of minority business
enterprise or women business enterprise contractors and vendors in the future
operation of the amphitheater. The deposit will be returned to the
Partnership in December 1997 if the Partnership is in compliance with the
employment agreement. As of December 31, 1996, the Partnership has
compensated the City of Hartford for noncompliance with the terms of the
agreement in connection with the construction of the facility and the hiring
of contractors and the City of Hartford has agreed to make no additional
claims with respect to this matter.
Income taxes --
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes". This
statement requires a company to recognize deferred tax assets and liabilities
for the expected future tax consequences of events that have been recognized
in a company's financial statements or tax returns. Under this method,
deferred tax assets and liabilities are determined based on the difference
between the financial statement carrying amounts and the tax bases of assets
and liabilities and net operating loss carryforwards available for tax
reporting purposes, using the applicable tax rates for the years in which the
differences are expected to reverse. A valuation allowance is recorded on
deferred tax assets unless realization is more likely than not.
The income tax effects of the operations of the Partnership accrue to the
partners in accordance with the terms of the Partnership agreement and are
not reflected in the accompanying combined financial statements.
Revenue recognition --
Revenue from ticket sales is recognized upon occurrence of the event.
Advance ticket sales are recorded as deferred income until the event occurs.
Ticket revenue is recorded net of payments in lieu of taxes under the terms
of the City of Hartford lease (see Note 6) and admission taxes.
Advertising --
The Company expenses the cost of advertising when the specific event takes
place. Advertising expense was $639,424 and $689,160 for the years ended
December 31, 1996 and 1995, respectively.
F-29
<PAGE>
CONNECTICUT PERFORMING ARTS, INC. AND
CONNECTICUT PERFORMING ARTS PARTNERS
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
2. SHAREHOLDERS' EQUITY:
Common stock --
The Company is authorized to issue 5,000 shares of common stock with no
par value. The subscription receivable of $100 as of December 31, 1996
represents the amount due from shareholders for 100 shares of common stock at
$10 per share, of which $900 was received in February 1995.
Preferred stock --
The Company is authorized to issue 295,000 shares of preferred stock at no
par value. As of December 31, 1996 and 1995, 125,000 of such shares have been
designated as Series A Preferred Stock and 125,000 of such shares have been
designated as Series B Preferred Stock. Series A and Series B Preferred Stock
are not entitled to dividends and have liquidation rights of $10 per share.
Series A Preferred Stock is mandatorily redeemable at the rate of 20,835
shares commencing December 31, 1995 (the Initial Redemption Date) and an
aggregate of 20,833 shares on each six month anniversary of the Initial
Redemption Date until all 125,000 shares of the Series A Preferred Stock have
been redeemed, at $11.445 per share. As of December 31, 1996, no shares of
Series A Preferred Stock had been redeemed. The Company is accreting the
difference between the redemption price and the proceeds per share over the
period from the issuance date to the respective scheduled redemption dates.
Series B Preferred Stock is mandatorily redeemable at a per share price of
$10 in whole or in part at the option of the Company at any such time as
legally available funds, as defined in the resolution establishing and
designating the preferred stock, are available. On the tenth anniversary of
the completion date of the amphitheater any Series B Preferred Stock
outstanding shall be redeemed by the Company at a per share price of $10.
The Series A and Series B Preferred Stock will not be redeemed if such
redemption would result in a violation of the provisions of the Connecticut
Development Authority assistance agreement (see Note 4) or the mortgage loan
agreement (see Note 5).
3. PARTNERS' EQUITY:
In 1993, Nederlander of Connecticut, Inc. and Connecticut Amphitheater
Development Corporation each made an initial capital contribution of
$250,000.
4. GRANT FUNDS:
Connecticut Development Authority (CDA) Assistance Agreement --
On September 12, 1994, the CDA entered into a non-recourse assistance
agreement with the Company whereby the CDA provided grant funds for the
construction and development of an amphitheater in the City of Hartford (the
Project) through the issuance of State of Connecticut General Fund Obligation
Bonds (GFO Bonds). The Company received bond proceeds of $8,863,000, which
amount is net of CDA bond issuance costs of $593,000 and withholdings of
$429,000 by the CDA to cover the expected operating shortfall, as discussed
below, through December 31, 1995. Commencing January 1, 1996, the annual tax
revenues derived from the operation of the amphitheater are utilized to
satisfy the annual debt service requirements under the GFO Bonds. In the
event that annual tax revenues derived from the operation of the amphitheater
do not equal annual debt service requirements under the GFO Bonds, the
Company must deposit the lesser of the operating shortfall, as defined, or
10% of the annual debt service under the GFO Bonds. An operating shortfall
did not exist for the year ended December 31, 1996. The GFO Bonds mature on
October 15, 2024 and have an average coupon rate of 6.33%. Annual debt
service requirements on the GFO Bonds for each of the next five years and
thereafter are as follows:
F-30
<PAGE>
CONNECTICUT PERFORMING ARTS, INC. AND
CONNECTICUT PERFORMING ARTS PARTNERS
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
4. GRANT FUNDS: (Continued)
<TABLE>
<CAPTION>
YEAR AMOUNT
- ------------- ------------
<S> <C>
1997.......... $ 740,556
1998 ......... 738,906
1999 ......... 736,656
2000 ......... 738,856
2001 ......... 740,293
Thereafter .. 17,140,363
------------
$20,835,630
============
</TABLE>
The assistance agreement requires an annual attendance of at least 400,000
for each of the first three years of operations. It will not be considered an
event of default if the annual attendance is less than 400,000 provided that
no operating shortfall exists for that year or if an operating shortfall
exists such amount has been deposited by the Company. If there is an event of
default, the CDA may foreclose on the construction mortgage loan (see Note
5). If the amphitheater's operations are relocated outside of Connecticut
during the ten year period subsequent to the assistance agreement or during
the period of the construction mortgage loan, the full amount of the grant
funds plus a penalty of 5% must be repaid to the State of Connecticut.
City of Hartford Grant Funds --
On February 15, 1995 the Company entered into an agreement with the City
of Hartford whereby the City of Hartford provided grant funds of $2,050,000
for the remediation and closure of a solid waste disposal area near the
amphitheater. As of December 31, 1995 all funds had been received by the
Company.
5. NOTES PAYABLE AND LONG-TERM DEBT:
Notes payable --
In October 1995, the Company entered into two notes payable with related
parties for an aggregate of $2,000,000. As of December 31, 1996 and 1995,
$1,450,000 and $1,100,000, respectively was outstanding on these notes. The
notes bear interest at 6.6% per annum and are payable upon demand.
CDA mortgage loan --
On September 12, 1994, CDA entered into a construction mortgage loan
agreement for $7,685,000 with the Company. The purpose of the loan was to
finance a portion of the construction and development of the amphitheater.
The loan agreement contains substantially the same covenants as the CDA
assistance agreement (see Note 4). As of December 31, 1995, proceeds of
$6,519,000, which amount is net of deferred financing costs of approximately
$1,166,000, had been received by the Company.
F-31
<PAGE>
CONNECTICUT PERFORMING ARTS, INC. AND
CONNECTICUT PERFORMING ARTS PARTNERS
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
5. NOTES PAYABLE AND LONG-TERM DEBT: (Continued)
The mortgage loan bears interest at 8.73% and is payable in monthly
installments of principal and interest. The mortgage loan matures on October
15, 2019. As of December 31, 1996, future principal payments are as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
- ------------- -----------
<S> <C>
1997.......... $ 111,667
1998 ......... 121,667
1999 ......... 131,667
2000 ......... 141,667
2001 ......... 152,500
Thereafter .. 6,854,498
-----------
$7,513,666
===========
</TABLE>
The loan is guaranteed by the Company's shareholders and is collateralized
by a lien on the Company's assets. As of December 31, 1996, the loan was
secured by an irrevocable standby letter of credit issued by a shareholder of
the Company in the amount of $785,000. The letter of credit was replaced in
March 1997 by a letter of credit issued by a new shareholder (see Note 10).
Ogden Entertainment, Inc. (OE) Concession Agreement --
In October 1994, the Partnership entered into a concession agreement with
OE which provides for the payment of concession commissions to the
Partnership. In connection with the concession agreement, OE loaned the
Partnership $4,500,000 in 1995 to facilitate the construction of the
amphitheater. On December 30, 1996, the concession agreement was amended and
restated retroactively to October 18, 1994. In accordance with the terms of
the amended agreement, which expires on July 7, 2025, interest only, at the
6-month LIBOR rate, through July 7, 1995 and principal and interest, at the
rate of 7.5% per annum, were due on the note payable via withholdings of the
first $41,716 from each monthly commission payment commencing July 20, 1995
through December 20, 1995. Effective January 2, 1996, and through the term of
the amended concession agreement, principal and interest, at the rate of 7.5%
per annum on the note is payable via withholdings of the first $31,299 from
each monthly commission payment.
OE loaned the Partnership an additional $1,000,000 during 1995. This loan
bears interest at a rate of 9.75% per annum and is payable via withholdings
of an additional $11,900 of principal, plus interest, from each monthly
commission payment through December 20, 2002. As of December 31, 1996,
aggregate future principal payments to OE are as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
- ------------- -----------
<S> <C>
1997.......... $ 190,722
1998 ......... 194,442
1999 ......... 198,451
2000 ......... 202,772
2001 ......... 207,427
Thereafter .. 4,218,234
-----------
$5,212,048
===========
</TABLE>
The concession agreement provided for the Partnership to supply certain
equipment to OE at the Partnership's expense. This equipment was installed
prior to the opening of the amphitheater (the Initial
F-32
<PAGE>
CONNECTICUT PERFORMING ARTS, INC. AND
CONNECTICUT PERFORMING ARTS PARTNERS
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
5. NOTES PAYABLE AND LONG-TERM DEBT: (Continued)
Equipment). The Initial Equipment was purchased by OE at a cost of $850,933
and the Partnership was obligated to reimburse OE for the cost of the
equipment. Accordingly, this amount was reflected as an accrued expense in
the accompanying combined balance sheet as of December 31, 1995. In 1996, in
connection with the amended concession agreement, the $850,933, and an
additional $33,067 related to 1996 equipment purchases, was converted to a
note payable for $884,000. The note bears interest at the rate of 9.25% per
annum and provides for monthly principal and interest payments of $10,185 to
OE, however, the Partnership is not required to make any principal or
interest payments to the extent that 5% of receipts, as defined, in any month
are less than the amount of the payment due. As of December 31, 1996, future
principal payments to OE by the Partnership are as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
- ------------- ---------
<S> <C>
1997.......... $ 42,210
1998 ......... 46,284
1999 ......... 50,751
2000 ......... 55,650
2001 ......... 61,022
Thereafter .. 628,083
---------
$884,000
=========
</TABLE>
Conn Ticketing Company (CTC) Promissory Note Payable --
On April 1, 1995, CTC (a company related to the Company and the
Partnership via common ownership) entered into a promissory note agreement
with ProTix Connecticut General Partnership (PTCGP). Under the terms of the
agreement, CTC borrowed $825,000 at 9.375% per annum from PTCGP. Principal
and interest are repayable by CTC in nine annual installments of $139,714
which commenced March 31, 1996. In May 1995, CTC loaned $824,500 to the
Company which is also repayable in nine annual installments of principal and
interest of $139,714. The PTCGP loan to CTC is secured by CTC's receivable
from the Company. As of December 31, 1996, future principal payments to CTC
by the Company are as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
- ------------- ---------
<S> <C>
1997.......... $ 68,217
1998 ......... 74,613
1999 ......... 81,608
2000 ......... 89,259
2001 ......... 97,627
Thereafter .. 351,306
---------
$762,630
=========
</TABLE>
In January 1995, the Partnership entered into a ticket and sales agreement
with PTCGP through December 31, 2004. Under the terms of the agreement, PTCGP
pays the Partnership an annual fee of $140,000 commencing in March 1996.
Proceeds from the annual fee for the first nine years will be used by the
Partnership to make the annual principal and interest payment to CTC.
Line of credit --
The Partnership has a line of credit in the amount of $2,000,000, which
bears interest at 8.25% per annum, with a bank. As of December 31, 1996,
$395,000 was outstanding on the line of credit.
F-33
<PAGE>
CONNECTICUT PERFORMING ARTS, INC. AND
CONNECTICUT PERFORMING ARTS PARTNERS
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
5. NOTES PAYABLE AND LONG-TERM DEBT: (Continued)
Capital lease obligations --
The Partnership entered into capital leases for certain office equipment.
The leases expire in 1998 and 2000. As of December 31, 1996 future principal
payments are as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
- ------- ---------
<S> <C>
1997 ... $16,984
1998 ... 13,905
1999 ... 4,550
2000 ... 4,213
---------
$39,652
=========
</TABLE>
6. LAND AND BUILDING LEASES:
Land lease agreement between the City of Hartford and the Partnership --
The Partnership entered into a 40 year lease agreement for certain land
with the City of Hartford, Connecticut on September 14, 1994. The lease
agreement provides for two successive options to extend the term of the lease
for a period of ten years each. The Partnership pays an annual basic rent of
$50,000 commencing July 1, 1995; and additional rent payments in lieu of real
estate taxes (PILOT) in an amount equal to 2% of all admission receipts, food
and beverage revenue, merchandise revenue and parking receipts that exceed
10% of the total admission receipts, which amount is to be net of any
surcharges and sales or like taxes levied by governmental authorities on the
price of such items.
Assignment of lease by the Partnership to the Company --
The above lease was subsequently assigned by the Partnership to the
Company on September 22, 1994 for consideration of $1.
Lease and sublease agreement between the Company and the Partnership --
On October 19, 1994, the Company subleased the land and buildings and
improvements thereon to the Partnership for a period of 40 years commencing
upon substantial completion of the amphitheater. The sublease agreement
provides for two successive options to extend the term of the lease for a
period of ten years each. The sublease agreement provides for the Partnership
to pay rent to the Company in amounts ranging from $804,000 to $831,100 per
annum for the first 25 years and $100,000 per annum thereafter including the
option periods. Additional rent of six semi-annual installments of $238,452
is also payable by the Partnership commencing six months after the start of
operations. Subsequent to the six semi-annual installments an aggregate of
$1,250,000 will be payable in semi-annual installments based on available
cash flow of the Partnership, as defined. Additionally, the Partnership is
also required to pay the annual basic rent ($50,000) and any additional
payments in lieu of taxes under the terms of the lease agreement between the
City of Hartford and the Partnership described above. The Partnership will
also pay additional rent equal to principal and interest payable by the
Company to the concession company for a previously arranged concessionaire
arrangement (see Note 5). The accompanying combined statement of operations
for the year ended December 31, 1996 includes rent expense of $50,000 which
represents the aggregate amount due to the City of Hartford under the terms
of the above agreements.
7. INCOME TAXES:
The provision for income taxes for the year ended December 31, 1996
represents minimum state income taxes for the Company. As of December 31,
1996, the Company has a net deferred tax asset of
F-34
<PAGE>
CONNECTICUT PERFORMING ARTS, INC. AND
CONNECTICUT PERFORMING ARTS PARTNERS
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
7. INCOME TAXES: (Continued)
approximately $750,000 primarily as a result of aggregate net operating
losses since inception. Usage of the net operating loss carryforwards is
restricted in the event of certain ownership changes. A valuation allowance
has been recorded for the same amount due to the uncertainty related to the
realization of this asset.
8. RELATED PARTY TRANSACTIONS:
Accounts receivable -related party as of December 31, 1996, includes net
amounts due from a shareholder of $121,265 and receivables from another
related party of $105,000.
9. CONTINGENCIES:
The Company and the Partnership are party to certain litigation arising in
the normal course of business. Management, after consultation with legal
counsel, believes the disposition of these matters will not have a material
adverse effect on the combined results of operations or financial condition.
10. SUBSEQUENT EVENTS:
Effective March 5, 1997, the Partnership and Company entered into a
$1,500,000 loan agreement with the CDA of which $1 million was funded in
March 1997. Principal payments of $150,000 are due on July 1 and October 1 of
each year commencing July 1, 1997 through October 1, 2001. The note bears
interest at the rate of 8.9% per annum through February 1, 1998, and
thereafter at the index rate, as defined, plus 2.5%. In addition, the
Partnership and Company are required to make principal payments in an amount
equal to 10% of the annual gross revenue, as defined, in excess of $13
million on or before March 1 of each calendar year commencing March 1, 1998.
In March 1997, three subsidiaries of SFX Broadcasting, Inc.
(Broadcasting), which were created for such purpose, were merged into
Nederlander of Connecticut, Inc., Connecticut Amphitheater Development
Corporation and QN Corp., a newly formed entity. In connection with the
merger, the name of Nederlander of Connecticut, Inc., was changed to NOC,
Inc. (NOC) and the directors of NOC, Inc., Connecticut Amphitheater
Development Corporation (CADCO) and QN Corp. (QN) were replaced with
directors of the Broadcasting acquisition subsidiaries. Each outstanding
share of stock of NOC, CADCO and QN was canceled and exchanged for an
aggregate of $1 million cash and shares of Broadcasting Class A Common Stock
valued at $9 million, subject to certain adjustments. The shares are subject
to a put provision between the second and seventh anniversary of the closing
whereby the holder can put each share back to Broadcasting for the per share
value of Broadcasting stock as of the merger closing date, as defined, less
10%. Additionally, the shares may be called by Broadcasting during the same
period for an amount equal to the per share value of the Broadcasting stock
as of the merger closing date, as defined, plus 10%. As consideration for
approval of the transaction, the CDA received shares of Broadcasting stock
valued at approximately $361,000.
F-35
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
of SFX Broadcasting, Inc.:
We have audited the accompanying combined balance sheets of DEER CREEK
PARTNERS, L.P. (formerly Sand Creek Partners, L.P.) and MURAT CENTRE, L.P.,
as of December 31, 1996 and 1995, and the related combined statements of
operations and partners' equity (deficit) and cash flows for the years ended
December 31, 1996 and 1995. These financial statements are the responsibility
of the Partnerships' management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of Deer Creek
Partners, L.P. and Murat Centre, L.P. as of December 31, 1996 and 1995, and
the combined results of their operations and their cash flows for the years
ended December 31, 1996 and 1995 in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Indianapolis, Indiana
September 29, 1997.
F-36
<PAGE>
DEER CREEK PARTNERS, L.P. AND MURAT CENTRE, L.P.
COMBINED BALANCE SHEETS
AS OF DECEMBER 31, 1995 AND 1996
<TABLE>
<CAPTION>
1995 1996
------------- ------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents.................. $ 1,894,533 $ 876,776
Accounts receivable........................ 138,548 155,929
Prepaid show expense....................... -- 42,114
Prepaid expenses........................... 91,919 118,152
------------- ------------
Total current assets..................... 2,125,000 1,192,971
------------- ------------
Property and equipment:
Land....................................... 2,428,770 2,428,770
Buildings.................................. 6,155,979 6,155,979
Site improvements.......................... 2,328,369 2,230,594
Leasehold improvements..................... 5,270,038 9,663,357
Furniture and equipment.................... 1,070,547 1,722,874
------------- ------------
17,253,703 22,201,574
Less: Accumulated depreciation............. 2,167,567 2,850,077
------------- ------------
Total property and equipment............. 15,086,136 19,351,497
------------- ------------
Other Assets:
Cash surrender value--life insurance
policy.................................... 62,819 71,815
Unamortized loan acquisition costs ....... 93,439 350,055
------------- ------------
Total other assets....................... 156,258 421,870
------------- ------------
TOTAL ASSETS ............................ $17,367,394 $20,966,338
============= ============
</TABLE>
The accompanying notes are an integral part of these statements.
F-37
<PAGE>
DEER CREEK PARTNERS, L.P. AND MURAT CENTRE, L.P.
COMBINED BALANCE SHEETS
AS OF DECEMBER 31, 1995 AND 1996
<TABLE>
<CAPTION>
1995 1996
------------- -------------
<S> <C> <C>
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Current portion of notes and capital lease
obligation........................................... $ 796,391 $ 611,127
Current portion of deferred ticket revenue............ 542,420 841,476
Accounts payable...................................... 472,365 520,663
Accrued interest...................................... 663,391 299,600
Accrued property taxes................................ 125,524 280,734
Current portion of loan payable....................... -- 34,200
Construction payable and other accrued liabilities .. 3,341,284 50,641
------------- -------------
Total current liabilities .......................... 5,941,375 2,638,441
------------- -------------
Long-term Liabilities:
Notes payable and capital lease obligation,
net of current portion............................... 12,998,738 17,266,768
Loan, net of current portion (Note 5)................. -- 99,200
Deferred ticket revenue, net of current portion ...... -- 168,833
------------- -------------
Total long-term liabilities......................... 12,998,738 17,534,801
------------- -------------
Partners' equity (deficit):
Contributed capital .................................. -- 2,200,000
Undistributed earnings (loss) ........................ (1,572,719) (1,406,904)
------------- -------------
(1,572,719) 793,096
------------- -------------
TOTAL LIABILITIES AND PARTNERS' EQUITY.............. $17,367,394 $20,966,338
============= =============
</TABLE>
The accompanying notes are an integral part of these statements.
F-38
<PAGE>
DEER CREEK PARTNERS, L.P. AND MURAT CENTRE, L.P.
COMBINED STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
<TABLE>
<CAPTION>
1995 1996
-------------- --------------
<S> <C> <C>
Operating revenues:
Concert revenue.................................. $11,073,491 $14,194,502
Cost of concerts................................. 8,939,022 10,724,059
-------------- --------------
2,134,469 3,470,443
Ancillary income:
Royalty commissions.............................. 1,706,458 1,799,950
Corporate sponsorships........................... 959,518 1,056,161
Other ancillary income........................... 789,433 1,375,528
-------------- --------------
5,589,878 7,702,082
Operating expenses:
General & administrative......................... 2,419,679 3,452,990
Depreciation & amortization...................... 343,567 783,167
Other operating expenses......................... 249,812 471,126
-------------- --------------
3,013,058 4,707,283
Income from operations........................... 2,576,820 2,994,799
Other income (expense):
Interest income.................................. 86,034 84,123
Interest expense................................. (2,203,690) (1,549,579)
-------------- --------------
Net Income (Loss).............................. $ 459,164 $ 1,529,343
Partners' Equity (Deficit) at beginning of year $(1,857,603) $(1,572,719)
Contributions.................................... -- 2,200,000
Distributions.................................... (174,280) (1,363,528)
-------------- --------------
Partners' Equity (Deficit) at end of year ...... $(1,572,719) $ 793,096
============== ==============
</TABLE>
The accompanying notes are an integral part of these statements.
F-39
<PAGE>
DEER CREEK PARTNERS, L.P. AND MURAT CENTRE, L.P.
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
<TABLE>
<CAPTION>
1995 1996
------------- -------------
<S> <C> <C>
Operating Activities:
Net income .................................................... $ 459,164 $ 1,529,343
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization................................. 461,678 783,167
Decrease (increase) in certain assets:
Accounts receivable........................................... (45,317) (17,381)
Prepaid show expenses......................................... -- (42,114)
Prepaid expenses and other ................................... 746,307 (33,381)
Increase (decrease) in certain liabilities:
Accounts payable, construction payable and other accrued
liabilities.................................................. 3,424,461 (3,087,135)
Deferred ticket revenue....................................... (1,266,654) 467,889
Accrued interest.............................................. 389,251 (363,791)
Other......................................................... (75,407) 44,852
------------- -------------
Net cash provided by (used in) operating activities ........ 4,093,483 (718,551)
------------- -------------
Investing Activities:
Capital expenditures.......................................... (6,713,889) (5,197,260)
------------- -------------
Net cash used by investing activities......................... (6,713,889) (5,197,260)
------------- -------------
Financing Activities:
Net proceeds from borrowings.................................. 3,060,087 5,057,249
Capital contributions......................................... -- 2,200,000
Department of Metropolitan Development Grant.................. 761,014 338,986
Principal payments on notes and loan payable and capital
leases....................................................... (20,308) (1,334,653)
Distributions to partners..................................... (174,280) (1,363,528)
------------- -------------
Net cash provided by financing activities ................... 3,626,513 4,898,054
------------- -------------
Net increase (decrease) in cash and cash equivalents .......... 1,006,107 (1,017,757)
Cash and cash equivalents:
Beginning of period........................................... 888,426 1,894,533
------------- -------------
End of period................................................. $ 1,894,533 $ 876,776
============= =============
Supplemental disclosures:
Cash paid for interest........................................ $ 1,148,049 $ 1,912,494
Equipment acquired under capital leases....................... -- 139,000
============= =============
</TABLE>
The accompanying notes are an integral part of these statements.
F-40
<PAGE>
DEER CREEK PARTNERS, L.P. AND MURAT CENTRE, L.P.
NOTES TO COMBINED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Prior to 1997 (See Note 10) Deer Creek Partners, L.P. (the Deer Creek
Partnership) owned and operated Deer Creek Music Center (Deer Creek), a
concert amphitheater located in Hamilton County, near Indianapolis, Indiana
which commenced operations in 1989. Sand Creek Partners, L.P. (the general
partner) was a 50% general partner and is responsible for the management of
the Deer Creek Partnership. Conseco, Inc. (Conseco) was a 50% limited partner
of the Deer Creek Partnership. All distributable cash, as defined by the Deer
Creek partnership agreement, is to be distributed equally between the
Partners.
The Deer Creek Partnership was formed on January 5, 1996 as a result of
Conseco exercising its option to become a 50% owner of Deer Creek. Deer Creek
was previously 100% owned by Sand Creek Partners, L.P. This change in
ownership has been accounted for as a reorganization, and thus the carrying
value of the assets and liabilities related to Deer Creek remain unchanged as
a result of the reorganization.
Murat Centre, L.P. (Murat Partnership), formed on August 1, 1995, leases
and operates the Murat Theatre (Theatre), a renovated concert and
entertainment venue located in downtown Indianapolis, Indiana. The Theatre's
grand reopening was in March, 1996. The Theatre is currently owned by and was
previously operated by the Murat Temple Association, Inc. Murat Centre, Inc.
is the general partner and is responsible for management of the Theatre.
Profits and losses of the Murat Partnership are allocated 1% to the general
partner and 99% to the limited partners. Distributions to partners are
generally limited to the income taxes payable by the partners as a result of
taxable income generated by the Murat Partnership. To the extent that cash
flow for the applicable year exceeds all payment requirements as discussed in
Note 3, the excess shall be distributed to the partners.
In connection with reopening the Theatre, the Murat Partnership expended
approximately $11.7 million for renovations which began in 1995. Start-up and
organizational costs of approximately $85,000 in 1995 and $90,000 in 1996
were expensed as incurred and have been included in general and
administrative expenses in the combined statement of operations for the years
ended December 31, 1996 and 1995. The building is leased under a 50 year
operating lease with options for 5 additional consecutive 10 year periods
under the same terms and conditions as the initial 50 year lease.
b. Basis of Accounting
The financial statements have been prepared in accordance with generally
accepted accounting principles. Such principles require management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities and disclosures of contingent assets and liabilities at the date
of financial statements and the amounts of income and expenses during the
reporting period. Actual results could differ from those estimated.
c. Property and Equipment
Property and equipment are carried at cost less accumulated depreciation.
Depreciation is provided using the straight-line method over the estimated
useful lives of the assets. Buildings are depreciated over forty years,
leasehold improvements over thirty years, site improvements over twenty
years, and furniture and equipment over five to seven years.
d. Loan Acquisition Costs
Loan acquisition costs represent agency and commitment fees paid to the
lenders, closing costs and legal fees incurred in connection with the notes
payable (see Note 2). These fees are being amortized on a straight-line basis
over a fifteen year period, which represented the approximate term of the
related debt.
F-41
<PAGE>
DEER CREEK PARTNERS, L.P. AND MURAT CENTRE, L.P.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
e. Deferred Revenue
Deferred revenue includes individual show ticket revenue, season ticket
revenue, and corporate box seat revenue received in advance of events or the
next concert season and will be recognized over the period in which the shows
are held. A portion of the deferred revenue was derived from the bartering of
tickets for goods and services related to the Murat renovation. Barter
transactions are recorded at the estimated fair value of the materials or
service received.
f. Income Taxes
No provision for Federal or state income taxes is required because the
partners are taxed directly on their distributable shares of the
Partnerships' income or loss.
g. Cash Equivalents
The Partnerships consider all highly liquid investments with an original
maturity of three months or less to be cash equivalents.
h. Advertising and Promotion
Advertising and promotion costs are expensed at the time the related
promotional event is held. The costs were approximately $930,000 in 1996 and
$595,000 in 1995.
2. NOTES PAYABLE
Notes payable and capital lease obligations as of December 31, 1995 and
1996 consisted of the following:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1995 1996
-------------- --------------
<S> <C> <C>
MURAT PARTNERSHIP
- -------------------------------------------------------------------
Note payable to bank with 9.25% interest rate subject to adjustment
in 2001 and 2006; payable in monthly installments of $30,876,
including interest, in addition to annual contingent principal
payments based upon remaining net cash flow as defined in Note 3;
secured by assets of the Murat Partnership and guaranteed by two
of the limited partners for $375,000 each; balance due no later
than April 1, 2011. ............................................... $ -- $2,928,053
Note payable with 9% non-compounding interest rate through November
14, 1996, 12% non-compounding interest rate from November 15, 1996
through November 14, 1998, 18% non-compounding interest rate
thereafter; all interest is cumulative; principal and interest
payments are based upon remaining net cash flow as defined in Note
3; subordinate to above bank note payable. ........................ 2,647,165 3,000,000
Note payable with 0% interest rate; principal payments the lesser
of $.15 per ticket sold during fiscal year or remaining net cash
flow as defined in Note 3; subordinate to above bank note payable. -- 800,000
F-42
<PAGE>
DEER CREEK PARTNERS, L.P. AND MURAT CENTRE, L.P.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, DECEMBER 31,
1995 1996
-------------- --------------
Note payable with interest calculated annually and is equal to the
lesser of (1) $.10 per ticket sold during fiscal year, (2) prime
plus 1% or (3) remaining net cash flow as defined in Note 3;
interest and principal is paid at the lesser of $.10 per ticket
sold during fiscal year or remaining net cash flow as defined in
Note 3; principal is also required to be paid down upon sale of
certain Partnership assets or the refinancing of certain
Partnership loans; subordinate to above bank note payable ........ $ -- $ 1,000,000
Other.............................................................. 90,940 --
DEER CREEK PARTNERSHIP
Note payable with interest calculated annually at 9.5%; payable in
quarterly installments of approximately $353,000, including
interest, through the year 2010; secured by substantially all of
the assets of the partnership and is guaranteed up to 50%, jointly
and severally, by two officers of Sunshine Promotions, Inc.
(Sunshine), and by Sunshine (See Note 6.).......................... -- 10,019,361
Note payable with interest at 11.18% payable in monthly
installments and contingent interest based upon net cash flow;
secured by substantially all of the assets of the Partnership;
principal due 1999 with the option for the holder to accelerate
the maturity date to 1996. ........................................ 11,041,024 --
Capital leases ..................................................... 16,000 130,481
-------------- --------------
Total notes payable and capital lease obligations................. 13,795,129 17,877,894
Less--Current portion ............................................ 796,391 611,127
-------------- --------------
$12,998,738 $17,266,768
============== ==============
</TABLE>
Principal payments made on the Murat Partnership bank term note during
1996 totaled $71,947. The Murat Partnership's 1996 net cash flow (see Note 3)
did not require additional principal payments to be made on its notes
payable. The bank term note contains cash flow and leverage ratio covenants.
The Murat Partnership was not in compliance with the cash flow covenant as of
December 31, 1996, but received a waiver dated March 31, 1997 for the
December 31, 1996 calculation. Provisions of the $800,000 note payable
require the Murat Partnership to continue making payments after the principal
has been paid down equal to the lesser of $.15 per ticket sold during the
fiscal year or remaining cash flow, as defined in Note 3. These payments are
to be made to a not-for-profit foundation and will be designated for
remodeling and upkeep of the Theatre.
Under the terms of the note payable in 1995, the Deer Creek Partnership
incurred contingent interest, which was based on cash flow, of $885,000.
During 1995, Deer Creek Partnership's current lender (a related party)
purchased the note payable and entered into an amended and restated loan
agreement with the partnership on January 5, 1996. For each year until the
Deer Creek loan is repaid, net cash flow (as defined) in excess of $400,000
shall be paid as a principal payment on the loan, not to exceed $400,000. In
1995 and 1996, the Deer Creek Partnership's net cash flow was such that the
maximum principal payment of $400,000 was required for each year. In
addition, the promotional management fee paid to Sunshine (see Note 6) is
subordinate to the quarterly loan payments.
F-43
<PAGE>
DEER CREEK PARTNERS, L.P. AND MURAT CENTRE, L.P.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Principal maturities of notes payable for the next 5 years, excluding
principal paydowns resulting from excess cash flow:
<TABLE>
<CAPTION>
<S> <C>
1997 ... $578,895
1998 ... 635,682
1999 ... 698,041
2000 ... 766,518
2001.... 841,712
</TABLE>
Future capital lease payments of principal and interest are as follows:
<TABLE>
<CAPTION>
<S> <C>
1997 ... $50,800
1998 ... 46,250
1999 ... 37,000
2000 ... 36,000
2001 ... 4,000
</TABLE>
3. MURAT CASH FLOW PAYMENTS
Each of the Murat Partnership's debt agreements require certain principal
and interest to be paid in April of each year based upon the Murat
Partnership's net cash flow for the preceding year. The Murat Partnership's
building lease agreement provides for lease payments to be made based upon
the same net cash flow calculation. Net cash flow, as defined in each
agreement, approximates net income, plus depreciation and amortization, less
capital expenditures and partnership distributions necessary to pay
applicable income taxes. Net cash flow in each year will be used by the Murat
Partnership to pay principal, interest and lease payments in the following
order of priority:
1. Payment of interest on $1,000,000 note equal to the lesser of (a) $.10 per
ticket sold, (b) prime plus 1% or (c) remaining net cash flow;
2. Additional principal payments on bank note so that the total principal
paid each month (including mandatory term payments discussed in Note 2)
equals up to, but not exceeding, $16,667. If cash flow in any fiscal year
is not sufficient to meet these additional principal payments, the
obligation carries forward to the subsequent year;
3. For 1997 and beyond, building operating lease payments not to exceed
$50,000 per year, non-cumulative;
4. Interest related to the $3 million note (including previous years'
cumulative amounts not paid);
5. Principal payment on the $3 million note until paid in full;
6. Principal payment on $800,000 note equal to lesser of $.15 per ticket sold
during fiscal year or remaining net cash flow;
If cash flow is such that only a portion is paid on the obligation in 2.
above, Sunshine, Inc.'s management fee (see Note 6.) could be reduced by the
amount paid in 1. in order to maximize the amount available to fully pay the
obligation in 2.
4. DMD GRANT
As part of the original financing for renovation of the Theatre, the
Department of Metropolitan Development (DMD) contributed approximately
$760,000 in 1995 and $340,000 in 1996 to the Murat Partnership. The DMD
stipulated that the grant was to be used for leasehold improvements on the
Theatre. As such, the grant has been recorded on the balance sheet as a
reduction of leasehold improvements and is being amortized over 30 years.
F-44
<PAGE>
DEER CREEK PARTNERS, L.P. AND MURAT CENTRE, L.P.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
5. AGREEMENTS WITH OUTSIDE VENDORS
Effective February 1996, the Murat Partnership entered into a ten year
agreement with a caterer to provide exclusive catering services at the
Theatre. The Murat Partnership is entitled to a commission based upon a
percentage of the caterer's net sales. As part of the agreement the caterer
loaned the Murat Partnership $165,000, at a nominal interest rate, for
leasehold improvements necessary to provide catering services. In February
1996 the Murat Partnership began repaying the loan ratably over 5 years.
Effective February 1996, the Murat Partnership entered into a ten year
agreement with a concessionaire for the exclusive license to sell concession
food and beverages at Theatre events. The Murat Partnership is entitled to
royalty commissions based upon a percentage of the concessionaire's gross
receipts. The concessionaire has paid the Murat Partnership $50,000 to be
used for leasehold improvements (which are being depreciated over 30 years)
which will be used by the concessionaire. This payment has been recorded as
deferred income and is being amortized over the term of the agreement. On
March 28, 1997 the rights to the concession agreement were acquired by the
caterer under the same terms as the original concession agreement.
Effective March 1996, the Murat Partnership entered into a five year
agreement with a stagehand union allowing the union to provide services at
all ticketed shows held in the main theater other than the broadway series.
The agreement, among other items, sets minimum hours per show and hourly
wages to be paid to union members. It also sets forth duties which must be
performed solely by union members. A separate agreement between the stagehand
union and Pace Theatrical Group, Inc. (see Note 7) governs the use of union
stagehands for the broadway series.
Effective February 1996, the Murat Partnership entered into a one year
agreement granting another party the right to manage and operate the Theatre
parking lot.
In July 1988, the Deer Creek Partnership entered into a ten-year agreement
with a concessionaire for the exclusive license to sell food and beverages at
Deer Creek events. The Deer Creek Partnership is entitled to royalty
commissions based upon a percentage of the concessionaire's gross receipts.
The Deer Creek Partnership has an agreement with another concessionaire
for an exclusive license to sell consigned nonconsumable novelties and
programs at Deer Creek events. The agreement expires on October 31, 2001. The
Deer Creek Partnership is entitled to royalty commissions based on the
concessionaire's gross receipts.
Total revenues related to the Deer Creek and Murat Center Partnership's
vendor agreements were approximately $1.8 million and $1.7 million in 1996
and 1995, respectively.
6. MANAGEMENT AGREEMENTS
The Deer Creek Partnership and Murat Partnership have entered into
agreements which expire in 2009 and 2015, respectively, with Sunshine whose
stockholders are also the limited partners of the general partner. Sunshine
provides the overall promotional management and booking of the entertainment
events held at respective venues, along with other general management
responsibilities. As compensation for Sunshine's services, the Deer Creek
Partnership pays Sunshine 4 percent of gross ticket sales, royalty income and
various other revenues. Total fees to Sunshine for these services were
approximately $581,000 in 1995 and $560,000 in 1996. The Murat pays Sunshine
an annual management fee of $300,000, adjusted annually each January 1 by the
greater of 4% or the annual increase in the consumer price index. In 1996 no
such fee was recognized by the Murat Partnership as Sunshine permanently
waived the $300,000 management fee due for 1996.
In June 1988, the Deer Creek Partnership entered into a ten-year agreement
with an unrelated management company to provide the on-site operations
management for Deer Creek. At the end of 1995, this agreement was terminated
by mutual consent of both parties. The Deer Creek Partnership entered
F-45
<PAGE>
DEER CREEK PARTNERS, L.P. AND MURAT CENTRE, L.P.
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
into a new agreement with the former management company whereby it agreed to
pay $75,000 in 1996, 1997 and 1998 and also to provide to the former
management company selected season tickets at Deer Creek in 1997 and 1998. In
return, for 1996, 1997 and 1998, the Deer Creek Partnership is to receive
advertising and promotion.
7. BROADWAY SERIES PARTNERSHIP
In 1996 the Murat Partnership entered into a 5 year partnership agreement
with Pace Theatrical Group, Inc. (Pace) and Broadway Series Management (BSMG)
to co-present a subscription series of touring Broadway type shows in
Indianapolis. This agreement calls for net profits and losses derived from
the series to be split, after the allocation of certain revenues to the Murat
Partnership and Pace, as follows: 45% Murat Partnership, 45% Pace, and 10%
BSMG. No capital was invested by any of the parties and all income has been
distributed to the parties. The Murat Partnership is responsible for the
local marketing and management of the series, while Pace is responsible for
booking, series management, and season ticket sales for the series. The Murat
Partnership recognized earnings related to this partnership of $270,000 in
1996.
8. RELATED PARTIES
In addition to the management agreement with Sunshine discussed in Note 6,
the Deer Creek Partnership and Murat Partnership have conducted business with
certain related parties in which the limited partners of the general partner
have significant interests. Fees paid to all other related parties for
catering, uniforms and marketing services totaled $249,000 in 1995 and
$65,000 in 1996 from the Deer Creek Partnership and $46,000 in 1996 from the
Murat Partnership.
9. SALE OF MURAT PARTNERSHIP AND DEER CREEK PARTNERSHIP
In June 1997, the partners of the Murat Partnership and the Deer Creek
Partnership agreed to sell all of the assets of the Murat Partnership and
Deer Creek Partnership to SFX Broadcasting, Inc. (Broadcasting). The total
sales price to Broadcasting of the combined partnership assets was
approximately $33 million. As a part of the sale, Broadcasting assumed or
retired virtually all liabilities and acquired all assets of the Murat
Partnership and the Deer Creek Partnership.
F-46
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To PACE Entertainment Corporation:
We have audited the accompanying consolidated balance sheet of PACE
Entertainment Corporation (a Texas Corporation) and subsidiaries as of
September 30, 1997, and the related consolidated statements of operations,
shareholders' equity and cash flows for the year then ended. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of PACE
Entertainment Corporation and subsidiaries as of September 30, 1997, and the
results of their operations and their cash flows for the year then ended in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Houston, Texas
December 15, 1997 (except with respect
to the matters discussed in
Note 12, as to which the date
is December 22, 1997)
F-47
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
PACE Entertainment Corporation and Subsidiaries
We have audited the accompanying consolidated balance sheet of PACE
Entertainment Corporation and subsidiaries as of September 30, 1996, and the
related consolidated statements of operations, cash flows, and shareholders'
equity for each of the two years in the period ended September 30, 1996.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of PACE
Entertainment Corporation and subsidiaries at September 30, 1996, and the
consolidated results of their operations and their cash flows for each of the
two years in the period ended September 30, 1996, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Houston, Texas
December 13, 1996
F-48
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
-------------------- -------------
1996 1997 1997
--------- --------- -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............................ $23,165 $23,784 $27,702
Trade receivables, net ............................... 4,097 4,562 6,741
Accounts receivable, related parties ................. 1,010 1,007 1,096
Notes receivable ..................................... 3,040 386 81
Prepaid expenses ..................................... 6,106 9,967 10,586
Investments in theatrical productions ................ 2,489 4,402 3,958
Deferred tax asset ................................... 1,872 979 943
--------- --------- -------------
Total current assets ................................ 41,779 45,087 51,107
INVESTMENTS IN UNCONSOLIDATED PARTNERSHIPS ............ 8,816 13,899 15,613
NOTES RECEIVABLE, related parties ..................... 6,958 8,024 7,766
INTANGIBLE ASSETS, net ................................ 17,244 17,894 17,633
OTHER ASSETS, net ..................................... 4,484 4,933 6,047
--------- --------- -------------
Total assets ........................................ $79,281 $89,837 $98,166
========= ========= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities ............. $10,285 $11,078 9,277
Deferred revenue ..................................... 26,909 32,093 33,208
Current maturities of long-term debt ................. 2,576 2,394 2,688
--------- --------- -------------
Total current liabilities ........................... 39,770 45,565 45,173
LONG-TERM DEBT ........................................ 21,863 23,129 31,543
OTHER NONCURRENT LIABILITIES .......................... 2,496 1,607 2,080
REDEEMABLE COMMON STOCK ............................... 3,264 2,456 2,983
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, $1 par value; 500,000 shares
authorized,
2,579 shares issued as of September 30, 1996 and
1997 ................................................ 3 3 3
Additional paid-in capital ........................... 1,910 1,942 2,097
Retained earnings .................................... 10,115 15,275 14,427
Treasury stock, at cost, 544 shares .................. (140) (140) (140)
--------- --------- -------------
Total shareholders' equity .......................... 11,888 17,080 16,387
--------- --------- -------------
Total liabilities and shareholders' equity ......... $79,281 $89,837 $98,166
========= ========= =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-49
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED SEPTEMBER 30 DECEMBER 31
------------------------------------- --------------------
1995 1996 1997 1996 1997
----------- ----------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
GROSS REVENUES ................... $ 150,385 $ 156,325 $ 176,046 $ 38,430 $ 38,552
COST OF SALES .................... (131,364) (135,925) (148,503) (34,221) (33,687)
EQUITY IN EARNINGS (LOSS) OF
UNCONSOLIDATED PARTNERSHIPS AND
THEATRICAL PRODUCTIONS .......... 2,183 3,048 6,838 (111) 1,185
----------- ----------- ----------- ---------- ----------
Gross profit ................... 21,204 23,448 34,381 4,098 6,050
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES ......... (13,351) (15,951) (21,260) (4,072) (5,018)
STOCK COMPENSATION ............... (25) (3,675) (456) (6) (683)
LITIGATION SETTLEMENT ............ -- (3,657) -- -- --
DEPRECIATION AND AMORTIZATION ... (1,223) (1,737) (1,896) (434) (523)
----------- ----------- ----------- ---------- ----------
Operating profit (loss) ........ 6,605 (1,572) 10,769 (414) (174)
INTEREST INCOME, related parties 305 329 403 75 178
INTEREST INCOME, other ........... 147 176 60 35 6
INTEREST EXPENSE ................. (655) (1,206) (1,997) (480) (867)
----------- ----------- ----------- ---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES
AND MINORITY INTEREST ........... 6,402 (2,273) 9,235 (784) (857)
INCOME TAX (PROVISION) BENEFIT .. (2,575) 714 (3,529) 222 182
MINORITY INTEREST ................ (485) (446) (546) (130) (173)
----------- ----------- ----------- ---------- ----------
NET INCOME (LOSS) ................ $ 3,342 $ (2,005) $ 5,160 $ (692) $ (848)
=========== =========== =========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-50
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN RETAINED TREASURY SHAREHOLDERS'
STOCK CAPITAL EARNINGS STOCK EQUITY
-------- ------------ ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
BALANCE AT SEPTEMBER 30, 1994 ................ $ 3 $1,465 $ 8,778 $(140) $10,106
Amortization of deferred stock compensation . -- 25 -- -- 25
Net income .................................. -- -- 3,342 -- 3,342
-------- ------------ ---------- ---------- ---------------
BALANCE AT SEPTEMBER 30, 1995 ................ 3 1,490 12,120 (140) 13,473
Issuance of restricted stock and
amortization of deferred stock compensation -- 420 -- -- 420
Net loss .................................... -- -- (2,005) -- (2,005)
-------- ------------ ---------- ---------- ---------------
BALANCE AT SEPTEMBER 30, 1996 ................ 3 1,910 10,115 (140) 11,888
Issuance of restricted stock and
amortization of deferred stock compensation -- 32 -- -- 32
Net income .................................. -- -- 5,160 -- 5,160
-------- ------------ ---------- ---------- ---------------
BALANCE AT SEPTEMBER 30, 1997 ................ 3 1,942 15,275 (140) 17,080
Issuance of restricted stock and
amortization of deferred stock compensation
(unaudited)................................. -- 155 -- 155
Net loss (unaudited) ........................ -- -- (848) -- (848)
-------- ------------ ---------- ---------- ---------------
BALANCE AT DECEMBER 31, 1997 (unaudited) .... $ 3 $2,097 $14,427 $(140) $16,387
======== ============ ========== ========== ===============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-51
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED SEPTEMBER 30 DECEMBER 31
---------------------------------
1995 1996 1997 1996 1997
--------- ---------- ---------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ............................... $ 3,342 $ (2,005) $ 5,160 $ (692) $ (848)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities-
Depreciation and amortization .................. 1,223 1,737 1,896 434 522
Equity in (earnings) loss of unconsolidated
partnerships .................................. (1,624) (486) (4,912) 607 (1,150)
Distributions from unconsolidated partnerships 1,297 1,090 2,354 1,073 411
Restricted stock compensation .................. 25 3,675 456 6 683
Deferred income tax expense (benefit) ......... 848 (4,541) 2,037 36 (574)
Changes in operating assets and liabilities- ...
Trade receivables ............................. 447 (826) (465) 383 (2,179)
Notes receivable .............................. (1,813) (1,227) 2,654 1,140 305
Prepaid expenses .............................. (221) 1,466 (3,861) (2,099) (619)
Investments in theatrical productions ........ 305 (335) (1,913) (1,658) 444
Other assets .................................. (37) (1,130) (421) (39) (469)
Accounts payable and accrued liabilities ..... 947 (1,142) (920) (264) (2,626)
Deferred revenue .............................. (1,082) (1,008) 5,184 (7,004) 1,115
Other liabilities ............................. 171 1,601 (34) 130 3,083
--------- ---------- ---------- --------- ---------
Net cash provided by (used in) operating
activities .................................. 3,828 (3,131) 7,215 (7,947) (1,902)
--------- ---------- ---------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired .............. -- (13,233) (2,215) -- (178)
Capital expenditures ............................ (728) (827) (1,008) (407) (900)
Loans and advances to related parties ........... (2,301) (535) (2,295) 2 169
Contributions to unconsolidated partnerships ... (1,212) (1,806) (2,162) (618) (1,980)
--------- ---------- ---------- --------- ---------
Net cash used in investing activities ....... (4,241) (16,401) (7,680) (1,023) (2,889)
--------- ---------- ---------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt additions .................... 8,927 24,043 24,287 557 14,593
Payments on debt ................................ (8,928) (6,512) (23,203) (873) (5,884)
--------- ---------- ---------- --------- ---------
Net cash provided by (used in) financing
activities .................................. (1) 17,531 1,084 (316) 8,709
--------- ---------- ---------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS ...................................... (414) (2,001) 619 (9,286) 3,918
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR . 25,580 25,166 23,165 23,165 23,784
--------- ---------- ---------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR ....... $25,166 $ 23,165 $ 23,784 $13,879 $27,702
========= ========== ========== ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid ................................... $ 620 $ 1,117 $ 1,900 $ 180 $ 644
Income taxes paid ............................... 2,276 2,804 2,103 565 93
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-52
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION:
Description of Business
PACE Entertainment Corporation (referred to herein as PACE or the
Company), a Texas corporation, is a diversified live entertainment company
operating principally in the United States. The Company presents and produces
theatrical shows, musical concerts and specialized motor sports events.
Through certain unconsolidated partnerships, the Company also owns interests
in and operates amphitheaters, which are used primarily for the presentation
of live performances by musical artists.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
PACE and its majority-owned subsidiaries. The Company accounts for its
investments in 50 percent or less owned entities, including theatrical
production partnerships, using the equity method. Intercompany balances are
eliminated.
The Company has various agreements related to the presentation of events
with other live entertainment organizations whereby the Company retains 50
percent to 80 percent of the profits from such events. The Company
consolidates the revenues and related costs from these events and records the
amounts paid to the other parties in cost of sales.
Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents. At September 30,
1997, the Company had restricted cash and cash equivalents of $2,950,000,
which secured letters of credit totaling $3,750,000.
Trade Receivables
Trade receivables are shown net of allowance for doubtful accounts of
$120,000 and $134,000 at September 30, 1996 and 1997, respectively.
Prepaid Expenses
Prepaid expenses include show advances and deposits, event advertising
costs and other costs directly related to future events. Such costs are
charged to operations upon completion of the related events.
As of September 30, 1996 and 1997, prepaid expenses included event
advertising costs of $1,337,000 and $1,498,000, respectively. The Company
recognized event advertising expenses of $13,818,000, $14,861,000 and
$13,802,000 in cost of sales for the years ended September 30, 1995, 1996 and
1997, respectively.
Investments in Theatrical Productions
Theatrical production partnerships are typically formed to invest in a
single theatrical production and, therefore, have limited lives which are
generally less than one year. Accordingly, the Company's investments in such
partnerships are generally shown as current assets. The partnerships amortize
production costs over the estimated life of each production based on the
percentage of revenues earned in relation to projected total revenues.
F-53
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Intangible Assets
Intangible assets consisted of the following (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30
--------------------
1996 1997
--------- ---------
<S> <C> <C>
Goodwill .................................... $16,599 $17,851
Noncompete agreements and other intangibles 3,940 3,857
--------- ---------
20,539 21,708
Accumulated amortization .................... (3,295) (3,814)
--------- ---------
$17,244 $17,894
========= =========
</TABLE>
Goodwill, which represents the excess of costs of business acquisitions
over the fair value of net assets acquired, is being amortized on a
straight-line basis over periods not exceeding 40 years. The noncompete
agreements and other intangibles are being amortized on a straight-line basis
over periods generally not exceeding five years. The Company evaluates on an
ongoing basis whether events and circumstances indicate that the amortization
periods of intangibles warrant revision. Additionally, the Company
periodically assesses whether the carrying amounts of intangibles exceed
their expected future benefits and value, in which case an impairment loss
would be recognized. Such assessments are based on various analyses,
including cash flow and profitability projections.
Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consisted of the following (in
thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30
-------------------
1996 1997
--------- --------
<S> <C> <C>
Accounts payable .......... $ 1,192 $ 1,866
Accrued payroll ........... 2,384 2,936
Other accrued liabilities 6,709 6,276
--------- --------
$10,285 $11,078
========= ========
</TABLE>
Revenue Recognition
Revenues from the presentation and production of an event, including
interest on advance ticket sales, are recognized upon completion of the
event. Deferred revenue relates primarily to advance ticket sales.
The Company barters event tickets and sponsorship rights for products and
services, including event advertising. These barter transactions are not
recognized in the accompanying consolidated financial statements and are not
material to the Company's financial position or results of operations.
Stock-Based Compensation
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
123, "Accounting for Stock-Based Compensation," during the year ended
September 30, 1997, and implemented its disclosure provisions. While SFAS No.
123 encourages companies to recognize expense for stock options at estimated
fair value based on an option-pricing model, the Company has elected to
continue to follow Accounting Principles Board (APB) Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations in
accounting for its employee stock options.
F-54
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Financial Instruments
The carrying amounts of cash equivalents approximate fair value because of
the short maturities of these investments. The carrying amount of long-term
debt approximates fair value as borrowings bear interest at current market
rates.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Reclassifications
Certain 1995 and 1996 amounts have been reclassified to conform with the
1997 presentation.
Interim Financial Information
The interim financial data as of December 31, 1997 and for the three-month
periods ended December 31, 1996 and 1997 is unaudited; and certain
information and disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have
been omitted. However, in the opinion of management, the interim data
includes all adjustments, consisting only of normal recurring adjustments,
necessary for a fair statement of the results for the interim periods. The
results of operations for the interim periods are not necessarily indicative
of the results to be expected for the entire year.
2. ACQUISITIONS:
On March 13, 1996, the Company acquired substantially all the assets of
SRO Motorsports (SRO), a division of Madison Square Garden, L.P., under an
asset purchase agreement for an aggregate initial purchase price of
approximately $13,300,000 in cash and $3,800,000 in assumed liabilities. The
agreement also provides for a contingent deferred purchase price not to
exceed $1,000,000, payable if annual earnings before interest, taxes,
depreciation and amortization of the Company's motor sports operations, as
defined, exceed $8,000,000 for any fiscal year through September 30, 2001. No
deferred purchase price costs had been incurred through September 30, 1997.
The acquisition of SRO was accounted for under the purchase method and the
assets acquired and liabilities assumed were recorded at fair value,
resulting in the recognition of $14,250,000 of goodwill and $400,000 of other
intangibles. The results of operations of SRO since March 13, 1996, have been
included in the accompanying consolidated financial statements.
The following unaudited pro forma information assumes that the Company had
acquired SRO as of October 1, 1994. The pro forma information includes
adjustments for interest expense that would have been incurred to finance the
acquisition, amortization of goodwill and other intangibles, the income tax
effects of the operations of SRO, and the elimination of certain intercompany
balances. The unaudited pro forma information, which is not necessarily
indicative of what actual results would have been, is as follows (in
thousands):
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30
----------------------
1995 1996
---------- ----------
(UNAUDITED)
<S> <C> <C>
Gross revenues ... $167,422 $172,952
Net income (loss) 3,742 (257)
</TABLE>
F-55
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENTS IN UNCONSOLIDATED PARTNERSHIPS AND THEATRICAL
PRODUCTIONS:
Investments in unconsolidated partnerships and theatrical productions
consisted of the following (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30
-------------------
1996 1997
--------- --------
<S> <C> <C>
Investment in--
Pavilion Partners ......................... $ 3,131 $ 4,810
Universal/PACE Amphitheaters Group, L.P. . 3,380 3,991
Other ..................................... 2,305 5,098
--------- --------
Investments in unconsolidated partnerships 8,816 13,899
Investments in theatrical productions ..... 2,489 4,402
--------- --------
$11,305 $18,301
========= ========
</TABLE>
The Company's share of earnings and the distributions received from these
investments were as follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
----------------------------
1995 1996 1997
-------- -------- --------
<S> <C> <C> <C>
Equity in earnings (losses) of--
Pavilion Partners .................. $1,872 $ 103 $2,803
Universal/PACE Amphitheaters Group,
L.P. .............................. 551 871 645
Other .............................. (799) (488) 1,464
-------- -------- --------
Equity in earnings of unconsolidated
partnerships ....................... 1,624 486 4,912
Equity in earnings of theatrical
productions ........................ 559 2,562 1,926
-------- -------- --------
$2,183 $3,048 $6,838
======== ======== ========
Distributions received from--
Pavilion Partners .................. $ 992 $1,002 $1,124
Universal/PACE Amphitheaters Group,
L.P. .............................. 166 78 34
Other .............................. 139 10 1,196
-------- -------- --------
Distributions from unconsolidated
partnerships ....................... 1,297 1,090 2,354
Distributions from theatrical
productions ........................ 4,240 5,836 6,803
-------- -------- --------
$5,537 $6,926 $9,157
======== ======== ========
</TABLE>
F-56
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Pavilion Partners
Pavilion Partners is a Delaware general partnership between the Company
and Amphitheater Entertainment Partnership (AEP). AEP is a partnership
between Sony Music Entertainment Inc. (Sony) and Blockbuster Entertainment
Corporation (Blockbuster). Pavilion Partners owns and operates amphitheaters,
which are used primarily for the presentation of live performances by musical
artists. Pavilion Partners had interests in 10 and 11 amphitheaters at
September 30, 1996 and 1997, respectively. The Company owns a 33-1/3 percent
interest in, and is the managing partner of, Pavilion Partners.
In general, all of Pavilion Partners' income is allocated to the partners
in proportion to their respective ownership interests. The partnership
agreement generally restricts cash distributions to 35 percent of cash flow
after scheduled debt service. Additionally, PACE has been entitled to certain
priority allocations of net income based, in part, on the cash flow from one
of the amphitheaters it contributed to Pavilion Partners. During the periods
ended September 30, 1995, 1996 and 1997, the priority allocations of net
income included in the Company's equity in earnings of Pavilion Partners were
$771,000, $725,000 and $119,000, respectively. The cumulative amount of the
priority allocations of net income was limited; PACE is not entitled to any
future priority allocations. AEP is entitled to receive priority allocations
of net income once a loan related to an amphitheater contributed by
Blockbuster is repaid. The cumulative priority allocations of net income to
AEP is limited to $7,000,000. The loan is scheduled to mature in 2004 and no
such allocation has yet been made.
PACE also received booking fees of $323,000, $235,000 and $395,000 from
Pavilion Partners for the years ended September 30, 1995, 1996 and 1997,
respectively. In addition, the Company is reimbursed for certain costs of
providing management services to Pavilion Partners. These reimbursements
totaled $1,629,000, $1,824,000 and $1,968,000 during the periods ended
September 30, 1995, 1996 and 1997, respectively, and offset general and
administrative expenses.
Summarized financial information as of and for the years ended September
30, 1995, 1996 and 1997, for Pavilion Partners follows (in thousands):
<TABLE>
<CAPTION>
1995 1996 1997
--------- --------- ----------
<S> <C> <C> <C>
Current assets .......................... $15,787 $20,700 $ 30,178
Noncurrent assets ....................... 64,619 72,793 72,598
--------- --------- ----------
Total assets ........................... $80,406 $93,493 $102,776
========= ========= ==========
Current liabilities ..................... $ 9,467 $17,194 $ 19,748
Noncurrent liabilities .................. 51,578 58,695 59,166
Partners' capital ....................... 19,361 17,604 23,862
--------- --------- ----------
Total liabilities and partners' capital $80,406 $93,493 $102,776
========= ========= ==========
Gross revenues .......................... $69,372 $89,223 $100,209
========= ========= ==========
Gross profit ............................ $19,440 $27,993 $ 36,157
========= ========= ==========
Net income (loss) ....................... $ 3,104 $ (839) $ 6,986
========= ========= ==========
</TABLE>
F-57
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Universal/PACE
The Company owns a 32.5 percent interest in Universal/PACE Amphitheaters
Group, L.P. (Universal/PACE), a limited partnership between the Company and
Universal Concerts, Inc., which controls two amphitheaters. PACE earned
management fees of $167,000, $79,000 and $34,000 from Universal/PACE for the
years ended September 30, 1995, 1996 and 1997, respectively. Summarized
financial information as of and for the years ended September 30, 1995, 1996
and 1997, for Universal/ PACE follows (in thousands):
<TABLE>
<CAPTION>
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
Current assets .......................... $ 4,085 $ 3,420 $ 6,659
Noncurrent assets ....................... 14,654 14,185 14,156
--------- --------- ---------
Total assets ........................... $18,739 $17,605 $20,815
========= ========= =========
Current liabilities ..................... $ 6,599 $ 3,876 $10,221
Noncurrent liabilities .................. 6,467 5,618 602
Partners' capital ....................... 5,673 8,111 9,992
--------- --------- ---------
Total liabilities and partners' capital $18,739 $17,605 $20,815
========= ========= =========
Gross revenues .......................... $24,070 $20,336 $25,299
========= ========= =========
Gross profit ............................ $ 5,968 $ 6,361 $ 5,817
========= ========= =========
Net income .............................. $ 1,183 $ 2,438 $ 1,880
========= ========= =========
</TABLE>
Other
The Company also has investments in numerous theatrical production and
other unconsolidated partnerships. Summarized financial information as of and
for the years ended September 30, 1995, 1996 and 1997, for these
partnerships, excluding Pavilion Partners and Universal/PACE, follows (in
thousands):
<TABLE>
<CAPTION>
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
Current assets .......................... $ 10,410 $ 12,433 $ 35,743
Noncurrent assets ....................... 5,668 7,267 14,050
---------- ---------- ----------
Total assets ........................... $ 16,078 $ 19,700 $ 49,793
========== ========== ==========
Current liabilities ..................... $ 7,539 $ 6,566 $ 19,134
Noncurrent liabilities .................. 2,315 2,250 2,957
Partners' capital ....................... 6,224 10,884 27,702
---------- ---------- ----------
Total liabilities and partners' capital $ 16,078 $ 19,700 $ 49,793
========== ========== ==========
Gross revenues .......................... $113,854 $111,715 $249,707
========== ========== ==========
Gross profit ............................ $ 221 $ 10,440 $ 34,454
========== ========== ==========
Net income (loss) ....................... $ (1,863) $ 9,823 $ 32,164
========== ========== ==========
</TABLE>
F-58
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. LONG-TERM DEBT:
Long-term debt consisted of the following (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30
--------------------
1996 1997
--------- ---------
<S> <C> <C>
Term loan ................ $14,464 $12,322
Revolving line of credit 9,250 12,950
Other notes payable ..... 725 251
--------- ---------
24,439 25,523
Less-Current portion .... (2,576) (2,394)
--------- ---------
$21,863 $23,129
========= =========
</TABLE>
In March 1996, the Company entered into a new credit agreement with
certain financial institutions. The credit agreement provides for a term loan
and a revolving line of credit, both of which bear interest at either LIBOR
plus 2 percent or prime, at the option of the Company. At September 30, 1997,
the weighted average interest rate was 7.8 percent. The term loan is
scheduled to mature in March 2001 and is payable in quarterly installments of
$536,000 plus interest, with a balloon payment at maturity. The Company may
borrow $27,000,000 under the revolving line of credit until February 1998;
subsequently, borrowings are limited to $13,000,000 until March 2001, when
the revolving line of credit expires. The Company must pay a quarterly
commitment fee equal to 0.375 percent per annum on the average daily unused
portion of the revolving line of credit. The term loan and the revolving line
of credit are secured by substantially all of the Company's assets, including
pledges of the capital stock of its subsidiaries. The credit agreement
contains various restrictions and requirements relating to, among other
things, mergers, sales of assets, investments and maintenance of certain
financial ratios.
At September 30, 1997, scheduled maturities of long-term debt were as
follows (in thousands):
<TABLE>
<CAPTION>
<S> <C>
For the year ending September
30--
1998 ............................ $ 2,394
1999 ............................ 2,143
2000 ............................ 2,143
2001............................. 18,843
--------
$25,523
========
</TABLE>
F-59
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. INCOME TAXES:
Deferred taxes reflect the tax effects of temporary differences between
the financial statement carrying amounts and the tax bases of assets and
liabilities. Significant components of the Company's deferred tax assets and
liabilities were as follows (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30
-----------------
1996 1997
-------- -------
<S> <C> <C>
Deferred tax assets--
Investments in unconsolidated partnerships
and theatrical productions .................. $ 286 $ 237
Accounts payable and accrued liabilities .... 1,014 1,480
Restricted stock compensation ................ 1,387 409
Other noncurrent liabilities ................. 1,717 --
Other ........................................ 107 281
-------- -------
Total deferred tax assets ................... 4,511 2,407
-------- -------
Deferred tax liabilities--
Investments in unconsolidated partnerships
and theatrical productions .................. 1,522 1,099
Prepaid expenses ............................. 907 1,237
Intangibles .................................. 646 672
-------- -------
Total deferred tax liabilities .............. 3,075 3,008
-------- -------
$1,436 $ (601)
======== =======
</TABLE>
Deferred taxes are included in the consolidated balance sheets as follows
(in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30
-------------------
1996 1997
-------- ---------
<S> <C> <C>
Current deferred tax assets . $1,872 $ 979
Other noncurrent liabilities (436) (1,580)
-------- ---------
$1,436 $ (601)
======== =========
</TABLE>
The income tax (provision) benefit consisted of the following (in
thousands):
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
----------------------------------
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
Current--
Federal ...................... $(1,251) $(2,817) $(1,319)
State ........................ (476) (1,010) (173)
Deferred--
Federal ...................... (692) 3,705 (1,777)
State ........................ (156) 836 (260)
---------- ---------- ----------
Total tax (provision) benefit $(2,575) $ 714 $(3,529)
========== ========== ==========
Effective tax rate ............ 44% 26% 41%
========== ========== ==========
</TABLE>
F-60
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The reconciliation of income tax computed at the U.S. federal statutory
rates to the income tax (provision) benefit is as follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30
-------------------------------
1995 1996 1997
---------- ------- ----------
<S> <C> <C> <C>
Tax at the federal statutory rate .... $(2,012) $ 924 $(2,954)
Increases resulting from--
State income taxes, net of federal
tax effect .......................... (417) (112) (286)
Nondeductible expenses ............... (60) (98) (185)
Other ................................ (86) -- (104)
---------- ------- ----------
Total income tax (provision) benefit $(2,575) $ 714 $(3,529)
========== ======= ==========
</TABLE>
6. REDEEMABLE COMMON STOCK:
At September 30, 1997, the Company had outstanding 155 shares of common
stock that are redeemable under conditions that are not solely within the
control of the Company. The Company granted this redeemable stock to certain
executives during the years ended September 30, 1996 and 1997. To the extent
that the grants related to prior service, the Company recognized compensation
costs on the grant date. Additionally, the Company recognizes compensation
costs for the change in value of certain shares that, as discussed below, the
Company may be required to purchase from the executives at fair market value.
Restricted stock compensation related to these grants totaled $3,260,000 and
$425,000 during the years ended September 30, 1996 and 1997, respectively.
The Company has the right of first refusal to purchase the redeemable common
stock at fair market value.
Agreements with one executive who received 140 shares of redeemable stock
provide that the Company will have call options to purchase these shares from
the executive for a total of $3,420,000. These agreements also provide that
the executive will have put options to sell such shares to the Company for
$3,420,000. The put and call options are only exercisable if the executive's
employment is terminated before an initial public offering of the Company's
common stock.
Of the redeemable stock granted to this executive, 123 shares were granted
during the year ended September 30, 1996, and vested during the year ended
September 30, 1997. Since the grant related to prior service, the Company
recognized compensation costs on the grant date. During the year ended
September 30, 1997, the Company executed a promissory note in the amount of
$1,232,000 with this executive. This note bears interest at 5.45 percent, is
secured by 140 shares of the Company's common stock, and is scheduled to
mature in October 2001. The proceeds of the note were used to pay the
executive's tax liability related to the 123 shares that vested during the
year ended September 30, 1997. Accordingly, the value of redeemable stock
outstanding has been reduced by this note receivable.
The remaining 17 shares of redeemable stock received by this executive
were granted during the year ended September 30, 1997, and vest ratably
during the years ending September 30, 1999 and 2000. To fund the executive's
tax liability related to these 17 shares, the Company may be required to
purchase up to 41 percent of the shares at fair market value when the shares
vest. The Company has similar agreements with the other executives who
received the remaining 15 shares of redeemable stock, which were granted
during the year ended September 30, 1996. In order to fund the executives'
tax liabilities related to these grants and related restricted common stock
grants, these 15 shares of redeemable stock must be purchased at fair market
value when the shares vest during the years ended September 30, 1998 and
1999. Although all 32 shares that the Company may be required to purchase in
order to satisfy executives' tax liabilities have future vesting
requirements, the Company recognized compensation costs on the grant dates to
the extent the grants related to prior service. The difference between such
expense recognition and recognition over the vesting periods is not material
to the Company's results of operations and financial position.
F-61
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. SHAREHOLDER'S EQUITY:
The Company granted 23 shares of restricted common stock to certain
executives during the year ended September 30, 1996. These shares vest
ratably during the years ended September 30, 1998 and 1999. Although the
shares have future vesting requirements, the Company recognized compensation
costs on the grant dates to the extent the grants related to prior service.
The difference between such expense recognition, which totaled $390,000 and
$6,000 during the years ended September 30, 1996 and 1997, respectively, and
recognition over the vesting periods is not material to the Company's results
of operations and financial position. The Company has the right of first
refusal to purchase at fair market value all of the shares granted during the
year ended September 30, 1996. Additionally, if the executives' employment is
terminated before an initial public offering of the Company's common stock,
the Company has a call option to purchase the vested shares at fair market
value.
Effective October 15, 1993, the Company and one of its officers entered
into an employment agreement which provided for the granting of 45 shares of
the Company's common stock. The shares vested over a five-year period and the
Company recorded related compensation expense of $25,000 for each of the
years ended September 30, 1995, 1996 and 1997.
8. STOCK OPTIONS:
The Company adopted the 1996 Stock Incentive Compensation Plan during the
year ended September 30, 1996. Under the plan, the Company may grant awards
based on its common stock to employees and directors. Such awards may
include, but are not limited to, restricted stock, stock options, stock
appreciation rights and convertible debentures. Up to 325 shares of common
stock may be issued under the plan. During the year ended September 30, 1996,
the Company granted options to purchase 117 shares of common stock at a
weighted average exercise price of $18,989 per share, which approximated fair
value on the date of grant. Such options vest and are generally exercisable
ratably over a four-year period. The options expire in 10 years.
An option to purchase 22 shares of common stock at $10,000 per share was
granted to an executive during the year ended September 30, 1994. This option
was canceled subsequent to September 30, 1997.
Because the exercise prices of the Company's employee stock options
equaled the fair market value of the underlying stock on the date of grant,
no compensation expense was recognized in accordance with APB Opinion No. 25.
Had compensation cost for the options been determined based on the fair value
at the grant date pursuant to SFAS No. 123, the Company's net income would
have decreased by $49,000 and $148,000 for the years ended September 30, 1996
and 1997, respectively. For this purpose, the fair value of the options was
estimated using the minimum value method assuming that the risk-free interest
rate was 6.7 percent and that no dividends will be paid.
9. RELATED-PARTY TRANSACTIONS:
The Company contracts with certain theatrical partnerships of which it is
a minority partner to obtain the rights to present theatrical productions in
the Company's markets. Approximately $20,000,000, $33,400,000 and $31,200,000
of expenses were incurred for such rights and included in cost of sales
during the years ended September 30, 1995, 1996 and 1997, respectively.
The Company contracts with certain unconsolidated partnerships to sell the
rights to present musical concerts. Approximately $2,446,000 of revenues was
earned from the sale of such rights during the year ended September 30, 1997.
No such rights were sold during the years ended September 30, 1995 and 1996.
As of September 30, 1997, notes receivable, related parties included
$6,453,000 due from executives and $1,571,000 due from other related parties.
Two of the notes receivable from executives are promissory notes from the
Company's principal shareholder. As of September 30, 1997, these two notes
totaled
F-62
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
$5,961,000, including accrued interest of $550,000. One note, in the
original principal amount of $2,911,000, bears interest at 5.83 percent, is
secured by 254 shares of PACE common stock and matures on March 28, 1999. The
other note is for $2,500,000, bears interest at 6.34 percent, is secured by
246 shares of PACE common stock and was scheduled to mature on November 3,
1997. This note has been extended to mature on November 4, 2000. Interest
income on these two notes was approximately $300,000 for each of the years
ended September 30, 1995, 1996 and 1997. At September 30, 1997, the Company
also had a $583,000 receivable from its principal shareholder. The principal
shareholder has represented his intention to pay the outstanding loans and
receivable balance from personal assets or if necessary, the liquidation of
certain ownership interests in the Company.
At September 30, 1997, notes receivable from other related parties
included $945,000 due from a joint venture partner. The terms of the related
joint venture agreement provide for the Company to loan to the joint venture
partner any required capital contributions, to be repaid on a priority basis
from the profits allocated to the joint venture partner. The advances accrue
interest at the prime rate plus 4 percent (12.5 percent at September 30,
1997) and are secured by the joint venture partner's 50 percent interest in
the joint venture.
10. LITIGATION SETTLEMENT:
The Company was previously named as a defendant in a case filed in Wake
County, North Carolina (Promotion Litigation). There were several other
defendants named in the litigation, including Pavilion Partners, with various
causes of action asserted against one or more of each of the defendants,
including (a) breach of alleged contract, partnership, joint venture and
fiduciary duties between certain of the defendants and Pro Motion Concerts,
(b) constructive fraud, (c) interference with prospective advantage, (d)
unfair trade practices, (e) constructive trust and (f) unjust enrichment. The
essence of the plaintiffs' claims was that certain of the defendants agreed
to enter into a partnership with plaintiffs for the development and operation
of an amphitheater.
On May 1, 1997, the Promotion Litigation was settled. All defendants were
fully and finally released with prejudice from any and all claims and causes
of action. The defendants did not acknowledge or admit any liability. The
settlement called for payments from defendants totaling $4,500,000. The
Company was obligated to pay $1,500,000 immediately after the settlement and
is obligated to pay an additional $2,000,000 on or before May 1, 1998. To
guarantee payment of this $2,000,000 obligation, the Company had a standby
letter of credit outstanding at September 30, 1997. The remaining $1,000,000
of the settlement was paid by Pavilion Partners during the year ended
September 30, 1997. This expense and related legal expenses were charged to
operations for the year ended September 30, 1996.
F-63
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. COMMITMENTS AND CONTINGENCIES:
Leases
The Company leases office facilities under noncancelable operating leases
with future minimum rent payments as follows (in thousands):
<TABLE>
<CAPTION>
<S> <C>
For the year ending September 30--
1998 ............................ $1,006
1999 ............................ 417
2000 ............................ 215
2001 ............................ 193
2002 ............................ 195
Thereafter ....................... 33
--------
Total ........................... $2,059
========
</TABLE>
Rent expense was $676,000, $765,000 and $1,084,000 for the years ended
September 30, 1995, 1996 and 1997, respectively.
Change in Control Provisions
The Company and its unconsolidated partnerships, including Pavilion
Partners, have entered into numerous leases and other contracts in the
ordinary course of business. Certain of these agreements either contain
restrictions on their assignability or would require third-party approval of
a change in control of the Company.
Employment Agreements
The Company has employment agreements with certain key employees. Such
agreements generally provide for minimum salary levels, guaranteed bonuses
and incentive bonuses which are payable if specified financial goals are
attained. As of September 30, 1997, the Company's minimum commitment under
these agreements were as follows (in thousands):
<TABLE>
<CAPTION>
<S> <C>
For the year ending September 30--
1998 ............................ $4,463
1999 ............................ 3,825
2000 ............................ 2,789
2001 ............................ 1,430
2002 ............................ 743
</TABLE>
The Company is currently negotiating certain other employment agreements
that may result in additional future commitments.
Insurance
The Company carries a broad range of insurance coverage, including general
liability, workers' compensation, stop-loss coverage for its employee health
plan and umbrella policies. The Company carries deductibles of up to $10,000
per occurrence for general liability claims and is self-insured for annual
healthcare costs of up to $25,000 per covered employee and family. The
Company has accrued for estimated potential claim costs in satisfying the
deductible and self-insurance provisions of the insurance policies for claims
occurring through September 30, 1997. The accrual is based on known facts and
historical trends, and management believes such accrual to be adequate.
F-64
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Legal Proceedings
Various legal actions and claims are pending against the Company, most of
which are covered by insurance. In the opinion of management, the ultimate
liability, if any, which may result from these actions and claims will not
materially affect the financial position or results of operations of the
Company.
Guarantees
The Company has guaranteed a $2,438,000 debt of a partnership in which
Pavilion Partners holds a 50 percent interest. PACE has agreements with its
partners whereby they would assume approximately 50 percent of any liability
arising from this guarantee. The debt matures June 1, 2003. Management does
not believe that the guarantee will result in a material liability to the
Company.
Income Taxes
The Internal Revenue Service is examining several years of returns of a
majority-owned subsidiary. Management is currently discussing a possible
settlement of approximately $600,000, which has been accrued in the Company's
financial statements.
Subscription Agreement
During April 1995, the Company acquired an interest in a company
incorporated in the United Kingdom. Pursuant to a subscription agreement, the
Company made payments totaling $1,355,000 prior to September 30, 1997. The
Company has agreed to pay an additional pounds sterling239,000 in April 1998.
Construction Commitments
An unconsolidated partnership has committed to certain renovation work at
its amphitheater. The Company may be obligated to fund up to approximately
$7.3 million of these renovations. Through its investment in another
unconsolidated partnership, the Company has an interest in a performance hall
being constructed for musical and theatrical presentations. The Company had
funded $0.4 million of the performance hall construction costs through
September 30, 1997; the Company's estimated additional funding commitments
are approximately $2.0 million. In addition, the Company and several third
parties are currently negotiating definitive agreements to develop a
theatrical venue. The Company may be obligated to fund approximately $3.0
million of the costs of this development over an undetermined period of time.
Put Option Agreement
The Company has entered into put option agreements with two banks whereby
the Company may be required to repurchase a total of 1,000 shares of the
Company's common stock held by an affiliate that collateralizes the personal
loans of the Company's principal shareholder at a per share price of $1,500.
The put options are effective only in the event of a loan default of the
shareholder prior to July 31, 1999. At September 30, 1997, the loans were not
in default.
12. SUBSEQUENT EVENTS:
Subsequent to September 30, 1997, the Company entered into certain
agreements with an executive who previously had been granted an option to
purchase 22 shares of common stock at $10,000 per share. Pursuant to the new
agreements, the option was canceled and the executive was granted 22 shares
of restricted common stock.
In December 1997, the Company and its shareholders entered into an
agreement with SFX Entertainment, Inc. (SFX), whereby the shareholders would
sell their interests in the Company to SFX (SFX Transaction). The purchase
price of $109 million in cash and 1,500,000 shares of SFX Class A Common
Stock is subject to adjustment prior to closing. Closing is subject to
certain conditions, including
F-65
<PAGE>
PACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
approval of certain third parties. Concurrent with closing, the agreement
requires, among other things, the repayment of all outstanding loans and
receivables due from the Company's principal shareholder (see Note 9) and the
repayment of the promissory note received from an executive in connection
with a stock grant (see Note 6). Additionally, the agreement provides for the
settlement of all restricted and redeemable stock, as well as all outstanding
stock options. This settlement is expected to result in a one-time charge by
the Company of approximately $4.7 million, net of related tax effects. The
agreement also requires SFX to provide the Company with a $25 million line of
credit (Acquisition Facility) to be used for certain acquisitions being
contemplated by the Company. If the acquisition of the Company is not
consummated, this line of credit will be converted to a term loan in the
amount of advances then outstanding or under certain circumstances, will
become immediately due and payable. This bridge financing is secured by the
assets acquired and an option to purchase the Company's interest in Pavilion
Partners.
In December 1997, the Company entered into agreements to effectively
purchase substantially all of the assets of United Sports of America (USA
Transaction), a producer and presenter of demolition derbies, thrill shows,
air shows, monster truck shows, tractor pull events, motorcycle racing and
bull riding in the United States and Canada. Pursuant to the agreements, the
total purchase price is $6,000,000 in cash of which an option amount of
$500,000 was paid upon the execution of the agreement and closing is subject
to the satisfactory completion of due diligence by the Company. Management
does not expect this transaction to close until May 1998. In the event the
transaction does not close, the option amount will be forfeited if certain
conditions are not met.
In December 1997, the Company entered into an agreement to purchase
Blockbuster's 33 1/3 percent interest in Pavilion Partners (Blockbuster
Transaction) for $4,171,000 in cash, $2,940,000 in assumed liabilities and
the assumption of certain indemnification obligations of Blockbuster under
the Pavilion Partners Partnership Agreement. In addition, the Company has
agreed to purchase a note with a balance of $9,507,000, including accrued
interest of $1,601,000, at September 30, 1997. The transaction is contingent
on, among other things, obtaining acceptable financing including the release
of Blockbuster from certain debt obligations and the approval of Sony (Note
3)
On December 22, 1997, the Company entered into an agreement to purchase
Sony's 33 1/3 percent interest in Pavilion Partners (Sony Transaction) for
$27,500,000 in cash. The transaction is contingent on, among other things,
government approval and obtaining acceptable financing including the release
of Sony from certain debt obligations. (see Note 3)
EVENTS SUBSEQUENT TO DATE OF AUDITORS' REPORT (UNAUDITED)
Effective February 25, 1998, the SFX Transaction, Blockbuster Transaction
and Sony Transaction closed. In conjunction with the closing, SFX retired the
Company's outstanding term loan and revolving line of credit and purchased or
retired a substantial portion of thoe indebtedness of Pavilion Partners,
including debt which was previously guaranteed by PACE. No borrowings had
been made under the Acquisition Facility, which expired with the closing of
the SFX transaction. Additionally, all put option agreements related to the
Company's common Stock were terminated.
During February 1998, the Company granted 40 shares of restricted common
stock to an executive. This grant combined with the settlement of all
restricted and redeemable stock and all outstanding stock options in
conjunction with the SFX Transaction resulted in a one-time charge during
February 1998 of approximately $5.2 million, net of related tax effects.
The USA Transaction closed on March 25, 1998. To effect the USA
Transaction, PACE contributed $4,000,000 to a newly formed partnership and
that partnership acquired a 67% interest in certain assets and liabilities of
United Sports of America from third parties. The remaining 33% interest in
those assets and liabilities was contributed to the partnership by a
subsidiary of SFX.
F-66
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Pavilion Partners:
We have audited the accompanying consolidated balance sheet of Pavilion
Partners, a Delaware general partnership, as of September 30, 1997, and the
related consolidated statements of income, partners' capital and cash flows
for the year then ended. These consolidated financial statements are the
responsibility of the partnership's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Pavilion
Partners as of September 30, 1997, and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Houston, Texas
December 15, 1997 (except with
respect to the matters discussed
in Note 11, as to which the date
is December 22, 1997)
F-67
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of Pavilion Partners
In our opinion, the accompanying consolidated balance sheet and the
related consolidated statements of income, of partners' capital and of cash
flows present fairly, in all material respects, the financial position of
Pavilion Partners and its subsidiaries (the Partnership) at September 30,
1996 and the results of their operations and their cash flows for the year
ended October 31, 1995 and the eleven months ended September 30, 1996, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Partnership's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Houston, Texas
December 12, 1996
F-68
<PAGE>
PAVILION PARTNERS
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30
--------------------- DECEMBER 31
1996 1997 1997
--------- ---------- ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............................. $ 8,554 $ 17,898 $15,464
Accounts receivable ................................... 7,842 6,167 2,067
Accounts receivable, related parties .................. 1,878 3,878 1,687
Notes receivable, related parties ..................... 1,218 1,218 1,218
Prepaid expenses and other current assets ............. 1,208 1,017 622
--------- ---------- ------------
Total current assets ............................... 20,700 30,178 21,058
Prepaid rent .......................................... 7,075 6,938 6,898
Property and equipment, net ........................... 61,292 59,938 59,291
Other assets .......................................... 4,426 5,722 5,777
--------- ---------- ------------
Total assets ....................................... $93,493 $102,776 $93,024
========= ========== ============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable ...................................... $ 1,404 $ 1,193 $ 260
Accounts payable, related parties ..................... 1,866 3,948 2,193
Accrued liabilities ................................... 8,112 7,032 5,614
Deferred revenue ...................................... 3,602 5,081 3,067
Current portion of notes payable and capital lease
obligation ........................................... 1,573 1,614 1,639
Current portion of note payable, related party ....... 637 880 945
--------- ---------- ------------
Total current liabilities .......................... 17,194 19,748 13,718
Notes payable ......................................... 43,680 42,192 41,879
Note payable, related party ........................... 7,268 7,025 6,961
Capital lease obligation .............................. 6,130 5,989 5,952
Other liabilities and minority interests in
consolidated subsidiaries ............................ 1,617 3,960 2,911
--------- ---------- ------------
Total liabilities .................................. 75,889 78,914 71,421
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL ...................................... 17,604 23,862 21,603
--------- ---------- ------------
Total liabilities and partners' capital ........... $93,493 $102,776 $93,024
========= ========== ============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
F-69
<PAGE>
PAVILION PARTNERS
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
ELEVEN MONTHS
YEAR ENDED ENDED YEAR ENDED THREE MONTHS ENDED
OCTOBER 31, SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
1995 1996 1997 1996 1997
------------- --------------- --------------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
TICKET REVENUES ......... $43,266 $50,151 $ 58,479 $ 4,186 $ 4,554
OTHER OPERATING
REVENUES................ 28,109 33,942 41,730 3,254 3,141
------------- --------------- --------------- --------- ---------
Total revenues ........ 71,375 84,093 100,209 7,440 7,695
COST OF SALES ........... 49,226 57,723 64,052 4,862 5,229
------------- --------------- --------------- --------- ---------
Gross profit .......... 22,149 26,370 36,157 2,578 2,466
SELLING, GENERAL AND
ADMINISTRATIVE
EXPENSES................ 8,329 9,774 10,858 2,299 1,987
DEPRECIATION AND
AMORTIZATION ........... 2,461 3,346 3,975 961 1,031
OTHER OPERATING COSTS .. 5,345 7,390 8,531 961 723
LITIGATION EXPENSES AND
SETTLEMENT ............. -- 2,380 -- -- --
------------- --------------- --------------- --------- ---------
Operating profit
(loss) ............... 6,014 3,480 12,793 (1,643) (1,275)
INTEREST INCOME ......... 504 391 532 74 167
INTEREST EXPENSE ........ 2,793 3,855 4,413 1,127 1,102
------------- --------------- --------------- --------- ---------
INCOME (LOSS) BEFORE
MINORITY INTEREST ...... 3,725 16 8,912 (2,696) (2,210)
MINORITY INTEREST ....... 276 308 1,926 (63) (59)
------------- --------------- --------------- --------- ---------
NET INCOME (LOSS) ....... $ 3,449 $ (292) $ 6,986 (2,633) (2,151)
============= =============== =============== ========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-70
<PAGE>
PAVILION PARTNERS
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
(IN THOUSANDS)
<TABLE>
<CAPTION>
AMPHITHEATER
ENTERTAINMENT
PARTNERSHIP SM/PACE, INC. TOTAL
--------------- --------------- ---------
<S> <C> <C> <C>
BALANCE, October 31, 1994 ............ $13,108 $2,805 $15,913
Net income .......................... 1,788 1,661 3,449
Distributions ....................... -- (699) (699)
--------------- --------------- ---------
BALANCE, October 31, 1995 ............ 14,896 3,767 18,663
Net income (loss) ................... (330) 38 (292)
Distributions ....................... -- (767) (767)
--------------- --------------- ---------
BALANCE, September 30, 1996 .......... 14,566 3,038 17,604
Net income .......................... 4,578 2,408 6,986
Distributions ....................... -- (728) (728)
--------------- --------------- ---------
BALANCE, September 30, 1997 .......... $19,144 $4,718 $23,862
Net loss (unaudited) ................ (1,435) (716) (2,151)
Distributions (unaudited) ........... -- (108) (108)
--------------- --------------- ---------
BALANCE, December 31, 1997
(unaudited) ......................... $17,709 $3,894 $21,603
=============== =============== =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-71
<PAGE>
PAVILION PARTNERS
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE
FOR THE ELEVEN MONTHS FOR THE THREE MONTHS ENDED
YEAR ENDED ENDED YEAR ENDED DECEMBER 31,
OCTOBER 31, SEPTEMBER 30, SEPTEMBER 30, --------------------
1995 1996 1997 1996 1997
------------- --------------- --------------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) ............... $ 3,449 $ (292) $ 6,986 (2,633) (2,151)
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities--
Depreciation and amortization . 2,461 3,346 3,975 961 1,031
Minority interest .............. 276 308 1,926 (63) (59)
Changes in assets and
liabilities--
Accounts receivable ........... (1,455) (3,647) 1,669 5,124 4,100
Accounts receivable and
payable, related parties .... 32 (756) 82 (299) 436
Prepaid expenses and other
current assets ............... 191 (296) 266 774 435
Accounts payable and accrued
liabilities .................. (512) 1,695 (2,184) (1,925) (2,350)
Deferred revenue and other
liabilities .................. 1,304 2,110 2,284 (2,082) (2,092)
Other, net .................... (785) (1,259) (1,548) (141) (1,210)
------------- --------------- --------------- --------- ---------
Net cash provided by (used
in) operating activities ... 4,961 1,209 13,456 (284) (1,860)
------------- --------------- --------------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Payments of preoperating costs . (1,318) (1,114) (59) (271) --
Capital expenditures ............ (25,856) (7,483) (1,879) (15) (178)
------------- --------------- --------------- --------- ---------
Net cash used in investing
activities .................. (27,174) (8,597) (1,938) (286) (178)
------------- --------------- --------------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Funding of capital commitments
by partners .................... 4,046 -- -- -- --
Distributions to partner ........ (699) (767) (728) (728) (108)
Proceeds from borrowings ........ 24,322 8,323 -- -- --
Repayments of borrowings ........ (639) (1,072) (1,446) (375) (288)
------------- --------------- --------------- --------- ---------
Net cash provided by (used
in) financing activities ... 27,030 6,484 (2,174) (1,103) (396)
------------- --------------- --------------- --------- ---------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS ............ 4,817 (904) 9,344 (1,673) (2,434)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD ............. 4,641 9,458 8,554 8,554 17,898
------------- --------------- --------------- --------- ---------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD ....................... $ 9,458 $ 8,554 $17,898 $ 6,881 $15,464
============= =============== =============== ========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-72
<PAGE>
PAVILION PARTNERS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BASIS OF PRESENTATION:
Pavilion Partners (the Partnership) is a Delaware general partnership
between SM/PACE, Inc. (PACE), which is a wholly owned subsidiary of PACE
Entertainment Corporation, and Amphitheater Entertainment Partnership (AEP).
AEP is a partnership between a wholly owned subsidiary of Sony Music
Entertainment Inc. (Sony) and two wholly owned subsidiaries of Blockbuster
Entertainment Corporation (Blockbuster). PACE is the managing partner of the
Partnership. AEP owns a 66 2/3 percent interest in the Partnership, and PACE
owns a 33 1/3 percent interest in the Partnership.
In April 1990, Sony and PACE formed YM/PACE Partnership which changed its
name to the Sony Music/PACE Partnership. Effective April 1, 1994, the
partners entered into an agreement whereby Blockbuster obtained an indirect
33 1/3 percent interest in Sony Music/PACE Partnership, which was renamed
Pavilion Partners. In accordance with the agreement, Sony contributed an
interest-bearing note in the amount of $4,250,000 and its existing interest
in Sony Music/PACE Partnership to AEP. Concurrently, Blockbuster contributed
an interest-bearing note in the amount of $4,250,000 and its interest in
three existing amphitheaters to AEP. AEP in turn contributed these assets to
the Partnership. At the same time, PACE Entertainment Corporation contributed
its interest in two existing amphitheaters to the Partnership. Upon
completion of these contributions to the Partnership, AEP owned a 66 2/3
percent interest in the Partnership and PACE owned a 33 1/3 percent interest
in the Partnership.
The Partnership owns and operates amphitheaters, which are primarily used
for the presentation of live performances by musical artists. As of September
30, 1997, the Partnership owned interests in or leased 10 amphitheaters and
had a long-term management contract to operate an additional amphitheater.
All of the amphitheaters owned or operated by the Partnership are located in
the United States.
In April 1997, the Partnership entered into a new partnership agreement
with a third party to be known as Western Amphitheater Partners (WAP). The
Partnership contributed or licensed the assets and liabilities of the Glen
Helen Amphitheatre, and the other partner contributed or licensed the assets
and liabilities of the Irvine Meadows Amphitheatre. Each partner has a 50
percent interest in WAP. Under the terms of the Partnership agreement, the
partners are required to make an additional capital contribution of
approximately $850,000 each in WAP which was accrued by the Partnership at
September 30, 1997. The fiscal year-end for the WAP partnership will be
December 31.
During 1996, the Partnership changed its fiscal year-end from October 31
to September 30.
2. SIGNIFICANT ACCOUNTING POLICIES:
Principles of Consolidation
The consolidated financial statements of the Partnership include all of
its wholly owned subsidiaries and other partnerships in which Pavilion
Partners holds a controlling interest. All partnerships in which Pavilion
Partners holds less than a controlling interest are reported on the equity
method of accounting. All significant intercompany transactions have been
eliminated in consolidation.
Basis of Contributed Assets
All assets contributed to the Partnership by the partners were recorded at
the carrying values of the contributing entities.
Revenue Recognition
The Partnership records revenues from the presentation of events at the
completion of the related event. Advance ticket sales are classified as
deferred revenue until the event has occurred. Sponsorship and other revenues
that are not related to any single event are classified as deferred revenue
and amortized over each of the amphitheaters' various shows during the
operating season.
F-73
<PAGE>
PAVILION PARTNERS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The Partnership barters event tickets and sponsorship rights for products
and services, including event advertising. These barter transactions are not
recognized in the accompanying consolidated financial statements and are not
material to the Partnership's financial position or results of operations.
Income Taxes
No provision for federal or state income taxes is necessary in the
financial statements of the Partnership because, as a partnership, it is not
subject to federal or state income taxes and the tax effect of its activities
accrues to the partners.
Prepaid Expenses
Prepaid expenses include show advances and deposits, event advertising
costs and other costs directly related to future events. Such costs are
charged to operations upon completion of the related events.
As of September 30, 1996 and 1997, prepaid expenses included event
advertising costs of $160,000 and $137,000, respectively. The Partnership
recognized event advertising expenses of $5,815,000, $6,439,000 and
$6,569,000 in cost of sales for the year ended October 31, 1995, the eleven
months ended September 30, 1996, and the year ended September 30, 1997,
respectively.
Other Assets
The Partnership incurs certain costs in identifying and selecting
potential sites for amphitheater development. All costs incurred by the
Partnership during the initial site selection phase are expensed as incurred.
Certain incremental start-up costs that are incurred after a decision has
been made to develop a site are capitalized as preoperating costs. After an
amphitheater is fully developed, these preoperating costs are amortized on a
straight-line basis over a five-year period.
Contract acquisition costs include fees associated with securing a
contract with a booking agent for one of the Partnership's amphitheaters.
These costs are amortized on a straight-line basis over the life of the
contract which is 10 years.
Property and Equipment
Property and equipment is stated at cost. Repair and maintenance costs are
expensed as incurred. Interest incurred in connection with the construction
of an amphitheater is capitalized as part of the cost of the amphitheater.
During 1995 and 1996, the Partnership capitalized interest in connection with
the construction of amphitheaters of $645,000 and $161,000, respectively. No
interest was capitalized in 1997.
Leasehold improvements are amortized on a straight-line basis over the
shorter of their estimated useful lives or the term of the lease. Other
property and equipment is depreciated on a straight-line basis over the
estimated useful lives of the assets. A summary of the principal ranges of
useful lives used in computing the annual provision for depreciation and
amortization is as follows:
<TABLE>
<CAPTION>
RANGE OF YEARS
--------------
<S> <C>
Buildings .............. 27-31.5
Leasehold improvements 5-31.5
Equipment .............. 3-7
Furniture and fixtures 5-10
</TABLE>
The Partnership evaluates on an ongoing basis whether events and
circumstances indicate that the estimated useful lives of property and
equipment warrant revision. The Partnership adopted Statement of Financial
Accounting Standard (SFAS) No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," in 1997. The
adoption of SFAS No. 121 did not have a material effect on the Partnership's
financial position or results of operations.
F-74
<PAGE>
PAVILION PARTNERS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Fair Value of Financial Instruments
The carrying amounts of the Partnership's financial instruments
approximate their fair value at September 30, 1996 and 1997.
Statement of Cash Flows
The Partnership considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents. Interest paid was
$2,319,000, $3,652,000 and $3,917,000 for 1995, 1996 and 1997, respectively.
During the year ended October 31, 1995, the Partnership issued a note payable
with a fair value of $1,300,000 to a vendor in exchange for certain equipment
with a fair value which approximated the amount of the note. During 1997, the
Partnership contributed or licensed the assets and liabilities of the Glen
Helen Amphitheatre into the new WAP Partnership in which it holds a 50
percent interest. The net book value of the investment made in the WAP
Partnership was $54,000.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Partnership to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Reclassifications
Certain amounts in the 1995 and 1996 consolidated financial statements
have been reclassified to conform to the 1997 presentation.
Interim Financial Information
The interim financial data as of December 31, 1997 and for the three-month
periods ended December 31, 1996 and 1997 is unaudited and certain information
and disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted.
However, in the opinion of management, the interim data includes all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair statement of the results for the interim periods. The results of
operations for the interim periods are not necessarily indicative of the
results to be expected for the entire year.
3. PARTNERSHIP AGREEMENT:
The Partnership agreement provides, among other things, for the following:
Contributions and Project Loans
In addition to the initial contributions as discussed in Note 1, the
partners are obligated to contribute, in proportion to their respective
Partnership interests, any deficiency in the funding for the construction of
each approved amphitheater development or any operational shortfall, as
defined in the Partnership agreement. No such funding was required in 1995,
1996 or 1997.
In addition, AEP is responsible for providing project financing, as
defined, for each approved amphitheater development. To the extent AEP does
not fulfill this responsibility, AEP must indemnify, defend and hold harmless
the Partnership from all claims, demands, liabilities or other losses
(including the loss of any earnest money deposits and any reasonable
attorneys' fees) which might result from AEP's failure to provide such
project loan.
Income Allocation
In general, all of the Partnership's income is allocated to the partners
in proportion to their respective Partnership interests. However, PACE
receives a priority allocation of net income, as defined in the Partnership
agreement, until the cumulative amount of such allocations is equal to
$2,000,000 increased
F-75
<PAGE>
PAVILION PARTNERS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
by 7 percent of the unpaid allocation on the last day of each fiscal year.
Any such allocation of net income to PACE is distributed in the following
year. The priority allocation of net income to PACE for 1995, 1996 and 1997
was approximately $767,000, $716,000 and $119,000, respectively. This
allocation obligation was fully satisfied with the distribution of the fiscal
1997 income allocation amount during October 1997.
AEP is entitled to receive a priority allocation of net income once a loan
related to an amphitheater contributed by Blockbuster is repaid. At September
30, 1997, the loan balance is $7,905,000 and is payable in quarterly
installments with a balloon payment due at its maturity on April 1, 2004. The
priority allocation of net income is equal to 65 percent of the cash flow
attributable to the amphitheater, as defined in the Partnership agreement.
The cumulative priority allocation of net income to AEP is limited to
$7,000,000. No such allocation was made in 1995, 1996 or 1997.
On November 1 of each calendar year, the executive committee of the
Partnership determines if any excess cash exists in the Partnership's
accounts above what is necessary to fund future operations and obligations.
Any such excess cash may be distributed to the partners in proportion to
their respective interests in the Partnership. No distributions of excess
cash flow have been made.
4. PROPERTY AND EQUIPMENT:
The components of the Partnership's property and equipment are as follows
(in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30
-------------------
1996 1997
--------- --------
<S> <C> <C>
Property ....................................... $ 695 $ 695
Buildings ...................................... 10,817 10,817
Leasehold improvements ......................... 53,148 53,826
Equipment ...................................... 5,007 4,488
Furniture and fixtures ......................... 705 722
Construction in progress ....................... -- 786
--------- --------
70,372 71,334
Less--Accumulated depreciation and amortization 9,080 11,396
--------- --------
$61,292 $59,938
========= ========
</TABLE>
Depreciation and amortization expense associated with property and
equipment for 1995, 1996 and 1997 was $1,905,000, $2,693,000 and $3,179,000,
respectively.
Assets under capital lease included above are as follows (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30
------------------
1996 1997
-------- --------
<S> <C> <C>
Building ...................... $5,333 $5,333
Furniture and equipment ...... 841 841
-------- --------
6,174 6,174
Less--Accumulated depreciation 2,068 2,237
-------- --------
$4,106 $3,937
======== ========
</TABLE>
Amortization expense associated with assets under capital lease for 1995,
1996 and 1997 was $169,000, $156,000 and $169,000, respectively.
F-76
<PAGE>
PAVILION PARTNERS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. OTHER ASSETS:
Other assets consist of the following (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30
------------------
1996 1997
-------- --------
<S> <C> <C>
Preoperating costs, net of accumulated amortization of $2,092,000 and
$1,094,000, respectively................................................. $2,153 $1,709
Investment in unconsolidated partnerships ................................ 1,302 2,797
Contract acquisition costs, net of accumulated amortization of $45,000
and $129,000, respectively .............................................. 624 815
Other .................................................................... 347 402
-------- --------
$4,426 $5,723
======== ========
</TABLE>
During 1995, 1996 and 1997, the Partnership recognized equity in earnings
of unconsolidated partnerships of $263,000, $129,000 and $1,592,000,
respectively, which is included in other operating revenues.
6. ACCRUED LIABILITIES:
Accrued liabilities consist of the following (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30
-----------------
1996 1997
-------- -------
<S> <C> <C>
Interest ........................... $ 544 $ 522
Rent ............................... 638 580
Taxes .............................. 748 613
Litigation expenses and settlement 1,873 --
Insurance .......................... 1,216 1,656
Other .............................. 3,093 3,660
-------- -------
$8,112 $7,031
======== =======
</TABLE>
Accrued liabilities do not include accrued interest on the notes payable
to Blockbuster (see Note 7). Such accrued interest, which is included in
accounts payable, related parties, was $1,082,000 and $1,601,000 as of
September 30, 1996 and 1997, respectively.
F-77
<PAGE>
PAVILION PARTNERS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. NOTES PAYABLE:
Notes payable to third parties consist of the following (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30
--------------------
1996 1997
--------- ---------
<S> <C> <C>
Note payable to a bank, interest at LIBOR plus 0.18% (6% at
September 30, 1996 and 1997), payments due semiannually with a
balloon payment due on maturity in July 2005, guaranteed by
Sony .......................................................... $13,122 $12,573
Note payable to a bank, interest at 8.35% through July 2002 and
LIBOR plus 0.18% thereafter, due in July 2005, guaranteed by
Sony........................................................... 10,000 10,000
Note payable to a bank, interest at LIBOR plus 0.85% (6.78% at
September 30, 1996 and 1997), payments due annually with a
balloon payment due on maturity in December 2005, guaranteed
by Blockbuster and Sony........................................ 7,732 7,575
Note payable to a bank, interest at prime minus 105 basis
points (7.2% and 7.45% at September 30, 1996 and 1997,
respectively), payments due quarterly with a balloon payment
due on maturity in April 2000, guaranteed by Sony.............. 6,449 6,356
Note payable to a bank, interest at 9.46%, payments due
quarterly with a balloon payment due on maturity in December
1999, guaranteed by Sony....................................... 3,958 3,914
Note payable to a vendor, interest imputed at 8.98%, payments
due weekly through May 2005.................................... 1,826 1,671
Other notes payable to vendors, interest at fixed rates ranging
from 8.2% to 10.72%, due in equal installments with final
maturities ranging from December 1996 through February 2006 ... 2,040 1,591
--------- ---------
Total......................................................... 45,127 43,680
Less--Current maturities........................................ 1,447 1,488
--------- ---------
Noncurrent portion............................................ $43,680 $42,192
========= =========
Note payable to a related party consist of the following (in
thousands):
SEPTEMBER 30
--------------------
1996 1997
--------- ---------
Note payable to Blockbuster, interest at 7%, payments due
quarterly with a balloon payment due on maturity in April
2004, secured by property and equipment with a net book value
of $6,212 ..................................................... $ 7,905 $ 7,905
Less--Current maturities........................................ 637 880
--------- ---------
Noncurrent portion............................................ $ 7,268 $ 7,025
========= =========
</TABLE>
The terms of contracts with concessionaires such as food and beverage
vendors generally require the vendors to make a significant initial payment
to the Partnership at the time of the construction of an amphitheater. These
advances are repayable in periodic installments from amounts otherwise due to
the Partnership under the concession contracts. As of September 30, 1997, the
notes payable to vendors under
F-78
<PAGE>
PAVILION PARTNERS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
such arrangements had a weighted-average effective interest rate of 9.15
percent. The Partnership's weighted-average interest rate on notes payable to
banks was 7.3 percent on September 30, 1997.
Interest expense on the note payable to a related party was $547,000,
$489,000 and $519,000 for 1995, 1996 and 1997, respectively. Principal and
interest on the note payable to a related party have not been paid as
accounts receivable, related parties from Blockbuster remain outstanding.
As of September 30, 1997, scheduled maturities of notes payable were as
follows:
<TABLE>
<CAPTION>
<S> <C>
1998 ......... $ 2,368
1999 ......... 1,841
2000 ......... 11,560
2001 ......... 1,751
2002 ......... 1,811
Thereafter .. 32,254
--------
$51,585
========
</TABLE>
8. LEASE COMMITMENTS:
The Partnership leases various amphitheaters under operating and capital
leases. Initial lease terms are 25 to 60 years with varying renewal periods
at the Partnership's option on most leases. A number of the amphitheater
leases provide for escalating rent over the lease term. Rental expense on
operating leases is recognized on a straight-line basis over the life of such
leases. The majority of the amphitheater leases provide for contingent
rentals, generally based upon a percentage of gross revenues, as defined in
the respective lease agreements. Minimum rental expense associated with
operating leases for 1995, 1996 and 1997 was $648,000, $2,353,000 and
$2,612,000, respectively. Contingent rental expense associated with operating
leases for 1995, 1996 and 1997 was $2,407,000, $2,515,000 and $2,571,000,
respectively. Contingent rental expense associated with capital leases for
1995, 1996 and 1997 was $144,000, $155,000 and $149,000, respectively.
Minimum rental commitments on long-term capital and operating leases at
September 30, 1997, were as follows (in thousands):
<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
--------- -----------
<S> <C> <C>
Year ending September 30--
1998 .................................... $ 757 $ 2,902
1999 .................................... 757 3,056
2000 .................................... 756 3,148
2001 .................................... 757 3,248
2002 .................................... 757 3,297
Thereafter .............................. 9,714 54,693
--------- -----------
13,498 $70,344
===========
Less--Amount representing interest ...... 7,383
---------
Present value of minimum rental payments 6,115
Less--Current portion .................... 126
---------
Noncurrent portion........................ $ 5,989
=========
</TABLE>
9. RELATED PARTIES:
The responsibility for the day-to-day business and affairs of the
Partnership has been delegated by the partners to a managing director and
support staff employed by PACE Entertainment Corporation and
F-79
<PAGE>
PAVILION PARTNERS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
its subsidiaries. PACE Entertainment Corporation and its subsidiaries
provide the Partnership with management and consulting services in connection
with the development, construction, maintenance and operation of
amphitheaters owned or leased by the Partnership. The Partnership paid
$1,650,000, $1,687,000 and $1,968,000 during 1995, 1996 and 1997,
respectively, to PACE Entertainment Corporation as reimbursement for the
costs of these services.
The Partnership paid PACE Music Group (PMG), a subsidiary of PACE
Entertainment Corporation, $289,000, $225,000 and $395,000 during 1995, 1996
and 1997, respectively, for services provided by PMG as a local presenter at
one of the Partnership's amphitheaters.
Accounts receivable from and accounts payable to related parties at
September 30, 1997, of $3,878,000 and $3,948,000, respectively, relate to
amounts owed to and due from the partners arising from the formation of the
Partnership and general and administrative expenses paid by or on behalf of
the Partnership.
Notes receivable, related parties consist of two notes due from AEP which
bear interest at 5.62 percent per annum and matured April 1, 1997. Principal
payments on the notes are due upon request by the Partnership in order to
fund the construction of proposed amphitheaters. Interest on the partners'
notes amounted to $192,000, $63,000 and $68,000 for 1995, 1996 and 1997,
respectively.
10. COMMITMENTS AND CONTINGENCIES:
Commitments
The Partnership guarantees 50 percent of a $2,305,000 promissory note
issued by its 50 percent equity partner in the Starwood Amphitheater. The
note matures on June 1, 2003.
The Partnership has committed to fund certain renovation work at one of
its amphitheaters in proportion to its 66 2/3 percent partnership interest in
that amphitheater. The renovations are to include increasing seating capacity
and upgrading the amphitheater's concession plazas and parking facilities.
The total budget for these renovations is approximately $11.0 million of
which $5.0 million will be funded by the minority partner and a note payable
to vendor, therefore the Partnership's funding commitment is approximately
$6.0 million.
The Partnership maintains cash in bank deposit accounts which, at times,
may exceed federally insured limits. The Partnership has not experienced any
losses in such accounts. Management performs periodical evaluations of the
relative credit standards of the financial institutions with which it deals.
Additionally, the Partnership's cash management and investment policies
restrict investments to low-risk, highly liquid securities. Accordingly,
management does not believe that the Partnership is currently exposed to any
significant credit risk on cash and cash equivalents.
The Partnership is subject to other claims and litigation arising in the
normal course of its business. The Partnership does not believe that any of
these proceedings will have a material adverse effect on its financial
position or results of operations.
The Partnership was previously named as a defendant in a case filed in
Wake County, North Carolina (Promotion Litigation). There were several
defendants named in the litigation with various causes of action asserted
against one or more of each of the defendants, including (a) breach of
alleged contract, partnership, joint venture and fiduciary duties between
certain of the defendants and Pro Motion Concerts, (b) constructive fraud,
(c) interference with prospective advantage, (d) unfair trade practices, (e)
constructive trust and (f) unjust enrichment. The essence of the plaintiff's
claims was that certain of the defendants agreed to enter into a partnership
with the plaintiffs for the development and operation of an amphitheater. On
May 1, 1997, the Promotion Litigation was settled. All defendants were fully
and finally released with prejudice from any and all claims and causes of
action. Although the defendants believe that they would have prevailed at a
trial of the Promotion Litigation, the defendants chose to
F-80
<PAGE>
PAVILION PARTNERS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
settle rather than risk the uncertainties of a trial. The defendants did not
acknowledge or admit any liability. The settlement called for payments to
plaintiffs totaling $4.5 million, of which $1.0 million was paid by the
Partnership. The Partnership recorded litigation settlement expense of $1.0
million at September 30, 1996. The settlement was paid during May 1997.
Change in Control Provisions
The Partnership has entered into numerous leases and other contracts in
the ordinary course of business. Certain of these agreements either contain
restrictions on their assignability or would require third-party approval of
a change in control of the Partnership.
Employment Agreements
The Partnership has employment agreements with certain key employees. Such
agreements generally provide for minimum salary levels, guaranteed bonuses
and incentive bonuses which are payable if specified financial goals are
attained. As of September 30, 1997, the Company's minimum commitment under
these agreements were as follows (in thousands);
<TABLE>
<CAPTION>
<S> <C>
For the year ending September
30--
1998 ............................. $335
1999 ............................. 177
</TABLE>
Insurance
The Partnership carries a broad range of insurance coverage, including
general liability, workers' compensation, employee health coverage and
umbrella policies. The Partnership carries deductibles of up to $10,000 per
occurrence for general liability claims. The Partnership has accrued for
estimated potential claim costs in satisfying the deductible provisions of
the insurance policies for claims occurring through September 30, 1997. The
accrual is based on known facts and historical trends, and management
believes such accrual to be adequate.
11. SUBSEQUENT EVENTS:
In December 1997, the managing partner and its shareholders entered into
an agreement whereby the shareholders would sell their interests in PACE
Entertainment Corporation to SFX Entertainment, Inc. (SFX Transaction).
Closing is subject to certain conditions, including the approval of third
parties.
On December 19, 1997, the PACE Entertainment Corporation entered into an
agreement to purchase Blockbuster's 33 1/3 percent interest in the
Partnership (Blockbuster Transaction) for $4,171,000 in cash, $2,940,000 in
assumed liabilities and the assumption of certain indemnification obligations
of Blockbuster under the Partnership agreement. In addition, PACE
Entertainment Corporation has agreed to purchase the note payable to
Blockbuster with a balance of $9,507,000, including accrued interest of
$1,601,000, at September 30, 1997. The transaction is contingent on, among
other things, obtaining acceptable financing including the release of
Blockbuster from certain debt obligations and the approval of Sony.
On December 22, 1997, PACE Entertainment Corporation entered into an
agreement to purchase Sony's 33 1/3 percent interest in the Partnership (Sony
Transaction) for $27,500,000 in cash. The transaction is contingent on, among
other things, government approval and obtaining acceptable financing
including the release of Sony from certain debt obligations (see Note 7).
EVENT SUBSEQUENT TO DATE OF AUDITORS' REPORT (UNAUDITED)
Effective February 25, 1998, the SFX Transaction, Blockbuster Transaction
and Sony Transaction closed. In conjunction with the closing, SFX purchased
or retired approximately $38 million of the Partnership's outstanding notes
payable.
F-81
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Boards of Directors
Contemporary Group
We have audited the accompanying combined balance sheets of Contemporary
Group as of December 31, 1996 and 1997 and the related combined statements of
operations, cash flows and stockholders' equity for the years then ended.
These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the combined financial position of
Contemporary Group at December 31, 1996 and 1997 and the results of their
operations and their cash flows for the years then ended, in conformity with
generally accepted accounting principles.
New York, New York
March 20, 1998
Ernst & Young LLP
F-82
<PAGE>
CONTEMPORARY GROUP
COMBINED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31
-----------------------------
1996 1997
-------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash ............................................................ $ 2,972,409 $10,427,805
Accounts receivable ............................................. 4,067,444 7,672,187
Notes receivable -related party ................................. -- 1,000,000
Prepaid expenses and other current assets ....................... 272,105 210,640
-------------- -------------
Total current assets ............................................. 7,311,958 19,310,632
Property and equipment, at cost, less accumulated depreciation
and amortization of $2,723,986 in 1996 and $3,264,972 in 1997 .. 2,438,210 2,813,902
Reimbursable event costs.......................................... 474,469 152,617
Deferred event expenses........................................... 250,973 402,460
Investment in Riverport........................................... 4,934,513 5,436,717
Other assets...................................................... 120,256 199,518
-------------- -------------
Total assets...................................................... $15,530,379 $28,315,846
============== =============
LIABILITIES AND COMBINED STOCKHOLDERS' EQUITY
Current liabilities:
Accrued compensation and bonuses................................. $ 2,906,153 $ 6,721,459
Accrued expenses and other current liabilities................... 1,994,036 6,169,861
Accounts payable................................................. 1,733,676 1,347,539
Current portion of note payable.................................. 667,138 1,075,000
-------------- -------------
Total current liabilities......................................... 7,301,003 15,313,859
Deferred revenue and other liabilities............................ 2,586,880 5,570,295
Note payable, less current portion................................ 1,659,723 739,424
Combined stockholders' equity..................................... 3,982,773 6,692,268
-------------- -------------
Total liabilities and combined stockholders' equity............... $15,530,379 $28,315,846
============== =============
</TABLE>
See accompanying notes.
F-83
<PAGE>
CONTEMPORARY GROUP
COMBINED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------
1996 1997
------------- -------------
<S> <C> <C>
Operating revenues:
Event promotion revenue ............ $38,023,454 $48,057,060
Marketing revenue .................. 12,969,621 30,195,359
Other event revenue ................ 8,859,218 10,800,118
------------- -------------
59,852,293 89,052,537
Cost of revenue ..................... 46,410,935 66,940,088
------------- -------------
13,441,358 22,112,449
Operating expenses:
Salary and bonus expense ........... 8,010,991 18,992,476
Depreciation and amortization ..... 566,573 540,986
General and administrative expenses 3,767,111 4,887,615
------------- -------------
12,344,675 24,421,077
Income (loss) from operations ....... 1,096,683 (2,308,628)
Other income (expense):
Interest income .................... 158,512 201,310
Interest expense ................... (213,658) (192,130)
Loss on asset disposal ............. -- (84,261)
Equity in income of Riverport ..... 822,716 1,002,204
------------- -------------
767,570 927,123
------------- -------------
Income before income taxes .......... 1,864,253 (1,381,505)
Federal and state taxes ............. 35,367 --
------------- -------------
Net income (loss) ................... $ 1,828,886 $(1,381,505)
============= =============
</TABLE>
See accompanying notes.
F-84
<PAGE>
CONTEMPORARY GROUP
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------
1996 1997
------------- --------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income .................................................. $ 1,828,886 $(1,381,505)
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization .............................. 566,573 540,986
Loss on asset disposal ..................................... -- 84,261
Non cash interest expense................................... 148,113 154,701
Equity in income of Riverport, net of distributions
received .................................................. (222,716) (502,204)
Changes in operating assets and liabilities:
Accounts receivable ....................................... (899,830) (3,604,743)
Prepaid expenses and other current assets ................. 225,754 61,465
Reimbursable event costs .................................. (207,355) 321,852
Deferred event expenses ................................... (159,393) (151,487)
Other assets .............................................. (29,923) (79,262)
Accounts payable .......................................... (186,876) (386,137)
Accrued compensation and bonuses .......................... 1,489,179 3,815,306
Accrued expenses and other current liabilities ........... 1,116,003 4,175,825
Deferred revenue .......................................... 1,324,206 3,227,827
Other liabilities ......................................... (1,134,683) (244,412)
------------- --------------
Net cash provided by operating activities ................... 3,857,938 6,032,473
INVESTING ACTIVITIES
Loan to related party ....................................... -- (1,000,000)
Purchase of property and equipment .......................... (1,159,382) (1,063,848)
Proceeds from sale of property and equipment ................ -- 62,909
------------- --------------
Net cash used in investing activities ....................... (1,159,382) (2,000,939)
FINANCING ACTIVITIES
Borrowings .................................................. 626,970 --
Payments of notes payable ................................... (109,832) (667,138)
Proceeds received from capital contributions ................ -- 5,000,000
Distributions paid .......................................... (2,993,000) (909,000)
------------- --------------
Net cash provided by (used in) financing activities ........ (2,475,862) 3,423,862
------------- --------------
Net increase in cash ........................................ 222,694 7,455,396
Cash at beginning of period ................................. 2,749,715 2,972,409
------------- --------------
Cash at end of period ....................................... $ 2,972,409 $10,427,805
============= ==============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest ...................................... $ 143,271 $ 37,421
============= ==============
Cash paid for income taxes .................................. $ 34,550 $ 27,077
============= ==============
</TABLE>
See accompanying notes.
F-85
<PAGE>
CONTEMPORARY GROUP
COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
Year ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
<S> <C>
Balance, January 1, 1996 ....................... $ 5,146,887
Distributions to stockholders ................. (2,993,000)
Net income for the year ended December 31,
1996 ......................................... 1,828,886
-------------
Balance, December 31, 1996 ..................... 3,982,773
Distributions to stockholders ................. (909,000)
Capital contributions ......................... 5,000,000
Net loss for the year ended December 31, 1997 (1,381,505)
-------------
Balance, December 31, 1997 ..................... $ 6,692,268
=============
</TABLE>
See accompanying notes.
F-86
<PAGE>
CONTEMPORARY GROUP
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Combination
The accompanying combined financial statements include the accounts of
Contemporary International Productions Corporation, Contemporary Productions
Incorporated, Contemporary Marketing, Inc. ("CMI"), Contemporary Sports
Incorporated, Innovative Training and Education Concepts Corporation, n/k/a
Contemporary Group, Inc., Contemporary Investments Corporation ("CIC"),
Contemporary Investments of Kansas, Inc., Continental Entertainment
Associates, Inc., Dialtix, Inc., and Capital Tickets L.P. (collectively, the
"Contemporary Group" or the "Companies"). Intercompany transactions and
balances among these companies have been eliminated in combination. The
Companies are subject to common ownership and to the transaction described in
Note 8.
The Contemporary Group is a live entertainment and special events
producer, venue operator and consumer marketer. Income from operations
originates from the operation of the concert division which earns promotion
income in two ways: either a fixed fee for organizing and promoting an event
or an arrangement that entitles it to a profit percentage based on a
predetermined formula. The Companies recognize revenue from the promotion of
events when earned, which is generally upon exhibition. The Companies record
commissions on booking acts as well as sponsorship and concession income as
other event revenues.
CIC is a 50% partner in Riverport Performing Arts Centre Joint Venture
("Riverport"), a Missouri general partnership which operates a 20,000 seat
outdoor amphitheater located in St. Louis, Missouri. The investment in
Riverport is recorded under the equity method of accounting.
Income Taxes
As of December 31, 1997, all of the entities combined are either "S
Corporations" or partnerships and therefore no tax provision has been
provided. In 1996, certain of the entities were "C Corporations" for which a
tax provision has been provided.
For the year ended December 31, 1996, with respect to the "C
Corporations," the total provision for income taxes is $35,367.
Certain of the "C Corporations" filed elections to be treated as "S
Corporations" beginning January 1, 1997. Therefore, with respect to such
corporations, no provision for income taxes has been provided for the year
ended December 31, 1997. These Companies have subsequently revoked the
election to be taxed as "S Corporations", effective January 1, 1998.
Accounts Receivable
Accounts receivable consist of amounts due from ticket vendors, venue box
offices and customers of marketing services. Management considers these
accounts receivable as of December 31, 1997 and 1996 to be collectible;
accordingly, no allowance for doubtful accounts is recorded.
Revenue Recognition
Deferred revenue relates primarily to an advance on future concession
revenues which is evidenced by a noninterest bearing note payable and
advances on marketing services. Payments collected in advance are recognized
as income as events occur or services are provided. Reimbursable event costs
represent amounts paid by the Companies on behalf of co-promoters and other
parties with interests in the events which will be reimbursed by such
parties.
Sales under long-term contracts for the Company's marketing division are
recorded under the percentage-of-completion method, wherein revenues and
estimated costs are recorded as the work is performed.
F-87
<PAGE>
CONTEMPORARY GROUP
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
Significant Customer
CMI's most significant customer is AT&T, which provided approximately 23%
and 12% of the Companies' combined revenues for the years ended December 31,
1997 and 1996, respectively. In March 1998, AT&T has indicated that it will
no longer be using the services of CMI.
Advertising Costs
Advertising costs are expensed as incurred. For the year ended December
31, 1997 and 1996, advertising costs were $115,634 and $71,879, respectively.
Property and Equipment
Property and equipment is recorded at cost. Depreciation is computed on
either the straight-line method or accelerated methods over the estimated
useful lives of the assets or the term of the related lease as follows:
<TABLE>
<CAPTION>
<S> <C>
Furniture, fixtures and equipment ....5-7 years
Land improvements ..................... 15 years
Leasehold improvements ................ 10 years
</TABLE>
Risks and Uncertainties
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Reclassification
Certain amounts in the 1996 financial statements have been reclassified to
conform with the current year's presentation.
2. INVESTMENTS
The following is a summary of the financial position and results of
operations of Riverport as of and for the year ended December 31, 1996 and
1997:
<TABLE>
<CAPTION>
DECEMBER 31
----------------------------
1996 1997
------------- -------------
<S> <C> <C>
Current assets .......................... $ 473,275 $ 284,424
Property and equipment .................. 11,815,552 11,188,826
Other assets ............................ 16,553 --
------------- -------------
Total assets ............................ $12,305,380 $11,473,250
============= =============
Current liabilities ..................... $ 1,993,981 $ 318,028
Other liabilities ....................... 442,374 281,789
Partners' capital ....................... 9,869,025 10,873,433
------------- -------------
Total liabilities and partners' capital $12,305,380 $11,473,250
============= =============
Revenue ................................. $11,693,138 $14,247,109
Net operating income .................... $ 1,970,887 $ 2,616,839
Net income .............................. $ 1,645,431 $ 2,004,408
</TABLE>
F-88
<PAGE>
CONTEMPORARY GROUP
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
During the years ended December 31, 1997 and 1996, CIC received a cash
distribution of $500,000 and $600,000, respectively, from Riverport.
3. NOTES PAYABLE
At December 31, 1997 and 1996, CIC held a $2,322,500 non interest-bearing
note payable to its partner in Riverport. The carrying value of the note was
$1,814,424 and $1,734,723 at December 31, 1997 and 1996, respectively, which
includes imputed interest at a rate of approximately 9%. The note, which was
payable in installments through December 1, 2000 and was secured by CIC's
investment in Riverport, was repaid in 1998 in connection with the
transaction described in Note 8.
At December 31, 1996, the Companies had a $592,138 bank note payable which
bore interest based on the prime lending rate (8.25% in 1996, 8.5% in 1997)
and was repaid in full during 1997.
4. COMMON STOCK
The Companies' stock and tax status for 1997 are as follows:
<TABLE>
<CAPTION>
TAX SHARES SHARES PAR
STATUS AUTHORIZED ISSUED VALUE
------------- ------------ -------- -------
<S> <C> <C> <C> <C>
Contemporary International Productions
Corporation............................... S-Corp. 30,000 10 $1
Contemporary Productions Incorporated .... S-Corp. 30,000 100 $1
Contemporary Marketing, Inc. .............. S-Corp. 30,000 100 $1
Contemporary Sports, Incorporated ........ S-Corp. 30,000 100 $1
Innovative Training and Education Concepts
Corporation n/k/a Contemporary Group,
Inc....................................... S-Corp. 30,000 100 $1
Contemporary Investments Corporation ..... S-Corp. 30,000 200 $1
Contemporary Investments of Kansas, Inc. .. S-Corp. 30,000 30,000 $1
Continental Entertainment Associates,
Inc....................................... C-Corp. 300 6 $100
Dialtix, Inc. ............................. S-Corp. 300 6 $100
Capital Tickets L.P. ...................... Partnership N/A N/A N/A
</TABLE>
5. COMMITMENTS AND CONTINGENCIES
Leases
The Companies lease office facilities and concert venues under
noncancellable leases which expire at various dates through 2004. Such leases
contain various operating escalations and renewal options.
Total rent expense for the year ended December 31, 1997 and 1996 was
$705,489 and $818,123, respectively.
F-89
<PAGE>
CONTEMPORARY GROUP
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
Future minimum lease payments under noncancellable operating leases as of
December 31, 1997 are as follows:
<TABLE>
<CAPTION>
<S> <C>
1998 ......... $ 858,757
1999 ......... 863,757
2000 ......... 440,050
2001 ......... 264,000
Thereafter .. 317,000
-----------
$2,743,564
===========
</TABLE>
Compensation
During 1996, CMI entered into an employment agreement with one of its
employees which provided her rights to future cash payments based on the fair
value of CMI, as defined. These rights would vest on January 1, 2002 or upon
the occurrence of certain transactions, including a change of control. On
December 31, 1997, in connection with an amendment to her employment
agreement, the rights became fully vested and CMI paid this employee
$1,329,284. In addition, she is entitled to receive as a bonus $2,854,899
under the amendment, which will be paid in 1998 and is accrued at December
31, 1997.
Litigation
The Companies are party to various legal proceedings generally incidental
to their businesses. Although the ultimate disposition of these proceedings
is not presently determinable, management, after discussions with counsel,
does not expect the outcome of these proceedings to have a material adverse
effect on the financial condition of the Companies.
6. EMPLOYEE RETIREMENT PLAN
In January 1992, the Companies began a retirement plan for their employees
under Section 401(k) of the Internal Revenue Code. All employees are eligible
to participate once they obtain the minimum age requirement of 21 years and
have satisfied the service requirement of one year with the Companies.
Participant contributions are subject to the limitations of Section 402(g) of
the Internal Revenue Code. The Companies contribute to participant employees'
accounts at the rate of 25% of the first 5% of the participating employees'
contributions. During the years ended December 31, 1996 and 1997, the
Companies contributions totaled approximately $25,600 and $37,769,
respectively.
7. RELATED PARTY TRANSACTIONS
During 1997, the Company loaned $1,000,000 to its co-presidents. The loans
which bore a rate of interest of approximately 5.8% were repaid in full in
early 1998.
8. SUBSEQUENT EVENTS
In February 1998, the owners of the Companies sold 100% of the capital
stock of Contemporary International Productions Corporation and the assets of
the remaining companies comprising the Contemporary Group, excluding cash and
1997 receivables, to SFX Entertainment, Inc. for an aggregate consideration
of $62,300,000 in cash and the issuance of preferred stock convertible into
1,402,851 shares of SFX Entertainment Class A Common Stock upon a spin-off or
redeemable into cash if the spin-off does not occur by July 1, 1998. In
connection with this transaction, SFX Entertainment and its affiliates also
acquired the 50% interest of Riverport not owned by CIC for $12,585,000.
F-90
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Riverport Performing Arts Centre, Joint Venture:
We have audited the accompanying balance sheets of Riverport Performing
Arts Centre, Joint Venture (a Missouri General Partnership) as of December
31, 1997 and 1996, and the related statements of income and changes in
partners' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Joint Venture's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Riverport Performing Arts
Centre, Joint Venture as of December 31, 1997 and 1996, and the results of
its operations and its cash flows for the years then ended, in conformity
with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
St. Louis, Missouri,
February 27, 1998
F-91
<PAGE>
RIVERPORT PERFORMING ARTS CENTRE, JOINT VENTURE
BALANCE SHEETS -- AS OF DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................ $ 202,251 $ 76,231
Accounts receivable...................... -- 324,275
Prepaid expenses and other current
assets.................................. 82,173 72,769
------------- -------------
Total current assets...................... 284,424 473,275
------------- -------------
FACILITY:
Land and leasehold interest.............. 5,156,342 5,156,342
Buildings and improvements............... 8,516,251 8,449,225
Furniture, fixtures and equipment ....... 2,293,356 2,218,987
Less-Allowance for depreciation.......... (4,777,123) (4,009,002)
------------- -------------
11,188,826 11,815,552
------------- -------------
OTHER ASSETS--Deferred financing fees,
net ...................................... -- 16,553
------------- -------------
$11,473,250 $12,305,380
============= =============
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt .... $ 160,585 $ 1,376,762
Accounts payable and accrued expenses ... 120,043 453,804
Deferred income.......................... 37,400 163,415
------------- -------------
Total current liabilities................. 318,028 1,993,981
LONG-TERM DEBT............................ 281,789 442,374
------------- -------------
599,817 2,436,355
PARTNERS' EQUITY.......................... 10,873,433 9,869,025
------------- -------------
$11,473,250 $12,305,380
============= =============
</TABLE>
The accompanying notes are an integral part of these balance sheets.
F-92
<PAGE>
RIVERPORT PERFORMING ARTS CENTRE, JOINT VENTURE
STATEMENTS OF INCOME AND CHANGES IN PARTNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
REVENUES:
Show admission........................... $ 9,901,214 $ 8,053,939
Sponsorships and promotions.............. 1,113,100 914,690
Concession rental........................ 1,970,742 1,724,060
Parking.................................. 1,122,979 843,283
Other.................................... 139,074 157,166
------------- -------------
Operating revenues...................... 14,247,109 11,693,138
------------- -------------
EXPENSES:
Talent................................... 5,825,962 4,382,735
Other show expenses...................... 1,866,910 1,706,317
Advertising and marketing................ 1,037,048 887,673
Producer fees and commissions............ 1,187,253 1,071,946
General and administrative............... 1,713,097 1,673,580
------------- -------------
Operating expenses...................... 11,630,270 9,722,251
------------- -------------
Net operating income.................... 2,616,839 1,970,887
============= -------------
OTHER EXPENSES (INCOME):
Depreciation and amortization............ 779,278 767,258
Interest, net............................ 13,167 112,947
Other income............................. (180,014) (554,749)
------------- -------------
Other expenses, net..................... 612,431 325,456
------------- -------------
Net income.............................. 2,004,408 1,645,431
PARTNERS' EQUITY AT THE BEGINNING OF
PERIOD.................................... 9,869,025 9,423,594
DISTRIBUTION TO PARTNERS.................. (1,000,000) (1,200,000)
------------- -------------
PARTNERS' EQUITY AT THE END OF THE
PERIOD.................................... $10,873,433 $ 9,869,025
============= =============
</TABLE>
The accompanying notes are an integral part of these statements.
F-93
<PAGE>
RIVERPORT PERFORMING ARTS CENTRE, JOINT VENTURE
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $ 2,004,408 $ 1,645,431
Adjustments to reconcile net income to net cash provided
by operating activities
Depreciation and amortization............................ 779,278 767,258
Change in accounts receivable............................ 324,275 (215,712)
Change in prepaid expenses and other current assets ..... (4,008) (3,606)
Change in accounts payable and accrued expenses ......... (333,761) 284,945
Change in deferred income................................ (126,015) (31,505)
------------- -------------
Net cash provided by operating activities............... 2,644,177 2,446,811
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Facility additions........................................ (141,395) (182,801)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt......................................... (1,376,762) (1,160,585)
Distribution to Partners.................................. (1,000,000) (1,200,000)
------------- -------------
Net cash used in financing activities................... (2,376,762) (2,360,585)
------------- -------------
Change in cash and cash equivalents..................... 126,020 (96,575)
CASH AND CASH EQUIVALENTS, beginning of year............... 76,231 172,806
------------- -------------
CASH AND CASH EQUIVALENTS, end of year..................... $ 202,251 $ 76,231
============= =============
</TABLE>
The accompanying notes are an integral part of these statements.
F-94
<PAGE>
RIVERPORT PERFORMING ARTS CENTRE, JOINT VENTURE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
1. SIGNIFICANT ACCOUNTING POLICIES:
Organization
The Riverport Performing Arts Centre, Joint Venture (the Joint Venture) is
a Missouri General Partnership between Contemporary Investments Corporation
(Contemporary) and Sverdrup/BRC Joint Venture (formerly Sverdrup/MDRC Joint
Venture). The partners each hold a 50% interest in the equity and operations
of the Joint Venture. The term of the Joint Venture continues until December
31, 2045. The Joint Venture is the developer, owner and operator of a 20,000
seat outdoor amphitheater located in St. Louis, Missouri. The Joint Venture
contracts with popular musical performing artists for the entertainment of
its guests. Entertainment is provided during the months of April through
October to guests primarily from the St. Louis metropolitan area.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash equivalents consist of investments with a maturity of three months or
less when purchased. Cash equivalents are carried at cost, which approximates
market. Interest income of $61,199 and $56,708 for 1997 and 1996,
respectively, is netted against interest expense in the accompanying
statements of income.
Depreciation and Amortization
Depreciation is provided using the straight-line method over estimated
useful lives of 5 to 20 years. Deferred financing fees are amortized over the
life of the related debt.
Leasehold Interest
The facility was constructed on land obtained through a leasehold interest
that expires on April 25, 2011. The Sverdrup/BRC Joint Venture sold to
Contemporary an undivided 50% interest in the leasehold interest.
Concurrently, both Sverdrup/BRC Joint Venture and Contemporary contributed
their undivided 50% interests in the leasehold interest into the Joint
Venture. Ground rent is $1 per year under the lease with the Joint Venture
assigned as landlord.
Deferred Income
Deferred income reflects advance sales of season tickets for the
subsequent operating season and is amortized into show admission revenues as
the subsequent operating season progresses.
Income Taxes
Income taxes have not been provided for in the financial statements since
the Joint Venture is organized as a partnership, and each partner is liable
for its own tax payments.
F-95
<PAGE>
RIVERPORT PERFORMING ARTS CENTRE, JOINT VENTURE
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. LONG-TERM DEBT
Notes payable outstanding at December 31 are as follows:
<TABLE>
<CAPTION>
1997 1996
---------- ------------
<S> <C> <C>
Mortgage note due in installments through 1997, bearing
interest at prime plus 1/2% which averaged 8.875%
during 1997 and 1996.................................... $ -- $1,216,178
Noninterest-bearing note due in installments through
2000.................................................... 442,374 602,958
---------- ------------
442,374 1,819,136
Less-Current maturities.................................. 160,585 1,376,762
---------- ------------
$281,789 $ 442,374
========== ============
</TABLE>
The mortgage note contains covenants that require the Joint Venture to
maintain certain financial ratios and also prohibit certain transactions. The
mortgage note is secured by buildings, improvements, furniture, fixtures and
equipment, limited to the remaining term of the leasehold interest expiring
April 25, 2011. The mortgage note was paid off on September 25, 1997. The
noninterest-bearing note is secured by all concession equipment. Cash paid
for interest totaled $79,391 and $173,172 for 1997 and 1996, respectively.
Maturities of long-term debt are as follows:
<TABLE>
<CAPTION>
<S> <C>
1998... $160,585
1999... 160,585
2000... 121,204
----------
$442,374
==========
</TABLE>
3. CONCESSION RENTAL:
The Joint Venture rents certain premises at its location for the sale of
concessions under a lease that expires in 2000. Rental income is based on a
percentage of gross receipts for some products sold and gross margin for
other products sold.
4. RELATED-PARTY TRANSACTIONS
Contempro Group, Inc., an affiliate of Contemporary, provides various
services to the Joint Venture. These services include marketing, media
placement, sales and show production. Approximately $2,235,000 and $1,766,000
was paid for these services in 1997 and 1996, respectively.
In addition to the payments described above, the Joint Venture also
compensates Contempro Group, Inc. as an agent for the procurement of these
services.
Sverdrup Investments, Inc., an affiliate of Sverdrup/BRC Joint Venture,
was paid $36,000 for accounting services in 1997 and $147,000 for accounting
and landscaping services in 1996.
Riverport Trust, an affiliate of Sverdrup/BRC Joint Venture, provides
ground maintenance to the tenants of the Riverport complex. The fees charged
for these services is based on the total space occupied by the tenant. The
Joint Venture paid approximately $62,000 and $73,000 for these services in
1997 and 1996, respectively.
The Joint Venture had liabilities for related-party transactions and
pass-through costs to affiliates of Contemporary totaling approximately
$56,000 and $416,000 as of December 31, 1997 and 1996, respectively. The
Joint Venture also had receivables for income collected by Contemporary
totaling approximately $273,000 as of December 31, 1996.
F-96
<PAGE>
RIVERPORT PERFORMING ARTS CENTRE, JOINT VENTURE
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. CONTINGENCIES:
From time to time, the Joint Venture is a party to certain lawsuits and
other claims related to the normal conduct of its business. Management
believes that liabilities, if any, resulting from the resolution of pending
or threatened proceedings would not materially affect the financial condition
or results of operations of the Joint Venture.
6. SUBSEQUENT EVENT:
On February 27, 1998, Sverdrup/BRC Joint Venture and Contemporary sold
their 50% interests in the equity and operations of the Joint Venture to SFX
Entertainment, Inc. and Contemporary Acquisition Corporation, respectively.
F-97
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
SJS Entertainment Corporation
We have audited the accompanying combined balance sheets of SJS
Entertainment Corporation as of December 31, 1996 and 1997, and the related
combined statements of operations and retained earnings and cash flows for
the years then ended. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the financial position of SJS
Entertainment Corporation at December 31, 1996 and 1997 and the combined
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
March 18, 1998
F-98
<PAGE>
SJS ENTERTAINMENT CORPORATION
COMBINED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1996 1997
------------ -------------
<S> <C> <C>
ASSETS
Current assets:
Cash ............................................. $ 230,280 $ 330,315
Accounts receivable .............................. 2,257,110 2,954,730
Due from officers ................................ 616,177 --
Prepaid expenses ................................. 27,962 54,475
------------ -------------
Total current assets............................... 3,131,529 3,339,520
Fixed assets, at cost:
Furniture, fixtures and office equipment ........ 309,756 414,904
Production equipment ............................. 95,317 190,721
Leasehold improvements ........................... 61,228 61,228
------------ -------------
466,301 666,853
Accumulated depreciation and amortization ........ 187,546 314,940
------------ -------------
Net fixed assets .................................. 278,755 351,913
Other assets ...................................... 23,658 24,737
------------ -------------
Total assets ...................................... $3,433,942 $3,716,170
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Loans payable--bank .............................. $1,900,000 1,500,000
Accounts payable ................................. 694,055 955,876
Accrued expenses ................................. 857,423 399,614
Due to officers .................................. -- 1,294,291
------------ -------------
Total current liabilities.......................... 3,451,478 4,149,781
Stockholders' equity:
Common stock ..................................... 27,200 27,200
Retained earnings (deficit) ...................... 30,264 (385,811)
Treasury stock ................................... (75,000) (75,000)
------------ -------------
Total stockholders' equity (deficit) .............. 17,536 (433,611)
------------ -------------
Total liabilities and combined stockholders'
equity ........................................... $3,433,942 $3,716,170
============ =============
</TABLE>
See accompanying notes.
F-99
<PAGE>
SJS ENTERTAINMENT CORPORATION
COMBINED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1996 1997
------------- -------------
<S> <C> <C>
Net sales, including management fees from related
party
(Note 2) ............................................. $11,374,672 $14,218,435
Cost of sales ......................................... 4,039,320 4,320,654
------------- -------------
Gross profit........................................... 7,335,352 9,897,781
------------- -------------
Operating expenses:
Officers salaries and bonus .......................... 2,965,353 4,000,000
Employee payroll and taxes ........................... 2,211,372 3,087,185
Consulting fees ...................................... 272,233 290,693
Messengers and delivery expense ...................... 208,697 255,814
Telephone and utilities .............................. 341,649 468,878
Travel and Transportation expenses ................... 240,218 351,748
Advertising and promotion ............................ 149,907 382,640
Rent expense, net .................................... 182,012 261,834
Depreciation and amortization ........................ 84,001 127,394
Other, net ........................................... 648,128 1,002,727
------------- -------------
7,303,570 10,228,913
------------- -------------
Income (loss) from operations ......................... 31,782 (331,132)
Interest expense--net ................................. (3,229) (35,657)
Other income .......................................... -- 77,510
------------- -------------
Income before provision for income taxes .............. 28,553 (289,279)
Provision for income taxes ............................ 91,197 126,796
------------- -------------
Net loss .............................................. (62,644) (416,075)
Retained earnings at beginning of year ................ 92,908 30,264
------------- -------------
Retained earnings (deficit) at end of year ............ $ 30,264 $ (385,811)
============= =============
</TABLE>
See accompanying notes.
F-100
<PAGE>
SJS ENTERTAINMENT CORPORATION
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1996 1997
------------- -------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net loss ............................................. $ (62,644) $ (416,075)
Adjustments to reconcile net loss to net cash
provided
by (used in) operating activities:
Depreciation and amortization ...................... 84,001 127,394
Changes in assets and liabilities:
(Increase) decrease in accounts receivable ....... 241,679 (697,620)
(Increase) in prepaid expenses .................... (5,445) (26,513)
(Increase) Decrease in other assets ............... 4,737 (1,079)
Increase (decrease) in accounts payable .......... (130,667) 261,821
Increase (decrease) in accrued expenses .......... 636,011 (457,809)
Increase in due to affiliate ...................... 22,137 --
------------- -------------
Net cash provided by operating activities ............ 789,809 (1,209,881)
------------- -------------
CASH FLOW FROM INVESTING ACTIVITIES
Cash used to acquire fixed assets .................... (184,132) (200,552)
------------- -------------
CASH FLOW FROM FINANCING ACTIVITIES
Officers' loans, net ................................. (2,204,564) 1,910,468
Repayments of bank loan .............................. (275,760) (1,900,000)
Proceeds from new bank loans ......................... 1,900,000 1,500,000
Payments towards treasury stock financing agreement . (12,500) --
------------- -------------
Net cash provided by (used by) financing activities . (592,824) 1,510,468
------------- -------------
Net increase in cash ................................. 12,853 100,035
------------- -------------
Cash at beginning of year ............................ 217,427 230,280
------------- -------------
Cash at end of year .................................. $ 230,280 $ 330,315
============= =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid during period .......................... $ 9,003 $ 33,222
============= =============
Income taxes paid during period ...................... $ 180,636 $ 77,333
============= =============
</TABLE>
See accompanying notes.
F-101
<PAGE>
SJS ENTERTAINMENT CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements present the combined financial position and
results of operations of SJS Entertainment Corporation and its wholly-owned
subsidiary SJS Research Corporation, and Urban Entertainment Corp.
(collectively, the "Company") which is affiliated through common management
and ownership. All intercompany balances and transactions have been
eliminated in combination.
Nature of Business
The Company creates, produces and distributes music-related radio programs
and services which it barters or exchanges with radio broadcasters for
commercial air time, which is then sold to national network advertisers.
Through SJS Research, incorporated in September 1997, the Company provides
statistical information relating to the Entertainment Industry based upon
telephone surveys.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management use of estimates based
upon available information, which directly affect reported amounts. Actual
results could differ from those estimates.
Depreciation and Amortization
Depreciation of furniture, fixtures and equipment is computed using the
straight-line and declining balance methods, at rates adequate to allocate
the cost of the applicable asset over its expected useful life. Amortization
of leasehold improvements is computed using the straight-line method over the
shorter of the lease term or the expected useful life of the asset.
<TABLE>
<CAPTION>
<S> <C>
Estimated useful life ranges are as follows:
Furniture, fixtures and office equipment ...... 5-7 years
Production equipment ........................... 5 years
Leasehold improvements ......................... 5-10 years
</TABLE>
Concentration of Credit Risk
The Company maintains bank balances with Sterling National Bank in excess
of the federally insured limit of $100,000.
Reclassification
Certain 1996 amounts have been reclassified to conform to the 1997
presentation. Retained earnings at January 1, 1996 was adjusted to reflect
the underaccrual of $51,831 of state and local taxes and $115,000 of sales
commissions related to 1995.
2. RELATED PARTY TRANSACTIONS
Due from/to Officers
The Company maintains a running loan/exchange account with its officers in
order to satisfy the cash flow needs of operations. There is no interest
charged by either party on these temporary loans.
As of January 1, 1996, the Company owed its officers $1,589,146. During
1996, the officers loaned the Company an additional $354,780, while the
Company paid to its officers a total of $2,560,103.
As of January 1, 1997, the officers owed the companies $616,177. During
the year, the officers paid back this amount, and loaned the Company an
additional $1,294,291.
F-102
<PAGE>
SJS ENTERTAINMENT CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
In addition, the Company pays its officers in total $2,000 per month
towards the business use of their home. These amounts are charged to rent
expense and totaled $24,000 for each of the years ended December 31, 1996 and
1997.
Salaries and bonuses paid to officers is determined annually by the
Company's board of directors.
Management Services
The Company managed the operations of a related company which is 40% owned
by the officers of the Company. In exchange for the services provided, the
Company received management fees of $40,000 per month. In addition, the
Company had subleased a portion of its premises to this related company and
is also reimbursed for other direct operating expenses (telephone, utilities,
cleaning, bookkeeping and administrative) and indirect overhead costs. This
arrangement terminated at the end of April 1997.
During the years ended December 31, 1996 and 1997, the Company received
the following amounts from this related company:
<TABLE>
<CAPTION>
1996 1997
---------- ----------
<S> <C> <C>
Management fees ................. $480,000 $160,000
Rental income ................... 69,780 32,490
Direct expense reimbursement ... 25,519 13,347
Indirect overhead reimbursement 108,000 27,914
---------- ----------
$683,299 $233,751
========== ==========
</TABLE>
Management fees, rental income, the direct expense reimbursement and
indirect overhead reimbursement are reflected as an adjustment to the related
income or expense account in the accompanying statement of operations.
The Company received $77,510 from an unrelated third party as
consideration for the termination of the management services agreement and
sublease agreement, which was recorded as other income in 1997.
3. LOANS PAYABLE--BANK
At December 31, 1997, the Company owed to Sterling National Bank a term
loan of $1,500,000, which was secured by all corporate receivables and is
personally guaranteed by the officers of the Company. Interest charged to the
Company was at a rate of prime plus 1%. This amount was fully repaid on
February 28, 1998.
At December 31, 1996, the Company owed to Sterling National Bank a term
loan of $1,600,000 which was secured by personal certificates of deposit
totaling $1,600,000 and a $300,000 line-of-credit which was secured by all
corporate assets and guaranteed by the officers/shareholders. Interest
charged to the Company was at the rate of prime plus 1%.
On February 20, 1997 the certificates matured, at which time they were
transferred into the Company as an officers' loan repayment and used to
pay-off the bank loan. In 1997, the Company also repaid the $300,000
line-of-credit from Sterling National Bank.
4. COMMITMENTS AND CONTINGENCIES
Automobile Lease
The Company leases automobiles with monthly payments of $1,834 due through
February, 1999.
F-103
<PAGE>
SJS ENTERTAINMENT CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
Office and Audio Production Studio Leases
The Company maintains several offices for sales and administration
throughout the United States, as well as two production studios. The main
premises are located in New York City and is subject to an operating lease
expiring March 31, 2006. Other premises are subject to operating leases with
various terms ranging from month-to-month, to January 31, 2001.
Future minimum commitments for automobile, office and studio leases,
including two new leases entered into during 1997, are as follows:
<TABLE>
<CAPTION>
<S> <C>
1998 ......... $ 311,200
1999 ......... 300,000
2000 ......... 267,000
2001 ......... 240,100
2002 ......... 246,200
Thereafter .. 852,500
-----------
$2,217,000
===========
</TABLE>
Rent expense for offices and production studios, net of the subtenant
lease income (see note 2 below), totaled $261,834 for the year ended December
31, 1997 compared to $182,012 for the year ended December 31, 1996, while the
automobile lease cost was approximately $22,000 for both 1996 and 1997.
Consulting Agreements
Urban Entertainment Corp. is a party to consulting agreements with two
individuals, requiring monthly payments totaling $9,583 to be paid through
December 31, 1999.
5. SHAREHOLDERS' EQUITY
Shareholders' equity consists of the following:
<TABLE>
<CAPTION>
PAR ISSUED AND
COMPANY CLASS VALUE AUTHORIZED OUTSTANDING VALUE
- ----------------------------- --------------- ------- ------------ ------------- ---------
<S> <C> <C> <C> <C> <C>
SJS Entertainment
Corporation.................. -- None 1,000 1,000 $27,000
Urban Entertainment Corp. .... A (voting) None 840 840 100
B (nonvoting) None 160 160 100
---------
$27,200
=========
</TABLE>
6. INCOME TAXES
Urban Entertainment Corporation has elected "S" Corporation status for
both federal and state tax purposes. Accordingly, all items of income, loss,
deduction or credit are reported by the stockholders on their respective
personal income tax returns. Therefore, no federal or state tax has been
provided.
SJS Entertainment Corporation is subject to corporate taxes at the federal
level and eight state and local jurisdictions.
The provision for income taxes for the years ended December 31, 1997 and
1996 is summarized as follows:
<TABLE>
<CAPTION>
1996 1997
--------- ----------
<S> <C> <C>
Current:
Federal..... $ 9,647 $ 28,266
State....... 81,550 98,530
Deferred: .. -- --
--------- ----------
Total....... $91,197 $126,796
========= ==========
</TABLE>
F-104
<PAGE>
SJS ENTERTAINMENT CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
Deferred income taxes reflect the tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. As of December 31,
1997, the Company had deferred tax assets of approximately $124,000 relating
to start-up costs which is offset in full by a valuation allowance.
The provision for income taxes differed from the U.S. statutory rate
principally due to nondeductible meals and entertainment expense, state and
local taxes and in 1997 only, the valuation allowance.
7. EMPLOYEE RETIREMENT PLAN
The Company maintains a retirement plan for their employees under Section
401(k) of the Internal Revenue Code. All employees are eligible to
participate once they obtain the minimum age requirement of 21 years, and
have satisfied the service requirement of six months with the Company.
Participants may make voluntary contributions into the plan of up to 15% of
their compensation. The Company contributes to each participant's account an
amount equal to 25% of the participant's voluntary contribution, or $2,000,
whichever is less.
During the years ended December 31, 1996 and 1997, employer contributions
totaled $16,758 and $18,747 respectively.
8. LEGAL MATTERS
The Company has been named in various lawsuits arising in the normal
course of business. It is not possible at this time to assess the probability
of any liability against the Company as a result of these lawsuits.
Management has stated that all cases will be vigorously defended.
9. SUBSEQUENT EVENTS
On February 27, 1998, the Company was acquired by SFX Entertainment Inc.
F-105
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
The Album Network, Inc.
We have audited the accompanying combined balance sheets of The Album
Network, Inc. and Affiliated Companies as of September 30, 1997 and 1996, and
the related combined statements of operations and stockholders' deficit and
cash flows for the years then ended. These financial statements are the
responsibility of management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of The Album
Network, Inc. and Affiliated Companies at September 30, 1997 and 1996, and
the combined results of their operations and their cash flows for the years
then ended, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
November 20, 1997
New York, New York
F-106
<PAGE>
THE ALBUM NETWORK, INC. AND AFFILIATED COMPANIES
COMBINED BALANCE SHEET
<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------------
1996 1997
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents .......................................... $ 160,453 $ 272,423
Accounts receivable, less allowance for doubtful
accounts of $153,728 in 1997and $95,450 in 1996 ................... 2,148,159 2,229,237
Officers' loans receivable ......................................... 423,447 390,794
Prepaid expenses and other current assets .......................... 125,558 234,914
------------- -------------
Total current assets ................................................ 2,857,617 3,127,368
Property, plant and equipment, at cost, less accumulated
depreciation of $1,056,689 in 1997 and $ 914,513 in 1996 .......... 278,898 303,614
Deferred software costs, less accumulated amortization of $106,639
in 1997 and $45,768 in 1996 ........................................ 172,302 262,061
Other noncurrent assets ............................................. 39,477 37,033
------------- -------------
Total assets ........................................................ $ 3,348,294 $ 3,730,076
============= =============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accrued officers' bonuses .......................................... $ 1,200,000 $ 1,251,000
Accounts payable and other accrued expenses ........................ 1,081,469 1,208,424
Officers' loans payable ............................................ 650,000 489,085
Unearned subscription income ....................................... 530,255 406,529
Taxes payable and other current liabilities ........................ 339,551 224,011
Current portion of long-term debt .................................. 636,723 506,228
------------- -------------
Total current liabilities ........................................... 4,437,998 4,085,277
Long-term debt ...................................................... 1,294,133 1,051,881
Deferred income taxes ............................................... 279,434 114,178
Combined stockholders' deficit ...................................... (2,663,271) (1,521,260)
------------- -------------
Total liabilities and stockholders' deficit ......................... $ 3,348,294 $ 3,730,076
============= =============
</TABLE>
See accompanying notes.
F-107
<PAGE>
THE ALBUM NETWORK, INC. AND AFFILIATED COMPANIES
COMBINED BALANCE SHEET
DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents .......................................... $ 169,498
Accounts receivable, less allowance for doubtful
accounts of $157,682 .............................................. 2,268,205
Officers' loans receivable ......................................... 406,421
Prepaid expenses and other current assets .......................... 133,293
-----------
Total current assets ................................................ 2,977,417
Property, plant and equipment, at cost, less accumulated
depreciation of $1,098,747 ......................................... 307,096
Deferred software costs, less accumulated amortization of $127,116 . 282,453
Other noncurrent assets ............................................. 9,525
-----------
Total assets ........................................................ $ 3,576,491
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and other accrued expenses ........................ $ 1,346,095
Officers' loans payable ............................................ 717,336
Unearned subscription income ....................................... 558,358
Taxes payable and other current liabilities ........................ 749,108
Current portion of long-term debt .................................. 635,464
-----------
Total current liabilities ........................................... 4,006,361
Long-term debt ...................................................... 939,200
Deferred income taxes ............................................... 53,575
Combined stockholders' deficit ...................................... (1,422,645)
-----------
Total liabilities and stockholders' deficit ......................... $ 3,576,491
===========
</TABLE>
See accompanying notes.
F-108
<PAGE>
THE ALBUM NETWORK, INC. AND AFFILIATED COMPANIES
COMBINED STATEMENTS OF OPERATIONS AND
STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------
1996 1997
-------------- -------------
<S> <C> <C>
OPERATING REVENUES
Advertising revenue ................................ $ 7,040,465 $ 7,619,751
Research services revenue .......................... 2,453,026 2,441,703
Direct mail & subscription revenue ................. 1,791,887 1,837,248
Broadcast revenue .................................. 2,085,714 2,235,788
Consulting revenue.................................. 720,000 470,000
Other revenue ...................................... 675,790 1,152,448
-------------- -------------
14,766,882 15,756,938
Direct costs of revenue ............................ 4,408,997 4,107,328
-------------- -------------
10,357,885 11,649,610
OPERATING EXPENSES
Officers' salary expense ........................... 3,384,870 3,662,427
Other salary expense ............................... 3,956,910 3,949,715
Depreciation and amortization ...................... 183,976 203,047
General and administrative expenses ................ 2,524,704 2,483,197
-------------- -------------
10,050,460 10,298,386
-------------- -------------
Income from operations ............................. 307,425 1,351,224
OTHER INCOME (EXPENSE)
Interest income--officers' loans ................... 35,000 41,600
Interest income--third party ....................... 6,961 1,295
Interest expense--officers' loans .................. (35,000) (55,940)
Interest expense--third party ...................... (256,164) (175,490)
-------------- -------------
Income before income taxes ......................... 58,222 1,162,689
INCOME TAXES
Provision for income taxes ......................... 211,832 20,678
-------------- -------------
Net income (loss) .................................. (153,610) 1,142,011
Combined stockholders' deficit at beginning of year (2,509,661) (2,663,271)
-------------- -------------
Combined stockholders' deficit at end of year ..... $(2,663,271) $(1,521,260)
============== =============
</TABLE>
See accompanying notes.
F-109
<PAGE>
THE ALBUM NETWORK, INC. AND AFFILIATED COMPANIES
COMBINED STATEMENT OF OPERATIONS AND
STOCKHOLDERS' DEFICIT
THREE MONTHS ENDED DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
OPERATING REVENUES
Advertising revenue ................................. $ 1,605,422
Research services revenue ........................... 604,961
Direct mail & subscription revenue .................. 521,851
Broadcast revenue ................................... 825,686
Other revenue ....................................... 97,437
3,655,357
Direct costs of revenue ............................. 1,056,785
-----------
2,598,572
OPERATING EXPENSES
Officers' salary expense ............................ 209,424
Other salary expense ................................ 1,090,662
Depreciation and amortization ....................... 62,535
General and administrative expenses ................. 1,034,159
2,396,780
-----------
Income from operations .............................. 201,792
OTHER INCOME (EXPENSE)
Interest income--officers' loans .................... 4,171
Interest income--third party ........................ 169
Interest expense--officers' loans ................... (15,596)
Interest expense--third party ....................... (26,921)
-----------
Income before income taxes .......................... 163,615
INCOME TAXES
Provision for income taxes .......................... 65,000
-----------
Net income (loss) ................................... 98,615
Combined stockholders' deficit at beginning of
period ............................................. (1,521,260)
-----------
Combined stockholders' deficit at end of period .... $(1,422,645)
===========
</TABLE>
See accompanying notes.
F-110
<PAGE>
THE ALBUM NETWORK, INC. AND AFFILIATED COMPANIES
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
--------------------------
1996 1997
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income ......................................................... $(153,610) $1,142,011
Adjustment to reconcile net income to net cash (used in) provided
by operating activities:
Depreciation and amortization .................................... 183,976 203,047
Provision for doubtful accounts .................................. 13,584 58,278
Changes in operating assets and liabilities:
Accounts receivable ............................................. (246,873) (139,356)
Prepaid expenses and other current assets ....................... 154,120 (109,356)
Other non current assets ........................................ (3,378) 2,444
Accounts payable and accrued expenses ........................... 69,816 126,955
Unearned subscription income .................................... 101,623 (123,726)
Accrued officers' bonus ......................................... 639,000 51,000
Deferred income taxes ........................................... 39,268 (165,256)
Taxes payable and other current liabilities ..................... 143,423 (115,540)
------------ ------------
Net cash provided by operating activities .......................... 940,949 930,501
------------ ------------
INVESTING ACTIVITIES
Purchase of property and equipment ................................. (65,731) (166,892)
Deferred software costs ............................................ (97,463) (150,630)
------------ ------------
Net cash used in investing activities .............................. (163,194) (317,522)
------------ ------------
FINANCING ACTIVITIES
Payments on long term debt ......................................... (860,236) (527,747)
Proceeds from additional debt borrowings ........................... 52,500 155,000
Proceeds from (repayments of) officers' loans, net ................. 61,355 (128,262)
------------ ------------
Net cash used in financing activities .............................. (746,381) (501,009)
------------ ------------
Net increase in cash and cash equivalents .......................... 31,374 111,970
Cash and cash equivalents at beginning of year ..................... 129,079 160,453
------------ ------------
Cash and cash equivalents at end of year ........................... $ 160,453 $ 272,423
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest ............................................. $ 304,726 $ 190,168
============ ============
Cash paid for income taxes ......................................... $ 21,375 $ 26,316
============ ============
</TABLE>
See accompanying notes.
F-111
<PAGE>
THE ALBUM NETWORK, INC. AND AFFILIATED COMPANIES
COMBINED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
OPERATING ACTIVITIES
Net income ......................................................... $ 98,615
Adjustment to reconcile net income to net cash (used in) provided
by operating activities:
Depreciation and amortization .................................... 62,535
Provision for doubtful accounts .................................. 3,954
Changes in operating assets and liabilities:
Accounts receivable ............................................. (42,922)
Prepaid expenses and other current assets ....................... 101,621
Other non current assets ........................................ 27,508
Accounts payable and accrued expenses ........................... 137,671
Unearned subscription income .................................... 151,829
Accrued officers' bonus ......................................... (1,251,000)
Deferred income taxes ........................................... (60,603)
Taxes payable and other current liabilities ..................... 525,097
-----------
Net cash used in operating activities .............................. (245,695)
INVESTING ACTIVITIES
Purchase of property and equipment ................................. (45,540)
Deferred software costs ............................................ (40,869)
-----------
Net cash used in investing activities .............................. (86,409)
FINANCING ACTIVITIES
Payments on long term debt ......................................... (112,681)
Proceeds from additional debt borrowings ........................... 129,236
Proceeds from officers' loans, net ................................. 212,624
-----------
Net cash provided by financing activities .......................... 229,179
-----------
Net decrease in cash and cash equivalents .......................... (102,925)
Cash and cash equivalents at beginning of year ..................... 272,423
-----------
Cash and cash equivalents at end of year ........................... $ 169,498
===========
</TABLE>
See accompanying notes.
F-112
<PAGE>
THE ALBUM NETWORK, INC. AND AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Principles of Combination
The accompanying combined financial statements include the accounts of The
Album Network, Inc., The Network 40, Inc., The Urban Network, Inc. and
In-the-Studio (collectively, the "Companies"). Intercompany transactions and
balances among the Companies have been eliminated in combination.
On August 27, 1997, the board of directors and shareholders of the
Companies approved a plan of agreement and merger which provided that The
Urban Network, Inc. merge into The Album Network, Inc. (the "Company")
effective September 24, 1997. The Companies accounted for the transaction as
a merger of companies under common control.
The Companies publish six music trade magazines, produce rock, urban and
top 40 programming specials and manufacture compact disc samplers. They also
serve as product marketing advisors to contemporary music talent and their
managers in providing creative content and innovative marketing campaigns. In
addition, the Companies provide research services for radio station program
directors and record label executives. The Companies publishes five print
periodicals for rock and top 40 music broadcasters, retailers and music
industry executives. The weekly publications are the "Album Network" and the
"Network 40". The monthly publications are the "Virtually Alternative" and
"Totally Adult" and the quarterly publication is titled "AggroActive."
Additionally, "The Urban Network" trade magazine is published each week.
Revenue Recognition
The Companies' magazines generate revenue from advertising sales,
complemented by subscription sales and incremental direct mail revenue.
Unearned subscription income represents revenues on subscriptions for
which publications have not been delivered to customers as of the balance
sheet date. Unearned subscription income at September 30, 1996 also includes
unearned income on certain advertising and direct mail packages.
Revenue from research services is recognized straight-line over the
license term or upon the sale of computer software developed for licensees
and other customers. Advertising and broadcast revenues are recognized when
advertisements are run or aired.
Furniture and Equipment
Furniture and equipment are valued at cost less accumulated depreciation.
Depreciation is provided on the straight-line and declining balance methods
over the estimated useful lives of the assets, as follows:
<TABLE>
<CAPTION>
<S> <C>
Computer hardware ...........5 years
Software .................... 5 years
Furniture and equipment .... 5-7 years
Leasehold improvements ..... 5 years
</TABLE>
Deferred Software Costs
Costs incurred to produce software masters and subsequent enhancements to
such software are capitalized and amortized over the remaining economic life
of the master (generally, five years). Costs of maintenance and customer
support are charged to expense when incurred.
Cash and Cash Equivalents
The Companies consider all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
Income Taxes
Each of the affiliated Companies file a separate tax return. The Album
Network, Inc. and the Urban Network, Inc. are "C Corporations." The Network
40, Inc. has elected to be taxed as an "S Corporation". The "S Corporation"
election is effective for both federal and state tax purposes. Accordingly
all items of income, loss, deduction or credit are reported by the
shareholders on their respective personal income tax returns. The corporate
tax rate for S Corporations in California is one and one-half percent (1.5%).
F-113
<PAGE>
THE ALBUM NETWORK, INC. AND AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
Risks and Uncertainties
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Concentration of Credit Risk
The Company maintains bank balances with City National Bank in excess of
the federally insured limit of $100,000.
Reclassification
Certain amounts in the financial statements have been reclassified to
conform with the current presentations.
Interim Financial Information
Financial information as of December 31, 1997 and for the three months
ended December 31, 1997 is unaudited. In the opinion of management, all
adjustments necessary for a fair presentation of the results for such period
have been included, all adjustments are of a normal and recurring nature.
Interim results are not necessarily indicative of results for a full year.
2. RELATED PARTY TRANSACTIONS
Officers' Loans
The Companies have several loan agreements outstanding with its officers
in order to satisfy the cash flow needs of operations. The interest rates on
the loans to and from the officers range from approximately 10% to 12%.
At October 1, 1995, the officers owed the Companies $471,918 and the
Companies owed the officers $637,116. During the year ended September 30,
1996, the officers repaid $48,471 and loaned the Companies an additional
$12,884.
At October 1, 1996, the officers owed the Companies $423,447 and the
Companies owed the officers $650,000. During the year ended September 30,
1997, the officers repaid $32,653 to the Companies and the Companies repaid
$160,915 to the officers.
3. LONG-TERM DEBT
A summary of long-term debt as of September 30, 1997 and 1996 is as
follows:
<TABLE>
<CAPTION>
SEPTEMBER 30
-------------------------
1996 1997
------------ -----------
<S> <C> <C>
Note payable to City National Bank, collateralized by certain
equipment and personally guaranteed by the stockholders; payable
in monthly installments of $2,917 plus interest at 10.5%; due May
1999 ............................................................. $ 96,994 $ 62,740
Note payable to City National Bank, personally guaranteed by the
stockholders; payable in monthly installments of $41,233 plus
interest at 8.75% through January 22, 1997 and at 8.25%
thereafter; due December 2000.(A) ................................ 1,821,862 1,415,369
Other.............................................................. 12,000 80,000
------------ -----------
1,930,856 1,558,109
Less current portion .............................................. 636,723 506,228
------------ -----------
Long-term debt .................................................... $1,294,133 $1,051,881
============ ===========
</TABLE>
(A) In September 1995 The Album Network, Inc., The Network 40, Inc. and The
Urban Network, Inc. entered into a loan agreement with City National Bank
for $2,330,000 in connection with a redemption of common stock. Interest
was set at 8.75% per year and principal and interest were payable in
monthly installments of $57,846 through September 1999. In January 1997,
the loan agreement was revised. Interest was reset at 8.25% and monthly
payments of $41,233 were extended through December 2000. The principal
balance at the date of revision was $1,687,560.
F-114
<PAGE>
THE ALBUM NETWORK, INC. AND AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
4. COMMON STOCK
The Companies' stock and tax status at September 30, 1997 are as follows:
<TABLE>
<CAPTION>
SHARES
ISSUED
TAX SHARES AND
STATUS AUTHORIZED OUTSTANDING
------------- ------------ -------------
<S> <C> <C> <C>
The Album Network, Inc. C-Corp. 1,000,000 220
The Network 40, Inc. ... S-Corp. 100,000 825
The Urban Network, Inc. C-Corp. 100,000 825
In-the-Studio ........... Partnership n/a n/a
</TABLE>
5. COMMITMENTS AND CONTINGENCIES
Leases
The Companies lease an office facility under noncancellable leases which
expire in February 1998.
Total rent expense for the years ended September 30, 1997 and 1996 under
operating leases was $262,812 and $256,026, respectively.
Future minimum lease payments under noncancellable operating leases as of
September 30, 1997 total $121,155, all of which is payable in 1998.
Other Matters
As of September 30, 1997, approximately $80,000 was drawn on lines of
credit with City National Bank. There were no amounts drawn as of September
30, 1996.
6. INCOME TAXES
The Album Network has received a Statutory Notice of Deficiency from the
Internal Revenue Service ("IRS") for the years ended September 30, 1994, 1995
and 1996 asserting tax deficiencies resulting primarily from an IRS position
that compensation paid to officers was unreasonable and excessive. In total,
approximately $3.5 million of adjustments increasing taxable income have been
proposed. The total additional tax, penalties and interest through September
30, 1997 related to these adjustments would be approximately $1.8 million.
The company has analyzed these matters with tax counsel and believes it has
meritorious defenses to the deficiencies asserted by the IRS. The company has
filed a petition with the United States Tax Court contesting the asserted
liability. While the company believes that a successful defense of this case
may be made, in light of the economic burdens of the defense, the company may
entertain a settlement for up to $291,000. Accordingly, the company has
recorded reserves in such amount, including $23,000, $115,000 and $153,000
for the years ended September 30, 1997, 1996 and prior periods, respectively.
F-115
<PAGE>
THE ALBUM NETWORK, INC. AND AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
For the years ended September 30, 1996 and 1997 the provision for income
taxes is as follows:
<TABLE>
<CAPTION>
1996 1997
---------- -----------
<S> <C> <C>
Current:
Federal .. $129,911 $ 143,056
State ..... 17,710 42,878
---------- -----------
Total .... 147,621 185,934
---------- -----------
Deferred:
Federal .. 49,764 (150,383)
State ..... 14,447 (14,873)
---------- -----------
Total .... 64,211 (165,256)
---------- -----------
Total ...... $211,832 $ 20,678
========== ===========
</TABLE>
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The significant
components of the Companies' deferred tax assets and liabilities as of
September 30, 1996 and 1997 are as follows:
<TABLE>
<CAPTION>
1996 1997
---------- ---------
<S> <C> <C>
Deferred tax assets:
Contributions carryforward .... $ 8,194 $ 10,078
Deferred tax liabilities:
Fixed assets ................... 12,280 11,830
Intangible assets .............. 275,346 112,424
---------- ---------
Total deferred tax liabilities 287,628 124,254
---------- ---------
Net deferred tax liabilities ... $279,434 $114,176
========== =========
</TABLE>
7. EMPLOYEE RETIREMENT PLAN
In January 1997, the Companies began a retirement plan for their employees
under Section 401(k) of the Internal Revenue Code. All employees are eligible
to participate once they obtain the minimum age requirement of 21 years, and
have satisfied the service requirement of one year with the Companies.
Participant contributions are subject to the limitations of Section 402 (g)
of the Internal Revenue Code. The Companies contribute monthly to
participating employees accounts at the rate of 10% of the participating
employees contributions. During the year ended September 30, 1997, the
Companies contributions totaled approximately $14,000.
8. SUBSEQUENT EVENTS (UNAUDITED)
On February 27, 1998, the Company was acquired by SFX Entertainment Inc.
F-116
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
BG Presents, Inc.
We have audited the accompanying consolidated balance sheets of BG
Presents, Inc. and Subsidiaries as of January 31, 1997 and 1998, and the
related consolidated statements of income, cash flows and stockholders'
equity for each of the three years in the period ended January 31, 1998.
These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of BG Presents,
Inc. and subsidiaries at January 31, 1997 and 1998, and the consolidated
results of their operations and their cash flows for each of the three years
in the period ended January 31, 1998, in conformity with generally accepted
accounting principles.
Ernst & Young LLP
New York, New York
March 20, 1998
F-117
<PAGE>
BG PRESENTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JANUARY 31
----------------------------
1997 1998
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents .............................. $11,819,831 $ 5,380,984
Accounts receivable--trade ............................. 3,164,543 5,460,915
Accounts receivable--related parties ................... 1,347,150 776,174
Investments ............................................ 370,000 --
Inventories ............................................ 236,078 227,766
Prepaid assets ......................................... 450,883 3,001,450
Income tax receivable .................................. 418,528 --
Deferred income taxes .................................. 94,000 --
Other current assets.................................... -- 118,455
------------- -------------
Total current assets .................................... 17,901,013 14,965,744
Property and equipment, net ............................. 9,661,910 8,904,509
Goodwill, net of accumulated amortization of $238,400
and $357,600 at January 31, 1997 and 1998,
respectively............................................ 1,549,600 1,430,400
Other assets (Note 6).................................... 167 4,100,011
------------- -------------
Total assets ............................................ $29,112,690 $29,400,664
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable--current portion ......................... $ 722,966 $ 879,040
Lease commitment--current portion ...................... 35,676 --
Accounts payable ....................................... 3,229,054 1,816,959
Deferred revenue ....................................... 1,362,533 1,480,145
Accrued liabilities and other current liabilities ...... 3,721,749 3,753,613
------------- -------------
Total current liabilities ............................... 9,071,978 7,929,757
Lease commitment, less current portion .................. 6,704,719 --
Notes payable, less current portion ..................... 5,233,709 11,134,834
Deferred income taxes ................................... 2,617,000 2,617,000
Stockholders' equity:
Common stock, no par value; 10,000,000 shares
authorized; 1,000,000 shares issued and outstanding in
1997 and 1998.......................................... 1,198,947 1,198,947
Retained earnings....................................... 4,286,337 6,520,126
------------- -------------
Total stockholders' equity............................... 5,485,284 7,719,073
------------- -------------
Total liabilities and stockholders' equity............... $29,112,690 $29,400,664
============= =============
</TABLE>
See accompanying notes.
F-118
<PAGE>
BG PRESENTS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31
-------------------------------------------
1996 1997 1998
------------- ------------- -------------
<S> <C> <C> <C>
REVENUES
Concert revenues........................ $62,996,606 $74,981,534 $ 75,898,464
Contract management .................... 7,844,248 10,255,060 23,632,596
Concessions/merchandise ................ 5,536,287 7,094,593 6,021,845
------------- ------------- -------------
76,377,141 92,331,187 105,552,905
Cost of revenues ....................... 54,383,763 69,916,840 81,092,377
------------- ------------- -------------
21,993,378 22,414,347 24,460,528
EXPENSES
General and administrative ............. 17,614,296 17,602,501 18,866,259
Depreciation and amortization .......... 1,441,439 1,474,414 1,026,684
------------- ------------- -------------
Income from operations ................. 2,937,643 3,337,432 4,567,585
OTHER INCOME (EXPENSE)
Interest expense ....................... (1,324,219) (1,257,758) (916,723)
Interest income ........................ 307,756 295,057 294,888
Miscellaneous .......................... 535,191 289,222 (24,300)
------------- ------------- -------------
Income before provision for income
taxes ................................. 2,456,371 2,663,953 3,921,450
Provision for income taxes ............. 1,160,718 1,272,190 1,687,661
------------- ------------- -------------
Net income.............................. $ 1,295,653 $ 1,391,763 $ 2,233,789
============= ============= =============
</TABLE>
See accompanying notes.
F-119
<PAGE>
BG PRESENTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31
-------------------------------------------
1996 1997 1998
------------- ------------- -------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income........................................... $ 1,295,653 $ 1,391,763 $ 2,233,789
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of property and
equipment.......................................... 1,322,239 1,355,214 907,484
Amortization of goodwill............................ 119,200 119,200 119,200
Loss on sale of property and equipment ............. 13,603 -- --
Changes in operating assets and liabilities:
Accounts receivable--trade ........................ 524,566 (1,356,263) (2,296,372)
Accounts receivable--related parties .............. (496,971) (821) 570,976
Inventories ....................................... (228,294) (7,784) 8,312
Prepaid assets and other .......................... (322,524) 478,391 (2,550,567)
Income tax receivable ............................. (50,888) (328,390) 300,073
Accounts payable and accrued expenses ............. (491,982) 3,128,476 (1,380,231)
Deferred income taxes ............................. 1,139,000 45,000 94,000
Deferred revenue .................................. (67,859) 379,748 117,612
Other ............................................. 288,367 160 74,347
------------- ------------- -------------
Net cash provided by (used in) operating activities 3,044,110 5,204,694 (1,801,377)
INVESTING ACTIVITIES
Purchase of SAP limited partnership interest ....... (4,250,000) -- --
Proceeds from sale of equipment ..................... 13,150 -- --
Capital expenditures, including White River
Amphitheatre........................................ (469,447) (367,678) (4,247,528)
Other ............................................... (644,496) (247,000) 293,254
------------- ------------- -------------
Net cash used in investing activities ............... (5,350,793) (614,678) (3,954,274)
FINANCING ACTIVITIES
Payments of notes payable ........................... (444,985) (775,756) --
Borrowings on notes payable.......................... -- 1,000,000 6,057,199
Payments of lease commitments ....................... (395,330) (405,275) (6,740,395)
Retirement of stock ................................. -- (21,053) --
------------- ------------- -------------
Net cash used in financing activities ............... (840,315) (202,084) (683,196)
Net increase (decrease) in cash and cash equivalents (3,146,998) 4,387,932 (6,438,847)
Cash and cash equivalents at beginning of year ..... 10,578,897 7,431,899 11,819,831
------------- ------------- -------------
Cash and cash equivalents at end of year............. $ 7,431,899 $11,819,831 $ 5,380,984
============= ============= =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest............................... $ 1,324,219 $ 1,257,664 $ 1,092,356
Cash paid for income taxes .......................... 888,738 1,280,000 1,325,000
</TABLE>
See accompanying notes.
F-120
<PAGE>
BG PRESENTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED JANUARY 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
<S> <C>
Balance--January 31, 1995 ...................... $2,818,921
Net income for the year ended January 31, 1996 1,295,653
------------
Balance--January 31, 1996 ...................... 4,114,574
Net income for the year ended January 31, 1997 1,391,763
Repurchase and retirement of stock ............. (21,053)
------------
Balance--January 31, 1997 ...................... 5,485,284
Net income for the year ended January 31, 1998 2,233,789
------------
Balance--January 31, 1998 ...................... $7,719,073
============
</TABLE>
See accompanying notes.
F-121
<PAGE>
BG PRESENTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 1998
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Business and Principles of Consolidation
BG Presents, Inc. ("BGP" or the "Company") is a holding company for
various operating subsidiaries which principally promote and manage musical
and special events in the San Francisco Bay Area. In addition, the Company
owns the Shoreline Amphitheatre in Mountain View, California. Bill Graham
Enterprises, Inc. ("BGE"), Bill Graham Presents, Inc. ("BGPI"), Bill Graham
Management, Inc. ("BGM"), AKG, Inc. ("AKG"), Shoreline Amphitheatre, Ltd.
("SAL"), Fillmore Fingers, Inc. ("FF"), and Shoreline Amphitheatre Partners
("SAP" and, collectively, the "Companies") are wholly-owned subsidiaries of
the Company. The accompanying consolidated financial statements include the
accounts of the Company and all of its wholly-owned subsidiaries.
Intercompany transactions and balances have been eliminated in consolidation.
BGE and BGPI earn promotion income in two ways: either a fixed fee for
organizing and promoting an event, or an arrangement that entitles them to a
profit percentage based on a predetermined formula. In addition, the
Companies earn revenue from merchandise and concessions sold during events
which they promote. BGM manages the careers of various artists and records a
percentage of the artists' gross sales from publishing rights, record sales,
and tours as contract management revenue.
AKG operates the Fillmore, Warfield, and Punchline theatres located in San
Francisco, which generate revenue from food and beverage sales, sponsorships,
and ticket sales. Bill Graham Special Events, a division of AKG, records
management/contract fees from organizing corporate and other parties at
various venues in the San Francisco Bay Area. FF provides table service (food
and beverage) for two theatres located in Los Angeles owned by third parties.
Revenue Recognition
Revenue from talent management and the sales of tickets is recognized when
earned. Cash received from the sale of tickets for events not yet performed
is deferred. Revenue from the direct sale of compact discs is recognized upon
the date of sale. The Company's revenue included $305,017, $14,562,000 and
$13,483,683 during the fiscal years ended January 31, 1996, 1997 and 1998,
respectively, from various gymnastics tours, ice skating tours and television
specials.
Cash and Cash Equivalents
The Company considers all investments purchased with an original maturity
date of three months or less to be cash equivalents. At January 31, 1996,
1997 and 1998, the Companies had cash balances in excess of the federally
insured limits of $100,000 per institution.
Use of Estimates
Generally accepted accounting principles require management to make
assumptions in estimates that affect the amount reported in the financial
statements for assets, liabilities, revenues, and expenses. In addition,
assumptions and estimates are used to determine disclosure for contingencies,
commitments, and other matters discussed in the notes to the financial
statements. Actual results could differ from those estimates.
Accounts Receivable
The Company's accounts receivable are principally due from ticket service
and merchandising companies in the San Francisco Bay Area. In addition,
related party receivables include amounts due from owners of the Company and
from affiliated companies. Management believes that all accounts receivable
as of January 31, 1996, 1997 and 1998 were fully collectible; therefore, no
allowance for doubtful accounts was recorded.
F-122
<PAGE>
BG PRESENTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
(CONTINUED)
Property and Equipment
Property and equipment are recorded at cost and depreciated over their
estimated useful lives, which range from 3 to 40 years. Leasehold
improvements are amortized on the straight-line basis over the shorter of the
lease term or estimated useful lives of the assets. Maintenance and repairs
are charged to expense as incurred.
Goodwill
The Company amortizes goodwill over a 15 year period.
Income Taxes
The Companies account for income taxes under the liability method, whereby
deferred tax assets and liabilities are determined based on differences
between financial reporting and tax bases of assets and liabilities and are
measured using enacted tax rates and laws that will be in effect when the
differences are expected to reverse.
Inventories
Inventories, which consist principally of compact discs and beverage
items, are stated at first-in, first-out (FIFO) cost, which is not in excess
of market.
Advertising and Promotion Costs
The Company expenses all advertising and promotion costs as incurred,
except in instances where management believes these costs generate a direct
response from customers. Advertising expenses were $3,408,322, $4,319,291 and
$4,519,049 for the fiscal years ended January 31, 1996, 1997 and 1998,
respectively.
2. INCOME TAXES
The provision for income taxes for the fiscal years ended January 31, 1997
and 1998 is summarized as follows:
<TABLE>
<CAPTION>
1997 1998
------------ ------------
<S> <C> <C>
Current:
Federal .. $ 984,500 $1,304,837
State...... 285,800 378,824
------------ ------------
1,270,300 1,683,661
Deferred:
Federal .. 1,500 3,100
State ..... 400 900
------------ ------------
1,900 4,000
------------ ------------
$1,272,200 $1,687,661
============ ============
</TABLE>
Deferred income taxes reflect the tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The Company's net
deferred tax liabilities as of January 31, 1997 and 1998 are primarily the
result of the difference between the book basis of depreciable assets and the
related tax basis.
The difference between the tax provision at Federal statutory rates and
the effective rate is due to state taxes, amortization of goodwill and other
nondeductible items.
F-123
<PAGE>
BG PRESENTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. PROPERTY AND EQUIPMENT
Property and equipment as of January 31, 1997 and 1998 consists of the
following:
<TABLE>
<CAPTION>
1997 1998
-------------- --------------
<S> <C> <C>
Buildings ................... $ 8,234,231 $ 8,251,729
Leasehold improvements ..... 10,326,553 10,403,033
Equipment ................... 2,166,037 2,184,855
Office furniture ............ 693,068 711,235
Computer equipment .......... 330,367 343,493
Vehicle ..................... 61,211 67,205
-------------- --------------
21,811,467 21,961,550
Accumulated depreciation and
amortization ............... (12,783,510) (13,528,140)
-------------- --------------
9,027,957 8,443,410
Land ........................ 633,953 633,953
-------------- --------------
$ 9,661,910 $ 9,067,363
============== ==============
</TABLE>
4. PENSION PLAN
The Company sponsors a 401(k) Tax Advantage Savings Plan that covers
employees who have one year of service, have worked at least 1,000 hours, are
21 years of age or older, and are not covered by a union contract. At its
discretion, the Company may contribute a percentage of gross pay to the plan,
up to a maximum gross pay of $150,000 per participant. In addition, the
Company makes a matching contribution of 25% of each participant's account up
to $400 of their salary deferral each year, for a maximum company matching
contribution of $100. Total contributions to the plan were approximately
$182,000, $186,000 and $213,049 for the years ended January 31, 1996, 1997
and 1998, respectively.
F-124
<PAGE>
BG PRESENTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. NOTES PAYABLE
Notes payable as of January 31, 1997 and 1998 consists of the following:
<TABLE>
<CAPTION>
1997 1998
------------ ------------
<S> <C> <C>
Note payable to Midland Loan Services LP; monthly
payments of $16,574, including interest at the bank's
index rate plus 3.5% (8.4% and 8.375% at January 31,
1997 and 1998, respectively; matures May 1, 2004;
secured by deed ........................................ $2,215,001 $ 2,193,732
Note payable to Sanwa Bank; quarterly payments range
from $75,000 to $200,000, interest accrued monthly at
the bank's prime rate plus 0.5% (8.75% and 8.75% at
January 31, 1997 and 1998, respectively); matures
January 31, 2001........................................ 2,925,000 2,425,000
Note payable to Sanwa Bank; monthly payments of $16,666,
including interest at a rate of London Inter-Bank
Offered Rate (LIBOR) plus 2.5%; matures January 31,
2002; secured by assets of the Company (excluding the
office building)........................................ 816,674 616,682
Note payable to Sanwa Bank; monthly payments range from
$12,000 to $25,000, interest accrued monthly at the
bank's index rate plus 2.375%; matures March 1, 2007;
secured by deed......................................... -- 6,778,460
------------ ------------
5,956,675 12,013,874
Less current portion .................................... (722,966) (879,040)
------------ ------------
$5,233,709 $11,134,834
============ ============
</TABLE>
The first note payable with Sanwa Bank also provided for a line-of-credit
of up to $1,000,000 that expired on April 30, 1997. At January 31, 1998,
there were no borrowings outstanding against this credit line.
F-125
<PAGE>
BG PRESENTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. NOTES PAYABLE (CONTINUED)
At January 31, 1998, the Company has a $3,000,000 unused line-of-credit
with a bank to be drawn upon as needed, with interest at the bank's prime
rate plus 0.5%. In addition, the Company may use up to $1,500,000 of the line
for letters-of-credit. This line-of-credit is secured by the assets of the
Company.
Maturities of long-term debt are approximately as follows:
<TABLE>
<CAPTION>
<S> <C>
Year ended January 31:
1999 ................. $ 879,040
2000 ................. 893,998
2001 ................. 1,851,908
2002 ................. 227,764
2003 ................. 246,791
Thereafter ............ 7,914,373
------------
$12,013,874
============
</TABLE>
6. COMMITMENTS AND CONTINGENCIES
Leases
The Company leases nightclubs, theaters and storage space pursuant to
noncancellable operating leases. Certain leases require contingent rentals to
be paid based on a percentage of gross sales of tickets, merchandise, and
food and beverage. These leases expire on various dates through June 2021.
At January 31, 1998, the future minimum operating lease payments under
noncancelable operating leases are as follows:
<TABLE>
<CAPTION>
<S> <C>
Year ended January 31:
1999 ................. $ 543,354
2000 ................. 547,211
2001 ................. 485,961
2002 ................. 451,694
2003 ................. 425,633
Thereafter ............ 2,367,353
-----------
$4,821,206
===========
</TABLE>
Total minimum rental expense included in operating expenses for the years
ended January 31, 1996, 1997 and 1998 was $810,956, $438,500 and $706,219,
respectively, and the contingent rental expense was $541,334, $627,222 and
$725,787, respectively. Included in cost of revenues is $6,145,944,
$6,392,616 and $7,265,769 of contingent rentals paid based on gross sales for
the years ended January 31, 1996, 1997 and 1998, respectively.
Shoreline Amphitheater Lease and Agreement
The Shoreline Amphitheater Lease and Agreement, as amended, provides for,
among other things, that the City of Mountain View, California (the "City")
owns certain real property (the "Site") which it has leased to the Company
for the purpose of constructing and operating the amphitheater. The lease
terminates after 35 years on November 30, 2021, and the Company has the
option to extend for three additional five-year periods.
The Company is obligated to pay as rent to the City a certain percentage
of "gross receipts" received annually by the Company and additional rent
based on the "net available cash" of the Company, as such terms are defined
in the agreement.
F-126
<PAGE>
BG PRESENTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Rent expense charged to operations for the years ended January 31, 1996,
1997 and 1998 amounted to $594,002, $396,789 and $613,933, respectively.
As of the year ended January 31, 1997, the Company was obligated to pay
the City $93,200 monthly, which related to $9,500,000 of funds provided the
Company by the City pursuant to the lease. Prior to the refinancing of this
arrangement as a $6.9 million note payable to Sanwa Bank (see Note 5), the
Company had accounted for this obligation as a long-term liability
amortizable on a monthly basis over the 20-year period commencing August 1,
1986. The principal and interest (10.24%) on this liability were being
amortized monthly. At January 31, 1997, the outstanding balance amounted to
$6,740,395, of which $35,676 was current.
Seattle White River Amphitheatre
The Company has committed payments for the construction of an amphitheatre
in the Seattle, Washington market totaling $10 million. Through January 31,
1998, the Company has paid $3,921,812 toward this project. This amount is
included in other assets on the balance sheet. The Company has also
capitalized interest pertaining to the capital expenditures for the
amphitheatre of $175,633 at January 31, 1998, which is also included in other
assets on the balance sheet.
Employment Contracts
The Company has entered into employment contracts with certain key
employees which amount to $2,300,000 per year. These contracts are in effect
until the first note payable to Sanwa Bank (see Note 5) is paid in full or
six years, whichever comes first. According to these agreements, compensation
and other benefits will cease if discharged with just cause, death or
disability, and resignation of employment. Benefits do not cease if
discharged without just cause.
Contingencies
The Company is involved in various legal and other matters arising in the
normal course of business. Based upon information available to management,
its review of these matters to date and consultation with counsel, management
believes that any liability relating to these matters would not have a
material effect on the Company's financial position and results of
operations.
7. SUBSEQUENT EVENTS
Acquisition of Companies by SFX Entertainment, Inc.
On February 24, 1998, the stockholders of the Company sold all of the
outstanding capital stock of the Companies to SFX Entertainment, Inc. for
cash consideration of $60.8 million (including the repayment of $12 million
in the Companies' debt and the issuance of 562,640 shares of common stock of
SFX Entertainment, Inc.). The Company has agreed to have net working capital,
as defined, at the closing at least equal to the Company's debt.
F-127
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
Concert/Southern Promotions
We have audited the accompanying combined balance sheet of
Concert/Southern Promotions and Affiliated Companies as of December 31, 1997,
and the related combined statements of operations, cash flows and
stockholders' equity for the year then ended. These financial statements are
the responsibility of management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of Concert/Southern
Promotions and Affiliated Companies at December 31, 1997, and the combined
results of their operations and their cash flows for the year then ended, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
March 13, 1998
F-128
<PAGE>
CONCERT/SOUTHERN PROMOTIONS AND AFFILIATED COMPANIES
COMBINED BALANCE SHEET
DECEMBER 31, 1997
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents .......................... $ 612,967
Accounts receivable ................................ 185,437
Due from owners (Note 3) ........................... 332,754
Prepaid expenses and other current assets ......... 115,844
------------
Total current assets ................................ 1,247,002
Investments in equity investees (Note 2)............. 895,790
Property and equipment:
Land ............................................... 19,638
Leasehold improvements ............................. 286,998
Furniture and equipment ............................ 496,265
-------------
802,901
Accumulated depreciation and amortization ......... 460,483
-------------
342,418
------------
Total assets ........................................ $2,485,210
============
LIABILITIES AND COMBINED STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses .............. $ 229,558
Deferred income .................................... 368,150
------------
Total current liabilities ........................... 597,708
Combined stockholders' equity (Note 4) .............. 1,887,502
------------
Total liabilities and combined stockholders' equity $2,485,210
============
</TABLE>
See accompanying notes.
F-129
<PAGE>
CONCERT/SOUTHERN PROMOTIONS AND AFFILIATED COMPANIES
COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
<S> <C>
Operating revenues:
Concert revenue .................... $14,796,977
Cost of concerts.................... 9,877,586
-------------
4,919,391
Operating expenses:
Salaries--officers ................. 364,000
Bonuses--officers .................. 564,767
Salaries--other .................... 367,356
Rent expense ....................... 207,220
Legal and accounting fees .......... 201,435
Depreciation and amortization ..... 78,682
General and administrative expenses 1,367,304
-------------
3,150,764
-------------
Income from operations............... 1,768,627
Other income:
Interest income .................... 59,624
Losses from equity investees ...... (79,629)
-------------
Net income .......................... $ 1,748,622
=============
</TABLE>
See accompanying notes.
F-130
<PAGE>
CONCERT/SOUTHERN PROMOTIONS AND AFFILIATED COMPANIES
COMBINED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
<S> <C>
OPERATING ACTIVITIES
Net income ...................................................................... $ 1,748,622
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization ................................................. 78,682
Losses from equity investees................................................... 79,629
Changes in operating assets and liabilities:
Accounts receivable .......................................................... 1,000,781
Prepaid expenses and other current assets .................................... 69,896
Accounts payable and accrued expenses ........................................ (452,361)
Deferred income .............................................................. 368,150
Net cash provided by operating activities ....................................... 2,893,399
FINANCING ACTIVITIES
Due to/from owner ............................................................... (398,080)
Distributions paid to stockholder ............................................... (2,722,827)
-------------
Net cash used in financing activities ........................................... (3,120,907)
-------------
Net decrease in cash and cash equivalents ....................................... (227,508)
Cash and cash equivalents at beginning of year .................................. 840,475
-------------
Cash and cash equivalents at end of year ........................................ $ 612,967
=============
</TABLE>
See accompanying notes.
F-131
<PAGE>
CONCERT/SOUTHERN PROMOTIONS AND AFFILIATED COMPANIES
COMBINED STATEMENT OF STOCKHOLDERS' EQUITY
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
<S> <C>
Balance, January 1, 1997 .... $ 2,861,707
Distributions to stockholder (2,722,827)
Net income ................... 1,748,622
-------------
Balance, December 31, 1997 .. $ 1,887,502
=============
</TABLE>
See accompanying notes.
F-132
<PAGE>
CONCERT/SOUTHERN PROMOTIONS AND AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Principles of Combination
The accompanying combined financial statements include the accounts of
Southern Promotions, Inc., High Cotton, Inc., Buckhead Promotions, Inc.,
Northern Exposure, Inc., Pure Cotton, Inc., Cooley and Conlon Management,
Inc. ("CCMI") and Interfest, Inc. and their wholly-owned subsidiaries:
Concert/ Southern Chastain Promotions ("Concert/Southern"), Roxy Ventures,
Cotton Club and Midtown Music Festival (collectively, the "Companies").
Intercompany transactions and balances among these companies have been
eliminated in combination. The Companies are presented on a combined basis to
reflect common ownership by Alex Cooley, Peter Conlon and Stephen Selig III.
Concert/Southern is the predominant musical event promoter in the Atlanta,
Georgia region, and through Chastain Joint Ventures ("Chastain Ventures") is
the operator, pursuant to a long-term lease with the City of Atlanta, of the
Chastain Park Amphitheater. Chastain Ventures is owned equally by
Concert/Southern and the Atlanta Symphony Orchestra, and is accounted for by
Concert/Southern on the equity method. Buckhead Promotions and Northern
Exposure equally own Roxy Ventures which holds a long-term lease for the Roxy
Theatre, and Pure Cotton holds a long-term lease for the Cotton Club.
Interfest, Inc. promoted the three-day Midtown Music Festival held in
downtown Atlanta during 1997. In addition, High Cotton owns 52.6% of HC
Properties, Inc., a real estate investment company which is accounted for on
the equity method.
The Companies record revenue when earned. Concert revenue includes
ticketing, concession, and sponsorship revenue. Deferred income relates
primarily to deposits received in advance of the concert season.
Property and Equipment
Land, leasehold improvements, and furniture and equipment are stated at
cost. Depreciation of furniture and equipment is provided primarily by the
straight-line method over the estimated useful lives of the respective
classes of assets. Leasehold improvements are amortized over the life of the
lease or of the improvement, whichever is shorter.
Income Taxes
The Companies have been organized as either partnerships or corporations
which have elected to be taxed as "S Corporations." The "S Corporation"
elections are effective for both federal and state tax purposes. Accordingly,
all items of income, loss, deduction or credit are reported by the partners
or shareholders on their respective personal income tax returns and,
therefore, no current or deferred federal or state taxes have been provided
in the accompanying combined financial statements.
The difference between the tax basis and the reported amounts of the
Companies' assets and liabilities was $16,576 at December 31, 1997.
Risks and Uncertainties
Accounts receivable are due from ticket vendors and venue box offices.
These amounts are typically collected within 20 days of a performance.
Management considers accounts receivable to be fully collectible;
accordingly, no allowance for doubtful accounts is required.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
F-133
<PAGE>
CONCERT/SOUTHERN PROMOTIONS AND AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS (continued)
2. INVESTMENTS IN EQUITY INVESTEES
The following is a summary of the financial position and results of
operations of the Companies' equity investees as of and for the period ended
December 31, 1997:
<TABLE>
<CAPTION>
CHASTAIN
PARK AMPHITHEATER HC PROPERTIES
----------------- ---------------
(50% OWNED) (52.6% OWNED)
<S> <C> <C>
Current assets .......................... $322,527 $ 51,820
Property and equipment .................. 468,145 810,480
Other assets ............................ -- 415,145
----------------- ---------------
Total assets ............................ $790,672 $1,277,445
================= ===============
Current liabilities ..................... $129,953 $ 1,927
Partners' capital ....................... 660,719 1,275,518
----------------- ---------------
Total liabilities and partners' capital $790,672 $1,277,445
================= ===============
Revenue ................................. $653,251 $ 87,407
Expenses ................................ 747,055 165,328
----------------- ---------------
Net income (loss) ....................... $(93,804) $ (77,921)
================= ===============
</TABLE>
3. RELATED PARTY TRANSACTIONS
The Companies have an arrangement with Stephen Selig III whereby the cash
receipts of Concert/Southern, Buckhead Promotions and Roxy Ventures are
transferred to the Selig Enterprises, Inc. Master Cash Account (the "Master
Account"). All subsequent payments made by the Companies are funded by the
Master Account. Accordingly, the Companies' cash held by the Master Account
of $281,058 is recorded as due from owner.
In addition, CCMI has recorded a receivable from its stockholders of
$51,696.
4. STOCKHOLDERS' EQUITY
The Companies' stocks are as follows:
<TABLE>
<CAPTION>
SHARES SHARES PAR
AUTHORIZED ISSUED VALUE
------------ -------- -------
<S> <C> <C> <C>
Southern Promotions 1,000,000 5,000 $1
High Cotton ......... 10,000 550 1
Buckhead Promotions 1,000,000 500 1
Northern Exposure .. 1,000,000 1,000 1
Pure Cotton ......... 100,000 500 1
CCMI ................ 10,000 1,000 1
Interfest ........... 100,000 500 1
--------
9,050
========
</TABLE>
F-134
<PAGE>
CONCERT/SOUTHERN PROMOTIONS AND AFFILIATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS (continued)
5. COMMITMENTS AND CONTINGENCIES
Leases
The following is a schedule of future minimum rental payments under
operating leases (principally office and venue facilities) that have initial
or remaining lease terms in excess of one year as of December 31, 1997:
<TABLE>
<CAPTION>
<S> <C>
Year ended December 31:
1998 .................. $ 222,539
1999 .................. 183,198
2000 .................. 188,991
2001 .................. 133,350
2002 .................. 136,350
Thereafter ............ 174,375
-----------
Total ................. $1,038,803
===========
</TABLE>
Certain office facilities have renewal and escalation clauses.
Legal Matters
On October 10, 1997, Concert/Southern settled a lawsuit agreeing to pay
$100,000. Such amount has been provided for in the accompanying combined
statement of operations.
The Companies have also been named in various other lawsuits arising in
the normal course of business. It is not possible at this time to assess the
probability of any liability against the Companies as a result of these
lawsuits. Management has stated that all cases will be vigorously defended.
6. SUBSEQUENT EVENTS
On March 4, 1998, SFX Entertainment Inc. acquired the Companies for a
total cash purchase price of $16,900,000 (including a working capital payment
of $300,000).
Prior to the sale of the Companies to SFX, the sole shareholder of High
Cotton received a distribution of High Cotton's interest in HC Properties,
Inc.
F-135
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE
HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONA OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS DOES NOT CONSTITURE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATED OR AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
-----------------------------------
SUMMARY OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
Available Information ......................... 4
Table of Contents ............................. 5
Prospectus Summary ............................ 10
Risk Factors .................................. 23
The Exchange Offer ............................ 35
Capitalization ................................ 43
Unaudited Pro Forma Condensed
Combined Financial Statements .............. 45
Selected Consolidated Financial Data .......... 60
Management's Discussion and Analysis of
Financial Condition and Results of
Operations ................................. 62
Overview of the Live Entertainment
Industry ................................... 76
Business ...................................... 78
The Spin-Off .................................. 93
Management .................................... 99
Principal Stockholders ........................ 106
Certain Relationships and Related
Transactions ............................... 107
Description of Credit Facility and Other
Indebtedness ............................... 111
Description of the Notes ...................... 115
Description of Exchange Notes ................. 116
Certain United States Federal Tax
Considerations of the Exchange Offer
and an Investment in the Exchange
Notes ...................................... 145
Plan of Distribution .......................... 147
Legal Matters ................................. 148
Experts ....................................... 149
Index to Defined Terms ........................ 151
Index to Financial Statements ................. F-1
</TABLE>
[SFX ENTERTAINMENT, INC. LOGO]
OFFER TO EXCHANGE
9 1/8% SENIOR SUBORDINATED NOTES
DUE 2008, SERIES B
($350,000,000 PRINCIPAL AMOUNT)
FOR
9 1/8% SENIOR SUBORDINATED NOTES
DUE 2008, SERIES A
($350,000,000 PRINCIPAL AMOUNT
OUTSTANDING)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the DGCL empowers a Delaware corporation to indemnify any
person who is, or is threatened to be made, a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that the person is or was an officer or director of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorney's fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the person
in connection with the action, suit or proceeding, provided that he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses which he actually and reasonably incurred in connection
therewith.
The Company's Certificate of Incorporation (the "Company Certificate")
provides that no director of the Company will be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty
as a director, except for liability:
o for any breach of the director's duty of loyalty to the Company or its
stockholders;
o for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
o under Section 174 of the DGCL; or
o for any transaction from which the director derived an improper
personal benefit.
In addition to the circumstances in which a director of the Company is not
personally liable as set forth above, no director will be liable to the Company
or its stockholders to such further extent as permitted by any law enacted
after the date of the Company Certificate, including any amendment to the DGCL.
The Company Certificate requires the Company to indemnify any person who
was, is, or is threatened to be made a party to any action, suit or proceeding,
by reason of the fact that he (a) is or was a director or officer of the
Company or (b) is or was serving at the request of the Company as a director,
officer, partner, venturer, proprietor, trustee, employee, agent, or similar
functionary of another corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise. This
indemnification is to be to the fullest extent permitted by the DGCL. The right
to indemnification will be a contract right and, as such, will run to the
benefit of any director or officer who is elected and accepts the position of
director or officer of the Company or elects to continue to serve as a director
or officer of the Company while this provision of the Company Certificate is in
effect. The right to indemnification includes the right to be paid by the
Company for expenses incurred in defending any such action, suit or proceeding
in advance of its final disposition to the maximum extent permitted under the
DGCL. If a claim for indemnification or advancement of expenses is not paid in
full by the Company within 60 days after a written claim has been received by
the Company, the claimant may, at any time thereafter, bring suit against the
Company to recover the unpaid amount of the claim and, if successful in whole
or in part, expenses of prosecuting his claim. It will be a defense to any such
action that the requested indemnification or advancement of costs of defense
are not permitted under the DGCL, but the burden of proving this defense will
be on the Company. The rights described above do not exclude any other right
that any person may have or acquire under any statute, by-law, resolution of
stockholders or directors, agreement or otherwise.
The by-laws of the Company require the Company to indemnify its officers,
directors, employees and agents to the full extent permitted by the DGCL. The
by-laws also require the Company to pay expenses incurred by a director in
defending a civil or criminal action, suit or proceeding by reason of the fact
that
II-1
<PAGE>
he is/was a director (or was serving at the Company's request as a director or
officer of another corporation) in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director to repay the advance if it ultimately is determined that the
director is not entitled to be indemnified by the Company as authorized by
relevant sections of the DGCL. The indemnification and advancement of expenses
provided in the by-laws are not to be deemed exclusive of any other rights
provided by any agreement, vote of stockholders or disinterested directors or
otherwise.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ----------- ---------------------------------------------------------------------------------------------
<S> <C>
2.1 + Form of Distribution Agreement between SFX Entertainment and SFX.
2.2 + Form of Tax Sharing Agreement between SFX Entertainment and SFX.
2.3 + Form of Employee Benefits Agreement between SFX Entertainment and SFX.
3.1 + Amended and Restated Certificate of Incorporation of SFX Entertainment.
3.2 Bylaws of SFX Entertainment (incorporated by reference to Registration Statement on Form
S-1 (File No. 333-43387) filed with the SEC on March 11, 1998).
3.3 Certificate of Amendment to the Certificate of Incorporation of the Company, as filed with
the Secretary of State of Delaware on February 25, 1998 (incorporated by reference to Report
on Form 8-K (File No. 333-43287) filed with the SEC on March 11, 1998)
3.4 Certificate of Designations relating to the Series A Preferred Stock of the Company as filed
with the Secretary of State of Delaware on February 27, 1998 (incorporated by reference to
Report on Form 8-K (File No. 333-43287) filed with the SEC on March 11, 1998)
3.5* Restated Articles of Incorporation of AKG, Inc.
3.6* Bylaws of AKG, Inc.
3.7 + Certificate of Incorporation of American Broadway, Inc.
3.8 + Bylaws of American Broadway, Inc.
3.9 + Certificate of Incorporation of Ardee Festivals N.J., Inc.
3.10 + Bylaws of Ardee Festivals N.J., Inc.
3.11 * Certificate of Incorporation of Ardee Productions, Ltd.
3.12 + Bylaws of Ardee Productions, Ltd.
3.13 + Certificate of Incorporation of Atlanta Concerts, Inc.
3.13A+ Bylaws of Atlanta Concerts, Inc.
3.13B+ Certificate of Incorporation of Beach Concerts, Inc.
3.14 + Bylaws of Beach Concerts, Inc.
3.15 + Certificate of Formation of BGP Acquisition, LLC.
3.16 * Articles of Incorporation of Bill Graham Enterprises, Inc.
3.17 + Bylaws of Bill Graham Enterprises, Inc.
3.18 * Articles of Incorporation of Bill Graham Management, Inc.
3.19 * Bylaws of Bill Graham Management, Inc.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ ---------------------------------------------------------------------------------
<S> <C>
3.20* Articles of Incorporation of Bill Graham Presents, Inc.
3.21* Amended and Restated Bylaws of Bill Graham Presents, Inc.
3.22* Articles of Incorporation of BG Presents, Inc.
3.23* Bylaws of BG Presents, Inc.
3.24+ Certificate of Incorporation of Broadway Concerts, Inc.
3.25* Bylaws of Broadway Concerts, Inc.
3.26* Articles of Incorporation of Cooley and Conlon Management Co.
3.27* Bylaws of Cooley and Conlon Management Co.
3.28* Articles of Incorporation of Concerts, Inc.
3.29* Bylaws of Concerts, Inc.
3.30* Certificate of Incorporation of Connecticut Amphitheater Development Corporation
3.31* Bylaws of Connecticut Amphitheater Development Corporation
3.32* Certificate of Incorporation of Connecticut Concerts, Incorporated.
3.33+ Bylaws of Connecticut Concerts, Incorporated.
3.34+ Certificate of Incorporation of Connecticut Performing Arts, Inc.
3.35* Bylaws of Connecticut Performing Arts, Inc.
3.36+ Certificate of Limited Partnership of Connecticut Performing Arts Partners
3.37+ Certificate of Limited Partnership of Conn Ticketing Company.
3.38* Certificate of Incorporation of Contemporary Group Acquisition Corp.
3.39+ Bylaws of Contemporary Group Acquisition Corp.
3.40* Articles of Incorporation of Contemporary Group, Inc.
3.41+ Bylaws of Contemporary Group, Inc.
3.42* Certificate of Incorporation of Contemporary Marketing, Incorporated.
3.43* Bylaws of Contemporary Marketing, Incorporated.
3.44* Certificate of Incorporation of Contemporary Productions, Inc.
3.45* Bylaws of Contemporary Productions, Inc.
3.46* Certificate of Incorporation of Contemporary Sports, Incorporated
3.47* Bylaws of Contemporary Sports, Incorporated.
3.48* Certificate of Incorporation of Deer Creek Amphitheater Concerts, Inc.
3.49* Bylaws of Deer Creek Amphitheater Concerts, Inc.
3.50* Certificate of Limited Partnership of Deer Creek Amphitheater Concerts, LP.
3.51+ Certificate of Incorporation of Delsener/Slater Enterprises, Ltd.
3.52+ Bylaws of Delsener/Slater Enterprises, Ltd.
3.53+ Certificate of Incorporation of Dumb Deal, Inc.
3.54+ Bylaws of Dumb Deal, Inc.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ -----------------------------------------------------------------
<S> <C>
3.55* Articles of Incorporation of Entertainment Performing Arts, Inc.
3.56* Bylaws of Entertainment Performing Arts, Inc.
3.57* Certificate of Incorporation of Exit 116 Revisited, Inc.
3.58* Bylaws of Exit 116 Revisited, Inc.
3.59+ Certificate of Incorporation of Festival Productions, Inc.
3.60+ Bylaws of Festival Productions, Inc.
3.61* Restated Certificate of Incorporation of Fillmore Corporation
3.62* Bylaws of Fillmore Corporation
3.63* Restated Articles of Incorporation of Fillmore Fingers, Inc.
3.64* Bylaws of Fillmore Fingers, Inc.
3.65* Certificate of Incorporation of FPI Concerts, Inc.
3.66* Bylaws of FPI Concerts, Inc.
3.67+ Certificate of Limited Partnership of GSAC Partners
3.68* Articles of Incorporation of High Cotton, Inc.
3.69* Bylaws of High Cotton, Inc.
3.70* Certificate of Incorporation of In House Tickets, Inc.
3.71* Bylaws of In House Tickets, Inc.
3.72* Certificate of Incorporation of Irving Plaza Concerts, Inc.
3.73* Bylaws of Irving Plaza Concerts, Inc.
3.74* Certificate of Incorporation of Murat Center Concerts, Inc.
3.75* Bylaws of Murat Center Concerts, Inc.
3.76* Certificate of Limited Partnership of Murat Center Concerts, LP.
3.77* Certificate of Incorporation of NOC, Inc.
3.78* Bylaws of NOC, Inc.
3.79* Certificate of Incorporation of Northeast Ticketing Company.
3.80* Bylaws of Northeast Ticketing Company
3.81* Articles of Incorporation of Old PCI, Inc.
3.82+ Bylaws of Old PCI, Inc.
3.83* Articles of Incorporation of PACE AEP Acquisition, Inc.
3.84* Bylaws of PACE AEP Acquisition, Inc.
3.85* Articles of Incorporation of PACE Amphitheaters, Inc.
3.86* Bylaws of PACE Amphitheaters, Inc.
3.87* Articles of Incorporation of PACE Amphitheater Management, Inc.
3.88* Bylaws of PACE Amphitheater Management, Inc.
3.89* Articles of Incorporation of PACE Bayou Place, Inc.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ---------- ----------------------------------------------------------------------
<S> <C>
3.90* Bylaws of PACE Bayou Place, Inc.
3.91* Articles of Incorporation of PACE Communications, Inc.
3.92* Bylaws of PACE Communications, Inc.
3.93* Articles of Incorporation of PACE Concerts GP, Inc.
3.94* Bylaws of PACE Concerts GP, Inc.
3.95* Certificate of Limited Partnership for PACE Concerts, Ltd.
3.96 + Reserved.
3.97 + Certificate of Incorporation of PACE Entertainment Corporation
3.98 + Bylaws of PACE Entertainment Corporation
3.99* Articles of Incorporation of PACE Entertainment GP Corp.
3.100* Bylaws of PACE Enterainment GP Corp.
3.101 + Certificate of Limited Partnership for PACE Entertainment Group, Ltd.
3.102 + Reserved.
3.103 + Articles of Incorporation of PACE Milton Keynes, Inc.
3.104 + Bylaws of PACE Milton Keynes, Inc.
3.105 + Articles of Incorporation of PACE Motor Sports, Inc.
3.106 + Bylaws of PACE Motor Sports, Inc.
3.107 + Certificate of Incorporation of PACE Music Group, Inc.
3.108 + Bylaws of PACE Music Group, Inc.
3.109 + Certificate of Incorporation of PACE Productions, Inc.
3.110 + Bylaws of PACE Productions, Inc.
3.111 + Articles of Incorporation of PACE Theatrical Group, Inc.
3.112 + Bylaws of PACE Theatrical Group, Inc.
3.113 + Articles of Incorporation of PACE Touring, Inc.
3.114 + Bylaws of PACE Touring, Inc.
3.115 + Certificate of Incorporation of PACE Variety Entertainment, Inc.
3.116 + Bylaws of PACE Variety Entertainment, Inc.
3.117 + Articles of Incorporation of PACE UK Holding Corporation
3.118 + Bylaws of PACE UK Holding Corporation
3.119 + Certificate of Limited Partnership of Pavilion Partners
3.119A+ Certificate of Incorporation of PEC, Inc.
3.119B+ Bylaws of PEC, Inc.
3.120 + Certificate of Incorporation of Polaris Amphitheater Concerts, Inc.
3.121 + Articles of Incorporation of PTG-Florida, Inc.
3.122 + Bylaws of PTG-Florida, Inc.
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ----------- ----------------------------------------------------------------------
<S> <C>
3.123+ Bylaws of Polaris Amphitheater Concerts, Inc.
3.124+ Certificate of Incorporation of QN Corp.
3.125+ Bylaws of QN Corp.
3.126+ Certificate of Incorporation of SFX Broadcasting of the Midwest, Inc.
3.127+ Bylaws of SFX Broadcasting of the Midwest, Inc.
3.128+ Certificate of Incorporation of SFX Concerts, Inc.
3.129+ Bylaws of SFX Concerts, Inc.
3.130+ Certificate of Formation of SFX Network Group, LLC.
3.131+ Certificate of Incorporation of Shoreline Amphitheatre, Ltd.
3.132+ Bylaws of Shoreline Amphitheatre, Ltd.
3.133+ Certificate of Limited Partnership of Shoreline Amphitheatre Partners
3.134+ Articles of Incorporation of SJS Entertainment Corporation
3.135+ Bylaws of SJS Entertainment Corporation
3.136+ Certificate of Incorporation of SM/PACE, Inc.
3.137+ Bylaws of SM/PACE, Inc.
3.138+ Certificate of Incorporation of Southeast Ticketing Company.
3.138A+ Bylaws of Southeast Ticketing Company
3.139+ Articles of Incorporation of Southern Promotions, Inc.
3.140+ Bylaws of Southern Promotions, Inc.
3.141+ Certificate of Formation of Sunshine Concerts, LLC.
3.142+ Certificate of Incorporation of Sunshine Designs, Inc.
3.143+ Bylaws of Sunshine Designs, Inc.
3.144+ Certificate of Limited Partnership of Sunshine Design, LP
3.145+ Certificate of Incorporation of Suntex Acquisition, Inc.
3.146+ Bylaws of Suntex Acquisition, Inc.
3.147+ Certificate of Limited Partnership of Suntex Acquisition, LP
3.148+ Certificate of Incorporation of The Album Network, Inc.
3.149+ Bylaws of The Album Network Inc.
3.150+ Articles of Incorporation of Touring Productions, Inc.
3.151+ Bylaws of Touring Productions, Inc.
3.152+ Articles of Incorporation of Tuneful Company, Inc.
3.153+ Bylaws of Tuneful Company, Inc.
3.154+ Certificate of Formation of Westbury Music Fair, LLC
3.155+ Articles of Incorporation of Wolfgang Records
3.156+ Bylaws of Wolfgang Records
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ---------- -----------------------------------------------------------------------------------------------
<S> <C>
4.1 Indenture relating to the 9 1/8% Senior Subordinated Notes due 2008 (incorporated by
reference to Current Report on Form 8-K (File No. 333-43287) filed with the SEC on March 11, 1998)
4.2 Registration Rights Agreement relating to the 9 1/8% Senior Subordinated Notes due 2008
(incorporated by reference to Current Report on Form 8-K (File No. 333-43287) filed with the SEC on
March 11, 1998)
5.1 + Opinion of Baker & McKenzie.
10.1 Stock Purchase Agreement, dated as of October 11, 1996, by and among Delsener/Slater
Enterprises, Ltd., Beach Concerts, Inc., Connecticut Concerts Incorporated, Broadway
Concerts, Inc., Arden Productions, Ltd., In-house Tickets, Inc., Exit 116 Revisited, Inc., Ron
Delsener, Mitch Slater and SFX Broadcasting, Inc. (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.2 License Agreement, dated January 29, 1990, by and between the State of New York and
Beach Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1 (File
No. 333-43287) filed with the SEC)
10.3 Amendment to License Agreement of January 29, 1990, dated as of April 11, 1997, by and
between the State of New York and Beach Concerts, Inc. (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.4 Lease Agreement, Easement Agreement and Declaration of Restrictive Covenants dated as of
May 1, 1996, by and between New Jersey Highway Authority and GSAC Partners
(incorporated by reference to Registration Statement on Form S-1 (File No. 333-43287) filed
with the SEC)
10.5 Partnership Agreement, dated as of November 18, 1996, by and between Pavilion Partners
Exit 116 Revisited, Inc. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.6 Asset Purchase and Sale Agreement, dated June 23, 1997, by and among Sunshine Concerts,
L.L.C., SFX Broadcasting, Inc., Sunshine Promotions, Inc., P. David Lucas and Steven P.
Sybesma (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.7 Asset Purchase and Sale Agreement, dated as of June 23, 1997, by and among Suntex
Acquisition, L.P., SFX Broadcasting, Inc., Suntex, Inc., P. David Lucas, Steven P. Sybesma,
Greg Buttrey and John Valant (incorporated by reference to Registration Statement on Form
S-1 (File No. 333-43287) filed with the SEC)
10.8 Asset Purchase and Sale Agreement, dated as of June 23, 1997, by and among Deer Creek
Amphitheater Concerts, L.P., SFX Broadcasting, Inc., Deer Creek Partners, L.P., Sand Creek
Partners, L.P., Sand Creek, Inc., P. David Lucas and Steven P. Sybesma (incorporated by
reference to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.9 Asset Purchase and Sale Agreement, dated as of June 23, 1997, by and among Murat Centre
Concerts, L.P., SFX Broadcasting, Inc., Murat Centre L.P., P. David Lucas and Steven P.
Sybesma (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.10 Asset Purchase and Sale Agreement, dated June 23, 1997, by and among Polaris
Amphitheater Concerts, Inc., SFX Broadcasting, Inc., Polaris Amphitheater Limited
Partnership and certain of the partners of Polaris Amphitheater Limited Partnership
(incorporated by reference to Registration Statement on Form S-1 (File No. 333-43287) filed
with the SEC)
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ -----------------------------------------------------------------------------------------------
<S> <C>
10.11 Asset Purchase and Sale Agreement, dated as of June 23, 1997, by and among Sunshine
Design, L.P., SFX Broadcasting, Inc., Tourdesign, Inc., P. David Lucas and Steven P. Sybesma
(incorporated by reference to Registration Statement on Form S-1 (File No. 333-43287) filed
with the SEC)
10.12 Indenture of Lease, dated as of September 1, 1995, by and between Murat Temple
Association, Inc. and Murat Centre, L.P. (incorporated by reference to Registration Statement
on Form S-1 (File No. 333-43287) filed with the SEC)
10.13 Agreement of Merger, dated as of February 12, 1997, by and among SFX Broadcasting, Inc.,
NOC Acquisition Corp., Cadco Acquisition Corp., QN-Acquisition Corp., Nederlander of
Connecticut, Inc., Connecticut Amphitheater Development Corporation, QN Corp.,
Connecticut Performing Arts, Inc., Connecticut Performing Arts Partners and the
Stockholders of Nederlander of Connecticut, Inc., Connecticut Amphitheater Development
Corporation and QN Corp. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.14 Agreement of Merger, dated as of February 14, 1997, by and among SFX Broadcasting, Inc.,
NOC Acquisition Corp., Cadco Acquisition Corp., QN-Acquisition Corp., Nederlander of
Connecticut, Inc., Connecticut Amphitheater Development Corporation, QN Corp.,
Connecticut Performing Arts, Inc., Connecticut Performing Arts Partners and the
Stockholders of Nederlander of Connecticut, Inc., Connecticut Amphitheater Development
Corporation and QN Corp. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.15 Second Amendment of Agreement of Merger, dated as of March 19, 1997, by and among SFX
Broadcasting, Inc., NOC Acquisition Corp., Cadco Acquisition Corp., QN-Acquisition Corp.,
Nederlander of Connecticut, Inc., Connecticut Amphitheater Development Corporation, QN
Corp., Connecticut Performing Arts, Inc., Connecticut Performing Arts Partners and the
Stockholders of Nederlander of Connecticut, Inc., Connecticut Amphitheater Development
Corporation and QN Corp. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.16 Lease Agreement, dated as of September 14, 1994, by and between The City of Hartford and
Connecticut Performing Arts Partners (incorporated by reference to Registration Statement
on Form S-1 (File No. 333-43287) filed with the SEC)
10.17 Agreement and Plan of Merger and Asset Purchase Agreement, dated as of December 10,
1997, by and among SFX Entertainment, Inc., Contemporary Investments Corporation,
Contemporary Investments of Kansas, Inc., Continental Entertainment Associates, Inc.,
Capital Tickets, LP, Dialtix, Inc., Contemporary International Productions Corporation, Steven
F. Schankman Living Trust, dated 10/22/82, Irving P. Zuckerman Living Trust, dated 11/24/81,
Steven F. Schankman and Irving P. Zuckerman (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.18 Lease Agreement, dated December 13, 1992, by and between Wyandotte County, Kansas and
Wyandotte County Parks Board and Sandstone Amphitheater Joint Venture (incorporated by
reference to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.19 Stock Purchase Agreement, dated as of December 11, 1997, among each of the shareholders
of BGP Presents, Inc. and BGP Acquisitions, LLC (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.20 Amphitheater Lease and Agreement, dated June 20, 1986, between the City of Mountain
View, the Mountain View Shoreline Regional Park Community and Shoreline Amphitheater
Partners (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ ----------------------------------------------------------------------------------------------
<S> <C>
10.21 Stock and Asset Purchase Agreement, dated December 2, 1997, between and among SFX
Network Group, L.L.C. and SFX Entertainment, Inc., and Elias N. Bird, individually and as
Trustee under the Bird Family Trust u/d/o 11/18/92, Gary F. Bird, individually and as Trustee
under the Gary F. Bird Corporation Trust u/d/o 2/4/94, Stephen R. Smith, individually and as
Trustee under the Smith Family Trust u/d/o 7/17/89, June E. Brody, Steven A. Saslow and The
Network 40, Inc. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.22 Purchase and Sale Agreement, dated as of December 15, 1997, by and among Alex Cooley, S.
Stephen Selig, III, Peter Conlon, Southern Promotions, Inc., High Cotton, Inc., Cooley and
Conlon Management, Inc., Buckhead Promotions, Inc., Northern Exposure, Inc., Pure Cotton,
Inc., Interfest, Inc., Concert/Southern Chastain Promotions Joint Venture, Roxy Ventures
Joint Venture and SFX Concerts, Inc. (incorporated by reference to Registration Statement on
Form S-1 (File No. 333-43287) filed with the SEC)
10.23 Stock Purchase Agreement, dated as of December 12, 1997 by and between Pace
Entertainment Corporation and SFX Entertainment, Inc. (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.24 Agreement and Plan of Merger, dated as of August 24, 1997, as amended on February 9,
1998, among SFX Buyer, SFX Buyer Sub and SFX (composite version) (incorporated by
reference to Report on Form 8-K (File No. 333-43287) filed with the SEC on March 11, 1998)
10.25 Reserved
10.26 Non-Negotiable Promissory Note, dated as of June 23, 1997, between SFX (as maker) and
Sunshine Promotions, Inc. (as payee)(incorporated by reference to Registration Statement on
Form S-1 (File No. 333-43287) filed with the SEC)
10.31 Operator Lease Agreement, dated as of September 26, 1989, by and between the City of
Phoenix and The Westside Amphitheatre Corp. (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.32 Addendum to Operator Lease Agreement, dated as of September 26, 1989, by and between
the City of Phoenix and Pavilion Partners (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.33 Memorandum of Lease, dated as of April 1, 1994, by and between the City of Phoenix and
Pavilion Partners (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.34 Lease Agreement, dated as of February 9, 1994, by and between New Jersey Development
Authority and Sony Music/Pace Partnership (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.35 First Amendment to Lease Agreement, dated as of March 11, 1994, by and between New
Jersey Economic Development and Sony Music/Pace Partnership (incorporated by reference
to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.36 Second Amendment to Lease Agreement, dated as of June 7, 1994, by and between New
Jersey Economic Development Authority and Pavilion Partners (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.37 Third Amendment to Lease Agreement, dated as of March 15, 1995, by and between New
Jersey Economic Development Authority and Pavilion Partners (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ --------------------------------------------------------------------------------------------
<S> <C>
10.38 Fourth Amendment|P to Lease Agreement, dated as of March 11, 1997, by and between the
New Jersey Economic Development Authority and Pavilion Partners (incorporated by
reference to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.39 Three Way Agreement, dated as of April 28, 1995, by and between New Jersey Economic
Development Authority, South Jersey Performing Arts Center, Inc. and Pavilion Partners
(incorporated by reference to Registration Statement on Form S-1 (File No. 333-43287) filed
with the SEC)
10.40 Lease Agreement, dated as of December 1, 1989, between Crossroads Properties,
Incorporated and Pace Entertainment Group, Inc. (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.41 Assignment of Ground Lease, dated as of April 6, 1990, by and between Pace Entertainment
Group, Inc. and YM/Pace Partnership (incorporated by reference to Registration Statement
on Form S-1 (File No. 333-43287) filed with the SEC)
10.42 Partnership Agreement, dated as of July 1, 1991, by and between SM/PACE Partnership and
CDC Amphitheaters/I, Inc. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.43 First Amendment to Partnership Agreement, dated as of January 31, 1992, by and between
SM/PACE Partnership and CDC Amphitheaters/I, Inc. (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.44 Lease Agreement, dated as of December 1, 1990, by and between the City of Raleigh, North
Carolina and Sony Music/Pace Partnership (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.45 Amendment to Lease Agreement, dated as of November 15, 1995, by and between Walnut
Creek Amphitheater Partnership and City of Raleigh, North Carolina (incorporated by
reference to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.46 Mutual Recognition Agreement, dated as of December 1, 1990, by and among Walnut Creek
Amphitheater Financing Assistance Corporation, First Union National Bank of North
Carolina, City of Raleigh, North Carolina and Sony Music/Pace Partnership (incorporated by
reference to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.47 Mutual Recognition Agreement, dated as of December 1, 1990, by and among Walnut Creek
Amphitheater Financing Assistance Corporation, First Union National Bank of North
Carolina, City of Raleigh, North Carolina and Sony Music/Pace Partnership (incorporated by
reference to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.48 Partnership Agreement, dated as of February 28, 1986, by and between Belz Investment
Company, Inc., Martin S. Belz and Pace Productions, Inc. (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.49 First Amendment to Partnership Agreement, dated as of June 15, 1986, by and among Belz
Investment Company, Martin S. Belz, Belz-Starwood, Inc. and Pace Productions, Inc.
(incorporated by reference to Registration Statement on Form S-1 (File No. 333-43287) filed
with the SEC)
10.50 Partnership Agreement, dated as of May 15, 1996, by and between Pavilion Partners and
CDC/SMT, Inc. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
</TABLE>
II-10
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ --------------------------------------------------------------------------------------------
<S> <C>
10.51 Lease Agreement, Easement Agreement and Declaration of Restrictive Covenants, dated as
of January 4, 1995, by and between South Florida Fair and Pam Beach County Expositions,
Inc. and Pavilion Partners (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.52 First Amendment to Lease Agreement, dated as of June 5, 1995, by and between South
Florida Fair and Pam Beach County Expositions, Inc. and Pavilion Partners (incorporated by
reference to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.53 Partnership Agreement, dated as of April 4, 1997, by and between Pavilion Partners and
Irvine Meadows Amphitheater (incorporated by reference to Registration Statement on Form
S-1 (File No. 333-43287) filed with the SEC)
10.54 Amended and Restated Agreement, dated as of October 1, 1991, by and between The Irvine
Company and Irvine Meadows (incorporated by reference to Registration Statement on Form
S-1 (File No. 333-43287) filed with the SEC)
10.55 Concession Lease, dated as of October 19, 1992, by and between the County of San
Bernardino and Amphitheater Entertainment Corporation (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.56 Partnership Formation Agreement, dated as of January 22, 1988, by and among MCA
Concerts II, Inc. and Pace Entertainment Group, Inc. (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.57 Lease and Use Agreement, dated as of December 9, 1987, by and between City of Dallas and
Pace Entertainment Group, Inc. (incorporated by reference to Registration Statement on
Form S-1 (File No. 333-43287) filed with the SEC)
10.58 Agreement, dated as of October 10, 1988, by and between the City of Atlanta and MCA
Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.59 Amended Indenture of Lease, February 2, 1984, by and between the City of Atlanta and
Filmworks U.S.A., Inc. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.60 Amendment to Lease Agreement, dated as of October 10, 1988, between the City of Atlanta,
Georgia and Filmworks U.S.A., Inc. (incorporated by reference to Registration Statement on
Form S-1 (File No. 333-43287) filed with the SEC)
10.61 Agreement Regarding Sublease, dated as of January 20, 1988, by and between Filmworks
U.S.A., Inc. and MCA Concerts, Inc. (incorporated by reference to Registration Statement on
Form S-1 (File No. 333-43287) filed with the SEC)
10.62 First Amendment to Sublease, dated as of January 21, 1988, between Filmworks U.S.A., Inc.
and MCA Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.63 Second Amendment to Sublease, dated as of April 19, 1988, between Filmworks U.S.A., Inc.
and MCA Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.64 Third Amendment to Sublease, dated as of September 15, 1988, between Filmworks U.S.A.,
Inc. and MCA Concerts, Inc. (incorporated by reference to Registration Statement on Form
S-1 (File No. 333-43287) filed with the SEC)
</TABLE>
II-11
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ -------------------------------------------------------------------------------------------
<S> <C>
10.65 Memorandum of Agreement, dated as of October 10, 1988, by and between the City of
Atlanta and MCA Concerts, Inc. (incorporated by reference to Registration Statement on
Form S-1 (File No. 333-43287) filed with the SEC)
10.66 Assignment of Sublease, dated as of June 15, 1989, by Filmworks U.S.A., Inc. and MCA
Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.67 Assignment of Sublease, dated as of June 23, 1989, by Filmworks U.S.A., Inc. and MCA
Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.68 Assignment of Agreement, dated as of June 15, 1989, by the City of Atlanta and MCA
Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.69 Assignment of Agreement, dated as of June 23, 1989, by the City of Atlanta and MCA
Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.70 Lease, dated as of June, 1997, by and between 500 Texas Avenue Limited Partnership and
Bayou Place Performance Hall General Partnership (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.71 Master Licensed User Agreement, dated as of February 1, 1996, by and between Ticketmaster
Ticketing Co., Inc. and Pace Entertainment Corporation (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.72 Joint Venture Agreement, dated as of July, 1995 by and between American Broadway, Inc.
and Gentry & Associates, Inc. (incorporated by reference to Registration Statement on Form
S-1 (File No. 333-43287) filed with the SEC)
10.73 Amended and Restated Employment Agreement, dated as of December 12, 1997, by and
between SFX Entertainment, Inc. and Brian E. Becker (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.74 Second Amended and Restated Partnership Agreement, dated as of April 1, 1994 by and
between The Westside Amphitheatre Corporation, San Bernardino Amphitheater Corporation
and YM Corp. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.75 Employment Agreement, dated as of January 2, 1997, between Delsener/Slater Enterprises,
Inc., SFX Broadcasting, Inc. and Ron Delsener (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.76 Employment Agreement, dated as of January 2, 1997, between Delsener/Slater Enterprises,
Inc., SFX Broadcasting, Inc. and Mitch Slater (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.77 1998 Stock Option and Restricted Stock Plan of the Company (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.78 Reserved
10.79 Credit and Guarantee Agreement, dated as of February 26, 1998, by and among SFX
Entertainment, the Subsidiary Guarantors party thereto, the Lenders party thereto, Goldman
Sachs Partners, L.P., as co-documentation agent, Lehman Commercial Paper, Inc., as
co-documentation agent and the Bank of New York, as administrative agent (incorporated by
reference to Report on Form 8-K (File No. 333-43287) filed with the SEC on March 11, 1998)
</TABLE>
II-12
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ---------- ---------------------------------------------------------------------------------------------
<S> <C>
10.80 Purchase Agreement, dated February 5, 1998, relating to the 9 1/8% Senior Subordinated Notes
due 2008 of SFX Entertainment, Inc., by and among SFX Entertainment, Inc., Lehman
Brothers Inc., Sachs & Co., BNY Capital Markets, Inc. and ING Barings (incorporated by
reference to Report on Form 8-K (File No. 333-43287) filed with the SEC on March 11, 1998)
10.81 Amendment No. 2 to Agreement and Plan of Merger among SBI Holdings Corporation, SBI
Radio Acquisition Corporation and SFX Broadcasting, Inc., dated March 9, 1998
(incorporated by reference to Annual Report on Form 10-K (File No. 333-43287) filed with
the SEC on March 18, 1998)
12.1* Ratio of Earnings to Fixed Charges.
21.1 Subsidiaries of the Registrant (incorporated by reference to Annual Report on Form 10-K
(File No. 333-43287) filed with the SEC on March 18, 1998)
23.1 + Consent of Baker & McKenzie (included in Exhibit 5.1).
23.2* Consent of Ernst & Young LLP.
23.3* Consent of Arthur Andersen LLP.
23.4* Consent of Price Waterhouse LLP.
24.1* Power of Attorney for D. Geoffrey Armstrong
24.2* Power of Attorney for Allen Becker
24.3* Power of Attorney for Brian Becker
24.4* Power of Attorney for Gary Becker
24.5* Power of Attorney for Thomas P. Benson
24.6* Power of Attorney for Bill Brusca
24.7* Power of Attorney for Nicholas P. Clainos
24.8* Power of Attorney for Peter Conlon
24.9* Power of Attorney for Alex Cooley
24.10* Power of Attorney for Ron Delsener
24.11* Power of Attorney for Edward Dugan
24.12* Power of Attorney for Michael G. Ferrel
24.13* Power of Attorney for Kraig G. Fox
24.14* Power of Attorney for Paul Kramer
24.15* Power of Attorney for Richard A. Liese
24.16* Power of Attorney for P. David Lucas
24.17* Power of Attorney for James F. O'Grady, Jr.
24.18* Power of Attorney for Gregg D. Perloff
24.19* Power of Attorney for Franklin D. Rockwell, Jr.
24.20* Power of Attorney for Mitch Slater
24.21* Power of Attorney for Robert F.X. Sillerman
24.22* Power of Attorney for Peter Strauss
</TABLE>
II-13
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ -----------------------------------------------------------------------------------------
<S> <C>
25.1+ Statement of Eligibility and Qualification of Trustee on Form T-1 of The Chase Manhattan
Bank
99.1+ Form of Letter of Transmittal for the 9 1/8% Senior Subordinated Notes due 2008
99.2+ Form of Notice of Guaranteed Delivery
99.3+ Form of Letter to Clients
99.4+ Form of Letter to Broker-Dealers
</TABLE>
- ----------
+ To be filed by amendment.
* Filed herewith.
(b) Financial Schedules.
None.
ITEM 22. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such posteffective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it
became effective.
II-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
SFX Entertainment, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman, Member of the April 16, 1998
- -----------------------------
Office of the Chairman and Director
Robert F.X. Sillerman
(principal executive officer)
* President, Chief Executive Officer, April 16, 1998
- -----------------------------
Member of the Office of the
Michael G. Ferrel
Chairman and Director
* Executive Vice President and Director April 16, 1998
- -----------------------------
D. Geoffrey Armstrong
* Chief Financial Officer, Vice President April 16, 1998
- -----------------------------
and Director (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, General April 16, 1998
- -----------------------------
Counsel, Secretary and Director
Howard J. Tytel
* Vice President, Associate General April 16, 1998
- -----------------------------
Counsel and Director
Richard A. Liese
* Director April 16, 1998
- -----------------------------
James F. O'Grady, Jr.
* Director April 16, 1998
- -----------------------------
Paul Kramer
* Director April 16, 1998
- -----------------------------
Edward F. Dugan
* Director April 16, 1998
- -----------------------------
Brian Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
AKG, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Director April 16, 1998
- -----------------------------
Gregg D. Perloff
* Director April 16, 1998
- -----------------------------
Franklin D. Rockwell, Jr.
* Director April 16, 1998
- -----------------------------
Nicholas P. Clainos
* Chief Financial Officer, Vice President April 16, 1998
- -----------------------------
and Director (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
American Broadway, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Attorney-in-Fact
for Kraig G. Fox,
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Gary Becker
* Vice President (principal executive April 16, 1998
- -----------------------------
officer, principal financial officer and
Kraig G. Fox
principal accounting officer)
* Director April 16, 1998
- -----------------------------
Peter Straus
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Ardee Festivals, N.J., Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Ardee Productions, Ltd.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Atlanta Concerts, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Chief Financial Officer, Vice President April 16, 1998
- -----------------------------
(principal financial and principal
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, General April 16, 1998
- -----------------------------
Counsel, Secretary and Director
Howard J. Tytel
* Co-President and Director April 16, 1998
- -----------------------------
Peter Conlon
* Co-President April 16, 1998
- -----------------------------
Alex Cooley
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Beach Concerts, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
BGP Acquisition, LLC
By: SFX Entertainment, Inc.,
its managing member
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman, Member of the April 16, 1998
- -----------------------------
Office of the Chairman and Director
Robert F.X. Sillerman
(principal executive officer)
* President, Chief Executive Officer, April 16, 1998
- -----------------------------
Member of the Office of the
Michael G. Ferrel
Chairman and Director
* Executive Vice President and Director April 16, 1998
- -----------------------------
D. Geoffrey Armstrong
* Chief Financial Officer, Vice President April 16, 1998
- -----------------------------
an Director (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, General April 16, 1998
- -----------------------------
Counsel, Secretary and Director
Howard J. Tytel
* Vice President, Associate General April 16, 1998
- -----------------------------
Counsel and Director
Richard A. Liese
* Director April 16, 1998
- -----------------------------
James F. O'Grady, Jr.
* Director April 16, 1998
- -----------------------------
Paul Kramer
* Director April 16, 1998
- -----------------------------
Edward F. Dugan
* Director April 16, 1998
- -----------------------------
Brian Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Bill Graham Enterprises, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Nicholas P. Clainos
* Director April 16, 1998
- -----------------------------
Gregg D. Perloff
* Director April 16, 1998
- -----------------------------
Franklin D. Rockwell, Jr.
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Bill Graham Management, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Nicholas P. Clainos
* Director April 16, 1998
- -----------------------------
Gregg D. Perloff
* Director April 16, 1998
- -----------------------------
Franklin D. Rockwell, Jr.
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Bill Graham Presents, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Nicholas P. Clainos
* Director April 16, 1998
- -----------------------------
Gregg D. Perloff
* Director April 16, 1998
- -----------------------------
Franklin D. Rockwell, Jr.
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-25
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Broadway Concerts, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-26
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Cooley and Conlon Management Co.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer (principal April 16, 1998
- -----------------------------
financial and accounting officer)
Thomas P. Benson
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Co-President and Director April 16, 1998
- -----------------------------
Peter Conlon
* Co-President April 16, 1998
- -----------------------------
Alex Cooley
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-27
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Concerts, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President and Co-Chief Executive April 16, 1998
- -----------------------------
Officer
Ron Delsener
* Co-President and Co-Chief Executive April 16, 1998
- -----------------------------
Officer
Mitch Slater
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-28
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Connecticut Amphitheater Development
Corp.
By: /s/ Howard J. Tytel
---------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-29
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Connecticut Concerts, Incorporated
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-30
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Connecticut Performing Arts, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-31
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Connecticut Performing Arts
Partners
By: NOC, Inc., a general partner
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-32
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Conn Ticketing Company
By: Northeast Ticketing Company, a general
partner
By: /s/ Howard J. Tytel
-------------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-33
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Contemporary Group Acquisition
Corp.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- -------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Chief Executive Officer and Director April 16, 1998
- -----------------------------
(principal executive officer)
Michael G. Ferrel
* Chief Financial Officer April 16, 1998
- -----------------------------
(principal financial and accounting
Thomas P. Benson
officer)
/s/ Howard J. Tytel Executive Vice President, April 16, 1998
- -----------------------------
Secretary and Director
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-34
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Contemporary Group, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- -------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Chief Executive Officer and Director April 16, 1998
- -----------------------------
(principal executive officer)
Michael G. Ferrel
* Chief Financial Officer April 16, 1998
- -----------------------------
(principal financial and accounting
Thomas P. Benson
officer)
/s/ Howard J. Tytel Executive Vice President, April 16, 1998
- -----------------------------
Secretary and Director
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-35
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Contemporary Marketing, Inc
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- -------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Chief Executive Officer and Director April 16, 1998
- -----------------------------
(principal executive officer)
Michael G. Ferrel
* Chief Financial Officer April 16, 1998
- -----------------------------
(principal financial and accounting
Thomas P. Benson
officer)
/s/ Howard J. Tytel Executive Vice President, April 16, 1998
- -----------------------------
Secretary and Director
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-36
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Contemporary Productions,
Incorporated
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- --------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Chief Executive Officer, and Director April 16, 1998
- -----------------------------
(principal executive officer)
Michael G. Ferrel
* Chief Financial Officer April 16, 1998
- -----------------------------
(principal financial and accounting
Thomas P. Benson
officer)
/s/ Howard J. Tytel Executive Vice President, April 16, 1998
- -----------------------------
Secretary and Director
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-37
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Contemporary Sports, Incorporated
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- -------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Chief Executive Officer and Director April 16, 1998
- -----------------------------
(principal executive officer)
Michael G. Ferrel
* Chief Financial Officer April 16, 1998
- -----------------------------
(principal financial and accounting
Thomas P. Benson
officer)
/s/ Howard J. Tytel Executive Vice President, April 16, 1998
- -----------------------------
Secretary and Director
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-38
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Deer Creek Amphitheater Concerts,
Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Chief Executive Officer, President April 16, 1998
- -----------------------------
and Director
P. David Lucas
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-39
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Deer Creek Amphitheater Concerts
L.P.
By: Deer Creek Amphitheater
Concerts, Inc., its general
partner
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Chief Executive Officer, President April 16, 1998
- -----------------------------
and Director
P. David Lucas
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-40
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Delsener/Slater Enterprises, Ltd.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* President, Chief Executive Officer, April 16, 1998
- -----------------------------
Member of the Office of the
Michael G. Ferrel
Chairman and Director
/s/ Howard J. Tytel Executive Vice President, General April 16, 1998
- -----------------------------
Counsel, Secretary and Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer and Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer and Director
Mitch Slater
* Vice President, Chief Financial Officer April 16, 1998
- -----------------------------
(principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-41
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Dumb Deal, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-42
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Entertainment Performing Arts, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer, Vice President April 16, 1998
- -----------------------------
and Director (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer and Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer and Director
Mitch Slater
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-43
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Exit 116 Revisited, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-44
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Festival Productions, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-45
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Fillmore Corporation
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Nicholas P. Clainos
* Director April 16, 1998
- -----------------------------
Gregg D. Perloff
* Director April 16, 1998
- -----------------------------
Franklin D. Rockwell, Jr.
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-46
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Fillmore Fingers, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Nicholas P. Clainos
* Director April 16, 1998
- -----------------------------
Gregg D. Perloff
* Director April 16, 1998
- -----------------------------
Franklin D. Rockwell, Jr.
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-47
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
FPI Concerts, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-48
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
GSAC Partners
By: Pavilion Partners, its general
partner
By: SM/PACE, Inc., its general
partner
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-49
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
High Cotton, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Co-President and Director April 16, 1998
- -----------------------------
Peter Conlon
* Chief Executive Officer and Director April 16, 1998
- -----------------------------
(principal executive officer)
Michael G. Ferrel
* Chief Financial Officer April 16, 1998
- -----------------------------
(principal financial and accounting
Thomas P. Benson
officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President April 16, 1998
- -----------------------------
Alex Cooley
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-50
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
In House Tickets, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-51
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Irving Plaza Concerts, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Attorney-in-Fact for
Thomas P. Benson
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ------------------------------------- ---------------
<S> <C> <C>
* President and Director April 16, 1998
- -----------------------------
(principal executive officer)
Bill Brusca
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal executive officer
Thomas P. Benson
and principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-52
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Murat Center Concerts, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- --------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer April 16, 1998
- -----------------------------
(principal financial and accounting
Thomas P. Benson
officer)
/s/ Howard J. Tytel Executive Vice President, General April 16, 1998
- -----------------------------
Counsel, Secretary and Director
Howard J. Tytel
(principal executive officer)
* Chief Executive Officer and President April 16, 1998
- -----------------------------
P. David Lucas
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-53
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Murat Center Concerts, L.P.
By: Murat Center Concerts, Inc., its
general partner
By: /s/ Howard J. Tytel
-------------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- --------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer April 16, 1998
- -----------------------------
(principal financial and accounting
Thomas P. Benson
officer)
/s/ Howard J. Tytel Executive Vice President, General April 16, 1998
- -----------------------------
Counsel, Secretary and Director
Howard J. Tytel
(principal executive officer)
* Chief Executive Officer and President April 16, 1998
- -----------------------------
P. David Lucas
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-54
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
NOC, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, General April 16, 1998
- -----------------------------
Counsel, Secretary and Director
Howard J. Tytel
* Vice President, Chief Financial Officer April 16, 1998
- -----------------------------
(principal financial officer and
Thomas P. Benson
principal accounting officer)
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer and Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer and Director
Mitch Slater
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-55
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Northeast Ticketing Company
By: NOC, Inc., its general partner
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* President, Chief Executive Officer and April 16, 1998
- -----------------------------
Director
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, General April 16, 1998
- -----------------------------
Counsel, Secretary and Director
Howard J. Tytel
* Vice President, Chief Financial Officer April 16, 1998
- -----------------------------
(principal financial officer and
Thomas P. Benson
principal accounting officer)
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer and Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer and Director
Mitch Slater
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-56
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Old PCI, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-57
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE AEP Acquisition, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-58
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Amphitheaters, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-59
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Amphitheater Management, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-60
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Bayou Place, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-61
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Communications, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-62
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Concerts GP, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-63
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Concerts, Ltd.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-64
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Entertainment Corporation
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-65
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Entertainment GP Corp.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-66
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Entertainment Group, Ltd.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-67
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Milton Keynes, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-68
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Motor Sports, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-69
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Music Group, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-70
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Productions, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-71
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Theatrical Group, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-72
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Touring, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-73
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE Variety Entertainment, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Attorney-in-Fact for
Thomas P. Benson
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------- ---------------
<S> <C> <C>
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer) (principal
executive officer)
* Director April 16, 1998
- -----------------------------
Kraig Fox
* Director April 16, 1998
- -----------------------------
Gary Becker
* Director April 16, 1998
- -----------------------------
Peter Straus
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-74
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PACE UK Holding Corporation
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-75
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Pavilion Partners
By: SM/PACE, Inc., its general
partner
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-76
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PEC, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-77
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Polaris Amphitheater Concerts, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Chief Executive Officer, President and April 16, 1998
- -----------------------------
Director
P. David Lucas
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-78
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
PTG-Florida, Inc.
By: PACE Theatrical Group, Inc. its
general partner
By: /s/ Howard J. Tytel
-------------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-79
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
QN Corp.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-80
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
SFX Broadcasting of the Midwest,
Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Attorney-in-Fact for
Thomas P. Benson, Vice
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- -------------------------------------- ---------------
<S> <C> <C>
* President and Director April 16, 1998
- -----------------------------
P. David Lucas
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
/s/ Howard J. Tytel Director April 16, 1998
- -----------------------------
Howard J. Tytel
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal executive officer)
Thomas P. Benson
(principal financial officer and
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-81
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
SFX Concerts, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-82
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
SFX Network Group, LLC
By: SFX Entertainment, Inc., its Managing
Member
By: /s/ Howard J. Tytel
-------------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman, Member of the April 16, 1998
- -----------------------------
Office of the Chairman and Director
Robert F.X. Sillerman
(principal executive officer)
* President, Chief Executive Officer, April 16, 1998
- -----------------------------
Member of the Office of the
Michael G. Ferrel
Chairman and Director
* Executive Vice President and Director April 16, 1998
- -----------------------------
D. Geoffrey Armstrong
* Chief Financial Officer, Vice President April 16, 1998
- -----------------------------
and Director (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, General April 16, 1998
- -----------------------------
Counsel, Secretary and Director
Howard J. Tytel
* Vice President, Associate General April 16, 1998
- -----------------------------
Counsel and Director
Richard A. Liese
* Director April 16, 1998
- -----------------------------
James F. O'Grady, Jr.
* Director April 16, 1998
- -----------------------------
Paul Kramer
* Director April 16, 1998
- -----------------------------
Edward F. Dugan
* Director April 16, 1998
- -----------------------------
Brian Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-83
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Shoreline Amphitheatre, Ltd.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Nicholas P. Clainos
* Director April 16, 1998
- -----------------------------
Gregg D. Perloff
* Director April 16, 1998
- -----------------------------
Franklin D. Rockwell, Jr.
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-84
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Shoreline Amphitheatre Partners
By: Shoreline Ampitheatre, Ltd., its
general partner
By: /s/ Howard J. Tytel
-------------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Nicholas P. Clainos
* Director April 16, 1998
- -----------------------------
Gregg D. Perloff
* Director April 16, 1998
- -----------------------------
Franklin D. Rockwell, Jr.
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-85
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
SJS Entertainment Corporation
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Vice President, Chief Financial Officer April 16, 1998
- -----------------------------
and Director (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Assistant April 16, 1998
- -----------------------------
Secretary and Director (principal
Howard J. Tytel
executive officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-86
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
SM/PACE, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-87
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Southeast Ticketing Company
By: Connecticut Amphitheatre Development
Corp.,
its general partner
By: /s/ Howard J. Tytel
-------------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman and Director April 16, 1998
- -----------------------------
(principal executive officer)
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Ron Delsener
* Co-President, Co-Chief Executive April 16, 1998
- -----------------------------
Officer, Director
Mitch Slater
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial officer and
Thomas P. Benson
principal accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-88
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Southern Promotions, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Co-President and Director April 16, 1998
- -----------------------------
Peter Conlon
* Chief Executive Officer and Director April 16, 1998
- -----------------------------
(principal executive officer)
Michael G. Ferrel
* Chief Financial Officer (principal April 16, 1998
- -----------------------------
financial and accounting officer)
Thomas P. Benson
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director
Howard J. Tytel
* Co-President April 16, 1998
- -----------------------------
Alex Cooley
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-89
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Sunshine Concerts, LLC
By: SFX Broadcasting of the Midwest,
Inc.,
its managing member
By: /s/ Howard J. Tytel
---------------------------------
Howard J. Tytel,
Attorney-in-Fact for
Thomas P. Benson, Chief Financial
Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* President and Director April 16, 1998
- -----------------------------
P. David Lucas
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
/s/ Howard J. Tytel Director April 16, 1998
- -----------------------------
Howard J. Tytel
* Vice President, Chief Financial Officer April 16, 1998
- -----------------------------
(principal executive officer) (principal
Thomas P. Benson
financial officer and principal
accounting officer)
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-90
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Sunshine Designs, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Chief Executive Officer and President April 16, 1998
- -----------------------------
P. David Lucas
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-91
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Sunshine Designs, LP
By: Sunshine Design, Inc., its
general partner
By: /s/ Howard J. Tytel
---------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Chief Executive Officer and President April 16, 1998
- -----------------------------
P. David Lucas
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-92
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Suntex Acquisition, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Chief Executive Officer April 16, 1998
- -----------------------------
P. David Lucas
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-93
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Suntex Acquisition, LP
By: Suntex Acquisition, Inc., its
general partner
By: /s/ Howard J. Tytel
----------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Chief Executive Officer April 16, 1998
- -----------------------------
P. David Lucas
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Vice President and Chief Financial April 16, 1998
- -----------------------------
Officer (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-94
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
The Album Network, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Chief Executive Officer and Director April 16, 1998
- -----------------------------
(principal executive officer)
Michael G. Ferrel
* Vice President, Chief Financial Officer April 16, 1998
- -----------------------------
and Director (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Assistant April 16, 1998
- -----------------------------
Secretary and Director
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-95
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Touring Productions, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-96
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Tuneful Company, Inc.
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Michael G. Ferrel
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
* Director April 16, 1998
- -----------------------------
Brian Becker
* Director April 16, 1998
- -----------------------------
Allen Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-97
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Westbury Music Fair, LLC
By: SFX Entertainment, Inc., its managing
member
By: /s/ Howard J. Tytel
-------------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Executive Chairman, Member of the April 16, 1998
- -----------------------------
Office of the Chairman and Director
Robert F.X. Sillerman
(principal executive officer)
* President, Chief Executive Officer, April 16, 1998
- -----------------------------
Member of the Office of the
Michael G. Ferrel
Chairman and Director
* Executive Vice President and Director April 16, 1998
- -----------------------------
D. Geoffrey Armstrong
* Chief Financial Officer, Vice President April 16, 1998
- -----------------------------
and Director (principal financial and
Thomas P. Benson
accounting officer)
/s/ Howard J. Tytel Executive Vice President, General April 16, 1998
- -----------------------------
Counsel, Secretary and Director
Howard J. Tytel
* Vice President, Associate General April 16, 1998
- -----------------------------
Counsel and Director
Richard A. Liese
* Director April 16, 1998
- -----------------------------
James F. O'Grady, Jr.
* Director April 16, 1998
- -----------------------------
Paul Kramer
* Director April 16, 1998
- -----------------------------
Edward F. Dugan
* Director April 16, 1998
- -----------------------------
Brian Becker
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-98
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on April 16, 1998.
Wolfgang Records
By: /s/ Howard J. Tytel
------------------------------
Howard J. Tytel,
Executive Vice President and
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
the registrant, its general partner or managing member, as the case may be, and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
* Director April 16, 1998
- -----------------------------
Robert F.X. Sillerman
* Director April 16, 1998
- -----------------------------
Nicholas P. Clainos
* Director April 16, 1998
- -----------------------------
Gregg D. Perloff
* Director April 16, 1998
- -----------------------------
Franklin D. Rockwell, Jr.
* Chief Financial Officer and Vice April 16, 1998
- -----------------------------
President (principal financial
Thomas P. Benson
and accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and April 16, 1998
- -----------------------------
Director (principal executive officer)
Howard J. Tytel
*By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Attorney-in-fact
</TABLE>
II-99
<PAGE>
<TABLE>
EXHIBIT INDEX
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ----------- ---------------------------------------------------------------------------------------------
<S> <C>
2.1 + Form of Distribution Agreement between SFX Entertainment and SFX.
2.2 + Form of Tax Sharing Agreement between SFX Entertainment and SFX.
2.3 + Form of Employee Benefits Agreement between SFX Entertainment and SFX.
3.1 + Amended and Restated Certificate of Incorporation of SFX Entertainment.
3.2 Bylaws of SFX Entertainment (incorporated by reference to Registration Statement on Form
S-1 (File No. 333-43387) filed with the SEC on March 11, 1998).
3.3 Certificate of Amendment to the Certificate of Incorporation of the Company, as filed with
the Secretary of State of Delaware on February 25, 1998 (incorporated by reference to Report
on Form 8-K (File No. 333-43287) filed with the SEC on March 11, 1998)
3.4 Certificate of Designations relating to the Series A Preferred Stock of the Company as filed
with the Secretary of State of Delaware on February 27, 1998 (incorporated by reference to
Report on Form 8-K (File No. 333-43287) filed with the SEC on March 11, 1998)
3.5* Restated Articles of Incorporation of AKG, Inc.
3.6* Bylaws of AKG, Inc.
3.7 + Certificate of Incorporation of American Broadway, Inc.
3.8 + Bylaws of American Broadway, Inc.
3.9 + Certificate of Incorporation of Ardee Festivals N.J., Inc.
3.10 + Bylaws of Ardee Festivals N.J., Inc.
3.11 * Certificate of Incorporation of Ardee Productions, Ltd.
3.12 + Bylaws of Ardee Productions, Ltd.
3.13 + Certificate of Incorporation of Atlanta Concerts, Inc.
3.13A+ Bylaws of Atlanta Concerts, Inc.
3.13B+ Certificate of Incorporation of Beach Concerts, Inc.
3.14 + Bylaws of Beach Concerts, Inc.
3.15 + Certificate of Formation of BGP Acquisition, LLC.
3.16 * Articles of Incorporation of Bill Graham Enterprises, Inc.
3.17 + Bylaws of Bill Graham Enterprises, Inc.
3.18 * Articles of Incorporation of Bill Graham Management, Inc.
3.19 * Bylaws of Bill Graham Management, Inc.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ ---------------------------------------------------------------------------------
<S> <C>
3.20* Articles of Incorporation of Bill Graham Presents, Inc.
3.21* Amended and Restated Bylaws of Bill Graham Presents, Inc.
3.22* Articles of Incorporation of BG Presents, Inc.
3.23* Bylaws of BG Presents, Inc.
3.24+ Certificate of Incorporation of Broadway Concerts, Inc.
3.25* Bylaws of Broadway Concerts, Inc.
3.26* Articles of Incorporation of Cooley and Conlon Management Co.
3.27* Bylaws of Cooley and Conlon Management Co.
3.28* Articles of Incorporation of Concerts, Inc.
3.29* Bylaws of Concerts, Inc.
3.30* Certificate of Incorporation of Connecticut Amphitheater Development Corporation
3.31* Bylaws of Connecticut Amphitheater Development Corporation
3.32* Certificate of Incorporation of Connecticut Concerts, Incorporated.
3.33+ Bylaws of Connecticut Concerts, Incorporated.
3.34+ Certificate of Incorporation of Connecticut Performing Arts, Inc.
3.35* Bylaws of Connecticut Performing Arts, Inc.
3.36+ Certificate of Limited Partnership of Connecticut Performing Arts Partners
3.37+ Certificate of Limited Partnership of Conn Ticketing Company.
3.38* Certificate of Incorporation of Contemporary Group Acquisition Corp.
3.39+ Bylaws of Contemporary Group Acquisition Corp.
3.40* Articles of Incorporation of Contemporary Group, Inc.
3.41+ Bylaws of Contemporary Group, Inc.
3.42* Certificate of Incorporation of Contemporary Marketing, Incorporated.
3.43* Bylaws of Contemporary Marketing, Incorporated.
3.44* Certificate of Incorporation of Contemporary Productions, Inc.
3.45* Bylaws of Contemporary Productions, Inc.
3.46* Certificate of Incorporation of Contemporary Sports, Incorporated
3.47* Bylaws of Contemporary Sports, Incorporated.
3.48* Certificate of Incorporation of Deer Creek Amphitheater Concerts, Inc.
3.49* Bylaws of Deer Creek Amphitheater Concerts, Inc.
3.50* Certificate of Limited Partnership of Deer Creek Amphitheater Concerts, LP.
3.51+ Certificate of Incorporation of Delsener/Slater Enterprises, Ltd.
3.52+ Bylaws of Delsener/Slater Enterprises, Ltd.
3.53+ Certificate of Incorporation of Dumb Deal, Inc.
3.54+ Bylaws of Dumb Deal, Inc.
</TABLE>
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<TABLE>
<CAPTION>
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NO. DESCRIPTION
- ------------ -----------------------------------------------------------------
<S> <C>
3.55* Articles of Incorporation of Entertainment Performing Arts, Inc.
3.56* Bylaws of Entertainment Performing Arts, Inc.
3.57* Certificate of Incorporation of Exit 116 Revisited, Inc.
3.58* Bylaws of Exit 116 Revisited, Inc.
3.59+ Certificate of Incorporation of Festival Productions, Inc.
3.60+ Bylaws of Festival Productions, Inc.
3.61* Restated Certificate of Incorporation of Fillmore Corporation
3.62* Bylaws of Fillmore Corporation
3.63* Restated Articles of Incorporation of Fillmore Fingers, Inc.
3.64* Bylaws of Fillmore Fingers, Inc.
3.65* Certificate of Incorporation of FPI Concerts, Inc.
3.66* Bylaws of FPI Concerts, Inc.
3.67+ Certificate of Limited Partnership of GSAC Partners
3.68* Articles of Incorporation of High Cotton, Inc.
3.69* Bylaws of High Cotton, Inc.
3.70* Certificate of Incorporation of In House Tickets, Inc.
3.71* Bylaws of In House Tickets, Inc.
3.72* Certificate of Incorporation of Irving Plaza Concerts, Inc.
3.73* Bylaws of Irving Plaza Concerts, Inc.
3.74* Certificate of Incorporation of Murat Center Concerts, Inc.
3.75* Bylaws of Murat Center Concerts, Inc.
3.76* Certificate of Limited Partnership of Murat Center Concerts, LP.
3.77* Certificate of Incorporation of NOC, Inc.
3.78* Bylaws of NOC, Inc.
3.79* Certificate of Incorporation of Northeast Ticketing Company.
3.80* Bylaws of Northeast Ticketing Company
3.81* Articles of Incorporation of Old PCI, Inc.
3.82+ Bylaws of Old PCI, Inc.
3.83* Articles of Incorporation of PACE AEP Acquisition, Inc.
3.84* Bylaws of PACE AEP Acquisition, Inc.
3.85* Articles of Incorporation of PACE Amphitheaters, Inc.
3.86* Bylaws of PACE Amphitheaters, Inc.
3.87* Articles of Incorporation of PACE Amphitheater Management, Inc.
3.88* Bylaws of PACE Amphitheater Management, Inc.
3.89* Articles of Incorporation of PACE Bayou Place, Inc.
</TABLE>
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<TABLE>
<CAPTION>
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NO. DESCRIPTION
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<S> <C>
3.90* Bylaws of PACE Bayou Place, Inc.
3.91* Articles of Incorporation of PACE Communications, Inc.
3.92* Bylaws of PACE Communications, Inc.
3.93* Articles of Incorporation of PACE Concerts GP, Inc.
3.94* Bylaws of PACE Concerts GP, Inc.
3.95* Certificate of Limited Partnership for PACE Concerts, Ltd.
3.96 + Reserved.
3.97 + Certificate of Incorporation of PACE Entertainment Corporation
3.98 + Bylaws of PACE Entertainment Corporation
3.99* Articles of Incorporation of PACE Entertainment GP Corp.
3.100* Bylaws of PACE Enterainment GP Corp.
3.101 + Certificate of Limited Partnership for PACE Entertainment Group, Ltd.
3.102 + Reserved.
3.103 + Articles of Incorporation of PACE Milton Keynes, Inc.
3.104 + Bylaws of PACE Milton Keynes, Inc.
3.105 + Articles of Incorporation of PACE Motor Sports, Inc.
3.106 + Bylaws of PACE Motor Sports, Inc.
3.107 + Certificate of Incorporation of PACE Music Group, Inc.
3.108 + Bylaws of PACE Music Group, Inc.
3.109 + Certificate of Incorporation of PACE Productions, Inc.
3.110 + Bylaws of PACE Productions, Inc.
3.111 + Articles of Incorporation of PACE Theatrical Group, Inc.
3.112 + Bylaws of PACE Theatrical Group, Inc.
3.113 + Articles of Incorporation of PACE Touring, Inc.
3.114 + Bylaws of PACE Touring, Inc.
3.115 + Certificate of Incorporation of PACE Variety Entertainment, Inc.
3.116 + Bylaws of PACE Variety Entertainment, Inc.
3.117 + Articles of Incorporation of PACE UK Holding Corporation
3.118 + Bylaws of PACE UK Holding Corporation
3.119 + Certificate of Limited Partnership of Pavilion Partners
3.119A+ Certificate of Incorporation of PEC, Inc.
3.119B+ Bylaws of PEC, Inc.
3.120 + Certificate of Incorporation of Polaris Amphitheater Concerts, Inc.
3.121 + Articles of Incorporation of PTG-Florida, Inc.
3.122 + Bylaws of PTG-Florida, Inc.
</TABLE>
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<TABLE>
<CAPTION>
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NO. DESCRIPTION
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<S> <C>
3.123+ Bylaws of Polaris Amphitheater Concerts, Inc.
3.124+ Certificate of Incorporation of QN Corp.
3.125+ Bylaws of QN Corp.
3.126+ Certificate of Incorporation of SFX Broadcasting of the Midwest, Inc.
3.127+ Bylaws of SFX Broadcasting of the Midwest, Inc.
3.128+ Certificate of Incorporation of SFX Concerts, Inc.
3.129+ Bylaws of SFX Concerts, Inc.
3.130+ Certificate of Formation of SFX Network Group, LLC.
3.131+ Certificate of Incorporation of Shoreline Amphitheatre, Ltd.
3.132+ Bylaws of Shoreline Amphitheatre, Ltd.
3.133+ Certificate of Limited Partnership of Shoreline Amphitheatre Partners
3.134+ Articles of Incorporation of SJS Entertainment Corporation
3.135+ Bylaws of SJS Entertainment Corporation
3.136+ Certificate of Incorporation of SM/PACE, Inc.
3.137+ Bylaws of SM/PACE, Inc.
3.138+ Certificate of Incorporation of Southeast Ticketing Company.
3.138A+ Bylaws of Southeast Ticketing Company
3.139+ Articles of Incorporation of Southern Promotions, Inc.
3.140+ Bylaws of Southern Promotions, Inc.
3.141+ Certificate of Formation of Sunshine Concerts, LLC.
3.142+ Certificate of Incorporation of Sunshine Designs, Inc.
3.143+ Bylaws of Sunshine Designs, Inc.
3.144+ Certificate of Limited Partnership of Sunshine Design, LP
3.145+ Certificate of Incorporation of Suntex Acquisition, Inc.
3.146+ Bylaws of Suntex Acquisition, Inc.
3.147+ Certificate of Limited Partnership of Suntex Acquisition, LP
3.148+ Certificate of Incorporation of The Album Network, Inc.
3.149+ Bylaws of The Album Network Inc.
3.150+ Articles of Incorporation of Touring Productions, Inc.
3.151+ Bylaws of Touring Productions, Inc.
3.152+ Articles of Incorporation of Tuneful Company, Inc.
3.153+ Bylaws of Tuneful Company, Inc.
3.154+ Certificate of Formation of Westbury Music Fair, LLC
3.155+ Articles of Incorporation of Wolfgang Records
3.156+ Bylaws of Wolfgang Records
</TABLE>
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<TABLE>
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EXHIBIT
NO. DESCRIPTION
- ---------- -----------------------------------------------------------------------------------------------
<S> <C>
4.1 Indenture relating to the 9 1/8% Senior Subordinated Notes due 2008 (incorporated by
reference to Current Report on Form 8-K (File No. 333-43287) filed with the SEC on March 11, 1998)
4.2 Registration Rights Agreement relating to the 9 1/8% Senior Subordinated Notes due 2008
(incorporated by reference to Current Report on Form 8-K (File No. 333-43287) filed with the SEC on
March 11, 1998)
5.1 + Opinion of Baker & McKenzie.
10.1 Stock Purchase Agreement, dated as of October 11, 1996, by and among Delsener/Slater
Enterprises, Ltd., Beach Concerts, Inc., Connecticut Concerts Incorporated, Broadway
Concerts, Inc., Arden Productions, Ltd., In-house Tickets, Inc., Exit 116 Revisited, Inc., Ron
Delsener, Mitch Slater and SFX Broadcasting, Inc. (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.2 License Agreement, dated January 29, 1990, by and between the State of New York and
Beach Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1 (File
No. 333-43287) filed with the SEC)
10.3 Amendment to License Agreement of January 29, 1990, dated as of April 11, 1997, by and
between the State of New York and Beach Concerts, Inc. (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.4 Lease Agreement, Easement Agreement and Declaration of Restrictive Covenants dated as of
May 1, 1996, by and between New Jersey Highway Authority and GSAC Partners
(incorporated by reference to Registration Statement on Form S-1 (File No. 333-43287) filed
with the SEC)
10.5 Partnership Agreement, dated as of November 18, 1996, by and between Pavilion Partners
Exit 116 Revisited, Inc. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.6 Asset Purchase and Sale Agreement, dated June 23, 1997, by and among Sunshine Concerts,
L.L.C., SFX Broadcasting, Inc., Sunshine Promotions, Inc., P. David Lucas and Steven P.
Sybesma (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.7 Asset Purchase and Sale Agreement, dated as of June 23, 1997, by and among Suntex
Acquisition, L.P., SFX Broadcasting, Inc., Suntex, Inc., P. David Lucas, Steven P. Sybesma,
Greg Buttrey and John Valant (incorporated by reference to Registration Statement on Form
S-1 (File No. 333-43287) filed with the SEC)
10.8 Asset Purchase and Sale Agreement, dated as of June 23, 1997, by and among Deer Creek
Amphitheater Concerts, L.P., SFX Broadcasting, Inc., Deer Creek Partners, L.P., Sand Creek
Partners, L.P., Sand Creek, Inc., P. David Lucas and Steven P. Sybesma (incorporated by
reference to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.9 Asset Purchase and Sale Agreement, dated as of June 23, 1997, by and among Murat Centre
Concerts, L.P., SFX Broadcasting, Inc., Murat Centre L.P., P. David Lucas and Steven P.
Sybesma (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.10 Asset Purchase and Sale Agreement, dated June 23, 1997, by and among Polaris
Amphitheater Concerts, Inc., SFX Broadcasting, Inc., Polaris Amphitheater Limited
Partnership and certain of the partners of Polaris Amphitheater Limited Partnership
(incorporated by reference to Registration Statement on Form S-1 (File No. 333-43287) filed
with the SEC)
</TABLE>
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<CAPTION>
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NO. DESCRIPTION
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<S> <C>
10.11 Asset Purchase and Sale Agreement, dated as of June 23, 1997, by and among Sunshine
Design, L.P., SFX Broadcasting, Inc., Tourdesign, Inc., P. David Lucas and Steven P. Sybesma
(incorporated by reference to Registration Statement on Form S-1 (File No. 333-43287) filed
with the SEC)
10.12 Indenture of Lease, dated as of September 1, 1995, by and between Murat Temple
Association, Inc. and Murat Centre, L.P. (incorporated by reference to Registration Statement
on Form S-1 (File No. 333-43287) filed with the SEC)
10.13 Agreement of Merger, dated as of February 12, 1997, by and among SFX Broadcasting, Inc.,
NOC Acquisition Corp., Cadco Acquisition Corp., QN-Acquisition Corp., Nederlander of
Connecticut, Inc., Connecticut Amphitheater Development Corporation, QN Corp.,
Connecticut Performing Arts, Inc., Connecticut Performing Arts Partners and the
Stockholders of Nederlander of Connecticut, Inc., Connecticut Amphitheater Development
Corporation and QN Corp. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.14 Agreement of Merger, dated as of February 14, 1997, by and among SFX Broadcasting, Inc.,
NOC Acquisition Corp., Cadco Acquisition Corp., QN-Acquisition Corp., Nederlander of
Connecticut, Inc., Connecticut Amphitheater Development Corporation, QN Corp.,
Connecticut Performing Arts, Inc., Connecticut Performing Arts Partners and the
Stockholders of Nederlander of Connecticut, Inc., Connecticut Amphitheater Development
Corporation and QN Corp. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.15 Second Amendment of Agreement of Merger, dated as of March 19, 1997, by and among SFX
Broadcasting, Inc., NOC Acquisition Corp., Cadco Acquisition Corp., QN-Acquisition Corp.,
Nederlander of Connecticut, Inc., Connecticut Amphitheater Development Corporation, QN
Corp., Connecticut Performing Arts, Inc., Connecticut Performing Arts Partners and the
Stockholders of Nederlander of Connecticut, Inc., Connecticut Amphitheater Development
Corporation and QN Corp. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.16 Lease Agreement, dated as of September 14, 1994, by and between The City of Hartford and
Connecticut Performing Arts Partners (incorporated by reference to Registration Statement
on Form S-1 (File No. 333-43287) filed with the SEC)
10.17 Agreement and Plan of Merger and Asset Purchase Agreement, dated as of December 10,
1997, by and among SFX Entertainment, Inc., Contemporary Investments Corporation,
Contemporary Investments of Kansas, Inc., Continental Entertainment Associates, Inc.,
Capital Tickets, LP, Dialtix, Inc., Contemporary International Productions Corporation, Steven
F. Schankman Living Trust, dated 10/22/82, Irving P. Zuckerman Living Trust, dated 11/24/81,
Steven F. Schankman and Irving P. Zuckerman (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.18 Lease Agreement, dated December 13, 1992, by and between Wyandotte County, Kansas and
Wyandotte County Parks Board and Sandstone Amphitheater Joint Venture (incorporated by
reference to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.19 Stock Purchase Agreement, dated as of December 11, 1997, among each of the shareholders
of BGP Presents, Inc. and BGP Acquisitions, LLC (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.20 Amphitheater Lease and Agreement, dated June 20, 1986, between the City of Mountain
View, the Mountain View Shoreline Regional Park Community and Shoreline Amphitheater
Partners (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
</TABLE>
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NO. DESCRIPTION
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<S> <C>
10.21 Stock and Asset Purchase Agreement, dated December 2, 1997, between and among SFX
Network Group, L.L.C. and SFX Entertainment, Inc., and Elias N. Bird, individually and as
Trustee under the Bird Family Trust u/d/o 11/18/92, Gary F. Bird, individually and as Trustee
under the Gary F. Bird Corporation Trust u/d/o 2/4/94, Stephen R. Smith, individually and as
Trustee under the Smith Family Trust u/d/o 7/17/89, June E. Brody, Steven A. Saslow and The
Network 40, Inc. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.22 Purchase and Sale Agreement, dated as of December 15, 1997, by and among Alex Cooley, S.
Stephen Selig, III, Peter Conlon, Southern Promotions, Inc., High Cotton, Inc., Cooley and
Conlon Management, Inc., Buckhead Promotions, Inc., Northern Exposure, Inc., Pure Cotton,
Inc., Interfest, Inc., Concert/Southern Chastain Promotions Joint Venture, Roxy Ventures
Joint Venture and SFX Concerts, Inc. (incorporated by reference to Registration Statement on
Form S-1 (File No. 333-43287) filed with the SEC)
10.23 Stock Purchase Agreement, dated as of December 12, 1997 by and between Pace
Entertainment Corporation and SFX Entertainment, Inc. (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.24 Agreement and Plan of Merger, dated as of August 24, 1997, as amended on February 9,
1998, among SFX Buyer, SFX Buyer Sub and SFX (composite version) (incorporated by
reference to Report on Form 8-K (File No. 333-43287) filed with the SEC on March 11, 1998)
10.25 Reserved
10.26 Non-Negotiable Promissory Note, dated as of June 23, 1997, between SFX (as maker) and
Sunshine Promotions, Inc. (as payee)(incorporated by reference to Registration Statement on
Form S-1 (File No. 333-43287) filed with the SEC)
10.31 Operator Lease Agreement, dated as of September 26, 1989, by and between the City of
Phoenix and The Westside Amphitheatre Corp. (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.32 Addendum to Operator Lease Agreement, dated as of September 26, 1989, by and between
the City of Phoenix and Pavilion Partners (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.33 Memorandum of Lease, dated as of April 1, 1994, by and between the City of Phoenix and
Pavilion Partners (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.34 Lease Agreement, dated as of February 9, 1994, by and between New Jersey Development
Authority and Sony Music/Pace Partnership (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.35 First Amendment to Lease Agreement, dated as of March 11, 1994, by and between New
Jersey Economic Development and Sony Music/Pace Partnership (incorporated by reference
to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.36 Second Amendment to Lease Agreement, dated as of June 7, 1994, by and between New
Jersey Economic Development Authority and Pavilion Partners (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.37 Third Amendment to Lease Agreement, dated as of March 15, 1995, by and between New
Jersey Economic Development Authority and Pavilion Partners (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
</TABLE>
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NO. DESCRIPTION
- ------------ --------------------------------------------------------------------------------------------
<S> <C>
10.38 Fourth Amendment|P to Lease Agreement, dated as of March 11, 1997, by and between the
New Jersey Economic Development Authority and Pavilion Partners (incorporated by
reference to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.39 Three Way Agreement, dated as of April 28, 1995, by and between New Jersey Economic
Development Authority, South Jersey Performing Arts Center, Inc. and Pavilion Partners
(incorporated by reference to Registration Statement on Form S-1 (File No. 333-43287) filed
with the SEC)
10.40 Lease Agreement, dated as of December 1, 1989, between Crossroads Properties,
Incorporated and Pace Entertainment Group, Inc. (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.41 Assignment of Ground Lease, dated as of April 6, 1990, by and between Pace Entertainment
Group, Inc. and YM/Pace Partnership (incorporated by reference to Registration Statement
on Form S-1 (File No. 333-43287) filed with the SEC)
10.42 Partnership Agreement, dated as of July 1, 1991, by and between SM/PACE Partnership and
CDC Amphitheaters/I, Inc. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.43 First Amendment to Partnership Agreement, dated as of January 31, 1992, by and between
SM/PACE Partnership and CDC Amphitheaters/I, Inc. (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.44 Lease Agreement, dated as of December 1, 1990, by and between the City of Raleigh, North
Carolina and Sony Music/Pace Partnership (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.45 Amendment to Lease Agreement, dated as of November 15, 1995, by and between Walnut
Creek Amphitheater Partnership and City of Raleigh, North Carolina (incorporated by
reference to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.46 Mutual Recognition Agreement, dated as of December 1, 1990, by and among Walnut Creek
Amphitheater Financing Assistance Corporation, First Union National Bank of North
Carolina, City of Raleigh, North Carolina and Sony Music/Pace Partnership (incorporated by
reference to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.47 Mutual Recognition Agreement, dated as of December 1, 1990, by and among Walnut Creek
Amphitheater Financing Assistance Corporation, First Union National Bank of North
Carolina, City of Raleigh, North Carolina and Sony Music/Pace Partnership (incorporated by
reference to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.48 Partnership Agreement, dated as of February 28, 1986, by and between Belz Investment
Company, Inc., Martin S. Belz and Pace Productions, Inc. (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.49 First Amendment to Partnership Agreement, dated as of June 15, 1986, by and among Belz
Investment Company, Martin S. Belz, Belz-Starwood, Inc. and Pace Productions, Inc.
(incorporated by reference to Registration Statement on Form S-1 (File No. 333-43287) filed
with the SEC)
10.50 Partnership Agreement, dated as of May 15, 1996, by and between Pavilion Partners and
CDC/SMT, Inc. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
</TABLE>
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<CAPTION>
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NO. DESCRIPTION
- ------------ --------------------------------------------------------------------------------------------
<S> <C>
10.51 Lease Agreement, Easement Agreement and Declaration of Restrictive Covenants, dated as
of January 4, 1995, by and between South Florida Fair and Pam Beach County Expositions,
Inc. and Pavilion Partners (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.52 First Amendment to Lease Agreement, dated as of June 5, 1995, by and between South
Florida Fair and Pam Beach County Expositions, Inc. and Pavilion Partners (incorporated by
reference to Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.53 Partnership Agreement, dated as of April 4, 1997, by and between Pavilion Partners and
Irvine Meadows Amphitheater (incorporated by reference to Registration Statement on Form
S-1 (File No. 333-43287) filed with the SEC)
10.54 Amended and Restated Agreement, dated as of October 1, 1991, by and between The Irvine
Company and Irvine Meadows (incorporated by reference to Registration Statement on Form
S-1 (File No. 333-43287) filed with the SEC)
10.55 Concession Lease, dated as of October 19, 1992, by and between the County of San
Bernardino and Amphitheater Entertainment Corporation (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.56 Partnership Formation Agreement, dated as of January 22, 1988, by and among MCA
Concerts II, Inc. and Pace Entertainment Group, Inc. (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.57 Lease and Use Agreement, dated as of December 9, 1987, by and between City of Dallas and
Pace Entertainment Group, Inc. (incorporated by reference to Registration Statement on
Form S-1 (File No. 333-43287) filed with the SEC)
10.58 Agreement, dated as of October 10, 1988, by and between the City of Atlanta and MCA
Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.59 Amended Indenture of Lease, February 2, 1984, by and between the City of Atlanta and
Filmworks U.S.A., Inc. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.60 Amendment to Lease Agreement, dated as of October 10, 1988, between the City of Atlanta,
Georgia and Filmworks U.S.A., Inc. (incorporated by reference to Registration Statement on
Form S-1 (File No. 333-43287) filed with the SEC)
10.61 Agreement Regarding Sublease, dated as of January 20, 1988, by and between Filmworks
U.S.A., Inc. and MCA Concerts, Inc. (incorporated by reference to Registration Statement on
Form S-1 (File No. 333-43287) filed with the SEC)
10.62 First Amendment to Sublease, dated as of January 21, 1988, between Filmworks U.S.A., Inc.
and MCA Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.63 Second Amendment to Sublease, dated as of April 19, 1988, between Filmworks U.S.A., Inc.
and MCA Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1
(File No. 333-43287) filed with the SEC)
10.64 Third Amendment to Sublease, dated as of September 15, 1988, between Filmworks U.S.A.,
Inc. and MCA Concerts, Inc. (incorporated by reference to Registration Statement on Form
S-1 (File No. 333-43287) filed with the SEC)
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ -------------------------------------------------------------------------------------------
<S> <C>
10.65 Memorandum of Agreement, dated as of October 10, 1988, by and between the City of
Atlanta and MCA Concerts, Inc. (incorporated by reference to Registration Statement on
Form S-1 (File No. 333-43287) filed with the SEC)
10.66 Assignment of Sublease, dated as of June 15, 1989, by Filmworks U.S.A., Inc. and MCA
Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.67 Assignment of Sublease, dated as of June 23, 1989, by Filmworks U.S.A., Inc. and MCA
Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.68 Assignment of Agreement, dated as of June 15, 1989, by the City of Atlanta and MCA
Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.69 Assignment of Agreement, dated as of June 23, 1989, by the City of Atlanta and MCA
Concerts, Inc. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.70 Lease, dated as of June, 1997, by and between 500 Texas Avenue Limited Partnership and
Bayou Place Performance Hall General Partnership (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.71 Master Licensed User Agreement, dated as of February 1, 1996, by and between Ticketmaster
Ticketing Co., Inc. and Pace Entertainment Corporation (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.72 Joint Venture Agreement, dated as of July, 1995 by and between American Broadway, Inc.
and Gentry & Associates, Inc. (incorporated by reference to Registration Statement on Form
S-1 (File No. 333-43287) filed with the SEC)
10.73 Amended and Restated Employment Agreement, dated as of December 12, 1997, by and
between SFX Entertainment, Inc. and Brian E. Becker (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.74 Second Amended and Restated Partnership Agreement, dated as of April 1, 1994 by and
between The Westside Amphitheatre Corporation, San Bernardino Amphitheater Corporation
and YM Corp. (incorporated by reference to Registration Statement on Form S-1 (File No.
333-43287) filed with the SEC)
10.75 Employment Agreement, dated as of January 2, 1997, between Delsener/Slater Enterprises,
Inc., SFX Broadcasting, Inc. and Ron Delsener (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.76 Employment Agreement, dated as of January 2, 1997, between Delsener/Slater Enterprises,
Inc., SFX Broadcasting, Inc. and Mitch Slater (incorporated by reference to Registration
Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.77 1998 Stock Option and Restricted Stock Plan of the Company (incorporated by reference to
Registration Statement on Form S-1 (File No. 333-43287) filed with the SEC)
10.78 Reserved
10.79 Credit and Guarantee Agreement, dated as of February 26, 1998, by and among SFX
Entertainment, the Subsidiary Guarantors party thereto, the Lenders party thereto, Goldman
Sachs Partners, L.P., as co-documentation agent, Lehman Commercial Paper, Inc., as
co-documentation agent and the Bank of New York, as administrative agent (incorporated by
reference to Report on Form 8-K (File No. 333-43287) filed with the SEC on March 11, 1998)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ---------- ---------------------------------------------------------------------------------------------
<S> <C>
10.80 Purchase Agreement, dated February 5, 1998, relating to the 9 1/8% Senior Subordinated Notes
due 2008 of SFX Entertainment, Inc., by and among SFX Entertainment, Inc., Lehman
Brothers Inc., Sachs & Co., BNY Capital Markets, Inc. and ING Barings (incorporated by
reference to Report on Form 8-K (File No. 333-43287) filed with the SEC on March 11, 1998)
10.81 Amendment No. 2 to Agreement and Plan of Merger among SBI Holdings Corporation, SBI
Radio Acquisition Corporation and SFX Broadcasting, Inc., dated March 9, 1998
(incorporated by reference to Annual Report on Form 10-K (File No. 333-43287) filed with
the SEC on March 18, 1998)
12.1* Ratio of Earnings to Fixed Charges.
21.1 Subsidiaries of the Registrant (incorporated by reference to Annual Report on Form 10-K
(File No. 333-43287) filed with the SEC on March 18, 1998)
23.1 + Consent of Baker & McKenzie (included in Exhibit 5.1).
23.2* Consent of Ernst & Young LLP.
23.3* Consent of Arthur Andersen LLP.
23.4* Consent of Price Waterhouse LLP.
24.1* Power of Attorney for D. Geoffrey Armstrong
24.2* Power of Attorney for Allen Becker
24.3* Power of Attorney for Brian Becker
24.4* Power of Attorney for Gary Becker
24.5* Power of Attorney for Thomas P. Benson
24.6* Power of Attorney for Bill Brusca
24.7* Power of Attorney for Nicholas P. Clainos
24.8* Power of Attorney for Peter Conlon
24.9* Power of Attorney for Alex Cooley
24.10* Power of Attorney for Ron Delsener
24.11* Power of Attorney for Edward Dugan
24.12* Power of Attorney for Michael G. Ferrel
24.13* Power of Attorney for Kraig G. Fox
24.14* Power of Attorney for Paul Kramer
24.15* Power of Attorney for Richard A. Liese
24.16* Power of Attorney for P. David Lucas
24.17* Power of Attorney for James F. O'Grady, Jr.
24.18* Power of Attorney for Gregg D. Perloff
24.19* Power of Attorney for Franklin D. Rockwell, Jr.
24.20* Power of Attorney for Mitch Slater
24.21* Power of Attorney for Robert F.X. Sillerman
24.22* Power of Attorney for Peter Strauss
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------------ -----------------------------------------------------------------------------------------
<S> <C>
25.1+ Statement of Eligibility and Qualification of Trustee on Form T-1 of The Chase Manhattan
Bank
99.1+ Form of Letter of Transmittal for the 9 1/8% Senior Subordinated Notes due 2008
99.2+ Form of Notice of Guaranteed Delivery
99.3+ Form of Letter to Clients
99.4+ Form of Letter to Broker-Dealers
</TABLE>
- ----------
+ To be filed by amendment.
* Filed herewith.
<PAGE>
RESTATED
ARTICLES OF INCORPORATION
DAVID M. MAYERI and RICHARD E. BATES certify that:
1. We are President and Secretary, respectively, of AKG, INC., a
California corporation.
2. The corporation's articles of incorporation are amended and restated
to read in their entirety as follows:
I
The name of the corporation is AKG, INC.
II
The purpose of the corporation is to engage in any lawful act or activity for
which a corporation may be organized under the General Corporation Law of
California other than the banking business, the trust company business or the
practice of a profession permitted to be incorporated by the California
Corporations Code.
III
The corporation is authorized to issue only one class of shares of stock; the
total number of shares authorized to be issued is 1,000.
IV
(a) The liability of the directors of the corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law.
(b) The corporation is authorized to provide indemnification of agents (as
defined in Corporations Code Section 317) through bylaw provisions, agreements
with agents, vote of shareholders or disinterested directors or otherwise, to
the fullest extent permissible under California law.
(c) Any amendment, repeal or modification of any provision of this Article IV
shall not adversely affect any right or protection of an agent of this
corporation existing at the time of such amendment, repeal or modification.
* * * * * * *
3. The foregoing amendment and restatement of articles of incorporation
has been duly approved by the board of directors.
<PAGE>
4. The foregoing amendment and restatement of articles of incorporation
has been duly approved by the required vote of the shareholders in
accordance with Section 902 of the California Corporations Code. The
total number of outstanding shares entitled to vote was 100. The
number of shares voting in favor of the amendment exceeded the
percentage vote required, which was more than 50%.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
Dated: August 11 , 1993
/s/ David M. Mayeri
-------------------------------
DAVID M. MAYERI, President
/s/ Richard E. Bates
--------------------------------
RICHARD E. BATES, Secretary
2
<PAGE>
BYLAWS
OF
AKG, Inc.
<PAGE>
BYLAWS
OF
AKG, Inc.
ARTICLE I - OFFICES
1.01 - PRINCIPAL OFFICE
The principal executive and business office of the
corporation is hereby fixed and located in the County of San Francisco, State
of California or such other location as the board of directors may determine.
1.02 - OTHER OFFICES
Branch or subordinate offices may at any time be established
at any place or places by the board of directors.
ARTICLE II - MEETINGS OF SHAREHOLDERS
2.01 - PLACE OF MEETINGS
All annual and all other meetings of shareholders shall be
held at the principal executive office of the corporation, or at any other
place within or without the State of California which may be designated either
by the board of directors, or by the written consent of all shareholders
entitled to vote thereat, provided such shareholder consent is given either
before or after the meeting and filed with the secretary of the corporation.
2.02 - ANNUAL MEETINGS
The annual meetings of shareholders shall be held on the
first Thursday of the third month following the end of each fiscal year at
10:00 a.m.; provided, however, that should said day fall upon a legal holiday,
then any such annual meeting of shareholders shall be held at the same time
1
<PAGE>
and place on the next day thereafter ensuing which is not a legal holiday. At
such meetings, directors shall be elected, reports of the affairs of the
corporation shall be considered, and any other business may be transacted
which is within the powers of the shareholders.
2.03 - SPECIAL MEETINGS
Special meetings of the shareholders, for any purpose or
purposes whatsoever, may be called at any time by any of (i) the president,
(ii) the board of directors, (iii) the chairman of the board, or (iv) one or
more shareholders holding shares in the aggregate entitled to cast not less
than 10 percent of the votes at that meeting.
If a special meeting is called by any person or persons
other than the board of directors, such person shall make a request therefor
in writing, specifying (i) the date and time of such meeting, which shall be
not less than 35 nor more than 60 days after the receipt of the request, and
(ii) the general nature of the business proposed to be transacted at the
meeting. Such request shall be delivered personally or sent by registered mail
or by telegraphic or other facsimile transmission to the chairman of the
board, the president, any vice president or the secretary of the corporation.
The officer receiving the request shall cause notice to be given within 20
days to the shareholders entitled to vote, in accordance with the provisions
of Sections 2.4 and 2.5, and the notice shall set forth that a meeting will be
held at the time requested by the person or persons calling the meeting. If
the notice is not given within such 20-day period, the person(s) requesting
the meeting may give the notice.
2.04 - NOTICE OF MEETINGS
All notices of meetings of shareholders, whether annual or
special, shall be sent or otherwise given not less than 10 nor more than 60
days before the date of the meeting, except as provided in Section 2.03. The
notice shall specify the place, date and hour of the meeting and (i) in the
case of a special meeting, the general nature of the business to be
transacted, or (ii) in the case of the annual meeting, those matters which the
board of directors, at the time of giving the notice, intends to present for
action by the shareholders. The notice of any meeting at which directors are
to be elected shall include the name of any nominee or nominees whom, at the
time of the notice,
2
<PAGE>
management intends to present for election. The notice shall also state the
general nature of the proposal if action is proposed to be taken at any
meeting for approval of any of the following: (i) a contract or transaction in
which a director has a direct or indirect financial interest; (ii) an
amendment of the articles of incorporation; (iii) a reorganization of the
corporation; (iv) a voluntary dissolution of the corporation; or (v) a
distribution in dissolution other than in accordance with the rights of any
outstanding preferred shares. Notwithstanding the absence of specific notice
thereof, any such action may nevertheless be presented to the meeting and be
validly acted upon by the shareholders if approved by all shareholders
entitled to vote thereon, unless they sign waivers of notice specifying the
general nature of the proposal so approved.
2.05 - MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Notice of any shareholders' meeting shall be given either
personally or by first-class mail or telegraphic or written communication,
charges prepaid, addressed to the shareholder at the address of that
shareholder appearing on the books of the corporation or given by the
shareholder to the corporation for the purpose of notice. If no such address
appears on the corporation's books or has been so given, notice shall be
deemed to have been given if published at least once in a newspaper of general
circulation in the county where that office is located or in any manner
permitted by law. Notice shall be deemed to have been given at the time when
delivered personally, deposited in the mail, delivered to a common carrier for
transmission to the recipient, actually transmitted by electronic means to the
recipient by the person giving the notice, or sent by other means of written
communication.
An affidavit of the mailing or other means of giving any
notice of any shareholders' meeting may be executed by the secretary,
assistant secretary, or any transfer agent of the corporation giving the
notice, and filed and maintained in the minute book of the corporation.
2.06 - ADJOURNED MEETINGS AND NOTICE THEREOF
Any shareholders' meeting, annual or special, whether or not
a quorum is present, may be adjourned from time to time by the vote of the
majority of the shares which are represented at the meeting either in person
or by proxy, but in the absence of a quorum.
3
<PAGE>
It shall not be necessary to give any notice of an
adjournment or of the business to be transacted at an adjourned meeting other
than by announcement at the meeting at which such adjournment is taken.
However, when any shareholders' meeting, either annual or special, is
adjourned for more than 45 days, or if after the adjournment a new record date
is fixed for the adjourned meeting notice of the adjourned meeting shall be
given to each shareholder of record entitled to vote at the adjourned meeting.
At any adjourned meetings, the corporation may transact any business that
might have been transacted at the regular meeting.
2.07 - RECORD DATE FOR SHAREHOLDERS OF RECORD
For purposes of determining which shareholders are entitled
to receive notice of any meeting, to vote, or to give consent to corporate
action without a meeting, the board of directors may fix a record date in
advance of such meeting or corporate action which shall not be less than 10
nor more than 60 days before any such meeting or any such action without a
meeting. Only shareholders of record at the close of business on the date so
fixed are entitled to notice and to vote or to give consent, as the case may
be, notwithstanding any transfer of any shares on the books of the corporation
after the record date, except as otherwise provided in the articles of
incorporation, by agreement, or in the California General Corporation Law.
If the board of directors does not so fix a record date:
(a) The record date for determining shareholders entitled to
receive notice of or to vote at a meeting of shareholders shall be at the
close of business on the business day next preceding the day on which notice
is given or, if notice is waived, at the close of business on the business day
next preceding the day on which the meeting is held; and
(b) The record date for determining shareholders entitled to
give consent to corporate action in writing without a meeting (i) when no
prior action by the board has been taken, shall be the day on which the first
written consent is given, or (ii) when prior action of the board has been
taken, shall be at the close of business on the day on which the board adopts
the resolution relating to that action, or the 60th day before the date of
such other action, whichever is later.
4
<PAGE>
2.08 - VOTING AT MEETINGS
Except as otherwise provided in the articles of
incorporation and in the case of cumulative voting for directors, each
shareholder is entitled to one vote. The shareholders' vote may be by voice
vote or by ballot; provided, however, that any election for directors must be
by ballot if demanded by any shareholder before the voting has begun. On any
matter other than the election of directors, any shareholder may vote part of
the shares in favor of the proposal and refrain from voting the remaining
shares or vote them against the proposal, but if the shareholder fails to
specify the number of shares which the shareholder is voting affirmatively, it
will be conclusively presumed that the shareholder's approving vote is with
respect to all shares that the shareholder is entitled to vote. The
affirmative vote of a majority of the shares represented and voting, provided
such shares voting affirmatively also constitutes a majority of the number of
shares required for a quorum, shall be the act of the shareholders, unless the
vote of a greater number or voting by classes is required by California
General Corporation Law or by the articles of incorporation.
Every shareholder entitled to vote at any election for
directors shall have the right to cumulate his votes by (i) giving one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which his shares are entitled, or (ii)
distributing such cumulated votes on the same principle among as many
candidates as he chooses; provided that the name of such candidate has been
placed in nomination prior to the voting and that at least one shareholder has
given notice at the meeting, prior to the voting, of an intention to cumulate
votes. In any election of directors, the candidates receiving the highest
number of votes, up to the number of directors to be elected, shall be
elected. Votes against a director or not cast shall have no effect.
2.09 - QUORUM
The presence in person or by proxy of persons entitled to
vote a majority of the voting shares at any meeting shall constitute a quorum
of the shareholders for the transaction of business.
The shareholders present at a duly called or held meeting at
which a quorum is present may continue to do business until adjournment,
notwithstanding the withdrawal of one or more shareholders to leave less than
a quorum, if any action taken (other than adjournment) is
5
<PAGE>
approved by at least a majority of the shares required to constitute a quorum.
2.10 - CONSENT OF ABSENTEES
The transactions of any meeting of shareholders, either
annual or special, however called and noticed and wherever held, shall be as
valid as though made at a meeting duly held after regular call and notice if a
quorum is present either in person or by proxy and if, either before or after
the meeting, each of the shareholders entitled to vote who was not present in
person or by proxy signs a written waiver of notice or a consent to the
holding of such meeting or an approval of the minutes thereof. The waiver of
notice or consent need not specify either the business to be transacted or the
purpose of any annual or special meeting of shareholders, unless the action
taken or proposed to be taken is for approval of any of those matters
specified in Section 2.04. All such waivers, consents or approvals shall be
filed with the corporate records or made a part of the minutes of the meeting.
Attendance at a meeting, in person or by proxy, shall also
constitute a waiver of notice of that meeting, except when the person objects
at the beginning of the meeting to the transaction of any business because
the meeting has not been lawfully called or convened, and except that
attendance at a meeting is not a waiver of any right to object to the
consideration of matters required by law to be included in the notice of the
meeting but not so included, if that objection is expressly made at the
meeting.
2.11 - ACTION WITHOUT MEETING
Except as may be limited by the articles of incorporation
and except for the election of directors, any action which may be taken by
vote of the shareholders at any annual or special meeting may be taken without
a meeting and without prior notice if a consent in writing setting forth the
action so taken is signed by the holders of outstanding shares 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. Directors may be elected by written consent without a
meeting only if the written consents of all outstanding shares entitled to
vote are obtained, except that a vacancy in the board (other than a vacancy
created by removal of a director) not filled
6
<PAGE>
by the board may be filled by the written consent of the holders of a majority
of the outstanding shares entitled to vote.
All such consents shall be filed and maintained in the
corporate records. Any shareholder (or the shareholder's proxyholders, or a
transferee of the shares or a personal representative of the shareholder or
their respective proxyholders) giving a written consent may revoke the consent
only by a writing received by the corporation prior to the time that written
consents of the number of shares required to authorize the proposed action
have been filed with the secretary of the corporation. Such revocation is
effective upon its receipt by the secretary of the corporation.
Unless the consents of all shareholders entitled to vote have been
solicited in writing:
(1) Notice of shareholder approval without a meeting by less than
unanimous written consent shall be given at least 10 calendar days before the
consummation of the action authorized by such approval, if the corporate
action concerns (i) a contract or transaction in which a director has a direct
or indirect financial interest under Section 310 of the California
Corporations Code, (ii) indemnification of agents of the corporation, (iii)
reorganization of the corporation, or (iv) a distribution in dissolution other
than in accordance with the rights of the outstanding preferred shares; and
(2) Prompt notice shall be given of any other corporate action
approved by shareholders without a meeting by less than unanimous written
consent.
All such notices shall be given in the manner provided by Section 2.05.
2.12 - PROXIES
Every person entitled to vote for directors or on any other
matter shall have the right to do so either in person or by one or more agents
authorized by a written proxy signed by the person and filed with the
secretary of the corporation. A proxy shall be deemed signed if the
shareholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission or otherwise) by the shareholder or the
shareholder's attorney-in-fact. A validly executed proxy that does not state
that it is irrevocable shall continue in full force and effect unless (i)
revoked by the
7
<PAGE>
person executing it, before the vote pursuant to that proxy, by a writing
delivered to the corporation stating that the proxy is revoked, or by
attendance at the meeting and voting in person by the person executing the
proxy, or by a subsequent proxy executed by the same person and presented at
the meeting; or (ii) written notice of the death or incapacity of the maker of
that proxy is received by the corporation before the vote pursuant to that
proxy is counted; provided; however, that no proxy shall be valid after the
expiration of 11 months from the date of the proxy, unless another term of
longer or shorter duration is specified in the proxy. The revocability of a
proxy that states on its face that is irrevocable shall be governed by the
provisions of Sections 705(e) and 705(f) of the Corporations Code of
California.
ARTICLE III - DIRECTORS
3.01 - POWERS
Except as reserved to the shareholders by law, the articles
of incorporation or these bylaws, all corporate powers shall be exercised by
or under the authority of, and the business and affairs of the corporation
shall be controlled by, the board of directors. Without limiting the
generality of the foregoing powers, the directors shall have the following
powers:
First: To conduct, manage and control the affairs and
business of the corporation and to make such rules and regulations therefor
not inconsistent with law or with the articles of incorporation or these
bylaws, as they may deem best.
Second: To select and remove all the other officers, agents
and employees of the corporation, to prescribe such powers and duties for them
as may not be inconsistent with law, with the articles of incorporation or
with these bylaws, to fix their compensation and to require from them security
for faithful service.
Third: To change the principal executive and business office
of the corporation from one location to another as provided in Section 1.01
hereof; to fix and locate from time to time one or more subsidiary offices of
the corporation within or without the State of California, as provided in
Section 1.02 hereof; to designate any place within or without the State of
California for the holding of any shareholders' meeting or meetings except
annual meetings; and to adopt, make and
8
<PAGE>
use a corporate seal, to prescribe the forms of certificates of stock and to
alter the form of such seal and of such certificates from time to time as in
their judgment they may deem best, provided that such seal and such
certificates shall at all times comply with the provisions of law.
Fourth: To authorize the issue of shares of stock of the
corporation from time to time, upon such terms as may be lawful, as dividends
or in consideration of money paid, labor done or services actually rendered to
the corporation or for its benefit or in its formation or reorganization,
debts or securities canceled, or tangible or intangible property actually
received; but neither promissory notes of the purchaser, unless secured by
property other than the shares acquired or otherwise permitted by Section 408
of the General Corporation Law, nor future services shall constitute payment
or part payment for shares of the corporation.
Fifth: To borrow money and incur indebtedness for the
purposes of the corporation and to cause to be executed and delivered
therefor, in the corporate name, promissory notes, bonds, debentures, deeds of
trust, mortgages, pledges, hypothecations or other evidences of debt and
securities therefor.
Sixth: To designate, by resolution adopted by a majority of
the authorized number of directors, one or more committees, each consisting of
two or more directors, to serve at the pleasure of the board. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent member at any meeting of the committee. Any such committee
shall have all the authority of the board to the extent provided in the
resolution of the board or in the bylaws, except with respect to:
(a) The approval of any action for which, under the General
Corporation Law of California, also requires approval of the shareholders or
approval of the outstanding shares;
(b) The filling of vacancies on the board or in any committee;
(c) The fixing of compensation of the directors for serving
on the board or on any committee;
(d) The amendment or repeal of bylaws or the adoption of new
bylaws;
(e) The amendment or repeal of any resolution of the board
which by its express terms is not so amendable or repealable;
(f) A distribution to the shareholders of the corporation,
except at a rate, in a periodic
9
<PAGE>
amount or within a price range set forth in the articles or determined by the
board; or
(g) The appointment of other committees of the board or the
members thereof.
Seventh: To declare dividends at such times and in such
amounts as the condition of the affairs of the corporation may warrant.
Eighth: Generally to exercise all of the powers and to
perform all of the acts and duties that from time to time may be permitted by
law appertaining to their office.
3.02 - NUMBER OF DIRECTORS
The authorized number of directors of the corporation shall
be one until changed by an amendment of this bylaw.
3.03 - ELECTION AND TERM OF OFFICE
The directors shall be elected at each annual meeting of
shareholders and may be elected at any special meeting of shareholders held
for that purpose. Each director shall hold office until his successor is
elected and qualified, or until his earlier death, resignation, removal or
ineligibility.
3.04 - REMOVAL
A director may be removed for cause by (i) the board, when
such director has been convicted of a felony or declared incompetent by court
order, or (ii) the superior court, at the suit of at least 10% of the
shareholders of any class of shares having found that the director has either
committed fraudulent or dishonest acts, or has grossly abused his authority
with reference to the corporation.
A director may be removed without cause by a majority vote
of all outstanding shares, provided that (i) where cumulative voting is in
effect, such director may not be removed over the objection of the number of
shares required to elect him, and (ii) where the articles of incorporation
provide for the election of a director by the shareholders of a certain class
or series of shares, such director may be removed only by the majority vote of
the outstanding shares of such class or series.
10
<PAGE>
Except as provided in this Section 3.04, and any reduction
of the authorized number of directors notwithstanding, a director may not be
removed prior to the expiration of such director's term of office.
3.05 - VACANCIES
Vacancies in the board of directors may be filled by a
majority of the remaining directors, though less than a quorum, or by a sole
remaining director. A vacancy in the board of directors shall be deemed to
exist (i) in case of the death, resignation, ineligibility or removal of any
director, (ii) if the authorized number of directors is increased, or (iii) if
the shareholders fail, at any annual or special meeting of shareholders at
which any director or directors are elected, to elect the full authorized
number of directors to be voted for at that meeting.
The shareholders may elect a director or directors at any
time to fill any vacancy or vacancies not filled by the directors. If the
board of directors accepts the resignation of a director tendered to take
effect at a future time, the board or the shareholders shall have the power to
elect a successor to take office when the resignation is to become effective.
3.06 - PLACE OF MEETING
Regular and special meetings of the board of directors shall
be held at any place within or without the State of California which has been
designated from time to time by resolution of the board or by written consent
of all members of the board. In the absence of such designation, meetings
shall be held at the principal executive and business office of the
corporation.
3.07 - MEETINGS BY TELEPHONE CONFERENCE
Members of the board may participate in a meeting through
use of conference telephone or similar communication equipment, so long as all
members participating in such meeting can hear one another.
3.08 - ACTION WITHOUT MEETING
Any action required or permitted to be taken by the board of
directors or any
11
<PAGE>
committee thereof may be taken without a meeting if each member of the board
consents in writing to such action. Such consents shall be filed with the
minutes of the meetings of the board.
3.09 - ORGANIZATION MEETING
Immediately following each annual meeting of shareholders,
the board of directors shall hold a regular meeting for the purpose of
organization, election of officers and the transaction of other business.
Notice of such meeting is hereby dispensed with.
3.10 - SPECIAL MEETINGS
Special meetings of the board of directors for any purpose
or purposes may be called at any time by (i) the chairman of the board, (ii)
the president, (iii) any vice president, (iv) the secretary, or (v) any two
directors.
Written notice of the time and place of special meetings
shall be delivered personally to the directors or sent to each director by
mail or by other form of written communication, charges prepaid, addressed to
him at his address as it appears upon the records of the corporation or, if it
is not so shown or is not readily ascertainable, at the place in which the
meetings of directors are regularly held. In case such notice is mailed, it
shall be deposited in the United States mail at least four days prior to the
date of the meeting. In case such notice is delivered personally or
telegraphed, it shall be so delivered or deposited with the telegraph company
at least 48 hours prior to the time of the meeting.
3.11 - ADJOURNMENT
A majority of the directors present, whether or not a quorum
is present, may adjourn any directors' meeting to another time and place. If a
meeting is adjourned for more than 24 hours, notice of any adjournment to
another time or place shall be given in the manner specified in Section 3.10
prior to the time of the adjourned meeting to the directors who were not
present at the time of adjournment.
12
<PAGE>
3.12 - WAIVER OF NOTICE
The transactions at any meeting of the board of directors,
however called and noticed, or wherever held, shall be as valid as though such
transactions had occurred at a meeting duly held after regular call and notice
if a quorum is present and if, either before or after the meeting, each of the
directors not present signs a written waiver of notice of or consent to
holding the meeting or an approval of the minutes thereof. All such waivers,
consents or approvals shall be filed with the corporate records or made a part
of the minutes of the meeting.
3.13 - QUORUM
A majority of the authorized number of directors then
holding office shall constitute a quorum for the transaction of business. The
act of the majority of the directors at a meeting at which a quorum is present
shall be the act of the board of directors, unless a greater number is
required by law, the articles of incorporation or these bylaws. However, a
meeting at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of directors if any action taken is
approved by at least a majority of the required quorum for such meeting. The
provisions of this Section 3.13 shall apply to action taken by any committee
from time to time designated by the board of directors.
ARTICLE IV - OFFICERS
4.01 - OFFICERS
The officers of the corporation shall be a president, a
secretary, a treasurer, and such other officers with such titles and duties as
may be appointed in accordance with the provisions of Section 4.03. Any number
of offices may be held by the same person. The president shall be the chief
executive officer and the treasurer shall be the chief financial officer.
4.02 - ELECTION
The officers of the corporation, except such officers as may
be appointed in accordance with the provisions of Sections 4.03 or 4.05, shall
be chosen annually by the board of
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directors; and each officer shall hold his office until he has resigned or
removed or is otherwise disqualified to serve and his successor has been
elected and qualified.
4.03 - REMOVAL AND RESIGNATION
Any officer may be removed, either with or without cause, by
a majority of the directors at the time in office, at any regular or special
meeting of the board, or, except in the case of an officer chosen by the board
of directors, by any officer upon whom such power of removal may be conferred
by the board of directors.
Any officer may resign at any time by giving written notice
to the board of directors or to the president or to the secretary of the
corporation. Any such resignation shall take effect at the date of the receipt
of such notice or any later time specified therein; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary
to make it effective.
4.04 - VACANCIES
A vacancy in any office because of death, resignation,
removal, disqualification or any other cause shall be filled in the manner
prescribed in these bylaws for regular appointments to such office.
4.05 - CHAIRMAN OF THE BOARD
The chairman of the board, if one has been appointed, shall,
if present, preside at all meetings of the board of directors and exercise and
perform all such other powers and duties as may from time to time be assigned
to him by the board of directors or prescribed by these bylaws.
4.06 - PRESIDENT
The president, subject to the board of directors, shall have
general supervision, direction and control of the business and of other
officers and employees of the corporation. He shall preside at all meetings of
the shareholders and, if there is no regular, appointed chairman of the board
or if such chairman is absent, at all meetings of the board of directors. He
shall be an ex officio member of all standing committees, including the
executive committee, if any, and shall have
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general powers and duties of management, together with such other powers and
duties as may be prescribed by the board of directors.
4.07 - SECRETARY
The secretary shall keep, or cause to be kept, a book of
minutes at the principal executive and business office, or such other place as
the board of directors may order, of all meetings of directors and
shareholders, with the time and place of holding, whether regular or special
and, if special, how authorized, the notice thereof given, the names of those
present at directors' meetings, the number of shares present or represented at
shareholders' meetings and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the
principal executive and business office or at the office of the corporation's
transfer agent, a share register or a duplicate share register showing the
names of the shareholders and their addresses, the number and classes of
shares held by each, the number and the date of certificates issued for the
same, and the number and date of cancellation of every certificate surrendered
for cancellation.
The secretary shall give, or cause to be given, notice of
all the meetings of the shareholders and of the board of directors required by
these bylaws or by law to be given, shall keep the seal of the corporation in
safe custody and shall have such other powers and shall perform such other
duties as may be prescribed by the board of directors or the bylaws.
4.08 - TREASURER
The chief financial officer shall be the treasurer. The
treasurer shall keep and maintain, or cause to be kept and maintained,
adequate and correct accounts of the properties and business transactions of
the corporation, including accounts of its assets, liabilities, receipts,
disbursements, gains, losses, capital, surplus and shares.
The treasurer shall deposit all moneys and other valuables
in the name and to the credit of the corporation with such depositories as may
be designated by the board of directors. He shall be responsible for the
proper disbursement of the funds of the corporation as may be ordered by the
board of directors and shall render to the president or directors, whenever
they request it, an account of all of his transactions as treasurer and of the
financial condition of the corporation. The
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treasurer shall prepare a proper annual budget of income and expenses for each
calendar year, revised quarterly, for approval of or revision by the board of
directors and shall be responsible for the handling of finances in connection
therewith. He shall have such other powers and shall perform such other duties
as may be prescribed by the board of directors. He shall see that all officers
signing checks are bonded in such amounts as may be fixed from time to time by
the board of directors.
4.09 - SUBORDINATE OFFICERS
The board of directors may appoint such vice presidents,
assistant treasurers and assistant secretaries and other subordinate officers
as the business of the corporation may require, each of whom shall hold office
for such period, have such authority and perform such duties as are provided
in these bylaws or as the board of directors may from time to time determine.
In the absence or disability of the president, treasurer or
secretary, the vice presidents, assistant treasurers and assistant
secretaries, respectively, in order of their rank as fixed by the board of
directors or, if not ranked, the subordinate officer designated by the board
of directors shall perform all the duties of such absent or disabled officer
and, when so acting, shall have all the powers of and be subject to all the
restrictions upon such officer. Each subordinate officer shall have such other
powers and shall perform such other duties as from time to time may be
prescribed for him by the board of directors or these bylaws.
ARTICLE V - SHARES OF STOCK
5.01 - SHARE CERTIFICATES
Certificates representing shares of the capital stock of the
corporation shall be in such form as shall be approved by the board of
directors, consistent with the articles of incorporation and the laws of the
State of California. A certificate or certificates for shares of the capital
stock of the corporation shall be issued to each shareholder when such shares
are fully paid, and the board of directors may authorize the issuance of
certificates or shares as partly paid provided that these certificates shall
state the amount of the consideration to be paid for them and the amount paid.
All
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such certificates shall be signed by (i) the chairman or vice chairman of the
board or the president or a vice president, and (ii) by the treasurer or an
assistant financial officer or the secretary or any assistant secretary,
certifying the number of shares and the class or series of shares issued to
the shareholder and evidenced by such certificate. The corporation may issue,
sell or transfer fractional shares.
5.02 - TRANSFER OF SHARES
Subject to the provisions of applicable securities and other
laws and any other valid contractual and other restrictions on transfer of
shares, upon the surrender to the corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
5.03 - LOST OR DESTROYED CERTIFICATE
The holder of any shares of stock of the corporation shall
immediately notify the corporation of any loss or destruction of the
certificate therefor, and the corporation may issue a new certificate in the
place of any certificate theretofore issued by it alleged to have been lost or
destroyed, upon approval of the board of directors. The board may, in its
discretion, as a condition to authorizing the issue of such new certificate,
require the owner of the lost or destroyed certificate, or his legal
representative, to make proof satisfactory to the board of directors of the
loss or destruction thereof and to give the corporation a bond or other
security, in such amount and with such surety or sureties as the board of
directors may determine, as indemnity against any claim that may be made
against the corporation on account of any such certificate so alleged to have
been lost or destroyed.
ARTICLE VI - MISCELLANEOUS
6.01 - INDEMNITY OF OFFICERS, DIRECTORS, EMPLOYEES AND OTHER AGENTS
The corporation shall, to the maximum extent permitted by
the California General Corporation Law, have power to indemnify each of its
agents against expenses, judgments, fines,
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settlements and other amounts actually and reasonably incurred in connection
with any proceeding arising by reason of the fact any such person is or was an
agent of the corporation and shall have power to advance to each such agent
expenses incurred in defending any such proceeding to the maximum extent
permitted by that law. For purposes of this Section, an "agent" of the
corporation includes any person who (i) is or was a director, officer,
employee or other agent of the corporation, (ii) is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, or
(iii) was a director, officer, employee or agent of a corporation which was a
predecessor corporation of the corporation or of another enterprise at the
request of such predecessor corporation.
6.02 - SHAREHOLDER INSPECTION OF ARTICLES AND BYLAWS
The corporation shall keep at its principal executive and
business office the original or a copy of the articles of incorporation and
the bylaws and any amendments thereto, certified by the secretary, which shall
be open to inspection by shareholders at all reasonable times during office
hours.
6.03 - MAINTENANCE AND INSPECTION OF RECORDS OF SHAREHOLDERS
The corporation shall keep at its principal executive and
business office or at the office of its transfer agent or registrar (if one
has been appointed), as determined by resolution of the board of directors, a
record of its shareholders, giving the names and addresses of all shareholders
and the number and class of shares held by each shareholder.
A shareholder or shareholders of the corporation holding at
least 5% in the aggregate of the outstanding voting shares of the corporation
may (i) inspect and copy the records of shareholders' names, addresses and
shareholdings, during usual business hours on five days' prior written demand
on the corporation, and (ii) obtain from the transfer agent of the
corporation, on written demand and on the tender of such transfer agent's
usual charges for such list, a list of the names and addresses of the
shareholders who are entitled to vote for the election of directors, and their
shareholdings, as of the most recent record date for which that list has been
compiled or as of a date specified by the shareholder after the date of
demand. This list shall be made available to any such
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shareholder or shareholders by the transfer agent on or before the later of
five days after the demand is received or the date specified in the demand as
the date as of which the list is to be compiled. The record of shareholders
shall also be open to inspection on the written demand of any shareholder or
holder of a voting trust certificate, at any time during usual business hours,
for a purpose reasonably related to the holder's interests as a shareholder or
as the holder of a voting trust certificate. Any inspection and copying under
this Section may be made in person or by an agent or attorney of the
shareholder or holder of a voting trust certificate making the demand.
6.04 - SHAREHOLDER INSPECTION OF CORPORATE RECORDS
The accounting books and records and minutes of proceedings
of the shareholders and the board of directors and any committee or committees
of the board of directors shall be kept at such place or places designated by
the board of directors or, in the absence of such designation, at the
principal executive and business office of the corporation. The minutes shall
be kept in written form, and the accounting books and records shall be kept
either in written form or in any other form capable of being converted into
written form. The minutes and accounting books and records shall be open to
inspection upon the written demand of any shareholder or holder of a voting
trust certificate, at any reasonable time during usual business hours, for a
purpose reasonably related to the holder's interests as a shareholder or as
the holder of a voting trust certificate. The inspection may be made in person
or by an agent or attorney and shall include the right to copy and make
extracts. These rights of inspection shall extend to the records of each
subsidiary corporation of the corporation.
6.05 - INSPECTION BY DIRECTORS
Every director shall have the absolute right at any
reasonable time to inspect all books, records and documents of every kind and
the physical properties of the corporation and each of its subsidiary
corporations. This inspection by a director may be made in person or by an
agent or attorney, and the right of inspection includes the right to copy and
make extracts of documents.
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6.06 - CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for payment of money,
notes or other evidences of indebtedness, issued in the name of or payable to
the corporation, shall be signed or endorsed by such person or persons and in
such manner as from time to time shall be determined by resolution of the
board of directors.
6.07 - EXECUTION OF INSTRUMENTS
Except as otherwise provided in these bylaws, the board of
directors may authorize one or more officers or agents to enter into any
contract or execute any instrument in the name of and on behalf of the
corporation, which authority may be general or confined to specific instances.
Unless so authorized by the board of directors, no officer, agent or employee
shall have any power or authority to bind the corporation by any contract or
engagement or to pledge its credit to render it liable for any purpose or to
any amount.
6.08 - REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The president or, in the event of his absence or inability
to serve, any vice president and the secretary or assistant secretary of this
corporation are authorized to vote, represent and exercise, on behalf of this
corporation, all rights incidental to any and all shares of any other
corporation standing in the name of this corporation. The authority herein
granted to such officers to vote or represent on behalf of this corporation
any and all shares held by this corporation in any other corporation may be
exercised either by such officers in person or by any person authorized to do
so by proxy or power of attorney duly executed by such officers.
6.09 - ANNUAL REPORT
The annual report to shareholders referred to in Section
1501(a) of the California Corporations Code is expressly waived subject to the
limitations thereof, but the board of directors of the corporation may cause
to be sent to the shareholders, not later than 120 days after the close of the
fiscal or calendar year, an annual report in such form as may be deemed
appropriate by the board of directors.
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6.10 - ANNUAL STATEMENT OF GENERAL INFORMATION
Within 90 days of incorporation and annually thereafter, the
corporation shall file with the Secretary of State, on the prescribed form, a
statement setting forth the authorized number of directors, the names and
complete business or residence addresses of all incumbent directors, the names
and complete business or residence addresses of the chief executive officer,
secretary and chief financial officer, the street address of its principal
executive office or principal business office in this state, and the general
type of business constituting the principal business activity of the
corporation, together with a designation of the agent of the corporation for
the purpose of service of process, all in compliance with Section 1502 of the
California Corporations Code.
ARTICLE VII - AMENDMENTS TO BYLAWS
7.01 - AMENDMENT BY SHAREHOLDERS
New bylaws may be adopted or these bylaws may be amended or
repealed by the vote or written consent of the shareholders entitled to
exercise a majority of the voting power of the corporation, except as
otherwise provided by either of these laws, these bylaws or the articles of
the corporation; provided, however, that if the articles of incorporation set
forth the number of authorized directors of the corporation, the authorized
number of directors may be changed only by an amendment of the articles of
incorporation.
7.02 - AMENDMENT BY DIRECTORS
Subject to the rights of the shareholders as provided in
Section 7.01 to adopt, amend or repeal bylaws, bylaws may be adopted, amended,
or repealed by the board of directors; provided, however, that the board of
directors may adopt a bylaw or amendment of a bylaw changing the authorized
number of directors only for the purpose of fixing the exact number of
directors within the limits specified in the articles of incorporation or in
Section 3.02 of these bylaws.
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CERTIFICATE OF SECRETARY
OF
AKG, INC.
The undersigned hereby certifies that:
1. He is the duly elected, qualified and acting Secretary of
AKG, INC., a duly organized and existing California corporation (the
"Corporation").
2. By Written Consent dated August 11, 1993, the
Corporation's sole shareholder and sole director adopted the Bylaws amendment
attached hereto as Exhibit A.
3. By Written Consent dated January 17, 1995, the
Corporation's sole shareholder amended Section 3.02 of the Corporation's
Bylaws to read as follows:
The authorized number of directors of the
corporation shall be three until changed by an amendment of
this bylaw.
4. By Written Consent dated January 17, 1995, the
Corporation's Board of Directors amended Section 4.06 by the addition of the
following paragraph:
The board of directors, in its sole discretion, may
elect two persons to serve as Co-Presidents of the
Corporation. In such event either Co-President, acting
independently, may perform the duties of the President as
described in these Bylaws.
5. The foregoing Bylaws, amended as set forth above,
constitute a full, true and correct copy of the Corporation's Bylaws as in
effect on the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this 17th day of January, 1995.
/s/ Franklin D. Rockwell, Jr.
------------------------------
FRANKLIN D. ROCKWELL, JR.
<PAGE>
EXHIBIT A
BYLAWS AMENDMENT
6.01 - INDEMNITY OF DIRECTORS, OFFICERS, AND EMPLOYEES
The corporation shall, to the fullest extent permitted by
the California General Corporation Law (the "Code") and in excess of that
which is otherwise provided by Code Section 317, indemnify each of the
directors, officers, and employees of the corporation and each person who is
or was serving at the request of the corporation as a director, officer, or
employee of another corporation (including without limitation direct and
indirect subsidiaries of the corporation) or a partnership, joint venture,
trust, or other enterprise (all such persons being hereinafter collectively
referred to as "Indemnified Persons") against all judgments, fines, penalties,
amounts paid in settlement (if the settlement is approved in advance by the
corporation (or, where applicable, such other corporation or other enterprise
described in this sentence), which approval shall not be unreasonably withheld
of delayed), and "expenses" (as hereinafter defined) actually and reasonably
incurred by the Indemnified Person in connection with any "proceeding" (as
hereinafter defined) involving the Indemnified Person by reason of the fact
that the Indemnified Person is or was a director, officer, or employee of the
corporation or, acting at the request of the corporation, any other
corporation, partnership, joint venture, trust, or other enterprise. For
purposes hereof, "expenses" include by way of illustration but not limitation
all reasonable attorneys' fees, retainers, court costs, transcript costs, fees
of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all
other disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, or being prepared to be a witness in any "proceeding." For
purposes hereof, a "proceeding" shall include by way of illustration but not
limitation any action, suit, arbitration, alternative dispute resolution
mechanism, investigation, administrative hearing, or any other proceeding,
whether civil, criminal, administrative, or investigative, and whether brought
by or on behalf of a third party or by or on behalf of the corporation.
Upon written request to the Board in each specific case by
an Indemnified Person seeking indemnification, the Board shall promptly
authorize indemnification consistent with the terms of the preceding paragraph
if the Board determines that the indemnification is not prohibited
<PAGE>
by the Code, including by reason of the requirements of Code Sections 204 (a)
(10) and (11) and, in the case of an action by or in the right of the
corporation to procure a judgment in its favor, subsections (1), (2), and (3)
of Code Section 317 (c). The termination of any proceeding by judgment, order,
settlement, conviction, or upon plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that an Indemnified Person did not
act in good faith and in a manner which the Indemnified Person reasonably
believed to be in or not opposed to the best interests of the corporation or,
with respect to any criminal proceeding, had no reasonable cause to believe
that the conduct of the Indemnified Person was unlawful.
If an Indemnified Person is entitled to indemnification by
the corporation for some or a portion of any judgments, fines, penalties,
amounts paid in settlement, or expenses actually and reasonably incurred by
the Indemnified Person in connection with any proceeding, but not, however,
for the total amount thereof, the corporation shall nevertheless indemnify the
Indemnified Person for the portion of such amounts to which the Indemnified
Person is entitled.
Upon written request to the Board in each specific case by
an Indemnified Person, the Board shall promptly authorize the advancement of
attorneys' fees and other expenses incurred by the Indemnified Person prior to
the final disposition of a proceeding in which the Indemnified Person is
involved by reason of the fact that the Indemnified Person is or was a
director, officer, or employee of the corporation or, acting at the request of
the corporation, any other corporation, partnership, joint venture, trust, or
other enterprise, but only if the Board obtains the written agreement of the
Indemnified Person, in a form satisfactory to the Board, to repay the advances
if and to the extent that it is ultimately determined that the Indemnified
Person is not entitled to be indemnified by the corporation for the attorneys'
fees and other expenses so advanced.
If an Indemnified Person makes a written request to the
Board for indemnification and the requested indemnification is not paid in
full by the corporation within forty-five (45) days after the date of the
written request, the Indemnified Person shall also be indemnified for the
attorneys' fees and other expenses of any proceeding brought by the
Indemnified Person against the corporation to recover the unpaid requested
indemnified amount. It shall be a defense in any such proceeding that the
Indemnified Person has not satisfied the standards of conduct which make it
permissible under applicable law for the corporation to indemnify the
Indemnified Person for the
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<PAGE>
amount claimed, but the burden of proving such defense shall be on the
corporation and the Indemnified Person shall be entitled to receive interim
payments of attorneys' fees and other expenses in connection with the
proceeding unless and until such defense is finally adjudicated by court order
or judgment from which no further right of appeal exists.
If, at the time of the receipt of a written request for
indemnification by an Indemnified Person, the corporation has director and
officer liability insurance in effect, the corporation shall give prompt
notice of the commencement of the proceeding described in the notice to the
corporation's insurers in accordance with the procedures set forth in the
respective policies. The corporation shall thereafter take all necessary or
appropriate action to cause such insurers to pay on behalf of the Indemnified
Person all amounts payable as a result of such proceeding in accordance with
the terms of such policies. The provisions of this paragraph shall not be
construed to impose upon the corporation any obligation to obtain or maintain
director and officer liability insurance.
The indemnification rights conferred hereby shall continue
as to any Indemnified Person who has ceased to be a director, officer, or
employee of the corporation or any other corporation, partnership, joint
venture, trust, or other enterprise for which the Indemnified Person was
serving as a director, officer, or employee at the request of the corporation,
and shall inure to the benefit of the heirs, executors, administrators, and
any other successors-in-interest of the Indemnified Person.
In the event of any change after the date of the adoption by
the corporation of this Section 6.01 in any applicable law, statute, or rule
which expands the right of a California corporation to indemnify its
directors, officers, or employees, such change shall be ipso facto within the
purview of the corporation's obligations hereunder. In the event of any change
in any applicable law, statute, or rule which narrows the right of a
California corporation to indemnify its directors, officers, or employees,
such change, to the extent not otherwise required by such law, statute, or
rule to be applied to the corporation, shall have no effect on the
indemnification obligations of the corporation.
3
<PAGE>
Certificate of Incorporation of
ARDEE PRODUCTIONS, LTD.
under Section 402 of the Business Corporation Law
IT IS HEREBY CERTIFIED THAT:
(1) The name of the proposed corporation is ARDEE PRODUCTIONS, LTD.
(2) The purpose or purposes for which this corporation is formed, are as
follows, to wit:
To purchase, own, lease, produce, exhibit, present,
represent, license, sell, and otherwise deal in and with masques, pageants,
community dramas, theatrical plans, dramatic compositions, operas, sketches,
scenarios, books, scores, moving pictures, etc., to represent, as agents and
otherwise, owners, managers, other agents, lessees and proprietors of masques,
pageants, community dramas, theatrical plays, dramatic compositions, operas,
musical compositions, sketches, scenarios, books, scores, moving pictures,
etc., and to license others to produce, lease, exhibit, present, represent,
license, sell and otherwise deal in masques, pageants, community dramas,
theatrical plays, dramatic compositions, operas, musical compositions,
sketches, scenarios, books, scores, moving pictures, etc., and to acquire,
hold, sell, assign, convey, set over and transfer, and otherwise deal in
copyrighted and uncopyrighted dramatic compositions, sketches, scenarios,
books, scores, etc., and more particularly for the purpose of dealing with
plays, dramatic compositions, etc., for stock, road and repertoire companies as
those terms are commonly and generally understood in the theatrical profession
and community representations.
To carry on the business of proprietors of masques, pageants,
community dramas, theatrical proprietors, music hall proprietors, caterers for
public entertainments, concert and public exhibitions, ballets, conjuring,
juggling, and other variety entertainment, and to provide, engage and employ
actors, dancers, singers, variety performers, athletes, and theatrical and
musical artists, and to produce and present to the public all sorts of shows,
exhibitions, and amusements which are or may be produced at a theatre or music
hall or in the open air. To acquire copyrights, rights of representation,
licenses and privileges of any sort likely to be conducive to the objects of
the corporation, and to employ persons to write, compose or invent masques,
pageants, community dramas, plays, songs, interludes, prologues, epilogues,
poetry, music and dances and to remunerate such persons, and to print or
publish or cause to be printed or published any masque, pageant, community
drama, play, poem, song or words of which the corporations may have a copyright
or the rights to publish, and to sell, distribute and deal with any material so
printed as the corporation may see fit and to grant licenses or rights in
respect to any property of the corporation, to any other person, firm or
corporation.
(3) The office of the corporation is to be located in the City (city)
(town) (incorporated village) of New York County of
New York State of New York.
(4) The aggregate number of shares of which the corporation shall have
the authority to issue is 200 shares with no par value.
(5) The Secretary of State is designated as agent of the corporation upon
whom process against it
The corporation, in furtherance of its corporate purposes above set
forth, shall have all of the powers enumerated in Section 202 of the Business
Corporation Law, subject to any limitations provided in the Business
Corporation Law or any other statute of the State of New York.
<PAGE>
may be served. The post office address to which the Secretary of
State shall mail a copy of any process against the corporation served
upon him is c/o Jerrold H. Kushnick, Esq., 720 Fifth Avenue, New
York, New York 10019.
The undersigned incorporator, or each of them if there are more than
one, is of the age of twenty-one years or over.
IN WITNESS WHEREOF, this certificate has been subscribed this 11th day of July
1967 by the undersigned who affirm(s) that the statements made herein are true
under the penalties of perjury.
JERROLD H. KUSHNICK /s/ Jerrold H. Kushnick
------------------------------ -----------------------------
Type name of incorporator Jerrold H. Kushnick
Signature
720 Fifth Avenue, New York, N.Y. 10019
----------------------------------------
Address
---------------------------------------- -----------------------------
Type name of incorporator Signature
----------------------------------------
Address
---------------------------------------- -----------------------------
Type name of incorporator Signature
----------------------------------------
Address
The corporation, in furtherance of its corporate purposes above set
forth, shall have all of the powers enumerated in Section 202 of the Business
Corporation Law, subject to any limitations provided in the Business
Corporation Law or any other statute of the State of New York.
<PAGE>
STATE OF NEW YORK )
COUNTY OF NEW YORK ) SS
On the 11th day of July 1967, before me personally came
JERROLD H. KUSHNICK, to me known to be the person described in and who executed
the foregoing certificate of incorporation, and he thereupon duly acknowledged
to me that he executed the same.
- -------------------------------------------------------------------------------
Certificate of Incorporation
of
ARDEE PRODUCTIONS, LTD.
under Section 402 of the Business Corporation Law
- -------------------------------------------------------------------------------
Filed By:
JERROLD H. KUSHNICK, ESQ.
Office and Post Office Address
720 Fifth Avenue
New York, New York 10019
<PAGE>
EXHIBIT 3.16
CERTIFICATE OF AMENDMENT OF ARTICLES OF
INCORPORATION OF F.M. PRODUCTIONS INC.
The undersigned, WILLIAM GRAHAM and WILLIAM K. COBLENTZ do hereby certify
that they are respectively, and have been at all times herein mentioned, the
duly elected and acting President and Secretary of F.M. PRODUCTIONS, INC., a
California corporation, and further that:
ONE: A special meeting of the Board of Directors of said corporation was
duly held at its principal office for the transaction of business at San
Francisco, California at 10:00 a.m., on the 26th day of September, 1979, at
which meeting there was at all times present and acting a quorum of the members
of said Board, and that the following resolution was duly adopted:
WHEREAS, it is deemed by the Board of Directors of this corporation
to be to its best interests and to the best interests of its
shareholders that its Articles of Incorporation be amended as
hereinafter provided:
NOW, THEREFORE, BE IT RESOLVED that Article FIRST of the Articles of
Incorporation of this corporation be amended to read as follows:
"FIRST: The name of this corporation is:
BILL GRAHAM ENTERPRISES, INC."
RESOLVED FURTHER that the Board of Directors of corporation hereby
adopts and approves said amendment to its Articles of Incorporation.
TWO: At a special meeting of the shareholders of said corporation duly
held at said principal office for the transaction of business at San Francisco,
California at 11:00 a.m. on the 26th day of September, 1979, the following
resolutions were duly adopted:
WHEREAS, it is deemed by the shareholders of this corporation to be
to their best interests and the best interests of the corporation
that its Articles of Incorporation be amended as hereinafter
provided:
NOW, THEREFORE, BE IT RESOLVED that Article First of the Articles of
Incorporation of this corporation be amended to read as follows:
"FIRST: The name of this corporation is:
BILL GRAHAM ENTERPRISES, INC."
RESOLVED, FURTHER that the shareholders of this corporation hereby
adopt and approve said amendment of its Articles of Incorporation.
<PAGE>
THREE: The foregoing amendment was adopted and approved at said
shareholders meeting by the total vote of two thousand four hundred (2,400)
shares.
FOUR: The total number of shares of said corporation entitled to vote on
or consent to the adoption of such amendment is two thousand four hundred
(2,400).
IN WITNESS WHEREOF, the undersigned have executed this certificate of
amendment this 15th day of October, 1979.
/s/ William Graham
--------------------------------
President
F.M. PRODUCTIONS, INC.
/s/ William K. Coblentz
-------------------------------
Secretary
F.M. PRODUCTIONS, INC.
-2-
<PAGE>
State of California )
)ss.
City and County of San Francisco )
WILLIAM GRAHAM and WILLIAM K. COBLENTZ, being first duly sworn, each for
himself, deposes and says:
That WILLIAM GRAHAM and WILLIAM K. COBLENTZ are, and were at all times
mentioned in the foregoing Certificate of Amendment, the President and
Secretary, respectively, of F.M. PRODUCTIONS, INC., a California corporation,
and each has read said Certificate, and that the statements therein made and
the matters set forth therein are true of their own knowledge, and that the
signatures purporting to be the signatures of said President and Secretary
thereto, are the genuine signatures of said President and Secretary.
/s/ William Graham /s/ William K. Coblentz
- ---------------------------------- ---------------------------------
WILLIAM GRAHAM WILLIAM K. COBLENTZ
Subscribed and sworn to before me
this 15(th) day of October, 1979.
/s/ Judith M. Fracher
- ----------------------------------
NOTARY PUBLIC
In and for the City and County of
San Francisco, State of California
<PAGE>
ARTICLES OF INCORPORATION
OF
F. M. PRODUCTIONS, INC.
----------------
KNOW ALL MEN BY THESE PRESENTS:
We, the undersigned, do hereby voluntarily associate ourselves for the
purpose of forming a private corporation under the laws of the State of
California, and WE HEREBY CERTIFY:
FIRST: The name of this corporation is
F. M. PRODUCTIONS, INC.
SECOND: The purpose for which said corporation is formed are:
To carry on the negotiation for, production of, purchase of, sale,
licensing, distribution, advertising and promotion of all rights, privileges
and properties in the entertainment industry, including but not limited to
all types of theatrical motion pictures, theatrical stage plays, musical
performances of all types and varieties on stage or otherwise, television
films, programs, presentations, commercials, radio recordings, programs,
presentations and commercials, books and music publication and music
recording;
To purchase and otherwise acquire, own, hold, sell or otherwise dispose of
musical compositions and rights pertaining thereto, and to publish, sell and
generally trade and deal in sheet music and song folios of every kind and
description, and to engage in any manner, shape or form in the recording and
reproduction of the human voice, musical instruments, and sounds of every
name, nature and description;
To manufacture, make, form, produce, create, buy or otherwise acquire,
sell, import and export, promote, trade and generally deal in and with, as
principal, agent, factor, wholesaler, retailer, commission merchant or
consignee, sheet music, song folios, discs, electrical transcriptions,
phonograph records and record blanks in any form or shape of metal, wax,
composition or other material or combination of materials, any and every
device of every name, nature and description; for the recording and
reproduction of the human voice, musical instruments and sound of every name,
nature and description.
To purchase, hold, own, manage, operate, sell, exchange, lease and hire
real property wheresoever situate or any interest therein or appurtenant
thereto; and to improve said real property by the erection and construction
<PAGE>
thereon of buildings and/or improvements of any character or nature
whatsoever, and to let and/or demise said buildings and/or improvements or
any portion thereof independently of the real property upon which the same
may be situate or together therewith;
To purchase, traffic, trade and deal in, handle and sell personal property
of every kind and character and wheresoever situate;
To engage in, operate, conduct and manage any lawful business enterprise,
project or undertaking;
To become a partner (either general or limited or both) and enter into
agreements of partnership or joint venture, with one or more persons or
corporations, for the purpose of carrying on any business whatsoever which
this corporation may deem proper or convenient in connection with any of the
purposes herein set forth or otherwise, or which may be calculated, directly
or indirectly, to promote the interest of this corporation or to enhance the
value of its property or business;
To apply for, obtain, register, purchase, lease or otherwise to acquire,
and to hold, own, use, operate and introduce and to sell, assign or otherwise
dispose of, any trademarks, trade names, copyrights, patents, inventions,
improvements and processes used in connection with or secured under Letters
Patent and/or copyrights from the United States or foreign countries, or
otherwise, and to exercise, develop, grant licenses in respect of, or
otherwise to turn to account any such trademarks, trade names, copyrights,
patents, licenses, processes and the like, or any such property or rights;
To borrow money from any person, firm, association or corporation; and to
secure the payment of any note, bond or other evidence of indebtedness of
this corporation by mortgage or deed of trust of its real property, by pledge
or hypothecation of its personal property, and by any other lawful manner or
means; to lend money and to accept as security for or in satisfaction of
obligations owing from others to this corporation, notes, bonds or other
evidence of indebtedness, secured by mortgage or deed of trust of real
property or pledge or hypothecation of personal property, or of any interest
herein;
To purchase, acquire, sell, hold, own and in every way handle and deal in
shares of the capital stock of any other corporation and of this corporation
so far as permitted by law; to purchase, acquire, sell, hold, own and in
every way handle and deal in bonds, debentures and other securities or
obligations of any other corporation, public or
-2-
<PAGE>
private, or of any body politic, domestic or foreign; to guarantee the payment
of dividends or interest on any shares of stock, bonds, debentures and other
securities or obligations of any other corporation whenever in the judgment
of the Board of Directors proper or necessary for the business purposes of
the corporation; and to acquire and undertake the good will, property rights
and assets and the liabilities of any person, firm, association or corporation,
and to pay for the same in cash, stocks, or bonds of this corporation or
otherwise;
To enter into, make, perform and carry out contracts of every kind and for
all lawful purposes with any person, firm, association or corporation; and
generally to do any and all acts and things useful, auxiliary, incident or
appertaining in any manner to the aforesaid purposes of this corporation; and
to do any and all other acts and things, and to exercise any and all other
powers which a corporation or natural person could do and exercise and which
now or hereafter may be authorized by or not inconsistent with the laws of
the United States or of the State of California.
The foregoing clauses setting forth the purposes of this corporation shall
be construed both as purposes and powers; and it is hereby expressly provided
that the foregoing enumeration of the specific purposes shall not be held to
limit or restrict in any manner all lawful purposes and powers of this
corporation.
THIRD: The primary business to be engaged in by this corporation is to
present musical and theatrical productions.
FOURTH: The principal office for the transaction of the business of the
corporation shall be located in the City and County of San Francisco, State
of California.
FIFTH: The total number of shares which the corporation shall have
authority to issue is twenty-five thousand (25,000) and the par value of said
shares shall be one dollar ($1.00) and the aggregate par value of all of the
shares of the corporation shall be twenty-five thousand dollars ($25,000).
All of said shares shall be common stock.
SIXTH: The number of directors of the corporation shall be three (3), and
the names and residences of the persons who are appointees to act until the
first annual meeting of shareholders or until the selection and qualification
of their successors are as follows:
<TABLE>
<CAPTION>
NAME ADDRESS
- ----------------------- -----------------------------
<S> <C>
William K. Coblentz 555 California Street
San Francisco, California
Janice Hanson 555 California Street
-3-
<PAGE>
San Francisco, California
Gayle Campbell 555 California Street
San Francisco, California
</TABLE>
IN WITNESS WHEREOF, we the undersigned, who are all of the directors
herein names, have hereunto set our hands and seals this 2nd day of October,
1970.
/s/ William K. Coblentz
-----------------------------------
WILLIAM K. COBLENTZ
/s/ Janice Hanson
-----------------------------------
JANICE HANSON
/s/ Gayle Campbell
-----------------------------------
GAYLE CAMPBELL
STATE OF CALIFORNIA )
) ss.
City and County of San Francisco )
On this 2nd day of October, 1970, before me, Nancy Parker, a Notary Public
in and for the City and County of San Francisco, State of California,
residing therein, duly commissioned and sworn, personally appeared WILLIAM K.
COBLENTZ, JANICE HANSON, and GAYLE CAMPBELL, known to me to be the persons
whose names are subscribed to the within instrument, and they severally
acknowledged to me that they executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and seal at my office in
San Francisco, California, the day and year in this certificate first above
written.
[Notarial Seal] /s/ Nancy Parker
-----------------------------------
NOTARY PUBLIC
in and for the City and County of
San Francisco, State of California
My Commission expires October 26, 1971
-4-
<PAGE>
ARTICLES OF INCORPORATION
I
The name of the corporation is BILL GRAHAM MANAGEMENT, INC.
II
The purpose of the corporation is to engage in any lawful act or activity for
which a corporation may be organized under the General Corporation Law of
California other than the banking business, the trust company business or the
practice of a profession permitted to be incorporated by the California
Corporations Code.
III
The name and address in the State of California of the corporation's initial
agent for service of process is:
Franklin D. Rockwell, Jr.
260 5th Street, 2nd Floor
San Francisco, CA 94103
IV
The corporation is authorized to issue only one class of shares of stock; and
the total number of shares authorized to be issued is Ten Thousand (10,000).
V
The liability of the directors of the corporation for monetary damages shall be
eliminated to the fullest extent permissible under California law.
VI
The corporation is authorized to provide indemnification of agents (as defined
in Corporations Code Section 317) through bylaw provisions, agreements with
agents, vote of shareholders or disinterested directors or otherwise, in excess
of the indemnification otherwise permitted by Corporations Code Section 317,
subject only to the applicable limits set forth in Corporations Code Section
204 with respect to actions for breach of duty to the corporation and its
shareholders.
Dated: August 2, 1990 /s/ Richard L. Greene
---------------------
RICHARD L. GREENE
<PAGE>
BYLAWS
OF
BILL GRAHAM MANAGEMENT, INC.
<PAGE>
BYLAWS
OF
BILL GRAHAM MANAGEMENT, INC.
ARTICLE I - OFFICES
1.01 - PRINCIPAL OFFICE
The principal executive and business office of the
corporation is hereby fixed and located in the City and County of San
Francisco, California or such other location as the board of directors may
determine.
1.02 - OTHER OFFICES
Branch or subordinate offices may at any time be established
at any place or places by the board of directors.
ARTICLE II - MEETINGS OF SHAREHOLDERS
2.01 - PLACE OF MEETINGS
All annual and all other meetings of shareholders shall be
held at the principal executive office of the corporation, or at any other
place within or without the State of California which may be designated either
by the board of directors, or by the written consent of all shareholders
entitled to vote thereat, provided such shareholder consent is given either
before or after the meeting and filed with the secretary of the corporation.
2.02 - ANNUAL MEETINGS
The annual meetings of shareholders shall be held on the
first Thursday of the fourth month following the end of each fiscal year at
10:00 a.m.; provided, however, that should said day fall upon a legal holiday,
then any such annual meeting of shareholders shall be held at the same time and
place on the next day thereafter ensuing which is not
<PAGE>
a legal holiday. At such meetings, directors shall be elected, reports of the
affairs of the corporation shall be considered, and any other business may be
transacted which is within the powers of the shareholders.
2.03 - SPECIAL MEETINGS
Special meetings of the shareholders, for any purpose or
purposes whatsoever, may be called at any time by any of (i) the president,
(ii) the board of directors, (iii) the chairman of the board, or (iv) one or
more shareholders holding shares in the aggregate entitled to cast not less
than 10 percent of the votes at that meeting.
If a special meeting is called by any person or persons other
than the board of directors, such person shall make a request therefor in
writing, specifying (i) the date and time of such meeting, which shall be not
less than 35 nor more than 60 days after the receipt of the request, and (ii)
the general nature of the business proposed to be transacted at the meeting.
Such request shall be delivered personally or sent by registered mail or by
telegraphic or other facsimile transmission to the chairman of the board, the
president, any vice president or the secretary of the corporation. The officer
receiving the request shall cause notice to be given within 20 days to the
shareholders entitled to vote, in accordance with the provisions of Sections
2.4 and 2.5, and the notice shall set forth that a meeting will be held at the
time requested by the person or persons calling the meeting. If the notice is
not given within such 20-day period, the person(s) requesting the meeting may
give the notice.
2.04 - NOTICE OF MEETINGS
All notices of meetings of shareholders, whether annual or
special, shall be sent or otherwise given not less than 10 nor more than 60
days before the date of the meeting, except as provided in Section 2.03. The
notice shall specify the place, date and hour of the meeting and (i) in the
case of a special meeting, the general nature of the business to be transacted,
or (ii) in the case of the annual meeting, those matters which the board of
directors, at the time of giving the notice, intends to present for action by
the shareholders. The notice of any meeting at which directors are to be
elected shall include the name of any nominee or nominees whom, at the time of
the notice, management intends to present for election. The notice shall also
state the general nature of the proposal if action is proposed to be taken at
any meeting for approval of any of the following: (i) a contract or transaction
in which a director has a direct or
2
<PAGE>
indirect financial interest; (ii) an amendment of the articles of
incorporation; (iii) a reorganization of the corporation; (iv) a voluntary
dissolution of the corporation; or (v) a distribution in dissolution other than
in accordance with the rights of any outstanding preferred shares.
Notwithstanding the absence of specific notice thereof, any such action may
nevertheless be presented to the meeting and be validly acted upon by the
shareholders if approved by all shareholders entitled to vote thereon, unless
they sign waivers of notice specifying the general nature of the proposal so
approved.
2.05 - MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Notice of any shareholders' meeting shall be given either
personally or by first-class mail or telegraphic or written communication,
charges prepaid, addressed to the shareholder at the address of that
shareholder appearing on the books of the corporation or given by the
shareholder to the corporation for the purpose of notice. If no such address
appears on the corporation's books or has been so given, notice shall be deemed
to have been given if published at least once in a newspaper of general
circulation in the county where that office is located or in any manner
permitted by law. Notice shall be deemed to have been given at the time when
delivered personally, deposited in the mail, delivered to a common carrier for
transmission to the recipient, actually transmitted by electronic means to the
recipient by the person giving the notice, or sent by other means of written
communication.
An affidavit of the mailing or other means of giving any
notice of any shareholders' meeting may be executed by the secretary, assistant
secretary, or any transfer agent of the corporation giving the notice, and
filed and maintained in the minute book of the corporation.
2.06 - ADJOURNED MEETINGS AND NOTICE THEREOF
Any shareholders' meeting, annual or special, whether or not
a quorum is present, may be adjourned from time to time by the vote of the
majority of the shares which are represented at the meeting either in person or
by proxy, but in the absence of a quorum.
It shall not be necessary to give any notice of an
adjournment or of the business to be transacted at an adjourned meeting other
than by announcement at the meeting at which such adjournment is taken.
However, when any shareholders' meeting, either annual or special, is adjourned
for more than 45 days, or if after the adjournment a
3
<PAGE>
new record date is fixed for the adjourned meeting notice of the adjourned
meeting shall be given to each shareholder of record entitled to vote at the
adjourned meeting. At any adjourned meetings, the corporation may transact any
business that might have been transacted at the regular meeting.
2.07 - RECORD DATE FOR SHAREHOLDERS OF RECORD
For purposes of determining which shareholders are entitled
to receive notice of any meeting, to vote, or to give consent to corporate
action without a meeting, the board of directors may fix a record date in
advance of such meeting or corporate action which shall not be less than 10 nor
more than 60 days before any such meeting or any such action without a meeting.
Only shareholders of record at the close of business on the date so fixed are
entitled to notice and to vote or to give consent, as the case may be,
notwithstanding any transfer of any shares on the books of the corporation
after the record date, except as otherwise provided in the articles of
incorporation, by agreement, or in the California General Corporation Law.
If the board of directors does not so fix a record date:
(a) The record date for determining shareholders entitled to
receive notice of or to vote at a meeting of shareholders shall be at the close
of business on the business day next preceding the day on which notice is given
or, if notice is waived, at the close of business on the business day next
preceding the day on which the meeting is held; and
(b) The record date for determining shareholders entitled to
give consent to corporate action in writing without a meeting (i) when no prior
action by the board has been taken, shall be the day on which the first written
consent is given, or (ii) when prior action of the board has been taken, shall
be at the close of business on the day on which the board adopts the resolution
relating to that action, or the 60th day before the date of such other action,
whichever is later.
2.08 - VOTING AT MEETINGS
Except as otherwise provided in the articles of incorporation
and in the case of cumulative voting for directors, each shareholder is
entitled to one vote per share. The shareholders' vote may be by voice vote or
by ballot;
4
<PAGE>
provided, however, that any election for directors must be by ballot if
demanded by any shareholder before the voting has begun. On any matter other
than the election of directors, any shareholder may vote part of the shares in
favor of the proposal and refrain from voting the remaining shares or vote them
against the proposal, but if the shareholder fails to specify the number of
shares which the shareholder is voting affirmatively, it will be conclusively
presumed that the shareholder's approving vote is with respect to all shares
that the shareholder is entitled to vote. The affirmative vote of a majority of
the shares represented and voting, provided such shares voting affirmatively
also constitutes a majority of the number of shares required for a quorum,
shall be the act of the shareholders, unless the vote of a greater number or
voting by classes is required by California General Corporation Law or by the
articles of incorporation. Every shareholder entitled to vote at any election
for directors shall have the right to cumulate his votes by (i) giving one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which his shares are entitled, or (ii)
distributing such cumulated votes on the same principle among as many
candidates as he chooses; provided that the name of such candidate has been
placed in nomination prior to the voting and that at least one shareholder has
given notice at the meeting, prior to the voting, of an intention to cumulate
votes. In any election of directors, the candidates receiving the highest
number of votes, up to the number of directors to be elected, shall be elected.
Votes against a director or not cast shall have no effect.
2.09 - QUORUM
The presence in person or by proxy of persons entitled to
vote a majority of the voting shares at any meeting shall constitute a quorum
of the shareholders for the transaction of business.
The shareholders present at a duly called or held meeting at
which a quorum is present may continue to do business until adjournment,
notwithstanding the withdrawal of one or more shareholders to leave less than a
quorum, if any action taken (other than adjournment) is approved by at least a
majority of the shares required to constitute a quorum.
5
<PAGE>
2.10 - CONSENT OF ABSENTEES
The transactions of any meeting of shareholders, either
annual or special, however called and noticed and wherever held, shall be as
valid as though made at a meeting duly held after regular call and notice if a
quorum is present either in person or by proxy and if, either before or after
the meeting, each of the shareholders entitled to vote who was not present in
person or by proxy signs a written waiver of notice or a consent to the holding
of such meeting or an approval of the minutes thereof. The waiver of notice or
consent need not specify either the business to be transacted or the purpose of
any annual or special meeting of shareholders, unless the action taken or
proposed to be taken is for approval of any of those matters specified in
Section 2.04. All such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
Attendance at a meeting, in person or by proxy, shall also
constitute a waiver of notice of that meeting, except when the person objects
at the beginning of the meeting to the transaction of any business because the
meeting has not been lawfully called or convened, and except that attendance at
a meeting is not a waiver of any right to object to the consideration of
matters required by law to be included in the notice of the meeting but not so
included, if that objection is expressly made at the meeting.
2.11 - ACTION WITHOUT MEETING
Except as may be limited by the articles of incorporation and
except for the election of directors, any action which may be taken by vote of
the shareholders at any annual or special meeting may be taken without a
meeting and without prior notice if a consent in writing setting forth the
action so taken is signed by the holders of outstanding shares 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. Directors may be elected by written consent without a
meeting only if the written consents of all outstanding shares entitled to vote
are obtained, except that a vacancy in the board (other than a vacancy created
by removal of a director) not filled by the board may be filled by the written
consent of the holders of a majority of the outstanding shares entitled to
vote.
All such consents shall be filed and maintained in the
corporate records. Any shareholder (or the shareholder's proxy holders, or a
transferee of the shares or a personal representative of the shareholder or
their
6
<PAGE>
respective proxyholders) giving a written consent may revoke the consent only
by a writing received by the corporation prior to the time that written
consents of the number of shares required to authorize the proposed action have
been filed with the secretary of the corporation. Such revocation is effective
upon its receipt by the secretary of the corporation.
Unless the consents of all shareholders entitled to vote have
been solicited in writing:
(1) Notice of shareholder approval without a meeting by less
than unanimous written consent shall be given at least 10 calendar days
before the consummation of the action authorized by such approval, if the
corporate action concerns (i) a contract or transaction in which a
director has a direct or indirect financial interest under Section 310 of
the California Corporations Code, (ii) indemnification of agents of the
corporation, (iii) reorganization of the corporation, or (iv) a
distribution in dissolution other than in accordance with the rights of
the outstanding preferred shares; and
(2) Prompt notice shall be given of any other corporate
action approved by shareholders without a meeting by less than unanimous
written consent.
All such notices shall be given in the manner provided by Section 2.05.
2.12 - PROXIES
Every person entitled to vote for directors or on any other
matter shall have the right to do so either in person or by one or more agents
authorized by a written proxy signed by the person and filed with the secretary
of the corporation. A proxy shall be deemed signed if the shareholder's name is
placed on the proxy (whether by manual signature, typewriting, telegraphic
transmission or otherwise) by the shareholder or the shareholder's
attorney-in-fact. A validly executed proxy that does not state that it is
irrevocable shall continue in full force and effect unless (i) revoked by the
person executing it, before the vote pursuant to that proxy, by a writing
delivered to the corporation stating that the proxy is revoked, or by
attendance at the meeting and voting in person by the person executing the
proxy, or by a subsequent proxy executed by the same person and presented at
the meeting; or (ii) written notice of the death or incapacity of the maker of
that proxy is received by the corporation before the vote pursuant to that
proxy is counted; provided, however, that no proxy shall be valid after the
expiration of 11 months from the date of the proxy, unless
7
<PAGE>
another term of longer or shorter duration is specified in the proxy. The
revocability of a proxy that states on its face that is irrevocable shall be
governed by the provisions of Sections 705(e) and 705(f) of the Corporations
Code of California.
ARTICLE III - DIRECTORS
3.01 - POWERS
Except as reserved to the shareholders by law, the articles
of incorporation or these bylaws, all corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall
be controlled by, the board of directors. Without limiting the generality of
the foregoing powers, the directors shall have the following powers:
First: To conduct, manage and control the affairs and
business of the corporation and to make such rules and regulations therefor not
inconsistent with law or with the articles of incorporation or these bylaws, as
they may deem best.
Second: To select and remove the officers, agents and
employees of the corporation, to prescribe such powers and duties for them as
may not be inconsistent with law, with the articles of incorporation or with
these bylaws and to fix their compensation.
Third: To change the principal executive and business office
of the corporation from one location to another as provided in Section 1.01; to
fix and locate from time to time one or more branch offices of the corporation
within or without the State of California, as provided in section 1.02; to
designate any place within or without the State of California for the holding
of any shareholders' meeting or meetings except annual meetings; and to adopt,
make and use a corporate seal, to prescribe the forms of certificates of stock
and to alter the form of such seal and of such certificates from time to time
as in their judgment they may deem best, provided that such seal and such
certificates shall at all times comply with the provisions of law.
Fourth: To authorize the issue of shares of stock of the
corporation from time to time, upon such terms as may be lawful, as dividends
or in consideration of money paid, labor done or services actually rendered to
the
8
<PAGE>
corporation or for its benefit or in its formation or reorganization, debts or
securities cancelled, or tangible or intangible property actually received; but
neither promissory notes of the purchaser, unless secured by property other
than the shares acquired or otherwise permitted by Section 408 of the General
Corporation Law, nor future services shall constitute payment or part payment
for shares of the corporation.
Fifth: To borrow money and incur indebtedness for the
purposes of the corporation and to cause to be executed and delivered therefor,
in the corporate name, promissory notes, bonds, debentures, deeds of trust,
mortgages, pledges, hypothecations or other evidences of debt and securities
therefor.
Sixth: To designate, by resolution adopted by a majority of
the authorized number of directors, one or more committees, each consisting of
two or more directors, to serve at the pleasure of the board. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent member at any meeting of the committee. Any such committee
shall have all the authority of the board to the extent provided in the
resolution of the board or in the bylaws, except with respect to:
(a) The approval of any action for which, under the General
Corporation Law of California, also requires approval of the shareholders or
approval of the outstanding shares;
(b) The filling of vacancies on the board or in any
committee;
(c) The fixing of compensation of the directors for serving
on the board or on any committee;
(d) The amendment or repeal of bylaws or the adoption of new
bylaws;
(e) The amendment or repeal of any resolution of the board
which by its express terms is not so amendable or repealable;
(f) A distribution to the shareholders of the corporation,
except at a rate, in a periodic amount or within a price range set forth in
the articles or determined by the board; or
(g) The appointment of other committees of the board or the
members thereof.
Seventh: To declare dividends at such times and in such
amounts as the condition of the affairs of the corporation may warrant.
Eighth: Generally to exercise all of the powers and to
perform all of the acts and duties that from time to time may be permitted by
law appertaining to their office.
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3.02 - NUMBER OF DIRECTORS
The authorized number of directors of the corporation shall
be two until changed by an amendment of this bylaw.
3.03 - ELECTION AND TERM OF OFFICE
The directors shall be elected at each annual meeting of
shareholders and may be elected at any special meeting of shareholders held for
that purpose. Each director shall hold office until his successor is elected
and qualified, or until his earlier death, resignation, removal or
ineligibility.
3.04 - REMOVAL
A director may be removed for cause by (i) the board, when
such director has been convicted of a felony or declared incompetent by court
order, or (ii) the superior court, at the suit of at least 10% of the
shareholders of any class of shares having found that the director has either
committed fraudulent or dishonest acts, or has grossly abused his authority
with reference to the corporation.
A director may be removed without cause by a majority vote of
all outstanding shares, provided that (i) where cumulative voting is in effect,
such director may not be removed over the objection of the number of shares
required to elect him, and (ii) where the articles of incorporation provide for
the election of a director by the shareholders of a certain class or series of
shares, such director may be removed only by the majority vote of the
outstanding shares of such class or series.
Except as provided in this Section 3.04, and any reduction of
the authorized number of directors notwithstanding, a director may not be
removed prior to the expiration of such director's term of office.
3.05 - VACANCIES
Vacancies in the board of directors may be filled by a
majority of the remaining directors, though less than a quorum, or by a sole
remaining director. A vacancy in the board of directors shall be deemed to
exist (i) in case of the death, resignation, ineligibility or removal of any
director, (ii) if the authorized number of directors is increased,
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or (iii) if the shareholders fail, at any annual or special meeting of
shareholders at which any director or directors are elected, to elect the full
authorized number of directors to be voted for at that meeting.
The shareholders may elect a director or directors at any
time to fill any vacancy or vacancies not filled by the directors. In the event
that such a vacancy is created by an event other than removal, any election by
written consent of the shareholders must be signed by holders of a majority of
the outstanding shares. If the board of directors accepts the resignation of a
director tendered to take effect at a future time, the board or the
shareholders shall have the power to elect a successor to take office when the
resignation is to become effective.
3.06 - MEETINGS BY TELEPHONE CONFERENCE
Members of the board may participate in a meeting through use
of conference telephone or similar communication equipment, so long as all
members participating in such meeting can hear one another.
3.07 - ACTION WITHOUT MEETING
Any action required or permitted to be taken by the board of
directors or any committee thereof may be taken without a meeting if each
member of the board consents in writing to such action. Such consents shall be
filed with the minutes of the meetings of the board.
3.08 - ORGANIZATION MEETING
Immediately following each annual meeting of shareholders,
the board of directors shall hold a regular meeting for the purpose of
organization, election of officers and the transaction of other business.
Notice of such meeting is hereby dispensed with.
3.09 - SPECIAL MEETINGS
Special meetings of the board of directors for any purpose or
purposes may be called at any time by (i) the chairman of the board, (ii) the
president, (iii) any vice president, (iv) the secretary, or (v) any two
directors.
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Written notice of the time and place of special meetings
shall be delivered personally to the directors or sent to each director by mail
or by other form of written communication, charges prepaid, addressed to him at
his address as it appears upon the records of the corporation or, if it is not
so shown or is not readily ascertainable, at the place in which the meetings of
directors are regularly held. In case such notice is mailed, it shall be
deposited in the United States mail at least four days prior to the date of the
meeting. In case such notice is delivered personally or telegraphed, it shall
be so delivered or deposited with the telegraph company at least 48 hours prior
to the time of the meeting.
3.10 - ADJOURNMENT
A majority of the directors present, whether or not a quorum
is present, may adjourn any directors' meeting to another time and place. If a
meeting is adjourned for more than 24 hours, notice of any adjournment to
another time or place shall be given in the manner specified in section 3.09
prior to the time of the adjourned meeting to the directors who were not
present at the time of adjournment.
3.11 - WAIVER OF NOTICE
The transactions at any meeting of the board of directors,
however called and noticed, or wherever held, shall be as valid as though such
transactions had occurred at a meeting duly held after regular call and notice
if a quorum is present and if, either before or after the meeting, each of the
directors not present signs a written waiver of notice of or consent to holding
the meeting or an approval of the minutes thereof. All such waivers, consents
or approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.
3.12 - QUORUM
A majority of the authorized number of directors then holding
office shall constitute a quorum for the transaction of business. The act of
the majority of the directors at a meeting at which a quorum is present shall
be the act of the board of directors, unless a greater number is required by
law, the articles of incorporation or these bylaws. However, a meeting at which
a quorum is initially present may continue to transact business notwithstanding
the
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withdrawal of directors if any action taken is approved by at least a majority
of the required quorum for such meeting. The provisions of this Section 3.12
shall apply to action taken by any committee from time to time designated by
the board of directors.
ARTICLE IV - OFFICERS
4.01 - OFFICERS
The officers of the corporation shall be a president, a
secretary, a treasurer, and such other officers with such titles and duties as
may be appointed in accordance with the provisions of Section 4.09. Any number
of offices may be held by the same person. The president shall be the chief
executive officer and the treasurer shall be the chief financial officer.
4.02 - ELECTION
The officers of the corporation, except such officers as may
be appointed in accordance with the provisions of Sections 4.04 or 4.09, shall
be chosen annually by the board of directors; and each officer shall hold his
office until he has resigned or removed or is otherwise disqualified to serve
and his successor has been elected and qualified.
4.03 - REMOVAL AND RESIGNATION
Any officer may be removed, either with or without cause, by
a majority of the directors at the time in office, at any regular or special
meeting of the board, or, except in the case of an officer chosen by the board
of directors, by any officer upon whom such power of removal may be conferred
by the board of directors.
Any officer may resign at any time by giving written notice
to the board of directors or to the president or to the secretary of the
corporation. Any such resignation shall take effect at the date of the receipt
of such notice or any later time specified therein; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
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4.04 - VACANCIES
A vacancy in any office because of death, resignation,
removal, disqualification or any other cause shall be filled in the manner
prescribed in these bylaws for regular appointments to such office.
4.05 - CHAIRMAN OF THE BOARD
The chairman of the board, if one has been appointed, shall,
if present, preside at all meetings of the board of directors and exercise and
perform all such other powers and duties as may from time to time be assigned
to him by the board of directors or prescribed by these bylaws.
4.06 - PRESIDENT
The president, subject to the board of directors, shall have
general supervision, direction and control of the business and of other
officers and employees of the corporation. He shall preside at all meetings of
the shareholders and, if there is no regular, appointed chairman of the board
or if such chairman is absent, at all meetings of the board of directors. He
shall be ex officio a member of all standing committees, including the
executive committee, if any, and shall have general powers and duties of
management, together with such other powers and duties as may be prescribed by
the board of directors.
4.07 - SECRETARY
The secretary shall keep, or cause to be kept, a book of
minutes at the principal executive and business office, or such other place as
the board of directors may order, of all meetings of directors and
shareholders, with the time and place of holding, whether regular or special
and, if special, how authorized, the notice thereof given, the names of those
present at directors' meetings, the number of shares present or represented at
shareholders' meetings and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the
principal executive and business office or at the office of the corporation's
transfer agent, a share register or a duplicate share register showing the
names of the
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shareholders and their addresses, the number and classes of shares held by
each, the number and the date of certificates issued for the same, and the
number and date of cancellation of every certificate surrendered for
cancellation.
The secretary shall give, or cause to be given, notice of all
the meetings of the shareholders and of the board of directors required by
these bylaws or by law to be given, shall keep the seal of the corporation in
safe custody and shall have such other powers and shall perform such other
duties as may be prescribed by the board of directors or the bylaws.
4.08 - TREASURER
The chief financial officer shall be the treasurer. The
treasurer shall keep and maintain, or cause to be kept and maintained, adequate
and correct accounts of the properties and business transactions of the
corporation, including accounts of its assets, liabilities, receipts,
disbursements, gains, losses, capital, surplus and shares.
The treasurer shall deposit all moneys and other valuables in
the name and to the credit of the corporation with such depositaries as may be
designated by the board of directors. He shall be responsible for the proper
disbursement of the funds of the corporation as may be ordered by the board of
directors and shall render to the president or directors, whenever they request
it, an account of all of his transactions as treasurer and of the financial
condition of the corporation. The treasurer shall prepare a proper annual
budget of income and expenses for each calendar year, revised quarterly, for
approval of or revision by the board of directors and shall be responsible for
the handling of finances in connection therewith. He shall have such other
powers and shall perform such other duties as may be prescribed by the board of
directors.
4.09 - SUBORDINATE OFFICERS
The board of directors may appoint such vice presidents,
assistant treasurers and assistant secretaries and other subordinate officers
as the business of the corporation may require, each of whom shall hold office
for such period, have such authority and perform such duties as are provided in
these bylaws or as the board of directors may from time to time determine.
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In the absence or disability of the president, treasurer or
secretary, the vice presidents, assistant treasurers and assistant secretaries,
respectively, in order of their rank as fixed by the board of directors or, if
not ranked, the subordinate officer designated by the board of directors shall
perform all the duties of such absent or disabled officer and, when so acting,
shall have all the powers of and be subject to all the restrictions upon such
officer. Each subordinate officer shall have such other powers and shall
perform such other duties as from time to time may be prescribed for him by the
board of directors or these bylaws.
ARTICLE V - SHARES OF STOCK
5.01 - SHARE CERTIFICATES
Certificates representing shares of the capital stock of the
corporation shall be in such form as shall be approved by the board of
directors, consistent with the articles of incorporation and the laws of the
State of California. A certificate or certificates for shares of the capital
stock of the corporation shall be issued to each shareholder when such shares
are fully paid, and the board of directors may authorize the issuance of
certificates or shares as partly paid provided that these certificates shall
state the amount of the consideration to be paid for them and the amount paid.
All such certificates shall be signed by (i) the chairman or vice chairman of
the board or the president or a vice president, and (ii) by the treasurer or an
assistant financial officer or the secretary or any assistant secretary,
certifying the number of shares and the class or series of shares issued to the
shareholder and evidenced by such certificate. The corporation may issue, sell
or transfer fractional shares.
5.02 - TRANSFER OF SHARES
Subject to the provisions of applicable securities and other
laws and any other valid contractual and other restrictions on transfer of
shares, upon the surrender to the corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
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5.03 - LOST OR DESTROYED CERTIFICATE
The holder of any shares of stock of the corporation shall
immediately notify the corporation of any loss or destruction of the
certificate therefor, and the corporation may issue a new certificate in the
place of any certificate theretofore issued by it alleged to have been lost or
destroyed, upon approval of the board of directors. The board may, in its
discretion, as a condition to authorizing the issue of such new certificate,
require the owner of the lost or destroyed certificate, or his legal
representative, to make proof satisfactory to the corporation of the loss or
destruction thereof and to give the corporation a bond or other security, in
such amount and with such surety or sureties as the corporation may determine,
as indemnity against any claim that may be made against the corporation on
account of any such certificate so alleged to have been lost or destroyed.
ARTICLE VI - MISCELLANEOUS
6.01 - INDEMNITY OF OFFICERS AND DIRECTORS
The corporation shall, to the fullest extent permitted by the
California General Corporation Law (and in excess of that otherwise permitted
by Section 317), indemnify each of its directors and officers against expenses,
judgments, fines, settlements and other amounts actually and reasonably
incurred in connection with any proceeding, including proceedings brought by or
on behalf of the corporation, arising by reason of the fact any such person is
or was a director or officer of the corporation and shall have power to advance
to each such director expenses incurred in defending any such proceeding to the
fullest extent permitted by that law.
6.02 - SHAREHOLDER INSPECTION OF ARTICLES AND BYLAWS
The corporation shall keep at its principal executive and
business office the original or a copy of the articles of incorporation and the
bylaws and any amendments thereto, certified by the secretary, which shall be
open to inspection by shareholders at all reasonable times during office hours.
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6.03 - MAINTENANCE AND INSPECTION OF RECORDS OF SHAREHOLDERS
The corporation shall keep at its principal executive and
business office or at the office of its transfer agent or registrar (if one has
been appointed), as determined by resolution of the board of directors, a
record of its shareholders, giving the names and addresses of all shareholders
and the number and class of shares held by each shareholder.
A shareholder or shareholders of the corporation holding at
least 5% in the aggregate of the outstanding voting shares of the corporation
may (i) inspect and copy the records of shareholders' names, addresses and
shareholdings, during usual business hours on five business days' prior written
demand on the corporation, and (ii) obtain from the transfer agent of the
corporation, on written demand and on the tender of such transfer agent's usual
charges for such list, a list of the names and addresses of the shareholders
who are entitled to vote for the election of directors, and their
shareholdings, as of the most recent record date for which that list has been
compiled or as of a date specified by the shareholder after the date of demand.
This list shall be made available to any such shareholder or shareholders by
the transfer agent on or before the later of five business days after the
demand is received or the date specified in the demand as the date as of which
the list is to be compiled. The record of shareholders shall also be open to
inspection on the written demand of any shareholder or holder of a voting trust
certificate, at any time during usual business hours, for a purpose reasonably
related to the holder's interests as a shareholder or as the holder of a voting
trust certificate. Any inspection and copying under this Section may be made in
person or by an agent or attorney of the shareholder or holder of a voting
trust certificate making the demand.
6.04 - SHAREHOLDER INSPECTION OF CORPORATE RECORDS
The accounting books and records and minutes of proceedings
of the shareholders and the board of directors and any committee or committees
of the board of directors shall be kept at such place or places designated by
the board of directors or, in the absence of such designation, at the principal
executive and business office of the corporation. The minutes shall be kept in
written form, and the accounting books and records shall be kept either in
written form or in any other form capable of being converted into written form.
The minutes and accounting books and records shall be open to inspection upon
the written demand of any shareholder or holder of a voting trust certificate,
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at any reasonable time during usual business hours, for a purpose reasonably
related to the holder's interests as a shareholder or as the holder of a voting
trust certificate. The inspection may be made in person or by an agent or
attorney and shall include the right to copy and make extracts. These rights of
inspection shall extend to the records of each subsidiary corporation of the
corporation.
6.05 - INSPECTION BY DIRECTORS
Every director shall have the absolute right at any
reasonable time to inspect all books, records and documents of every kind and
the physical properties of the corporation and each of its subsidiary
corporations. This inspection by a director may be made in person or by an
agent or attorney, and the right of inspection includes the right to copy and
make extracts of documents.
6.06 - REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The president or, in the event of his absence or inability to
serve, any vice president and the secretary or assistant secretary of this
corporation are authorized to vote, represent and exercise, on behalf of this
corporation, all rights incidental to any and all shares of any other
corporation standing in the name of this corporation. The authority herein
granted to such officers to vote or represent on behalf of this corporation any
and all shares held by this corporation in any other corporation may be
exercised either by such officers in person or by any person authorized to do
so by proxy or power of attorney duly executed by such officers.
6.07 - ANNUAL REPORT
The annual report to shareholders referred to in Section
1501(a) of the California Corporations Code is expressly waived subject to the
limitations thereof, but the board of directors of the corporation may cause to
be sent to the shareholders, not later than 120 days after the close of the
fiscal or calendar year, an annual report in such form as may be deemed
appropriate by the board of directors.
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6.08 - ANNUAL STATEMENT OF GENERAL INFORMATION
Within 90 days of incorporation and annually thereafter, the
corporation shall file with the Secretary of State, on the prescribed form, a
statement setting forth the authorized number of directors, the names and
complete business or residence addresses of all incumbent directors, the names
and complete business or residence addresses of the chief executive officer,
secretary and chief financial officer the street address of its principal
executive office or principal business office in this state, and the general
type of business constituting the principal business activity of the
corporation, together with a designation of the agent of the corporation for
the purpose of service of process, all in compliance with section 1502 of the
California Corporations Code.
ARTICLE VII - AMENDMENTS TO BYLAWS
7.01 - AMENDMENT BY SHAREHOLDERS
New bylaws may be adopted or these bylaws may be amended or
repealed by the vote or written consent of the shareholders entitled to
exercise a majority of the voting power of the corporation, except as otherwise
provided by either these bylaws or the articles of the corporation; provided,
however, that if the articles of incorporation set forth the number of
authorized directors of the corporation, the authorized number of directors may
be changed only by an amendment of the articles of incorporation.
7.02 - AMENDMENT BY DIRECTORS
Subject to the rights of the shareholders as provided in
Section 7.01 to adopt, amend or repeal bylaws, bylaws may be adopted, amended,
or repealed by the board of directors; provided, however, that the board of
directors may adopt a bylaw or amendment of a bylaw changing the authorized
number of directors only for the purpose of fixing the exact number of
directors within the limits specified in the articles of incorporation or in
Section 3.02 of these bylaws.
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CERTIFICATE OF SECRETARY
OF
BILL GRAHAM MANAGEMENT, INC.
The undersigned hereby certifies that:
1. He is now, and at all times herein mentioned has been, the
duly elected, qualified and acting Secretary of BILL GRAHAM MANAGEMENT, INC., a
duly organized and existing California corporation (the "Corporation").
2. By Written Consent dated August 6, 1993, the Corporation's
sole director adopted the Bylaws amendment attached hereto as Exhibit A.
3. At an annual meeting of the Corporation's shareholders
duly called and held on June 22, 1994, Article 3.02 of the Corporation's Bylaws
was amended to read as follows:
Number of Directors. The authorized number of directors of
the corporation shall be three until changed by an amendment of this
bylaw.
4. The foregoing Bylaws, amended as set forth above,
constitute a full, true and correct copy of the Corporation's Bylaws as in
effect on the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this 22nd day of June, 1994.
/s/ FRANKLIN D. ROCKWELL, JR.
-------------------------
FRANKLIN D. ROCKWELL, JR.
<PAGE>
EXHIBIT A
BYLAWS AMENDMENT
6.01 - INDEMNITY OF DIRECTORS, OFFICERS, AND EMPLOYEES
The corporation shall, to the fullest extent permitted by the
California General Corporation Law (the "Code") and in excess of that which is
otherwise provided by Code Section 317, indemnify each of the directors,
officers, and employees of the corporation and each person who is or was
serving at the request of the corporation as a director, officer, or employee
of another corporation (including without limitation direct and indirect
subsidiaries of the corporation) or a partnership, joint venture, trust, or
other enterprise (all such persons being hereinafter collectively referred to
as "Indemnified Persons") against all judgments, fines, penalties, amounts paid
in settlement (if the settlement is approved in advance by the corporation (or,
where applicable, such other corporation or other enterprise described in this
sentence), which approval shall not be unreasonably withheld of delayed), and
"expenses" (as hereinafter defined) actually and reasonably incurred by the
Indemnified Person in connection with any "proceeding" (as hereinafter defined)
involving the Indemnified Person by reason of the fact that the Indemnified
Person is or was a director, officer, or employee of the corporation or, acting
at the request of the corporation, any other corporation, partnership, joint
venture, trust, or other enterprise. For purposes hereof, "expenses" include by
way of illustration but not limitation all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, or being prepared to be a witness in any
"Proceeding." For purposes hereof, a "proceeding" shall include by way of
illustration but not limitation any action, suit, arbitration, alternative
dispute resolution mechanism, investigation, administrative hearing, or any
other proceeding, whether civil, criminal, administrative, or investigative,
and whether brought by or on behalf of a third party or by or on behalf of the
corporation.
Upon written request to the Board in each specific case by an
Indemnified Person seeking indemnification, the Board shall promptly authorize
indemnification consistent with the terms of the preceding paragraph if the
Board determines that the indemnification is not prohibited by the Code,
including by reason of the requirements of Code Sections 204 (a) (10) and (11)
and, in the case of an action by or in the right of the corporation
<PAGE>
to procure a judgment in its favor, subsections (1), (2), and (3) of Code
Section 317 (c). The termination of any proceeding by judgment, order,
settlement, conviction, or upon plea of nolo contendere or its equivalent shall
not, of itself, create a presumption that an Indemnified Person did not act in
good faith and in a manner which the Indemnified Person reasonably believed to
be in or not opposed to the best interests of the corporation or, with respect
to any criminal proceeding, had no reasonable cause to believe that the conduct
of the Indemnified Person was unlawful.
If an Indemnified Person is entitled to indemnification by
the corporation for some or a portion of any judgments, fines, penalties,
amounts paid in settlement, or expenses actually and reasonably incurred by the
Indemnified Person in connection with any proceeding, but not, however, for the
total amount thereof, the corporation shall nevertheless indemnify the
Indemnified Person for the portion of such amounts to which the Indemnified
Person is entitled.
Upon written request to the Board in each specific case by an
Indemnified Person, the Board shall promptly authorize the advancement of
attorneys' fees and other expenses incurred by the Indemnified Person prior to
the final disposition of a proceeding in which the Indemnified Person is
involved by reason of the fact that the Indemnified Person is or was a
director, officer, or employee of the corporation or, acting at the request of
the corporation, any other corporation, partnership, joint venture trust, or
other enterprise, but only if the Board obtains the written agreement of the
Indemnified Person, in a form satisfactory to the Board, to repay the advances
if and to the extent that it is ultimately determined that the Indemnified
Person is not entitled to be indemnified by the corporation for the attorneys'
fees and other expenses so advanced.
If an Indemnified Person makes a written request to the Board
for indemnification and the requested indemnification is not paid in full by
the corporation within forty-five (45) days after the date of the written
request, the Indemnified Person shall also be indemnified for the attorneys'
fees and other expenses of any proceeding brought by the Indemnified Person
against the corporation to recover the unpaid requested indemnified amount. It
shall be a defense in any such proceeding that the Indemnified Person has not
satisfied the standards of conduct which make it permissible under applicable
law for the corporation to indemnify the Indemnified Person for the amount
claimed, but the burden of proving such defense shall be on the corporation and
the Indemnified Person shall be entitled to receive
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interim payments of attorneys' fees and other expenses in connection with the
proceeding unless and until such defense is finally adjudicated by court order
or judgment from which no further right of appeal exists.
If, at the time of the receipt of a written request for
indemnification by an Indemnified Person, the corporation has director and
officer liability insurance in effect, the corporation shall give prompt notice
of the commencement of the proceeding described in the notice to the
corporation's insurers in accordance with the procedures set forth in the
respective policies. The corporation shall thereafter take all necessary or
appropriate action to cause such insurers to pay on behalf of the Indemnified
Person all amounts payable as a result of such proceeding in accordance with
the terms of such policies. The provisions of this paragraph shall not be
construed to impose upon the corporation any obligation to obtain or maintain
director and officer liability insurance.
The indemnification rights conferred hereby shall continue as
to any Indemnified Person who has ceased to be a director, officer, or employee
of the corporation or any other corporation, partnership, joint venture, trust,
or other enterprise for which the Indemnified Person was serving as a director,
officer, or employee at the request of the corporation, and shall inure to the
benefit of the heirs, executors, administrators, and any other
successors-in-interest of the Indemnified Person.
In the event of any change after the date of the adoption by
the corporation of this Section 6.01 in any applicable law, statute, or rule
which expands the right of a California corporation to indemnify its directors,
officers, or employees, such change shall be ipso facto within the purview of
the corporation's obligations hereunder. In the event of any change in any
applicable law, statute, or rule which narrows the right of a California
corporation to indemnify its directors, officers, or employees, such change, to
the extent not otherwise required by such law, statute, or rule to be applied
to the corporation, shall have no effect on the indemnification obligations of
the corporation.
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CERTIFICATE OF AMENDMENT
OF ARTICLES OF INCORPORATION
OF BILL GRAHAM PRESENTS, INC.
Nicholas P. Clainos and Franklin D. Rockwell, Jr. certify that:
1. They are the President and Secretary, respectively, of Bill Graham
Presents, Inc., a California. corporation.
2. An Article designated Article Seventh is added to the Articles of
Incorporation to read as follows:
"ARTICLE SEVENTH
a. The liability of the directors of the corporation
for monetary damages shall be eliminated to the
fullest extent permissible under California law.
b This corporation is authorized to provide
indemnification of agents (as defined in Section 317
of the California General Corporation Law) through
bylaw provisions, agreements with agents, vote of
shareholders or disinterested directors or
otherwise, in excess of the indemnification
otherwise permitted by said Section 317, subject
only to the applicable limits set forth in Section
204 of the California General Corporation Law with
respect to actions for breach of duty to the
corporation and its shareholders.
c. Any repeal or modification of the foregoing
provisions of this Article Seventh shall not
adversely affect any right of indemnification or
limitation of liability of an agent of the
corporation relating to acts or omissions occurring
prior to such repeal or modification."
3. The amendment herein set forth has been duly approved by the Board
of Directors.
4. The amendment herein set forth has been duly approved by the
required vote of the shareholders in accordance with Section 902 of the
Corporations Code. The Corporation has only one class of voting shares and the
number of outstanding voting shares is 200. The number of shares voting in
favor of the amendment equaled or exceeded the vote required. The percentage
vote required for the approval of the amendment herein set forth was more than
50%.
Date: 1-21-88 \s\ Nicholas P. Clainos
----------------------------------
Nicholas P. Clainos, President
Date: 1-21-88 \s\ Franklin D. Rockwell, Jr.
----------------------------------
Franklin D. Rockwell, Jr.,
Secretary
<PAGE>
I, Nicholas P. Clainos, declare under penalty of perjury under the
laws of the State of California that I have read the foregoing certificate and
know the contents thereof and that the same is true of my own knowledge.
Date: 1-21-88 \s\ Nicholas P. Clainos
------------------------
Nicholas P. Clainos,
I, Franklin D. Rockwell, Jr., declare under penalty of perjury under
the laws of the State of California that I have read the foregoing certificate
and know the contents thereof and that the same is true of my own knowledge.
Date: 1-21-88 \s\ Franklin D. Rockwell, Jr.
------------------------------
Franklin D. Rockwell, Jr.,
2
<PAGE>
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
BILL GRAHAM PRESENTS
NICHOLAS P. CLAINOS and DONALD J. WICHMAN certify that:
1. They are the President and Secretary respectively of BILL GRAHAM
PRESENTS, a California corporation.
2. Article FIRST of the Articles of Incorporation of this corporation is
amended to read as follows:
"FIRST: The name of this corporation is:
BILL GRAHAM PRESENTS, INC."
3. The foregoing amendment of Articles of Incorporation has been duly
approved by the Board of Directors.
4. The foregoing amendment of Articles of Incorporation has been duly
approved by the required vote of shareholders in accordance with
Section 902 of the Corporations Code. The total number of outstanding
shares of the corporation is 200. The number of shares voting in favor
of the amendment equaled or exceeded the vote required. The percentage
vote required was more than 50%.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
DATE: April 3, 1986
\s\ Nicholas P. Clainos
----------------------------------
NICHOLAS P. CLAINOS, President
\s\ Donald J. Wichman
----------------------------------
DONALD J. WICHMAN, Secretary
<PAGE>
ARTICLES OF INCORPORATION
OF
BILL GRAHAM PRESENTS
KNOW ALL MEN BY THESE PRESENTS:
We, the undersigned, do hereby voluntarily associate ourselves for the
purpose of forming a private corporation under the laws of the State of
California, and WE HEREBY CERTIFY:
FIRST: The name of this corporation is
BILL GRAHAM PRESENTS
SECOND: The purposes for which said corporation is formed are:
To carry on the negotiation for, production of, purchase of, sale,
licensing, distribution, advertising and promotion of all rights, privileges
and properties in the entertainment industry, including but not limited to all
types of theatrical motion pictures, theatrical stage plays, musical
performances of all types and varieties on stage or otherwise, television
films, programs, presentations, commercials, radio recordings, programs,
presentations and commercials, books and music publication and music recording;
To purchase and otherwise acquire, own, hold, sell or otherwise
dispose of musical compositions and rights pertaining thereto, and to publish,
sell and generally trade and deal in sheet music and song folios of every kind
and description, and to engage in any manner, shape or form in the recording
and reproduction of the human voice, musical instruments, and sounds of every
name, nature and description;
To manufacture, make, form, produce, create, buy or otherwise acquire,
sell, import and export, promote, trade and generally deal in and with, as
principal, agent, factor, wholesale retailer, commission merchant or consignee,
sheet music, song folios, discs, electrical transcriptions, phonograph records
and record blanks in any form or shape of metal, wax, composition or other
material or combination of materials, any and every device of every name,
nature and description, for the recording and reproduction of the human voice,
musical instruments and sound of every name, nature and description;
To purchase, hold, own, manage, operate, sell, exchange, lease and
hire real property wheresoever situate or any interest therein or appurtenant
thereto; and to improve said real property by the erection and construction
thereon of buildings and/or improvements of any character or nature whatsoever,
and to let and/or demise said buildings and/or improvements or any portion
thereof independently of the real property upon which the same may be situate
or together therewith;
To purchase, traffic, trade and deal in, handle and sell personal
property of every kind and character and wheresoever situate;
To engage in, operate, conduct and manage any lawful business
enterprise, project or undertaking;
To become a partner (either general or limited or both) and enter into
agreements of partnership or joint venture, with one or more persons or
corporations, for the purpose of carrying on any business whatsoever which this
corporation may deem proper or convenient in connection with any of the
purposes herein set forth or otherwise, or
<PAGE>
which may be calculated, directly or indirectly, to promote the interests of
this corporation or to enhance the value of its property or business;
To apply for, obtain, register, purchase, lease or otherwise to
acquire, and to hold, own, use, operate and introduce and to sell, assign or
otherwise dispose of, any trademarks, trade names, copyrights, patents,
inventions, improvements and processes used in connection with or secured under
Letters Patent and/or copyrights from the United States or foreign countries,
or otherwise, and to exercise, develop, grant licenses in respect of, or
otherwise to turn to account any such trademarks, trade names, copyrights,
patents, licenses, processes and the like, or any such property or rights;
To borrow money from any person, firm, association or corporation; and
to secure the payment of any note, bond or other evidence or indebtedness of
this corporation by mortgage or deed of trust of its real property, by pledge
or hypothecation of its personal property, and by any other lawful manner or
means; to lend money and to accept as security for or in satisfaction of
obligations owing from others to this corporation, notes, bonds or other
evidence of indebtedness, secured by mortgage or deed of trust of real property
or pledge or hypothecation of personal property, or of any interest therein;
To purchase, acquire, sell, hold, own and in every way handle and deal
in shares of the capital stock of any other corporation and of this corporation
so far as permitted by law; to purchase, acquire, sell, hold, own and in every
way handle and deal in bonds, debentures and other securities or obligations of
any other corporation, public or private, or of any body politic, domestic or
foreign; to guarantee the payment of dividends or interest on any shares of
stock, bonds, debentures and other securities or obligations of any other
corporation whenever in the judgment of the Board of Directors proper or
necessary for the business purposes of the corporation; and to acquire and
undertake the good will, property rights and assets and the liabilities of any
person, firm, association or corporation, and to pay for the same in cash,
stocks or bonds of this corporation or otherwise;
To enter into, make, perform and carry out contracts of every kind and
for all lawful purposes with any person, firm, association or corporation; and
generally to do any and all acts and things useful, auxiliary, incident or
appertaining in any manner to the aforesaid purposes of this corporation; and
to do any and all other acts and things, and to exercise any and all other
powers which a corporation or natural person could do and exercise and which
now or hereafter may be authorized by or not inconsistent with the laws of the
United States or of the State of California.
The foregoing clauses setting forth the purposes of this corporation
shall be construed both as purposes and powers; and it is hereby expressly
provided that the foregoing enumeration of the specific purposes shall not be
held to limit or restrict in any manner all lawful purposes and powers of this
corporation.
THIRD: The primary business to be engaged in by this corporation is
to present musical and theatrical productions.
FOURTH: The principal office for the transaction of the business of
the corporation shall be located in the City and County of San Francisco,
State of California.
FIFTH: The total number of shares which the corporation shall have
authority to issue is five thousand (5,000) and the par value of said shares
shall be Ten Dollars ($10.00) and the aggregate value of all of the shares of
the corporation shall be Fifty Thousand Dollars ($50,000.00). All of said
shares shall be common stock.
2
<PAGE>
SIXTH: The number of directors of the corporation shall be three (3),
and the names and residences of the persons who are appointees to act until the
first annual meeting of shareholders or until the selection and qualification
of their successors are as follows:
NAME ADDRESS
WILLIAM K. COBLENTZ San Francisco, California
JOSEPH H. MOLESS, JR. San Francisco, California
JUDITH M. FRISCHER San Francisco, California
3
<PAGE>
IN WITNESS WHEREOF, we the undersigned, who are all of the directors
herein named, have hereunto set our hands and seals this 3rd day of July, 1967.
William K. Coblentz
------------------------
WILLIAM K. COBLENTZ
Joseph H. Moless, Jr.
------------------------
JOSEPH H. MOLESS, JR.
Judith M. Frischer
------------------------
JUDITH M. FRISCHER
4
<PAGE>
STATE OF CALIFORNIA )
)
City and County of San Francisco )
On this 3rd day of July, 1967, before me, DORIS I. MARTIN, a Notary
Public in and for the City and County of San Francisco, State of California,
residing therein, duly commissioned and sworn, personally appeared WILLIAM K.
COBLENTZ, JOSEPH H. MOLESS, JR. and JUDITH M. FRISCHER, known to me to be the
persons whose names are subscribed to the within instrument, and they
severally acknowledged to me that they executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and seal at my office
in San Francisco, California, the day and year in this certificate first above
written.
Doris I. Martin
----------------------------------
NOTARY PUBLIC
in and for the City and County of
San Francisco, State of California
5
<PAGE>
AMENDED AND RESTATED BYLAWS
OF
BILL GRAHAM PRESENTS, INC.
ARTICLE I - OFFICES
1.01 - PRINCIPAL OFFICE
The principal executive and business office of the corporation is hereby
fixed and located in the City and County of San Francisco, California or such
other location as the board of directors may determine.
1.02 - OTHER OFFICES
Branch or subordinate offices may at any time be established at any place
or places by the board of directors.
ARTICLE II - MEETINGS OF SHAREHOLDERS
2.01 - PLACE OF MEETINGS
All annual and all other meetings of shareholders shall be held at the
principal executive office of the corporation, or at any other place within or
without the State of California which may be designated either by the board of
directors, or by the written consent of all shareholders entitled to vote
thereat, provided such shareholder consent is given either before or after the
meeting and filed with the secretary of the corporation.
2.02 - ANNUAL MEETINGS
The annual meetings of shareholders shall be held on the first Thursday in
April at 10:00 a.m.; provided, however, that should said day fall upon a legal
holiday, then any such annual meeting of shareholders shall be held at the same
time and place on the next day thereafter ensuing which is not a legal holiday.
At such meetings, directors shall be elected, reports of the affairs of the
corporation shall be considered, and any other business may be transacted which
is within the powers of the shareholders.
2.03 - SPECIAL MEETINGS
Special meetings of the shareholders, for any purpose or purposes
whatsoever, may be called at any time by any of (i) the president, (ii) the
board of directors, (iii) the chairman of the board, or (iv) one or more
shareholders holding shares in the aggregate entitled to cast not less than 10
percent of the votes at that meeting.
If a special meeting is called by any person or persons other than the
board of directors, such person shall make a request therefor in writing,
specifying (i) the date and time of such meeting, which shall be not less than
35 nor more than 60 days after the receipt of the request, and (ii) the general
nature of the business proposed to be transacted at the
<PAGE>
meeting. Such request shall be delivered personally or sent by registered mail
or by telegraphic or other facsimile transmission to the chairman of the board,
the president, any vice president or the secretary of the corporation. The
officer receiving the request shall cause notice to be given within 20 days to
the shareholders entitled to vote, in accordance with the provisions of Sections
2.4 and 2.5, and the notice shall set forth that a meeting will be held at the
time requested by the person or persons calling the meeting. If the notice is
not given within such 20-day period, the person(s) requesting the meeting may
give the notice.
2.04 - NOTICE OF MEETINGS
All notices of meetings of shareholders, whether annual or special, shall
be sent or otherwise given not less than 10 nor more than 60 days before the
date of the meeting, except as provided in Section 2.03. The notice shall
specify the place, date and hour of the meeting and (i) in the case of a special
meeting, the general nature of the business to be transacted, or (ii) in the
case of the annual meeting, those matters which the board of directors, at the
time of giving the notice, intends to present for action by the shareholders.
The notice of any meeting at which directors are to be elected shall include the
name of any nominee or nominees whom, at the time of the notice, management
intends to present for election. The notice shall also state the general nature
of the proposal if action is proposed to be taken at any meeting for approval of
any of the following: (i) a contract or transaction in which a director has a
direct or indirect financial interest; (ii) an amendment of the articles of
incorporation; (iii) a reorganization of the corporation; (iv) a voluntary
dissolution of the corporation; or (v) a distribution in dissolution other than
in accordance with the rights of any outstanding preferred shares.
Notwithstanding the absence of specific notice thereof, any such action may
nevertheless be presented to the meeting and be validly acted upon by the
shareholders if approved by all shareholders entitled to vote thereon, unless
they sign waivers of notice specifying the general nature of the proposal so
approved.
2.05 - MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Notice of any shareholders' meeting shall be given either personally or by
first-class mail or telegraphic or written communication, charges prepaid,
addressed to the shareholder at the address of that shareholder appearing on the
books of the corporation or given by the shareholder to the corporation for the
purpose of notice. If no such address appears on the corporation's books or has
been so given, notice shall be deemed to have been given if published at least
once in a newspaper of general circulation in the county where that office is
located or in any manner permitted by law. Notice shall be deemed to have been
given at the time when delivered personally, deposited in the mail, delivered to
a common carrier for transmission to the recipient, actually transmitted by
electronic means to the recipient by the person giving the notice, or sent by
other means of written communication.
An affidavit of the mailing or other means of giving any notice of any
shareholders' meeting may be executed by the secretary, assistant secretary, or
any transfer agent of the corporation giving the notice, and filed and
maintained in the minute book of the corporation.
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<PAGE>
2.06 - ADJOURNED MEETINGS AND NOTICE THEREOF
Any shareholders' meeting, annual or special, whether or not a quorum is
present, may be adjourned from time to time by the vote of the majority of the
shares which are represented at the meeting either in person or by proxy, but in
the absence of a quorum.
It shall not be necessary to give any notice of an adjournment or of the
business to be transacted at an adjourned meeting other than by announcement at
the meeting at which such adjournment is taken. However, when any shareholders'
meeting, either annual or special, is adjourned for more than 45 days, or if
after the adjournment a new record date is fixed for the adjourned meeting
notice of the adjourned meeting shall be given to each shareholder of record
entitled to vote at the adjourned meeting. At any adjourned meetings, the
corporation may transact any business that might have been transacted at the
regular meeting.
2.07 - RECORD DATE FOR SHAREHOLDERS OF RECORD
For purposes of determining which shareholders are entitled to receive
notice of any meeting, to vote, or to give consent to corporate action without a
meeting, the board of directors may fix a record date in advance of such meeting
or corporate action which shall not be less than 10 nor more than 60 days before
any such meeting or any such action without a meeting. Only shareholders of
record at the close of business on the date so fixed are entitled to notice and
to vote or to give consent, as the case may be, notwithstanding any transfer of
any shares on the books of the corporation after the record date, except as
otherwise provided in the articles of incorporation, by agreement, or in the
California General Corporation Law.
If the board of directors does not so fix a record date:
(a) The record date for determining shareholders entitled to receive
notice of or to vote at a meeting of shareholders shall be at the close of
business on the business day next preceding the day on which notice is given or,
if notice is waived, at the close of business on the business day next preceding
the day on which the meeting is held; and
(b) The record date for determining shareholders entitled to give consent
to corporate action in writing without a meeting (i) when no prior action by the
board has been taken, shall be the day on which the first written consent is
given, or (ii) when prior action of the board has been taken, shall be at the
close of business on the day on which the board adopts the resolution relating
to that action, or the 60th day before the date of such other action, whichever
is later.
2.08 - VOTING AT MEETINGS
Except as otherwise provided in the articles of incorporation and in the
case of cumulative voting for directors, each shareholder is entitled to one
vote per share. The shareholders' vote may be by voice vote or by ballot;
provided, however, that any election for directors must be by ballot if demanded
by any shareholder before the voting has begun.
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<PAGE>
On any matter other than the election of directors, any shareholder may vote
part of the shares in favor of the proposal and refrain from voting the
remaining shares or vote them against the proposal, but if the shareholder fails
to specify the number of shares which the shareholder is voting affirmatively,
it will be conclusively presumed that the shareholder's approving vote is with
respect to all shares that the shareholder is entitled to vote. The affirmative
vote of a majority of the shares represented and voting, provided such shares
voting affirmatively also constitutes a majority of the number of shares
required for a quorum, shall be the act of the shareholders, unless the vote of
a greater number or voting by classes is required by California General
Corporation Law or by the articles of incorporation. Every shareholder entitled
to vote at any election for directors shall have the right to cumulate his votes
by (i) giving one candidate a number of votes equal to the number of directors
to be elected multiplied by the number of votes to which his shares are
entitled, or (ii) distributing such cumulated votes on the same principle among
as many candidates as he chooses; provided that the name of such candidate has
been placed in nomination prior to the voting and that at least one shareholder
has given notice at the meeting, prior to the voting, of an intention to
cumulate votes. In any election of directors, the candidates receiving the
highest number of votes, up to the number of directors to be elected, shall be
elected. Votes against a director or not cast shall have no effect.
2.09 - QUORUM
The presence in person or by proxy of persons entitled to vote a majority
of the voting shares at any meeting shall constitute a quorum of the
shareholders for the transaction of business.
The shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding
the withdrawal of one or more shareholders to leave less than a quorum, if any
action taken (other than adjournment) is approved by at least a majority of the
shares required to constitute a quorum.
2.10 - CONSENT OF ABSENTEES
The transactions of any meeting of shareholders, either annual or special,
however called and noticed and wherever held, shall be as valid as though made
at a meeting duly held after regular call and notice if a quorum is present
either in person or by proxy and if, either before or after the meeting, each of
the shareholders entitled to vote who was not present in person or by proxy
signs a written waiver of notice or a consent to the holding of such meeting or
an approval of the minutes thereof. The waiver of notice or consent need not
specify either the business to be transacted or the purpose of any annual or
special meeting of shareholders, unless the action taken or proposed to be taken
is for approval of any of those matters specified in Section 2.04. All such
waivers, consents or approvals shall be filed with the corporate records or made
a part of the minutes of the meeting.
Attendance at a meeting, in person or by proxy, shall also constitute a
waiver of notice of that meeting, except when the person objects at the
beginning of the meeting to the transaction of any business because the meeting
has not
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<PAGE>
been lawfully called or convened, and except that attendance at a meeting is not
a waiver of any right to object to the consideration of matters required by law
to be included in the notice of the meeting but not so included, if that
objection is expressly made at the meeting.
2.11 - ACTION WITHOUT MEETING
Except as may be limited by the articles of incorporation and except for
the election of directors, any action which may be taken by vote of the
shareholders at any annual or special meeting may be taken without a meeting and
without prior notice if a consent in writing setting forth the action so taken
is signed by the holders of outstanding shares 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.
Directors may be elected by written consent without a meeting only if the
written consents of all outstanding shares entitled to vote are obtained, except
that a vacancy in the board (other than a vacancy created by removal of a
director) not filled by the board may be filled by the written consent of the
holders of a majority of the outstanding shares entitled to vote.
All such consents shall be filed and maintained in the corporate records.
Any shareholder (or the shareholder's proxyholders, or a transferee of the
shares or a personal representative of the shareholder or their respective proxy
holders) giving a written consent may revoke the consent only by a writing
received by the corporation prior to the time that written consents of the
number of shares required to authorize the proposed action have been filed with
the secretary of the corporation. Such revocation is effective upon its receipt
by the secretary of the Corporation.
Unless the consents of all shareholders entitled to vote have been
solicited in writing:
(1) Notice of shareholder approval without a meeting by less than
unanimous written consent shall be given at least 10 calendar days before
the consummation of the action authorized by such approval, if the
corporate action concerns (i) a contract or transaction in which a
director has a direct or indirect financial interest under Section 310 of
the California Corporations code, (ii) indemnification of agents of the
corporation, (iii) reorganization of the corporation, or (iv) a
distribution in dissolution other than in accordance with the rights of
the outstanding preferred shares; and
(2) Prompt notice shall be given of any other corporate action approved by
shareholders without a meeting by less than unanimous written consent.
All such notices shall be given in the manner provided by Section 2.05.
2.12 - PROXIES
Every person entitled to vote for directors or on any other matter shall
have the right to do so either in person or by one or more agents authorized by
a written proxy signed by the person and filed with the secretary of the
corporation. A proxy shall be deemed signed if the shareholder's name is placed
on the proxy (whether by manual signature, typewriting, telegraphic transmission
or otherwise) by the shareholder or the shareholder's attorney- in- fact.
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<PAGE>
A validly executed proxy that does not state that it is irrevocable shall
continue in full force and effect unless (i) revoked by the person executing it,
before the vote pursuant to that proxy, by a writing delivered to the
corporation stating that the proxy is revoked, or by attendance at the meeting
and voting in person by the person executing the proxy, or by a subsequent proxy
executed by the same person and presented at the meeting; or (ii) written notice
of the death or incapacity of the maker of that proxy is received by the
corporation before the vote pursuant to that proxy is counted; provided,
however, that no proxy shall be valid after the expiration of 11 months from the
date of the proxy, unless another term of longer or shorter duration is
specified in the proxy. The revocability of a proxy that states on its face that
is irrevocable shall be governed by the provisions of Sections 705(e) and 705(f)
of the Corporations Code of California.
ARTICLE III - DIRECTORS
3.01 - POWERS
Except as reserved to the shareholders by law, the articles of
incorporation or these bylaws, all corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
controlled by, the board of directors. Without limiting the generality of the
foregoing powers, the directors shall have the following powers:
First: To conduct, manage and control the affairs and business of the
corporation and to make such rules and regulations therefor not inconsistent
with law or with the articles of incorporation or these bylaws, as they may deem
best.
Second: To select and remove the officers, agents and employees of the
corporation, to prescribe such powers and duties for them as may not be
inconsistent with law, with the articles of incorporation or with these bylaws
and to fix their compensation.
Third: To change the principal executive and business office of the
corporation from one location to another as provided in Section 1.01; to fix and
locate from time to time one or more branch offices of the corporation within or
without the State of California, as provided in Section 1.02; to designate any
place within or without the State of California for the holding of any
shareholders' meeting or meetings except annual meetings; and to adopt, make and
use a corporate seal, to prescribe the forms of certificates of stock and to
alter the form of such seal and of such certificates from time to time as in
their judgment they may deem best, provided that such seal and such certificates
shall at all times comply with the provisions of law.
Fourth: To authorize the issue of shares of stock of the corporation from
time to time, upon such terms as may be lawful, as dividends or in consideration
of money paid, labor done or services actually rendered to the corporation or
for its benefit or in its formation or reorganization, debts or securities
cancelled, or tangible or intangible property actually received; but neither
promissory notes of the purchaser, unless secured by property other than the
shares
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<PAGE>
acquired or otherwise permitted by Section 408 of the General Corporation Law,
nor future services shall constitute payment or part payment for shares of the
corporation.
Fifth: To borrow money and incur indebtedness for the purposes of the
corporation and to cause to be executed and delivered therefor, in the corporate
name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges,
hypothecations or other evidences of debt and securities therefor.
Sixth: To designate, by resolution adopted by a majority of the authorized
number of directors, one or more committees, each consisting of two or more
directors, to serve at the pleasure of the board. The board may designate one or
more directors as alternate members of any committee, who may replace any absent
member at any meeting of the committee. Any such committee shall have all the
authority of the board to the extent provided in the resolution of the board or
in the bylaws, except with respect to:
(a) The approval of any action for which, under the General Corporation
Law of California, also requires approval of the shareholders or approval of the
outstanding shares;
(b) The filling of vacancies on the board or in any committee;
(c) The fixing of compensation of the directors for serving on the board
or on any committee;
(d) The amendment or repeal of bylaws or the adoption of new bylaws;
(e) The amendment or repeal of any resolution of the board which by its
express terms is not so amendable or repealable;
(f) A distribution to the shareholders of the corporation, except at a
rate, in a periodic amount or within a price range set forth in the articles or
determined by the board; or
(g) The appointment of other committees of the board or the members
thereof.
Seventh: To declare dividends at such times and in such amounts as the
condition of the affairs of the corporation may warrant.
Eighth: Generally to exercise all of the powers and to perform all of the
acts and duties that from time to time may be permitted by law appertaining to
their office.
3.02 - NUMBER OF DIRECTORS
The authorized number of directors of the corporation shall be two until
changed by an amendment of this bylaw.
3.03 - ELECTION AND TERM OF OFFICE
The directors shall be elected at each annual meeting of shareholders and
may be elected at any special meeting of shareholders held for that purpose.
Each director shall hold office until his successor is elected and qualified, or
until his earlier death, resignation, removal or ineligibility.
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<PAGE>
3.04 - REMOVAL
A director may be removed for cause by (i) the board, when such director
has been convicted of a felony or declared incompetent by court order, or (ii)
the superior court, at the suit of at least 10% of the shareholders of any class
of shares having found that the director has either committed fraudulent or
dishonest acts, or has grossly abused his authority with reference to the
corporation.
A director may be removed without cause by a majority vote of all
outstanding shares, provided that (i) where cumulative voting is in effect, such
director may not be removed over the objection of the number of shares required
to elect him, and (ii) where the articles of incorporation provide for the
election of a director by the shareholders of a certain class or series of
shares, such director may be removed only by the majority vote of the
outstanding shares of such class or series.
Except as provided in this Section 3.04, and any reduction of the
authorized number of directors notwithstanding, a director may not be removed
prior to the expiration of such director's term of office.
3.05 - VACANCIES
Vacancies in the board of directors may be filled by a majority of the
remaining directors, though less than a quorum, or by a sole remaining director.
A vacancy in the board of directors shall be deemed to exist (i) in case of the
death, resignation, ineligibility or removal of any director, (ii) if the
authorized number of directors is increased, or (iii) if the shareholders fail,
at any annual or special meeting of shareholders at which any director or
directors are elected, to elect the full authorized number of directors to be
voted for at that meeting.
The shareholders may elect a director or directors at any time to fill any
vacancy or vacancies not filled by the directors. In the event that such a
vacancy is created by an event other than removal, any election by written
consent of the shareholders must be signed by holders of a majority of the
outstanding shares. If the board of directors accepts the resignation of a
director tendered to take effect at a future time, the board or the shareholders
shall have the power to elect a successor to take office when the resignation is
to become effective.
3.06 - MEETINGS BY TELEPHONE CONFERENCE
Members of the board may participate in a meeting through use of
conference telephone or similar communication equipment, so long as all members
participating in such meeting can hear one another.
3.07 - ACTION WITHOUT MEETING
Any action required or permitted to be taken by the board of directors or
any committee thereof may be taken without a meeting if each member of the board
consents in writing to such action. Such consents shall be filed with the
minutes of the meetings of the board.
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<PAGE>
3.08 - ORGANIZATION MEETING
Immediately following each annual meeting of shareholders, the board of
directors shall hold a regular meeting for the purpose of organization, election
of officers and the transaction of other business. Notice of such meeting is
hereby dispensed with.
3.09 - SPECIAL MEETINGS
Special meetings of the board of directors for any purpose or purposes may
be called at any time by (i) the chairman of the board, (ii) the president,
(iii) any vice president, (iv) the secretary, or (v) any two directors.
Written notice of the time and place of special meetings shall be
delivered personally to the directors or sent to each director by mail or by
other form of written communication, charges prepaid, addressed to him at his
address as it appears upon the records of the corporation or, if it is not so
shown or is not readily ascertainable, at the place in which the meetings of
directors are regularly held. In case such notice is mailed, it shall be
deposited in the United States mail at least four days prior to the date of the
meeting. In case such notice is delivered personally or telegraphed, it shall be
so delivered or deposited with the telegraph company at least 48 hours prior to
the time of the meeting.
3.10 - ADJOURNMENT
A majority of the directors present, whether or not a quorum is present,
may adjourn any directors' meeting to another time and place. If a meeting is
adjourned for more than 24 hours, notice of any adjournment to another time or
place shall be given in the manner specified in Section 3.09 prior to the time
of the adjourned meeting to the directors who were not present at the time of
adjournment.
3.11 - WAIVER OF NOTICE
The transactions at any meeting of the board of directors, however called
and noticed, or wherever held, shall be as valid as though such transactions had
occurred at a meeting duly held after regular call and notice if a quorum is
present and if, either before or after the meeting, each of the directors not
present signs a written waiver of notice of or consent to holding the meeting or
an approval of the minutes thereof. All such waivers, consents or approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.
3.12 - QUORUM
A majority of the authorized number of directors then holding office shall
constitute a quorum for the transaction of business. The act of the majority of
the directors at a meeting at which a quorum is present shall be the act of the
board of directors, unless a greater number is required by law, the articles of
incorporation or these bylaws. However, a meeting at which a quorum is initially
present may continue to transact business notwithstanding the withdrawal of
directors if any action taken is approved by at least a majority of the required
quorum for such meeting.
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The provisions of this Section 3.12 shall apply to action taken by any committee
from time to time designated by the board of directors.
ARTICLE IV - OFFICERS
4.01 - OFFICERS
The officers of the corporation shall be a president, a secretary, a
treasurer, and such other officers with such titles and duties as may be
appointed in accordance with the provisions of Section 4.09. Any number of
offices may be held by the same person. The president shall be the chief
executive officer and the treasurer shall be the chief financial officer.
4.02 - ELECTION
The officers of the corporation, except such officers as may be appointed
in accordance with the provisions of Sections 4.04 or 4.09, shall be chosen
annually by the board of directors; and each officer shall hold his office until
he has resigned or removed or is otherwise disqualified to serve and his
successor has been elected and qualified.
4.03 - REMOVAL AND RESIGNATION
Any officer may be removed, either with or without cause, by a majority of
the directors at the time in office, at any regular or special meeting of the
board, or, except in the case of an officer chosen by the board of directors, by
any officer upon whom such power of removal may be conferred by the board of
directors.
Any officer may resign at any time by giving written notice to the board
of directors or to the president or to the secretary of the corporation. Any
such resignation shall take effect at the date of the receipt of such notice or
any later time specified therein; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
4.04 - VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these bylaws for regular appointments to such office.
4.05 - CHAIRMAN OF THE BOARD
The chairman of the board, if one has been appointed, shall, if present,
preside at all meetings of the board of directors and exercise and perform all
such other powers and duties as may from time to time be assigned to him by the
board of directors or prescribed by these bylaws.
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4.06 - PRESIDENT
The president, subject to the board of directors, shall have general
supervision, direction and control of the business and of other officers and
employees of the corporation. He shall preside at all meetings of the
shareholders and, if there is no regular, appointed chairman of the board or if
such chairman is absent, at all meetings of the board of directors. He shall be
ex officio a member of all standing committees, including the executive
committee, if any, and shall have general powers and duties of management,
together with such other powers and duties as may be prescribed by the board of
directors.
4.07 - SECRETARY
The secretary shall keep, or cause to be kept, a book of minutes at the
principal executive and business office, or such other place as the board of
directors may order, of all meetings of directors and shareholders, with the
time and place of holding, whether regular or special and, if special, how
authorized, the notice thereof given, the names of those present at directors'
meetings, the number of shares present or represented at shareholders' meetings
and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal executive
and business office or at the office of the corporation's transfer agent, a
share register or a duplicate share register showing the names of the
shareholders and their addresses, the number and classes of shares held by each,
the number and the date of certificates issued for the same, and the number and
date of cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all the meetings
of the shareholders and of the board of directors required by these bylaws or by
law to be given, shall keep the seal of the corporation in safe custody and
shall have such other powers and shall perform such other duties as may be
prescribed by the board of directors or the bylaws.
4.08 - TREASURER
The chief financial officer shall be the treasurer. The treasurer shall
keep and maintain, or cause to be kept and maintained, adequate and correct
accounts of the properties and business transactions of the corporation,
including accounts of its assets, liabilities, receipts, disbursements, gains,
losses, capital, surplus and shares.
The treasurer shall deposit all moneys and other valuables in the name and
to the credit of the corporation with such depositaries as may be designated by
the board of directors. He shall be responsible for the proper disbursement of
the funds of the corporation as may be ordered by the board of directors and
shall render to the president or directors, whenever they request it, an account
of all of his transactions as treasurer and of the financial condition of the
corporation. The treasurer shall prepare a proper annual budget of income and
expenses for each calendar year, revised quarterly, for approval of or revision
by the board of directors and shall be responsible for the handling of finances
in
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connection therewith. He shall have such other powers and shall perform such
other duties as may be prescribed by the board of directors.
4.09 - SUBORDINATE OFFICERS
The board of directors may appoint such vice presidents, assistant
treasurers and assistant secretaries and other subordinate officers as the
business of the corporation may require, each of whom shall hold office for such
period, have such authority and perform such duties as are provided in these
bylaws or as the board of directors may from time to time determine.
In the absence or disability of the president, treasurer or secretary, the
vice presidents, assistant treasurers and assistant secretaries, respectively,
in order of their rank as fixed by the board of directors or, if not ranked, the
subordinate officer designated by the board of directors shall perform all the
duties of such absent or disabled officer and, when so acting, shall have all
the powers of and be subject to all the restrictions upon such officer. Each
subordinate officer shall have such other powers and shall perform such other
duties as from time to time may be prescribed for him by the board of directors
or these bylaws.
ARTICLE V - SHARES OF STOCK
5.01 - SHARE CERTIFICATES
Certificates representing shares of the capital stock of the corporation
shall be in such form as shall be approved by the board of directors, consistent
with the articles of incorporation and the laws of the State of California. A
certificate or certificates for shares of the capital stock of the corporation
shall be issued to each shareholder when such shares are fully paid, and the
board of directors may authorize the issuance of certificates or shares as
partly paid provided that these certificates shall state the amount of the
consideration to be paid for them and the amount paid. All such certificates
shall be signed by (i) the chairman or vice chairman of the board or the
president or a vice president, and (ii) by the treasurer or an assistant
financial officer or the secretary or any assistant secretary, certifying the
number of shares and the class or series of shares issued to the shareholder and
evidenced by such certificate. The corporation may issue, sell or transfer
fractional shares.
5.02 - TRANSFER OF SHARES
Subject to the provisions of applicable securities and other laws and any
other valid contractual and other restrictions on transfer of shares, upon the
surrender to the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
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5.03 - LOST OR DESTROYED CERTIFICATE
The holder of any shares of stock of the corporation shall immediately
notify the corporation of any loss or destruction of the certificate therefor,
and the corporation may issue a new certificate in the place of any certificate
theretofore issued by it alleged to have been lost or destroyed, upon approval
of the board of directors. The board may, in its discretion, as a condition to
authorizing the issue of such new certificate, require the owner of the lost or
destroyed certificate, or his legal representative, to make proof satisfactory
to the corporation of the loss or destruction thereof and to give the
corporation a bond or other security, in such amount and with such surety or
sureties as the corporation may determine, as indemnity against any claim that
may be made against the corporation on account of any such certificate so
alleged to have been lost or destroyed.
ARTICLE VI - MISCELLANEOUS
6.01 - INDEMNITY OF OFFICERS, DIRECTORS AND EMPLOYEES
The corporation shall, to the fullest extent permitted by the California
General Corporation Law (the "Code") and in excess of that which is otherwise
provided by Code Section 317, indemnify each of the directors, officers, and
employees of the corporation and each person who is or was serving at the
request of the corporation as a director, officer, or employee of another
corporation (including without limitation direct and indirect subsidiaries of
the corporation) or a partnership, joint venture, trust, or other enterprise
(all such persons being hereinafter collectively referred to as "Indemnified
Persons") against all judgments, fines, penalties, amounts paid in settlement
(if the settlement is approved in advance by the corporation (or, where
applicable, such other corporation or other enterprise described in this
sentence), which approval shall not be unreasonably withheld of delayed), and
"expenses" (as hereinafter defined) actually and reasonably incurred by the
Indemnified Person in connection with any "proceeding" (as hereinafter defined)
involving the Indemnified Person by reason of the fact that the Indemnified
Person is or was a director, officer, or employee of the corporation or, acting
at the request of the corporation, any other corporation, partnership, joint
venture, trust, or other enterprise. For purposes hereof, "expenses" include by
way of illustration but not limitation all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, or being prepared to be a witness in any
"proceeding." For purposes hereof, a "proceeding" shall include by way of
illustration but not limitation any action, suit, arbitration, alternative
dispute resolution mechanism, investigation, administrative hearing, or any
other proceeding, whether civil, criminal, administrative, or investigative, and
whether brought by or on behalf of a third party or by or on behalf of the
corporation.
Upon written request to the Board in each specific case by an Indemnified
Person seeking indemnification, the Board shall promptly authorize
indemnification consistent with the terms of the preceding paragraph if the
Board
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determines that the indemnification is not prohibited by the Code, including by
reason of the requirements of Code Sections 204(a)(10) and (11) and, in the case
of an action by or in the right of the corporation to procure a judgment in its
favor, subsections (1), (2), and (3) of Code Section 317(c). The termination of
any proceeding by judgment, order, settlement, conviction, or upon plea of nolo
contendere or its equivalent shall not, of itself, create a presumption that an
Indemnified Person did not act in good faith and in a manner which the
Indemnified Person reasonably believed to be in or not opposed to the best
interests of the corporation or, with respect to any criminal proceeding, had no
reasonable cause to believe that the conduct of the Indemnified Person was
unlawful.
If an Indemnified Person is entitled to indemnification by the corporation
for some or a portion of any judgments, fines, penalties, amounts paid in
settlement, or expenses actually and reasonably incurred by the Indemnified
Person in connection with any proceeding, but not, however, for the total amount
thereof, the corporation shall nevertheless indemnify the Indemnified Person for
the portion of such amounts to which the Indemnified Person is entitled.
Upon written request to the Board in each specific case by an Indemnified
Person, the Board shall promptly authorize the advancement of attorneys' fees
and other expenses incurred by the Indemnified Person prior to the final
disposition of a proceeding in which the Indemnified Person is involved by
reason of the fact that the Indemnified Person is or was a director, officer, or
employee of the corporation or, acting at the request of the corporation, any
other corporation, partnership, joint venture, trust, or other enterprise, but
only if the Board obtains the written agreement of the Indemnified Person, in a
form satisfactory to the Board, to repay the advances if and to the extent that
it is ultimately determined that the Indemnified Person is not entitled to be
indemnified by the corporation for the attorneys' fees and other expenses so
advanced.
If an Indemnified Person makes a written request to the Board for
indemnification and the requested indemnification is not paid in full by the
corporation within forty-five (45) days after the date of the written request,
the Indemnified Person shall also be indemnified for the attorneys' fees and
other expenses of any proceeding brought by the Indemnified Person against the
corporation to recover the unpaid requested indemnified amount. It shall be a
defense in any such proceeding that the Indemnified Person has not satisfied the
standards of conduct which make it permissible under applicable law for the
corporation to indemnify the Indemnified Person for the amount claimed, but the
burden of proving such defense shall be on the corporation and the Indemnified
Person shall be entitled to receive interim payments of attorneys' fees and
other expenses in connection with the proceeding unless and until such defense
is finally adjudicated by court order or judgment from which no further right of
appeal exists.
If, at the time of the receipt of a written request for indemnification by
an Indemnified Person, the corporation has director and officer liability
insurance in effect, the corporation shall give prompt notice of the
commencement of the proceeding described in the notice to the corporation's
insurers in accordance with the procedures set forth in the respective policies.
The corporation shall thereafter take all necessary or appropriate action to
cause such insurers to pay on behalf of the Indemnified Person all amounts
payable as a result of such proceeding in accordance with the terms
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of such policies. The provisions of this paragraph shall not be construed to
impose upon the corporation any obligation to obtain or maintain director and
officer liability insurance.
The indemnification rights conferred hereby shall continue as to any
Indemnified Person who has ceased to be a director, officer, or employee of the
corporation or any other corporation, partnership, joint venture, trust, or
other enterprise for which the Indemnified Person was serving as a director,
officer, or employee at the request of the corporation, and shall inure to the
benefit of the heirs, executors, administrators, and any other
successors-in-interest of the Indemnified Person.
In the event of any change after the date of the adoption by the
corporation of this Section 6.01 in any applicable law, statute, or rule which
expands the right of a California corporation to indemnify its directors,
officers, or employees, such change shall be ipso facto within the purview of
the corporation's obligations hereunder. In the event of any change in any
applicable law, statute, or rule which narrows the right of a California
corporation to indemnify its directors, officers, or employees, such change, to
the extent not otherwise required by such law, statute, or rule to be applied to
the corporation, shall have no effect on the indemnification obligations of the
corporation.
6.02 - SHAREHOLDER INSPECTION OF ARTICLES AND BYLAWS
The corporation shall keep at its principal executive and business office
the original or a copy of the articles of incorporation and the bylaws and any
amendments thereto, certified by the secretary, which shall be open to
inspection by shareholders at all reasonable times during office hours.
6.03 - MAINTENANCE AND INSPECTION OF RECORDS OF SHAREHOLDERS
The corporation shall keep at its principal executive and business office
or at the office of its transfer agent or registrar (if one has been appointed),
as determined by resolution of the board of directors, a record of its
shareholders, giving the names and addresses of all shareholders and the number
and class of shares held by each shareholder.
A shareholder or shareholders of the corporation holding at least 5% in
the aggregate of the outstanding voting shares of the corporation may (i)
inspect and copy the records of shareholders' names, addresses and
shareholdings, during usual business hours on five business days' prior written
demand on the corporation, and (ii) obtain from the transfer agent of the
corporation, on written demand and on the tender of such transfer agent's usual
charges for such list, a list of the names and addresses of the shareholders who
are entitled to vote for the election of directors, and their shareholdings, as
of the most recent record date for which that list has been compiled or as of a
date specified by the shareholder after the date of demand. This list shall be
made available to any such shareholder or shareholders by the transfer agent on
or before the later of five business days after the demand is received or the
date specified in the demand as the date as of which the list is to be compiled.
The record of shareholders shall also be open to inspection on the written
demand of any shareholder or holder of a voting trust certificate, at any time
during usual business hours, for a purpose reasonably related to the holder's
interests as a shareholder or as the holder of a voting trust certificate.
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Any inspection and copying under this Section may be made in person or by an
agent or attorney of the shareholder or holder of a voting trust certificate
making the demand.
6.04 - SHAREHOLDER INSPECTION OF CORPORATE RECORDS
The accounting books and records and minutes of proceedings of the
shareholders and the board of directors and any committee or committees of the
board of directors shall be kept at such place or places designated by the board
of directors or, in the absence of such designation, at the principal executive
and business office of the corporation. The minutes shall be kept in written
form, and the accounting books and records shall be kept either in written form
or in any other form capable of being converted into written form. The minutes
and accounting books and records shall be open to inspection upon the written
demand of any shareholder or holder of a voting trust certificate, at any
reasonable time during usual business hours, for a purpose reasonably related to
the holder's interests as a shareholder or as the holder of a voting trust
certificate. The inspection may be made in person or by an agent or attorney and
shall include the right to copy and make extracts. These rights of inspection
shall extend to the records of each subsidiary corporation of the corporation.
6.05 - INSPECTION BY DIRECTORS
Every director shall have the absolute right at any reasonable time to
inspect all books, records and documents of every kind and the physical
properties of the corporation and each of its subsidiary corporations. This
inspection by a director may be made in person or by an agent or attorney, and
the right of inspection includes the right to copy and make extracts of
documents.
6.06 - REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The president or, in the event of his absence or inability to serve, any
vice president and the secretary or assistant secretary of this corporation are
authorized to vote, represent and exercise, on behalf of this corporation, all
rights incidental to any and all shares of any other corporation standing in the
name of this corporation. The authority herein granted to such officers to vote
or represent on behalf of this corporation any and all shares held by this
corporation in any other corporation may be exercised either by such officers in
person or by any person authorized to do so by proxy or power of attorney duly
executed by such officers.
6.07 - ANNUAL REPORT
The annual report to shareholders referred to in Section 1501(a) of the
California Corporations Code is expressly waived subject to the limitations
thereof, but the board of directors of the corporation may cause to be sent to
the shareholders, not later than 120 days after the close of the fiscal or
calendar year, an annual report in such form as may be deemed appropriate by the
board of directors.
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6.08 - ANNUAL STATEMENT OF GENERAL INFORMATION
Within 90 days of incorporation and annually thereafter, the corporation
shall file with the Secretary of State, on the prescribed form, a statement
setting forth the authorized number of directors, the names and complete
business or residence addresses of all incumbent directors, the names and
complete business or residence addresses of the chief executive officer,
secretary and chief financial officer, the street address of its principal
executive office or principal business office in this state, and the general
type of business constituting the principal business activity of the
corporation, together with a designation of the agent of the corporation for the
purpose of service of process, all in compliance with section 1502 of the
California Corporations Code.
ARTICLE VII - AMENDMENTS TO BYLAWS
7.01 - AMENDMENT BY SHAREHOLDERS
New bylaws may be adopted or these bylaws may be amended or repealed by
the vote or written consent of the shareholders entitled to exercise a majority
of the voting power of the corporation, except as otherwise provided by either
these bylaws or the articles of the corporation; provided, however, that if the
articles of incorporation set forth the number of authorized directors of the
corporation, the authorized number of directors may be changed only by an
amendment of the articles of incorporation.
7.02 - AMENDMENT BY DIRECTORS
Subject to the rights of the shareholders as provided in Section 7.01 to
adopt, amend or repeal bylaws, bylaws may be adopted, amended, or repealed by
the board of directors; provided, however, that the board of directors may adopt
a bylaw or amendment of a bylaw changing the authorized number of directors only
for the purpose of fixing the exact number of directors within the limits
specified in the articles of incorporation or in Section 3.02 of these bylaws.
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CERTIFICATE OF SECRETARY
OF
BILL GRAHAM PRESENTS, INC.
The undersigned hereby certifies that:
1. He is now and at all times herein mentioned has been, the duly elected,
qualified and acting Secretary of BILL PRESENTS, INC., a duly organized and
existing California corporation (the "Corporation").
2. By Written Consent of the Board of Directors dated April 7, 1994, the
following paragraph was added to Section 4.06 of the Corporation's Bylaws:
The board of directors, in its sole discretion, may elect two
persons to serve as Co-Presidents of the Corporation. In such event either
Co-President, acting independently, may perform the duties of the
President as described in these Bylaws.
3. At an annual meeting of the Corporation's shareholders duly called and
held on June 22, 1994, Section 3.02 of the Corporation's Bylaws was amended to
read as follows:
Number of Directors. The authorized number of directors of the corporation
shall be three until changed by an amendment of this bylaw.
4. The foregoing Amended and Restated Bylaws, amended as set forth above,
constitute a full, true and correct copy of the Corporation's Bylaws as in
effect on the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
effective the 22nd day of June, 1994.
\s\ Franklin D. Rockwell, Jr.
---------------------------------
FRANKLIN D. ROCKWELL, JR.
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Articles of Incorporation
of
BG Presents, Inc.
I. The name of this corporation is BG Presents, Inc.
II. The purpose of this corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law
of California other than the banking business, the trust company business
or the practice of a profession permitted to be incorporated by the
California Corporations Code.
III. The name in the State of California of this corporation's initial agent
for service of process is:
CT Corporation System
IV. The liability of the directors of the corporation for monetary damages
shall be eliminated to the fullest extent permissible under California
law.
V. The corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) for breach of
duty to the corporation and its stockholders through bylaw provisions or
through agreements with the agents, or both, in excess of the
indemnification otherwise permitted by Section 317 of the California
Corporation Code, subject to the limits on such excess indemnification set
forth in Section 204 of the California Corporations Code.
VI. This corporation is authorized to issue only one class of shares of stock;
and the total number of shares which this corporation is authorized to
issue is TEN MILLION (10,000,000).
DATED: December 20, 1993 /s/ illegible
---------------------------------
Incorporator
<PAGE>
BYLAWS
OF
BG PRESENTS, INC.
ARTICLE I - OFFICES
1.01 - PRINCIPAL OFFICE
The principal executive and business office of the corporation is
hereby fixed and located in the City and County of San Francisco, California or
such other location as the board of directors may determine.
1.02 - OTHER OFFICES
Branch or subordinate offices may at any time be established at any
place or places by the board of directors.
ARTICLE II - MEETINGS OF SHAREHOLDERS
2.01 - PLACE OF MEETINGS
All annual and all other meetings of shareholders shall be held at the
principal executive office of the corporation, or at any other place within or
without the State of California which may be designated either by the board of
directors, or by the written consent of all shareholders entitled to vote
thereat, provided such shareholder consent is given either before or after the
meeting and filed with the secretary of the corporation.
2.02 - ANNUAL MEETINGS
The annual meetings of shareholders shall be held on the first
Thursday in April at 10:00 a.m.; provided, however, that should said day fall
upon a legal holiday, then any such annual meeting of shareholders shall be
held at the same time and place on the next day thereafter ensuing which is not
a legal holiday. At such meetings, directors shall be elected, reports of the
affairs of the corporation shall be considered, and any other business may be
transacted which is within the powers of the shareholders.
2.03 - SPECIAL MEETINGS
Special meetings of the shareholders, for any purpose or purposes
whatsoever, may be called at any time by any of (i) the president, (ii) the
board of directors, (iii) the chairman of the board, or (iv) one or more
shareholders holding shares in the aggregate entitled to cast not less than 10
percent of the votes at that meeting.
If a special meeting is called by any person or persons other than the
board of directors, such person shall make a request therefor in writing,
specifying (i) the date and time of such meeting, which shall be not less than
35 nor more than 60 days after the receipt of the request, and (ii) the general
nature of the business proposed to be transacted at the
<PAGE>
meeting. Such request shall be delivered personally or sent by registered mail
or by telegraphic or other facsimile transmission to the chairman of the board,
the president, any vice president or the secretary of the corporation. The
officer receiving the request shall cause notice to be given within 20 days to
the shareholders entitled to vote, in accordance with the provisions of
Sections 2.4 and 2.5, and the notice shall set forth that a meeting will be
held at the time requested by the person or persons calling the meeting. If the
notice is not given within such 20-day period, the person(s) requesting the
meeting may give the notice.
2.04 - NOTICE OF MEETINGS
All notices of meetings of shareholders, whether annual or special,
shall be sent or otherwise given not less than 10 nor more than 60 days before
the date of the meeting, except as provided in Section 2.03. The notice shall
specify the place, date and hour of the meeting and (i) in the case of a
special meeting, the general nature of the business to be transacted, or (ii)
in the case of the annual meeting, those matters which the board of directors,
at the time of giving the notice, intends to present for action by the
shareholders. The notice of any meeting at which directors are to be elected
shall include the name of any nominee or nominees whom, at the time of the
notice, management intends to present for election. The notice shall also state
the general nature of the proposal if action is proposed to be taken at any
meeting for approval of any of the following: (i) a contract or transaction in
which a director has a direct or indirect financial interest; (ii) an amendment
of the articles of incorporation; (iii) a reorganization of the corporation;
(iv) a voluntary dissolution of the corporation; or (v) a distribution in
dissolution other than in accordance with the rights of any outstanding
preferred shares. Notwithstanding the absence of specific notice thereof, any
such action may nevertheless be presented to the meeting and be validly acted
upon by the shareholders if approved by all shareholders entitled to vote
thereon, unless they sign waivers of notice specifying the general nature of
the proposal so approved.
2.05 - MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Notice of any shareholders' meeting shall be given either personally
or by first-class mail or telegraphic or written communication, charges
prepaid, addressed to the shareholder at the address of that shareholder
appearing on the books of the corporation or given by the shareholder to the
corporation for the purpose of notice. If no such address appears on the
corporation's books or has been so given, notice shall be deemed to have been
given if published at least once in a newspaper of general circulation in the
county where that office is located or in any manner permitted by law. Notice
shall be deemed to have been given at the time when delivered personally,
deposited in the mail, delivered to a common carrier for transmission to the
recipient, actually transmitted by electronic means to the recipient by the
person giving the notice, or sent by other means of written communication.
An affidavit of the mailing or other means of giving any notice of any
shareholders' meeting may be executed by the secretary, assistant secretary, or
any transfer agent of the corporation giving the notice, and filed and
maintained in the minute book of the corporation.
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2.06 - ADJOURNED MEETINGS AND NOTICE THEREOF
Any shareholders' meeting, annual or special, whether or not a quorum
is present, may be adjourned from time to time by the vote of the majority of
the shares which are represented at the meeting either in person or by proxy,
but in the absence of a quorum.
It shall not be necessary to give any notice of an adjournment or of
the business to be transacted at an adjourned meeting other than by
announcement at the meeting at which such adjournment is taken. However, when
any shareholders' meeting, either annual or special, is adjourned for more than
45 days, or if after the adjournment a new record date is fixed for the
adjourned meeting notice of the adjourned meeting shall be given to each
shareholder of record entitled to vote at the adjourned meeting. At any
adjourned meetings, the corporation may transact any business that might have
been transacted at the regular meeting.
2.07 - RECORD DATE FOR SHAREHOLDERS OF RECORD
For purposes of determining which shareholders are entitled to receive
notice of any meeting, to vote, or to give consent to corporate action without
a meeting, the board of directors may fix a record date in advance of such
meeting or corporate action which shall not be less than 10 nor more than 60
days before any such meeting or any such action without a meeting. Only
shareholders of record at the close of business on the date so fixed are
entitled to notice and to vote or to give consent, as the case may be,
notwithstanding any transfer of any shares on the books of the corporation
after the record date, except as otherwise provided in the articles of
incorporation, by agreement, or in the California General Corporation Law.
If the board of directors does not so fix a record date:
(a) The record date for determining shareholders entitled to receive
notice of or to vote at a meeting of shareholders shall be at the close of
business on the business day next preceding the day on which notice is given
or, if notice is waived, at the close of business on the business day next
preceding the day on which the meeting is held; and
(b) The record date for determining shareholders entitled to give
consent to corporate action in writing without a meeting (i) when no prior
action by the board has been taken, shall be the day on which the first written
consent is given, or (ii) when prior action of the board has been taken, shall
be at the close of business on the day on which the board adopts the resolution
relating to that action, or the 60th day before the date of such other action,
whichever is later.
2.08 - VOTING AT MEETINGS
Except as otherwise provided in the articles of incorporation and in
the case of cumulative voting for directors, each shareholder is entitled to
one vote per share. The shareholders' vote may be by voice vote or by ballot;
provided, however, that any election for directors must be by ballot if
demanded by any shareholder before the voting has begun. On any matter other
than the election of directors, any shareholder may vote part of the shares in
favor of the proposal and refrain from voting the remaining shares or vote
them against the proposal, but if the shareholder fails to specify the number
of shares which the shareholder is voting affirmatively, it will be
conclusively presumed that the shareholder's
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approving vote is with respect to all shares that the shareholder is entitled
to vote. The affirmative vote of a majority of the shares represented and
voting, provided such shares voting affirmatively also constitutes a majority
of the number of shares required for a quorum, shall be the act of the
shareholders, unless the vote of a greater number or voting by classes is
required by California General Corporation Law or by the articles of
incorporation. Every shareholder entitled to vote at any election for directors
shall have the right to cumulate his votes by (i) giving one candidate a number
of votes equal to the number of directors to be elected multiplied by the
number of votes to which his shares are entitled, or (ii) distributing such
cumulated votes on the same principle among as many candidates as he chooses;
provided that the name of such candidate has been placed in nomination prior to
the voting and that at least one shareholder has given notice at the meeting,
prior to the voting, of an intention to cumulate votes. In any election of
directors, the candidates receiving the highest number of votes, up to the
number of directors to be elected, shall be elected. Votes against a director
or not cast shall have no effect.
2.09 - QUORUM
The presence in person or by proxy of persons entitled to vote a
majority of the voting shares at any meeting shall constitute a quorum of the
shareholders for the transaction of business.
The shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment,
notwithstanding the withdrawal of one or more shareholders to leave less than a
quorum, if any action taken (other than adjournment) is approved by at least a
majority of the shares required to constitute a quorum.
2.10 - CONSENT OF ABSENTEES
The transactions of any meeting of shareholders, either annual or
special, however called and noticed and wherever held, shall be as valid as
though made at a meeting duly held after regular call and notice if a quorum is
present either in person or by proxy and if, either before or after the
meeting, each of the shareholders entitled to vote who was not present in
person or by proxy signs a written waiver of notice or a consent to the holding
of such meeting or an approval of the minutes thereof. The waiver of notice or
consent need not specify either the business to be transacted or the purpose of
any annual or special meeting of shareholders, unless the action taken or
proposed to be taken is for approval of any of those matters specified in
Section 2.04. All such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
Attendance at a meeting, in person or by proxy, shall also constitute
a waiver of notice of that meeting, except when the person objects at the
beginning of the meeting to the transaction of any business because the meeting
has not been lawfully called or convened, and except that attendance at a
meeting is not a waiver of any right to object to the consideration of matters
required by law to be included in the notice of the meeting but not so
included, if that objection is expressly made at the meeting.
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2.11 - ACTION WITHOUT MEETING
Except as may be limited by the articles of incorporation and except
for the election of directors, any action which may be taken by vote of the
shareholders at any annual or special meeting may be taken without a meeting
and without prior notice if a consent in writing setting forth the action so
taken is signed by the holders of outstanding shares 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. Directors may be elected by written consent without a meeting only
if the written consents of all outstanding shares entitled to vote are
obtained, except that a vacancy in the board (other than a vacancy created by
removal of a director) not filled by the board may be filled by the written
consent of the holders of a majority of the outstanding shares entitled to
vote.
All such consents shall be filed and maintained in the corporate
records. Any shareholder (or the shareholder's proxyholders, or a transferee of
the shares or a personal representative of the shareholder or their respective
proxyholders) giving a written consent may revoke the consent only by a
writing received by the corporation prior to the time that written consents of
the number of shares required to authorize the proposed action have been filed
with the secretary of the corporation. Such revocation is effective upon its
receipt by the secretary of the corporation.
Unless the consents of all shareholders entitled to vote have been
solicited in writing:
(1) Notice of shareholder approval without a meeting by less than
unanimous written consent shall be given at least 10 calendar days
before the consummation of the action authorized by such approval, if
the corporate action concerns (i) a contract or transaction in which
a director has a direct or indirect financial interest under Section
310 of the California Corporations Code, (ii) indemnification of
agents of the corporation, (iii) reorganization of the corporation,
or (iv) a distribution in dissolution other than in accordance with
the rights of the outstanding preferred shares; and
(2) Prompt notice shall be given of any other corporate action
approved by shareholders without a meeting by less than unanimous
written consent.
All such notices shall be given in the manner provided by Section 2.05.
2.12 - PROXIES
Every person entitled to vote for directors or on any other matter
shall have the right to do so either in person or by one or more agents
authorized by a written proxy signed by the person and filed with the secretary
of the corporation. A proxy shall be deemed signed if the shareholder's name is
placed on the proxy (whether by manual signature, typewriting, telegraphic
transmission or otherwise) by the shareholder or the shareholder's
attorney-in-fact. A validly executed proxy that does not state that it is
irrevocable shall continue in full force and effect unless (i) revoked by the
person executing it, before the vote pursuant to that proxy, by a writing
delivered to the corporation stating that the proxy is revoked, or by
attendance at the meeting and voting in person by the person executing the
proxy, or by a subsequent proxy executed by the same person and presented at
the meeting; or (ii) written notice of the death or incapacity of the maker of
that proxy is received by the corporation before the vote pursuant to that
proxy is counted;
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the proxy is revoked, or by attendance at the meeting and voting in person by
the person executing the proxy, or by a subsequent proxy executed by the same
person and presented at the meeting; or (ii) written notice of the death or
incapacity of the maker of that proxy is received by the corporation before the
vote pursuant to that proxy is counted; provided, however, that no proxy shall
be valid after the expiration of 11 months from the date of the proxy, unless
another term of longer or shorter duration is specified in the proxy. The
revocability of a proxy that states on its face that is irrevocable shall be
governed by the provisions of Sections 705(e) and 705(f) of the Corporations
Code of California.
ARTICLE III - DIRECTORS
3.01 - POWERS
Except as reserved to the shareholders by law, the articles of
incorporation or these bylaws, all corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall
be controlled by, the board of directors. Without limiting the generality of
the foregoing powers, the directors shall have the following powers:
First: To conduct, manage and control the affairs and business of the
corporation and to make such rules and regulations therefor not inconsistent
with law or with the articles of incorporation or these bylaws, as they may
deem best.
Second: To select and remove the officers, agents and employees of the
corporation, to prescribe such powers and duties for them as may not be
inconsistent with law, with the articles of incorporation or with these bylaws
and to fix their compensation.
Third: To change the principal executive and business office of the
corporation from one location to another as provided in Section 1.01; to fix
and locate from time to time one or more branch offices of the corporation
within or without the State of California, as provided in Section 1.02; to
designate any place within or without the State of California for the holding
of any shareholders' meeting or meetings except annual meetings; and to adopt,
make and use a corporate seal, to prescribe the forms of certificates of stock
and to alter the form of such seal and of such certificates from time to time
as in their judgment they may deem best, provided that such seal and such
certificates shall at all times comply with the provisions of law.
Fourth: To authorize the issue of shares of stock of the corporation
from time to time, upon such terms as may be lawful, as dividends or in
consideration of money paid, labor done or services actually rendered to the
corporation or for its benefit or in its formation or reorganization, debts or
securities cancelled, or tangible or intangible property actually received; but
neither promissory notes of the purchaser, unless secured by property other
than the shares acquired or otherwise permitted by Section 408 of the General
Corporation Law, nor future services shall constitute payment or part payment
for shares of the corporation.
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Fifth: To borrow money and incur indebtedness for the purposes of the
corporation and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefor.
Sixth: To designate, by resolution adopted by a majority of the
authorized number of directors, one or more committees, each consisting of two
or more directors, to serve at the pleasure of the board. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent member at any meeting of the committee. Any such committee
shall have all the authority of the board to the extent provided in the
resolution of the board or in the bylaws, except with respect to:
(a) The approval of any action for which, under the General
Corporation Law of California, also requires approval of the shareholders or
approval of the outstanding shares;
(b) The filling of vacancies on the board or in any committee;
(c) The fixing of compensation of the directors for serving on the
board or on any committee;
(d) The amendment or repeal of bylaws or the adoption of new bylaws;
(e) The amendment or repeal of any resolution of the board which by
its express terms is not so amendable or repealable;
(f) A distribution to the shareholders of the corporation, except at a
rate, in a periodic amount or within a price range set forth in the articles or
determined by the board; or
(g) The appointment of other committees of the board or the members
thereof.
Seventh: To declare dividends at such times and in such amounts as the
condition of the affairs of the corporation may warrant.
Eighth: Generally to exercise all of the powers and to perform all of
the acts and duties that from time to time may be permitted by law appertaining
to their office.
3.02 - NUMBER OF DIRECTORS
The authorized number of directors of the corporation shall be three
until changed by an amendment of this bylaw.
3.03 - ELECTION AND TERM OF OFFICE
The directors shall be elected at each annual meeting of shareholders
and may be elected at any special meeting of shareholders held for that
purpose. Each director shall hold office until his successor is elected and
qualified, or until his earlier death, resignation, removal or ineligibility.
3.04 - REMOVAL
A director may be removed for cause by (i) the board, when such
director has been convicted of a felony or declared incompetent by court order,
or (ii) the superior court, at the suit of at least 10% of the shareholders of
any class of shares having found that the director has either committed
fraudulent or dishonest acts, or has grossly abused his authority with
reference to the corporation.
A director may be removed without cause by a majority vote of all
outstanding shares, provided that (i) where cumulative voting is in effect,
such director may not be removed over the objection of the number of shares
required to elect him, and (ii) where the articles of incorporation provide for
the election of a director by the shareholders of a certain
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class or series of shares, such director may be removed only by the majority
vote of the outstanding shares of such class or series.
Except as provided in this Section 3.04, and any reduction of the
authorized number of directors notwithstanding, a director may not be removed
prior to the expiration of such director's term of office.
3.05 - VACANCIES
Vacancies in the board of directors may be filled by a majority of the
remaining directors, though less than a quorum, or by a sole remaining
director. A vacancy in the board of directors shall be deemed to exist (i) in
case of the death, resignation, ineligibility or removal of any director, (ii)
if the authorized number of directors is increased, or (iii) if the
shareholders fail, at any annual or special meeting of shareholders at which
any director or directors are elected, to elect the full authorized number of
directors to be voted for at that meeting.
The shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. In the event that such a
vacancy is created by an event other than removal, any election by written
consent of the shareholders must be signed by holders of a majority of the
outstanding shares. If the board of directors accepts the resignation of a
director tendered to take effect at a future time, the board or the
shareholders shall have the power to elect a successor to take office when the
resignation is to become effective.
3.06 - MEETINGS BY TELEPHONE CONFERENCE
Members of the board may participate in a meeting through use of
conference telephone or similar communication equipment, so long as all members
participating in such meeting can hear one another.
3.07 - ACTION WITHOUT MEETING
Any action required or permitted to be taken by the board of directors
or any committee thereof may be taken without a meeting if each member of the
board consents in writing to such action. Such consents shall be filed with the
minutes of the meetings of the board.
3.08 - ORGANIZATION MEETING
Immediately following each annual meeting of shareholders, the board
of directors shall hold a regular meeting for the purpose of organization,
election of officers and the transaction of other business. Notice of such
meeting is hereby dispensed with.
3.09 - SPECIAL MEETINGS
Special meetings of the board of directors for any purpose or purposes
may be called at any time by (i) the chairman of the board, (ii) the president,
(iii) any vice president, (iv) the secretary, or (v) any two directors.
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Written notice of the time and place of special meetings shall be
delivered personally to the directors or sent to each director by mail or by
other form of written communication, charges prepaid, addressed to him at his
address as it appears upon the records of the corporation or, if it is not so
shown or is not readily ascertainable, at the place in which the meetings of
directors are regularly held. In case such notice is mailed, it shall be
deposited in the United States mail at least four days prior to the date of the
meeting. In case such notice is delivered personally or telegraphed, it shall
be so delivered or deposited with the telegraph company at least 48 hours prior
to the time of the meeting.
3.10 - ADJOURNMENT
A majority of the directors present, whether or not a quorum is
present, may adjourn any directors' meeting to another time and place. If a
meeting is adjourned for more than 24 hours, notice of any adjournment to
another time or place shall be given in the manner specified in Section 3.09
prior to the time of the adjourned meeting to the directors who were not
present at the time of adjournment.
3.11 - WAIVER OF NOTICE
The transactions at any meeting of the board of directors, however
called and noticed, or wherever held, shall be as valid as though such
transactions had occurred at a meeting duly held after regular call and notice
if a quorum is present and if, either before or after the meeting, each of the
directors not present signs a written waiver of notice of or consent to holding
the meeting or an approval of the minutes thereof. All such waivers, consents
or approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.
3.12 - QUORUM
A majority of the authorized number of directors then holding office
shall constitute a quorum for the transaction of business. The act of the
majority of the directors at a meeting at which a quorum is present shall be
the act of the board of directors, unless a greater number is required by law,
the articles of incorporation or these bylaws. However, a meeting at which a
quorum is initially present may continue to transact business notwithstanding
the withdrawal of directors if any action taken is approved by at least a
majority of the required quorum for such meeting. The provisions of this
Section 3.12 shall apply to action taken by any committee from time to time
designated by the board of directors.
ARTICLE IV - OFFICERS
4.01 - OFFICERS
The officers of the corporation shall be a president, a secretary, a
treasurer, and such other officers with such titles and duties as may be
appointed in accordance with the provisions of Section 4.09. Any number of
offices may be held by the same person. The president shall be the chief
executive officer and the treasurer shall be the chief financial officer.
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4.02 - ELECTION
The officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Sections 4.04 or 4.09, shall be
chosen annually by the board of directors; and each officer shall hold his
office until he has resigned or removed or is otherwise disqualified to serve
and his successor has been elected and qualified.
4.03 - REMOVAL AND RESIGNATION
Any officer may be removed, either with or without cause, by a
majority of the directors at the time in office, at any regular or special
meeting of the board, or, except in the case of an officer chosen by the board
of directors, by any officer upon whom such power of removal may be conferred
by the board of directors.
Any officer may resign at any time by giving written notice to the
board of directors or to the president or to the secretary of the corporation.
Any such resignation shall take effect at the date of the receipt of such
notice or any later time specified therein; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
4.04 - VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these bylaws for regular appointments to such office.
4.05 - CHAIRMAN OF THE BOARD
The chairman of the board, if one has been appointed, shall, if
present, preside at all meetings of the board of directors and exercise and
perform all such other powers and duties as may from time to time be assigned
to him by the board of directors or prescribed by these bylaws.
4.06 - PRESIDENT
The president, subject to the board of directors, shall have general
supervision, direction and control of the business and of other officers and
employees of the corporation. He shall preside at all meetings of the
shareholders and, if there is no regular, appointed chairman of the board or if
such chairman is absent, at all meetings of the board of directors. He shall be
ex officio a member of all standing committees, including the executive
committee, if any, and shall have general powers and duties of management,
together with such other powers and duties as may be prescribed by the board of
directors.
The board of directors, in its sole discretion, may elect two persons
to serve as Co-Presidents of the Corporation. In such event either
Co-President, acting independently, may perform the duties of the President as
described in these bylaws.
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4.07 - SECRETARY
The secretary shall keep, or cause to be kept, a book of minutes at
the principal executive and business office, or such other place as the board
of directors may order, of all meetings of directors and shareholders, with the
time and place of holding, whether regular or special and, if special, how
authorized, the notice thereof given, the names of those present at directors'
meetings, the number of shares present or represented at shareholders' meetings
and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal
executive and business office or at the office of the corporation's transfer
agent, a share register or a duplicate share register showing the names of the
shareholders and their addresses, the number and classes of shares held by
each, the number and the date of certificates issued for the same, and the
number and date of cancellation of every certificate surrendered for
cancellation.
The secretary shall give, or cause to be given, notice of all the
meetings of the shareholders and of the board of directors required by these
bylaws or by law to be given, shall keep the seal of the corporation in safe
custody and shall have such other powers and shall perform such other duties as
may be prescribed by the board of directors or the bylaws.
4.08 - TREASURER
The chief financial officer shall be the treasurer. The treasurer
shall keep and maintain, or cause to be kept and maintained, adequate and
correct accounts of the properties and business transactions of the
corporation, including accounts of its assets, liabilities, receipts,
disbursements, gains, losses, capital, surplus and shares.
The treasurer shall deposit all moneys and other valuables in the name
and to the credit of the corporation with such depositaries as may be
designated by the board of directors. He shall be responsible for the proper
disbursement of the funds of the corporation as may be ordered by the board of
directors and shall render to the president or directors, whenever they request
it, an account of all of his transactions as treasurer and of the financial
condition of the corporation. The treasurer shall prepare a proper annual
budget of income and expenses for each calendar year, revised quarterly, for
approval of or revision by the board of directors and shall be responsible for
the handling of finances in connection therewith. He shall have such other
powers and shall perform such other duties as may be prescribed by the board of
directors.
4.09 - SUBORDINATE OFFICERS
The board of directors may appoint such vice presidents, assistant
treasurers and assistant secretaries and other subordinate officers as the
business of the corporation may require, each of whom shall hold office for
such period, have such authority and perform such duties as are provided in
these bylaws or as the board of directors may from time to time determine.
In the absence or disability of the president, treasurer or secretary,
the vice presidents, assistant treasurers and assistant secretaries,
respectively, in order of their rank as fixed by the board of directors or, if
not ranked, the subordinate officer designated by the board of directors shall
perform all the duties of such absent or disabled officer
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and, when so acting, shall have all the powers of and be subject to all the
restrictions upon such officer. Each subordinate officer shall have such other
powers and shall perform such other duties as from time to time may be
prescribed for him by the board of directors or these bylaws.
ARTICLE V - SHARES OF STOCK
5.01 - SHARE CERTIFICATES
Certificates representing shares of the capital stock of the
corporation shall be in such form as shall be approved by the board of
directors, consistent with the articles of incorporation and the laws of the
State of California. A certificate or certificates for shares of the capital
stock of the corporation shall be issued to each shareholder when such shares
are fully paid, and the board of directors may authorize the issuance of
certificates or shares as partly paid provided that these certificates shall
state the amount of the consideration to be paid for them and the amount paid.
All such certificates shall be signed by (i) the chairman or vice chairman of
the board or the president or a vice president, and (ii) by the treasurer or an
assistant financial officer or the secretary or any assistant secretary,
certifying the number of shares and the class or series of shares issued to the
shareholder and evidenced by such certificate. The corporation may issue, sell
or transfer fractional shares.
5.02 - TRANSFER OF SHARES
Subject to the provisions of applicable securities and other laws and
any other valid contractual and other restrictions on transfer of shares, upon
the surrender to the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
5.03 - LOST OR DESTROYED CERTIFICATE
The holder of any shares of stock of the corporation shall immediately
notify the corporation of any loss or destruction of the certificate therefor,
and the corporation may issue a new certificate in the place of any certificate
theretofore issued by it alleged to have been lost or destroyed, upon approval
of the board of directors. The board may, in its discretion, as a condition to
authorizing the issue of such new certificate, require the owner of the lost or
destroyed certificate, or his legal representative, to make proof satisfactory
to the corporation of the loss or destruction thereof and to give the
corporation a bond or other security, in such amount and with such surety or
sureties as the corporation may determine, as indemnity against any claim that
may be made against the corporation on account of any such certificate so
alleged to have been lost or destroyed.
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ARTICLE VI - MISCELLANEOUS
6.01 - INDEMNITY OF OFFICERS, DIRECTORS AND EMPLOYEES
The corporation shall, to the fullest extent permitted by the
California General Corporation Law (the "Code") and in excess of that which is
otherwise provided by Code Section 317, indemnify each of the directors,
officers, and employees of the corporation and each person who is or was
serving at the request of the corporation as a director, officer, or employee
of another corporation (including without limitation direct and indirect
subsidiaries of the corporation) or a partnership, joint venture, trust, or
other enterprise (all such persons being hereinafter collectively referred to
as "Indemnified Persons") against all judgments, fines, penalties, amounts paid
in settlement (if the settlement is approved in advance by the corporation (or,
where applicable, such other corporation or other enterprise described in this
sentence), which approval shall not be unreasonably withheld or delayed), and
"expenses" (as hereinafter defined) actually and reasonably incurred by the
Indemnified Person in connection with any "proceeding" (as hereinafter defined)
involving the Indemnified Person by reason of the fact that the Indemnified
Person is or was a director, officer, or employee of the corporation or, acting
at the request of the corporation, any other corporation, partnership, joint
venture, trust, or other enterprise. For purposes hereof, "expenses" include by
way of illustration but not limitation all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, or being prepared to be a witness in any
"proceeding." For purposes hereof, a "proceeding" shall include by way of
illustration but not limitation any action, suit, arbitration, alternative
dispute resolution mechanism, investigation, administrative hearing, or any
other proceeding, whether civil, criminal, administrative, or investigative,
and whether brought by or on behalf of a third party or by or on behalf of the
corporation.
Upon written request to the Board in each specific case by an
Indemnified Person seeking indemnification, the Board shall promptly authorize
indemnification consistent with the terms of the preceding paragraph if the
Board determines that the indemnification is not prohibited by the Code,
including by reason of the requirements of Code Sections 204(a)(10) and (11)
and, in the case of an action by or in the right of the corporation to procure
a judgment in its favor, subsections (1) , (2) , and (3) of Code Section
317(c). The termination of any proceeding by judgment, order, settlement,
conviction, or upon plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that an Indemnified Person did not act in good
faith and in a manner which the Indemnified Person reasonably believed to be in
or not opposed to the best interests of the corporation or, with respect to any
criminal proceeding, had no reasonable cause to believe that the conduct of the
Indemnified Person was unlawful.
If an Indemnified Person is entitled to indemnification by the
corporation for some or a portion of any judgments, fines, penalties, amounts
paid in settlement, or expenses actually and reasonably incurred by the
Indemnified Person in connection with any proceeding, but not, however, for the
total amount thereof, the corporation shall
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nevertheless indemnify the Indemnified Person for the portion of such amounts
to which the Indemnified Person is entitled.
Upon written request to the Board in each specific case by an
Indemnified Person, the Board shall promptly authorize the advancement of
attorneys' fees and other expenses incurred by the Indemnified Person prior to
the final disposition of a proceeding in which the Indemnified Person is
involved by reason of the fact that the Indemnified Person is or was a
director, officer, or employee of the corporation or, acting at the request of
the corporation, any other corporation, partnership, joint venture, trust, or
other enterprise, but only if the Board obtains the written agreement of the
Indemnified Person, in a form satisfactory to the Board, to repay the advances
if and to the extent that it is ultimately determined that the Indemnified
Person is not entitled to be indemnified by the corporation for the attorneys'
fees and other expenses so advanced.
If an Indemnified Person makes a written request to the Board for
indemnification and the requested indemnification is not paid in full by the
corporation within forty-five (45) days after the date of the written request,
the Indemnified Person shall also be indemnified for the attorneys' fees and
other expenses of any proceeding brought by the Indemnified Person against the
corporation to recover the unpaid requested indemnified amount. It shall be a
defense in any such proceeding that the Indemnified Person has not satisfied
the standards of conduct which make it permissible under applicable law for the
corporation to indemnify the Indemnified Person for the amount claimed, but the
burden of proving such defense shall be on the corporation and the Indemnified
Person shall be entitled to receive interim payments of attorneys' fees and
other expenses in connection with the proceeding unless and until such defense
is finally adjudicated by court order or judgment from which no further right
of appeal exists.
If, at the time of the receipt of a written request for
indemnification by an Indemnified Person, the corporation has director and
officer liability insurance in effect, the corporation shall give prompt notice
of the commencement of the proceeding described in the notice to the
corporation's insurers in accordance with the procedures set forth in the
respective policies. The corporation shall thereafter take all necessary or
appropriate action to cause such insurers to pay on behalf of the Indemnified
Person all amounts payable as a result of such proceeding in accordance with
the terms of such policies. The provisions of this paragraph shall not be
construed to impose upon the corporation any obligation to obtain or maintain
director and officer liability insurance.
The indemnification rights conferred hereby shall continue as to any
Indemnified Person who has ceased to be a director, officer, or employee of the
corporation or any other corporation, partnership, joint venture, trust, or
other enterprise for which the Indemnified Person was serving as a director,
officer, or employee at the request of the corporation, and shall inure to the
benefit of the heirs, executors, administrators, and any other
successors-in-interest of the Indemnified Person.
In the event of any change after the date of the adoption by the
corporation of this Section 6.01 in any applicable law, statute, or rule which
expands the right of a California corporation to indemnify its directors,
officers, or employees, such change shall be ipso facto within the purview of
the corporation's obligations hereunder. In the event of any change in any
applicable law, statute, or rule which narrows the right of a California
corporation to indemnify its directors,
-14-
<PAGE>
officers, or employees, such change, to the extent not otherwise required by
such law, statute, or rule to be applied to the corporation, shall have no
effect on the indemnification obligations of the corporation.
6.02 - SHAREHOLDER INSPECTION OF ARTICLES AND BYLAWS
The corporation shall keep at its principal executive and business
office the original or a copy of the articles of incorporation and the bylaws
and any amendments thereto, certified by the secretary, which shall be open to
inspection by shareholders at all reasonable times during office hours.
6.03 - MAINTENANCE AND INSPECTION OF RECORDS OF SHAREHOLDERS
The corporation shall keep at its principal executive and business
office or at the office of its transfer agent or registrar (if one has been
appointed) , as determined by resolution of the board of directors, a record of
its shareholders, giving the names and addresses of all shareholders and the
number and class of shares held by each shareholder.
A shareholder or shareholders of the corporation holding at least 5%
in the aggregate of the outstanding voting shares of the corporation may (i)
inspect and copy the records of shareholders' names, addresses and
shareholdings, during usual business hours on five business days' prior written
demand on the corporation, and (ii) obtain from the transfer agent of the
corporation, on written demand and on the tender of such transfer agent's usual
charges for such list, a list of the names and addresses of the shareholders
who are entitled to vote for the election of directors, and their
shareholdings, as of the most recent record date for which that list has been
compiled or as of a date specified by the shareholder after the date of demand.
This list shall be made available to any such shareholder or shareholders by
the transfer agent on or before the later of five business days after the
demand is received or the date specified in the demand as the date as of which
the list is to be compiled. The record of shareholders shall also be open to
inspection on the written demand of any shareholder or holder of a voting trust
certificate, at any time during usual business hours, for a purpose reasonably
related to the holder's interests as a shareholder or as the holder of a voting
trust certificate. Any inspection and copying under this Section may be made in
person or by an agent or attorney of the shareholder or holder of a voting
trust certificate making the demand.
6.04 - SHAREHOLDER INSPECTION OF CORPORATE RECORDS
The accounting books and records and minutes of proceedings of the
shareholders and the board of directors and any committee or committees of the
board of directors shall be kept at such place or places designated by the
board of directors or, in the absence of such designation, at the principal
executive and business office of the corporation. The minutes shall be kept in
written form, and the accounting books and records shall be kept either in
written form or in any other form capable of being converted into written form.
The minutes and accounting books and records shall be open to inspection upon
the written demand of any shareholder or holder of a voting trust certificate,
at any reasonable time during usual business hours, for a purpose reasonably
related to the holder's interests as a shareholder or as the holder of a voting
trust certificate. The inspection may be made in person or by an agent or
attorney and shall include the right
-15-
<PAGE>
to copy and make extracts. These rights of inspection shall extend to the
records of each subsidiary corporation of the corporation.
6.05 - INSPECTION BY DIRECTORS
Every director shall have the absolute right at any reasonable time to
inspect all books, records and documents of every kind and the physical
properties of the corporation and each of its subsidiary corporations. This
inspection by a director may be made in person or by an agent or attorney, and
the right of inspection includes the right to copy and make extracts of
documents.
6.06 - REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The president or, in the event of his absence or inability to serve,
any vice president and the secretary or assistant secretary of this corporation
are authorized to vote, represent and exercise, on behalf of this corporation,
all rights incidental to any and all shares of any other corporation standing
in the name of this corporation. The authority herein granted to such officers
to vote or represent on behalf of this corporation any and all shares held by
this corporation in any other corporation may be exercised either by such
officers in person or by any person authorized to do so by proxy or power of
attorney duly executed by such officers.
6.07 - ANNUAL REPORT
The annual report to shareholders referred to in Section 1501(a) of
the California Corporations Code is expressly waived subject to the limitations
thereof, but the board of directors of the corporation may cause to be sent to
the shareholders, not later than 120 days after the close of the fiscal or
calendar year, an annual report in such form as may be deemed appropriate by
the board of directors.
6.08 - ANNUAL STATEMENT OF GENERAL INFORMATION
Within 90 days of incorporation and annually thereafter, the
corporation shall file with the Secretary of State, on the prescribed form, a
statement setting forth the authorized number of directors, the names and
complete business or residence addresses of all incumbent directors, the names
and complete business or residence addresses of the chief executive officer,
secretary and chief financial officer, the street address of its principal
executive office or principal business office in this state, and the general
type of business constituting the principal business activity of the
corporation, together with a designation of the agent of the corporation for
the purpose of service of process, all in compliance with section 1502 of the
California Corporations Code.
-16-
<PAGE>
ARTICLE VII - AMENDMENTS TO BYLAWS
7.01 - AMENDMENT BY SHAREHOLDERS
New bylaws may be adopted or these bylaws may be amended or repealed
by the vote or written consent of the shareholders entitled to exercise a
majority of the voting power of the corporation, except as otherwise provided
by either these bylaws or the articles of the corporation; provided, however,
that if the articles of incorporation set forth the number of authorized
directors of the corporation, the authorized number of directors may be changed
only by an amendment of the articles of incorporation.
7.02 - AMENDMENT BY DIRECTORS
Subject to the rights of the shareholders as provided in Section 7.01
to adopt, amend or repeal bylaws, bylaws may be adopted, amended, or repealed
by the board of directors; provided, however, that the board of directors may
adopt a bylaw or amendment of a bylaw changing the authorized number of
directors only for the purpose of fixing the exact number of directors within
the limits specified in the articles of incorporation or in Section 3.02 of
these bylaws.
-17-
<PAGE>
CERTIFICATE OF SECRETARY
The undersigned, being the duly elected, qualified and acting
Secretary of BG PRESENTS, INC., a California corporation, does hereby certify
that the foregoing Bylaws, comprising 26 pages, are the Bylaws of such
corporation, as duly adopted by written consent of the board of directors on
the date hereof.
Dated at San Francisco, California effective the second day of
November, 1994.
/s/ Franklin D. Rockwell, Jr.
-------------------------------
FRANKLIN D. ROCKWELL, JR.
-18-
<PAGE>
BROADWAY CONCERTS, INC.
BY LAWS
ARTICLE ONE
CAPITAL STOCK
SECTION ONE: Share certificates, as approved by the Board of Directors, shall be
issued to shareholders specifying the name of the owner, number of shares, and
date of issue. Each certificate shall be signed by the President and Secretary
with the corporate seal affixed thereon. Each certificate shall be numbered in
the order in which it is issued.
SECTION TWO: Each shareholder shall be entitled to one vote per share of common
stock, unless otherwise stated in Article of Incorporation.
SECTION THREE: Transfer of shares of stock shall be in the transfer ledger of
the corporation. Such transfers shall be done in person or by power of attorney.
Transfers shall be completed on the surrender of the old certificate, duly
assigned.
ARTICLE TWO
SHAREHOLDER'S MEETINGS
SECTION ONE: The annual meeting of the shareholders shall beheld from time to
time, at the time fixed by the directors. If the stated day is a weekend day or
a legal holiday, the meeting shall be held on the next succeeding day not a
weekend day or a holiday.
SECTION TWO: The place of the annual meeting may be changed by the Board of
Directors within or without the State of incorporation for any given year upon
____ days notice to the shareholders. Special meetings may be held within or
without of the State of incorporation and at such time as the Board of Directors
may fix.
SECTION THREE: Special meetings of the shareholders may be called at any time by
the President or any holder(s) of a majority of the outstanding shares of stock
entitled to vote.
SECTION FOUR: Notice of any special meeting of the shareholders shall be given
to all shareholders to their last known address by registered mail. Notice of
any special meeting of the shareholders shall state the purpose of such meeting.
Notice of a special meeting may be waived in writing either before or after such
meeting.
SECTION FIVE: Unless otherwise provided by law or the Articles of Incorporation,
all meetings of the shareholders, action may be taken by a majority vote of the
number of shares entitled to vote as represented by the shareholders present at
such meeting. Directors shall be elected by a plurality vote. A quorum shall
constitute one share over fifty percent of the outstanding shares entitled to
vote as represented by the shareholders present at such meeting. No business may
be transacted without the presence of a quorum. At any time during any
shareholders meeting, if it is determined that a quorum is no longer present,
the meeting shall be then adjourned.
SECTION SIX: Action may be taken by the shareholders without a formal meeting by
consent, if such consent is executed in writing by all of the shareholders
entitled to vote and if allowed under the laws of the State of incorporation.
<PAGE>
ARTICLE THREE
DIRECTORS
SECTION ONE: The Board of Directors shall control the full and entire management
of the affairs and business of the corporation. The Board of Directors shall
adopt rules and regulations to manage the affairs and business of the
corporation by resolution at special or the annual meeting. A quorum shall
consist of a majority of the directors. Resolutions adopted and all business
transacted by the Board of Directors shall be done by a majority vote of the
directors present at such meetings.
SECTION TWO: The Board of Directors shall consist of 1 member to be elected by
the shareholders at an annual meeting. The term of office shall be one year.
Vacancies may be filled by the Board of Directors prior to the expiration of the
term. Such appointment shall continue until the next annual meeting of
shareholders.
SECTION THREE: The Board of Directors shall meet annually at the same place of
the shareholders meetings immediately following the annual meeting of the
shareholders. Special meetings of the Board of Directors may be called by the
President or any two (2) directors on ten (10) days notice, or such other and
further notice as required by the laws of the State of incorporation.
SECTION FOUR: Notice of special or regular meetings of the Board of Directors
other than the annual meeting of the Board of Directors, shall be made by mail
to the last known address of each director. Such notice shall be mailed ten (10)
days prior to such meeting and shall include time and place and reasons for the
meeting. All other requirements of the laws of the State of incorporation for
notices shall be followed.
SECTION FIVE: All directors of the corporation who are present at a meeting of
the Board of Directors shall be deemed to have assented to action taken at such
meeting as to any corporate action taken, unless a director who did not vote in
favor on such action goes on record in the minutes as dissenting. In such a
case, the dissenting director will not be deemed to having assented to the
action taken.
SECTION SIX: Directors may be removed for cause by a majority vote at a meeting
of the shareholders or Directors. Directors may be removed without cause by a
majority vote at a meeting of the shareholders.
ARTICLE FOUR
OFFICERS
SECTION ONE: The officers of the corporation shall consist of a President,
Secretary and Treasurer. All officers shall be elected by the Board of Directors
and shall serve a term for compensation as fixed by the Board of Directors. The
Board of Directors may establish other offices as it may be deem fit.
SECTION TWO: The chief executive officer shall be the President. The President
shall have management powers of the corporation. His duties shall include but
are not limited to administration of the corporation presiding over shareholders
meeting including general supervision of the policies of the corporation as well
as general management. The President shall execute contracts, mortgages, loans
and bonds under the seal of the corporation. The President shall have other
powers as determined by the Board of Directors by resolution.
SECTION THREE: The Secretary shall keep the minutes of meetings of the Board of
Directors and shareholder meetings. The Secretary shall have charge of the
minute books, seal and stock books of the corporation. The Secretary shall have
other powers as delegated by the President.
2
<PAGE>
SECTION FOUR: The Treasurer shall have the power to manage the financial affairs
of the corporation. The Treasurer shall keep books and records of the financial
affairs and make such available to the President and Board of Directors upon
request. The Treasurer may make recommendations to the officers and directors in
regard to the financial affairs of the corporation.
SECTION FIVE: The Vice-President, if one is appointed by the Board of Directors,
shall have such powers as delegated to him by the President. Upon the inability
to perform by the President, the Vice-President shall serve as President until
such time as the President shall be able to perform or further action by the
Board of Directors. The President shall he deemed unable to perform his duties
upon written notification by the President of such inability or resignation to
the Board of Directors that the President is unable to perform.
SECTION SIX: Vacancies shall be filled by the Board of Directors. Until such
time as vacancies are filled the following rules of succession shall apply
without regard to Section Five of this Article. The Vice-President shall act as
President, the Treasurer shall act as Secretary, and the Secretary shall act as
Treasurer.
SECTION SEVEN: Assistants to officers may be appointed by the President. These
duties shall be those delegated to them by the President or the Board of
Directors.
SECTION EIGHT: Compensation of the officers shall be determined by the Board of
Directors.
ARTICLE FIVE
CONTRACTS AND INSTRUMENTS OF INDEBTEDNESS
SECTION ONE: No contracts or any instrument of indebtedness shall be executed
without approval by the Board of Directors by resolution. Upon such resolution,
the President shall be authorized to execute contracts or instruments of
indebtedness as specified in the resolution.
SECTION TWO: All checks, drafts or other instruments of indebtedness shall be
executed in the manner as determined by the Board of Directors by resolution.
ARTICLE SIX
CORPORATE SEAL
The seal of the corporation shall be provided by the Board of Directors by
resolution. The seal shall be used by the President or other officers of the
corporation as provided for in these By-Laws.
ARTICLE SEVEN
AMENDMENT
These By-Laws may be amended from time to time by a majority vote of the
Board of Directors or by a majority vote of the shareholders. These By-Laws may
be repealed and new By-Laws established in the same manner as amendments. These
By-Laws will continue in full force and effect until amended or repealed and
replaced by new By-Laws.
3
<PAGE>
ARTICLE EIGHT
DIVIDENDS
The Board of Directors may from time to time declare dividends to the
shareholders. These distributions may be in cash or property. No such dividends
may be made out of the capital of the corporation.
4
<PAGE>
ARTICLES OF INCORPORATION
OF
"BRUSCO, COOLEY AND CONLON MANAGEMENT CO."
I.
The name of the corporation is "BRUSCO, COOLEY AND CONLON MANAGEMENT
CO."
II.
The corporation is organized pursuant to the provisions of the Georgia
Business Corporation Code.
III.
The corporation shall have perpetual duration.
IV.
The corporation is a corporation for profit and is organized for the
following purposes:
(a) For management of entertainment artists;
(b) To carry on and to invest in and acquire interest in any business
venture or undertaking which the directors consider profitable; and
(c) For any lawful purpose or purposes not specifically prohibited to
corporations under the laws of this State.
V.
The corporation shall have authority, acting by its Board of
Directors, to issue not more than 10,000 shares at $1.00 par value.
VI.
The corporation shall not be in business until it has received
consideration of a fixed value, which shall not be less than $500.00, in
payment for the issuance of its shares of common stock.
<PAGE>
VII.
The initial registered office of the corporation shall be 2800 Tower
Place, 3340 Peachtree Road, N.E., Atlanta, Georgia 30026, and the initial
registered agent of the corporation at said address shall be JAMES B. CREW, JR.
VIII.
The initial Board of Directors of the corporation shall consist of
three members, whose names and addresses are as follows:
Charles D. Brusco
140 Fairway Ridge Road
Alpharetta, GA 30201
Alex Cooley
1593 Monroe Drive, N.E.
Atlanta, Georgia 30324
Peter D. Conlon
1593 Monroe Drive, N.E.
Atlanta, GA 30324
IX.
The name and address of the incorporator is James B. Crew, Jr., 2800
Tower Place, N.E., Atlanta, GA 30026.
X.
In accordance with the applicable provision of the Georgia Business
Corporation Code, the corporation shall have the power, acting through its
board of directors, to make distributions of its assets to its shareholders out
of its capital surplus and to acquire its own shares out of its unreserved and
unrestricted capital surplus available therefor.
IN WITNESS WHEREOF, I have hereunto executed these Articles of
Incorporation, this 24th day of June 1987.
/s/ James B. Crew, Jr.
-----------------------------------
James B. Crew, Jr.
- 2 -
<PAGE>
BUSINESS SERVICES AND REGULATION
ARTICLES OF INCORPORATION DATA ENTRY FORM
FOR GEORGIA CORPORATIONS
MAX CLELAND H. WAYNE HOWELL
Secretary of State Deputy Secretary of State
================================================================================
I. Filing Date 6/28/97 Code: CH/DP Docket No.: 87181188
------------ ------------ ----------------
Assigned Exam: 67 Amt.: $ 20,000 By: 45
------------------------------- ----------------- ---
Charter Number: 8715604 Completed:
----------------------------- ------------------
================================================================================
DO NOT WRITE ABOVE THIS LINE -- SOS USE ONLY
NOTICE OF APPLICANT: PRINT PLAINLY OR TYPE THE REMAINDER OF THIS FORM.
- --------------------------------------------------------------------------------
II. Corporate Name:
BRUSCO, COOLEY AND CONLON MANAGEMENT CO.
- --------------------------------------------------------------------------------
Mailing Address:
1593 Monore Drive, N.E.
- --------------------------------------------------------------------------------
City: County: State: Zip Code:
Atlanta Fulton Georgia 30324
- --------------------------------------------------------------------------------
III. Fees Submitted By:
James B. Crew, Jr.
- --------------------------------------------------------------------------------
Secretary of State: Check No.:
$ 20.00 485
- --------------------------------------------------------------------------------
Clerk of Court: Check No.: County:
$ 24.00 488
- --------------------------------------------------------------------------------
Publisher: Check No.: Name:
$ 60.00 487
- --------------------------------------------------------------------------------
IV. Incorporator:
JAMES B. CREW, JR.
- --------------------------------------------------------------------------------
Address:
2800 Tower Place, 3340 Peachtree Road, N.E.
- --------------------------------------------------------------------------------
City: State: Zip Code:
Atlanta Georgia 30026
- --------------------------------------------------------------------------------
V. Registered Agent/Office:
James B. Crew, Jr.
- --------------------------------------------------------------------------------
Address:
2800 Tower Place, 3340 Peachtree Road, N.E.
- --------------------------------------------------------------------------------
City: State: Zip Code:
Atlanta Georgia 30026
- --------------------------------------------------------------------------------
VI. ARTICLES OF INCORPORATION FILING CHECK-OFF LIST Applicant Examiner
- --------------------------------------------------------------------------------
1. Original and two conformed copies
of Articles of Incorporation X
- --------------------------------------------------------------------------------
2. Corporate name certificate enclosed
and verified X
- --------------------------------------------------------------------------------
3. Publisher's and Clerk's checks enclosed
and verified X
- --------------------------------------------------------------------------------
4. Consent form enclosed and verified X
- --------------------------------------------------------------------------------
5. Corporate duration and statutory
authority stated X
- --------------------------------------------------------------------------------
6. Number shares, par value, minimum
capital stated X
- --------------------------------------------------------------------------------
7. Number of directors and their names
and addresses X
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
VII. Applicant/Attorney: Telephone:
James B. Crew, Jr. 404/ 231-1935
- --------------------------------------------------------------------------------
Address:
2800 Tower Place, 3340 Peachtree Road, N.E.
- --------------------------------------------------------------------------------
City: State: Zip Code:
Atlanta Georgia 30026
- --------------------------------------------------------------------------------
NOTICE: Attach Articles of Incorporation, Secretary of State filing fee, name
certificate, consent to serve as registered agent, publisher's letter and fee
and clerk's fee and file with the Secretary of State at 2 Martin Luther King Jr.
Dr., Suite 315, West Tower, Atlanta, Georgia 30334. For information call
404-656-2817. This form does not replace the Articles of Incorporation. I
understand that the information on this form will be used in the Secretary of
State Corporate data base.
Signed: /s/ James B. Crew, Jr. Date: 6/25/87
------------------------------------------------------ ---------
James B. Crew, Jr.
<PAGE>
Secretary of State
Business Services and Regulation
Suite 300, West Tower
2 Martin Luther King Jr., Dr.
Atlanta, Georiga 30334 Docket Number : 87204346
Charter Number : 8715604
Date Incorporated : 6/29/87
Date Amended : 7/22/87
Examiner : Vanessa Robbins
Telephone : 404-656-2811
Mailed To:
James B. Crew, Jr.
McGee & Oxford
2800 Tower Place
3340 Peachtree Road
Atlanta, Georgia 30026
CERTIFICATE OF AMENDMENT
I, MAX CLELAND, Secretary of State and the Corporations Commissioner
of the State of Georiga do hereby certify, under the seal of my office, that the
articles of incorporation of
- --------------------------------------------------------------------------------
"BRUSCO, COOLEY AND CONLON MANAGEMENT CO."
has changed its name to
"COOLEY AND CONLON MANAGEMENT CO."
- --------------------------------------------------------------------------------
have been duly amended under the laws of the State of Georgia, by the filing of
articles of amendment in the office of the Secretary of State and the fees
therefor paid, as provided by law, and that attached hereto is a true and
correct copy of said articles of amendment.
WITNESS, my hand and official seal, in the City of Atlanta and the
State of Georgia on the date set forth below.
DATE: July 28, 1987
FORM A3 (3/87)
/s/ Max Cleland
--------------------------
MAX CLELAND
SECRETARY OF STATE
/s/ H. Wayne Howell
--------------------------
H. WAYNE HOWELL
DEPUTY SECRETARY OF STATE
- --------------------------------------------------------------------------------
SECURITIES CEMETERIES CORPORATIONS CORPORATIONS HOT-LINE
- --------------------------------------------------------------------------------
656-2894 656-3079 656-2817 404-656-2322
- --------------------------------------------------------------------------------
Outside Metro Area
- --------------------------------------------------------------------------------
<PAGE>
ARTICLES OF AMENDMENT
The Incorporator of Brusco, Cooley and Conlon Management Co., a
corporation organized in accordance with the laws of the State of Georgia, did
on the 16th day of July, 1987, before the issuance of any share of said
corporation, and before the organization meeting of the Board of Directors,
adopt an amendment to the Articles of Incorporation of said corporation as
follows:
1.
The name of the corporation is, "COOLEY AND CONLON MANAGEMENT CO."
2.
The initial Board of Directors of the corporation shall consist of
two members whose names and addresses are as follows:
Alex Cooley
1593 Monroe Drive, N.E.
Atlanta, Georgia 30324
Peter D. Conlon
1593 Monroe Drive, N.E.
Atlanta, Georgia 30324
Said amendment was adopted by the Incorporator on the 16th day of July, 1987,
there being no issued and outstanding shares said corporation.
IN WITNESS WHEREOF, BRUSCO COOLEY AND CONLON MANAGEMENT CO. has
caused these Articles to be executed and its corporate seal to be affixed and
caused the foregoing to be attested by its Incorporator on the 16th day of July,
1987.
/s/ James B. Crew, Jr.
-----------------------------------
JAMES B. CREW, JR.
Incorporator
<PAGE>
BUSINESS SERVICES AND REGULATION
ARTICLES OF INCORPORATION DATA ENTRY FORM
FOR GEORGIA CORPORATIONS
MAX CLELAND H. WAYNE HOWELL
Secretary of State Deputy Secretary of State
================================================================================
I. Filing Date 7/22/97 Code: NC/DP Docket No.: 87204346
------------ ------------ ----------------
Assigned Exam: 77 Amt.: $ 20,000 By: 45
------------------------------- ----------------- ---
Charter Number: Completed:
----------------------------- ------------------
================================================================================
DO NOT WRITE ABOVE THIS LINE -- SOS USE ONLY
NOTICE OF APPLICANT: PRINT PLAINLY OR TYPE THE REMAINDER OF THIS FORM.
- --------------------------------------------------------------------------------
II. Corporate Name:
COOLEY AND CONLON MANAGEMENT CO.
- --------------------------------------------------------------------------------
Mailing Address:
1593 Monore Drive, N.E.
- --------------------------------------------------------------------------------
City: County: State: Zip Code:
Atlanta Fulton Georgia 30324
- --------------------------------------------------------------------------------
III. Fees Submitted By:
James B. Crew, Jr.
- --------------------------------------------------------------------------------
Secretary of State: Check No.:
$ 10.00
- --------------------------------------------------------------------------------
Clerk of Court: Check No.: County:
$ 24.00 Fulton
- --------------------------------------------------------------------------------
Publisher: Check No.: Name:
$ 60.00 Daily Report Company
- --------------------------------------------------------------------------------
IV. Incorporator:
JAMES B. CREW, JR.
- --------------------------------------------------------------------------------
Address:
2800 Tower Place, 3340 Peachtree Road, N.E.
- --------------------------------------------------------------------------------
City: State: Zip Code:
Atlanta Georgia 30026
- --------------------------------------------------------------------------------
V. Registered Agent/Office:
James B. Crew, Jr.
- --------------------------------------------------------------------------------
Address:
2800 Tower Place, 3340 Peachtree Road, N.E.
- --------------------------------------------------------------------------------
City: State: Zip Code:
Atlanta Georgia 30026
- --------------------------------------------------------------------------------
VI. ARTICLES OF INCORPORATION FILING CHECK-OFF LIST Applicant Examiner
- --------------------------------------------------------------------------------
1. Original and two conformed copies
of Articles of Incorporation X
- --------------------------------------------------------------------------------
2. Corporate name certificate enclosed
and verified X
- --------------------------------------------------------------------------------
3. Publisher's and Clerk's checks enclosed
and verified X
- --------------------------------------------------------------------------------
4. Consent form enclosed and verified X
- --------------------------------------------------------------------------------
5. Corporate duration and statutory
authority stated X
- --------------------------------------------------------------------------------
6. Number shares, par value, minimum
capital stated X
- --------------------------------------------------------------------------------
7. Number of directors and their names
and addresses X
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
VII. Applicant/Attorney: Telephone:
James B. Crew, Jr. 404/ 231-1935
- --------------------------------------------------------------------------------
Address:
2800 Tower Place, 3340 Peachtree Road, N.E.
- --------------------------------------------------------------------------------
City: State: Zip Code:
Atlanta Georgia 30026
- --------------------------------------------------------------------------------
NOTICE: Attach Articles of Incorporation, Secretary of State filing fee, name
certificate, consent to serve as registered agent, publisher's letter and fee
and clerk's fee and file with the Secretary of State at 2 Martin Luther King Jr.
Dr., Suite 315, West Tower, Atlanta, Georgia 30334. For information call
404-656-2817. This form does not replace the Articles of Incorporation. I
understand that the information on this form will be used in the Secretary of
State Corporate data base.
Signed: /s/ James B. Crew, Jr. Date: 7/20/87
------------------------------------------------------ ---------
James B. Crew, Jr.
<PAGE>
COOLEY AND CONLON MANAGEMENT CO.
A GEORGIA CORPORATION
BY-LAWS
Article I
Meetings of the Stockholders
Section 1. The annual meeting of the stockholders of this corporation
shall be held unless otherwise specified in the notice of the meeting at the
principal office of the said corporation on the 1st day of October, of each
year, at 1 o'clock PM., unless said day is a legal holiday, in which case the
meeting shall be held at the same hour on the next day following which is not a
legal holiday, for the election of directors and the transactions as may come
properly before said meeting. A written or printed notice of the time and place
of said meeting shall be given by the secretary by delivery of, or mailing such
notice to each of the stockholders, addressed to him at his usual place of
business, at least ten days previous to such meeting, and in such other manner,
if any, as may be prescribed by law.
If for any reason the annual meeting of the stockholders shall not be held
as hereinafter provided, it may be held on any subsequent day to be fixed by the
Board of Directors.
Section 2. Special meetings of the stockholders may be called at any time
by the president or Board of Directors, and the president shall call a special
meeting whenever he is requested in writing to do so by the stockholders
representing one-third in interest of the capital stock; such request must
specify the time and place and object of the proposed meeting, and notice of
such meeting shall be given, unless waived, in the same manner as in the case of
the annual meeting of the stockholders.
Section 3. At any meeting of the stockholders, a majority in interest of
the common stockholders shall constitute a quorum for the transaction of
business, except as otherwise provided by law, except that a lesser number may
adjourn a meeting. At all such stockholders' meetings, each common stockholder
shall be entitled to one vote for each share of stock standing in his name on
the books of the corporation, and such vote may be cast by the stockholder in
person or by proxy properly authorized by written or printed appointment,
executed by the stockholder himself or by his duly authorized attorney.
Article II
Directors
Section 1. The entire general charge of the affairs of the corporation
shall be managed and conducted by two directors to be elected by the
stockholders in accordance with the by-laws. They shall hold office for one
year, or until their successors are elected. The number of directors may be
increased by appropriate action of the stockholders of the corporation.
A majority of the Board of Directors at a meeting duly assembled shall be
necessary to constitute a quorum for the transaction of business, and the act of
the majority of the directors present at said meeting at which a quorum is
present shall be the act of the Board. Any vacancy in the Board may be filled
for the period until the next election by the remaining director or directors.
Section 2. A regular meeting of the Board of Directors shall be held
annually on the day of and immediately after the annual meeting of stockholders,
provided a majority of the directors elected at said meeting shall be present.
They shall organize and proceed to the election of officers as hereinafter
provided.
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Section 3. Special meetings of the directors may be called at any time by
the president, or shall be called by him or by the secretary, upon request in
writing, signed by two of the directors, specifying the time and place and
object of the proposed meeting.
Article III
Officers
Section 1. The Officers of the corporation shall consist of a President
who shall also be Chairman of the Board of Directors. There shall also be the
following Officers:
Vice President, Secretary of Treasurer
Article IV
President
Section 1. The President shall preside at all meetings of the corporation,
and of the Board of Directors, and shall sign all certificates of stock, and all
notes and obligations of the corporation, unless otherwise directed by the Board
of Directors, by the Board of Directors of him. He shall make annual reports of
the condition of the company, and submit the same to the stockholders at their
annual meeting.
Vice President
Section 2. During the absence and inability of the President to render and
perform his duties or exercise his powers, as set forth in these by-laws or in
the acts under which this corporation is organized, the same shall be performed
and exercised by the Vice President; and when so acting, he shall have all the
powers and be subject to all the responsibilities hereby given to or imposed
upon such President.
Secretary
Section 3. The Secretary shall keep the Minutes of the meetings of the
Board of Directors and of the stockholders in appropriate books. He shall give
and serve all notices of the corporation. He shall be custodian of the records
and of the seal, and affix the latter when required. He shall keep the stock and
transfer books in the manner prescribed by law, so as to show at all times the
amount of capital stock, the manner and the time the same was paid in, the names
of owners thereof, alphabetically arranged, their respective places of
residence, their post office address, the number of shares owned by each, the
time at which each person became such owner, and the amount paid thereon; and
keep such stock and transfer books open daily during business hours at the
office of the corporation, subject to the inspection of any stockholder of the
corporation, and permit such stockholder to make extracts from said books to the
extent and as prescribed by law. He shall sign all certificates of stock. He
shall present to the Board of Directors at their stated meetings all
communications addressed to him officially by the President or any Officer or
shareholder of the corporation. He shall attend to all correspondence and
perform all the duties incident to the office of Secretary.
Treasurer
Section 4. The Treasurer shall have the care and custody of and be
responsible for all the funds and securities of the corporation, and deposit all
such funds in the name of the corporation in such bank or banks, trust company
or trust companies or safe deposit vaults as the Board of Directors may
designate. He shall sign, make, and endorse in the name of the corporation, all
checks, drafts, warrants and orders for the payment of money, and pay out and
dispose of same and receipt therefor, under the direction of the President or
the Board of Directors. He shall exhibit at all reasonable times his books and
accounts to any director or stockholder of the company upon application at the
office of the corporation during business hours. He shall render a statement of
the condition of the finances of the corporation
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at each regular meeting of the Board of Directors, and at such other times as
shall be required of him, and a full financial report at the annual meeting of
the stockholders. He shall keep at the office of the corporation correct books
of account of all its business and transactions and such other books of account
as the Board of Directors may require. He shall do and perform all duties
pertaining to the office of Treasurer.
Article V
Capital Stock
Section 1. Subscriptions to the capital stock shall be paid in at such
times and in such installments as the Board of Directors may, by resolution,
require.
Section 2. Certificates of stock shall be issued, in the manner prescribed
by law, to each stockholder, showing the number of shares to which he is
entitled. Each certificate shall be signed by the president and secretary and
have the corporate seal affixed thereto.
Section 3. Stock shall be transferable only by entry upon the books of the
corporation upon surrender of the outstanding certificate or certificates
therefor, with the assignment thereof duly executed. Each certificate,
surrendered upon the transfer of stock, shall be at once cancelled and pasted on
the margin or stub in the book from which it was taken when issued.
Section 4. In case of any application for the issue of a new certificate
of stock in place of one or more claimed to have been lost or destroyed, the
same shall be referred to the Board of Directors who shall determine whether to
grant such application, and the terms, if any, upon which it is granted.
Section 5. Upon the issuance by the corporation of any additional shares
beyond the original issue or of subsequent sales by any time thereafter, all
pre-existing stockholders shall have a pre-emptive right to purchase such
additional shares in proportion to the number of shares then held by such
stockholder. The president shall give notice in writing to each stockholder in
the event of said additional shares being issued or sold, and the stockholder
shall have thirty days within which to accept or reject in writing said offer.
Article VI
Seal
Section 1. The common seal of the corporation shall be in the
following form:
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Article VII
Dividends
Section 1. Dividends may be declared and paid out of the surplus
profits of the corporation as often and at such times as the directors may
determine.
Article VIII
By-Laws
Section 1. These by-laws may be altered or amended and additional by-laws
adopted by a majority vote at any meeting of the stockholders in the notice of
which the proposed amendment or new by-laws shall be set forth at large.
The foregoing by-laws adopted and approved by the stockholder and Board of
Directors, this 1st day of October, 1987.
/s/ Alex Cooley
-----------------------
ALEX COOLEY
/s/ Peter Conlon
-----------------------
PETER D. CONLON
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<PAGE>
Articles of Incorporation
(PURSUANT TO NRS 78)
STATE OF NEVADA
[SEAL]
Secretary of State
================================================================================
IMPORTANT: Read instructions on reverse side before completing this form
TYPE OR PRINT (BLACK INK ONLY)
1. NAME OF CORPORATION: Concerts, Inc.
-----------------------------------------------------
2. RESIDENT AGENT: (designated resident agent and his STREET ADDRESS in
Nevada where process may be served)
Name of Resident Agent: Griffin Corporate Services Attn: Janice C. George
--------------------------------------------------
Street Address: 1325 Airmotive Way, Suite 130, Reno 89502
----------------------------------------------------------
3. SHARES: (number of shares the corporation is authorized to issue)
Number of shares with par value: 1,000 Par Value: $.01
----- ----
Number of shares without par value: 0
---
4. GOVERNING BOARD: Shall be styled as (check one): X Directors __ Trustees
The FIRST BOARD OF DIRECTORS shall consist of 1 members, and the names and
addresses are as follows:
Allen J. Becker 515 Post Oak Blvd., Suite 300
Houston, TX 77027
5. PURPOSE (optional -- see reverse side): The purpose of the corporation
shall be:
- --------------------------------------------------------------------------------
6. OTHER MATTERS: This form includes the minimal statutory requirements to
incorporate under NRS 78. You may attach additional information pursuant
to NRS 78.037 or any other information you deem appropriate. If any of the
additional information is contradictory to this form, it cannot be filed
and will be returned to you for correction. Number of pages attached:
7. SIGNATURES OF INCORPORATORS: The names and addresses of each of the
incorporators signing the articles.
Janice C. George
1325 Airmotive Way, Suite 130, Reno, NV 89502
/s/ Janice C. George
------------------------------------------
State of Nevada, County of Washoe
------ ------
This instrument was acknowledged before me on
12/20 , 1996 by
------------------------------------- --
JANICE C. GEORGE
-------------------------------------
as incorporator of Concerts, Inc.
-----------------
/s/ Denise M. Peck, Notary Public
-------------------------------------
8. CERTIFICATE OF ACCEPTANCE OF APPOINTMENT AS RESIDENT AGENT
Griffin Corporate Services hereby accepts appointment as Resident Agent
for the above-named corporation
/s/ Janice C. George 12/20/96
----------------------------- -----------------
Signature of Resident Agent (Assistant Secretary) Date
<PAGE>
BYLAWS OF
CONCERTS, INC. (A NEVADA CORPORATION)
December 31, 1996
<PAGE>
ARTICLE I
OFFICES
Section 1. The registered office shall be in Reno, Nevada or in such other
city in the State of Nevada as the board of directors may from time to time
determine.
Section 2. The corporation may also have offices at such other places both
within and without the State of Nevada as the board of directors may from time
to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All annual and special meetings of the stockholders may be held
at such time and place within or without the State of Nevada as shall be stated
in the notice of the meeting, or in a duly executed waiver of notice thereof.
Section 2. Annual meetings of stockholders shall be held on such date and
at such time as shall be determined by the Board of Directors. At each annual
meeting the stockholders shall elect by a plurality vote a board of directors
and transact such other business as may properly be brought before the meeting.
Section 3. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the articles of
incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the board of
directors, or at the request in writing of stockholders owning a majority in
amount of the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
Section 4. Notices of meetings shall be in writing and signed by the
president or a vice president, or the secretary, or an assistant secretary, or
by such other person or persons as the directors shall designate. Such notice
shall state the purpose or purposes for which the meeting is called and the time
when and the place where it is to be held. A copy of such notice shall be either
delivered personally to or shall be mailed, postage prepaid, to each stockholder
of record entitled to vote at such meeting not less than ten nor more than sixty
days before such meeting. If mailed, it shall be directed to a stockholder at
his address as it appears upon the records of the corporation and upon such
mailing of any such notice, the service thereof shall be complete, and the time
of the notice shall begin to run from the date upon
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which such notice is deposited in the mail for transmission to such stockholder.
Personal delivery of any such notice to any officer of a corporation or
association, or to any member of a partnership shall constitute delivery of such
notice to such corporation, association or partnership. In the event of the
transfer of stock after delivery or mailing of the notice of and prior to the
holding of the meeting it shall not be necessary to deliver or mail notice of
the meeting to the transferee.
Section 5. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
Section 6. The holders of a majority of the stock issued and outstanding
and entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the articles of
incorporation. If, however, such quorum shall not be present or represented at
any meeting of the stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified.
Section 7. When a quorum is present or represented at any meeting, the
vote of the holders of a majority of the stock having voting power present in
person or represented by proxy shall decide any question brought before such
meeting, unless the question is one upon which by express provision of the
statutes or of the articles of incorporation a different vote is required in
which case such express provision shall govern and control the decision of such
question.
Section 8. At any meeting of the stockholders, any stockholder may be
represented and vote by a proxy or proxies appointed by an instrument in
writing. In the event that any such instrument in writing shall designate two or
more persons to act as proxies, a majority of such persons present at the
meeting, or, if only one shall be present, then that one shall have and may
exercise all of the powers conferred by such written instrument upon all of the
persons so designated unless the instrument shall otherwise provide. No such
proxy shall be valid after the expiration of six months from the date of its
execution, unless coupled with an interest, or unless the person executing it
specifies therein the
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length of time for which it is to continue in force, which in no case shall
exceed seven years from the date of its execution. Subject to the above, any
proxy duly executed is not revoked and continues in full force and effect until
an instrument revoking it or a duly executed proxy bearing a later date is filed
with the secretary of the corporation.
Section 9. Any action, which may be taken by the vote of the stockholders
at a meeting, may be taken without a meeting if authorized by the written
consent of stockholders holding at least a majority of the voting power, unless
the provisions of the statutes or of the articles of incorporation require a
greater proportion of voting power to authorize such action in which case such
greater proportion of written consents shall be required.
ARTICLE III
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. The number of directors which shall constitute the whole board
of directors shall not be less than one (1). Within the limits above specified,
the number of directors which shall constitute the whole board of directors
shall be determined by resolution of the board of directors or by the
stockholders at any annual or special meeting or otherwise pursuant to action of
the stockholders. Directors need not be stockholders. The directors shall be
elected at the annual meeting of the stockholders, except as provided in Section
2 of this Article III, and each director elected shall hold office until the
annual meeting next after his election and until his successor is duly elected
and qualified, or until his death or retirement or until he resigns or is
removed in the manner hereinafter provided. Directors shall be elected by a
plurality of the votes of the shares present in person or represented by proxy
and entitled to vote on the election of directors at any annual or special
meeting of stockholders. Such election shall be by written ballot.
Section 2. Any director may be removed, either with or without cause, at
any time, by the affirmative vote by written ballot of a majority in voting
interest of the stockholders of record of the corporation entitled to vote,
given at an annual meeting or at a special meeting of the stockholders called
for that purpose. The vacancy in the board of directors caused by any such
removal shall be filled by the stockholders at such meeting or, if not so
filled, by the board of directors as provided in Section 3 of this Article III.
Section 3. Vacancies, including those caused by an increase in the number
of directors, may be filled by a majority of the remaining directors though less
than a quorum. When one or more directors shall give notice of his or their
resignation to the board, effective at a future date, the board shall have power
to fill such vacancy or vacancies
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<PAGE>
to take effect when such resignation or resignations shall become effective,
each director so appointed to hold office during the remainder of the term of
office of the resigning director or directors.
Section 4. The business of the corporation shall be managed by its board
of directors which may exercise all such powers of the corporation and do all
such lawful acts and things as are not by statute or by the articles of
incorporation or by these Bylaws directed or required to be exercised or done by
the stockholders.
Section 5. The board of directors of the corporation may hold meetings,
both regular and special, either within or without the State of Nevada.
Section 6. The first meeting of each newly elected board of directors
shall be held at such time and place as shall be fixed by the vote of the
stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly elected
board of directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 7. Regular meetings of the board of directors may be held without
notice at such time and place as shall from time to time be determined by the
board.
Section 8. Special meetings of the board of directors may be called by the
president or secretary on the written request of two directors. Written notice
of special meetings of the board of directors shall be given to each director at
least three days before the date of the meeting.
Section 9. A majority of the board of directors, at a meeting duly
assembled, shall be necessary to constitute a quorum for the transaction of
business and the act of a majority of the directors present at any meeting at
which a quorum is present shall be the act of the board of directors, except as
may be otherwise specifically provided by statute or by the articles of
incorporation. Any action required or permitted to be taken at a meeting of the
directors may be taken without a meeting if a consent in writing, setting forth
the action so taken, shall be signed by all of the directors entitled to vote
with respect to the subject matter thereof.
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<PAGE>
COMMITTEES OF DIRECTORS
Section 10. The board of directors may, by resolution passed by a majority
of the whole board, designate one or more committees, each committee to consist
of one or more of the directors of the corporation, which, to the extent
provided in the resolution, shall have and may exercise the powers of the board
of directors in the management of the business and affairs of the corporation,
and may have power to authorize the seal of the corporation to be affixed to all
papers on which the corporation desires to place a seal. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the board of directors.
Section 11. The committees shall keep regular minutes of their proceedings
and report the same to the board when required.
COMPENSATION OF DIRECTORS
Section 12. The directors may be paid their expenses, if any, of
attendance at each meeting of the board of directors and may be paid a fixed sum
for attendance at each meeting of the board of directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
ARTICLE IV
NOTICES
Section 1. Notices to directors and stockholders shall be in writing and
delivered personally or mailed to the directors or stockholders at their
addresses appearing on the books of the corporation. Notice by mail shall be
deemed to be given at the time when the same shall be mailed. Notice to
directors may also be given by facsimile telecommunication.
Section 2. Whenever all parties entitled to vote at any meeting, whether
of directors or stockholders, consent, either by a writing on the records of the
meeting or filed with the secretary, or by presence at such meeting and oral
consent entered on the minutes, or by taking part in the deliberations at such
meeting without objection, the doings of such meeting shall be as valid as if
had at a meeting regularly called and noticed, and at such meeting any business
may be transacted which is not excepted from the written consent or to the
consideration of which no objection for want
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<PAGE>
of notice is made at the time, and if any meeting be irregular for want of
notice or of such consent, provided a quorum was present at such meeting, the
proceedings of said meeting may be ratified and approved and rendered likewise
valid and the irregularity or defect therein waived by a writing signed by all
parties having the right to vote at such meetings; and such consent or approval
of stockholders may be by proxy or attorney, but all such proxies and powers of
attorney must be in writing.
Section 3. Whenever any notice whatever is required to be given under the
provisions of the statutes, of the articles of incorporation or of these Bylaws,
a waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the board of
directors and shall be a president, a secretary and a treasurer. Any person may
hold two or more offices.
Section 2. The board of directors at its first meeting after each annual
meeting of stockholders shall choose a president, a secretary and a treasurer,
none of whom need be a member of the board.
Section 3. The board of directors may appoint vice presidents, assistant
secretaries and assistant treasurers and such other officers and agents as it
shall deem necessary who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the board.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the board
of directors may be removed at any time by the affirmative vote of a majority of
the board of directors. Any vacancy occurring in any office of the corporation
by death, resignation, removal or otherwise shall be filled by the board of
directors.
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<PAGE>
THE PRESIDENT
Section 6. The president shall be the chief executive officer of the
corporation, shall preside at all meetings of the stockholders and the board of
directors, shall have general and active management of the business of the
corporation, and shall see that all orders and resolutions of the board of
directors are carried into effect.
Section 7. He shall execute bonds, mortgages and other contracts requiring
a seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof, shall be expressly delegated by the board of directors to
some other officer or agent of the corporation.
THE VICE PRESIDENT
Section 8. The vice president, if there be one (or in the event there be
more than one, the vice presidents in the order designated, or in the absence of
any designation, then in the order of their election), shall, in the absence or
disability of the president, perform the duties and exercise the powers of the
president and shall perform such other duties as the board of directors may from
time to time prescribe.
THE SECRETARY
Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall keep in safe custody
the seal of the corporation and, when authorized by the board of directors,
affix the same to any instrument requiring it and, when so affixed, it shall be
attested by his signature or by the signature of the treasurer or an assistant
secretary.
THE ASSISTANT SECRETARY
Section 10. In the absence of the Secretary or in the event of his
inability or refusal to act, the Assistant Secretary, if any (or, if there be
more than one, the Assistant Secretaries in the order designated or, in the
absence of any designation, then in the order of their election), shall perform
the duties and exercise the powers of the Secretary
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<PAGE>
and shall perform such other duties and have such other powers as the Board of
Directors, the President or the Secretary may from time to time prescribe.
THE TREASURER
Section 11. The treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 12. He shall disburse the funds of the corporation as may be
ordered by the board of directors taking proper vouchers for such disbursements,
and shall render to the president and the board of directors, at the regular
meetings of the board, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
Section 13. If required by the board of directors, he shall give the
corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the board of directors for the faitliful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Every stockholder shall be entitled to have a certificate,
signed by the president or a vice president and the secretary or an assistant
secretary of the corporation, certifying the number of shares owned by him in
the corporation. If the corporation is authorized to issue shares of more than
one class or more than one series of any class, there shall be set forth upon
the face or back of the certificate, or the certificate shall have a statement
that the corporation will furnish to any stockholders upon request and without
charge, a full or summary statement of the designations, preferences and
relative, participating, optional or other special rights of the various classes
of stock or series thereof and the qualifications, limitations or restrictions
of such rights, and, if the corporation shall be authorized to issue only
special stock, such certificate shall set forth in full or summarize the rights
of the holders of such stock.
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<PAGE>
Section 2. Whenever any certificate is countersigned or otherwise
authenticated by a transfer agent or transfer clerk, and by a registrar, then a
facsimile of the signatures of the officers or agents of the corporation may be
printed or lithographed upon such certificate in lieu of the actual signatures.
In case any officer or officers who shall have signed, or whose facsimile
signature or signatures shall have been used on, any such certificate or
certificates shall cease to be such officer or officers of the corporation,
whether because of death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the corporation, such certificate or
certificates may nevertheless be adopted by the corporation and be issued and
delivered as though the person or persons who signed such certificate or
certificates, or whose facsimile signature or signatures shall have been used
thereon, had not ceased to be an officer or officers of such corporation.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or destroyed,
upon the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost or destroyed. When authorizing such issue of a
new certificate or certificates, the board of directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost or destroyed.
TRANSFER OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
CLOSING OF TRANSFER BOOKS
Section 5. The directors may prescribe a period not exceeding sixty days
prior to any meeting of the stockholders during which no transfer of stock on
the books of the corporation may be made, or may fix a day not more
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<PAGE>
than sixty days prior to the holding of any such meeting as the day as of which
stockholders entitled to notice of and to vote at such meeting shall be
determined; and only stockholders of record on such day shall be entitled to
notice or to vote at such meeting.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof; except as otherwise provided by the laws of
Nevada.
ARTICLE VII
INDEMNIFICATION
Section 1. The Corporation shall indemnify persons who are or were a
director or officer of the Corporation both in their capacities as directors and
officers of the Corporation and, if serving at the request of the Corporation as
a director, officer, trustee, employee, agent or similar functionary of another
foreign or domestic corporation, trust, partnership, joint venture, sole
proprietorship, employee benefit plan or other enterprise, in each of those
capacities, against any and all liability and reasonable expense that may be
incurred by them in connection with or resulting from (a) any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative (collectively, a "Proceeding"), (b)
an appeal in such a Proceeding, or (c) any inquiry or investigation that could
lead to such a Proceeding, all to the full extent permitted by Section 78.751 of
the Nevada General Corporation Law. The Corporation shall pay or reimburse, in
advance of the final disposition of the Proceeding, to all persons who are or
were a director or officer of the Corporation all reasonable expenses incurred
by such person who was, is or is threatened to be made a named defendant or
respondent in a Proceeding to the full extent permitted by Section 78.751 of the
Nevada General Corporation Law. The Corporation may indemnify persons who are or
were an employee or agent (other than a director or officer) of the Corporation,
or persons who are not or were not employees or agents of the Corporation but
who are or were serving at the request of the Corporation as a director,
officer, trustee, employee, agent or similar functionary of another foreign or
domestic corporation, trust, partnership,
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<PAGE>
joint venture, sole proprietorship, employee benefit plan or other enterprise
(collectively, along with the directors and officers of the Corporation, such
persons are referred to herein as "Corporate Functionaries") against any and all
liability and reasonable expense that may be incurred by them in connection with
or resulting from (a) any Proceeding, (b) an appeal in such a Proceeding, or (c)
any inquiry or investigation that could lead to such a Proceeding, all to the
full extent permitted by Section 78.751 of the Nevada General Corporation Law.
The rights of indemnification provided for in this Article VII shall be in
addition to all rights to which any Corporate Functionary may be entitled under
any agreement or vote of shareholders or as a matter of law or otherwise.
Section 2. The Corporation may purchase or maintain insurance on behalf of
any Corporate Functionary against any liability asserted against him and
incurred by him in such a capacity or arising out of his status as a Corporate
Functionary, whether or not the Corporation would have the power to indemnify
him or her against the liability under the Nevada General Corporation Law or
these Bylaws; provided, however, that if the insurance or other arrangement is
with a person or entity that is not regularly engaged in the business of
providing insurance coverage, the insurance or arrangement may provide for
payment of a liability with respect to which the Corporation would not have the
power to indemnify the person only if including coverage for the additional
liability has been approved by the shareholders of the Corporation. Without
limiting the power of the Corporation to procure or maintain any kind of
insurance or arrangement, the Corporation may, for the benefit of persons
indemnified by the Corporation, (i) create a trust fund, (ii) establish any form
of self-insurance, (iii) secure its indemnification obligation by grant of any
security interest or other lien on the assets of the Corporation, or (iv)
establish a letter of credit, guaranty or surety arrangement. Any such insurance
or other arrangement may be procured, maintained or established within the
Corporation or its affiliates or with any insurer or other person deemed
appropriate by the Board of Directors of the Corporation regardless of whether
all or part of the stock or other securities thereof are owned in whole or in
part by the Corporation. In the absence of fraud, the judgment of the Board of
Directors of the Corporation as to the terms and conditions of such insurance or
other arrangement and the identity of the insurer or other person participating
in an arrangement shall be conclusive, and the insurance or arrangement shall
not be voidable and shall not subject the directors approving the insurance or
arrangement to liability, on any ground, regardless of whether directors
participating in approving such insurance or other arrangement shall be
beneficiaries thereof.
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<PAGE>
ARTICLE VIII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation, subject to
the provisions of the articles of incorporation, if any, may be declared by the
board of directors at any regular or special meeting pursuant to law. Dividends
may be paid in cash, in property, or in shares of the capital stock, subject to
the provisions of the articles of incorporation.
Section 2. Before payment of any dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserves in the
manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be fixed by resolution
of the board of directors.
SEAL
Section 5. The corporation shall have a seal which may be used by causing
it or a facsimile thereof to be impressed or affixed or in any manner
reproduced.
ARTICLE IX
AMENDMENTS
Section 1. These Bylaws may be altered or repealed, or new Bylaws may be
adopted, at any regular meeting of the stockholders or of the board of directors
or at any special meeting of the stockholders or of the board of directors if
notice of such alteration or repeal be contained in the notice of such special
meeting, at which a quorum is present, by the affirmative vote of a majority of
the shares or the directors, whichever the case may be.
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<PAGE>
I, THE UNDERSIGNED, being the secretary of Concerts, Inc., a Nevada corporation
(the "Company"), DO HEREBY CERTIFY the foregoing to be the Bylaws of the
Company, as adopted by the written consent of the sole director of the Company
on December 31, 1996.
/s/ Jeffry B. Lewis
--------------------------------
Jeffry B. Lewis, Secretary
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<PAGE>
CERTIFICATE OF INCORPORATION
STOCK CORPORATION
STATE OF CONNECTICUT
SECRETARY OF THE STATE
The undersigned incorporator(s); hereby form(s) a corporation under the Stock
Corporation Act of the State of Connecticut:
1. The nature of the corporation is Connecticut Amphitheater Development
Corporation.
2. The nature of the business is to be transacted or the purposes to be
promoted or carried out by the corporation, are as follows:
The development and operation of a center for the performing arts and all
other business which may be lawfully conducted by a Connecticut stock
corporation.
<PAGE>
Domestic Corporation
Secretary of the State
30 Trinity Street
Hartford, CT 06106
Name of Corporation: Connecticut Amphitheater Development Corporation
The above corporation appoints as its statutory agent for service, one of the
following:
Name of Natural Person who is Resident of Connecticut:
James P. Sandler
Business Address:
1 Hartford Square West, Hartford, CT 06106
Residence Address:
19 High Wood Road, Bloomfield, CT 06002
AUTHORIZATION
Name of Incorporator (Print or Type)
James P. Sandler Signed (Incorporator)
/s/ James P. Sandler
----------------------
Date: 10/13/93
Acceptance: Name of Statutory Agent for Service (Print or Type)
James P. Sandler Signed (Incorporator)
/s/ James P. Sandler
----------------------
<PAGE>
CERTIFICATE AMENDING OR RESTATING CERTIFICATE OF INCORPORATION
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 TRINITY STREET
HARTFORD, CT 06106
1. Name of Corporation:
Connecticut Amphitheater Development Corporation
2. The Certificate of Incorporation is:
A. Amended only pursuant to Conn. Gen. Stat ss.33-360.
5. The manner of adopting the resolution was as follows:
A. By the board of directors and shareholder, pursuant to Conn. Gen.
ss.33-360. Vote of Shareholders:
(i) No shares are required to be voted as a class; the
shareholder's vote was as follows:
Vote Required for Adoption 100 Vote Favoring Adoption 100
--- ---
Name of Pres. V.Pres.
James H. Koplik
Name of Sec. Assn't Sec.
James P. Sandler /s/ James P. Sandler
---------------------
C. The corporation does not have any shareholders. The resolution was
adopted by vote of at least two-thirds of the incorporators before
the organization meeting of the corporation and approved in writing
by all subscribers (if any) for shares of the corporation.
Signed:
/s/ James P. Sandler
- ----------------------
James P. Sandler
Dated at Hartford, this 4th day of September, 1994.
<PAGE>
CERTIFICATE OF INCORPORATION
STOCK CORPORATION
STATE OF CONNECTICUT
SECRETARY OF THE STATE
The undersigned incorporator(s); hereby form(s) a corporation under the Stock
Corporation Act of the State of Connecticut:
1. The name of the corporation is Connecticut Amphitheater Development
Corporation .
2. The nature of the business is to be transacted or the purposes to be
promoted or carried out by the corporation, are as follows:
To engage in any lawful act or activity for which corporations may be
formed under the laws of the State of Connecticut.
3. The designation of each class of shares the authorized number of ___ share
thereof, are as follows:
5,000 share no par value common stock.
4. The terms, limitations and relative rights and preferences of each class
of shares and series thereof (if any), or an express grant of authority to
the board of directors pursuant to Section 33-331, 1959 Supp. Conn. G.S.,
are as follows:
None
5. The minimum amount of stated capital with which the corporation shall
commence business is $1,000.00 dollars. (Not less than one thousand
dollars)
6.(7) Other provisions.
None
Dated at Hartford, Connecticut this 2nd day of September, 1994.
Name of Incorporator
Maureen E. Couchon
Signed (Incorporator)
Maureen E. Couchon
<PAGE>
BYLAWS
OF
CONNECTICUT AMPHITHEATER DEVELOPMENT CORPORATION
ARTICLE I
NAME AND LOCATION
1. NAME. The name of the Corporation shall be CONNECTICUT AMPHITHEATER
DEVELOPMENT CORPORATION.
2. PRINCIPAL OFFICE. The board of directors may from time to time
designate such place or places as the principal office and for the transaction
of Corporation business as it may determine.
ARTICLE II
CAPITAL STOCK
1. STOCK CERTIFICATES. All certificates of stock shall be signed by the
president or a vice president and by the secretary, assistant secretary or
treasurer of the Corporation and sealed with the corporate seal or a facsimile
thereof.
2. STOCK TRANSFER. Transfer of stock shall be made only on the books of
the Corporation and the old certificate properly endorsed shall be surrendered
and cancelled before a new certificate is issued .
3. STOCK BOOKS. The stock books of the Corporation shall be closed against
transfers of stock for a period of seven (7) days before the day of payment of a
dividend and before each annual meeting of the shareholders.
4. LOST CERTIFICATES. The board of directors may, in case any share
certificate is lost, stolen, destroyed or mutilated, authorize the issuance of a
new certificate in lieu thereof, upon such terms and conditions, including
reasonable indemnification of the Corporation, as the board shall determine.
ARTICLE III
SHAREHOLDERS MEETINGS
1. ANNUAL MEETING. The annual meeting of the shareholders shall be held
during the month of December in each year, at such place and at such time as may
be designated by a majority of the directors. At such meetings, the shareholders
shall elect the directors and transact such other business as may be properly
brought before the meeting.
2. SPECIAL MEETINGS. Meetings of shareholders for any purpose may be held
at such time and place within or without Connecticut as shall be stated in the
notice of the meeting or in a duly executed waiver of notice thereof. A special
meeting of the shareholders of the Corporation may be called by the president,
or by a majority of the directors, and shall be held at any time upon call by
the president or the secretary when either the president or the secretary is
requested in writing to call such meeting by a majority of the directors or by
one or more shareholders holding not less than one-tenth of' the voting power of
all shares entitled to vote at the meeting.
3. NOTICE AND WAIVER. Notice of the time and place of all annual and
special meetings shall be mailed or handed by the secretary to each shareholder
entitled to vote at such meeting not less than seven nor more than fifty days
before the date thereof, but this requirement as to notice may be waived at any
time by the shareholders in writing.
<PAGE>
4. PRESIDING OFFICER. The president, or in the absence of the president,
such other officer or shareholder as shall be designated by the shareholders
present, shall preside at all such meetings.
5. VOTING AND PROXIES. At every meeting, each shareholder shall be
entitled to one vote for each outstanding share of stock regardless of class,
held in his or her name, which vote may be cast in person or by proxy, on each
matter submitted to a vote at such meeting of shareholders, unless and except to
the extent that voting rights of shares of any class are increased, limited or
denied by the certificate of incorporation. All votes shall, if requested by the
presiding officer or by any shareholder, be by ballot, and the name of each
shareholder voting shall be written thereon with the number of shares held by
him or her. Any shareholder may designate an agent to vote in any meeting of the
shareholders of the Corporation, by a writing signed by him or her for that
purpose, and such proxy shall entitle the person thus authorized to vote at all
meetings of the shareholders held during the eleven months next succeeding the
date of such instrument unless a longer or shorter term is expressly provided
therein.
6. QUORUM AND ADJOURNMENT. The holders of a majority of shares entitled to
vote on the subject matter, present in person or by proxy at any meeting of
shareholders, shall constitute a quorum for such meeting except as may otherwise
be provided in these bylaws, or in the certificate of incorporation, or in the
Connecticut Stock Corporation Act. If, however, such quorum shall not be present
or represented at any meeting of the shareholders, shareholders present in
person or represented by proxy shall have power to adjourn the meting from time
to time, without notice other than announcement at the meeting, until a quorum
shall be present or represented. At such adjourned meeting at such a quorum
shall be present or represented any business may be transacted which might have
been transacted at the meeting as originally noticed.
7. ACTION BY SHAREHOLDERS. Except as may otherwise be specifically
provided in these bylaws, in the certificate of incorporation, or in the
Connecticut Stock Corporation Act, the affirmative vote, at a meeting of
shareholders duly held and at which a quorum is present, of a majority of the
voting power of the shares represented at such meeting which are entitled to
vote on the subject matter shall be the act of the shareholders.
8. ACTION WITHOUT A MEETING. Any action which may be taken at a meeting of
the shareholders may be taken without a meeting if a consent in writing, setting
forth the action so taken or to be taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof and
said consent shall be filed in the minute book of the Corporation.
ARTICLE IV
DIRECTORS
1. AUTHORITY, NUMBER AND QUALIFICATIONS. The business, property and
affairs of the Corporation shall be under the care and management of its board
of directors. Directors need not be shareholders and need not be residents of
Connecticut. The Corporation shall have at least three directorship, except
that, when all the issued and outstanding shares of stock are owned beneficially
and of record by less than three shareholders, the number may be less than three
but not less than the number of shareholders. The number of directorships shall
be the number fixed by resolution of the shareholders of directors, or, in the
absence thereof, shall be the number of directors elected at the preceding
annual meeting of shareholders.
2. QUORUM AND ACTION BY BOARD OF DIRECTORS. A majority of the directors at
the time shall constitute a quorum for the transaction of business; and the act
of a majority of the directors present at a meeting at which a quorum is present
at the time of the act shall be the act of the board of directors, unless the
presence of or action of a greater number is specifically required by these
bylaws, the certificate of incorporation, or the Connecticut Stock Corporation
Act. If a quorum shall not be present at any meeting of directors, the directors
present may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
3. ACTION-WITHOUT A MEETING. Any action which may be taken at a meeting of
the directors may be taken without a meeting if a consent in writing, setting
forth the action so taken, or to be taken, shall be signed by
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<PAGE>
all of the directors entitled to vote with respect to the subject matter thereof
and the number of such directors constitutes a quorum for such action. Such
consent shall be filed with the minutes of the Corporation.
4. TERMS AND VACANCIES. The directors, other than the first board of
directors, shall be elected annually, at the annual meeting of the Corporation
for a term extending until the next annual meeting of the Corporation; and each
director shall hold office for the term for which he or she is elected and until
his or her successor has been elected and qualified. Any vacancy or vacancies
occurring in the board, other than a vacancy created by an increase in the
number of directorships, may be filled for the unexpired term by action of the
sole remaining director in office or by the concurring vote of a majority of the
remaining directors in office, though such remaining directors are less than a
quorum, though the number of directors at the meeting is less than a quorum, and
though such majority is less than a quorum. Any vacancy or vacancies not filled
by the directors shall be filled by the election at an annual meeting, or at a
special meeting of shareholders called for the purpose. A director elected to
fill a vacancy shall be elected for the unexpired portion of the term of his or
her predecessor in office. Any directorship to be filled because of an increase
in the number of directors shall be filled by election at any annual meeting or
at a special meeting of shareholders called for that purpose. A director elected
to fill a newly created directorship shall serve until the next succeeding
annual meeting of shareholders and until his or her successor shall have been
elected or qualified.
5. ANNUAL AND SPECIAL MEETINGS. Annual meetings of the directors shall be
held immediately after the annual meeting of the shareholders; and regular and
special meetings of the directors may be held at such times and places, either
within or without Connecticut, as, in the opinion of the president or a majority
of the directors, the interests of the Corporation shall require, reasonable
notice having been given thereof. The directors may choose from among their
number a chairman to preside over meetings of the directors.
6. DESIGNATION OF CORPORATE DEPOSITORY AND BANKS. The board of directors
shall, from time to time, designate the bank or other depository in which the
funds of the Corporation shall be kept, and such funds shall be drawn, in the
name of the Corporation, by check signed by such officer, officers or other
agents as shall be expressly authorized for that purpose by vote or resolution
of the board of directors. Notes given by and in the name of the Corporation
shall be executed by such officer of officers as shall be expressly authorized
for that purpose by the board of directors.
7. REMOVAL OF DIRECTORS. Any director may be removed with our without
cause at any time by the act of the shareholders; and the vacancy in the board
of directors caused by any such removal may be filled by the act of the
shareholders.
8. EXECUTIVE AND OTHER COMMITTEES. The board of directors may designate
two or more directors to constitute an executive committee or other committees,
which committees shall have and may exercise such authority as is delegated to
them by the board of directors.
ARTICLE V
OFFICERS
1. NUMBER, QUALIFICATIONS, TERMS AND ELECTION. The officers of the
Corporation shall consist of a president and secretary. The directors may, in
addition to the foregoing officers, appoint one or more vice presidents, one or
more treasurers, one or more assistant treasurers, and one or more assistant
secretaries. The directors shall appoint the officers of the Corporation and
officers need not be shareholders, and need not be residents of Connecticut. Any
two or more officers may be held by the same person except the offices of
president and secretary. Officers shall be appointed at the annual directors'
meeting for a term extending until the next annual directors' meeting. Each
officer shall hold office for the term for which he or she is appointed and
until his successor has been appointed and qualified. Any vacancy or vacancies
occurring in any office of the Corporation may be filed for the unexpired term
by action of a majority of the remaining directors in office, though such
remaining directors are less than a quorum, though the number of directors at
the meeting are less than a quorum, and though such majority is less than a
quorum.
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<PAGE>
2. PRESIDENT. It shall be the duty of the president to be the chief
executive officer of the Corporation and he shall have general supervision over
the business of the Corporation, subject to the control of the board of
directors. He shall preside at each meeting of shareholders. He shall see that
all orders and resolutions of the board are carried into effect. In general he
shall perform all duties incident to the office of president and such other
duties as may from time to time be assigned to him, or specifically required to
be performed by him, by these bylaws, by the board of directors or by law.
3. VICE-PRESIDENT. It shall be the duty of the vice-president, in the
absence of the president, to perform the president's duties, and such officer
shall also perform such other duties as may be assigned to him, or specifically
required to be performed by him, by these bylaws, by the board of directors or
by law.
4. SECRETARY. It shall be the duty of the secretary to act as secretary of
and keep the minutes of all meetings of the board of directors and of
shareholders; to cause to be given notice of all meetings and shareholders and
directors; to be custodian of the seal of the Corporation and to affix the seal,
or cause it to be affixed, to all certificates for shares of stock of the
Corporation and to all documents, the execution of which on behalf of the
Corporation under its seal, shall have been specifically or generally authorized
by the board of directors; to have charge of the record of shareholders and also
of the other books, records and papers of the Corporation relating to its
organization as a Corporation, and to see that the reports, statements and other
documents required by law are properly kept or filed; and in general, to perform
all the duties incident to the offices of secretary and such other duties as may
from time to time be assigned to him by the board of directors or by the
president.
5. ASSISTANT SECRETARY. It shall be the duty of the assistant secretary,
in the absence of the secretary, to perform the secretary's duties, and such
officer shall also perform such other duties as may be assigned to him, or
specifically required to be performed by him, by the board of directors or by
the president.
6. TREASURER. It shall be the duty of the treasurer to receive and keep
the cash, funds and notes belonging to the Corporation, and enter regularly in
books kept for that purpose all monies received and disbursed on account of the
Corporation, which books shall at all reasonable times be open to the inspection
of the shareholders of the Corporation. He shall also perform such other duties
as may be assigned to him, or specifically required to be performed by him, by
the board of directors or by the president.
7. ASSISTANT TREASURER. It shall be the duty of the assistant treasurer,
in the absence of the treasurer, to perform the treasurer's duties, and such
officer shall also perform such other duties as may be assigned to him, or
specifically required to be performed by him, by the board of directors or by
the president.
8. REMOVAL. Any officer, agent or employee of the Corporation may be
removed, with or without cause, at any time by resolution adopted by the board
of directors at a special meeting of the board called for that purpose.
ARTICLE VI
SEAL
1. The seal of the Corporation shall be in the form imprinted hereon.
ARTICLE VII
AMENDMENTS
1. AMENDMENTS AND NOTICE. Bylaws of the Corporation may be adopted,
repealed, or amended only by the shareholders and such adoption, repeal, or
amendment of bylaws by shareholders shall require the affirmative note of a
majority of the voting power of shares entitled to vote thereon. No bylaws shall
be adopted, and no existing bylaws shall be amended or repealed, unless written
notice of such proposed action shall have been given in the call for the meeting
of shareholders at which such adoption, amendment or repeal is to be acted upon.
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<PAGE>
ARTICLE VIII
ISSUANCE OF STOCK BY BOARD OF DIRECTORS
1. The board of directors may issue at one time, or from time to time, all
or a portion of the unissued shares of the authorized capital stock of the
Corporation, as in the opinion and at the discretion of the board may be deemed
for the Corporation's best interests, and the board of directors may accept in
payment of such shares as may be issued, such consideration as from time to time
shall be deterniined by the board of directors and as may be permitted by law.
ARTICLE IX
BOOKS
1. BOOKS AND RECORDS. There shall be kept correct and complete books and
records of account and minutes of the proceedings of the corporation's
incorporators, shareholders and directors. There shall also be maintained at the
principal office of the Corporation a record of the Corporation's shareholders,
giving the names and addresses of all shareholders and the number and class of
shares held by each. At intervals of not more than twelve months, the
Corporation shall prepare a balance sheet showing its financial condition as of
a date not more than four months prior thereto and a profit and loss statement
shall be deposited at the principal office of the Corporation and shall be kept
for at least ten years from such date.
ARTICLE X
FISCAL YEAR
1. FISCAL YEAR. The fiscal year of the Corporation shall end on the last
day of December in each year.
ARTICLE XI
DEFINITIONS
All definitions contained in the section on "Definitions" in the "General
Provisions" of the Connecticut Stock Corporation Act, unless the context
otherwise requires, shall be applicable to such words and phrases as appear
herein. Dated at Hartford, Connecticut as of this 31st day of August, 1994.
/s/ James P. Sandler
------------------------------
James P. Sandler
Incorporator
(21) Bylaws
- 5 -
<PAGE>
CERTIFICATE OF INCORPORATION
CONNECTICUT CONCERTS INCORPORATED
The undersigned incorporator hereby forms a corporation under the Stock
Corporation Act of the State of Connecticut.
FIRST: The name of the corporation is CONNECTICUT CONCERTS INCORPORATED.
SECOND: The nature of the business to be transacted or the purposes to be
promoted or carried out by the corporation, are as follows:
This corporation is formed for the transaction of any business or the
promotion of any purpose which may be lawfully carried on by a corporation
except that of a state bank and trust company, savings bank, industrial bank or
building and load association. Nothing herein shall authorize the corporation to
transact in this state the business of a telegraph company, gas, electric light
or water company, or cemetery corporation, or of any company, except a telephone
company, requiring the right to take and condemn lands or to occupy the public
highways of this state. Nothing herein shall be construed to authorize this
corporation to transact the business of an insurance company or surety or
indemnity company except in compliance with any laws of this state regulating or
otherwise applying to the same.
THIRD: The designation of each class of shares, the authorized number of
shares of each such class, and the par value, if any, of each share thereof, are
as follows: Five Thousand, (5,000), common shares all of which shall be without
par value.
FOURTH: The minimum amount of stated capital with which the corporation
shall commence business is One Thousand Dollars.
Dated at Albany, New York on January 11th, 1994.
I hereby declare under the penalties of false statement, that the statements
made in the foregoing certificate are true.
/s/Lawrence A. Kirsch
---------------------------------
LAWRENCE A. KIRSCH, Incorporator
90 State Street
Albany, New York
<PAGE>
APPOINTMENT OF STATUTORY AGENT FOR SERVICE
DOMESTIC CORPORATION
61-6 Rev. 6/88
Secretary of the State
30 Trinity Street
Hartford, CT 06106
Name of Corporation: CONNECTICUT CONCERTS INCORPORATED Complete All Blanks
- --------------------------------------------------------------------------------
The above corporation appoints as its statutory agent for service,
one of the following:
- --------------------------------------------------------------------------------
Name of Natural Person Business Address Zip Code
Who is Resident of Connecticut
Residence Address Zip Code
- --------------------------------------------------------------------------------
Name of Connecticut Corporation Address of Principal Office in Conn.
(If none, enter address of appointee's
statutory agent for service)
- --------------------------------------------------------------------------------
Name of Corporation Address of Principal Office in Conn.
(Not organized under the Laws of Conn.*) (If none, enter "Secretary of
Corporation Service Company the State of Conn.")
90 State House Square, 9th Flr.
Hartford, CT 06103
- --------------------------------------------------------------------------------
*Which has procured a Certificate of Authority to transact business or
conduct affairs in this state.
- --------------------------------------------------------------------------------
AUTHORIZATION
- --------------------------------------------------------------------------------
Original Appointment
(Must be Signed
by a majority of
Incorporators)
- --------------------------------------------------------------------------------
Name of Incorporator (Print or Type) Signed (Incorporator) Date
LAWRENCE A. KIRSCH /s/ Lawrence A. Kirsch 1-10-94
- -----------------------------------------------------------------
Name of Incorporator (Print or Type) Signed (Incorporator)
- -----------------------------------------------------------------
Name of Incorporator (Print or Type) Signed (Incorporator)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Subsequent Appointment Name of President, Date
Vice President or Secretary
- -----------------------------------------------------------------
Signed (President, or
Vice President or Secretary)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Acceptance: Name of Statutory Agent for Service Signed (Statutory Agent
(Print or Type) for Service)
CORPORATION SERVICE COMPANY by: Bruce R. Winn /s/ Bruce R. Winn
VICE PRESIDENT
- --------------------------------------------------------------------------------
For Official Use Only Rec; CC:
FILED ----------------------------------------------
STATE OF CONNECTICUT
JAN 18, 1994 ----------------------------------------------
/S/Pauline R. _________
Secretary of the State ----------------------------------------------
By /s/ Illegible Time 2 p.m Please provide filer's name and complete
address for mailing receipt
<PAGE>
STATE OF CONNECTICUT )
) SS: HARTFORD
OFFICE OF THE SECRETARY OF THE STATE )
I hereby certify that this is a true copy of record in this Office
In Testimony whereof, I have hereunto set my hand,
and affixed the Seal of said State, at Hartford,
this 23rd day of February A.D. 1998
/s/ Miles S. Rapoport
- -----------------------------
SECRETARY OF THE STATE
<PAGE>
BYLAWS
OF
CONNECTICUT PERFORMING ARTS, INC.
ARTICLE I
NAME AND LOCATION
1. NAME. The name of the Corporation shall be CONNECTICUT PERFORMING ARTS,
INC.
2. PRINCIPAL OFFICE. The board of directors may from time to time
designate such place or places as the principal office and for the transaction
of Corporation business as it may determine.
ARTICLE II
CAPITAL STOCK
1. STOCK CERTIFICATES. All certificates of stock shall be signed by the
president or a vice president and by the secretary, assistant secretary or
treasurer of the Corporation and sealed with the corporate seal or a facsimile
thereof.
2. STOCK TRANSFER. Transfer of stock shall be made only on the books of
the Corporation and the old certificate properly endorsed shall be surrendered
and canceled before a new certificate is issued.
3. STOCK BOOKS. The stock books of the Corporation shall be closed against
transfers of stock for a period of seven (7) days before the day of payment of a
dividend and before each annual meeting of the shareholders.
4. LOST CERTIFICATES. The board of directors may, in case any share
certificate is lost, stolen, destroyed or mutilated, authorize the issuance of a
new certificate in lieu thereof, upon such terms and conditions, including
reasonable indemnification of the Corporation, as the board shall determine.
ARTICLE III
SHAREHOLDERS MEETINGS
1. ANNUAL MEETING. The annual meeting of the shareholders shall be held
during the month of December in each year, at such place and at such time as may
be designated by a majority of the directors. At such
<PAGE>
meetings, the shareholders shall elect the directors and transact such other
business as may be properly brought before the meeting.
2. SPECIAL MEETINGS. Meetings of shareholders for any purpose may be held
at such time and place within or without Connecticut as shall be stated in the
notice of the meeting or in a duly executed waiver of notice thereof. A special
meeting of the shareholders of the Corporation may be called by the president,
or by a majority of the directors, and shall be held at any time upon call by
the president or the secretary when either the president or the secretary is
requested in writing to call such meeting by a majority of the directors or by
one or more shareholders holding not less than one-tenth of the voting power of
all shares entitled to vote at the meeting.
3. NOTICE AND WAIVER. Notice of the time and place of all annual and
special meetings shall be mailed or handed by the secretary to each Shareholder
entitled to vote at such meeting not less than seven nor more than fifty days
before the date thereof, but this requirement as to notice may be waived at any
time by the shareholders in writing.
4. PRESIDING OFFICER. The president, or in the absence of the president,
such other officer or shareholder as shall be designated by the shareholders
present, shall preside at all such meetings.
5. VOTING AND PROXIES. At every meeting, each shareholder shall be
entitled to one vote for each outstanding share of stock regardless of class,
held in his or her name, which vote may be cast in person or by proxy, on each
matter submitted to a vote at such meeting of shareholders, unless and except to
the extent that voting rights of shares of any class are increased, limited or
denied by the certificate of incorporation. All votes shall, if requested by the
presiding officer or by any shareholder, be by ballot, and the name of each
shareholder voting shall be written thereon with the number of shares held by
him or her. Any shareholder may designate an agent to vote in any meeting of the
shareholders of the Corporation, by a writing signed by him or her for that
purpose, and such proxy shall entitle the person thus authorized to vote at all
meetings of the shareholders held during the eleven months next succeeding the
date of such instrument unless a longer or shorter term is expressly provided
therein.
6. QUORUM AND ADJOURNMENT. The holders of a majority of shares entitled to
vote on the subject matter, present in person or by proxy at any meeting of
shareholders, shall constitute a quorum for such meeting except as may otherwise
be provided in these bylaws, or in the certificate of incorporation, or in the
Connecticut Stock Corporation Act. If, however, such quorum shall not be present
or represented at any meeting of the shareholders,
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shareholders present in person or represented by proxy shall have power to
adjourn the meting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at such a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
noticed.
7. ACTION BY SHAREHOLDERS. Except as may otherwise be specifically
provided in these bylaws, in the certificate of incorporation, or in the
Connecticut Stock Corporation Act, the affirmative vote, at a meeting of
shareholders duly held and at which a quorum is present, of a majority of the
voting power of the shares represented at such meeting which are entitled to
vote on the subject matter shall be the act of the shareholders.
8. ACTION WITHOUT A MEETING. Any action which may be taken at a meeting of
the shareholders may be taken without a meeting if a consent in writing, setting
forth the action so taken or to be taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof and
said consent shall be filed in the minute book of the Corporation.
ARTICLE IV
DIRECTORS
1. AUTHORITY, NUMBER AND QUALIFICATIONS. The business, property and
affairs of the Corporation shall be under the car e and management of its board
of directors. Directors need not be shareholders and need not be residents of
Connecticut. The Corporation shall have at least three directorship, except
that, when all the issued and outstanding shares of stock are owned beneficially
and of record by less than three shareholders, the number may be less than three
but not less than the number of shareholders. The number of directorships shall
be the number fixed by resolution of the shareholders of directors, or, in the
absence thereof, shall be the number of directors elected at the preceding
annual meeting of shareholders.
2. QUORUM AND ACTION BY BOARD OF DIRECTORS. A majority of the directors at
the time shall constitute a quorum for the transaction of business; and the act
of a majority of the directors present at a meeting at which a quorum is present
at the time of the act shall be the act of the board of directors, unless the
presence of or action of a greater number is specifically required by these
bylaws, the certificate of incorporation, or the Connecticut Stock Corporation
Act. If a quorum shall not be present at any meeting of directors, the directors
present may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
3
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3. ACTION WITHOUT A MEETING. Any action which may be taken at a meeting of
the directors may be taken without a meeting if a consent in writing, setting
forth the action so taken, or to be taken, shall be signed by all of the
directors entitled to vote with respect to the subject matter thereof and the
number of such directors constitutes a quorum for such action. Such consent
shall be filed with the minutes of the Corporation.
4. TERMS AND VACANCIES. The directors, other than the first board of
directors, shall be elected annually, at the annual meeting of the Corporation
for a term extending until the next annual meeting of the Corporation; and each
director shall hold office for the term for which he or she is elected and until
his or her successor has been elected and qualified. Any vacancy or vacancies
occurring in the board, other than a vacancy created by an increase in the
number of directorships, may be filled for the unexpired term by action of the
sole remaining director in office or by the concurring vote of a majority of the
remaining directors in office, though such remaining directors are less than a
quorum, though the number of directors at the meting is less than a quorum, and
though such majority is less than a quorum. Any vacancy or vacancies not filled
by the directors shall be filled by the election at an annual meeting, or at a
special meeting of shareholders called for the purpose. A director elected to
fill a vacancy shall be elected for the unexpired portion of the term of his or
her predecessor in office. Any directorship to be filled because of an increase
in the number of directors shall be filled by election at any annual meeting or
at a special meeting of shareholders called for that purpose. A director elected
to fill a newly created directorship shall serve until the next succeeding
annual meeting of shareholders and until his or her successor shall have been
elected or qualified.
5. ANNUAL AND SPECIAL MEETINGS. Annual meetings of the directors shall be
held immediately after the annual meeting of the shareholders; and regular and
special meetings of the directors may be held at such times and places, either
within or without Connecticut, as, in the opinion of the president or a majority
of the directors, the interests of the Corporation shall require, reasonable
notice having been given thereof. The directors may choose from among their
number a chairman to preside over meetings of the directors.
6. DESIGNATION OF CORPORATE DEPOSITORY AND BANKS. The board of directors
shall, from time to time, designate the bank or other depository in which the
funds of the Corporation shall be kept, and such funds shall be drawn, in the
name of the Corporation, by check signed by such officer, officers or other
agents as shall be expressly authorized for that purpose by vote or resolution
of the board of directors. Notes given by and in the name of the Corporation
shall be executed by such officer of officers as shall be expressly authorized
for that purpose by the
4
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board of directors.
7. REMOVAL OF DIRECTORS. Any director may be removed with our without
cause at any time by the act of the shareholders; and the vacancy in the board
of directors caused by any such removal may be filled by the act of the
shareholders.
8. EXECUTIVE AND OTHER COMMITTEES. The board of directors may designate
two or more directors to constitute an executive committee or other committees,
which committees shall have and may exercise such authority as is delegated to
them by the board of directors.
ARTICLE V
OFFICERS
1. NUMBER, QUALIFICATIONS, TERMS AND ELECTION. The officers of the
Corporation shall consist of a president and secretary. The directors may, in
addition to the foregoing officers, appoint one or more vice presidents, one or
more treasurers, one or more assistant treasurers, and one or more assistant
secretaries. The directors shall appoint the officers of the Corporation and
officers need not be shareholders, and need not be residents of Connecticut. Any
two or more officers may be held by the same person except the offices of
president and secretary. Officers shall be appointed at the annual directors'
meeting for a term extending until the next annual directors meeting. Each
officer shall hold office for the term for which he or she is appointed and
until his successor has been appointed and qualified. Any vacancy or vacancies
occurring in any office of the Corporation may be filled for the unexpired term
by action of a majority of the remaining directors in office, though such
remaining directors are less than a quorum, though the number of directors at
the meeting are less than a quorum, and though such majority is less than a
quorum.
2. PRESIDENT. It shall be the duty of the president to be the chief
executive officer of the Corporation, and he shall have general supervision over
the business of the Corporation, subject to the control of the board of
directors. He shall preside at each meeting of shareholders. He shall see that
all orders and resolutions of the board are carried into effect. In general he
shall perform all duties incident to the office of president and such other
duties as may from time to time be assigned to him, or specifically required to
be performed by him, by these bylaws, by the board of directors or by law.
3. VICE-PRESIDENT. It shall be the duty of the vice-president, in the
absence of the president, to
5
<PAGE>
perform the president's duties, and such officer shall also perform such other
duties as may be assigned to him, or specifically required to be performed by
him, by these bylaws, by the board of directors or by law.
4. SECRETARY. It shall be the duty of the secretary to act as secretary of
and keep the minutes of all meetings of the board of directors and of
shareholders; to cause to be given notice of all meetings and shareholders and
directors; to be custodian of the seal of the Corporation and to affix the seal,
or cause it to be affixed, to all certificates for shares of stock of the
Corporation and to all documents, the execution of which on behalf of the
Corporation under its seal, shall have been specifically or generally authorized
by the board of directors; to have charge of the record of shareholders and also
of the other books, records and papers of the Corporation relating to its
organization as a Corporation, and to see that the reports, statements and other
documents required by law are properly kept or filed; and in general, to perform
all the duties incident to the offices of secretary and such other duties as may
from time to time be assigned to him by the board of directors or by the
president.
5. ASSISTANT SECRETARY. It shall be the duty of the assistant secretary,
in the absence of the secretary, to perform the secretary's duties, and such
officer shall also perform such other duties as may be assigned to him, or
specifically required to be performed by him, by the board of directors or by
the president.
6. TREASURER. It shall be the duty of the treasurer to receive and keep
the cash, funds and notes belonging to the Corporation, and enter regularly in
books kept for that purpose all monies received and disbursed on account of the
Corporation, which books shall at all reasonable times be open to the inspection
of the shareholders of the Corporation. He shall also perform such other duties
as may be assigned to him, or specifically required to be performed by him, by
the board of directors or by the president.
7. ASSISTANT TREASURER. It shall be the duty of the assistant treasurer,
in the absence of the treasurer, to perform the treasurer's duties, and such
officer shall also perform such other duties as may be assigned to him, or
specifically required to be performed by him, by the board of directors or by
the president.
8. REMOVAL. Any officer, agent or employee of the corporation may be
removed, with or without cause, at any time by resolution adopted by the board
of directors at a special meeting of the board called for that purpose.
6
<PAGE>
ARTICLE VI
SEAL
1. The seal of the Corporation shall be in the form imprinted hereon.
ARTICLE VII
AMENDMENTS
1. AMENDMENTS AND NOTICE. Bylaws of the Corporation may be adopted,
repealed, or amended only by the shareholders and such adoption, repeal, or
amendment of bylaws by shareholders shall require the affirmative note of a
majority of the voting power of shares entitled to vote thereon. No bylaws shall
be adopted, and no existing bylaws shall be amended or repealed, unless written
notice of such proposed action shall have been given in the call for the meting
of shareholders at which such adoption, amendment or repeal is to be acted upon.
ARTICLE VIII
ISSUANCE OF STOCK BY BOARD OF DIRECTORS
1. The board of directors may issue at one time, or from time to time, all
or a portion of the unissued shares of the authorized capital stock of the
Corporation, as in the opinion and at the discretion of the board may be deemed
for the Corporation's best interests, and the board of directors may accept in
payment of such shares as may be issued, such consideration as from time to time
shall be determined by the board of directors and as may be permitted by law.
ARTICLE IX
BOOKS
1. BOOKS AND RECORDS. There shall be kept correct and complete books and
records of account and minutes of the proceedings of the corporation's
incorporators, shareholders and directors. There shall also be maintained at the
principal office of the Corporation a record of the Corporation's shareholders,
giving the names and addresses of all shareholders and the number and class of
shares held by each. At intervals of not more than twelve months, the
Corporation shall prepare a balance sheet showing its financial condition as of
a date not more than four months prior thereto and a profit and loss statement
shall be deposited at the principal office of the Corporation and shall
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<PAGE>
be kept for at least ten years from such date.
ARTICLE X
FISCAL YEAR
1. FISCAL YEAR. The fiscal year of the Corporation shall end on the last
day of December in each year.
ARTICLE XI
DEFINITIONS
All definitions contained in the section on "Definitions" in the "General
Provisions" of the Connecticut Stock Corporation Act, unless the context
otherwise requires, shall be applicable to such words and phrases as appear
herein.
Dated at Hartford, Connecticut as of this 31st day of August, 1994.
/s/ James P. Sandler
--------------------------
James P. Sandler
Incorporator
8
<PAGE>
CERTIFICATE OF INCORPORATION
OF
CONTEMPORARY GROUP ACQUISITION CORP.
(Pursuant to Section 101 and 102 of the
General Corporation Law of the State of Delaware)
The Undersigned, in order to form a corporation pursuant to Sections 101
and 102 of the General Corporation Law of the State of Delaware, does hereby
certify as follows:
FIRST: The name of the corporation (the "Corporation") is Contemporary
Group Acquisition Corp.
SECOND: The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801. The name of the registered agent of the Corporation in the State of
Delaware at such address is The Corporation Trust Company.
THIRD: 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.
FOURTH: The total number of shares of capital stock which the corporation
shall have the authority to issue is 1,000 shares of common stock, par value
$0.01 per share.
FIFTH: The name and mailing address of the sole incorporator is as
follows:
NAME ADDRESS
---- -------
Rishi A. Varma c/o Rosenman & Colin LLP
575 Madison Avenue
New York, NY 10022-2585
SIXTH: The board of directors of the Corporation shall have the power to
adopt, amend and repeal the bylaws of the Corporation.
SEVENTH: Election of directors need not be by written ballot.
EIGHTH: No director of the corporation shall be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director; provided, however, that nothing in this Article EIGHTH shall
eliminate or limit the liability of any director (I) for 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
knowing violation of law, (iii) under Section 174 of the General Corporation Law
of the State of Delaware, or (iv) for any transaction from which the director
derived an improper personal benefit. Neither the amendment nor repeal of this
Article EIGHTH, nor the adoption of any provision of the Certificate of
Incorporation inconsistent with this Article EIGHTH in respect of any matter
occurring, or any cause of action, suit or claim that, but for this Article
EIGHTH, would accrue or arise, prior to such amendment, repeal or adoption of an
inconsistent provision.
NINTH: The Corporation shall, to the fullest extent permitted by the
provisions of Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons whom it shall have the power to indemnify under said section from and
against any and all
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<PAGE>
expenses, liabilities, or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee, or agent and shall inure to
the benefit of the heirs, executors, and administrators of such a person..
IN WITNESS WHEREOF, I have hereunto signed my name and affirm, under
penalty of perjury, that this Certificate is my act and deed and that the facts
stated herein are true this 12th day of January 1998.
/s/: Rishi A. Varma
---------------------------
Rishi A. Varma
Sole Incorporator
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<PAGE>
STATE OF MISSOURI . . OFFICE OF SECRETARY OF STATE
JUDITH K. MORIARTY, Secretary of State
ARTICLES OF INCORPORATION
Honorable Judith K. Moriarty /s/ Judith K. Moriarty
Secretary of State
State of Missouri
Jefferson City, MO 65101
The undersigned natural person of the age of eighteen (18)
years or more for the purpose of forming a corporation under The General and
Business Corporation Law of Missouri hereby adopts the following Articles of
Incorporation:
ARTICLE ONE
The name of the Corporation is: Innovative Training and Education
Concepts Corp.
ARTICLE TWO
The address, including street and number, if any, of the Corporation's
initial registered office in this State is 120 S. Central, 10th Floor, St.
Louis, MO 63105 and the name of its initial registered agent at such address is
Mark J. Temkin.
ARTICLE THREE
The aggregate number, class and par value, if any, of shares which the
Corporation shall have authority to issue shall be a total of thirty thousand
(30,000) shares of common stock, each share of the Corporation having a par
value of $1.00.
The preferences, qualifications, limitations, restrictions, and the
special or relative rights, including convertible rights, if any, in respect of
the shares of each class are as follows:
None except as otherwise set forth above.
ARTICLE FOUR
The extent, if any, to which the preemptive right of a shareholder to
acquire additional shares is limited or denied:
No shareholder shall have any preemptive right to acquire any
additional shares of stock in the Corporation, whatsoever.
ARTICLE FIVE
The name and place of residence of each Incorporator is as follows:
Richard N. Tishler, 12545 F Lighthouse Way, St. Louis, Missouri 63141.
<PAGE>
ARTICLE SIX
The number of Directors to constitute the first Board of Directors is
two (2). Thereafter the number of Directors shall be fixed by, or in the manner
provided in, the By-Laws. Any changes in the number of Directors will be
reported to the Secretary of State within thirty (30) calendar days of such
change.
ARTICLE SEVEN
The duration of the Corporation is Perpetual.
ARTICLE EIGHT
The Corporation is formed for the following purposes:
To establish, maintain, promote, provide, and conduct educational
seminars, courses and programs, and to conduct any and all activities, services
and/or businesses related thereto or associated therewith.
To own, hold, build, construct, and erect buildings, and structures of
all types and to buy, sell, lease, own, manage, operate, maintain, repair, or
store real and personal property of all kinds; to purchase, take, receive or
otherwise acquire, hold, own, pledge, transfer or otherwise dispose of its own
shares subject; to the provisions of Section 351.390 of the Revised Statutes of
Missouri (1986) and Amendments thereto; to execute deeds, mortgages, deeds of
trust, contracts and other types of written instruments; to acquire, hold, own,
buy, sell, transfer and otherwise dispose of patents and patent rights,
trademarks and trade names, copyrights, licenses, franchises, permits and other
evidences of right; to engage in any and all businesses and activities
permitted by law; to have and to exercise all powers necessary or incident to
carrying out its corporate purposes; to exercise all other powers permitted by
law, and to possess and enjoy all rights and powers which now or at any time
hereafter may be granted to or exercised by a corporation of this character; to
exercise all of the powers granted under the provisions of Section 351.385 of
the Revised Statutes of Missouri (1986) and Amendments thereto. The foregoing
clauses shall be construed both as objects and powers, and it is hereby
expressly provided that the foregoing enumeration of specific powers shall not
be held to limit or restrict in any manner the powers of this Corporation, nor
shall this Corporation be required to exercise all such powers at any one time.
ARTICLE NINE
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized: To make, alter or
repeal the By-laws of the Corporation.
ARTICLE TEN
Except as otherwise specifically provided by statute, all powers of
management and direct control of the Corporation shall be vested in the Board
of Directors.
ARTICLE ELEVEN
No contract or other transaction between this Corporation and any
other firm or corporation shall be affected or invalidated by reason of the
fact that any of the Directors or Officers of this Corporation are interested
in or are members, shareholders, directors or officers of such other firm or
corporation; and any Director or Officer of this Corporation may be a party to
or may be interested in any contract or transaction of this Corporation in
which this Corporation is interested and no such contract or transaction shall
be affected or invalidated thereby; and each and every person who may become a
Director of Officer of this Corporation is hereby relieved from any liability
as a result of holding any such position that might otherwise exist from
contracting or transacting business with this Corporation for
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<PAGE>
the benefit of such Director or Officer or of any person, firm, association or
corporation in which such Director or Officer may be in anyway interested.
ARTICLE TWELVE
The private property of the Shareholders of this Corporation shall not
be subject to the payment of corporate debts, except to the extent of any
unpaid balance of subscriptions for shares.
ARTICLE THIRTEEN
Each Director, Officer, employee or agent, or former Director,
Officer, employee or agent of this Corporation and his or her legal
representatives, shall be indemnified by the Corporation against liabilities,
expenses, counsel fees and costs reasonably incurred by such Director, Officer,
employee or agent or his or her estate in connection with, or arising out of,
any action, suit, proceeding or claim in which he or she is made a party by
reason of his or her being or having been such Director, Officer, employee or
agent; and any person who, at the request of this Corporation, served as
director, officer, employee or agent of another corporation in which this
Corporation owned corporate stock and his or her legal representative shall in
like manner be indemnified by this Corporation if such person acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the Corporation; or had no reasonable cause to believe
his or her conduct was unlawful. However, in neither case shall the Corporation
indemnify such Director, Officer, employee or agent with respect to any matters
as to which he or she shall be finally adjudged in any such action, suit or
proceeding to have been liable for negligence or misconduct in the performance
of his or her duties as such Director, Officer, employee or agent unless the
court in which the action or suit was brought determines upon application that
despite the adjudication of liability and in view of all the circumstances of
the case, the person is fairly and reasonably entitled to indemnification for
such expenses which the court shall deem proper. The indemnification herein
provided for, however, shall apply also in respect of any amount paid in
compromise or settlement of any such action, suit or proceeding or claim
asserted against such Director, Officer, employee or agent (including expenses,
counsel fees and costs reasonably incurred in connection therewith), provided
the Board of Directors shall have first approved such proposed compromise
settlement by a majority vote of the Board of Directors and determined that the
Director, Officer, employee or agent involved was not guilty of negligence or
misconduct; but, in taking such action, any Director involved shall not be
qualified to vote thereon, and if for this reason a quorum of the Board cannot
be obtained to vote on such matters, it shall be determined by a Committee of
three (3) or more persons appointed by the Shareholders at a duly called
special meeting or a regular meeting. In determining whether or not a Director,
Officer, employee or agent was guilty of negligence or misconduct in relation
to any such matter, the Board of Directors or Committee, as the case may be,
may rely conclusively upon an opinion of independent counsel selected by such
Board or Committee. The right to indemnification herein provided shall not be
exclusive of any other rights not inconsistent herewith to which such Director,
Officer, employee or agent may be entitled under the Articles of Incorporation,
the By-Laws of the Corporation, any agreement with the Corporation, vote of the
Shareholders or disinterested Directors under Section 351 of the Missouri
Corporation Laws of 1986, as amended, or otherwise.
ARTICLE FOURTEEN
A Stockholder of the Corporation shall be entitled to cumulative
voting of such Stockholder's shares for the election of Directors.
IN WITNESS WHEREOF, these Articles of Incorporation have been signed
this 2nd day of November, 1994.
/s/ Richard Tishler
----------------------------
Richard N. Tishler
Incorporator
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<PAGE>
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS )
I, a Notary Public in and for said State, do hereby certify that on
the 2nd day of November, 1994, personally appeared before me, Richard N.
Tishler, who being by me first duly sworn, declared that he is the person who
signed the foregoing document as Incorporator, and that the statements therein
contained are true.
/s/ Shannon Kister
-----------------
Shannon P. Kister
Notary Public
My Commission Expires: January 20, 1996
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<PAGE>
AMENDMENT OF ARTICLES OF INCORPORATION
OF INNOVATIVE TRAINING AND EDUCATION CONCEPTS CORP.
(To be submitted in duplicate)
Pursuant to the provisions of The General and Business Corporation Law of
Missouri, the undersigned Corporation certifies the following:
1. The present name of the Corporation is Innovative Training and Education
Concepts Corp.
2. The name under which it was originally organized was Innovative Training
and Education Concepts Corp.
3. The following amendment to Innovative Training and Education Concepts
Corp.'s Articles of Incorporation was adopted by the sole shareholder of
Innovative Training and Education Concepts Corp. on May 12, 1996:
ARTICLE ONE shall be deleted in its entirety and replaced with
the following which shall henceforth be read as ARTICLE ONE:
ARTICLE ONE
The name of the Corporation is: Contemporary Group, Inc."
4. Of the 100 shares outstanding, 100 of such shares were entitled to vote on
such amendments.
5. The number of outstanding shares of any class entitled to vote thereon as
a class were as follows:
Class Number of Outstanding Shares
Common 100
6. The number of shares voted for and against the amendments were as follows:
Class No. Voted For No. Voted Against
Common 100 0
<PAGE>
IN WITNESS WHEREOF, the undersigned, Steven F. Schankman and Irving P.
Zuckerman, each as Co-President of Innovative Training and Education Concepts
Corp. have executed this instrument and its Secretary, Carol M. Burton, has
affixed its corporate seal hereto and attested said seal effective as of the
12th day of May, 1996.
Innovative Training and
Education Concepts Corp.
ATTEST:
/s/ Carol M. Burton By: /s/ Steven F. Schankman
- --------------------------------- ----------------------------
Carol M. Burton, Secretary Steven F. Schankman
Co-President
ATTEST:
/s/ Carol M. Burton By: /s/ Irving P. Zuckerman
- --------------------------------- --------------------------------
Carol M. Burton, Secretary Irving P. Zuckerman
Co-President
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<PAGE>
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS )
I, CAROL M. BURTON, a Notary Public, do hereby certify that
effective as of the 12th day of May, 1996, personally appeared before me Steven
F. Schankman who, being by me first duly sworn, declared that he is the
Co-President of Innovative Training and Education Concepts Corp., and that he
signed the foregoing documents as President of Innovative Training and
Education Concepts Corp., and that the statements therein contained are true.
/s/ Carol Burton
-----------------
Carol M. Burton
Notary Public
My Commission Expires: (Notarial Seal)
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS )
I, CAROL M. BURTON, a Notary Public, do hereby certify that
effective as of the 12th day of May, 1996, personally appeared before me Irving
P. Zuckerman who, being by me first duly sworn, declared that he is the
Co-President of Innovative Training and Education Concepts Corp., and that he
signed the foregoing documents as President of Innovative Training and
Education Concepts Corp., and that the statements therein contained are true.
/s/ Carol Burton
-----------------------
Carol M. Burton
Notary Public
My Commission Expires: (Notarial Seal)
<PAGE>
No. 00237955
STATE OF MISSOURI
JAMES C. KIRKPATRICK, Secretary of State
Corporation Division
Certificate of Incorporation
WHEREAS, duplicate originals of Articles of Incorporation of CONTEMPORARY
MARKETING, INC. have been received and filed in the office of the Secretary of
State, which Articles, in all respects, comply with the requirements of The
General and Business Corporation Law:
NOW, THEREFORE, I, JAMES C. KIRKPATRICK, Secretary of State of the State of
Missouri, by virtue of the authority vested in me by law, do hereby certify and
declare CONTEMPORARY MARKETING, INC. a body corporate, duly organized this day
and that it is entitled to all rights and privileges granted corporations
organized under The General and Business Corporation Law; that the address of
its initial Registered Office in Missouri is 120 S. Central Avenue, Suite 1028,
Clayton, Mo. 63105; that its period of existence is Perpetual; and that the
amount of its Authorized Shares is 30,000 common @$1.00.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed the GREAT SEAL of
the State of Missouri, at the City of Jefferson, this 15th day of January 1982.
/s/ James C. Kirkpatrick
------------------------
Secretary of State
RECEIVED OF: CONTEMPORARY MARKETING, INC. Fifty-three Dollars and no/100
Dollars, $53.00. For Credit of General Revenue Fund, on Account of Incorporation
Tax and Fee.
/s/ James C. Kirkpatrick
------------------------
Secretary of State
<PAGE>
STATE OF MISSOURI...OFFICE OF SECRETARY OF STATE
JAMES C. KIRKPATRICK, Secretary of State
ARTICLES OF INCORPORATION
Honorable James C. Kirkpatrick
Secretary of State
State of Missouri Jefferson City, MO 65101
The undersigned natural person(s) of the age of eighteen years or more for
the purpose of forming a corporation under The General and Business Corporation
Law of Missouri adopt the following Articles of Incorporation:
ARTICLE ONE
The name of the corporation is: CONTEMPORARY MARKETING, INC.
ARTICLE TWO
The address, including street and number, if any, of the corporation's
initial registered office in this state is: 120 S. Central Avenue, Suite 1028,
Clayton, Missouri 63105 and the name of its initial agent at such address is:
Richard M. Riezman
ARTICLE THREE
The aggregate number, class and par value, if any, of shares which the
corporation shall have authority to issue shall be: 30,000 shares of common
stock with a par value of $1.00 per share. The preferences, qualifications,
limitations, restrictions, and the special or relative rights, including
convertible rights, if any, in respect of the shares of each class are as
follows:
None
ARTICLE FOUR
The extent, if any, to which the preemptive right of a shareholder to
acquire additional shares is limited or denied:
None
ARTICLE FIVE
The name and place of residence of each incorporator is as follows:
Name Street City
Richard M. Riezman 120 South Central Clayton, Missouri
ARTICLE SIX
X The number of directors to constitute the first board of directors is two.
- --- Thereafter the number of directors shall be fixed by, or in the manner
provided in the bylaws. Any changes in the number will be reported to the
Secretary of State within thirty calendar days of such change.
or
- 2 -
<PAGE>
___ The number of directors to constitute the board of directors is_____. (The
number of directors to constitute the board of directors must be stated
herein if there are to be less than three directors. The persons to
constitute the first board of directors may, but need not, be named).
ARTICLE SEVEN
The duration of the corporation is perpetual.
ARTICLE EIGHT
The corporation is formed for the following purposes: To buy, sell, at
wholesale and retail, exchange, lease, let, grant or take licenses in respect
of, improve, develop, repair, manage and maintain personal property and real
property of every kind, corporeal and incorporeal, and every kind of estate,
right, or interest therein or pertaining thereto; to construct, improve, repair,
raze, and wreck buildings, structures, and works of all kinds, for itself or for
others; to buy, sell, and deal in building materials and supplies; to advance
loans secured by mortgages or other liens on real estate; to act as loan broker;
Generally to do everything suitable, proper and conducive to the successful
conduct of a real estate agency and brokerage business in all its branches and
departments; To transport, convey and deliver, as a private carrier, all kinds
and character of commodities, for the company or for others, and to do all
things necessary, convenient or incidental thereto; To borrow money and for such
purposes, to execute notes, bonds, debentures or any other form of evidence of
indebtedness, and to secure the payment of the same by mortgage, deed of trust
or other form of encumbrance, pledge, or other form of hypothecation; To execute
deeds, mortgages, deeds of trust, contracts and other types of written
instruments; To purchase, acquire, own, hold, sell, assign, transfer or
otherwise dispose of, mortgage, pledge or otherwise encumber shares of stock of
this company or any other corporation or corporations of this state or any other
state, county, nation or government, or any interest therein, and while owner
thereof to exercise all rights, powers, and privileges of ownership pertaining
thereto; To loan or otherwise invest on such terms and conditions as its Board
of Directors may authorize; To buy or otherwise acquire, sell or otherwise
dispose of, pledge or otherwise hypothecate stocks, bonds, notes, debentures,
accounts receivable and all other types of securities, evidences of indebtedness
or chooses in action; To sell or otherwise dispose of stocks, bonds, debentures,
or other securities issued by the company, or any other corporation, and to pay
compensation for services rendered in connection therewith; To acquire, own,
hold, buy, sell, transfer and otherwise dispose of patents and patent rights,
trademark and tradenames, copyrights, licenses, franchises, permits and other
evidences of right; To acquire, deal and purchase, own, hold, lease, mortgage or
otherwise encumber, develop, exploit and dispose of mineral rights or royalty
interests of every kind. The object and purposes for which the corporation is
formed and the nature of business which may be transacted, promoted and carried
on by the corporation are to do any and all of the things herein mentioned as
fully and to the same extent as natural persons might or could do.
IN WITNESS WHEREOF, these Articles of Incorporation have been signed this
12th day of January, 1982
/s/ illegible
------------------------
------------------------
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<PAGE>
STATE OF MISSOURI )
)ss.
COUNTY OF ST. LOUIS)
I, Frederick J. Berger, a notary public, do hereby certify that on the
12th day of January, 1982, personally appeared before me, Richard M. Riezman,
who being by me first duly sworn, declared that he is the person who sign
foregoing document as incorporator, and that the statements herein contained are
true.
/s/ Frederick J. Berger
------------------------------------
Frederick J. Berger
Notary Public
My Commission Expires:
November 14, 1984
- 4 -
<PAGE>
STATE OF MISSOURI
JAMES C. KIRKPATRICK, Secretary of State
CORPORATION DIVISION
Statement of Change of Registered Agent or
Registered Office by Foreign or Domestic Corporations
INSTRUCTIONS
There is a $3.00 fee for filing this statement. It must be filed in
DUPLICATE. The statement should be sealed with the corporate seal. If it does
not have a seal. write "no seal" where the seal would otherwise appear.
The registered office may be, but need not be, the same as the place of
business of the corporation. but the registered office and the business address
of the agent must be the same. The corporation cannot act as its own registered
agent.
Any subsequent change in the registered office or agent must be
immediately reported to the Secretary of State. These forms are available upon
request from the Office of the Secretary of State.
To: SECRETARY OF STATE
P.O. Box 778
Jefferson City, Missouri 65102 Charter No. 00237955
The undersigned corporation, organized and existing under the laws of the
State of Missouri for the purpose of changing its registered agent or its
registered office, or both, in Missouri as provided by the provisions of "The
General and Business Corporation Act of Missouri," represents that:
1. The name of the corporation is CONTEMPORARY MARKETING INC.
2. The name of its PRESENT registered agent (before change) is Steven F.
Schankman.
3. The name of the new registered agent is Steven F. Schankman.
4. The address, including street number, if any, of its PRESENT registered
office (before change) is 680 Craig Rd., Penthouse Suite, Creve Coeur, MO
63141.
5. Its registered office (including street number, if any change is to be
made) is hereby CHANGED to 1401 S. Brentwood, 7th floor, St. Louis, MO
63144.
6. The address of its registered office and the address of the business
office of its registered agent, as changed will be identical.
7. Such change was authorized by resolution duly adopted by the board of
directors.
IN WITNESS WHEREOF, the undersigned corporation has caused this report to be
executed in its name by its PRESIDENT, attested by its SECRETARY this 29th day
of October, 1985.
Contemporary Marketing Inc.
---------------------------
Name of Corporation
By: /s/ Steven F. Schankman
-----------------------
Attest:
Carol M. Burton
<PAGE>
State of Missouri )
)ss.
County of St. Louis)
I, Nancy E. Bise, a Notary Public, do hereby certify that on the 29th day
of October, 1985, personally appeared before me Steven F. Schankman who declares
he is President of the corporation. executing the foregoing document, and being
first duly sworn. acknowledged that he signed the foregoing document in the
capacity therein set forth and declared that the statements therein contained
are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
before written.
Nancy E. Bise
-------------
Notary Public
- 2 -
<PAGE>
State of Missouri ... Office of Secretary of State
ROY D. BLUNT, Secretary of State
STATEMENT OF CHANGE OF REGISTERED AGENT
OR REGISTERED OFFICE
INSTRUCTIONS
The filing fee for this change is $5.00.
Change must be filed in DUPLICATE.
The registered office may be, but need not be, the same as the place of business
of the corporation or limited partnership, but the registered office and the
business address of the agent must be the same. The corporation or limited
partnership cannot act as its own registered agent. Any subsequent change in the
registered office or agent must be immediately reported to the Secretary of
State. Forms are available upon request.
The undersigned corporation or limited partnership, organized and existing
under the laws of the State of for the purpose of changing its registered agent
"The General and Business Corporation Act of Missouri," or the "Missouri.
Uniform Limited Partnership Law," represents that:
(1) The name of the corporation/ltd. partnership is: CONTEMPORARY MARKETING
INC.
(2) The name of its registered agent before this change is: Steven F.
Schankman.
(3) The name of the new registered agent is: Steven F. Schankman.
(4) The address, including street number, if any, of its registered office
before this change is: 680 Craig Rd., Penthouse Suite, Creve Coeur, MO
63141.
(5) Its registered office (including street number, if any change is to be
made) is hereby CHANGED TO: 1401 S. Bentwood, 7th fl., St. Louis, MO
63144.
(6) The address of its registered office and the address of the business
office of its registered agent, as changed will be identical.
(7) Such change was authorized by resolution duly adopted by the board of
directors of the corporation or by the limited partnership.
IN WITNESS WHEREOF, the undersigned corporation or limited partnership has
caused this report to be executed in its name by its PRESIDENT or VICE PRESIDENT
of the corporation, or GENERAL PARTNER of the limited partnership, and attested
to by the assistant secretary if a corporation on the 15th day of April, 1991.
CONTEMPORARY MARKETING CORP.
------------------------------------------
Name of corporation or limited partnership
(CORPORATE SEAL)
If no seal, state "none" By (ILLEGIBLE)
---------------------------------------
President or Vice President of corporation
NONE or
General Partner of limited partnership
Attest:
Carol Burton
- --------------------------------
Secretary or Assistant Secretary
of corporation
<PAGE>
State of Missouri
County of St. Louis
I, Carol M. Burton, a Notary Public, do hereby certify that on the 5th day
of April, 1991 personally appeared before me Steven F. Schankman who declares
he/she is the President or Vice President of the corporation, or a General
Partner of the limited partnership, executing the foregoing document, and being
first duly sworn, acknowledged that he/she signed the foregoing document in the
capacity therein set forth and declared that the statements therein contained
are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
before written.
Carol Burton
------------
Notary Public
(Notarial Seal)
My commission expires 9-8-92
------
SECRETARY OF STATE
P.O. BOX 778
JEFFERSON CITY, MO 65102
- 2 -
<PAGE>
BY-LAWS
OF
CONTEMPORARY MARKETING, INC.
ARTICLE I
OFFICES
The principal office of the Corporation is in St. Louis, Missouri. The
Corporation may have such other offices, either within or without the State of
Missouri, as the Board of Directors may designate or as the business of the
Corporation may require from time to time.
ARTICLE II
SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of the Shareholders
shall be held on the second Thursday in the month of December in each year, at
the hour of 2:00 p.m., for the purpose of electing Directors and for the
transaction of such other business as may come before the meeting. If the day
fixed for the annual meeting shall be a legal holiday in the State of Missouri,
such meeting shall be held on the next succeeding business day. If the election
of Directors shall not be held on the day designated herein for any annual
meeting of the Shareholders, or at any adjournment thereof, the Board of
Directors shall cause the election to be held on a specified date not longer
than ninety (90) days from the date of adjournment.
SECTION 2. Special Meetings. Special meetings of the Shareholders, for
any purpose or purposes, unless otherwise prescribed by statute, may be called
by the President or by the Board of Directors, or shall be called by the
President at the request of the holders of not less than fifty-one percent
(51%) of all the outstanding shares of the Corporation entitled to vote at the
meeting.
SECTION 3. Place of Meeting. All meetings of the Shareholders shall be
at the office of the Corporation or at such other place within or without the
State of Missouri as may be designated by the President or the Board of
Directors. The Board of Directors may designate any place, either within or
without the State of Missouri unless otherwise prescribed by statute, as the
place of meeting for any annual meeting or for any special meeting called by
the Board of Directors. A waiver of notice signed by the majority of
Shareholders entitled to vote at a meeting may designate any place, either
within or without the State of Missouri.
<PAGE>
SECTION 4. Notice of Meeting. Unless otherwise prescribed by statute,
written notice stating the place, day and hour of the meeting and, in the case
of a special meeting, the purpose or purposes for which the meeting is called,
shall, unless otherwise prescribed by statute, be delivered not less than ten
(10) days nor more than fifty (50) days before the date of the meeting, either
personally or by mail, by or at the direction of the President, or the
Secretary, or the officers or persons calling the meeting to each Shareholder
of record entitled to vote at such meeting. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail, addressed to
the Shareholder at the address as it appears on the stock transfer books of the
Corporation, with postage thereon prepaid.
SECTION 5. Closing of Transfer Books or Fixing Record Date. For the
purposes of determining Shareholders entitled to notice of or to vote at any
meeting of Shareholders or any adjournment thereof, or Shareholders entitled to
receive payment of any dividend, or in order to make a determination of
Shareholders for any other proper purpose, the Board of Directors of the
Corporation shall have the power to close the transfer books of the Corporation
for a period not exceeding fifty (50) days of any meeting of the Shareholders
or the date of payment of any dividend or the date from allotment of rights or
the date when any change or conversion or exchange of shares shall go into
effect. If the stock transfer books are closed for the purpose of determining
Shareholders entitled to notice of or to vote at a meeting of Shareholders,
such books shall be closed for at least ten (10) days immediately preceding
such meeting. In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the record date for any such
determination of Shareholders, such date in any case to be not more than fifty
(50) days and, in case of a meeting of Shareholders, not less than ten (10)
days, prior to the date on which the particular action requiring such
determination of Shareholders is to be taken. If the stock transfer books are
not closed and no record date is fixed for either the determination of
Shareholders entitled to notice of or to vote at a meeting of Shareholders, or
for the determination of Shareholders entitled to receive payment of a
dividend, only the Shareholders who are Shareholders of record at the close of
business on the twentieth (20th) day preceding the date of the meeting shall be
entitled to notice of and to vote at the meeting. When a determination of
Shareholders entitled to vote at any meeting of Shareholders has been made as
provided in this Section, such determination shall apply to any adjournment
thereof
SECTION 6. Voting Lists. The officer having charge of the stock
transfer books for shares of the Corporation shall make, at least ten (10) days
prior to each meeting of the Shareholders, a complete list of the
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<PAGE>
Shareholders entitled to vote at each meeting of Shareholders or any
adjournment thereof. Said list shall be arranged in alphabetical order, stating
the address of and the number of shares held by each Shareholder. Such list,
for a period of ten (10) days prior to such meeting, shall be produced and kept
on file at the registered office of the Corporation and shall be subject to the
inspections of any Shareholder during the whole time of the meeting for the
purposes thereof
SECTION 7. Quorum. A majority of the outstanding shares of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of Shareholders. If less than a quorum of the
outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting without further notice. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed. The Shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
Shareholders to leave less than a quorum.
SECTION 8. Proxies. At all meetings of Shareholders, a Shareholder may
vote in person or by proxy executed in writing by a Shareholder or by the
Shareholder's duly authorized attorney-in-fact. Such proxy shall be filed with
the Secretary of the Corporation before or at the time of the meeting. No proxy
shall be valid after eleven (11) months from the date of its execution, unless
otherwise provided in the proxy.
SECTION 9. Voting of Shares. Subject to the provisions of Section 12
of this Article II, each outstanding share entitled to vote shall be entitled
to one vote upon each matter submitted to a vote at a meeting of Shareholders.
SECTION 10. Voting of Shares by Certain Holders. Shares standing in
the name of another corporation, foreign or domestic, may be voted by such
officer, agent or proxy as the by-laws of that corporation may prescribe, or,
in the absence of such provision, as the board of directors of that corporation
may determine.
Shares held by an administrator, executor, guardian or conservator may
be voted by such person, either in person or by proxy, without a transfer of
such shares into such person's name. Shares standing in the name of a trustee
may be voted by such trustee, either in person or by proxy, but no trustee
shall be entitled to vote shares held by such trustee without a transfer of
such shares into such trustee's name.
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<PAGE>
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into such receiver's name if
authority so to do be contained in an appropriate order of the court by which
such receiver was appointed.
A Shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Shares of its own stock belonging to the Corporation shall not be
voted, directly or indirectly, at any meeting, and shall not be counted in
determining the total number of outstanding shares at any given time.
SECTION 11. Informal Action by Shareholders. Unless otherwise provided
by law, any action required to be taken at a meeting of the Shareholders, or
any other action which may be taken at a meeting of the Shareholders, may be
taken without holding a meeting if a consent in writing, setting forth the
action so taken, shall be signed by no less than a majority of all of the
Shareholders entitled to vote with respect to the subject matter thereof.
SECTION 12. Cumulative Voting. Unless otherwise provided by law, at
each election for Directors, every Shareholder entitled to vote at such
election shall have the right to vote, in person or by proxy, the number of
shares owned by such Shareholder for as many persons as there are Directors to
be elected and for whose election he or she has a right to vote, or to cumulate
his or her votes by giving one candidate as many votes as the number of such
Directors multiplied by the number of his or her shares shall equal, or by
distributing such votes on the same principal among any number of candidates.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of the Corporation
shall be managed by its Board of Directors.
SECTION 2. Tenure. Each Director shall hold office until the next
annual meeting of Shareholders or until his or her successor shall have been
elected and qualified.
SECTION 3. Place of Meeting. Regular and specific meetings of the
Board of Directors of the Corporation, or of any committee designated by the
Board of Directors, both regular and special, may be held at any
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<PAGE>
place either within or without the State of Missouri, and unless otherwise
designated as herein provided, shall be held at the office of the Corporation.
SECTION 4. First Meeting of Initial Board. The first meeting of each
newly named Board of Directors for the purposes of electing officers and
transacting such other business as may come before the meeting shall be held as
soon as conveniently possible upon the issuance of the Corporation's
Certificate of Incorporation. No notice of such organizational meeting of
Directors need be given, provided that a quorum shall be present. If, for any
reason, such meeting of the Directors is not or cannot be held as herein
prescribed, the officers may be elected at any meeting of the Directors
thereafter called for such purpose pursuant to these By-Laws.
SECTION 5. Regular Meetings. Regular meetings of the Board of
Directors may be held at such time and place as shall from time to time be
determined by resolution of the Board.
SECTION 6. Annual Meetings. Annual meetings of the Board of Directors
shall be held immediately after the final adjournment of the annual meeting of
the Shareholders.
SECTION 7. Notice of Regular Meetings. After the time and place of
regular meetings has been determined by a majority of Directors, no notice of
any other regular meetings need be given. Notice of any change in the time or
place of holding any regular meeting or any adjournment of a regular meeting
shall be given by mail or telegram not less than forty-eight (48) hours before
such meeting, to all Directors who were absent at the time such action was
taken.
SECTION 8. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the President or one (1)
Director. The person or persons authorized to call special meetings of the
Board of Directors may fix the time and place for holding any special meeting
of the Board of Directors provided that no special meeting be held outside the
County and/or City of the principal place of business without the consent of
all the members of the Board of Directors.
SECTION 9. Notice. Notice of any special meeting for any purpose or
purposes may be given by the President on five (5) days notice delivered
personally or mailed to each Director at his or her business address, or by
telegram. If mailed, such notice shall be deemed to be delivered when deposited
in the United States Mail so addressed, with postage thereon prepaid. If notice
be given by telegram, such notice shall be deemed to be delivered when the
-5-
<PAGE>
telegram is delivered to the telegraph company. Any Director may waive notice
of any meeting. The attendance of a Director at a meeting shall constitute a
waiver of notice of such meeting, except where a Director attends a meeting for
the express purpose of objecting to the transaction of any business threat
because the meeting has not been lawfully called or convened.
SECTION 10. Quorum. A majority of the Directors of the Corporation
shall constitute a quorum for the transaction of business at any meeting of the
Board of Directors, but if less than such majority is present at a meeting, a
majority of the Directors present may adjourn the meeting from time to time
without further notice.
SECTION 11. Manner of Acting. The act of the majority of the Directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
SECTION 12. Action Without a Meetings. Any action that may be taken by
the Board of Directors or any committee of the Board of Directors at a meeting
may be taken without a meeting if a consent in writing, setting forth the
action so to be taken, is signed by all of the members of the Board of
Directors or the committee, as the case may be. The Secretary shall file the
consents with the minutes of the meeting of the Board of Directors or of the
Committee, as the case may be.
SECTION 13. Vacancies. In case of death, resignation or
disqualification of one or more of the Directors, a majority of the remaining
Directors shall elect replacement Director(s) to fill such vacancy or
vacancies, who shall serve until the duly qualified successor(s) is (are)
elected at the next annual meeting of the Shareholders. A Director elected to
fill a vacancy shall serve until the next annual Shareholders' meeting.
SECTION 14. Removal. At a meeting called expressly for the purpose of
removal, one or more of the Directors or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares entitled to vote at a meeting of the Shareholders. If less than the
entire Board of Directors is to be removed, no one of the Directors may be
removed if the votes cast opposed to such Director's removal would be
sufficient to elect him or her if such votes were then cumulatively voted at an
election of the entire Board of Directors. Such meeting shall be held at the
registered office or principal business office of the Corporation.
SECTION 15. Compensation. By resolution of the Board of Directors,
each Director may be paid his or her expenses, if any, for attendance at each
meeting of the Board of Directors, and may be paid a stated salary as
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<PAGE>
Director or a fixed sum for attendance at each meeting of the Board of
Directors or both. No such payment shall preclude any Director from serving the
Corporation in any other capacity and receiving compensation therefor.
SECTION 16. Presumption of Assent. A Director of the Corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless such Director's dissent shall be entered in the minutes of the
meeting or unless such Director shall file a written dissent to such action
with the person acting as the Secretary of the meeting before the adjournment
thereof or shall forward such dissent by registered mail to the Secretary of
the Corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a Director who voted in favor of such action.
SECTION 17. Committees of Director. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one (1) or more
committees, each committee to consist of two (2) or more of the Directors of
the Corporation, which, to the extent provided in the resolution, shall have
and may exercise the powers of the Board of Directors in the management of the
business and affairs of the Corporation and may authorize the seal of the
Corporation to be affixed to all papers which may require it. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board of Directors. Each committee shall keep
regular minutes of its meetings and report the same to the Board of Directors
when required.
SECTION 18. Organization. The President, and in his or her absence the
Vice President, and in the absence of the President and all the Vice
Presidents, a Chairman pro tem, chosen by the Directors present, shall preside
at each meeting of the Directors and shall act as Chairman thereof. The
Secretary, and in his or her absence the Assistant Secretary, and in the
absence of the Secretary and the Assistant Secretary, a Secretary pro tem,
chosen by the Directors present shall act as Secretary of all meetings of the
Directors.
SECTION 19. Minutes and Statements. The Board of Directors shall cause
to be kept a complete record of its meetings and acts.
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<PAGE>
ARTICLE IV
OFFICERS
SECTION 1. Number. The officers of the Corporation shall be a
President, a Vice President, a Treasurer and a Secretary, each of whom shall be
elected by the Board of Directors. Such other officers and assistant officers
as may be deemed necessary may be elected or appointed by the Board of
Directors.
SECTION 2. Election and Term of Office. The officers of the
Corporation shall be elected by the Board of Directors at the Board's first
initial meeting and shall be elected thereafter by the Board of Directors at
the Board's annual meeting. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as conveniently
may be held. Each officer shall hold office until such officer's successor
shall have been duly elected and shall have qualified or until such officer's
death or resignation or until removal in the manner hereinafter provided.
SECTION 3. Removal. Any officer or agent appointed by the Board of
Directors may be removed by the Board of Directors whenever, in its judgment,
the best interests of the Corporation will be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the persons so
removed. Election or appointment of an officer or agent shall not of itself
create contract rights.
SECTION 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.
SECTION 5. President. The President shall be the principal executive
officer of the Corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the Corporation.
SECTION 6. Vice President. In the absence of the President or in the
event of his or her death, inability or refusal to act, the Vice President
shall perform the duties of the President, when so acting, shall have the
powers of and be subject to all the restrictions upon the President. The Vice
President shall perform such other duties as from time to time may be assigned
to him or her by the President or by the Board of Directors.
SECTION 7. Secretary. The Secretary shall: (a) keep the minutes of the
proceedings of the Shareholders and of the Board of Directors in one or more
books provided for that purpose; (b) see that all notices are duly given in
-8-
<PAGE>
accordance with the provisions of these By-Laws or as required by law; (c) be
custodian of the corporate records and of the seal of the Corporation and see
that the seal of the Corporation is affixed to all documents the execution of
which on behalf of the Corporation under its seal is duly authorized; (d) keep
a register of the post office address of each Shareholder which shall be
furnished to the Secretary of State by such Shareholder; (e) sign with the
President certificates for shares of the Corporation, the issuance of which
shall have been authorized by resolution of the Board of Directors; (f) have
general charge of the stock transfer books of the Corporation; and (g) in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him or her by the President or
by the Board of Directors.
SECTION 8. The Assistant Secretary. Each Assistant Secretary shall
assist the Secretary in the performance of his or her duties, and may at any
time perform any of the duties of the Secretary; in case of the death,
resignation, absence or disability of the Secretary, the duties of the
Secretary shall be performed by an Assistant Secretary, and each Assistant
Secretary shall have such other powers and perform such other duties as, from
time to time, may be assigned to him or her by the Board of Directors.
SECTION 9. Treasurer. The Treasurer shall: (a) have custody of and be
responsible for all funds and securities of the Corporation; (b) keep full and
accurate accounts of receipts and disbursements in the corporate books, and
deposit all such monies and other valuables in the name of and to the credit of
the Corporation in such banks, trust companies or other depositories as shall
be selected in accordance with the provisions of Article VI of these By-Laws;
and (c) in general perform all of the duties incident to the office of
Treasurer and such other duties as from time to time may be assigned to him by
the President or by the Board of Directors. If required by the Board of
Directors, the Treasurer shall give a bond for the faithful discharge of his or
her duties in such sum and with such surety or sureties as the Board of
Directors shall determine.
SECTION 10. The Assistant Treasurer. Each Assistant Treasurer shall
assist the Treasurer in the performance of his or her duties, and may at any
time perform any of the duties of the Treasurer, in case of the death,
resignation, absence or disability of the Treasurer, the duties of the
Treasurer shall be performed by an Assistant Treasurer, and each Assistant
Treasurer shall have such other powers and perform such other duties as, from
time to time, may be assigned to him or her by the Board of Directors.
-9-
<PAGE>
SECTION 11. Salaries. The salaries of the officers shall be fixed from
time to time by the Board of Directors, and no officer shall be prevented from
receiving such salary by reason of the fact that such officer is also a
Director of the Corporation.
ARTICLE V
RESIGNATIONS
Any Director or officer may resign his or her office at any time, such
resignation to be made in writing and to take effect from the time of its
receipt by the Corporation, unless some time be fixed in the resignation, and
then from that time. The acceptance of a resignation shall not be required to
make it effective.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. Contracts. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the Corporation, and such
authority may be general or confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf of the
Corporation, and no evidences of indebtedness shall be issued in its name,
unless authorized by a resolution of the Board of Directors. Such authority may
be general or confined to specific instances.
SECTION 3. Checks, Drafts, Etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation, shall be signed by such officer or officers, agent or
agents of the Corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
SECTION 4. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board of Directors
may select.
-10-
<PAGE>
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. Certificates for Shares. Certificates representing shares
of the Corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the President and by the
Secretary or by such other officers as authorized by law and by the Board of
Directors and sealed with the corporate seal. All certificates for shares shall
be consecutively numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the stock transfer books of the
Corporation. All certificates surrendered to the Corporation for transfer shall
be canceled, and no new certificate shall be issued until the former
certificate for a like number of shares shall have been surrendered and
canceled, except that in case of a lost, destroyed or mutilated certificate, a
new one may be issued therefor upon such terms and indemnity to the Corporation
as the By-Laws may prescribe.
SECTION 2. Restrictions on Transfer of Shares. Shares in the
Corporation cannot be transferred unless in full compliance with all federal
and state securities laws or an applicable exemption thereto.
SECTION 3. Registered Shareholders. The Corporation shall be entitled
to treat the registered holder of any share or shares of stock whose name
appears on its books as the owner or holder thereof as the absolute owner of
all legal and equitable interests therein for all purposes and (except as may
be otherwise provided by law) shall not be bound to recognize any equitable or
other claim to or interest in such shares of stock on the part of any other
person, regardless of whether or not it shall have actual or implied notice of
such claim or interest.
SECTION 4. Lost Certificates. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost or
destroyed, upon the making of an affidavit of the fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue
of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost or destroyed certificate or certificates or such owner's
legal representative, to advertise the same in such manner as it shall require
and/or to give the Corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the Corporation with respect to the
certificate alleged to have been lost or destroyed.
-11-
<PAGE>
ARTICLE VIII
CORPORATE SEAL
The Board of Directors may provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the Corporation,
the State of incorporation and the words "Corporate Seal."
ARTICLE IX
WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to
be given to any Shareholder or Director of the Corporation under the provisions
of these By-Laws or under the provisions of the Articles of Incorporation or
under the provisions of the General and Business Corporation Laws of Missouri,
a waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 1. Fiscal Year. The fiscal year of the Corporation shall be
determined by the Board of Directors.
SECTION 2. Inspection of Books. The Directors shall determine from
time to time whether, and if allowed, when and under what conditions and
regulations the accounts and books of the Corporation (except such as may by
statute be specifically open to inspection) or any of them shall be open to
inspection of the Shareholders, and Shareholders' rights in this respect are
and shall be restricted and limited accordingly.
SECTION 3. Checks and Notes. All checks and drafts on the
Corporation's bank accounts and all bills of exchange and promissory notes, and
all acceptances, obligations and other instruments for the payment of money,
shall be signed by such officer or officers or agent or agents as shall be
thereunto duly authorized from time to time by the Board of Directors;
provided, that checks drawn on the Corporation's payroll, dividend and special
accounts may bear the facsimile signatures, affixed thereto by a mechanical
device, of such officers or agents as the Board of Directors may authorize.
-12-
<PAGE>
SECTION 4. Dividends. The Board of Directors shall declare such
dividends as the Directors in their discretion see fit whenever the condition
of the Corporation, in their opinion, shall warrant the same subject to the
limitations of R.S. Mo. Section 351.220. The Board may declare dividends in
cash, in property or in capital stock.
SECTION 5. Indemnification. Each Director, Officer, employee or agent,
or former Director, Officer, employee or agent of this Corporation and his or
her legal representatives, shall be indemnified by the Corporation against
liabilities, fines, judgments, expenses, counsel fees and costs reasonably
incurred by such Director, Officer, employee or agent or his or her estate in
connection with, or arising out of, any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, or other enterprise in which he or she is made a party by reason
of his or her being or having been such Director, Officer, employee or agent;
and any person who, at the request of this Corporation, served as Director,
Officer, employee or agent of another corporation, partnership, joint venture,
trust or enterprise, in which this Corporation owned corporate stock, and his
or her legal representative shall in like manner be indemnified by this
Corporation; provided, that in all cases, in respect to the original Board of
Directors, indemnification shall be made, to the maximum extent permitted under
R.S. Mo. Section 351.355; and in respect to subsequently named Directors, and
all officers, employees or agents, unless and only to the extent that the court
in which the action or suit was brought determines upon application that,
despite the adjudication of liability and in view of all the circumstances of
the case, the person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper, no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of his or
her duties to the Corporation. The indemnification herein provided shall apply
also to any amount paid in compromise or settlement of any such action, suit or
proceeding or claim asserted against any such Director, officer, employee or
agent (including expenses, counsel fees and costs reasonably incurred in
connection therewith), provided the Board of Directors shall have first
approved such proposed compromise settlement; but, in taking such action, any
Director involved shall not be qualified to vote thereon, and if for this
reason a quorum of the Board cannot be obtained to vote on such matters, it
shall be determined by a Committee of two (2) or more persons appointed by the
Shareholders at a duly called special meeting or a regular meeting. In
determining whether a Director named subsequent to the naming of the original
Board of Directors, or any officer, employee or agent was guilty of negligence
or misconduct.
-13-
<PAGE>
No. 00237054
---------------
STATE of MISSOURI
JAMES C. KIRKPATRICK, Secretary of State
Corporation Division
Certificate of Incorporation
WHEREAS, duplicate originals of Articles of Incorporation of CONTEMPORARY
PRODUCTIONS NORTHERN, INC. have been received and filed in the office of the
Secretary of State, which Articles, in all respects, comply with the
requirements of The General and Business Corporation Law:
NOW, THEREFORE, I, JAMES C. KIRKPATRICK, Secretary of State of the State of
Missouri, by virtue of the authority vested in me by law, do hereby certify and
declare CONTEMPORARY PRODUCTION NORTHERN, INC. a body corporate, duly organized
this day and that it is entitled to all rights and privileges granted
corporations organized under The General and Business Corporation Law; that the
address of its initial Registered Office in Missouri is 120 South Central, Suite
1028, Clayton, Missouri 63105; that its period of existence is Perpetual; and
that the amount of its Authorized Shares is 30,000 Common @ $1.00 Par Value.
IN TESTIMONY WHEREOF, I have hereunto set my
hand and affixed the GREAT SEAL of the State
of Missouri. at the City of Jefferson, this
14th day of December, 1981.
/s/ James C. Kirkpatrick
------------------------------------
Secretary of State
RECEIVED OF: CONTEMPORARY PRODUCTIONS NORTHERN, INC. Fifty three dollars and
no/1.00-------------------------Dollars, $ 53.00 For Credit of General Revenue
Fund, on Account of Incorporation Tax and Fee.
/s/ James C. Kirkpatrick
------------------------------------
Secretary of State
No. 00237054
-----------
<PAGE>
STATE OF MISSOURI...OFFICE OF SECRETARY OF STATE
JAMES C. KIRKPATRICK, Secretary of State
ARTICLES OF INCORPORATION
Honorable James C. Kirkpatrick
Secretary of State
State of Missouri
Jefferson City, MO 65101
The undersigned natural person(s) of the age of eighteen years of
more for the purpose of forming a corporation under The General and Business
Corporation Law of Missouri adopt the following Articles of Incorporation:
ARTICLE ONE
The name of the corporation is: CONTEMPORARY PRODUCTIONS NORTHERN,
INC.
ARTICLE TWO
The address, including street and number, if any, of the
corporation's initial registered office in this state is: 120 South Central,
Suite 1028, Clayton, Missouri 63105 and the name of its initial agent at such
address is: Richard M. Riezman
ARTICLE THREE
The aggregate number, class and par value, if any, of shares which
the corporation shall have authority to issue shall be: 30,000 shares of common
stock at a par value of $1.00 each
The preferences, qualifications, limitations, restrictions, and the
special or relative rights, including convertible rights, if any, in respect of
the shares of each class are as follows: None
ARTICLE FOUR
The extent, if any, to which the preemptive right of a shareholder
to acquire additional shares is limited or denied:
None
- 2 -
<PAGE>
ARTICLE FIVE
The name and place of residence of each incorporator is as follows:
Name Street City
James P. Beck 120 South Central Clayton, Missouri
ARTICLE SIX
X The number of directors to constitute the first board of directors is one
- --- (1). Thereafter the number of directors shall be fixed by, or in the
manner provided in the bylaws. Any changes in the number will be reported
to the Secretary of State within thirty calendar days of such change.
or
___ The number of directors to constitute the board of directors is _____.
(The number of directors to constitute the board of directors must be
stated herein if there are to be less than three directors. The persons to
constitute the first board of directors may, but need not, be named).
ARTICLE SEVEN
The duration of the corporation is perpetual.
ARTICLE EIGHT
The corporation is formed for the following purposes: To produce shows,
entertainment and programs of amusement to the public. To buy, sell, at
wholesale and retail, exchange, lease, let, grant or take licenses in respect
of, improve, develop, repair, manage and maintain personal property and real
property of every kind, corporeal and incorporeal, and every kind of estate,
right, or interest therein or pertaining thereto; to construct, improve, repair,
raze, and wreck buildings, structures, and works of all kinds, for itself or for
others; to buy, sell, and deal in building materials and supplies; to advance
loans secured by mortgages or other liens on real estate; to act as loan broker;
Generally to do everything suitable, proper and conducive to the successful
conduct of a real estate agency and brokerage business in all its branches and
departments; to transport, convey and deliver, as a private carrier, all kinds
and character of commodities, for the company or for others, and to do all
things necessary, convenient or incidental thereto; To borrow money and for such
purposes, to execute notes, bonds, debentures or any other form of evidence of
indebtedness, and to secure the payment of the same by mortgage, deed of trust
or other form of encumbrance, pledge, or other form of hypothecation; To execute
deeds, mortgages, deeds of trust, contracts and other types of written
instruments; To purchase, acquire, own, hold, sell, assign, transfer or
otherwise dispose of, mortgage, pledge or otherwise encumber shares of stock of
this company or any other corporation or corporations of this state or any other
state, county, nation or government, or any interest therein, and while owner
thereof to exercise all rights, powers, and privileges of ownership pertaining
thereto; To loan or otherwise invest on such terms and conditions as its Board
of Directors may authorize; To buy or otherwise acquire, sell or otherwise
dispose of, pledge or otherwise hypothecate stocks, bonds, notes, debentures,
accounts receivable and all other types of securities, evidences of indebtedness
or choses in action; To sell or otherwise dispose of stocks, bonds, debentures,
or other securities issued by the company, or any other corporation, and to pay
compensation for services rendered in connection therewith; To acquire, own,
hold, buy, sell, transfer and otherwise dispose of patents and patent rights,
trademark and tradenames, copyrights, licenses, franchises,
- 3 -
<PAGE>
permits and other evidences of right; To acquire, deal and purchase, own, hold,
lease, mortgage or otherwise encumber, develop, exploit and dispose of mineral
rights or royalty interests of every kind. The object and purposes for which the
corporation is formed and the nature of business which may be transacted,
promoted and carried on by the corporation are to do any and all of the things
herein mentioned as fully and to the same extent as natural persons might or
could do.
IN WITNESS WHEREOF, these Articles of Incorporation have been signed
this 9th day of December, 1981.
/s/ James P. Beck
------------------------------
------------------------------
- 4 -
<PAGE>
STATE OF MISSOURI
SS.
COUNTY OF ST. LOUIS
I, M. Jill Wehmer, a notary public, do hereby certify that on the 9th day
of December, 1981, personally appeared before me, James P. Beck, (and
__________________________________,) who being by me first duly sworn,
(severally) declared that he is (they are) the person(s) who signed the
foregoing document as incorporator(s), and that the statements therein contained
are true.
/s/ M. Jill Wehmer
-------------------------------
Notary Public
My Commission Expires:
10/19/84
- ----------------------
- 5 -
<PAGE>
No. 00237054
------------
STATE of MISSOURI
JAMES C. KIRKPATRICK, Secretary of State
Corporation Division
Certificate of Incorporation
WHEREAS, CONTEMPORARY PRODUCTIONS INCORPORATED (FORMERLY: CONTEMPORARY
PRODUCTIONS NORTHERN, INC.) a corporation organized under The General and
Business Corporation Law has delivered to me a Certificate of Amendment of its
Articles of Incorporation and has in all respects complied with the requirements
of law governing the amendment of Articles of Incorporation under The General
and Business Corporation Law,
NOW, THEREFORE, I, JAMES C. KIRKPATRICK, Secretary
of the State of the State of Missouri, do hereby certify that I have filed said
Certificate of Amendment as provided by law, and that the Articles of
Incorporation of said corporation are amended in accordance therewith.
IN TESTIMONY WHEREOF, I have
hereunto set my hand and affixed the
GREAT SEAL of the State of Missouri,
at the City of Jefferson, this 31st
day of December, 1981
/s/ James C. Kirkpatrick
------------------------------
Secretary of State
RECEIVED OF CONTEMPORARY PRODUCTIONS INCORPORATED Fifteen dollars and
no/100------------------- Dollars, $15.00 For Credit of General Revenue Fund, on
Account of Incorporation Tax and Fee.
No. 00237054 /s/ James C. Kirkpatrick
------------------------------
Secretary of State
- 6 -
<PAGE>
237054
STATE OF MISSOURI . . . OFFICE OF SECRETARY OF STATE
JAMES C. KIRKPATRICK, Secretary of State
Amendment of Articles of Incorporation
(To be submitted in duplicate by an attorney)
HONORABLE JAMES C. KIRKPATRICK
SECRETARY OF STATE
STATE OF MISSOURI
JEFFERSON CITY, MO 65101
Pursuant to the provisions of The General and Business Corporation Law
of Missouri, the undersigned Corporation certifies the following:
(1) The present name of the Corporation is . . . CONTEMPORARY PRODUCTIONS
NORTHERN , INC.
The name under which it was originally organized was CONTEMPORARY
PRODUCTIONS NORTHERN, INC.
(2) An amendment to the Corporation's Articles of Incorporation was
adopted by the shareholders on December 24, 1981.
(3) Article # I is amended to read as follows:
The name of the corporation shall be CONTEMPORARY PRODUCTIONS
INCORPORATED.
- 7 -
<PAGE>
(4) Of the 1,000 shares outstanding, 1,000 of such shares were entitled to
vote on such amendment.
The number of outstanding shares of any class entitled to vote thereon as
a class were as follows:
Number of
Class Outstanding Shares
Common 1,000
(5) The number of shares voted for and against the amendment was as
follows:
Class No. Voted For No. Voted Against
Common 1,000 NIL
(6) If the amendment changed the number or par value of authorized shares
having a par value the amount in dollars of authorized shares having a par value
as changed is:
None
If the amendment changed the number of authorized shares without par
value, the authorized number of shares without par value as changed and the
consideration proposed to be received for such increased authorized shares
without par value as are to be presently issued are:
None
(7) If the amendment provides for an exchange, reclassification, or
cancellation of issued shares, or a reduction of the number of authorized shares
of any class below the number of issued shares of that class, the following is a
statement of the manner in which such reduction shall be effected:
N/A
- 8 -
<PAGE>
IN WITNESS WHEREOF, the undersigned Steven F. Schankman
----------------------------
President
has executed this instrument and its
- --------------------------------
Vice President
Secretary, Sandra A. Krumrey has affixed its corporate seal hereto and
- ---------------------------------
attested said seal on the 31st day of December, 1981.
PLACE
CORPORATE SEAL
HERE
(IF NO SEAL, STATE "NONE")
NONE CONTEMPORARY PRODUCTIONS NORTHERN, INC.
---------------------------------------
(Name of Corporation)
ATTEST:
/s/ Sandra A. Krumrey By /s/ Steven F. Schankman
- ----------------------------------- ----------------------------------
(Secretary or Asst. Secretary) (President)
STATE OF MISSOURI )
)ss.
COUNTY OF COLE )
I, Charles J. Fain, a notary public, do hereby certify that on this
31st day of December 1981, personally appeared before me Steven F. Schankman,
who, being by me first duly sworn, declared that he is the President of
CONTEMPORARY PRODUCTIONS NORTHERN, INC. that he signed the foregoing document as
President of the corporation, and that the statements therein contained are
true.
/s/ Charles J. Fain
---------------------------------
Notary Public
(NOTARIAL
SEAL)
My commission expires May 9, 1982
- 9 -
<PAGE>
STATE OF MISSOURI
JAMES C. KIRKPATRICK, Secretary of State
CORPORATION DIVISION
Statement of Change of Registered Agent or Registered Office
by Foreign or Domestic Corporations
INSTRUCTIONS
There is a $3.00 fee for filing this statement. It must be filed in
DUPLICATE (both copies signed and notarized).
The statement should be sealed with the corporate seal. If it does not
have a seal, write "no seal" where the seal would otherwise appear.
The registered office may be, but need not be, the same as the place of
business of the corporation, but the registered office and the business address
of the agent must be the same. The corporation cannot act as its own registered
agent.
Any subsequent change in the registered office or agent must be
immediately reported to the Secretary of State. These forms are available upon
request from the Office of the Secretary of State.
To: SECRETARY OF STATE
P.O. Box 778
Jefferson City, Missouri 65102 Charter No. 00237054
----------------
The undersigned corporation, organized and existing under the laws of the
State of Missouri for the purpose of changing its registered agent or its
registered office, or both, in Missouri as provided by the provisions of "The
General and Business Corporation Act of Missouri," represents that:
1. The name of the Corporation is Contemporary Productions Incorporated.
2. The name of its PRESENT registered agent (before change) is Richard M.
Riezman.
3. The name of the new registered agent is Steven F. Schankman.
4. The address, including street number, if any, if its PRESENT registered
office (before change) is 120 South Central, Suite 1028, Clayton, Missouri
63105.
5. Its registered office (including street number, if any change is to be
made) is hereby CHANGED TO 680 Craig Road, Penthouse Suite, Creve Coeur,
Missouri 63141.
6. The address of its registered office and the address of the business
office of its registered agent, as changed will be identical.
7. Such change was authorized by resolution duly adopted by the board of
directors.
- 10 -
<PAGE>
IN WITNESS WHEREOF, the undersigned corporation has caused this report to
be executed in its name by its PRESIDENT, attested by its SECRETARY this 29th
day of October, 1985.
Contemporary Productions Incorporated
-------------------------------------
Name of Corporation
(Corporate Seal) By /s/ Steven F. Schankman
-----------------------
President
if no seal, state "none".
Attest:
/s/ Carol M. Burton
- -------------------------------
Secretary
STATE OF MISSOURI )
)ss.:
COUNTY OF ST. LOUIS)
I, Nancy E. Bise, a Notary Public, do hereby certify that on the 29th day
of October, 1985, personally appeared before me Steven F. Schankman who declares
he is President of the corporation, executing the foregoing document, and being
first duly sworn, acknowledged that he signed the foregoing document in the
capacity therein set forth and declared that the statements therein contained
are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
before written.
(Notarial Seal) /s/ Nancy E. Bise
-----------------------------
Notary Public
My commission expires
-------------
- 11 -
<PAGE>
STATE OF MISSOURI . . . OFFICE OF SECRETARY OF STATE
ROY D. BLUNT, Secretary of State
STATEMENT OF CHANGE OF REGISTERED AGENT
OR REGISTERED OFFICE
INSTRUCTIONS
- --------------------------------------------------------------------------------
The filing fee for this change is $5.00.
Change must be filed in DUPLICATE.
The registered office may be, but need not be, the same as the place of business
of the corporation or limited partnership, but the registered office and the
business address of the agent must be the same. The corporation or limited
partnership cannot act as its own registered agent.
Any subsequent change in the registered office or agent must be immediately
reported to the Secretary of State. Forms are available upon request.
- --------------------------------------------------------------------------------
Charter No. 00237054
----------------
The undersigned corporation or limited partnership, organized and existing under
the laws of the State of Missouri for the purpose of changing its registered
agent "The General and Business Corporation Act of Missouri," or the "Missouri
Uniform Limited Partnership Law," represents that:
(1) The name of the corporation/ltd. partnership is:
Contemporary Productions Inc.
--------------------------------------------------------------------------
(2) The name of its registered agent before this change is:
Steven F. Schankman
--------------------------------------------------------------------------
(3) The name of the new registered agent is: Steven F. Schankman
---------------------------------
(4) The address, including the street number, if any, of its registered office
before this change is:
680 Craig Rd., Penthouse Suite, Creve Coeur, MO 63141
--------------------------------------------------------------------------
(5) Its registered office (including street number, if any change is to be
made) is hereby CHANGED TO:
1401 S. Brentwood, 7th Floor, St. Louis, MO 63144
--------------------------------------------------------------------------
(6) The address of its registered office and the address of the business
office of its registered agent, as changed will be identical.
(7) Such change was authorized by resolution duly adopted by the board of
directors of the corporation or by the limited partnership.
- 12 -
<PAGE>
IN WITNESS WHEREOF, the undersigned corporation or limited partnership has
caused this report to be executed in its name by its PRESIDENT or VICE PRESIDENT
of the corporation, or GENERAL PARTNER of the limited partnership, and attested
to by the assistant secretary if a corporation on the 15th day of April, 1991.
CONTEMPORARY PRODUCTIONS INC.
------------------------------------------
Name of corporation or limited partnership
(CORPORATE SEAL)
If no seal, state "none"
NONE By /s/ Steven F. Schankman
-----------------------------------------
President or Vice President of corporation
or
General Partner of limited partnership
Attest:
/s/ Carol M. Burton
- --------------------------------
Secretary or Assistant Secretary
of corporation
State of Missouri
ss
County of St. Louis
I, Carol M. Burton, a Notary Public, do hereby certify that on the 15th
day of April 1991, personally appeared before me Steven F. Schankman who
declares he is the President or Vice President of the corporation, or a General
Partner of the limited partnership, executing the foregoing document, and being
first duly sworn, acknowledged that he/she signed the foregoing document in the
capacity therein set forth and declared that the statements therein contained
are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
before written.
/s/ Carol M. Burton
--------------------------------
Notary Public
(Notarial Seal)
My commission expires 9/8/92
-----------
SECRETARY OF STATE
P.O. BOX 778
JEFFERSON CITY, MO 65102
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<PAGE>
BY-LAWS
OF
CONTEMPORARY PRODUCTIONS INCORPORATED
ARTICLE I. OFFICES
The principal office of the corporation in the State of Missouri
shall be located in the City of Creve Coeur, County of St. Louis. The
corporation may have such other offices, either within or without the State of
Missouri, as the Board of Directors may designate or as the business of the
corporation may require from time to time.
ARTICLE II. SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of the shareholders
shall be held on the third Tuesday in the month of December in each year,
beginning with the year 1982, at the hour of 10:00 o'clock A.M., for the purpose
of electing Directors and for the transaction of such other business as may come
before the meeting. If the day fixed for the annual meeting shall be a legal
holiday in the State of Missouri, such meeting shall be held on the next
succeeding business day. If the election of Directors shall not be held on the
day designated herein for any annual meeting of the shareholders, or at any
adjournment thereof, the Board of Directors shall cause the election to be held
at a special meeting of the shareholders as soon thereafter as conveniently may
be.
SECTION 2. Special Meetings. Special meetings of the shareholders,
for any purpose or purposes, unless otherwise prescribed by statute, may be
called by the President or by the Board of Directors, and shall be called by the
President at the request of the holders of not less than twenty per cent (20%)
of all the outstanding shares of the corporation entitled to vote at the
meeting.
SECTION 3. Place of Meeting. The Board of Directors may designate
any place, either within or without the State of Missouri unless otherwise
prescribed by statute, as the place of meeting for any annual meeting or for any
special meeting called by the Board of Directors. A waiver of notice signed by
all shareholders entitled to vote at a meeting may designate any place, either
within or without the State of
SECTION 4. Notice of Meeting. Written notice stating the place, day
and hour of the meeting and, in case of special meeting, the purpose or purposes
for which the meeting is called, shall unless otherwise prescribed by statute,
be delivered not less than ten nor more than fifty days before the date of the
meeting, either personally or
<PAGE>
by mail, by or at the direction of the President, or the Secretary, or the
persons calling the meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to the shareholder
at his address as it appears on the stock transfer books of the corporation,
with postage thereon prepaid.
SECTION 5. Closing of Transfer Books or Fixing of Record Date. For
the purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors of the
corporation may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, ____ days. If the stock transfer
books shall be closed for the purpose of determining shareholders entitled to
notice of or to vote at a meeting of shareholders, such books shall be closed
for at least _____ days immediately preceding such meeting. In lieu of closing
the stock transfer books, the Board of Directors may fix in advance a date as
the record date for any such determination of shareholders, such date in any
case to be not more than days and, in case of a meeting of shareholders, not
less than days prior to the date on which the particular action, requiring such
determination of shareholders is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record date
for such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this section, such determination shall apply to any adjournment thereof.
SECTION 6. Voting Lists. The officer or agent having charge of the
stock transfer books for shares of the corporation shall make a complete list of
the shareholders entitled to vote at each meeting of shareholders or any
adjournment thereof, arranged in alphabetical order, with the address of and the
number of shares held by each. Such list shall be produced and kept open at the
time and place of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting for the purposes thereof.
SECTION 7. Quorum. A majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. if less than a majority of the
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<PAGE>
outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed. The shareholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.
SECTION 8. Proxies. At all meetings of shareholders, a shareholder
may vote in person or by proxy executed in writing by shareholder or by his duly
authorized attorney in fact. Such proxy shall be filed with the secretary of the
corporation before or at the time of the meeting. No proxy shall be valid after
months from the date of its execution, unless otherwise provided in the proxy.
SECTION 9. Voting of Shares. Subject to the provisions of Section 12
of this Article II, each outstanding share entitled to vote shall be entitled to
one vote upon each matter submitted to a vote at a meeting of shareholders.
SECTION 10. Voting of Shares by Certain Holders. Shares standing in
the name of another corporation may be voted by such officer, agent or proxy as
the by-laws of such corporation may prescribe, or, in the absence of such
provision, as the board of directors of such corporation may determine.
Shares held by an administrator, executor, guardian or conservator
may be voted by him, either in person or by proxy, without a transfer of such
shares into his name. Shares standing in the name of a trustee may be voted by
him, either in person or by proxy, but no trustee shall be entitled to vote
shares held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote the shares so transferred.
-3-
<PAGE>
Shares of its own stock belonging to the corporation shall not be
voted, directly or indirectly, at any meeting, and shall not be counted in
determining the total number of outstanding shares at any given time.
SECTION 11. Informal Action by Shareholders. Unless other wise
provided by law, any action required to be taken at a meeting of the
shareholders, or any other action which may be taken at a meeting of the
shareholders, may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the shareholders entitled
to vote with respect to the subject matter thereof.
SECTION 12. Cumulative Voting. Unless otherwise provided by law, at
each election for Directors every shareholder entitled to vote at such election
shall have the right to vote, in person or by proxy, the number of shares owned
by him for as many persons as there are Directors to be elected and for whose
election he has a right to vote, or to cumulate his votes by giving one
candidate as many votes as the number of such Directors multiplied by the number
of his shares shall equal, or by distributing such votes on the same principle
among any number of candidates.
ARTICLE III. BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of the
corporation shall be managed by its Board of Directors.
SECTION 2. Number, Tenure and Qualifications. The number of
directors of the corporation shall be two. Each director shall hold office until
the next annual meeting of shareholders and until his successor shall have been
elected and qualified. Any change in the number of Directors will be reported to
the Secretary of State within thirty days of such change.
SECTION 3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this by-law immediately after,
and at the same place as, the annual meeting of shareholders. The Board of
Directors may provide, by resolution, the time and place for the holding of
additional regular meetings without other notice than such resolution.
SECTION 4. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the President or any two
directors. The person or persons authorized to call special meetings of the
Board of Directors may fix the place for holding any special meeting of the
Board of Directors called by them.
-4-
<PAGE>
SECTION 5. Notice. Notice of any special meeting shall be given at
least ten days previously thereto by written notice delivered personally or
mailed to each director at his business address, or by telegram. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
so addressed, with postage thereon prepaid. If notice be given by telegram, such
notice shall be deemed to be delivered when the telegram is delivered to the
telegraph company. Any director may waive notice of any meeting. The attendance
of a director at a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not lawfully called or
convened.
SECTION 6. Quorum. A majority of the number of directors fixed by
Section 2 of this Article III shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors, but if less than such
majority is present at a meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice.
SECTION 7. Manner of Acting. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors.
SECTION 8. Action Without A Meeting. Any action that may be taken by
the Board of Directors at a meeting may be taken without a meeting if a consent
in writing, setting forth the action so to be taken, shall be signed before such
action by all of the Directors.
SECTION 9. Vacancies. Any vacancy occurring in the Board of
Directors may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors, unless otherwise
provided by law. A director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office. Any directorship to be filled by
reason of an increase in the number of directors may be filled by election by
the Board of Directors for a term of office continuing only until the next
election of Directors by the shareholders.
SECTION 10. Compensation. By resolution of the Board of Directors,
each Director may be paid his expenses, if any, of attendance at each meeting of
the Board of Directors, and may be paid a stated salary as director or a fixed
sum for attendance at each meeting of the Board of Directors or both. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
-5-
<PAGE>
SECTION 11. Presumption of Assent. A director of the corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action taken
unless his dissent shall be entered in the minutes of the meeting or unless he
shall file his written dissent to such action with the person acting as the
secretary of the meeting before the adjournment thereof or shall forward such
dissent by registered mail to the Secretary of the corporation immediately after
the adjournment of the meeting. Such right to dissent shall not apply to a
Director who voted in favor of such action.
ARTICLE IV. OFFICERS.
SECTION 1. Number. The officers of the corporation shall be a
President, a Vice-President, a Secretary and a Treasurer, each of whom shall be
elected by the Board of Directors. Such other officers and assistant officers as
may be deemed necessary may be elected or appointed by the Board of Directors.
SECTION 2. Election and Term of Office. The officers of the
corporation to be elected by the Board of Directors shall be elected annually by
the Board of Directors at the first meeting of the Board of Directors held after
each annual meeting of the shareholders. If the election of officers shall not
be held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his successor shall
have been duly elected and shall have qualified or until his death or until he
shall resign or shall have been removed in the manner hereinabove provided.
SECTION 3. Removal. Any officer or agent may be removed by the Board
of Directors whenever in its judgment, the best interests of the corporation
will be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or appointment of an
officer or agent shall not of itself create contract rights.
SECTION 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.
SECTION 5. President. The President shall be the principal executive
officer of the corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the corporation. He shall, when present, preside at all meetings of
the shareholders and of the Board of Directors. He
-6-
<PAGE>
may sign, with the Secretary or any other proper officer of the corporation
thereunto authorized by the Board of Directors, certificates for shares of the
corporation, any deeds, mortgages, bonds, contracts, or other instruments which
the Board of Directors has authorized to be executed, except in cases where the
signing and execution thereof shall be expressly delegated by the Board of
Directors or by these By-Laws to some other officer or agent of the corporation,
or shall be required by law to be otherwise signed or executed; and in general
shall perform all duties incident to the office of President and such other
duties as may be prescribed by the Board of Directors from time to time.
SECTION 6. Vice-President. In the absence of the President or in the
event of his death, inability or refusal to act, the Vice-President shall
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. The
Vice-President shall perform such other duties as from time to time may be
assigned to him by the President or by the Board of Directors.
SECTION 7. Secretary. The Secretary shall: (a) keep the minutes of
the proceedings of the shareholders and of the Board of Directors in one or more
books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these By-Laws or as required by law; (c) be
custodian of the corporate records and of the seal of the corporation and see
that the seal of the corporation is affixed to all documents the execution of
which on behalf of the corporation under its seal is duly authorized; (d) to
keep a register of the post office address of each shareholder which shall be
furnished to the Secretary by such shareholder; (e) sign with the President,
certificates for shares of the corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors; (f) have general charge
of the stock transfer books of the corporation; and (g) in general perform all
duties incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the President or by the Board of Directors.
SECTION 8. Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the corporation;
(b) receive and give receipts for moneys due and payable to the corporation from
any source whatsoever, and deposit all such monies in the name of the
corporation in such banks, trust companies or other depositaries as shall be
selected in accordance with the provisions of Article V of these By-Laws; and
(c) in general perform all of the duties incident to the office of Treasurer and
such other duties as from time to time may be
-7-
<PAGE>
assigned to him by the President or by the Board of Directors. If required by
the Board of Directors, the Treasurer shall give a bond for the faithful
discharge of his duties in such sum and with such surety or sureties as the
Board of Directors shall determine.
SECTION 9. Salaries. The salaries of the officers shall be fixed
from time to time by the Board of Directors and no officer shall be prevented
from receiving such salary by reason of the fact that he is also a director of
the corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
SECTION 3. Checks, drafts, etc. All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation, shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
SECTION 4. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositaries as the Board of Directors
may select.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. Certificates for Shares. Certificates representing shares
of the corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the President and by the
Secretary or by such other officers authorized by law and by the Board of
Directors so to do, and sealed with the corporate seal. All certificates for
shares shall be consecutively numbered or otherwise identified. The name and
address
-8-
<PAGE>
of the person to whom the shares represented thereby are issued, with the number
of shares and date of issue, shall be entered on the stock transfer books of the
corporation. All certificates surrendered to the corporation for transfer shall
be canceled and no new certificate shall be issued until the former certificate
for a like number of shares shall have been surrendered and canceled, except
that in case of a lost, destroyed or mutilated certificate a new one may be
issued there for upon such terms and indemnity to the corporation as the Board
of Directors may prescribe.
SECTION 2. Transfer of Shares. Transfer of shares of the corporation
shall be made only on the stock transfer books. of the corporation by the holder
of record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the corporation,
and on surrender for cancellation of the certificate for such shares. The person
in whose name shares stand on the books of the corporation shall be deemed by
the corporation to be the owner thereof for all purposes.
ARTICLE VII. DIVIDENDS
The Board of Directors may from time to time declare, and the
corporation may pay, dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law and its articles of incorporation.
ARTICLE VIII. CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation
and the state of incorporation and the words, "Corporate Seal".
ARTICLE IX. WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to
be given to any shareholder or director of the corporation under the provisions
of these By-Laws or under the provisions of the articles of incorporation or
under the provisions of the Business Corporation Act, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be deemed equivalent to the giving of
such notice.
ARTICLE X. AMENDMENTS
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<PAGE>
These By-Laws may be altered, amended or repealed and new By-Laws
may be adopted by the Board of Directors at any regular or special meeting of
the Board of Directors.
-10-
<PAGE>
No. 00237559
-------------
STATE of MISSOURI
JAMES C. KIRKPATRICK, Secretary of State
Corporation Division
Certificate of Incorporation
WHEREAS, duplicate originals of Articles of Incorporation of CONTEMPORARY SPORTS
INCORPORATED have been received and filed in the office of the Secretary of
State, which Articles, in all respects, comply with the requirements of The
General and Business Corporation Law:
NOW, THEREFORE, I, JAMES C. KIRKPATRICK, Secretary of State of the State of
Missouri, by virtue of the authority vested in me by law, do hereby certify and
declare CONTEMPORARY SPORTS, INC. a body corporate, duly organized this day and
that it is entitled to all rights and privileges granted corporations organized
under The General and Business Corporation Law; that the address of its initial
Registered Office in Missouri is 120 South Central Avenue, Suite 1028, Clayton,
Missouri 63105; that its period of existence is perpetual; and that the amount
of its Authorized Shares is 30,000 common @ $1.00 par
IN TESTIMONY WHEREOF, I have hereunto set my
hand and affixed the GREAT SEAL of the State
of Missouri, at the City of Jefferson, this
31st day of December, 1981.
/s/ James C. Kirkpatrick
-----------------------------------
Secretary of State
RECEIVED OF: CONTEMPORARY SPORTS INCORPORATED Fifty three and
no/100--------------------Dollars, $53.00 For Credit of General Revenue Fund, on
Account of Incorporation Tax and Fee.
/s/ James C. Kirkpatrick
-----------------------------------
Secretary of State
No. 00237559
--------------
<PAGE>
ARTICLE FOUR
The extent, if any, to which the preemptive right of a shareholder to
acquire additional shares is limited or denied:
None
ARTICLE FIVE
The name and place of resident of each incorporator is as follows:
Name Street City
James P. Beck 120 South Central Ave. St. Louis, Missouri
ARTICLE SIX
X The number of directors to constitute the first board of directors is one
- --- (1). Thereafter the number of directors shall be fixed by, or in the
manner provided in the bylaws. Any changes in the number will be reported
to the Secretary of State within thirty calendar days of such change.
or
___ The number of directors to constitute the board of directors is . (The
number of directors to constitute the board of directors must be stated
herein if there are to be less than three directors. The persons to
constitute the first board of directors may, but need not, be named).
ARTICLE SEVEN
The duration of the corporation is perpetual.
ARTICLE EIGHT
The corporation is formed for the following purposes: To promote theater
productions, concerts and other activities of amusement to the general public.
To buy, sell, at wholesale and retail, exchange, lease, let, grant or take
licenses in respect of, improve, develop, repair, manage and maintain personal
property and real property of every kind, corporeal and incorporeal, and every
kind of estate, right, or interest therein or pertaining thereto; to construct,
improve, repair, raze, and wreck buildings, structures, and works of all kinds,
for itself or for others; to buy, sell, and deal in building materials and
supplies; to advance loans secured by mortgages or other liens on real estate;
to act as loan broker; Generally to do everything suitable, proper and conducive
to the successful conduct of a real estate agency and brokerage business in all
its branches and departments; To transport, convey and deliver, as a private
carrier, all kinds and character of commodities, for the company or for others,
and to do all things necessary, convenient or incidental thereto; To borrow
money and for such purposes, to execute notes, bonds, debentures or any other
form of evidence of indebtedness, and to secure the payment of the same by
mortgage, deed of trust or other form of encumbrance, pledge, or other form of
hypothecation; To execute deeds, mortgages, deeds of trust, contracts and other
types of written instruments; To purchase, acquire, own, hold, sell, assign,
transfer or otherwise dispose of, mortgage, pledge or otherwise encumber shares
of stock of this company or any other corporation or corporations of this state
or any other state, county, nation or government, or any interest therein, and
while owner thereof to exercise all rights, powers, and privileges of ownership
pertaining thereto; To loan or
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<PAGE>
otherwise invest on such terms and conditions as its Board of Directors may
authorize; To buy or otherwise acquire, sell or otherwise dispose of, pledge or
otherwise hypothecate stocks, bonds, notes, debentures, accounts receivable and
all other types of securities, evidences of indebtedness or choses in action; To
sell or otherwise dispose of stocks, bonds, debentures, or other securities
issued by the company, or any other corporation, and to pay compensation for
services rendered in connection therewith; To acquire, own, hold, buy, sell,
transfer and otherwise dispose of patents and patent rights, trademark and
tradenames, copyrights, licenses, franchises, permits and other evidences of
right; To acquire, deal and purchase, own, hold, lease, mortgage or otherwise
encumber, develop, exploit and dispose of mineral rights or royalty interests of
every kind. The object and purposes for which the corporation is formed and the
nature of business which may be transacted, promoted and carried on by the
corporation are to do any and all of the things herein mentioned as fully and to
the same extent as natural persons might or could do.
IN WITNESS WHEREOF, these Articles of Incorporation have been signed this
29th day of December, 1981.
/s/ James P. Beck
------------------------------------
------------------------------------
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<PAGE>
STATE OF MISSOURI
SS.
COUNTY OF ST. LOUIS
I, M. Jill Wehmer, a notary public, do hereby certify that on the 29th day
of December, 1981, personally appeared before me, _____________________, (and
__________________________________,) who being by me first duly sworn,
(severally) declared that he is (they are) the person(s) who signed the
foregoing document as incorporator(s), and that the statements therein contained
are true.
/s/ M. Jill Wehmer
------------------------------------
Notary Public
My Commission Expires:
10/19/84
- ----------------------
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<PAGE>
STATE OF MISSOURI
JAMES C. KIRKPATRICK, Secretary of State
CORPORATION DIVISION
Statement of Change of Registered Agent or Registered Office by
Foreign or Domestic Corporations
- --------------------------------------------------------------------------------
INSTRUCTIONS
There is a $3.00 fee for filing this statement. It must be filed in
DUPLICATE.
The statement should be sealed with the corporate seal. If it does not
have a seal, write "no seal" where the seal would otherwise appear.
The registered office may be, but need not be, the same as the place of
business of the corporation, but the registered office and the business address
of the agent must be the same. The corporation cannot act as its own registered
agent.
Any subsequent change in the registered office or agent must be
immediately reported to the Secretary of State. These forms are available upon
request from the Office of the Secretary of State.
- --------------------------------------------------------------------------------
To: SECRETARY OF STATE
P.O. Box 778
Jefferson City, Missouri 65102 Charter No. 00237559
-----------------
The undersigned corporation, organized and existing under the laws of the
State of Missouri for the purpose of changing its registered agent or its
registered office, or both, in Missouri as provided by the provisions of "The
General and Business Corporation Act of Missouri," represents that:
1. The name of the corporation is Contemporary Sports Incorporated.
2. The name of its PRESENT registered agent (before change) is Richard M.
Riezman.
3. The name of the new registered agent is Steven F. Schankman.
4. The address, including street number, if any, of its PRESENT registered
office (before change) is 120 South Central, Suite 1028, Clayton, Missouri
63105.
5. Its registered office (including street number, if any change is to be
made) is hereby CHANGED TO 680 Craig Road, Penthouse Suite, Creve Coeur,
Missouri 63141.
6. The address of its registered office and the address of the business
office of its registered agent, as changed will be identical.
7. Such change was authorized by resolution duly adopted by the board of
directors.
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<PAGE>
IN WITNESS WHEREOF, the undersigned corporation has caused this report to
be executed in its name by its PRESIDENT, attested by its SECRETARY this 29th
day of October, 1985.
Contemporary Sports Incorporated
-----------------------------------------
Name of Corporation
(Corporate Seal) By /s/ Steven F. Schankman
--------------------------------------
President
If no seal, state "none".
Attest:
/s/ Carol M. Burton
- ------------------------------
Secretary
STATE OF MISSOURI
}ss.
COUNTY OF ST. LOUIS
I, Nancy E. Bise, a Notary Public, do hereby certify that on the 29th day
of October, 1985, personally appeared before me Steven F. Schankman who declares
he is President of the corporation, executing the foregoing document, and being
first duly sworn, acknowledged that he signed the foregoing document in the
capacity therein set forth and declared that the statements therein contained
are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
before written.
(Notarial Seal) /s/ Nancy E. Bise
---------------------------
Notary Public
My commission expires__________________
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<PAGE>
STATE OF MISSOURI . . . OFFICE OF SECRETARY OF STATE
ROY D. BLUNT, Secretary of State
STATEMENT OF CHANGE OF REGISTERED AGENT
OR REGISTERED OFFICE
- --------------------------------------------------------------------------------
INSTRUCTIONS
The filing fee for this change is $5.00.
Change must be filed in DUPLICATE.
The registered office may be, but need not be, the same as the place of business
of the corporation or limited partnership, but the registered office and the
business address of the agent must be the same. The corporation or limited
partnership cannot act as its own registered agent.
Any subsequent change in the registered office or agent must be immediately
reported to the Secretary of State. Forms are available upon request.
- --------------------------------------------------------------------------------
Charter No. 00237559
--------------
The undersigned corporation or limited partnership, organized and existing under
the laws of the State of Missouri for the purpose of changing its registered
agent "The General and Business Corporation Act of Missouri," or the "Missouri
Uniform Limited Partnership Law," represents that:
(1) The name of the corporation/ltd. partnership is:
Contemporary Sports Inc.
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(2) The name of its registered agent before this change is:
Steven F. Schankman
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(3) The name of the new registered agent is: Steven F. Schankman
---------------------------------
(4) The address, including the street number, if any, of its registered office
before this change is:
680 Craig Rd., Penthouse Suite, Creve Coeur, MO 63141
--------------------------------------------------------------------------
(5) Its registered office (including street number, if any change is to be
made) is hereby CHANGED TO:
1401 S. Brentwood, 7th Floor, St. Louis, MO 63144
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(6) The address of its registered office and the address of the business
office of its registered agent, as changed will be identical.
(7) Such change was authorized by resolution duly adopted by the board of
directors of the corporation or by the limited partnership.
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<PAGE>
IN WITNESS WHEREOF, the undersigned corporation or limited partnership has
caused this report to be executed in its name by its PRESIDENT or VICE PRESIDENT
of the corporation, or GENERAL PARTNER of the limited partnership, and attested
to by the assistant secretary if a corporation on the 15th day of April, 1991.
CONTEMPORARY SPORTS INC.
-----------------------------------------
Name of corporation or limited partnership
(CORPORATE SEAL)
If no seal, state "none"
NONE By /s/ Steven F. Schankman
---------------------------------------
President or Vice President of corporation
or
General Partner of limited partnership
Attest:
/s/ Carol M. Burton
- --------------------------------
Secretary or Assistant Secretary
of corporation
State of Missouri
ss
County of St. Louis
I, Carol M. Burton, a Notary Public, do hereby certify that on the 15th
day of April 1991, personally appeared before me Carol M. Burton who declares
he/she is the President or Vice President of the corporation, or a General
Partner of the limited partnership, executing the foregoing document, and being
first duly sworn, acknowledged that he/she signed the foregoing document in the
capacity therein set forth and declared that the statements therein contained
are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
before written.
/s/ Carol M. Burton
--------------------------------------
Notary Public
(Notarial Seal)
My commission expires 9/8/92
-----------------
SECRETARY OF STATE
P.O. BOX 778
JEFFERSON CITY, MO 65102
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<PAGE>
BY-LAWS
OF
CONTEMPORARY SPORTS INCORPORATED
ARTICLE I. OFFICES
The principal office of the corporation in the State of Missouri shall be
located in the City of Creve Coeur, County of St. Louis. The corporation may
have such other offices, either within or without the State of Missouri, as the
Board of Directors may designate or as the business of the corporation may
require from time to time.
ARTICLE II. SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of the shareholders shall be
held on the third Tuesday in the month of December in each year, beginning with
the year 1982, at the hour of 10:00 o'clock A.M., for the purpose of electing
Directors and for the transaction of such other business as may come before the
meeting. If the day fixed for the annual meeting shall be a legal holiday in the
State of Missouri, such meeting shall be held on the next succeeding business
day. If the election of Directors shall not be held on the day designated herein
for any annual meeting of the shareholders, or at any adjournment thereof, the
Board of Directors shall cause the election to be held at a special meeting of
the shareholders as soon thereafter as conveniently may be.
SECTION 2. Special Meetings. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute, may be called by
the President or by the Board of Directors, and shall be called by the President
at the request of the holders of not less than twenty per cent (20%) of all the
outstanding shares of the corporation entitled to vote at the meeting.
SECTION 3. Place of Meeting. The Board of Directors may designate any
place, either within or without the State of Missouri unless otherwise
prescribed by statute, as the place of meeting for any annual meeting or for any
special meeting called by the Board of Directors. A waiver of notice signed by
all shareholders entitled to vote at a meeting may designate any place, either
within or without the State of [ ]
SECTION 4. Notice of Meeting. Written notice stating the place, day and
hour of the meeting and, in case of special meeting, the purpose or purposes for
which the meeting is called, shall unless otherwise prescribed by statute, be
delivered not less than ten nor more than fifty days before the date of the
meeting, either personally or by mail, by
<PAGE>
or at the direction of the President, or the Secretary, or the persons calling
the meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the shareholder at his address
as it appears on the stock transfer books of the corporation, with postage
thereon prepaid.
SECTION 5. Closing of Transfer Books or Fixing of Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or in order to make a determination of share
holders for any other proper purpose, the Board of Directors of the corporation
may provide that the stock transfer books shall be closed for a stated period
but not to exceed, in any case, days. If the stock transfer books shall be
closed for the purpose of determining shareholders entitled to notice of or to
vote at a meeting of shareholders, such books shall be closed for at least ____
days immediately preceding such meeting. In lieu of closing the stock transfer
books, the Board of Directors may fix in advance a date as the record date for
any such determination of shareholders, such date in any case to be not more
than __ days and, in case of a meeting of shareholders, not less than _____ days
prior to the date on which the particular action, requiring such determination
of shareholders is to be taken. If the stock transfer books are not closed and
no record date is fixed for the determination of shareholders entitled to notice
of or to vote at a meeting of shareholders, or shareholders entitled to receive
payment of a dividend, the date on which notice of the meeting is mailed or the
date on which the resolution of the Board of Directors declaring such dividend
is adopted, as the case may be, shall be the record date for such determination
of shareholders. When a determination of shareholders entitled to vote at any
meeting of share-holders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
SECTION 6. Voting Lists. The officer or agent having charge of the stock
transfer books for shares of the corporation shall make a complete list of the
shareholders entitled to vote at each meeting of shareholders or any adjournment
thereof, arranged in alphabetical order, with the address of and the number of
shares held by each. Such list shall be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting for the purposes thereof.
SECTION 7. Quorum. A majority of the outstanding shares of the corporation
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. if less than a majority of the outstanding shares
are represented at a meeting, a majority of the shares so represented may
adjourn the meeting from time to time
- 2 -
<PAGE>
without further notice. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. The shareholders present at a
duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
SECTION 8. Proxies. At all meetings of shareholders, a shareholder may
vote in person or by proxy executed in writing by shareholder or by his duly
authorized attorney-in-fact. Such proxy shall be filed with the secretary of the
corporation before or at the time of the meeting. No proxy shall be valid after
_____ months from the date of its execution, unless otherwise provided in the
proxy.
SECTION 9. Voting of Shares. Subject to the provisions of Section 12 of
this Article II, each outstanding share entitled to vote shall be entitled to
one vote upon each matter submitted to a vote at a meeting of shareholders.
SECTION 10. Voting of Shares by Certain Holders. Shares standing in the
name of another corporation may be voted by such officer, agent or proxy as the
by-laws of such corporation may prescribe, or, in the absence of such provision,
as the board of directors of such corporation may determine.
Shares held by an administrator, executor, guardian or conservator may be
voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Shares of its own stock belonging to the corporation shall not be voted,
directly or indirectly, at any meeting, and shall not be counted in determining
the total number of outstanding shares at any given time.
- 3 -
<PAGE>
SECTION 11. Informal Action by Shareholders. Unless otherwise provided by
law, any action required to be taken at a meeting of the shareholders, or any
other action which may be taken at a meeting of the shareholders, may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the shareholders entitled to vote with respect to the
subject matter thereof.
SECTION 12. Cumulative Voting. Unless otherwise provided by law, at each
election for Directors every shareholder entitled to vote at such election shall
have the right to vote, in person or by proxy, the number of shares owned by him
for as many persons as there are Directors to be elected and for whose election
he has a right to vote, or to cumulate his votes by giving one candidate as many
votes as the number of such Directors multiplied by the number of his shares
shall equal, or by distributing such votes on the same principle among any
number of candidates.
ARTICLE III. BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of the corporation
shall be managed by its Board of Directors.
SECTION 2. Number, Tenure and Qualifications. The number of directors of
the corporation shall be two. Each director shall hold office until the next
annual meeting of shareholders and until his successor shall have been elected
and qualified. Any change in the number of Directors will be reported to the
Secretary of State within thirty days of such change.
SECTION 3. Regular Meetings. A regular meeting of the Board of Directors
shall be held without other notice than this by-law immediately after, and at
the same place as, the annual meeting of shareholders. The Board of Directors
may provide, by resolution, the time and place for the holding of additional
regular meetings without other notice than such resolution.
SECTION 4. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the President or any two directors. The
person or persons authorized to call special meetings of the Board of Directors
may fix the place for holding any special meeting of the Board of Directors
called by them.
SECTION 5. Notice. Notice of any special meeting shall be given at least
ten days previously thereto by written notice delivered personally or mailed to
each director at his business address, or by telegram. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail so
addressed, with postage thereon
- 4 -
<PAGE>
prepaid. If notice be given by telegram, such notice shall be deemed to be
delivered when the telegram is delivered to the telegraph company. Any director
may waive notice of any meeting. The attendance of a director at a meeting shall
constitute a waiver of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
SECTION 6. Quorum. A majority of the number of directors fixed by Section
2 of this Article III shall constitute a quorum for the transaction of business
at any meeting of the Board of Directors, but if less than such majority is
present at a meeting, a majority of the directors present may adjourn the
meeting from time to time without further notice.
SECTION 7. Manner of Act. The act of the majority of the directors present
at a meeting at which a quorum is present shall be the act of the Board of
Directors.
SECTION 8. Action Without A Meeting. Any action that may be taken by the
Board of Directors at a meeting may be taken without a meeting if a consent in
writing, setting forth the action so to be taken, shall be signed before such
action by all of the Directors.
SECTION 9. Vacancies. Any vacancy occurring in the Board of Directors may
be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors, unless otherwise provided
by law. A director elected to fill a vacancy shall be elected for the unexpired
term of his predecessor in office. Any directorship to be filled by reason of an
increase in the number of directors may be filled by election by the Board of
Directors for a term of office continuing only until the next election of
Directors by the shareholders.
SECTION 10. Compensation. By resolution of the Board of Directors, each
Director may be paid his expenses, if any, of attendance at each meeting of the
Board of Directors, and may be paid a stated salary as director or a fixed sum
for attendance at each meeting of the Board of Directors or both. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
SECTION 11. Presumption of Assent. A director of the corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his dissent shall be entered in the minutes of the meeting or unless he shall
file his written dissent to such action with the person acting as the secretary
of the meeting before the adjournment thereof or shall forward such dissent by
- 5 -
<PAGE>
registered mail to the Secretary of the corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a Director
who voted in favor of such action.
ARTICLE IV. OFFICERS.
SECTION 1. Number. The officers of the corporation shall be a President, a
Vice-President, a Secretary and a Treasurer, each of whom shall be elected by
the Board of Directors. Such other officers and assistant officers as may be
deemed necessary may be elected or appointed by the Board of Directors.
SECTION 2. Election and Term of Office. The officers of the corporation to
be elected by the Board of Directors shall be elected annually by the Board of
Directors at the first meeting of the Board of Directors held after each annual
meeting of the shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as conveniently may
be. Each officer shall hold office until his successor shall have been duly
elected and shall have qualified or until his death or until he shall resign or
shall have been removed in the manner hereinabove provided.
SECTION 3. Removal. Any officer or agent may be removed by the Board of
Directors whenever in its judgment, the best interests of the corporation will
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment of an officer
or agent shall not of itself create contract rights.
SECTION 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.
SECTION 5. President. The President shall be the principal executive
officer of the corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the corporation. He shall, when present, preside at all meetings of
the shareholders and of the Board of Directors. He may sign, with the Secretary
or any other proper officer of the corporation thereunto authorized by the Board
of Directors, certificates for shares of the corporation, any deeds, mortgages,
bonds, contracts, contracts, or other instruments which the Board of Directors
has authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these
By-Laws to some other officer or agent of the corporation,
- 6 -
<PAGE>
or shall be required by law to be otherwise signed or executed; and in general
shall perform all duties incident to the office of President and such other
duties as may be prescribed by the Board of Directors from time to time.
SECTION 6. Vice-President. In the absence of the President or in the event
of his death, inability or refusal to act, the Vice-President shall perform the
duties of the President, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the President. The Vice-President shall
perform such other duties as from time to time may be assigned to him by the
President or by the Board of Directors.
SECTION 7. Secretary. The Secretary shall: (a) keep the minutes of the
proceedings of the shareholders and of the Board of Directors in one or more
books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these By-Laws or as required by law; (c) be
custodian of the corporate records and of the seal of the corporation and see
that the seal of the corporation is affixed to all documents the execution of
which on behalf of the corporation under its seal is duly authorized; (d) to
keep a register of the postoffice address of each shareholder which shall be
furnished to the Secretary by such shareholder; (e) sign with the President,
certificates for shares of the corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors; (f) have general charge
of the stock transfer books of the corporation; and (g) in general perform all
duties incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the President or by the Board of Directors.
SECTION 8. Treasurer. The Treasurer shall: (a) have charge and custody of
and be responsible for all funds and securities of the corporation; (b) receive
and give receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such monies in the name of the corporation in such
banks, trust companies or other depositaries as shall be selected in accordance
with the provisions of Article V of these By-Laws; and (c) in general perform
all of the duties incident to the office of Treasurer and such other duties as
from time to time may be assigned to him by the President or by the Board of
Directors. If required by the Board of Directors, the Treasurer shall give a
bond for the faithful discharge of his duties in such sum and with such surety
or sureties as the Board of Directors shall determine.
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<PAGE>
SECTION 9. Salaries. The salaries of the officers shall be fixed from time
to time by the Board of Directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation, and such authority
may be general or confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
SECTION 2. Transfer of Shares. Transfer of shares of the corporation shall
be made only on the stock transfer books of the corporation by the holder of
record thereof or by his legal representative, who shall furnish proper evidence
of authority to transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the corporation, and on
surrender for cancellation of the certificate for such shares. The person in
whose name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
ARTICLE VII. DIVIDENDS
The Board of Directors may from time to time declare, and the corporation
may pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law and its articles of incorporation.
ARTICLE VIII. CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation
and the state of incorporation and the words, "Corporate Seal".
ARTICLE IX. WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be
given to any shareholder or director of the corporation under the provisions of
these By-Laws or under the provisions of the articles of incorporation or under
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<PAGE>
the provisions of the Business Corporation Act, a waiver thereof in writing,
signed by the person or persons entitled to such notice, whether before or after
the time stated therein, shall be deemed equivalent to the giving of such
notice.
ARTICLE X. AMENDMENTS
These By-Laws may be altered, amended or repealed and new By-Laws may be
adopted by the Board of Directors at any regular or special meeting of the Board
of Directors.
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<PAGE>
CERTIFICATE OF INCORPORATION
OF
DEER CREEK AMPHITHEATER CONCERTS, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified, and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
FIRST: The name of the corporation (hereinafter called the
"corporation") is Deer Creek Amphitheater Concerts, Inc.
SECOND: The address, including street, number, city and county, of
the registered office of the corporation in the State of Delaware is 1013 Centre
Road, City of Wilmington 19805, County of New Castle; and the name of the
registered agent of the corporation in the State of Delaware at such address is
Corporation Service Company.
THIRD: 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.
FOURTH: The total number of shares of stock which the corporation
shall have authority to issue is one hundred. The par value of each of such
shares is one cent. All such shares are of one class and are shares of Common
Stock.
FIFTH: The name and the mailing address of the incorporator is as
follows:
NAME ADDRESS
---- -------
Deborah Goldman-Levi 150 East 58th Street, 19th Floor
New York, NY 10155
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between
this corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
ss.291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this corporation under
ss.279 of Title 8 of the Delaware Code order a meeting of the creditors or class
of creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three fourths in value of the
creditors or any class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, the binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this corporation, as the case
may be, and also on this corporation.
<PAGE>
EIGHTH: For the management of the business and for the conduct of
the affairs of the corporation, and in further definition, limitation, and
regulation of the powers of the corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the affairs of
the corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be fixed by,
or in the manner provided in, by the Bylaws. The phrase "whole Board" and the
phrase "total number of directors" shall be deemed to have the same meaning, to
wit, the total number of directors which the corporation would have if there
were no vacancies. No election of directors need be by written ballot.
2. After the original or other Bylaws of the corporation have been
adopted, amended, or repealed, as the case may be, in accordance with the
provision of ss.109 of the General Corporation Law of the State of Delaware,
and, after the corporation has received any payment for any of its stock, the
power to adopt, amend, or repeal the Bylaws of the corporation may be exercised
by the Board of Directors of the corporation; provided, however, that any
provision for the classification of directors of the corporation for staggered
terms pursuant to the provisions of subsections (d) of ss.141 of the General
Corporation Law of the State of Delaware shall be set forth in an initial Bylaw
or in a Bylaw adopted by the stockholders entitled to vote of the corporation
unless provisions for such classification shall be set forth in this certificate
of incorporation.
3. Whenever the corporation shall be authorized to issue only one
class of stock, each outstanding share shall entitle the holder thereof to
notice of, and the right to vote at, any meeting of stockholders. Whenever the
corporation shall be authorized to issue more than one class of stock, no
outstanding share of any class of stock which is denied voting power under the
provisions of the certificate of incorporation shall entitle the holder thereof
to the right to vote at any meeting of stockholders except as the provision of
paragraph (2) of subsection (b) of ss.242 of the General Corporation Law of the
State of Delaware shall otherwise require; provided, that no share of any such
class which is otherwise denied voting power shall entitle the holder thereof to
vote upon the increase to decrease in the number of authorized shares of said
class.
NINTH: The personal liability of the directors of the corporation is
hereby eliminated to the fullest extent permitted by the provisions of paragraph
(7) of subsection (b) of ss.102 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented.
TENTH: The corporation shall, to the fullest extent permitted by the
provisions of ss.145 of the General Corporation Law of the State of Delaware, as
the same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all of
the expenses, liabilities, or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any Bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee, or agent and shall inure to
the benefit of the heirs, executors, and administrators of such a person.
ELEVENTH: From time to time any of the provisions of this
certificate of incorporation may be amended, altered, or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in force
may be added or inserted in the manner and at the time prescribed by said laws,
and all rights at any time conferred upon the stockholders of the corporation by
this certificate of incorporation are granted subject to the provisions of this
Article ELEVENTH.
Signed on April 22, 1997
/s/ Deborah Goldman-Levi
----------------------------------
Deborah Goldman-Levi, Incorporator
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<PAGE>
BY-LAWS
OF
DEER CREEK AMPHITHEATER CONCERTS, INC.
------------------------------------------
ARTICLE I
OFFICES
1.1 Registered Office: The registered office shall be established
and maintained at and shall be the registered agent of the Corporation in charge
hereof.
1.2 Other Offices: The corporation may have other offices, either
within or without the State of Delaware, at such place or places as the Board of
Directors may from time to time appoint or the business of the corporation may
require, provided, however, that the corporation's books and records shall be
maintained at such place within the continental United States as the Board of
Directors shall from time to time designate.
ARTICLE II
STOCKHOLDERS
2.1 Place of Stockholders' Meetings: All meetings of the
stockholders of the corporation shall be held at such place or places, within or
outside the State of Delaware as may be fixed by the Board of Directors from
time to time or as shall be specified in the respective notices thereof.
2.2 Date and Hour of Annual Meetings of Stockholders: An annual
meeting of stockholders shall be held each year within five months after the
close of the fiscal year of the Corporation.
2.3 Purpose of Annual Meetings: At each annual meeting, the
stockholders shall elect the members of the Board of Directors for the
succeeding year. At any such annual meeting any further proper business may be
transacted.
2.4 Special Meetings of Stockholders: Special meetings of the
stockholders or of any class or series thereof entitled to vote may be called by
the President or by the Chairman of the Board of Directors, or at the request in
writing by stockholders of record owning at least fifty (50%) percent of the
issued and outstanding voting shares of common stock of the corporation.
2.5 Notice of Meetings of Stockholders: Except as otherwise
expressly required or permitted by law, not less than ten days nor more than
sixty days before the date of every stockholders' meeting the Secretary shall
give to each stockholder of record entitled to vote at such meeting, written
notice, served personally by mail or by telegram, stating the place, date and
hour of the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called. Such notice, if mailed shall be deemed
to be given when deposited in the United States mail, postage prepaid, directed
to the stockholder at his address for notices to such stockholder as it appears
on the records of the corporation.
2.6 Quorum of Stockholders: (a) Unless otherwise provided by the
Certificate of Incorporation or by law, at any meeting of the stockholders, the
presence in person or by proxy of stockholders entitled
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to cast a majority of the votes thereat shall constitute a quorum. The
withdrawal of any shareholder after the commencement of a meeting shall have no
effect on the existence of a quorum, after a quorum has been established at such
meeting.
(b) At any meeting of the stockholders at which a quorum shall
be present, a majority of voting stockholders, present in person or by proxy,
may adjourn the meeting from time to time without notice other than announcement
at the meeting. In the absence of a quorum, the officer presiding thereat shall
have power to adjourn the meeting from time to time until a quorum shall be
present. Notice of any adjourned meeting, other than announcement at the
meeting, shall not be required to be given except as provided in paragraph (d)
below and except where expressly required by law.
(c) At any adjourned session at which a quorum shall be
present, any business may be transacted which might have been transacted at the
meeting originally called but only those stockholders entitled to vote at the
meeting as originally noticed shall be entitled to vote at any adjournment or
adjournments thereof, unless a new record date is fixed by the Board of
Directors.
(d) If an adjournment is for more than thirty days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
2.7 Chairman and Secretary of Meeting: The President shall preside
at meetings of the stockholders. The Secretary shall act as secretary of the
meeting, or if he is not present, then the presiding officer may appoint a
person to act as secretary of the meeting.
2.8 Voting by Stockholders: Except as may be otherwise provided by
the Certificate of Incorporation or these by-laws, at every meeting of the
stockholders each stockholder shall be entitled to one vote for each share of
voting stock standing in his name on the books of the corporation on the record
date for the meeting. Except as otherwise provided by these by-laws, all
elections and questions shall be decided by the vote of a majority in interest
of the stockholders present in person or represented by proxy and entitled to
vote at the meeting.
2.9 Proxies: Any stockholder entitled to vote at any meeting of
stockholders may vote either in person or by proxy. Every proxy shall be in
writing, subscribed by the stockholder or his duly authorized attorney-in-fact,
but need not be dated, sealed, witnessed or acknowledged.
2.10 Inspectors: The election of directors and any other vote by
ballot at any meeting of the stockholders shall be supervised by at least two
inspectors. Such inspectors may be appointed by the presiding officer before or
at the meeting; or if one or both inspectors so appointed shall refuse to serve
or shall not be present, such appointment shall be made by the officer presiding
at the meeting.
2.11 List of Stockholders: (a) At least ten days before every
meeting of stockholders, the Secretary shall prepare and make a complete list of
the stockholders entitled to vote at the meeting, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder.
(b) During ordinary business hours, for a period of at least
ten days prior to the meeting, such list shall be open to examination by any
stockholder for any purpose germane to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or if not so specified, at the place where the meeting is
to be held.
(c) The list shall also be produced and kept at the time and
place of the meeting during the whole time of the meeting, and it may be
inspected by any stockholder who is present.
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(d) The stock ledger shall be the only evidence as to who are
the stockholders entitled to examine the stock ledger, the list required by this
Section 2.11 or the books of the corporation, or to vote in person or by proxy
at any meeting of stockholders.
2.12 Procedure at Stockholders' Meetings: Except as otherwise
provided by these by-laws or any resolutions adopted by the stockholders or
Board of Directors, the order of business and all other matters of procedure at
every meeting of stockholders shall be determined by the presiding officer.
2.13 Action by Consent Without Meeting: Unless otherwise provided by
the Certificate of Incorporation, any action required to be taken at any annual
or special meeting of stockholders, or any action which may be taken at any
annual or special meeting, may be taken without a meeting, without prior notice
and without a vote, if a consent 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. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing.
ARTICLE III
DIRECTORS
3.1 Powers of Directors: The property, business and affairs of the
corporation shall be managed by its Board of Directors, which may exercise all
the powers of the corporation except such as are by the law of the State of
Delaware or the Certificate of Incorporation or these by-laws required to be
exercised or done by the stockholders.
3.2 Number, Method of Election, Terms of Office of Directors: The
number of directors which shall constitute the Board of Directors shall be ( )
unless and until otherwise determined by a vote of a majority of the entire
Board of Directors. Each Director shall hold office until the next annual
meeting of stockholders and until his successor is elected and qualified,
provided, however, that a director may resign at any time. Directors need not be
stockholders.
3.3 Vacancies on Board of Directors; Removal: (a) Any director may
resign his office at any time by delivering his resignation in writing to the
Chairman of the Board or to the President. It will take effect at the time
specified therein or, if no time is specified, it will be effective at the time
of its receipt by the corporation. The acceptance of a resignation shall not be
necessary to make it effective, unless expressly so provided in the resignation.
(b) Any vacancy in the authorized number of directors may be
filled by majority vote of the stockholders, and any director so chosen shall
hold office until the next annual election of directors by the stockholders and
until his successor is duly elected and qualified or until his earlier
resignation or removal.
(c) Any director may be removed with or without cause t any
time by the majority vote of the stockholders given at a special meeting of the
stockholders called for that purpose.
3.4 Meetings of the Board of Directors: (a) The Board of Directors
may hold their meetings, both regular and special, either within or outside the
State of Delaware.
(b) Regular meetings of the Board of Directors may be held at
such time and place as shall from time to time be determined by resolution of
the Board of Directors. No notice of such regular meetings shall be required. If
the date designated for any regular meeting be a legal holiday, then the meeting
shall be held on the next day which is not a legal holiday.
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(c) The first meeting of each newly elected Board of Directors
shall be held immediately following the annual meeting of the stockholders for
the election of officers and the transaction of such other business as may come
before it. If such meeting is held at the place of the stockholders' meeting, no
notice thereof shall be required.
(d) Special meetings of the Board of Directors shall be held
whenever called by direction of the Chairman of the Board or the President or at
the written request of any one director.
(e) The Secretary shall give notice to each director of any
special meeting of the Board of Directors by mailing the same at least three
days before the meeting or by telegraphing, telexing, or delivering the same not
later than the date before the meeting.
Unless required by law, such notice need not include a
statement of the business to be transacted at, or the purpose of, any such
meeting. Any and all business may be transacted at any meeting of the Board of
Directors. No notice of any adjourned meeting need be given. No notice to or
waiver by any director shall be required with respect to any meeting at which
the director is present.
3.5 Quorum and Action: Unless provided otherwise by law or by the
Certificate of Incorporation or these by-laws, a majority of the Directors shall
constitute a quorum for the transaction of business; but if there shall be less
than a quorum at any meeting of the Board, a majority of those present may
adjourn the meeting from time to time. The vote of a majority of the Directors
present at any meeting at which a quorum is present shall be necessary to
constitute the act of the Board of Directors.
3.6 Presiding Officer and Secretary of the Meeting: The President,
or, in his absence a member of the Board of Directors selected by the members
present, shall preside at meetings of the Board. The Secretary shall act as
secretary of the meeting, but in his absence the presiding officer may appoint a
secretary of the meeting.
3.7 Action by Consent Without Meeting: Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes or proceedings of the Board or committee.
3.8 Action by Telephonic Conference: Members of the Board of
Directors, or any committee designated by such board, may participate in a
meeting of such board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in such a meeting shall
constitute presence in person at such meeting.
3.9 Committees: The Board of Directors shall, by resolution or
resolutions passed by a majority of Directors, designate one or more committees,
each of such committees to consist of one or more Directors of the Corporation,
for such purposes as the Board shall determine. The Board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of such committee.
3.10 Compensation of Directors: Directors shall receive such
reasonable compensation for their service on the Board of Directors or any
committees thereof, whether in the form of salary or a fixed fee or both, with
expenses, if any, for attendance at meetings, as the Board of Directors may from
time to time determine. Nothing herein contained shall be construed to preclude
any Director from serving in any other capacity and receiving compensation
therefor.
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<PAGE>
ARTICLE IV
OFFICERS
4.1 Officers, Title, Elections, Terms: (a) The elected officers of
the corporation shall be a President, a Treasurer and a Secretary, and such
other officers as the Board of Directors shall deem advisable. The officers
shall be elected by the Board of Directors at its annual meeting following the
annual meeting of the stockholders, to serve at the pleasure of the Board or
otherwise as shall be specified by the Board at the time of such election and
until their successors are elected and qualified.
(b) The Board of Directors may elect or appoint at any time,
and from time to time, additional officers or agents with such duties as it may
deem necessary or desirable. Such additional officers shall serve at the
pleasure of the Board or otherwise as shall be specified by the Board at the
time of such election or appointment. Two or more offices may be held by the
same person.
(c) Any vacancy in any office may be filled for the unexpired
portion of the term by the Board of Directors.
(d) Any officer may resign his office at any time. Such
resignation shall be made in writing and shall take effect at the time specified
therein or, if no time has been specified, at the time of its receipt by the
corporation. The acceptance of a resignation shall not be necessary to make it
effective, unless expressly so provided in the resignation.
(e) The salaries of all officers of the corporation shall be
fixed by the Board of Directors.
4.2 Removal of Elected Officers: Any elected officer may be removed
at any time, either with or without cause, by resolution adopted at any regular
or special meeting of the Board of Directors by a majority of the Directors then
in office.
4.3 Duties: (a) President: The President shall be the principal
executive officer of the corporation and, subject to the control of the Board of
Directors, shall supervise and control all the business and affairs of the
corporation. He shall, when present, preside at all meetings of the stockholders
and of the Board of Directors. He shall see that all orders and resolutions of
the Board of Directors are carried into effect (unless any such order or
resolution shall provide otherwise), and in general shall perform all duties
incident to the office of president and such other duties as may be prescribed
by the Board of Directors from time to time.
(b) Treasurer: The Treasurer shall (1) have charge and custody
of and be responsible for all funds and securities of the Corporation; (2)
receive and give receipts for moneys due and payable to the corporation from any
source whatsoever; (3) deposit all such moneys in the name of the corporation in
such banks, trust companies, or other depositories as shall be selected by
resolution of the Board of Directors; and (4) in general perform all duties
incident to the office of treasurer and such other duties as from time to time
may be assigned to him by the President or by the Board of Directors. He shall,
if required by the Board of Directors, give a bond for the faithful discharge of
his duties in such sum and with such surety or sureties as the Board of
Directors shall determine.
(c) Secretary: The Secretary shall (1) keep the minutes of the
meetings of the stockholders, the Board of Directors, and all committees, if
any, of which a secretary shall not have been appointed, in one or more books
provided for that purpose; (2) see that all notices are duly given in accordance
with the provisions of these by-laws and as required by law; (3) be custodian of
the corporate records and of the seal of the corporation and see that the seal
of the corporation is affixed to all documents, the execution of which on behalf
of the corporation under its seal, is duly authorized; (4) keep a register of
the post office address of each stockholder which shall be furnished
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to the Secretary by such stockholder; (5) have general charge of stock transfer
books of the Corporation; and (6) in general perform all duties incident to the
office of secretary and such other duties as from time to time may be assigned
to him by the President or by the Board of Directors.
ARTICLE V
CAPITAL STOCK
5.1 Stock Certificates: (a) Every holder of stock in the corporation
shall be entitled to have a certificate signed by, or in the name of, the
corporation by the President and by the Treasurer or the Secretary, certifying
the number of shares owned by him.
(b) If such certificate is countersigned by a transfer agent
other than the corporation or its employee, or by a registrar other than the
corporation or its employee, the signatures of the officers of the corporation
may be facsimiles, and, if permitted by law, any other signature may be a
facsimile.
(c) In case any officer who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the corporation
with the same effect as if he were such officer at the date of issue.
(d) Certificates of stock shall be issued in such form not
inconsistent with the Certificate of Incorporation as shall be approved by the
Board of Directors, and shall be numbered and registered in the order in which
they were issued.
(e) All certificates surrendered to the corporation shall be
canceled with the date of cancellation, and shall be retained by the Secretary,
together with the powers of attorney to transfer and the assignments of the
shares represented by such certificates, for such period of time as shall be
prescribed from time to time by resolution of the Board of Directors.
5.2 Record Ownership: A record of the name and address of the holder
of such certificate, the number of shares represented thereby and the date of
issue thereof shall be made on the corporation's books. The corporation shall be
entitled to treat the holder of any share of stock as the holder in fact
thereof, and accordingly shall not be bound to recognize any equitable or other
claim to or interest in any share on the part of any other person, whether or
not it shall have express or other notice thereof, except as required by law.
5.3 Transfer of Record Ownership: Transfers of stock shall be made
on the books of the corporation only by direction of the person named in the
certificate or his attorney, lawfully constituted in writing, and only upon the
surrender of the certificate therefor and a written assignment of the shares
evidenced thereby. Whenever any transfer of stock shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of the
transfer if, when the certificates are presented to the corporation for
transfer, both the transferor and the transferee request the corporation to do
so.
5.4 Lost, Stolen or Destroyed Certificates: Certificates
representing shares of the stock of the corporation shall be issued in place of
any certificate alleged to have been lost, stolen or destroyed in such manner
and on such terms and conditions as the Board of Directors from time to time may
authorize.
5.5 Transfer Agent; Registrar; Rules Respecting Certificates: The
corporation may maintain one or more transfer offices or agencies where stock of
the corporation shall be transferable. The corporation may also maintain one or
more registry offices where such stock shall be registered. The Board of
Directors may make such rules and regulations as it may deem expedient
concerning the issue, transfer and registration of stock certificates.
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<PAGE>
5.6 Fixing Record Date for Determination of Stockholders of Record:
The Board of Directors may fix, in advance, a date as the record date for the
purpose of determining stockholders entitled to notice of, or to vote at, any
meeting of the stockholders or any adjournment thereof, or the stockholders
entitled to receive payment of any dividend or other distribution or the
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or to express consent to corporate
action in writing without a meeting, or in order to make a determination of the
stockholders for the purpose of any other lawful action. Such record date in any
case shall be not more than sixty days nor less than ten days before the date of
a meeting of the stockholders, nor more than sixty days prior to any other
action requiring such determination of the stockholders. A determination of
stockholders of record entitled to notice 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.
5.7 Dividends: Subject to the provisions of the Certificate of
Incorporation, the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the capital
stock of the corporation as and when they deem expedient. Before declaring any
dividend there may be set apart out of any funds of the corporation available
for dividends, such sum or sums as the Board of Directors from time to time in
their discretion deem proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
Board of Directors shall deem conducive to the interests of the corporation.
ARTICLE VI
SECURITIES HELD BY THE CORPORATION
6.1 Voting: Unless the Board of Directors shall otherwise order, the
President, the Secretary or the Treasurer shall have full power and authority,
on behalf of the corporation, to attend, act and vote at any meeting of the
stockholders of any corporation in which the corporation may hold stock, and at
such meeting to exercise any or all rights and powers incident to the ownership
of such stock, and to execute on behalf of the corporation a proxy or proxies
empowering another or others to act as aforesaid. The Board of Directors from
time to time may confer like powers upon any other person or persons.
6.2 General Authorization to Transfer Securities Held by the
Corporation:
(a) Any of the following officers, to wit: the President and
the Treasurer, shall be, and they hereby are, authorized and empowered to
transfer, convert, endorse, sell, assign, set over and deliver any and all
shares of stock, bonds, debentures, notes, subscription warrants, stock purchase
warrants, evidence of indebtedness, or other securities now or hereafter
standing in the name of or owned by the corporation, and to make, execute and
deliver, under the seal of the corporation, any and all written instruments of
assignment and transfer necessary or proper to effectuate the authority hereby
conferred.
(b) Whenever there shall be annexed to any instrument of
assignment and transfer executed pursuant to and in accordance with the
foregoing paragraph (a), a certificate of the Secretary of the corporation in
office at the date of such certificate setting forth the provisions of this
Section 6.2 and stating that they are in full force and effect and setting forth
the names of persons who are then officers of the corporation, then all persons
to whom such instrument and annexed certificate shall thereafter come, shall be
entitled, without further inquiry or investigation and regardless of the date of
such certificate, to assume and to act in reliance upon the assumption that the
shares of stock or other securities named in such instrument were theretofore
duly and properly transferred, endorsed, sold, assigned, set over and delivered
by the corporation, and that with respect to such securities the authority of
these provisions of the by-laws and of such officers is still in full force and
effect.
By-Laws - 7
<PAGE>
ARTICLE VII
MISCELLANEOUS
7.1 Signatories: All checks, drafts or other orders for the payment
of money, notes or other evidences of indebtedness issued in the name of the
corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
7.2 Seal: The seal of the corporation shall be in such form and
shall have such content as the Board of Directors shall from time to time
determine.
7.3 Notice and Waiver of Notice: Whenever any notice of the time,
place or purpose of any meeting of the stockholders, directors or a committee is
required to be given under the law of the State of Delaware, the Certificate of
Incorporation or these by-laws, a waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or after the holding
thereof, or actual attendance at the meeting in person or, in the case of any
stockholder, by his attorney-in-fact, shall be deemed equivalent to the giving
of such notice to such persons.
7.4 Indemnity: The corporation shall indemnify its directors,
officers and employees to the fullest extent allowed by law, provided, however,
that it shall be within the discretion of the Board of Directors whether to
advance any funds in advance of disposition of any action, suit or proceeding,
and provided further that nothing in this Section 7.4 shall be deemed to obviate
the necessity of the Board of Directors to make any determination that
indemnification of the director, officer or employee is proper under the
circumstances because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of Section 145 of the Delaware General Corporation Law.
7.5 Fiscal Year: Except as from time to time otherwise determined by
the Board of Directors, the fiscal year of the corporation shall end on .
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<PAGE>
CERTIFICATE OF LIMITED PARTNERSHIP
OF
DEER CREEK AMPHITHEATER CONCERTS, L.P.
This Certificate of Limited Partnership of Deer Creek Amphitheater
Concerts, L.P. (the "Limited Partnership") is being executed by the undersigned
for the purpose of forming a limited partnership pursuant to the Delaware
Revised Uniform Limited Partnership Act.
1. The name of the limited partnership is Deer Creek Amphitheater
Concerts, L.P.
2. The address of the registered office of the Limited Partnership in
Delaware is 1013 Centre Road, Wilmington, Delaware 19805. The Limited
Partnership's registered agent at that address is Corporation Service Company.
3. The name and address of the general partner is:
NAME ADDRESS
---- -------
Deer Creek Amphitheater 150 East 58th Street, 19th Floor
Concerts, Inc. New York, NY 10155
IN WITNESS WHEREOF, the undersigned, constituting the sole general partner
of the Limited Partnership, has caused this Certificate of Limited Partnership
to be duly executed as of June 10, 1997.
Deer Creek Amphitheater Concerts, L.P.
By: Deer Creek Amphitheater
Concerts, Inc., as General Partner
By: /s/ Robert F.X. Sillerman
-------------------------------------
Robert F.X. Sillerman
Executive Chairman
<PAGE>
ARTICLES OF INCORPORATION
OF
ENTERTAINMENT PERFORMING ARTS, INC.
The undersigned, being a natural person of the age of 18 years or
more and acting as the incorporator, does hereby adopt the following Articles of
Incorporation for the purpose of organizing a corporation pursuant to the
provisions of the Texas Business Corporation Act.
ARTICLE ONE
The name of the corporation is ENTERTAINMENT' PERFORMING ARTS, INC.
ARTICLE TWO
The period of duration of the corporation is perpetual.
ARTICLE THREE
The purpose or purposes for which the corporation is organized are:
To transact any or all lawful business for which corporations
may be incorporated under the Texas Business Corporation Act.
ARTICLE FOUR
The aggregate number of shares which the corporation shall have
authority to issue is one thousand, all of which are of one class and of the par
value of one dollar each.
ARTICLE FIVE
The corporation will not commence business until it has received for
the issuance of its shares consideration of the value of at least one thousand
dollars, consisting of money, labor done, or property actually received.
ARTICLE SIX
No holder of any class of shares of the corporation shall be
entitled to cumulate his votes at any election of directors.
<PAGE>
ARTICLE SEVENTH
The following provisions are inserted herein for the purpose of
defining, limiting, and regulating the powers of the corporation and of the
directors and of the shareholders, provided, however, that said provisions shall
not be deemed exclusive of any rights or liabilities otherwise granted or
imposed by the laws of the State of Texas:
(a) The corporation shall, to the fullest extent permitted by
Article 2.02-1 of the Texas Business Corporation Act, as the same may be
amended and supplemented, indemnify any and all persons whom it shall have
power to indemnify under said Article from and against any and all of the
expenses, liabilities, or other matters referred to or covered by said
Article.
(b) Whenever any provision of the Texas Business Corporation Act
shall otherwise require for the approval of any specified corporate action
the authorization of at least two-thirds of the voting power of
shareholders entitled to vote, any such corporate action shall be approved
by the authorization of at least a majority of the voting power of- the
shareholders entitled to vote; and whenever the corporation shall have one
or more classes or series of shares which are denied voting power under
the Articles of Incorporation but the authorization of at least two-thirds
of the voting power of said class or series is otherwise required for the
approval of any specified corporate action under the Texas Business
Corporation Act, any such corporate action shall be approved by said class
or series by the authorization of at least a majority of the voting power
of each such class and of each such series. The term "voting power", as
used herein, shall have the meaning ascribed to it by the provisions of
Article 2.29 of the Texas Business Corporation Act, as the same may be
amended and supplemented.
(c) In conformity with the provisions of Article 2.03 of the Texas
Business Corporation Act, as the same may be amended and supplemented, and
without the vote or concurrence of any of its shareholders, the
corporation may purchase, directly or indirectly, its own shares to the
extent of the aggregate of unrestricted capital surplus available therefor
and unrestricted reduction surplus available therefor.
ARTICLE EIGHTH
The post-office address of the initial registered office of the
corporation in the State of Texas is c/o The Prentice-Hall Corporation System,
Inc., Littlefield Building, Austin, Texas 78701, and the name of the initial
registered agent of the corporation at such address is The Prentice-Hall
Corporation System, Inc.
ARTICLE NINTH
The number of directors constituting the initial Board of Directors
of the corporation is one, and the name and the address of each person who is to
serve as a director until the first annual meeting of the shareholders or until
his successor is elected and qualified are:
2
<PAGE>
NAME ADDRESS
---- -------
Miles Wilkin 4543 Post Oak Place Drive,
Suite 200
Houston, Texas 77027
ARTICLE TEN
The name and the address of the incorporator are:
NAME ADDRESS
---- -------
Mary Sivers 1 Gulf+Western Plaza
New York, N.Y. 10023-7773
ARTICLE ELEVEN
From time to time any of the provisions of these Articles of
Incorporation may be amended, altered, or repealed, and other provisions
authorized by the laws of the State of Texas at the time in force may be added
or inserted in the manner and at the time prescribed by said laws, and all
contracts and rights at any time conferred upon the shareholders of the
corporation by these Articles of Incorporation are granted subject to the
provisions of this Article.
Signed on April 17, 1987.
/s/ Mary Sivers
------------------------------
Mary Sivers, Incorporator
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
I, Vita Ponzo, a notary public, do hereby certify that on this 17th
day of April, 1987, personally appeared before me Mary Sivers, who being by me
first duly sworn declared that she is the person who signed the foregoing
document as incorporator, and that the statements therein contained are true.
/s/ Vita Ponzo
------------------------------
Vita Ponzo
Notary Public
[Notary Mark]
3
<PAGE>
BYLAWS
OF
ENTERTAINMENT PERFORMING ARTS, INC.
ARTICLE I
OFFICES
Section 1. Registered Office. Until the Board of Directors otherwise
determines, the registered office of the Corporation required by the Texas
Business Corporation Act to be maintained in the State of Texas shall be at the
address set forth in the Articles of Incorporation of the Corporation, but such
registered office may be changed from time to time by the Board of Directors in
the manner provided by law and need not be identical to the principal place of
business of the Corporation.
Section 2. Other Offices. The Corporation may also have offices at such
other places or locations, within or without the State of Texas, as the Board of
Directors may, by resolution, from time to time determine or the business of the
Corporation may require.
ARTICLE II
SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders shall be
held at 10:00 a.m. on the first Tuesday in March of each year, if not a legal
holiday, and if a legal holiday, then on the next succeeding business day, or on
such other date and time as the Board of Directors shall fix and set forth in
the notice of the meeting, for the purpose of electing directors to succeed
those whose terms expire and for the transaction of any and all such other
business as may properly be brought before or submitted to this meeting. Any and
all business of any nature or character whatsoever may be transacted, and action
may be taken thereon, at any annual meeting, except as otherwise provided by law
or by these Bylaws.
Each annual meeting of the shareholders shall be held at the registered
office of the Corporation, or at such other place within or without the State of
Texas as may be determined by the Board of Directors and set forth in the notice
of the meeting. However, any annual meeting may be held at any place within or
without the State of Texas designated in a waiver or waivers of notice signed by
all of the shareholders.
Section 2. Special Meetings. Each special meeting of the shareholders
shall be held at the registered office of the Corporation, or at such other
place within or without the State of Texas as may be determined by the Board of
Directors and set forth in the notice of the meeting. However, any special
meeting may be held at any place within or without the State of Texas designated
in a waiver or waivers of notice signed by all of the shareholders.
Special meetings of the shareholders for any purpose or purposes, unless
otherwise prescribed by statute, or by the Articles of Incorporation of the
Corporation, may be called at any time by the President, by directors
constituting fifty percent (50%) or more of the Board of Directors, or by the
then holders of at least ten percent (10%) of the then issued and outstanding
shares of any class of the capital stock of the Corporation entitled to be voted
at such meeting, or of any class if there be more than one (1) class of such
stock entitled to vote on any matter to be submitted to the particular meeting.
Any notice calling a special meeting shall state the purpose or purposes of the
proposed meeting.
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Section 3. Record Dates and Closing of Transfer Books. For the purpose of
determining shareholders entitled to notice of or to vote at any meeting of
shareholders, or any adjournment thereof, or entitled to consent to any
corporate action in writing without a meeting, or entitled to receive payment of
any dividend, or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors of the Corporation may provide, in
advance, that the stock transfer books shall be closed for a stated period but
not to exceed, in any case, sixty (60) days. If the stock transfer books shall
be closed for the purpose of determining shareholders entitled to notice of or
to vote at a meeting of shareholders, or to consent to any corporate action in
writing without a meeting, such books shall be closed for at least ten (10) days
immediately preceding such meeting or consent. If the Board of Directors does
not close the stock transfer books, the Board of Directors shall fix in advance
a date as the record date for any such determination of shareholders, such date
in any case to be not more than sixty (60) days and, in case of a meeting of or
consent by the shareholders, not less than ten (10) days prior to the date on
which the particular action or consent requiring such determination of
shareholders is to be taken. If the stock transfer books are not closed and no
record date is fixed, the date on which the notice of the meeting is mailed, the
date the first written consent is given, or the date on which the resolution of
the Board of Directors declaring such dividend is adopted, as the case may be,
shall be the record date for such determination of shareholders. A determination
of shareholders of record entitled to notice of or to vote at a meeting of
shareholders shall apply to any adjournment of such meeting unless the Board of
Directors fixes a new record date for the adjourned meeting.
Section 4. Notices of Meetings. Written or printed notice stating the
place, day and hour of each meeting of the shareholders and, in case of a
special meeting, the purpose or purposes for which the meeting is called, shall
be delivered not less than ten (10) days nor more than sixty (60) days before
the date of the meeting, either personally or by mail, by or at the direction of
the President, the Secretary, or the person calling the meeting, to each
shareholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail
addressed to the shareholder at his address as it appears on the stock transfer
books of the Corporation, with postage thereon prepaid.
Section 5. Voting List. A complete list of shareholders entitled to vote
at each shareholders' meeting or any adjournment thereof arranged in
alphabetical order, with the address of and number of shares held by each
shareholder, shall be prepared by the Secretary or other officer or agent having
charge of the stock transfer books, and shall be kept on file at the registered
office of the Corporation and subject to inspection by any shareholder during
usual business hours for a period of at least ten (10) days prior to such
meeting. Such list shall be produced and kept open at such meeting and at all
times during such meeting shall be subject to inspection by any shareholder.
Section 6. Quorum of Shareholders. Unless otherwise provided in the
Articles of Incorporation of the Corporation, the holders of a majority of the
shares entitled to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of shareholders. The shareholders present at a duly
organized meeting may continue to transact business until adjournment
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
Section 7. Adjournments of Meetings. If the holders of the amount of stock
necessary to constitute a quorum shall fail to attend any meeting of the
shareholders in person or by proxy, then the holders of a majority of the votes
of the shareholders present, in person or by proxy, and entitled to vote
thereat, may adjourn any such meeting from time to time without notice, other
than by announcement at the meeting, until holders of the amount of stock
requisite to constitute a quorum shall be present at the particular meeting or
at any adjournment or adjournments thereof, in person or by proxy. The holders
of a majority of the votes of the shareholders present, in person or by proxy,
and entitled to vote at any meeting, may also adjourn any annual or special
meeting of the shareholders from time to time and without notice other than by
announcement at the meeting of the time and place at which the meeting will
reconvene, until the transaction of any and all business submitted or proposed
to be submitted to such meeting or any adjournment or adjournments thereof shall
have been completed. If the adjournment is for more than thirty (30) days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at such meeting. At any such adjourned meeting at which a
quorum is
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present, in person or by proxy, any business may be transacted which might have
been transacted at the meeting as originally notified or called.
Section 8. Attendance and Proxies. Each shareholder entitled to vote at
the particular shareholders' meeting may attend such meeting and vote in person
or may attend such meeting by proxy, and vote by such proxy, appointed by
instrument in writing subscribed by the shareholder or by such shareholder's
duly authorized agent or attorney-in-fact and filed with the Secretary or other
officer or agent in charge of tabulating votes at such meeting, before or at the
time of the particular meeting, and the attendance or the vote at any such
meeting of a proxy of any such shareholder so appointed shall for all purposes
be considered as attendance or vote in person of such shareholder. No proxy
shall be valid after eleven (11) months from the date of its execution unless a
longer period is expressly provided in the proxy. Each proxy shall be revocable
unless expressly provided therein to be irrevocable and unless coupled with an
interest. The Secretary or other officer or agent in charge of tabulating votes
at any shareholders' meeting shall decide all questions touching upon the
qualifications of voters, the validity of proxies or the acceptance or rejection
of votes.
Section 9. Conduct of Meeting. The President shall call each meeting of
the shareholders to order and shall act as Chairman of such meeting. If for any
reason whatever neither the President nor a Vice President of the Corporation
acts or will act as the Chairman of the meeting of the shareholders, then the
shareholders present, in person or by proxy, and entitled to vote thereat may by
majority vote appoint a Chairman who shall act as Chairman of the meeting. The
Chairman of the meeting shall determine the order of business and the procedure
at the meeting, including such regulation of the conduct of discussion as seem
to him appropriate.
The Secretary shall act as secretary of each meeting of the shareholders.
If for any reason whatever neither the Secretary nor an Assistant Secretary acts
or will act as secretary of the meeting of shareholders, then the Chairman of
the meeting or, if he fails to do so, the shareholders present, either in person
or by proxy, and entitled to vote thereat may by majority vote appoint any
person to act as secretary of the meeting and such person shall act as secretary
of the meeting.
Section 10. Voting of Shares. Except as may be otherwise provided in the
Articles of Incorporation of the Corporation or required by law, at each meeting
of the shareholders, each outstanding share, regardless of class, standing in
the shareholder's name on the stock transfer books on the record date for the
meeting shall be entitled to one (1) vote on each matter submitted to a vote at
such meeting. Treasury shares, shares of the Corporation's own stock owned by
another corporation, the majority of the voting stock of which is owned or
controlled by the Corporation, and shares of the Corporation's own stock held by
a corporation in a fiduciary capacity in favor of the Corporation shall not be
voted, directly or indirectly, at any meeting, and shall not be counted in
determining the total number of outstanding shares at any given time.
Section 11. Cumulative Voting. The right of cumulative voting shall exist
(in accordance with the terms of the Articles of Incorporation of the
Corporation, if so set forth) unless denied by the Articles of Incorporation.
Any shareholder who intends to cumulate his votes as herein authorized shall
give written notice of such intentions to the Secretary on or before the day
preceding the election at which such shareholder intends to cumulate his votes.
All shareholders may cumulate their votes if any shareholder gives the written
notice provided for herein.
Section 12. Voting of Shares Owned by Another Corporation. Shares of stock
of this Corporation standing in the name of another corporation, domestic or
foreign, on the books and records of this Corporation and having voting rights
may be voted by such officer, agent or proxy as the bylaws (or comparable
instrument) of such other corporation may authorize, or, in the absence of such
authorization, as the board of directors (or comparable body) of such other
corporation may determine, subject to such provisions of the Texas Business
Corporation Act as may be applicable in any instance.
Section 13. Shares Held by Administrators, Executors, Guardians,
Conservators, Trustees, Receivers or Pledgees. Shares held by an administrator,
executor, guardian, or conservator, may be voted by him so long as such
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shares form part of an estate being served by him, either in person or by proxy,
without a transfer of such shares into his name. Shares standing in the name of
a trustee may be voted by him, either in person or by proxy, but no trustee
shall be entitled to vote shares held by him unless such shares shall have been
transferred into his name as trustee. Shares standing in the name of a receiver
may be voted by such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without such shares being transferred
into his name if authority so to do is contained in an appropriate order of the
Court by which such receiver was appointed. A shareholder whose shares are
pledged shall be entitled to vote such shares until such shares have been
transferred into the name of the pledgee or other purchaser thereof, and
thereafter the pledgee or other purchaser shall be entitled to vote the shares
so transferred.
Section 14. Decisions at Meetings. At all meetings of the shareholders,
all questions, business, and matters except those the manner of deciding which
is otherwise expressly governed by the Texas Business Corporation Act, the
Articles of Incorporation of the Corporation or these Bylaws, shall be decided
by the vote of the holders of a majority of the votes of the shareholders of the
Corporation present, in person or by proxy, and entitled to vote, a quorum being
present. Upon the demand of any qualified voter or his proxy, voting on any
question, matter or business at such meeting shall be by ballot. In the event
any business, question or matter is so voted upon by ballot, then each ballot
shall be signed by the shareholder voting or by his proxy and shall state the
number of shares so voted and such other information as may be required under
the procedure established for the meeting.
Section 15. Written Consent and Telephone Meetings. Any action required or
permitted to be taken at any annual or special meeting of shareholders of the
Corporation may be taken without a meeting, without prior notice, and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by all of the shareholders (or such lesser number as may be permitted by
the Articles of Incorporation of the Corporation) entitled to vote with respect
to the subject matter thereof. Unless otherwise restricted by the Articles of
Incorporation of the Corporation or these Bylaws, and subject to proper notice
or waiver thereof, any regular or special meeting of the shareholders may be
held by means of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other, and
participation at such a meeting shall constitute presence in person at such
meeting and waiver of notice of such meeting, except where a person participates
in the meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Board of Directors. The business and affairs of the Corporation
shall be managed by the Board of Directors and, subject to such restrictions, if
any, as may be imposed by law, the Articles of Incorporation or by these Bylaws,
the Board of Directors may, and are fully authorized to, exercise all the powers
of the Corporation. Unless provided otherwise in the Articles of Incorporation
of the Corporation or these Bylaws, directors need not be residents of the State
of Texas, shareholders of the Corporation or have any other specific
qualification.
In addition to the powers and authority expressly conferred on the Board
of Directors by law, the Articles of Incorporation or these Bylaws, the Board of
Directors may exercise all the powers of the Corporation and do all such lawful
acts and things as may be done by the Corporation which are not by the laws of
the State of Texas, the Articles of Incorporation of the Corporation or these
Bylaws directed or required to be exercised or done by the shareholders.
Section 2. Number of Directors. The number of directors which shall
constitute the whole Board of Directors shall be the number fixed by the
shareholders of the Corporation from time to time, or in the absence of such a
determination shall be the number set forth in Articles of Incorporation, For
the purposes hereof, unless specifically provided otherwise by the shareholders
in connection with their election of a director, such director's "term" shall
begin on the date of his election and continue until the date set forth herein
for the next annual meeting of the shareholders,
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but such director shall continue in office thereafter at the pleasure of the
shareholders until his successor shall have been elected and qualified.
Section 3. Election and Term. Except for directors elected to fill
vacancies or increases in the Board of Directors, the procedure for which is set
forth below, the directors shall be elected each year at the annual meeting of
the shareholders, or at a special meeting of the shareholders held in lieu of
the annual meeting, if the same is not held when provided for by these Bylaws,
and each such director shall hold office, unless removed, in accordance with the
provisions of applicable law, the Articles of Incorporation of the Corporation
and these Bylaws, or unless he resigns, for the term for which he is elected and
until his successor shall have been elected and qualified.
Section 4. Vacancies Created by Resignations and Increases. Any vacancy
occurring in the Board of Directors by reason of the resignation of a director
may be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors. A director elected to fill
a vacancy shall be elected for the unexpired term of his predecessor in office
and until his successor shall have been elected and qualified.
Section 5. Removal; Vacancies. Subject to Article 2.32 of the Texas
Business Corporation Act and other applicable law, the directors of the
Corporation, and each of them, may be removed from office from time to time and
at any time with or without cause, by the shareholders entitled to vote at any
meeting thereof at which a quorum is present, by the vote of a majority of the
votes of the shareholders present in person or by proxy and entitled to vote
thereat; and any vacancy or vacancies in the Board resulting therefrom may be
filled by the affirmative vote of a majority of the remaining directors, though
less than a quorum of the Board of Directors, or at a special meeting of the
shareholders entitled to vote thereon called for that purpose, whichever shall
first occur. A director elected to fill such a vacancy shall be elected for the
unexpired term (as defined in Section 2 of this Article) of his predecessor in
office and until his successor shall have been elected and qualified.
Section 6. Meeting of Directors. Meetings of the Board of Directors,
regular or special, may be held either within or without the State of Texas.
Section 7. First Meeting. Each newly elected Board of Directors may hold
its first meeting for the purpose of organization and the transaction of
business, if a quorum is present, immediately after and at the same place as the
annual meeting of the stockholders, and no notice of such meeting shall be
necessary.
Section 8. Election of Officers. At the first meeting of the Board of
Directors in each year at which a quorum shall be present, held next after the
annual meeting of shareholders, the Board of Directors shall proceed to the
election of the officers of the Corporation.
Section 9. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such times and places as shall be designated or determined from
time to time by the Board of Directors. Notice of such regular meetings shall
not be required.
Section 10. Special Meetings. Special meetings of the Board of Directors
shall be held whenever and wherever called or provided to be held by the
Chairman of the Board (if any), by the President or by any two of the directors
for the time being in office if the number of directors shall be five (5) or
more or by any one (1) of the directors for the time being in office if the
number of directors shall be four (4) or less, and at the place, day and hour
determined by the officer or the director(s) calling or providing for the
holding of the particular meeting.
Section 11. Notice. The Secretary or an Assistant Secretary shall, but in
the event of the absence of the Secretary or an Assistant Secretary or the
failure, inability, refusal or omission on the part of the Secretary or an
Assistant Secretary so to do, any other officer of the Corporation or the
director or directors calling such meeting, may give notice of each special
meeting, and of the place, day and hour of the particular meeting, in person or
by mail, or by telephone, telegraph or other means of communication, at least
twenty-four (24) hours before the meeting to each
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director. The attendance of a director at any meeting shall constitute a waiver
of notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
Section 12. Quorum; Adjournment if Quorum is not Present; Required Vote of
Directors. Unless otherwise provided in the Articles of Incorporation of the
Corporation or by these Bylaws, a majority of the number of directors fixed by
these Bylaws shall constitute a quorum for the transaction of any and all
business of the Board of Directors, but if at any meeting, regular or special,
or any first meeting, of the Board of Directors there be less than a quorum
present, a majority of those present, or if only one (1) director be present,
then such director, may adjourn the meeting from time to time without notice,
other than by announcement at the meeting, until a quorum shall be present at
the meeting. A majority of the directors present at any meeting of the Board of
Directors, or if only one (1) director be present, then such director may
adjourn any meeting of the Board from time to time without notice, other than by
announcement at such meeting of the time and place at which the meeting will
reconvene, until the transaction of any and all business submitted or proposed
to be submitted to such meeting or any adjournment or adjournments thereof shall
have been completed. The vote of a majority of the directors present at any
meeting of the Board of Directors at which a quorum is present shall be the act
of the Board of Directors unless the act of a greater number is required by
applicable law, by the Articles of Incorporation of the Corporation or by these
Bylaws.
Section 13. Business to be Transacted. Any and all business of any nature
or character whatsoever may be transacted and action may be taken thereon at any
such first meeting or at any other meeting, regular or special, of the Board of
Directors. At any meeting at which every director shall be present, even though
without any notice, any business may be transacted.
Section 14. Conduct of Meetings. At all meetings of the Board of
Directors, business shall be transacted in such order as from time to time
determined by the Chairman of the Board (if any), or in his absence by the
President, or in his absence by resolution of the Board of Directors. At all
meetings of the Board of Directors the Chairman of the Board (if any) shall
preside and in the absence of the Chairman of the Board, the President shall
preside and in the absence of the President, a Vice President shall preside, but
if none of the Chairman of the Board, the President or a Vice President shall be
present or if none shall for any reason preside at any meeting of the Board,
then a chairman of the meeting shall be chosen by the Board from among the
directors present and such chairman so chosen shall preside at the meeting.
The Secretary of the Corporation, or in his absence, an Assistant
Secretary, shall act as Secretary of the meetings of the Board of Directors, but
in the absence of the Secretary and an Assistant Secretary, or if for any reason
neither acts as Secretary thereof, the presiding officer shall appoint any
person of his choice to act, and such person shall act as Secretary of the
meeting.
Section 15. Presumption of Asset. A director of the Corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action unless his
dissent shall be entered in the minutes of the meeting or unless he shall file
his written dissent to such action with the person acting as the Secretary of
the meeting before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
Section 16. Compensation. Directors may receive such compensation for
their services, if any, as may be fixed or determined by resolution of the Board
of Directors, and the Board may fix a sum for expenses, if any, for attendance
at meetings of the Board, whether regular or special, or first meetings;
provided that nothing herein contained shall, or shall be construed so as to,
preclude any director from serving the Corporation in any other capacity or
receiving compensation therefor. Members of special or standing committees may
be allowed such compensation and expenses of attendance, if any, for such
committee meetings, as may be determined by resolution of the entire Board of
Directors.
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Section 17. Consent and Telephone Meetings. Unless otherwise restricted by
the Articles of Incorporation of the Corporation or these Bylaws, any action
required or permitted to be taken at any annual or special meeting of Directors
of the Corporation may be taken without a meeting, without prior notice, and
without a vote, if the consent in writing, setting forth the action so taken,
shall be signed by all of the Directors of the Corporation. Unless otherwise
restricted by the Articles of Incorporation of the Corporation or these Bylaws,
and subject to proper notice or waiver thereof, any regular or special meeting
of the Directors may be held by conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in such a meeting shall constitute presence in
person at such meeting and waiver of notice of such meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
Section 18. Approval or Ratification of Acts or Contracts by Shareholders.
The Board of Directors in its discretion may submit any act or contract for
approval or ratification at any annual meeting of the shareholders, or at any
special meeting of the shareholders called for the purpose of considering any
such act or contract, and any act or contract that shall be approved or ratified
at any such meeting, at which a quorum is present, by the holders of a majority
(or such greater number as required by statute, the Articles of Incorporation of
the Corporation or these Bylaws) of the shares entitled to vote thereon and
present in person or by proxy at such meeting, shall be as valid and binding
upon the Corporation and upon all the shareholders as if it had been approved by
every shareholder of the Corporation.
ARTICLE IV
MATTERS RELATING TO OFFICERS' AND DIRECTORS' SERVICES
Section 1. Indemnification of Directors and Officers. To the fullest
extent permitted by applicable law, including to the fullest extent permitted by
Article 2.02-1 of the Texas Business Corporation Act, any successor to or
modification of such article, or any other applicable statute or judicial or
administrative decision, the Corporation shall indemnify, reimburse and advance
expenses prior to the final disposition of the proceeding to, each director,
former director or officer of the Corporation who was, is or is threatened to be
made a defendant or respondent in any proceeding, and shall indemnify, reimburse
and advance expenses prior to the final disposition of the proceeding to, each
director, former director, officer, employee, agent or person who is or was
serving at the request of the Corporation as a director, officer, partner,
venturer, proprietor, trustee, employee, agent or similar functionary of another
foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise, who was, is or
is threatened to be made a defendant or respondent in any proceeding.
Section 2. Insurance. To the fullest extent permitted by applicable law,
if approved by the Board of Directors, the Corporation may purchase and maintain
insurance to protect itself, its directors, officers and such other persons as
may be determined by the Board of Directors, against any and all liabilities,
whether or not the Corporation would have the power to indemnify such persons
against such liabilities under applicable law, to the fullest extent permitted
by applicable law.
Section 3. Nonexclusivity of Rights. The right to indemnification and the
advancement and payment of expenses and other rights permitted in this Article
IV shall not be exclusive of any other right which any person may have or
hereafter acquire under any law (common or statutory), the Articles of
Incorporation of the Corporation, these Bylaws, other agreements, the vote of
the shareholders or Board of Directors, or otherwise.
Section 4. Services. No director or, unless determined otherwise by the
Board of Directors, officer of the Corporation, shall be required to devote his
time or any particular portion of his time or render services or any particular
services exclusively to this Corporation. Each and every director and, unless
determined otherwise by the Board of Directors, each and every officer of the
Corporation, shall be entirely free to engage, participate and invest in any and
all such businesses, enterprises and activities, either similar or dissimilar to
the business, enterprise and activities of the
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Corporation, without breach of duty to the Corporation or to its shareholders
and without accountability or liability to the Corporation or to its
shareholders in any event or under any circumstances or conditions.
Each and every director and, unless determined otherwise by the Board of
Directors, each and every officer of the Corporation, shall be entirely free to
act for, serve and represent any other corporation or corporations, entity or
entities, and any person or persons, in any capacity or capacities, and be or
become a director or officer, or both, of any other corporation or corporations,
entity or entities, irrespective of whether or not the business, purposes,
enterprises and activities, or any of them, thereof be similar or dissimilar to
the business, purposes, enterprises and activities, or any of them, of the
Corporation, without breach of duty to the Corporation or to its shareholders
and without accountability or liability of any character or description to the
Corporation or to its shareholders in any event or under any circumstances or
conditions.
Section 5. Directors' and Officers' Interests in Contracts and
Transactions. No contract or transaction between the Corporation and one (1) or
more of its directors or officers, or between the Corporation and any firm or
partnership of which one (1) Or more of its directors or officers are. members
or employees or in which they are otherwise interested, or between the
Corporation and any corporation or association or other entity in which one (1)
or more of this Corporation's directors or officers are shareholders, members,
directors, officers or employees or in which they are otherwise interested,
shall be void or voidable solely by reason of or as a result of such connection
with or holding an office or offices as director or officer or as directors or
officers of this Corporation or such interest in or in connection with such
other firm, partnership, corporation, association or other entity,
notwithstanding the presence of such director or directors, or officer or
officers, at the meeting of the Board of Directors of this Corporation which
acts upon or in reference to any such contract or transaction, and
notwithstanding his or their being counted in determining the presence of a
quorum of the Board of Directors at such a meeting, nor his or their
participation in such meetings, nor his or their voting on or with respect to
such action, nor shall any director or officer be responsible to, or liable to
account to, this Corporation for any profits realized by or from or through any
such contract or transaction of the Corporation by reason of such interest or
his being or having been a director or officer, or both, of this Corporation if
the requirements and provisions of Article 2.35-1 of the Texas Business
Corporation Act, other applicable law, the Articles of Incorporation of this
Corporation and the Bylaws are met.
Section 6. Amendment or Repeal. Any repeal or amendment of any provision
of this Article shall be prospective only and shall not adversely affect any
right of any person existing at the time of such repeal or amendment.
ARTICLE V
EXECUTIVE AND OTHER COMMITTEES
The Board of Directors, by resolution or resolutions adopted by a majority
of the number of directors fixed by these Bylaws, may designate one (1) or more
directors to constitute an Executive Committee, or such other committees as the
Board of Directors may provide, may designate one (1) or more directors as
alternative members of any committee and in like manner may discontinue any such
committee. The members of such committees shall, respectively, hold office only
during the pleasure of the Board of Directors. Each such committee, to the
extent provided in such resolution or resolutions, shall have and may exercise
all of the authority of the entire Board of Directors in the business and
affairs of the Corporation except where action of the entire Board of Directors
is specified by the Texas Business Corporation Act or other applicable law.
Unless set forth in the resolution of the Board of Directors creating such
committee, no committee shall have the power or authority to authorize a
distribution or authorize the issuance of any shares of the Corporation. Regular
meetings of such committees shall be held at such time and place as the
committee may determine, and special meetings may be called at any time by the
President, the Chairman of the Board (if any) or by any member of the committee.
Notice of all meetings of such committees shall be given to each member of such
committee, in the same manner and specifying the same information as notices
required herein for special meetings of the entire Board of Directors. A
majority of the members of a committee shall
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constitute a quorum for the transaction of business by such committee. Minutes
of all such meetings shall be kept by an officer in charge of such meeting and
presented to the entire Board of Directors upon request. All matters of
procedure not specifically set forth herein shall be as set forth in these
Bylaws relating to meetings of the entire Board of Directors. The designation of
such committees and the delegation thereto of authority shall not operate to
relieve the Board of Directors, or any member thereof, of any responsibility
imposed upon it or him by law.
ARTICLE VI
OFFICERS
Section 1. Officers. The officers of the Corporation shall be chosen by
the Board of Directors. The officers shall be a President and a Secretary, and
such other officers, including assistant officers, as the Board of Directors may
from time to time determine or elect. Any person may hold two or more offices at
the same time.
Section 2. Term; Removal. Each officer shall hold his office at the
pleasure of the Board of Directors. Any officer or agent elected or appointed by
the Board of Directors may be removed, either with or without cause, by the
Board of Directors whenever in its judgment the best interests of the
Corporation will be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed. Election or
appointment of an officer or agent shall not of itself create contract rights.
Section 3. Vacancies. Any vacancy occurring in any office of the
Corporation may be filled by the Board of Directors for the unexpired portion of
the term for the person with respect to which a vacancy has occurred.
Section 4. Salaries. The salaries or other compensation of the officers
and agents of the Corporation shall be fixed from time to time by the Board of
Directors or, upon its failure to act, by the President.
Section 5. Powers and Duties of Officers. Each officer of the Corporation
shall perform the duties and exercise the powers expressly conferred on him or
provided for in these Bylaws, as well as the usual duties and powers incident to
such office, and such other duties and powers as may be assigned to him from
time to time by the Board of Directors.
Section 6. Chairman of the Board. The Board of Directors may select from
among its members a Chairman of the Board who may, if so selected, preside at
all meetings of the Board of Directors and approve the minutes of all
proceedings thereat, and he shall be available to consult with and advise the
officers of the Corporation with respect to the conduct of the business and
affairs of the Corporation.
Section 7. President. The President, subject always to the control of the
Board of Directors, and subject to any limitations contained in the Articles of
Incorporation of the Corporation, these Bylaws or applicable law, shall be the
chief executive officer of the Corporation and shall have general executive
charge, management and control of the affairs, properties and operations of the
Corporation in the ordinary course of its business, with all such duties, powers
and authority with respect to such affairs, properties and operations as may be
reasonably incident to such responsibili ties; he may appoint or employ and
discharge employees and agents of the Corporation and fix their compensation; he
may make, execute, acknowledge and deliver any and all contracts, leases, deeds,
conveyances, assignments, bills of sale, transfers, releases and receipts, any
and all mortgages, deeds of trust, indentures, pledges, chattel mortgages, liens
and hypothecations, and any and all bonds, debentures and notes, and any and all
other obligations and encumbrances and any and all other instruments, documents,
evidences of indebtedness, and papers of any kind or character for and on behalf
of and in the name of the Corporation, and, with the Secretary or an Assistant
Secretary, he may sign all certificates for shares of the capital stock of the
Corporation; he shall do and perform such other duties and have such additional
authority and powers as from time to time may be assigned to or conferred upon
him by the Board of Directors.
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Section 8. Vice Presidents. In the absence of the President or in the
event of his disability or refusal to act, a Vice President, if any (or in the
event there be more than one Vice President, the Vice Presidents in the order
designated, or in the absence of any designation, then in the order of their
election), subject always to the control of the Board of Directors, shall
perform the duties of the President (including any duty of the President set
forth in these Bylaws), and when so acting, shall have all the powers of and be
subject to all the restrictions upon the President. Each Vice President shall
perform such other duties as from time to time may be assigned to him by the
President or by the Board of Directors of the Corporation. Any action taken by a
Vice President in the performance of the duties of the President shall be
conclusive evidence of the absence or inability to act of the President at the
time such action was taken.
Section 9. Treasurer. The Treasurer, if any, subject always to the control
of the Board of Directors, shall have responsibility for the custody and control
of all the funds and securities of the Corporation. When necessary or proper, he
may endorse on behalf of the Corporation, for collection, checks, notes and
other obligations and shall deposit the same to the credit of the Corporation in
such bank or banks or depositories as shall be selected or designated by or in
the manner prescribed by the Board of Directors. He may sign all receipts and
vouchers for payments made to the Corporation, either alone or jointly with such
other officer as may be designated by the Board of Directors. Whenever required
by the Board of Directors he shall render a statement of the cash account of the
Corporation. He shall enter or cause to be entered, punctually and regularly, on
the books of the Corporation to be kept by him or under his supervision or
direction for that purpose, full and accurate accounts of all moneys received
and paid out by, for or on account of the Corporation. He shall at all
reasonable times exhibit such books and accounts and other financial records to
any director of the Corporation during business hours. He shall have such other
powers and duties as may be conferred upon or assigned to him by the President
or the Board of Directors. The Treasurer shall perform all acts incident to the
position of Treasurer subject always to the control of the Board of Directors.
He shall, if required by the Board of Directors, give such bond for the faithful
discharge of his duties in such form and amounts as the Board of Directors may
require.
Section 10. Assistant Treasurers. Each Assistant Treasurer, if any, shall
have the usual powers and duties pertaining to his office, together with such
other powers and duties as may be conferred upon or assigned to him by the
President or the Board of Directors. Each Assistant Treasurer shall have and
exercise the powers of the Treasurer during that officer's absence or inability
to act.
Section 11. Secretary. The Secretary, subject always to the control of the
Board of Directors, (1) shall keep the minutes of all meetings of which he is
the secretary, in books provided for that purpose, (2) shall attend to the
giving and serving of all notices if so requested, (3) may sign with the
President or a Vice President in the name of the Corporation and/or attest the
signatures of either to, all contracts, conveyances, transfers, assignments,
encumbrances, authorizations and all other instruments, documents and papers, of
any and every description whatsoever, of or executed for or on behalf of the
Corporation and affix the seal of the Corporation thereto, (4) may sign with the
President or a Vice President all certificates for shares of the capital stock
of the Corporation and affix the corporate seal of the Corporation thereto, (5)
shall have charge of and maintain and keep or supervise and control the
maintenance and keeping of the stock certificate books, transfer books and stock
ledgers and such other books and papers as the Board of Directors may authorize,
direct or provide for, all of which shall at all reasonable times be open to the
inspection of any director, upon request, at the office of the Corporation
during business hours, (6) shall in general perform all the duties incident to
the office of Secretary, and (7) shall have such other powers and duties as may
be conferred upon or assigned to him by the President or the Board of Directors.
Section 12 Assistant Secretaries. In the absence of the Secretary or in
the event of his disability or refusal to act, an Assistant Secretary (or in the
event there be more than one Assistant Secretary, the Assistant Secretaries in
the order designated, or in the absence of any designation, then in the order of
their election), subject always to the control of the Board of Directors, shall
perform the duties of the Secretary (including any duty of the Secretary set
forth in these Bylaws), and when so acting shall have all the powers of and be
subject to all the restrictions upon the Secretary. Each
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Assistant Secretary, if any, shall also have the usual powers and duties
pertaining to his office, together with such other powers and duties as may be
conferred upon or assigned to him by the President, the Board of Directors or
the Secretary.
Section 13. Securities of Other Issuers. Unless otherwise directed by the
Board of Directors, the President or any Vice President of the Corporation shall
have power and authority, on behalf of the Corporation, in person or by proxy,
to transfer, endorse for transfer, vote, consent or take any other action with
respect to any securities of another issuer which may be held or owned by the
Corporation and to make, execute and deliver any waiver, proxy or consent with
respect to any such securities.
ARTICLE VII
BOOKS AND RECORDS
The Corporation shall keep correct and complete books and records of
account, and minutes of the proceedings of the shareholders and the Board of
Directors, in written form or in any other form capable of being converted into
written form within a reasonable time. The Corporation shall keep, at its
registered office or principal place of business, a record of its shareholders,
giving the names and addresses of all shareholders and the number and class of
shares held by each.
ARTICLE VIII
CAPITAL STOCK
Section 1. Stock Certificates. The certificates for shares of the capital
stock of the Corporation shall be in such form, not inconsistent with that
required by law and the Articles of Incorporation of the Corporation, as shall
be approved by the Board of Directors. The stock certificates shall be
consecutively numbered and shall be entered in the books of the Corporation as
they are issued and shall exhibit the holder's name and the number of shares.
The stock record books and the blank stock certificate books shall be kept by
the Secretary, or at the office of any transfer agent determined by the Board of
Directors. Every holder of stock in the Corporation shall be entitled to have a
certificate signed by, or in the name of the Corporation by the President or a
Vice President, and the Secretary or an Assistant Secretary, certifying the
number of shares owned by him in the Corporation, with the seal of the
Corporation or a facsimile thereof impressed or printed thereon if the Board of
Directors shall have provided for such a seal. Any or all of the signatures on
such certificates may be facsimile.
Section 2. Transfers. Shares of stock of the Corporation shall be
transferable in the manner prescribed by the laws of the State of Texas and in
these Bylaws. Transfers of stock shall be made on the books of the Corporation
only by the person named in the certificate, or by his attorney-in-fact or legal
representative, duly and lawfully authorized in writing, and upon the surrender
of the certificate therefor, which shall be canceled, and a new certificate, or
certificates in the aggregate, shall be issued for a like number of shares.
The Board of Directors may appoint a transfer agent or a registrar for
each class of stock, and may require all stock certificates to bear the
signature of such transfer agent and of such registrar or either of them.
Section 3. Registered Holders. The Corporation shall be entitled to treat
the person in whose name any share or shares of stock or any warrant, right or
option is registered as the owner thereof for all purposes and shall not be
bound to recognize any equitable or other claim to, or interest in, such share
or shares, warrant, right or option on the part of any other person, whether or
not the Corporation shall have actual or other notice thereof, except as may be
expressly provided otherwise by the laws of the State of Texas.
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Section 4. Lost or Destroyed Certificates. The Corporation may, in its
sole discretion, issue a new certificate for shares of its stock in the place of
any certificate theretofore issued by it, alleged to have been lost or
destroyed, and the President may, in his discretion, require the owner of the
lost or destroyed certificate, or his legal representative, to give the
Corporation such statement under oath or other evidence of such loss or
destruction as he may desire, and a bond in form, amount and with such surety or
sureties as he may prescribe or determine, which is sufficient, in the sole
judgment of the President, to indemnify and protect the Corporation against any
and all claims, liabilities, costs and expenses that may be made or asserted
against it or which it may suffer or incur or pay, on account of the alleged
loss of any such certificate or the issuance of such new certificate. A new
certificate may be issued without requiring any bond when, in the sole
discretion of the President, it is proper so to do. The Corporation shall have
no obligation of any kind to issue a new certificate to the owner of an
allegedly lost or destroyed certificate if such owner does not request the
issuance of a new certificate before the Corporation registers a transfer of the
shares represented by the allegedly lost or destroyed certificate.
Section 5. Regulations. The Board of Directors shall have the power and
authority to make all such rules and regulations as they may deem expedient
concerning the issue, transfer and registration or the replacement of
certificates for shares of the capital stock of the Corporation.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 1. Fiscal Year. The fiscal year of the Corporation shall be such
as the Board of Directors shall, by resolution, provide or establish or such as
the President shall determine subject to approval of the Board.
Section 2. Seal. If determined by the Board of Directors, the Corporation
shall have a seal, which seal shall be in such form as the Board of Directors
shall prescribe, and may be used by causing it or a facsimile thereof to be
impressed, affixed, printed, or reproduced in any other manner.
Section 3. Notice and Waiver of Notice. Whenever any notice whatever is
required to be given to any shareholder or director under the provisions of the
Texas Business Corporation Act or under the provisions of these Bylaws or the
Articles of Incorporation of the Corporation, said notice shall be deemed
sufficient if delivered personally or deposited in a post office box in a sealed
postpaid wrapper addressed to the person or persons entitled thereto at their
post office addresses, respectively, as same appear on the books or other
records of the Corporation, and such notice shall be deemed to have been timely
and duly given and received if given in any other manner or by any other means
authorized or provided for elsewhere in these Bylaws. Such notice shall be
deemed to have been given and received on the day of such personal delivery or
three (3) days after the date of mailing, as the case may be. A waiver or
waivers of notice in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be equivalent to
the giving of such notice.
Section 4. Resignations. Any director or officer may resign at any time.
Oral or written notice of each such resignation shall be delivered to the Board
of Directors, the President or the Secretary. Each such resignation shall take
effect at the time specified therein, or, if no time be specified, at the time
of its receipt by either the Board of Directors or the President or the
Secretary.
Section 5. Persons. Wherever used or appearing in these Bylaws, pronouns
of the masculine gender shall include the persons of the female sex as well as
the neuter gender and the singular shall include the plural wherever
appropriate.
Section 6. Laws and Statutes. Wherever used or appearing in these Bylaws,
the words "law" or "laws" or "statute" or "statutes," respectively, shall mean
and refer to laws and statutes, or a law or a statute, of the State of Texas,
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to the extent only that such is or are expressly applicable, except where
otherwise expressly stated or the context requires that such words not be so
limited.
Section 7. Headings. The headings of the Articles and Sections of these
Bylaws are inserted for convenience of reference only and shall not be deemed to
be a part thereof or used in the construction or interpretation thereof.
ARTICLE X
AMENDMENTS
Except as otherwise provided in the Articles of Incorporation of the
Corporation or any agreement among the Corporation and all of its shareholders,
these Bylaws (a) may, from time to time, be added to, changed, altered, amended
or repealed or new Bylaws may be made or adopted by the affirmative vote of at
least a majority of the Directors present at any annual or regular or special
meeting of the Board of Directors, and (b) pursuant to Section 2.23 of the Texas
Business Corporation Act, may not be added to, changed, altered, amended or
repealed or new bylaws made or adopted by the shareholders of the Corporation,
except with the affirmative vote of the Board of Directors.
WITNESS the signature of a duly authorized officer of the Corporation
effective the ___ day of __________, 19__.
By: /s/ Jeffry B. Lewis
---------------------------------
Name: Jeffry B. Lewis
Title: Secretary
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CERTIFICATE OF INCORPORATION
OF
EXIT 116 REVISITED, INC.
TO: The Secretary of State
State of New Jersey
Pursuant to the provisions of the New Jersey Business Corporation
Act, the undersigned, being a natural person of at least 18 years of age and
acting as the incorporator of the corporation hereby being organized thereunder,
certifies that:
FIRST: The name of the corporation (hereinafter called the
"corporation") is
EXIT 116 REVISITED, INC.
SECOND: The corporation may engage in any activity within the
purposes for which corporations may be organized under the New Jersey Business
Corporation Act.
THIRD: The aggregate number of shares which the corporation shall
have the authority to issue is 200, all of which are without par value, and all
of which are of the same class.
FOURTH: The address of the initial registered office of the
corporation within the State of New Jersey is 830 Bear Tavern Road, West
Trenton, New Jersey 08628; and the name of the initial registered agent at such
address is Corporation Service Company.
FIFTH: The number of directors constituting the first Board of
Directors of the corporation is one; and the name and address of the person who
is to serve as the first director of the corporation is as follows:
NAME ADDRESS
Ron Delsener 27 East 67th Street
New York, New York 10021
SIXTH: The name and address of the incorporator is as follows:
NAME ADDRESS
Renee Payne CSC Networks/Prentice Hall
830 Bear Tavern Road
West Trenton, New Jersey 08628
SEVENTH: For the management of the business and for the conduct of
the affairs of the corporation, and in further definition, limitation, and
regulation of the powers of the corporation and of its directors and of its
shareholders or any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the affairs of
the corporation, including the election of the Chairman of the Board of
Directors, if any, the President, the Treasurer, the Secretary, and other
principal officers of the corporation, shall be vested in its Board of
Directors.
<PAGE>
2. The Board of Directors shall have the power to remove directors
for cause and to suspend directors pending a final determination that cause
exists for removal.
3. The corporation shall, to the fullest extent permitted by Section
14A:3-5 of the New Jersey Business Corporation Act, as the same may be amended
and supplemented, indemnify any and all corporate agents whom it shall have
power to indemnify under said section from and against any and all of the
expenses, liabilities, or other matters referred to in or covered by said
Section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any By-Law agreement, vote of shareholders, or otherwise, and shall continue as
to a person who has ceased to be a corproate agent and shall inure to the
benefit of the heirs, executors, administrators, and personal representatives of
such a corporate agent. The term "corporate agent" as used herein shall have the
meaning attributed to it by Sections 14A:3-5 and 14A:5-21 of the New Jersey
Business Corporation Act and by any other applicable provision of law.
4. The personal liability of the directors of the corporation is
hereby eliminated to the fullest extent permitted by subsection 14A:2-7 of the
New Jersey Business Corporation Act, as the same may be amended and
supplemented.
EIGHTH: The shareholders shall not have preemptive rights.
NINTH: The duration of the corporation is to be perpetual.
Signed on April 16, 1996
/s/ Renee Payne
-------------------------
Renee Payne, Incorporator
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BY-LAWS
OF
EXIT 116 REVISITED, INC.
(a New Jersey Corporation)
------------------
ARTICLE I
SHAREHOLDERS
1. CERTIFICATES REPRESENTING SHARES. Certificates representing
shares shall set forth thereon the statements prescribed by Section 14A:7-11 and
where applicable, by Sections 14A:5-21 and 14A: 12-5, of the New Jersey Business
Corporation Act and by any other applicable provision of law and shall be signed
by the Chairman or Vice-Chairman of the Board of Directors, if any, or by the
President or a Vice-President and may be counter-signed by the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer and may be sealed
with the corporate seal or a facsimile thereof. Any or all other signatures upon
a certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the corporation with the
same effect as if he were such officer, transfer agent, or registrar at the date
of its issue.
A card which is punched, magnetically coded, or otherwise treated so
as to facilitate machine or automatic processing, may be used as a share
certificate if it otherwise complies with the provisions of Section 14A: 7-11 of
the New Jersey Business Corporation Act.
The corporation may issue a new certificate for shares in place of
any certificate theretofore issued by it alleged to have been lost or destroyed
and the Board of Directors may require the owner of any lost or destroyed
certificate or his legal representative to give the corporation a bond
sufficient to indemnify the corporation against any claim that may be made
against it on account of the alleged loss or destruction of any such certificate
or the issuance of any such new certificate.
2. FRACTIONAL SHARE INTERESTS. Unless otherwise provided in its
certificate of incorporation, the corporation may, but shall not be obliged to
issue fractions of a share and certificates therefor. By action of the Board,
the corporation may in lieu of issuing fractional shares, pay cash equal to the
value of such fractional share or issue scrip in registered or bearer form which
shall entitle the holder to receive a certificate for a full share upon the
surrender of such scrip aggregating a full share. A certificate for a fractional
share shall entitle the holder to exercise voting rights, to receive dividends
thereon, and to participate in any distribution of assets of the corporation in
the event of liquidation but scrip shall not entitle the holder to exercise such
voting rights, receive dividends or participate in any such distribution of
assets unless such scrip shall so provide. All scrip shall be issued subject to
the condition that it shall become void if not exchanged for certificates
representing full shares before a specified date.
3. SHARE TRANSFERS. Upon compliance with provisions restricting the
transferability of shares if any, transfers of shares of the corporation shall
be made only on the share record of the corporation by the registered holder
thereof, or by his attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the corporation or with a transfer
agent or a registrar, if any, and on surrender of the certificate or
certificates for such shares properly endorsed and the payment of all taxes due
thereon, if any.
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4. RECORD DATE FOR SHAREHOLDERS. The Board of Directors may fix, in
advance, a date as the record date for determining the shareholders with regard
to any corporate action or event and, in particular, for determining the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof; to give a written consent to any action without a
meeting; or to receive payment of any dividend or allotment of any right. Any
such record date shall in no case be more than sixty days prior to the
shareholders' meeting or other corporate action or event to which it relates.
Any such record date for a shareholders' meeting shall not be less than ten days
before the date of the meeting. Any such record date to determine shareholders
entitled to give a written consent shall not be more than sixty days before the
date fixed for tabulation of the consents or, if no date has been fixed for
tabulation, more than sixty days before the last day on which consents received
may be counted. If no such record date is fixed, the record date for a
shareholders' meeting shall be the close of business on the day next preceding
the day on which notice is given, or if no notice is given the day next
preceding the day on which the meeting is held: and the record date for
determining shareholders for any other purpose shall be at the close of business
on the day on which the resolution of the Board of Directors relating thereto is
adopted. When a determination of shareholders of record for a shareholders'
meeting has been made as provided in this section such determination shall apply
to any adjournment thereof unless the Board of Directors fixes a new record date
under this section for the adjourned meetings.
5. MEANING OF CERTAIN TERMS. As used herein in respect of the right
to notice of a meeting of shareholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share" or "shares" or "shareholder" or "shareholders"
refers to an outstanding share or shares and to a holder or holders of record of
outstanding shares when the corporation is authorized to issue only one class of
shares and said reference is alsointended to include any outstanding share or
shares and any holder or holders of record of outstanding shares of any class
upon which or upon whom the Certificate of Incorporation confers such rights
where there are two or more classes or series of shares or upon which or upon
whom the New Jersey Business Corporation Act confers such rights notwithstanding
that the Certificate of Incorporation may provide for more than one class or
series of shares, one or more of which are limited or denied such rights
thereunder.
6. SHAREHOLDER MEETINGS.
-TIME. The annual meeting shall be held at the time fixed, from time
to time, by the directors, provided, that the first annual meeting shall be held
on a date within thirteen months after the organization of the corporation, and
each successive annual meeting shall be held on a date within thirteen months
after the date of the preceding annual meeting. If, for any reason, the
directors shall fail to fix the time for an annual meeting, such meeting shall
be held at noon on the first Tuesday in April. A special meeting shall be held
on the date fixed by the directors.
-PLACE. Annual meetings and special meetings shall be held at such
place, within or without the State of New Jersey, as the directors may, from
time to time, fix. Whenever the directors shall fail to fix such place, the
meeting shall be held at the registered office of the corporation in the State
of New Jersey.
-CALL. Annual meetings may be called by the directors or by the
President or by any officer instructed by the directors to call the meeting.
Special meetings may be called in like manner.
-NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE. Written notice
of every meeting shall be given, stating the time, place, and purpose or
purposes of the meeting. If any action is proposed to be taken which would, if
taken, entitle shareholders to dissent and to receive payment for their shares,
the notice shall include a statement of that purpose and to that effect. The
notice of every meeting shall be given, personally or by mail, and, except as
otherwise provided by the New Jersey Business Corporation Act, not less than ten
days nor more than sixty days before the date of the meeting, unless the lapse
of the prescribed period of time shall have been waived before or after the
taking of any action, to each shareholder at his record address or at such other
address which he may have furnished by request in writing to the Secretary of
the corporation. Notice by mail shall be deemed to be given when deposited, with
postage thereon prepaid, in a post office or official depository under the
exclusive care and custody of the United States post office department. When a
meeting is adjourned to another time or place, it shall not be necessary to give
notice of the adjourned meeting if the time and place to which the meeting is
adjourned are
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announced at the meeting at which the adjournment is taken and at the adjourned
meeting only such business is transacted as might have been transacted at the
original meeting. However, if after the adjournment the directors fix a new
record date for the adjourned meeting, a notice of the adjourned meeting shall
be given to each shareholder on the new record date. Notice of a meeting need
not be given to any shareholder who submits a signed waiver of notice before or
after the meeting. The attendance of a shareholder at a meeting without
protesting prior to the conclusion of the meeting, the lack of notice of such
meeting shall constitute a waiver of notice by him.
-VOTING LIST. The officer or agent having charge of the stock
transfer books for shares of the corporation shall make and certify a complete
list of the shareholders entitled to vote at the shareholders' meeting or any
adjournment thereof. Any such list may consist of cards arranged alphabetically
or any equipment which permits the visual display of the information required by
the provisions of Section 14A:5-8 of the New Jersey Business Corporation Act.
Such list shall be arranged alphabetically within each class, series, if any or
group of shareholders maintained by the corporation for convenience of
reference, with the address of and the number of shares held by, each
shareholder; be produced (or available by means of a visual display) at the time
and place of the meeting; be subject to the inspection of any shareholder for
reasonable periods during the meeting; and be prima facie evidence as to who are
the shareholders entitled to examine such list or to vote at such meeting.
-CONDUCT OF MEETING. Meetings of the shareholders shall be presided
over by one of the following officers in the order of seniority and if present
and acting - the Chairnan of the Board, if any, the Vice-Chairman of the Board,
if any, the President, a Vice-President, or, if none of the foregoing is in
office and present and acting, by a chairman to be chosen by the shareholders.
The Secretary of the corporation, or in his absence, an Assistant Secretary,
shall act as secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present the Chairman of the meeting shall appoint a
secretary of the meeting.
-PROXY REPRESENTATION. Every shareholder may authorize another
person or persons to act for him by proxy in all matters in which a shareholder
is entitled to participate, whether by waiving notice of or the lapse of the
prescribed period of time before any meeting, voting or participating at a
meeting, or expressing consent without a meeting. Every proxy must be signed by
the shareholder or his agent, except that a proxy may be given by a shareholder
or his agent by telegram or cable or by any means of electronic communication
which results in a writing. No proxy shall be valid for more than eleven months
unless a longer time is expressly provided therein. Unless it is irrevocable as
provided in subsection 14A:5-19(3) of the New Jersey Business Corporation Act a
proxy shall be revocable at will. The grant of a later proxy revokes any earlier
proxy unless the earlier proxy is irrevocable. A proxy shall not be revoked by
the death or incapacity of the shareholder, but the proxy shall continue to be
in force until revoked by the personal representative or guardian of the
shareholder. The presence at any meeting of any shareholder who has given a
proxy does not revoke the proxy unless the shareholder files written notice of
the revocation with the Secretary of the meeting prior to the voting of the
proxy or votes the shares subject to the proxy by written ballot. A person named
in a proxy as the attorney or agent of a shareholder may, if the proxy so
provides, substitute another person to act in his place, including any other
person named as an attorney or agent in the same proxy. The substitution shall
not be effective until an instrument effecting it is filed with the Secretary of
the corporation.
INSPECTORS - APPOINTMENT. The directors, in advance of any meeting,
or of the tabulation of written consents of shareholders without a meeting may,
but need not, appoint one or more inspectors to act at the meeting or any
adjournment thereof or to tabulate such consents and make a written report
thereof. If an inspector or inspectors to act at any meeting of shareholders are
not so appointed by the directors or shall fail to qualify, if appointed, the
person presiding at the shareholders' meeting may, and on the request of any
shareholder entitled to vote thereat, shall, make such appointment. In case any
person appointed as inspector fails to appear or act, the vacancy may be filled
by appointment made by the directors in advance of the meeting or at the meeting
by the person presiding at the meeting. Each inspector appointed, if any, before
entering upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector with strict impartiality and
according to the best of his ability. No person shall be elected a director in
an election for which he has served as an inspector. The inspectors, if any,
shall determine the number of shares outstanding and the voting power of each,
the shares represented at the meeting, the existence of a quorum, the validity
and effect of proxies, and shall receive votes or consents, hear and determine
all challenges and
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questions arising in connection with the fight to vote, count and tabulate all
votes or consents, determine the result, and do such acts as are proper to
conduct the election or vote with fairness to all shareholders. If there are
three or more inspectors, the act of a majority shall govern. On request of the
person presiding at the meeting or any shareholder entitled to vote thereat, the
inspectors shall make a report in writing of any challenge, question, or matter
determined by them. Any report made by them shall be prima facie evidence of the
facts therein stated, and such report shall be filed with the minutes of the
meeting.
- QUORUM. Except for meetings ordered by the Superior Court to be
called and held pursuant to Sections 14A:5-2 and 14A:5-3 of the New Jersey
Business Corporation Act, the holders of the shares entitled to cast at least a
majority of the votes at a meeting shall constitute a quorum at the meeting of
shareholders for the transaction of business.
The shareholders present may continue to do business until
adjournment, notwithstanding the withdrawal of enough shareholders to leave less
than a quorum. Less than a quorum may adjourn.
- VOTING. Each share shall entitle the holder thereof to one vote.
In the election of directors, a plurality of the votes cast shall elect, and no
election need be by ballot unless a shareholder demands the same before the
voting begins. Any other action shall be authorized by a majority of the votes
cast except where the New Jersey Business Corporation Act prescribes a different
proportion of votes.
7. SHAREHOLDER ACTION WITHOUT MEETINGS. Subject to any limitations
prescribed by the provisions of Section 14A:5-6 of the New Jersey Business
Corporation Act and upon compliance with said provisions, any action required or
permitted to be taken at a meeting of shareholders by the provisions of said Act
or by the Certificate of Incorporation or these By-Laws may be taken without a
meeting if all of the shareholders entitled to vote thereon consent thereto in
writing and (except for the annual election of directors) may also be taken by
less than all of the shareholders who would have been entitled to cast the
minimum number of votes which would be necessary to authorize any such action at
a meeting at which all shareholders entitled to vote thereon were present and
voting. Whenever any action is taken pursuant to the foregoing provisions, the
written consents of the shareholders consenting thereto or the written report of
inspectors appointed to tabulate such consents shall be filed with the minutes
of proceedings of shareholders.
ARTICLE II
GOVERNING BOARD
1. FUNCTIONS, DEFINITIONS AND COMPENSATION. The business and affairs
of the corporation shall be managed and conducted by or under the direction of a
governing board, which is herein referred to as the "Board of Directors" or
"directors" notwithstanding that the members thereof may otherwise bear the
titles of trustees, managers, or governors or any other designated title, and
notwithstanding that only one director legally constitutes the Board. The word
"director" or "directors" likewise herein refers to a member or to members of
the governing board notwithstanding the designation of a different official
title or titles. The use of the phrase "entire board" herein refers to the total
number of directors which the corporation would have if there were no vacancies.
The Board of Directors, by the affirmative vote of a majority of directors in
office and irrespective of any personal interest of any of them, shall have
authority to establish reasonable compensation of directors for services to the
corporation as directors, officers, or otherwise.
2. QUALIFICATIONS AND NUMBER. Each director shall be at least
eighteen years of age. A director need not be a shareholder, a citizen of the
United States or a resident of the State of New Jersey. The number of directors
of the corporation shall be not less than one nor more than 3. The first Board
and subsequent Boards shall consist of 1 director until changed as hereinafter
provided. The directors shall have power from time to time, in the interim
between annual and special meetings of the shareholders, to increase or decrease
their number within the minimum and maximum number herein before prescribed.
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3. ELECTION AND TERM. The first Board of Directors shall hold office
until the first annual meeting of shareholders and until their successors have
been elected and qualified. Thereafter, directors who are elected at an annual
meeting of shareholders, and directors who are elected in the interim to fill
vacancies and newly created directorships, shall hold office until the next
succeeding annual meeting of shareholders and until their successors have been
elected and qualified. In the interim between annual meetings of shareholders or
of special meetings of shareholders called for the election of directors, newly
created directorships and any existing vacancies in the Board of Directors,
including vacancies resulting from the removal of directors for cause or without
cause, may be filled by the affirmative vote of the remaining directors,
although less than a quorum exists or by the sole remaining director. A director
may resign by written notice to the corporation. The resignation shall be
effective upon receipt thereof by the corporation or at such subsequent time as
shall be specified in the notice of resionation. When one or more directors
shall resign from the Board of Directors effective at a future date, a majority
of the directors then in office, including those who have so resigned, shall
have power to fill such vacancy or vacancies, the vote thereon to take effect
when such resignation or resignations shall become effective.
4. REMOVAL OF DIRECTORS. One or more or all the directors of the
corporation may be removed for cause or without cause by the shareholders. The
Board of Directors shall have the power to remove directors for cause and to
suspend directors pending a final determination that cause exists for removal.
5. MEETINGS.
- TIME. Meetines shall be held at such time as the Board shall fix,
except that the first meeting of a newly elected Board shall be held as soon
after its election as the directors may conveniently assemble.
- PLACE. Meetings shall be held at such place within or without the
State of New Jersey as shall be fixed by the Board.
- CALL. No call shall be required for regular meetings for which the
time and place have been fixed. Special meetings may be called by or at the
direction of the Chairman of the Board, if any, of the President, or of a
majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be
required for regular meetings for which the time and place have been fixed.
Written, oral, or any other mode of notice of the time and place shall be given
for special meetings in sufficient time for the convenient assembly of the
directors thereat. The notice of any meeting need not specify the business to be
transacted at, or the purpose of, the meeting. Any requirement of furnishing a
notice shall be waived by any director who signs a waiver of notice before or
after the meeting, or who attends the meeting without protesting, prior to the
conclusion of the meeting, the lack of notice to him. Notice of an adjourried
meeting need not be given if the time and place are fixed at the meeting
adjourning, and if the period of adjournment does not exceed ten days in any one
adjournment.
- QUORUM AND ACTION. Each director shall have one vote at meetings
of the Board of Directors. The participation of directors with a majority of the
votes of the entire Board shall constitute a quorum for the transaction of
business. Any action approved by a majority of the votes of directors present at
a meeting at which a quorum is present shall be the act of the Board of
Directors unless the New Jersey Business Corporation Act requires a greater
proportion. Where appropriate communication facilities are reasonably available,
any or all directors shall have the right to participate in all or any part of a
meeting of the Board of Directors or a committee of the Board of Directors by
means of conference telephone or any means of communication by which all persons
participating in the meeting are able to hear each other.
- CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if
present, shall preside at all meetings. Otherwise, the President, if present, or
any other director chosen by the Board, shall preside.
6. COMMITTEES. The Board of Directors, by resolution adopted by a
majority of the entire Board
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of Directors, may appoint from among its members one or more directors to
constitute an Executive Committee and one or more other committees, each of
which, to the extent provided in the resolution appointing it, shall have and
may exercise all of the authority of the Board of Directors with the exception
of any authority the delegation of which is prohibited by Section 14A:6-9 of the
New Jersey Business Corporation Act. Actions taken at a meeting of any such
committee shall be reported to the Board of Directors at its next meeting
following such committee meeting; except that, when the meeting of the Board is
held within two days after the committee meeting, such report shall, if not made
at the first meeting, be made to the Board at its second meeting following such
committee meeting. Each director of a committee shall have one vote at meetings
of that committee. The participation of directors with the Majority of the votes
of a committee shall constitute, a quorum of that committee for the transaction
of business. Any action approved by a majority of the votes of directors of a
committee present at a meeting of that committee at which a quorum is present
shall be the act of the committee unless the New Jersey Business Corporation Act
requires a greater proportion.
7. WRITTEN CONSENT. Any action required or permitted to be taken
pursuant to authorization voted at a meeting of the Board of Directors or any
committee thereof may be taken without a meeting, if, prior or subsequent to the
action, all members of the Board of Directors or of such committee, as the case
may be, consent thereto in writing and such written consents are filed with the
minutes of the proceedings of the Board of Directors or committee. Such consent
shall have the same effect as a unanimous vote of the Board of Directors or
committee for all purposes and may be stated as such in any certificate or other
document filed with the Secretary of State of the State of New Jersey.
ARTICLE III
OFFICERS
The directors shall elect a President, a Secretary and a Treasurer,
and may elect a Chairman of the Board, a Vice-Chairman of the Board, one or more
Vice-Presidents, Assistant Vice-Presidents, Assistant Secretaries, and Assistant
Treasurers, and such other officers and agents as they shall determine. The
President may but need not be a director. Any two or more offices may be held by
the same person but no officer shall execute, acknowledge, or verify any
instrument in more than one capacity if such instrument is required by law to be
executed, acknowledged or verified by two or more officers.
Unless otherwise provided in the resolution of election, each
officer shall hold office until the meeting of the Board of Directors following
the next annual meeting of shareholders and until his successor has been elected
and qualified.
Officers shall have the powers and duties defined in the resolutions
appointing them.
The Board of Directors may remove any officer for cause or without
cause. An officer may resign by written notice to the corporation. The
resignation shall be effective upon receipt thereof by the corporation or at
such subsequent time as shall be specified in the notice of resignation.
ARTICLE IV
REGISTERED OFFICE, BOOKS AND RECORDS
The address of the initial registered office of the corporation in
the State of New Jersey, and the name of the initial registered agent at said
address, are set forth in the original Certificate of Incorporation of the
corporation.
The corporation shall keep books and records of account and minutes
of the proceedings of its shareholders, Board of Directors, and the Executive
Committee and other committee or committees, if any. Such books, records and
minutes may be kept within or outside the State of New Jersey. The corporation
shall keep at its principal office, or at the office of its transfer agent, its
registered office, a record or records containing the names and addresses
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of all shareholders, the number, class, and series of shares held by each and
the dates when they respectively became the owners of record thereof. Any of the
foregoing books, minutes, or records may be in written form or in any other form
capable of being converted into readable form within a reasonable time.
ARTICLE V
CORPORATE SEAL
The corporate seal shall be in such form as the Board of Directors
shall prescribe.
ARTICLE VI
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be
subject to change, by the Board of Directors.
ARTICLE VII
CONTROL OVER BY-LAWS
On and after the date upon which the first Board of Directors shall
have adopted the initial corporate By-Laws, which shall be deemed to have been
adopted by the shareholders for the purposes of the New Jersey Business
Corporation Act, the power to make, alter, and repeal the By-Laws of the
corporation may be exercised by the directors or the shareholders; provided,
that any By-Laws made by the Board of Directors may be altered or repealed, and
new By-Laws made, by the shareholders.
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I HEREBY CERTIFY that the foregoing is a full, true, and correct
copy of the By-Laws of Exit 116 Revisited, Inc. a New Jersey corporation, as in
effect on the date hereof.
WITNESS my hand and the seal of the corporation.
Dated: As of May 10, 1996
/s/ Illegible
-------------------------------------
Secretary of Exit 116 Revisited, Inc.
(SEAL)
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RESTATED CERTIFICATE OF INCORPORATION
OF
FILLMORE CORPORATION
FILLMORE CORPORATION, a corporation organized and existing under the laws of the
State of Delaware, hereby certifies that:
1. The corporation's Certificate of Incorporation is amended and restated to
read in its entirety as follows:
FIRST: The name of the corporation is FILLMORE CORPORATION.
SECOND: Its registered office in the State of Delaware is located at
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle 19801. The registered agent in charge thereof is The
Corporation Trust Company.
THIRD: 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 Delaware.
FOURTH: The total number of shares of stock that the corporation shall
have authority to issue is One Thousand (1,000), and the par value of each
of such shares is One Dollar ($1.00).
FIFTH: The Board of Directors of the corporation is expressly authorized
to make, alter or repeal bylaws of the corporation; but the stockholders
may make additional bylaws and may alter or repeal any bylaw, whether
adopted by them or otherwise.
SIXTH: The liability of the directors of the corporation for monetary
damages shall be eliminated to the fullest extent permissible under
Delaware law.
SEVENTH: Elections of directors need not be by written ballot, except to
the extent provided in the bylaws of the corporation.
* * * * * * *
<PAGE>
2. The foregoing Restated Certificate of Incorporation has been duly adopted in
the manner required by Sections 242 and 245 of the General Corporation Law of
Delaware.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been executed
this 6th day of August, 1993.
FILLMORE CORPORATION
By: /s/ Nicholas P. Clainos
---------------------------------
Nichaolas P. Clainos, President
Attest:
/s/ Franklin D. Rockwell
- ------------------------
Franklin D. Rockwell, Jr., Secretary
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<PAGE>
FILLMORE CORPORATION
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BY - LAWS
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ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware.
Section 2. The corporation may also have offices at such other
places both within and without the State of Delaware as the board of directors
may from time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of
directors shall be held in the City of San Francisco, State of California, at
such place as may be fixed from time to time by the board of directors, or at
such other place either within or without the State of Delaware as shall be
designated from time to time by the board of directors and stated in the notice
of the meeting. Meetings of stockholders for any other purpose may be held at
such time and place, within or without the State of Delaware, as shall be stated
in the notice of the meeting or in a duly executed waiver of notice thereof.
Section 2. Annual meetings of stockholders shall be held at 10:00
A.M. on the first Thursday of April in each year, if not a legal holiday, and if
a legal holiday, then on the next business day following, at said hour, or at
such other date and time as shall be designated from time to time by the board
of directors and transact such other business as may properly be brought before
the meeting. (Amended by Board resolution 1/18/91)
Section 3. Written notice of the annual meeting stating the place,
date and hour of the meeting shall be given to each stockholder entitled to vote
at such meeting not less than ten nor more than fifty days before the date of
the meeting.
<PAGE>
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, arid showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 5. Special meetings of the stockholders, for any purpose of
purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the president and shall be called by the pres
ident or secretary at the request in writing of a majority of the board of
directors, or at the request in writing of stockholders owning a majority in
amount of the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
Section 6. Written notice of a special meeting stating the place,
date and hour of the meeting and the purpose or purposes for which the meeting
is called, shall be given not less than ten nor more than fifty days before the
date of the meeting, to each stockholder entitled to vote at such meeting.
Section 7. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
trans action of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting, at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new
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record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.
Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the certificate of incorporation, a different vote is required in which case
such express provision shall govern and control the decision of such question.
Section 10. Each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of the
capital stock having voting power held by such stockholder, but no proxy shall
be voted on after three years from its date, unless the proxy provides for a
longer period. At all elections of directors of the corporation each stockholder
having voting power shall be entitled to exercise the right of cumulative voting
as provided in the certificate of incorporation.
Section 11. Whenever the vote of stockholders at a meeting thereof
is required or permitted to be taken for or in connection with any corporate
action, by any provision of the statutes, the meeting and vote of stock holders
may be dispensed with if all of the stockholders who would have been entitled to
vote upon the action if such meeting were held shall consent in writing to such
corporate action being taken; or if the certificate of incorporation authorizes
the action to be taken with the written consent of the holders of less than all
of the stock who would have been entitled to vote upon the action if a meeting
were held, then on the written consent of the stockholders having not less than
such percentage of that number of votes as may be authorized in the certificate
of incorporation; provided that in no case shall the written consent be by the
holders of stock having less than the minimum percentage of the vote required by
statute for the proposed corporate action, and provided that prompt notice must
be given to all stockholders of the taking of corporate action without a meeting
and by less than unanimous written consent.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the whole
board shall be two. The directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 2 of this Article, and each
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director elected shall hold office until his successor is elected and qualified.
Directors need not be stockholders. (Amended by Board resolution 1/18/91)
Section 2. Vacancies and newly created directorships resulting from
any increase in the authorized number of directors may be filled by a majority
of tile directors then in office, though less than a quorum, or by a sole
remaining director, and the directors so chosen shall hold office until the next
annual election and until their successors are duly elected and shall qualify,
unless sooner displaced. If there are no directors in office, then an election
of directors may be held in the manner provided by statute. If, at the time of
filling any vacancy or any newly created directorship, the directors then in
office shall constitute less than a majority of the whole board (as constituted
immediately prior to any such increase), the Court of Chancery may, upon
application of any stockholder or stockholders holding at least ten percent of
the total number of the shares at the time outstanding having the right to vote
for such directors, summarily order an election to be held to fill any such
vacancies or newly created directorships, or to replace the directors chosen by
the directors then in office.
Section 3. The business of the corporation shall be managed by its
board of directors which may exercise all such powers of the corporation and do
all such lawful acts and things as are not by statute or by the certificate of
incorporation or by these by-laws directed or required to be exercised or done
by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
Section 5. The first meeting of each newly elected board of
directors shall be held at such time and place as shall be fixed by the vote of
the stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly elected
board of directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
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Section 6. Regular meetings of the board of directors may be held
without notice at such time and at such place as shall from time to time be
determined by the board.
Section 7. Special meetings of the board may be called by the
president on ten days' notice to each director, either personally or by mail or
by telegram; special meetings shall be called by the president or secretary in
like manner and on like notice on the written request of two directors.
Section 8. At all meetings of the board two directors shall
constitute a quorum for the transaction of business and the act of a majority of
the directors present at any meeting at which there is a quorum shall be the act
of the board of directors, except as may be otherwise specifically provided by
statute or by the certificate of incorporation. If a quorum shall not be present
at any meeting of the board of directors the directors present thereat may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the certificate of
incorporation or these by-laws, any action required or permitted to be taken at
any meeting of the board of directors or of any committee thereof may be taken
without a meeting, if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
COMMITTEES OF DIRECTORS
Section 10. The board of directors may, by resolution passed by a
majority of the whole board, designate one or more committees, each committee to
consist of two or more of the directors of the corporation. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. Any
such committee, to the extent provided in the resolution, shall have and may
exercise the powers of the board of directors in the management of the business
and affairs of the corporation, and may authorize the seal of the corporation to
be affixed to all papers which may require it; provided, however, that in the
absence or disqualification of any member of such committee or committees, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the board of directors to act at the meeting in the place of
any such absent or disqualified member. Such committee or committees shall have
name or names as may be determined from time to time by resolution adopted by
the board of directors.
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Section 11. Each committee shall keep regular minutes of its
meetings and report the same to the board of directors when required.
COMPENSATION OF DIRECTORS
Section 12. The directors may be paid their expenses, if any, of
attendance at each meeting of the board of directors and may be paid a fixed sum
for attendance at each meeting of the board of directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these by-laws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the
board of directors and shall be a president, a vice-president, a secretary and a
treasurer. The board of directors may also choose additional vice-presi dents,
and one or more assistant secretaries and assistant treasurers. Any number of
offices may be held by the same person, unless the certificate of incorporation
or these by-laws otherwise provide.
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Section 2. The board of directors at its first meeting after each
annual meeting of stockholders shall choose a president, one or more
vice-presidents, a secretary and a treasurer.
Section 3. The board of directors may appoint such other officers
and agents as it shall deem necessary who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board.
Section 4. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer elected or appointed by the
board of directors may be removed at any time by the affirmative vote of a
majority of the board of directors. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.
THE PRESIDENT
Section 6. The president shall be the chief executive officer of the
corporation, shall preside at all meetings of the stockholders and the board of
directors, shall have general and active management of the business of the
corporation and shall see that all orders and resolutions of the board of
directors are carried into effect.
Section 7. He shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the board of
directors to some other officer or agent of the corporation.
THE VICE-PRESIDENTS
Section 8. In the absence of the president or in the event of his
inability or refusal to act, the vice president (or in the event there be more
than one vice president, the vice-presidents in the order designated, or in the
absence of any designation, then in the order of their election) shall perform
the duties of the president, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the president. The vice-presidents
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
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Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He, shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall have custody of the
corporate seal of the corporation and he, or an assistant secretary, shall have
authority to affix the same to any instrument requiring it and when so affixed,
it may be attested by his signature of by the signature of such assistant
secretary. The board of directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by his
signature.
Section 10. The assistant secretary, or if there be more than one,
the assistant secretaries in the order determined by the board of directors (or
if there be no such determination, then in the order of their election), shall,
in the absence of the secretary or in the event of his inability refusal to act,
perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 12. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
Section 13. If required by the board of directors, he shall give the
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death,
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resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his possession or under his control
belonging to the corporation.
Section 14. The assistant treasurer, or if there shall be more than
one, the assistant treasurers in the order determined by the board of directors
(or if there be no such determination, then in the order of their election),
shall, in the absence of the treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the treasurer and
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of' the corporation
by, the chairman or vice chairman of the board of directors or the president or
a vice-president and the treasurer or an assistant treasurer, or the secretary
or an assistant secretary of the corporation, certifying the number of shares
owned by him in the corporation.
Section 2. Where a certificate is countersigned (1) by a transfer
agent other than the corporation or its employee, or, (2) by a registrar other
than the corporation or its employee, any other signature on the certificate may
be facsimile. In case any officer, transfer agent' or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued, it may be issued by the corporation with the same effect as if he
were such officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the board of directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond
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in such sum as it may direct as indemnity against any claim that may be made
against the corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.
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TRANSFERS OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent
of the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
FIXING RECORD DATE
Section 5. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled 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, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. 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.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and to hold liable for calls and
ass essments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation,
subject to the provisions of the certi ficate of incorporation, if any, may be
declared by the board of directors at any regular or special meeting, pursuant
to
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law. Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside
out of any funds of the corporation available for dividends such sum or sums as
the directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or-for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
ANNUAL STATEMENT
Section 3. The board of directors shall present at each annual
meeting, and at any special meeting of the stockholders when called for by vote
of the stockholders, a full and clear statement of the business and condition of
the corporation.
CHECKS
Section 4. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon the name
of the corporation, the War of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE VIII
AMENDMENTS
Section 1. These by-laws may be altered, amended or repealed or new
by-laws may be adopted by the stockholders or by the board of directors, when
such power is conferred upon the board of directors by the certificate of
incorporation, at any regular meeting of the stockholders or of the board of
directors or at any special meeting of the
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stockholders or of the board of directors if notice of such alteration,
amendment, repeal or adoption of new bylaws be contained in the notice of such
special meeting.
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RESTATED
ARTICLES OF INCORPORATION
RICHARD L. GREENE and DAVID M. MAYERI certify that:
1. We are President and Secretary, respectively, of FILLMORE FINGERS, INC., a
California corporation.
2. The corporation's articles of incorporation are amended and restated to
read in their entirety as follows:
I
The name of the corporation is FILLMORE FINGERS, INC.
II
The purpose of the corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law
of California other than the banking business, the trust company business
or the practice of a profession permitted to be incorporated by the
California Corporations Code.
III
The corporation is authorized to issue only one class of shares of stock;
the total number of shares authorized to be issued is 100,000.
IV
(a) The liability of the directors of the corporation for monetary damages
shall be eliminated to the fullest extent permissible under California
law.
(b) The corporation is authorized to provide indemnification of agents (as
defined in Corporations Code Section 317) through bylaw provisions,
agreements with agents, vote of shareholders or disinterested directors or
otherwise, to the fullest extent permissible under California law.
(c) Any amendment, repeal or modification of any provision of this Article
IV shall not adversely affect any right or protection of an agent of this
corporation existing at the time of such amendment, repeal or
modification.
<PAGE>
3. The foregoing amendment and restatement of articles of incorporation has
been duly approved by the board of directors.
4. The foregoing amendment and restatement of articles of incorporation has
been duly approved by the required vote of the shareholders in accordance
with Section 902 of the California Corporations Code. The total number of
outstanding shares entitled to vote was 10,000. The number of shares
voting in favor of the amendment exceeded the percentage vote required,
which was more than 50%.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
Dated: August 11 , 1993
/s/ Richard L. Green
----------------------------
RICHARD L. GREENE, President
/s/ David M. Mayeri
----------------------------
DAVID M. MAYERI, Secretary
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BYLAWS
OF
FILLMORE FINGERS, INC.
ARTICLE I - OFFICES
1.01 - PRINCIPAL OFFICE
The principal executive and business office of the corporation is
hereby fixed and located at 260 Fifth Street in the City and County of San
Francisco, State of California or such other location as the board of directors
may determine.
The corporation shall also maintain a place of business in the
County of Alameda, State of California.
1.02 - OTHER OFFICES
Branch or subordinate offices may at any time be established at any
place or places by the board of directors.
ARTICLE II - MEETINGS OF SHAREHOLDERS
2.01 - PLACE OF MEETINGS
All annual and all other meetings of shareholders shall be held at
the principal executive office of the corporation, or at any other place within
or without the State of California which may be designated either by the board
of directors, or by the written consent of all shareholders entitled to vote
thereat, provided such shareholder consent is given either before or after the
meeting and filed with the secretary of the corporation.
2.02 - ANNUAL MEETINGS
The annual meetings of shareholders shall be held on the first
Thursday of the fourth month following the end of each fiscal year at 10:00
a.m.; provided, however, that should said day fall upon a legal holiday, then
any such annual meeting of shareholders shall be held at the same time and place
on the next day thereafter ensuing which is not a legal holiday. At such
meetings, directors shall be elected, reports of the affairs of the corporation
shall be considered, and any other business may be transacted which is within
the powers of the shareholders.
<PAGE>
2.03 - SPECIAL MEETINGS
Special meetings of the shareholders, for any purpose or purposes
whatsoever, may be called at any time by any of (i) the president, (ii) the
board of directors, (iii) the chairman of the board, or (iv) one or more
shareholders holding shares in the aggregate entitled to cast not less than 10
percent of the votes at that meeting.
If a special meeting is called by any person or persons other than
the board of directors, such person shall make a request therefor in writing,
specifying (i) the date and time of such meeting, which shall be not less than
35 nor more than 60 days after the receipt of the request, and (ii) the general
nature of the business proposed to be transacted at the meeting. Such request
shall be delivered personally or sent by registered mail or by telegraphic or
other facsimile transmission to the chairman of the board, the president, any
vice president or the secretary of the corporation. The officer receiving the
request shall cause notice to be given within 20 days to the shareholders
entitled to vote, in accordance with the provisions of Sections 2.4 and 2.5, and
the notice shall set forth that a meeting will be held at the time requested by
the person or persons calling the meeting. If the notice is not given within
such 20-day period, the person(s) requesting the meeting may give the notice.
2.04 - NOTICE OF MEETINGS
All notices of meetings of shareholders, whether annual or special,
shall be sent or otherwise given not less than 10 nor more than 60 days before
the date of the meeting, except as provided in Section 2.03. The notice shall
specify the place, date and hour of the meeting and (i) in the case of a special
meeting, the general nature of the business to be transacted, or (ii) in the
case of the annual meeting, those matters which the board of directors, at the
time of giving the notice, intends to present for action by the shareholders.
The notice of any meeting at which directors are to be elected shall include the
name of any nominee or nominees whom, at the time of the notice, management
intends to present for election. The notice shall also state the general nature
of the proposal if action is proposed to be taken at any meeting for approval of
any of the following: (i) a contract or transaction in which a director has a
direct or indirect financial interest; (ii) an amendment of the articles of
incorporation; (iii) a reorganization of the corporation; (iv) a voluntary
dissolution of the corporation; or (v) a distribution in dissolution other than
in accordance with the rights of any outstanding preferred shares.
Notwithstanding the absence of specific notice thereof, any such action may
nevertheless be presented to the meeting and be validly acted upon by the
shareholders if approved by all shareholders entitled to vote thereon, unless
they sign waivers of notice specifying the general nature of the proposal so
approved.
2.05 - MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Notice of any shareholders' meeting shall be given either personally
or by first-class mail or telegraphic or written communication, charges prepaid,
addressed to the shareholder at the address of that shareholder appearing on the
books of the corporation or given by the shareholder to the corporation for the
purpose of notice. If no such address appears on the corporation's books or has
been so given, notice shall be deemed to have
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been given if published at least once in a newspaper of general circulation in
the county where that office is located or in any manner permitted by law.
Notice shall be deemed to have been given at the time when delivered personally,
deposited in the mail, delivered to a common carrier for transmission to the
recipient, actually transmitted by electronic means to the recipient by the
person giving the notice, or sent by other means of written communication.
An affidavit of the mailing or other means of giving any notice of
any shareholders' meeting may be executed by the secretary, assistant secretary,
or any transfer agent of the corporation giving the notice, and filed and
maintained in the minute book of the corporation.
2.06 - ADJOURNED MEETINGS AND NOTICE THEREOF
Any shareholders' meeting, annual or special, whether or not a
quorum is present, may be adjourned from time to time by the vote of the
majority of the shares which are represented at the meeting either in person or
by proxy, but in the absence of a quorum.
It shall not be necessary to give any notice of an adjournment or of
the business to be transacted at an adjourned meeting other than by announcement
at the meeting at which such adjournment is taken. However, when any
shareholders' meeting, either annual or special, is adjourned for more than 45
days, or if after the adjournment a new record date is fixed for the adjourned
meeting notice of the adjourned meeting shall be given to each shareholder of
record entitled to vote at the adjourned meeting. At any adjourned meetings, the
corporation may transact any business that might have been transacted at the
regular meeting.
2.07 - RECORD DATE FOR SHAREHOLDERS OF RECORD
For purposes of determining which shareholders are entitled to
receive notice of any meeting, to vote, or to give consent to corporate action
without a meeting, the board of directors may fix a record date in advance of
such meeting or corporate action which shall not be less than 10 nor more than
60 days before any such meeting or any such action without a meeting. Only
shareholders of record at the close of business on the date so fixed are
entitled to notice and to vote or to give consent, as the case may be,
notwithstanding any transfer of any shares on the books of the corporation after
the record date, except as otherwise provided in the articles of incorporation,
by agreement, or in the California General Corporation Law.
If the board of directors does not so fix a record date:
(a) The record date for determining shareholders entitled to receive
notice of or to vote at a meeting of shareholders shall be at the close of
business on the business day next preceding the day on which notice is given or,
if notice is waived, at the close of business on the business day next preceding
the day on which the meeting is held; and
(b) The record date for determining shareholders entitled to give
consent to corporate action in writing without a meeting (i) when no prior
action by the board has been taken, shall be the day on which the first written
consent is given, or (ii) when prior action of the board has been taken, shall
be at the close of business on the
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day on which the board adopts the resolution relating to that action, or the
60th day before the date of such other action, whichever is later.
2.08 - VOTING AT MEETINGS
Except as otherwise provided in the articles of incorporation and in
the case of cumulative voting for directors, each shareholder is entitled to one
vote. The shareholders' vote may be by voice vote or by ballot; provided,
however, that any election for directors must be by ballot if demanded by any
shareholder before the voting has begun. On any matter other than the election
of directors, any shareholder may vote part of the shares in favor of the
proposal and refrain from voting the remaining shares or vote them against the
proposal, but if the shareholder fails to specify the number of shares which the
shareholder is voting affirmatively, it will be conclusively presumed that the
shareholder's approving vote is with respect to all shares that the shareholder
is entitled to vote. The affirmative vote of a majority of the shares
represented and voting, provided such shares voting affirmatively also
constitutes a majority of the number of shares required for a quorum, shall be
the act of the shareholders, unless the vote of a greater number or voting by
classes is required by California General Corporation Law or by the articles of
incorporation.
Every shareholder entitled to vote at any election for directors
shall have the right to cumulate his votes by (i) giving one candidate a number
of votes equal to the number of directors to be elected multiplied by the number
of votes to which his shares are entitled, or (ii) distributing such cumulated
votes on the same principle among as many candidates as he chooses; provided
that the name of such candidate has been placed in nomination prior to the
voting and that at least one shareholder has given notice at the meeting, prior
to the voting, of an intention to cumulate votes. In any election of directors,
the candidates receiving the highest number of votes, up to the number of
directors to be elected, shall be elected. Votes against a director or not cast
shall have no effect.
2.09 - QUORUM
The presence in person or by proxy of persons entitled to vote a
majority of the voting shares at any meeting shall constitute a quorum of the
shareholders for the transaction of business.
The shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding
the withdrawal of one or more shareholders to leave less than a quorum, if any
action taken (other than adjournment) is approved by at least a majority of the
shares required to constitute a quorum.
2.10 - CONSENT OF ABSENTEES
The transactions of any meeting of shareholders, either annual or
special, however called and noticed and wherever held, shall be as valid as
though made at a meeting duly held after regular call and notice if a quorum is
present either in person or by proxy and if, either before or after the meeting,
each of the shareholders entitled to vote who was not present in person or by
proxy signs a written waiver of notice or a consent to the
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holding of such meeting or an approval of the minutes thereof. The waiver of
notice or consent need not specify either the business to be transacted or the
purpose of any annual or special meeting of shareholders, unless the action
taken or proposed to be taken is for approval of any of those matters specified
in Section 2.04. All such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
Attendance at a meeting, in person or by proxy, shall also
constitute a waiver of notice of that meeting, except when the person objects at
the beginning of the meeting to the transaction of any business because the
meeting has not been lawfully called or convened, and except that attendance at
a meeting is not a waiver of any right to object to the consideration of matters
required by law to be included in the notice of the meeting but not so included,
if that objection is expressly made at the meeting.
2.11 - ACTION WITHOUT MEETING
Except as may be limited by the articles of incorporation and except
for the election of directors, any action which may be taken by vote of the
shareholders at any annual or special meeting may be taken without a meeting and
without prior notice if a consent in writing setting forth the action so taken
is signed by the holders of outstanding shares 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.
Directors may be elected by written consent without a meeting only if the
written consents of all outstanding shares entitled to vote are obtained, except
that a vacancy in the board (other than a vacancy created by removal of a
director) not filled by the board may be filled by the written consent of the
holders of a majority of the outstanding shares entitled to vote.
All such consents shall be filed and maintained in the corporate
records. Any shareholder (or the shareholder's proxyholders, or a transferee of
the shares or a personal representative of the shareholder or their respective
proxyholders) giving a written consent may revoke the consent only by a writing
received by the corporation prior to the time that written consents of the
number of shares required to authorize the proposed action have been filed with
the secretary of the corporation. Such revocation is effective upon its receipt
by the secretary of the corporation.
Unless the consents of all shareholders entitled to vote have been
solicited in writing:
(1) Notice of shareholder approval without a meeting by less than
unanimous written consent shall be given at least 10 calendar days before
the consummation of the action authorized by such approval, if the
corporate action concerns (i) a contract or transaction in which a
director has a direct or indirect financial interest under Section 310 of
the California Corporations Code, (ii) indemnification of agents of the
corporation, (iii) reorganization of the corporation, or (iv) a
distribution in dissolution other than in accordance with the rights of
the outstanding preferred shares; and
(2) Prompt notice shall be given of any other corporate action
approved by shareholders without a meeting by less than unanimous written
consent.
All such notices shall be given in the manner provided by Section 2.05.
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2.12 - PROXIES
Every person entitled to vote for directors or on any other matter
shall have the right to do so either in person or by one or more agents
authorized by a written proxy signed by the person and filed with the secretary
of the corporation. A proxy shall be deemed signed if the shareholder's name is
placed on the proxy (whether by manual signature, typewriting, telegraphic
transmission or otherwise) by the shareholder or the shareholder's
attorney-in-fact. A validly executed proxy that does not state that it is
irrevocable shall continue in full force and effect unless (i) revoked by the
person executing it, before the vote pursuant to that proxy, by a writing
delivered to the corporation stating that the proxy is revoked, or by attendance
at the meeting and voting in person by the person executing the proxy, or by a
subsequent proxy executed by the same person and presented at the meeting; or
(ii) written notice of the death or incapacity of the maker of that proxy is
received by the corporation before the vote pursuant to that proxy is counted;
provided, however, that no proxy shall be valid after the expiration of 11
months from the date of the proxy, unless another term of longer or shorter
duration is specified in the proxy. The revocability of a proxy that states on
its face that is irrevocable shall be governed by the provisions of Sections
705(e) and 705(f) of the Corporations Code of California.
ARTICLE III - DIRECTORS
3.01 - POWERS
Except as reserved to the shareholders by law, the articles of
incorporation or these bylaws, all corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
controlled by, the board of directors. Without limiting the generality of the
foregoing powers, the directors shall have the following powers:
First: To conduct, manage and control the affairs and business of
the corporation and to make such rules and regulations therefor not inconsistent
with law or with the articles of incorporation or these bylaws, as they may deem
best.
Second: To select and remove all the other officers, agents and
employees of the corporation, to prescribe such powers and duties for them as
may not be inconsistent with law, with the articles of incorporation or with
these bylaws, to fix their compensation and to require from them security for
faithful service.
Third: To change the principal executive and business office of the
corporation from one location to another as provided in Section 1.01 hereof; to
fix and locate from time to time one or more subsidiary offices of the
corporation within or without the State of California, as provided in Section
1.02 hereof; to designate any place within or without the State of California
for the holding of any shareholders' meeting or meetings except annual meetings;
and to adopt, make and use a corporate seal, to prescribe the forms of
certificates of stock and to alter the form of such seal and of such
certificates from time to time as in their judgment they may deem best, provided
that such seal and such certificates shall at all times comply with the
provisions of law.
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Fourth: To authorize the issue of shares of stock of the corporation
from time to time, upon such terms as may be lawful, as dividends or in
consideration of money paid, labor done or services actually rendered to the
corporation or for its benefit or in its formation or reorganization, debts or
securities cancelled, or tangible or intangible property actually received; but
neither promissory notes of the purchaser, unless secured by property other than
the shares acquired or otherwise permitted by Section 408 of the General
Corporation Law, nor future services shall constitute payment or part payment
for shares of the corporation.
Fifth: To borrow money and incur indebtedness for the purposes of
the corporation and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations or other evidences of debt and securities therefor.
Sixth: To designate, by resolution adopted by a majority of the
authorized number of directors, one or more committees, each consisting of two
or more directors, to serve at the pleasure of the board. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent member at any meeting of the committee. Any such committee
shall have all the authority of the board to the extent provided in the
resolution of the board or in the bylaws, except with respect to:
(a) The approval of any action for which, under the General
Corporation Law of California, also requires approval of the shareholders or
approval of the outstanding shares;
(b) The filling of vacancies on the board or in any committee;
(c) The fixing of compensation of the directors for serving on the
board or on any committee;
(d) The amendment or repeal of bylaws or the adoption of new bylaws;
(e) The amendment or repeal of any resolution of the board which by
its express terms is not so amendable or repealable;
(f) A distribution to the shareholders of the corporation, except at
a rate, in a periodic amount or within a price range set forth in the articles
or determined by the board; or
(g) The appointment of other committees of the board or the members
thereof.
Seventh: To declare dividends at such times and in such amounts as
the condition of the affairs of the corporation may warrant.
Eighth: Generally to exercise all of the powers and to perform all
of the acts and duties that from time to time may be permitted by law
appertaining to their office.
3.02 - NUMBER OF DIRECTORS
The authorized number of directors of the corporation shall be two
until changed by an amendment of this bylaw.
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3.03 - ELECTION AND TERM OF OFFICE
The directors shall be elected at each annual meeting of shareholders and may be
elected at any special meeting of shareholders held for that purpose. Each
director shall hold office until his successor is elected and qualified, or
until his earlier death, resignation, removal or ineligibility.
3.04 - REMOVAL
A director may be removed for cause by (i) the board, when such
director has been convicted of a felony or declared incompetent by court order,
or (ii) the superior court, at the suit of at least 10% of the shareholders of
any class of shares having found that the director has either committed
fraudulent or dishonest acts, or has grossly abused his authority with reference
to the corporation.
A director may be removed without cause by a majority vote of all
outstanding shares, provided that (i) where cumulative voting is in effect, such
director may not be removed over the objection of the number of shares required
to elect him, and (ii) where the articles of incorporation provide for the
election of a director by the shareholders of a certain class or series of
shares, such director may be removed only by the majority vote of the
outstanding shares of such class or series.
Except as provided in this Section 3.04, and any reduction of the
authorized number of directors notwithstanding, a director may not be removed
prior to the expiration of such director's term of office.
3.05 - VACANCIES
Vacancies in the board of directors may be filled by a majority of
the remaining directors, though less than a quorum, or by a sole remaining
director. A vacancy in the board of directors shall be deemed to exist (i) in
case of the death, resignation, ineligibility or removal of any director, (ii)
if the authorized number of directors is increased, or (iii) if the shareholders
fail, at any annual or special meeting of shareholders at which any director or
directors are elected, to elect the full authorized number of directors to be
voted for at that meeting.
The shareholders may elect a director or directors at any time to
fill any vacancy or vacancies not filled by the directors. If the board of
directors accepts the resignation of a director tendered to take effect at a
future time, the board or the shareholders shall have the power to elect a
successor to take office when the resignation is to become effective.
3.06 - PLACE OF MEETING
Regular and special meetings of the board of directors shall be held
at any place within or without the State of California which has been designated
from time to time by resolution of the board or by written consent of all
members of the board. In the absence of such designation, meetings shall be held
at the principal executive and business office of the corporation.
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3.07 - MEETINGS BY TELEPHONE CONFERENCE
Members of the board may participate in a meeting through use of
conference telephone or similar communication equipment, so long as all members
participating in such meeting can hear one another.
3.08 - ACTION WITHOUT MEETING
Any action required or permitted to be taken by the board of
directors or any committee thereof may be taken without a meeting if each member
of the board consents in writing to such action. Such consents shall be filed
with the minutes of the meetings of the board.
3.09 - ORGANIZATION MEETING
Immediately following each annual meeting of shareholders, the board
of directors shall hold a regular meeting for the purpose of organization,
election of officers and the transaction of other business. Notice of such
meeting is hereby dispensed with.
3.10 - SPECIAL MEETINGS
Special meetings of the board of directors for any purpose or
purposes may be called at any time by (i) the chairman of the board, (ii) the
president, (iii) any vice president, (iv) the secretary, or (v) any two
directors.
Written notice of the time and place of special meetings shall be
delivered personally to the directors or sent to each director by mail or by
other form of written communication, charges prepaid, addressed to him at his
address as it appears upon the records of the corporation or, if it is not so
shown or is not readily ascertainable, at the place in which the meetings of
directors are regularly held. In case such notice is mailed, it shall be
deposited in the United States mail at least four days prior to the date of the
meeting. In case such notice is delivered personally or telegraphed, it shall be
so delivered or deposited with the telegraph company at least 48 hours prior to
the time of the meeting.
3.11 - ADJOURNMENT
A majority of the directors present, whether or not aquorum is
present, may adjourn any directors' meeting to another time and place. If a
meeting is adjourned for more than 24 hours, notice of any adjournment to
another time or place shall be given in the manner specified in Section 3.10
prior to the time of the adjourned meeting to the directors who were not present
at the time of adjournment.
3.12 - WAIVER OF NOTICE
The transactions at any meeting of the board of directors, however
called and noticed, or wherever held, shall be as valid as though such
transactions had occurred at a meeting duly held after regular call and notice
if
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a quorum is present and if, either before or after the meeting, each of the
directors not present signs a written waiver of notice of or consent to holding
the meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.
3.13 - QUORUM
A majority of the authorized number of directors then holding office
shall constitute a quorum for the transaction of business. The act of the
majority of the directors at a meeting at which a quorum is present shall be the
act of the board of directors, unless a greater number is required by law, the
articles of incorporation or these bylaws. However, a meeting at which a quorum
is initially present may continue to transact business notwithstanding the
withdrawal of directors if any action taken is approved by at least a majority
of the required quorum for such meeting. The provisions of this Section 3.13
shall apply to action taken by any committee from time to time designated by the
board of directors.
ARTICLE IV - OFFICERS
4.01 - OFFICERS
The officers of the corporation shall be a president, a secretary, a
treasurer, and such other officers with such titles and duties as may be
appointed in accordance with the provisions of Section 4.03. Any number of
offices may be held by the same person. The president shall be the chief
executive officer and the treasurer shall be the chief financial officer.
4.02 - ELECTION
The officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Sections 4.03 or 4.05, shall be
chosen annually by the board of directors; and each officer shall hold his
office until he has resigned or removed or is otherwise disqualified to serve
and his successor has been elected and qualified.
4.03 - REMOVAL AND RESIGNATION
Any officer may be removed, either with or without cause, by a
majority of the directors at the time in office, at any regular or special
meeting of the board, or, except in the case of an officer chosen by the board
of directors, by any officer upon whom such power of removal may be conferred by
the board of directors.
Any officer may resign at any time by giving written notice to the
board of directors or to the president or to the secretary of the corporation.
Any such resignation shall take effect at the date of the receipt of such notice
or any later time specified therein; and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective.
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4.04 - VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these bylaws for regular appointments to such office.
4.05 - CHAIRMAN OF THE BOARD
The chairman of the board, if one has been appointed, shall, if
present, preside at all meetings of the board of directors and exercise and
perform all such other powers and duties as may from time to time be assigned to
him by the board of directors or prescribed by these bylaws.
4.06 - PRESIDENT
The president, subject to the board of directors, shall have general
supervision, direction and control of the business and of other officers and
employees of the corporation. He shall preside at all meetings of the
shareholders and, if there is no regular, appointed chairman of the board or if
such chairman is absent, at all meetings of the board of directors. He shall be
ex officio a member of all standing committees, including the executive
committee, if any, and shall have general powers and duties of management,
together with such other powers and duties as may be prescribed by the board of
directors.
4.07 - SECRETARY
The secretary shall keep, or cause to be kept, a book of minutes at
the principal executive and business office, or such other place as the board of
directors may order, of all meetings of directors and shareholders, with the
time and place of holding, whether regular or special and, if special, how
authorized, the notice thereof given, the names of those present at directors'
meetings, the number of shares present or represented at shareholders' meetings
and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal
executive and business office or at the office of the corporation's transfer
agent, a share register or a duplicate share register showing the names of the
shareholders and their addresses, the number and classes of shares held by each,
the number and date of certificates issued for the same, and the number and date
of cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all the
meetings of the shareholders and of the board of directors required by these
bylaws or by law to be given, shall keep the seal of the corporation in safe
custody and shall have such other powers and shall perform such other duties as
may be prescribed by the board of directors or the bylaws.
4.08 - TREASURER
The chief financial officer shall be the treasurer. The treasurer
shall keep and maintain, or cause to be kept and maintained, adequate and
correct accounts of the properties and business transactions of the corporation,
including accounts of its assets, liabilities, receipts, disbursements, gains,
losses, capital, surplus and shares.
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The treasurer shall deposit all moneys and other valuables in the
name and to the credit of the corporation with such depositaries as may be
designated by the board of directors. He shall be responsible for the proper
disbursement of the funds of the corporation as may be ordered by the board of
directors and shall render to the president or directors, whenever they request
it, an account of all of his transactions as treasurer and of the financial
condition of the corporation. The treasurer shall prepare a proper annual budget
of income and expenses for each calendar year, revised quarterly, for approval
of or revision by the board of directors and shall be responsible for the
handling of finances in connection therewith. He shall have such other powers
and shall perform such other duties as may be prescribed by the board of
directors. He shall see that all officers signing checks are bonded in such
amounts as may be fixed from time to time by the board of directors.
4.09 - SUBORDINATE OFFICERS
The board of directors may appoint such vice presidents, assistant
treasurers and assistant secretaries and other subordinate officers as the
business of the corporation may require, each of whom shall hold office for such
period, have such authority and perform such duties as are provided in these
bylaws or as the board of directors may from time to time determine.
In the absence or disability of the president, treasurer or
secretary, the vice presidents, assistant treasurers and assistant secretaries,
respectively, in order of their rank as fixed by the board of directors or, if
not ranked, the subordinate officer designated by the board of directors shall
perform all the duties of such absent or disabled officer and, when so acting,
shall have all the powers of and be subject to all the restrictions upon such
officer. Each subordinate officer shall have such other powers and shall perform
such other duties as from time to time may be prescribed for him by the board of
directors or these bylaws.
ARTICLE V - SHARES OF STOCK
5.01- SHARE CERTIFICATES
Certificates representing shares of the capital stock of the
corporation shall be in such form as shall be approved by the board of
directors, consistent with the articles of incorporation and the laws of the
State of California. A certificate or certificates for shares of the capital
stock of the corporation shall be issued to each shareholder when such shares
are fully paid, and the board of directors may authorize the issuance of
certificates or shares as partly paid provided that these certificates shall
state the amount of the consideration to be paid for them and the amount paid.
All such certificates shall be signed by (i) the chairman or vice chairman of
the board or the president or a vice president, and (ii) by the treasurer or an
assistant financial officer or the secretary or any assistant secretary,
certifying the number of shares and the class or series of shares issued to the
shareholder and evidenced by such certificate. The corporation may issue, sell
or transfer fractional shares.
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<PAGE>
5.02 - TRANSFER OF SHARES
Subject to the provisions of applicable securities and other laws
and any other valid contractual and other restrictions on transfer of shares,
upon the surrender to the corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
5.03 - LOST OR DESTROYED CERTIFICATE
The holder of any shares of stock of the corporation shall
immediately notify the corporation of any loss or destruction of the certificate
therefor, and the corporation may issue a new certificate in the place of any
certificate theretofore issued by it alleged to have been lost or destroyed,
upon approval of the board of directors. The board may, in its discretion, as a
condition to authorizing the issue of such new certificate, require the owner of
the lost or destroyed certificate, or his legal representative, to make proof
satisfactory to the board of directors of the loss or destruction thereof and to
give the corporation a bond or other security, in such amount and with such
surety or sureties as the board of directors may determine, as indemnity against
any claim that may be made against the corporation on account of any such
certificate so alleged to have been lost or destroyed.
ARTICLE VI - MISCELLANEOUS
6.01 - INDEMNITY OF OFFICERS, DIRECTORS, EMPLOYEES AND OTHER AGENTS
The corporation shall, to the maximum extent permitted by the
California General Corporation Law, have power to indemnify each of its agents
against expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with any proceeding arising by reason of the
fact any such person is or was an agent of the corporation and shall have power
to advance to each such agent expenses incurred in defending any such proceeding
to the maximum extent permitted by that law. For purposes of this Section, an
"agent" of the corporation includes any person who (i) is or was a director,
officer, employee or other agent of the corporation, (ii) is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, or
(iii) was a director, officer, employee or agent of a corporation which was a
predecessor corporation of the corporation or of another enterprise at the
request of such predecessor corporation.
6.02 - SHAREHOLDER INSPECTION OF ARTICLES AND BYLAWS
The corporation shall keep at its principal executive and business
office the original or a copy of the articles of incorporation and the bylaws
and any amendments thereto, certified by the secretary, which shall be open to
inspection by shareholders at all reasonable times during office hours.
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6.03 - MAINTENANCE AND INSPECTION OF RECORDS OF SHAREHOLDERS
The corporation shall keep at its principal executive and business
office or at the office of its transfer agent or registrar (if one has been
appointed), as determined by resolution of the board of directors, a record of
its shareholders, giving the names and addresses of all shareholders and the
number and class of shares held by each shareholder.
A shareholder or shareholders of the corporation holding at least 5%
in the aggregate of the outstanding voting shares of the corporation may (i)
inspect and copy the records of shareholders' names, addresses and
shareholdings, during usual business hours on five days' prior written demand on
the corporation, and (ii) obtain from the transfer agent of the corporation, on
written demand and on the tender of such transfer agent's usual charges for such
list, a list of the names and addresses of the shareholders who are entitled to
vote for the election of directors, and their shareholdings, as of the most
recent record date for which that list has been compiled or as of a date
specified by the shareholder after the date of demand. This list shall be made
available to any such shareholder or shareholders by the transfer agent on or
before the later of five days after the demand is received or the date specified
in the demand as the date as of which the list is to be compiled. The record of
shareholders shall also be open to inspection on the written demand of any
shareholder or holder of a voting trust certificate, at any time during usual
business hours, for a purpose reasonably related to the holder's interests as a
shareholder or as the holder of a voting trust certificate. Any inspection and
copying under this Section may be made in person or by an agent or attorney of
the shareholder or holder of a voting trust certificate making the demand.
6.04 - SHAREHOLDER INSPECTION OF CORPORATE RECORDS
The accounting books and records and minutes of proceedings of the
shareholders and the board of directors and any committee or committees of the
board of directors shall be kept at such place or places designated by the board
of directors or, in the absence of such designation, at the principal executive
and business office of the corporation. The minutes shall be kept in written
form, and the accounting books and records shall be kept either in written form
or in any other form capable of being converted into written form. The minutes
and accounting books and records shall be open to inspection upon the written
demand of any shareholder or holder of a voting trust certificate, at any
reasonable time during usual business hours, for a purpose reasonably related to
the holder's interests as a shareholder or as the holder of a voting trust
certificate. The inspection may be made in person or by an agent or attorney and
shall include the right to copy and make extracts. These rights of inspection
shall extend to the records of each subsidiary corporation of the corporation.
6.05 - INSPECTION BY DIRECTORS
Every director shall have the absolute right at any reasonable time
to inspect all books, records and documents of every kind and the physical
properties of the corporation and each of its subsidiary corporations. This
inspection by a director may be made in person or by an agent or attorney, and
the right of inspection includes the right to copy and make extracts of
documents.
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6.06 - CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for payment of money, notes or
other evidences of indebtedness, issued in the name of or payable to the
corporation, shall be signed or endorsed by such person or persons and in such
manner as from time to time shall be determined by resolution of the board of
directors.
6.07 - EXECUTION OF INSTRUMENTS
Except as otherwise provided in these bylaws, the board of directors
may authorize one or more officers or agents to enter into any contract or
execute any instrument in the name of and on behalf of the corporation, which
authority may be general or confined to specific instances. Unless so authorized
by the board of directors, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its
credit to render it liable for any purpose or to any amount.
6.08 - REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The president or, in the event of his absence or inability to serve,
any vice president and the secretary or assistant secretary of this corporation
are authorized to vote, represent and exercise, on behalf of this corporation,
all rights incidental to any and all shares of any other corporation standing in
the name of this corporation. The authority herein granted to such officers to
vote or represent on behalf of this corporation any and all shares held by this
corporation in any other corporation may be exercised either by such officers in
person or by any person authorized to do so by proxy or power of attorney duly
executed by such officers.
6.09 - ANNUAL REPORT
The annual report to shareholders referred to in Section 1501(a) of
the California Corporations Code is expressly waived subject to the limitations
thereof, but the board of directors of the corporation may cause to be sent to
the shareholders, not later than 120 days after the close of the fiscal or
calendar year, an annual report in such form as may be deemed appropriate by the
board of directors.
6.10 - ANNUAL STATEMENT OF GENERAL INFORMATION
Within 90 days of incorporation and annually thereafter, the
corporation shall file with the Secretary of State, on the prescribed form, a
statement setting forth the authorized number of directors, the names and
complete business or residence addresses of all incumbent directors, the names
and complete business or residence addresses of the chief executive officer,
secretary and chief financial officer, the street address of its principal
executive office or principal business office in this state, and the general
type of business constituting the principal business activity of the
corporation, together with a designation of the agent of the corporation for the
purpose of service of process, all in compliance with section 1502 of the
California Corporations Code.
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ARTICLE VII - AMENDMENTS TO BYLAWS
7.01 - AMENDMENT BY SHAREHOLDERS
New bylaws may be adopted or these bylaws may be amended or repealed
by the vote or written consent of the shareholders entitled to exercise a
majority of the voting power of the corporation, except as otherwise provided by
either of these laws, these bylaws or the articles of the corporation; provided,
however, that if the articles of incorporation set forth the number of
authorized directors of the corporation, the authorized number of directors may
be changed only by an amendment of the articles of incorporation.
7.02 - AMENDMENT BY DIRECTORS
Subject to the rights of the shareholders as provided in Section
7.01 to adopt, amend or repeal bylaws, bylaws may be adopted, amended, or
repealed by the board of directors; provided, however, that the board of
directors may adopt a bylaw or amendment of a bylaw changing the authorized
number of directors only for the purpose of fixing the exact number of directors
within the limits specified in the articles of incorporation or in Section 3.02
of these bylaws.
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CERTIFICATE OF SECRETARY
OF
FILLMORE FINGERS, INC.
The undersigned hereby certifies that:
1. He is the duly elected, qualified and acting Secretary of
FILLMORE FINGERS, INC., a duly organized and existing California corporation
(the "Corporation").
2. By Written Consents dated August 11, 1993, the Corporation's sole
shareholder and sole director adopted the Bylaws amendment attached hereto as
Exhibit A.
3. By Written Consent dated January 17, 1995, the Corporation's sole
shareholder amended Section 3.02 of the Corporation's Bylaws to read as follows:
The authorized number of directors of the corporation shall be three
until changed by an amendment of this bylaw.
4. By Written Consent dated January 17, 1995, the Corporation's
Board of Directors amended Section 4.06 by the addition of the following
paragraph:
The board of directors, in its sole discretion, may elect two
persons to serve as Co-Presidents of the Corporation. In such event
either Co-President, acting independently, may perform the duties of
the President as described in these Bylaws.
5. The foregoing Bylaws, amended as set forth above, constitute a
full, true and correct copy of the Corporation's Bylaws as in effect on the date
hereof.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
this 17th day of January, 1995.
/s/ Franklin D. Rockwell, Jr.
-----------------------------
FRANKLIN D. ROCKWELL, JR.
<PAGE>
EXHIBIT A
BYLAWS AMENDMENT
6.01 - INDEMNITY OF DIRECTORS, OFFICERS. AND EMPLOYEES
The corporation shall, to the fullest extent permitted by the
California General Corporation Law (the "Code") and in excess of that which is
otherwise provided by Code Section 317, indemnify each of the directors,
officers, and employees of the corporation and each person who is or was serving
at the request of the corporation as a director, officer, or employee of another
corporation (including without limitation direct and indirect subsidiaries of
the corporation) or a partnership, joint venture, trust, or other enterprise
(all such persons being hereinafter collectively referred to as "Indemnified
Persons") against all judgments, fines, penalties, amounts paid in settlement
(if the settlement is approved in advance by the corporation (or, where
applicable, such other corporation or other enterprise described in this
sentence), which approval shall not be unreasonably withheld of delayed), and
"expenses" (as hereinafter defined) actually and reasonably incurred by the
Indemnified Person in connection with any "proceeding" (as hereinafter defined)
involving the Indemnified Person by reason of the fact that the Indemnified
Person is or was a director, officer, or employee of the corporation or, acting
at the request of the corporation, any other corporation, partnership, joint
venture, trust, or other enterprise. For purposes hereof, "expenses" include by
way of illustration but not limitation all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, or being prepared to be a witness in any
"proceeding." For purposes hereof, a "proceeding" shall include by way of
illustration but not limitation any action, suit, arbitration, alternative
dispute resolution mechanism, investigation, administrative hearing, or any
other proceeding, whether civil, criminal, administrative, or investigative, and
whether brought by or on behalf of a third party or by or on behalf of the
corporation.
Upon written request to the Board in each specific case by an
Indemnified Person seeking indemnification, the Board shall promptly authorize
indemnification consistent with the terms of the preceding paragraph if the
Board determines that the indemnification is not prohibited by the Code,
including by reason of the requirements of Code Sections 204(a)(10) and (11)
and, in the case of an action by or in the right of the corporation to procure a
judgment in its favor, subsections (1), (2), and (3) of Code Section 317 (c) .
The termination of any proceeding by judgment, order, settlement, conviction, or
upon plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that an Indemnified Person did not act in good faith and in a manner
which the Indemnified Person reasonably believed to be in or not opposed to the
best interests of the corporation or, with respect to any criminal proceeding,
had no reasonable cause to believe that the conduct of the Indemnified Person
was unlawful.
If an Indemnified Person is entitled to indemnification by the
corporation for some or a portion of any judgments, fines, penalties, amounts
paid in settlement, or expenses actually and reasonably incurred by the
<PAGE>
Indemnified Person in connection with any proceeding, but not, however, for the
total amount thereof, the corporation shall nevertheless indemnify the
Indemnified Person for the portion of such amounts to which the Indemnified
Person is entitled.
Upon written request to the Board in each specific case by an
Indemnified Person, the Board shall promptly authorize the advancement of
attorneys' fees and other expenses incurred by the Indemnified Person prior to
the final disposition of a proceeding in which the Indemnified Person is
involved by reason of the fact that the Indemnified Person is or was a director,
officer, or employee of the corporation or, acting at the request of the
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CERTIFICATE OF INCORPORATION
OF
FPI CONCERTS, INC.
------------------------------------
FIRST. The name of this corporation shall be:
FPI CONCERTS, INC.
SECOND. Its registered office in the State of Delaware is to be
located at 1013 Centre Road, in the City of Wilmington, County of New Castle,
and its registered agent at such address is the CORPORATION SERVICE COMPANY.
THIRD. The purpose or purposes of the corporation shall be:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
FOURTH. The total number of shares of stock which this corporation is
authorized to issue is:
One Thousand (1,000) shares with a par value of one cent ($.01) per
share, amounting to Ten Dollars ($10.00).
FIFTH. The name and address of the incorporator is as follows:
Wendy L. Schuyler
Corporation Service Company
1013 Centre Road
Wilmington, DE 19805
SIXTH. The Board of Directors shall have the power to adopt, amend or
repeal the by-laws.
SEVENTH. No director shall be personally liable to the Corporation or
its stockholders for monetary damages for any breach of fiduciary duty by such
director as a director. Notwithstanding the foregoing sentence, a director
shall be liable to the extent provided by applicable law, (i) for 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) pursuant to Section 174 of the Delaware
General Corporation Law or (iv) for any transaction from which the director
derived an improper personal benefit. No amendment to or repeal of this Article
Seventh shall apply to or have any effect on the liability or alleged liability
of any director of the Corporation for or with respect to any acts or omissions
of such director occurring prior to such amendment.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being the incorporator
hereinbefore named, has executed, signed and acknowledged this certificate of
incorporation this tenth day of February, A.D., 1997.
/s/ Wendy L. Schuyler
-----------------------
Wendy L. Schuyler
Incorporator
<PAGE>
BY-LAWS
OF
FPI CONCERTS, INC.
-------------------------------------
ARTICLE I
OFFICES
1.1 Registered Office: The registered office shall be established
and maintained at and shall be the registered agent of the Corporation in charge
hereof.
1.2 Other Offices: The corporation may have other offices, either
within or without the State of Delaware, at such place or places as the Board of
Directors may from time to time appoint or the business of the corporation may
require, provided, however, that the corporation's books and records shall be
maintained at such place within the continental United States as the Board of
Directors shall from time to time designate.
ARTICLE II
STOCKHOLDERS
2.1 Place of Stockholders' Meetings: All meetings of the
stockholders of the corporation shall be held at such place or places, within or
outside the State of Delaware as may be fixed by the Board of Directors from
time to time or as shall be specified in the respective notices thereof.
2.2 Date and Hour of Annual Meetings of Stockholders: An annual
meeting of stockholders shall be held each year within five months after the
close of the fiscal year of the Corporation.
2.3 Purpose of Annual Meetings: At each annual meeting, the
stockholders shall elect the members of the Board of Directors for the
succeeding year. At any such annual meeting, any further proper business may be
transacted.
2.4 Special Meetings of Stockholders: Special meetings of the
stockholders or of any class or series thereof entitled to vote may be called by
the President or by the Chairman of the Board of Directors, or at the request in
writing by stockholders of record owning at least fifty percent (50%) of the
issued and outstanding voting shares of common stock of the corporation.
By-Laws - 1
<PAGE>
2.5 Notice of Meetings of Stockholders: Except as otherwise
expressly required or permitted by law, not less than ten days nor more than
sixty days before the date of every stockholders' meeting, the Secretary shall
give to each stockholder of record entitled to vote at such meeting, written
notice, served personally by mail or by telegram, stating the place, date and
hour of the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called. Such notice if mailed shall be deemed
to be given when deposited in the United States mail, postage prepaid, directed
to the stockholder at his address for notices to such stockholder as it appears
on the records of the corporation.
2.6 Quorum of Stockholders: (a) Unless otherwise provided by the
Certificate of Incorporation or by law, at any meeting of the stockholders, the
presence in person or by proxy of stockholders entitled to cast a majority of
the votes thereat shall constitute a quorum. The withdrawal of any shareholder
after the commencement of a meeting shall have no effect on the existence of a
quorum, after a quorum has been established at such meeting.
(b) At any meeting of the stockholders at which a quorum shall
be present, a majority of voting stockholders, present in person or by proxy,
may adjourn the meeting from time to time without notice other than announcement
at the meeting. In the absence of a quorum, the officer presiding thereat shall
have power to adjourn the meeting from time to time until a quorum shall be
present. Notice of any adjourned meeting, other than announcement at the
meeting, shall not be required to be given except as provided in paragraph (d)
below and except where expressly required by law.
(c) At any adjourned session at which a quorum shall be
present, any business may be transacted which might have been transacted at the
meeting originally called but only those stockholders entitled to vote at the
meeting as originally noticed shall be entitled to vote at any adjournment or
adjournments thereof, unless a new record date is fixed by the Board of
Directors.
(d) If an adjournment is for more than thirty days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
2.7 Chairman and Secretary of Meeting: The President shall preside
at meetings of the stockholders. The Secretary shall act as secretary of the
meeting or if he is not present, then the presiding officer may appoint a person
to act as secretary of the meeting.
2.8 Voting by Stockholders: Except as may be otherwise provided by
the Certificate of Incorporation or these by-laws, at every meeting of the
stockholders each stockholder shall be entitled to one vote for each share of
voting stock standing in his name on the books of the corporation on the record
date for the meeting. Except as otherwise provided by these by-laws, all
elections and questions shall be decided by the vote of a majority in interest
of the stockholders present in person or represented by proxy and entitled to
vote at the meeting.
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<PAGE>
2.9 Proxies: Any stockholder entitled to vote at any meeting of
stockholders may vote either in person or by proxy. Every proxy shall be in
writing, subscribed by the stockholder or his duly authorized attorney-in-fact,
but need not be dated, sealed, witnessed or acknowledged.
2.10 Inspectors: The election of directors and any other vote by
ballot at any meeting of the stockholders shall be supervised by at least two
inspectors. Such inspectors may be appointed by the presiding officer before or
at the meeting; or if one or both inspectors so appointed shall refuse to serve
or shall not be present, such appointment shall be made by the officer presiding
at the meeting.
2.11 List of Stockholders: (a) At least ten days before every
meeting of stockholders, the Secretary shall prepare and make a complete list of
the stockholders entitled to vote at the meeting, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder.
(b) During ordinary business hours, for a period of at least
ten days prior to the meeting, such list shall be open to examination by any
stockholder for any purpose germane to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or if not so specified, at the place where the meeting is
to be held.
(c) The list shall also be produced and kept at the time and
place of the meeting during the whole time of the meeting, and it may be
inspected by any stockholder who is present.
(d) The stock ledger shall be the only evidence as to who are
the stockholders entitled to examine the stock ledger, the list required by this
Section 2.11 or the books of the corporation, or to vote in person or by proxy
at any meeting of stockholders.
2.12 Procedure at Stockholders' Meetings: Except as otherwise
provided by these by-laws or any resolutions adopted by the stockholders or
Board of Directors, the order of business and all other matters of procedure at
every meeting of stockholders shall be determined by the presiding officer.
2.13 Action By Consent Without Meeting: Unless otherwise provided by
the Certificate of Incorporation, any action required to be taken at any annual
or special meeting of stockholders, or any action which may be taken at any
annual or special meeting, may be taken without a meeting, without prior notice
and without a vote, if a consent 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. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing.
By-Laws - 3
<PAGE>
ARTICLE III
DIRECTORS
3.1 Powers of Directors: The property, business and affairs of the
corporation shall be managed by its Board of Directors which may exercise all
the powers of the corporation except such as are by the law of the State of
Delaware or the Certificate of Incorporation or these by-laws required to be
exercised or done by the stockholders.
3.2 Number, Method of Election, Terms of Office of Directors: The
number of directors which shall constitute the Board of Directors shall be ( )
unless and until otherwise determined by a vote of a majority of the entire
Board of Directors. Each Director shall hold office until the next annual
meeting of stockholders and until his successor is elected and qualified,
provided, however, that a director may resign at any time. Directors need not be
stockholders.
3.3 Vacancies on Board of Directors, Removal: (a) Any director may
resign his office at any time by delivering his resignation in writing to the
Chairman of the Board or to the President. It will take effect at the time
specified therein or, if no time is specified, it will be effective at the time
of its receipt by the corporation. The acceptance of a resignation shall not be
necessary to make it effective, unless expressly so provided in the resignation.
(b) Any vacancy in the authorized number of directors may be
filled by majority vote of the stockholders and any director so chosen shall
hold office until the next annual election of directors by the stockholders and
until his successor is duly elected and qualified or until his earlier
resignation or removal.
(c) Any director may be removed with or without cause at any
time by the majority vote of the stockholders given at a special meeting of the
stockholders called for that purpose.
3.4 Meetings of the Board of Directors: (a) The Board of Directors
may hold their meetings, both regular and special, either within or outside the
State of Delaware.
(b) Regular meetings of the Board of Directors may be held at
such time and place as shall from time to time be determined by resolution of
the Board of Directors. No notice of such regular meetings shall be required. If
the date designated for any regular meeting be a legal holiday, then the meeting
shall be held on the next day which is not a legal holiday.
(c) The first meeting of each newly elected Board of Directors
shall be held immediately following the annual meeting of the stockholders for
the election of officers and the transaction of such other business as may come
before it. If such meeting is held at the place of the stockholders' meeting, no
notice thereof shall be required.
By-Laws - 4
<PAGE>
(d) Special meetings of the Board of Directors shall be held
whenever called by direction of the Chairman of the Board or the President or at
the written request of any one director.
(e) The Secretary shall give notice to each director of any
special meeting of the Board of Directors by mailing the same at least three
days before the meeting or by telegraphing, telexing, or delivering the same not
later than the date before the meeting.
Unless required by law, such notice need not include a
statement of the business to be transacted at, or the purpose of, any such
meeting. Any and all business may be transacted at any meeting of the Board of
Directors. No notice of any adjourned meeting need be given. No notice to or
waiver by any director shall be required with respect to any meeting at which
the director is present.
3.5 Quorum and Action: Unless provided otherwise by law or by the
Certificate of Incorporation or these by-laws, a majority of the Directors shall
constitute a quorum for the transaction of business; but if there shall be less
than a quorum at any meeting of the Board, a majority of those present may
adjourn the meeting from time to time. The vote of a majority of the Directors
present at any meeting at which a quorum is present shall be necessary to
constitute the act of the Board of Directors.
3.6 Presiding Officer and Secretary of the Meeting: The President,
or, in his absence a member of the Board of Directors selected by the members
present, shall preside at meetings of the Board. The Secretary shall act as
secretary of the meeting, but in his absence the presiding officer may appoint a
secretary of the meeting.
3.7 Action by Consent Without Meeting: Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes or proceedings of the Board or committee.
3.8 Action by Telephonic Conference: Members of the Board of
Directors, or any committee designated by such board, may participate in a
meeting of such board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in such a meeting shall
constitute presence in person at such meeting.
3.9 Committees: The Board of Directors shall, by resolution or
resolutions passed by a majority of Directors designate one or more committees,
each of such committees to consist of one or more Directors of the Corporation,
for such purposes as the Board shall determine. The Board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of such committee.
By-Laws - 5
<PAGE>
3.10 Compensation of Directors: Directors shall receive such
reasonable compensation for their service on the Board of Directors or any
committees thereof, whether in the form of salary or a fixed fee for attendance
at meetings, or both, with expenses, if any, as the Board of Directors may from
time to time determine. Nothing herein contained shall be construed to preclude
any Director from serving in any other capacity and receiving compensation
therefor.
ARTICLE IV
OFFICERS
4.1 Officers, Title, Elections, Terms: (a) The elected officers of
the corporation shall be a President, a Treasurer and a Secretary, and such
other officers as the Board of Directors shall deem advisable. The officers
shall be elected by the Board of Directors at its annual meeting following the
annual meeting of the stockholders, to serve at the pleasure of the Board or
otherwise as shall be specified by the Board at the time of such election and
until their successors are elected and qualified.
(b) The Board of Directors may elect or appoint at any time,
and from time to time, additional officers or agents with such duties as it may
deem necessary or desirable. Such additional officers shall serve at the
pleasure of the Board or otherwise as shall be specified by the Board at the
time of such election or appointment. Two or more offices may be held by the
same person.
(c) Any vacancy in any office may be filled for the unexpired
portion of the term by the Board of Directors.
(d) Any officer may resign his office at any time. Such
resignation shall be made in writing and shall take effect at the time specified
therein or, if no time has been specified, at the time of its receipt by the
corporation. The acceptance of a resignation shall not be necessary to make it
effective, unless expressly so provided in the resignation.
(e) The salaries of all officers of the corporation shall be
fixed by the Board of Directors.
4.2 Removal of Elected Officers: Any elected officer may be removed
at any time, either with or without cause, by resolution adopted at any regular
or special meeting of the Board of Directors by a majority of the Directors then
in office.
4.3 Duties: (a) President: The President shall be the principal
executive officer of the corporation and, subject to the control of the Board of
Directors, shall supervise and control all the business and affairs of the
corporation. He shall, when present, preside at all meetings of the stockholders
and of the Board of Directors. He shall see that all orders and resolutions of
the Board of Directors are carried into effect (unless any such order or
resolution shall
By-Laws - 6
<PAGE>
provide otherwise), and in general shall perform all duties incident to the
office of president and such other duties as may be prescribed by the Board of
Directors from time to time.
(b) Treasurer: The Treasurer shall (1) have charge and custody
of and be responsible for all funds and securities of the Corporation; (2)
receive and give receipts for moneys due and payable to the corporation from any
source whatsoever; (3) deposit all such moneys in the name of the corporation in
such banks, trust companies, or other depositories as shall be selected by
resolution of the Board of Directors; and (4) in general perform all duties
incident to the office of treasurer and such other duties as from time to time
may be assigned to him by the President or by the Board of Directors. He shall,
if required by the Board of Directors, give a bond for the faithful discharge of
his duties in such sum and with such surety or sureties as the Board of
Directors shall determine.
(c) Secretary: The Secretary shall (1) keep the minutes of the
meetings of the stockholders, the Board of Directors, and all committees, if
any, of which a secretary shall not have been appointed, in one or more books
provided for that purpose; (2) see that all notices are duly given in accordance
with the provisions of these by-laws and as required by law; (3) be custodian of
the corporate records and of the seal of the corporation and see that the seal
of the corporation is affixed to all documents, the execution of which on behalf
of the corporation under its seal, is duly authorized; (4) keep a register of
the post office address of each stockholder which shall be furnished to the
Secretary by such stockholder; (5) have general charge of stock transfer books
of the Corporation; and (6) in general perform all duties incident to the office
of secretary and such other duties as from time to time may be assigned to him
by the President or by the Board of Directors.
ARTICLE V
CAPITAL STOCK
5.1 Stock Certificates: (a) Every holder of stock in the corporation
shall be entitled to have a certificate signed by, or in the name of, the
corporation by the President and by the Treasurer or the Secretary, certifying
the number of shares owned by him.
(b) If such certificate is countersigned by a transfer agent
other than the corporation or its employee, or by a registrar other than the
corporation or its employee, the signatures of the officers of the corporation
may be facsimiles, and, if permitted by law, any other signature may be a
facsimile.
(c) In case any officer who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the corporation
with the same effect as if he were such officer at the date of issue.
By-Laws - 7
<PAGE>
(d) Certificates of stock shall be issued in such form not
inconsistent with the Certificate of Incorporation as shall be approved by the
Board of Directors, and shall be numbered and registered in the order in which
they were issued.
(e) All certificates surrendered to the corporation shall be
canceled with the date of cancellation, and shall be retained by the Secretary,
together with the powers of attorney to transfer and the assignments of the
shares represented by such certificates, for such period of time as shall be
prescribed from time to time by resolution of the Board of Directors.
5.2 Record Ownership: A record of the name and address of the holder
of such certificate, the number of shares represented thereby and the date of
issue thereof shall be made on the corporation's books. The corporation shall be
entitled to treat the holder of any share of stock as-the holder in fact
thereof, and accordingly shall not be bound to recognize any equitable or other
claim to or interest in any share on the part of any other person, whether or
not it shall have express or other notice thereof, except as required by law.
5.3 Transfer of Record Ownership: Transfers of stock shall be made
on the books of the corporation only by direction of the person named in the
certificate or his attorney, lawfully constituted in writing, and only upon the
surrender of the certificate therefor and a written assignment of the shares
evidenced thereby. Whenever any transfer of stock shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of the
transfer if, when the certificates are presented to the corporation for
transfer, both the transferor and the transferee request the corporation to do
so.
5.4 Lost, Stolen or Destroyed Certificates: Certificates
representing shares of the stock of the corporation shall be issued in place of
any certificate alleged to have been lost, stolen or destroyed in such manner
and on such terms and conditions as the Board of Directors from time to time may
authorize.
5.5 Transfer Agent, Registrar, Rules Respecting Certificates: The
corporation may maintain one or more transfer offices or agencies where stock of
the corporation shall be transferable. The corporation may also maintain one or
more registry offices where such stock shall be registered. The Board of
Directors may make such rules and regulations as it may deem expedient
concerning the issue, transfer and registration of stock certificates.
5.6 Fixing Record Date for Determination of Stockholders of Record:
The Board of Directors may fix, in advance, a date as the record date for the
purpose of determining stockholders entitled to notice of, or to vote at, any
meeting of the stockholders or any adjournment thereof, or the stockholders
entitled to receive payment of any dividend or other distribution or the
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or to express consent to corporate
action in writing without a meeting, or in order to make a determination of the
stockholders for the purpose of any other lawful action. Such record date in any
case shall be not more than sixty days nor less than ten days before the date of
a meeting
By-Laws - 8
<PAGE>
of the stockholders, nor more than sixty days prior to any other action
requiring such determination of the stockholders. A determination of
stockholders of record entitled to notice 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.
5.7 Dividends: Subject to the provisions of the Certificate of
Incorporation, the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the capital
stock of the corporation as and when they deem expedient. Before declaring any
dividend there may be set apart out of any funds of the corporation available
for dividends, such sum or sums as the Board of Directors from time to time in
their discretion deem proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
Board of Directors shall deem conducive to the interests of the corporation.
ARTICLE VI
SECURITIES HELD BY THE CORPORATION
6.1 Voting: Unless the Board of Directors shall otherwise order, the
President, the Secretary or the Treasurer shall have full power and authority,
on behalf of the corporation, to attend, act and vote at any meeting of the
stockholders of any corporation in which the corporation may hold stock, and at
such meeting to exercise any or all rights and powers incident to the ownership
of such stock, and to execute on behalf of the corporation a proxy or proxies
empowering another or others to act as aforesaid. The Board of Directors from
time to time may confer like powers upon any other person or persons.
6.2 General Authorization to Transfer Securities Held by the
Corporation
(a) Any of the following officers, to wit: the President and
the Treasurer, shall be, and they hereby are, authorized and empowered to
transfer, convert, endorse, sell, assign, set over and deliver any and all
shares of stock, bonds, debentures, notes, subscription warrants, stock purchase
warrants, evidence of indebtedness, or other securities now or hereafter
standing in the name of or owned by the corporation, and to make, execute and
deliver, under the seal of the corporation, any and all written instruments of
assignment and transfer necessary or proper to effectuate the authority hereby
conferred.
(b) Whenever there shall be annexed to any instrument of
assignment and transfer executed pursuant to and in accordance with the
foregoing paragraph (a), a certificate of the Secretary of the corporation in
office at the date of such certificate setting forth the provisions of this
Section 6.2 and stating that they are in full force and effect and setting forth
the names of persons who are then officers of the corporation, then all persons
to whom such instrument and annexed certificate shall thereafter come, shall be
entitled, without further inquiry or investigation and regardless of the date of
such certificate, to assume and to act in reliance upon the assumption that
By-Laws - 9
<PAGE>
the shares of stock or other securities named in such instrument were
theretofore duly and properly transferred, endorsed, sold, assigned, set over
and delivered by the corporation, and that with respect to such securities the
authority of these provisions of the by-laws and of such officers is still in
full force and effect.
ARTICLE VII
MISCELLANEOUS
7.1 Signatories: All checks, drafts or other orders for the payment
of money, notes or other evidences of indebtedness issued in the name of the
corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
7.2 Seal: The seal of the corporation shall be in such form and
shall have such content as the Board of Directors shall from time to time
determine.
7.3 Notice and Waiver of Notice: Whenever any notice of the time,
place or purpose of any meeting of the stockholders, directors or a committee is
required to be given under the law of the State of Delaware, the Certificate of
Incorporation or these by-laws, a waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or after the holding
thereof, or actual attendance at the meeting in person or, in the case of any
stockholder, by his attorney-in-fact, shall be deemed equivalent to the giving
of such notice to such persons.
7.4 Indemnity: The corporation shall indemnify its directors,
officers and employees to the fullest extent allowed by law, provided, however,
that it shall be within the discretion of the Board of Directors whether to
advance any funds in advance of disposition of any action, suit or proceeding,
and provided further that nothing in this Section 7.4 shall be deemed to obviate
the necessity of the Board of Directors to make any determination that
indemnification of the director, officer or employee is proper under the
circumstances because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of Section 145 of the Delaware General Corporation Law.
7.5 Fiscal Year: Except as from time to time otherwise determined by
the Board of Directors, the fiscal year of the corporation shall end on
By-Laws - 10
<PAGE>
ARTICLES OF INCORPORATION
OF
HIGH COTTON, INC.
I.
The name of the Corporation is High Cotton, Inc.
II.
The Corporation is organized pursuant to the provisions of the
Georgia Business Corporation Code.
III.
The Corporation shall have perpetual duration.
IV.
The Corporation is organized for the following purpose or
purposes:
To produce and direct concerts, fairs,
stage shows and the performing arts, including but
not limited to acting as agent, general manager,
consultant and joint venturer of entertainers and
artistic productions;
To acquire by purchase, exchange, lease,
devise, or other means, and to hold, own, maintain,
manage, improve, develop and operate, and to sell,
transfer, convey, lease, mortgage, exchange or
otherwise dispose of or deal in or with, real
property, wherever situated, and any and all rights,
interests or privileges therein; and to erect,
construct, make, improve and operate, or to aid or
subscribe toward the erection, construction, making,
improvement and operation of offices, warehouses,
plants, mills, stores, laboratories, studios,
workshops, buildings, and other establishments and
installations, and equipment, machinery, apparatus
and any other facilities, of every kind and
description;
In general, to carry on any other lawful
business whatsoever, and to have, enjoy, and
exercise all the rights, powers, and privileges
which are now or which may hereafter be conferred
upon corporations organized under the Georgia
Business Corporation Code.
<PAGE>
V.
The authorized capital stock of the Corporation shall be
$10,000.00, which shall consist of 10,000 shares of $1.00 par value common
stock.
VI.
The Corporation shall not commence business until it shall
have received not less than Five Hundred Dollars ($500.00) in payment for the
issuance of shares of stock.
VII.
The initial registered office of the Corporation is 2400
First Atlanta Tower, Atlanta, Georgia 30383, located in Fulton County. The
initial registered agent of the Corporation is Harry L. Hickson, whose written
consent to such appointment is attached to these Articles of Incorporation.
VIII.
The number of directors constituting the initial Board of
Directors shall be one (1) and the name and address of each member of the
initial Board of Directors is:
NAMES ADDRESSES
Alex Cooley 1593 Monroe Drive
Atlanta, Georgia 30324
IX.
The name and address of the Incorporator of the Corporation is:
NAME ADDRESS
Harry L. Hickson 2400 First Atlanta Tower
Atlanta, Georgia 30383
X.
None of the holders of the capital stock of the Corporation
shall be entitled, as a matter of right by virtue of their holding of capital
stock of the Corporation, to purchase, subscribe for or otherwise acquire: (i)
any new or additional shares of stock of the Corporation of any class; or (ii)
any options or warrants to purchase,
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<PAGE>
subscribe for or otherwise acquire any such new or additional shares; or (iii)
any shares, evidences of indebtedness or other securities convertible into or
carrying options to purchase, subscribe for or otherwise acquire any such new
or additional shares.
XI.
The Board of Directors of the Corporation may, from time to
time, and at its discretion, distribute a portion of the assets of the
Corporation to its shareholders out of the capital surplus of the Corporation.
XII.
The Board of Directors of the Corporation may, from time to
time, and at its discretion, cause the Corporation to purchase its own shares
to the extent of unreserved and unrestricted capital surplus available for said
purchase.
XIII.
No director of the Corporation shall be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that this Article shall not
eliminate or limit the liability of a director to the extent provided by
applicable law (i) for appropriation, in violation of his duties, of any
business opportunity of the Corporation, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or knowing violation of law,
(iii) Under Section 14-2-154 of the Georgia Business Corporation Code (as in
effect and as hereafter amended), or (iv) for any transaction from which the
director derived an improper personal benefit. If the Georgia Business
Corporation Code is amended to authorize corporate action further eliminating
or limiting the personal liability of directors, then the liability of each
director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the Georgia Business Corporation Code, as amended. Neither
the amendment or repeal of this Article, nor the adoption of any provision of
these Articles of
-3-
<PAGE>
Incorporation inconsistent with this Article, shall eliminate or reduce the
effect of this Article in respect of any acts or omissions occurring prior to
such amendment, repeal or adoption of an inconsistent provision.
IN WITNESS WHEREOF, the undersigned has executed these
Articles of Incorporation on August 25, 1988.
/s/ Harry L. Hickson
-------------------------
Harry L. Hickson
Incorporator
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<PAGE>
BY- LAWS OF HIGH COTTON, INC.
(ADOPTED: AUGUST 26, 1988)
ARTICLE I.
OFFICES
The address of the registered office of the corporation is 2400 First
Atlanta Tower, Atlanta, Georgia 30383 and the name of the registered agent is
Harry L. Hickson.
The corporation may have other offices at such places within or
without the State of Georgia as the Board of Directors may from time to time
designate or the business of the corporation may require or make desirable.
ARTICLE II.
SHAREHOLDERS' MEETINGS
Section 1. PLACE OF MEETING. The Board of Directors may designate any
place within or without the State of Georgia as the place of meeting for any
annual or for any special meeting called by the Board of Directors. A waiver of
notice signed by all shareholders entitled to vote at a meeting may designate
any place within or without the State of Georgia as the place for the holding
of such meeting. If no designation is made, or if a special meeting be
otherwise called, the place of meeting shall be the principal office of the
corporation in the State of Georgia.
Section 2. ANNUAL MEETING. An annual meeting of the shareholders shall
be held on the last Friday in August of each year, if not a legal holiday; and
if such is a legal holiday, then on the next following day not a legal holiday,
at such time and place as the Board of Directors shall determine, at which time
the shareholders shall elect a Board of Directors and transact such other
business as may be properly brought before the meeting. Notwithstanding the
foregoing, the Board of Directors may cause the annual meeting of shareholders
to be held on such other datein any year as they shall determine to be in the
best interests of the corporation; and any business transacted at said meeting
shall have the same validity as if transacted on the date designated herein.
Section 3. SPECIAL MEETINGS. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by statute or the Articles
of Incorporation, may be called by the President, or the Chairman of the Board
of Directors, if any. The President or Secretary shall call a special meeting
when: (1) requested in writing by any two or more of the directors; or (2)
requested in writing by shareholders owning a majority of the shares entitled
to vote. Such written request shall state the purpose or purposes of the
proposed meeting.
Section 4. NOTICE. Except as otherwise required by statute or the
Articles of Incorporation, written notice of each meeting of the shareholders,
whether annual or special, shall be served, either personally or by mail, upon
each shareholder of record entitled to vote at such meeting, not less than ten
(10) nor more than fifty (50) days before the meeting. If mailed, such notice
shall be directed to a shareholder at his post office address last shown on the
records of the corporation. Notice of any special meeting of shareholders shall
state the purpose or purposes for which the meeting is called. Notice of any
meeting of shareholders shall not, be required to be given to any shareholder
who, in
<PAGE>
person or by his attorney thereunto authorized, either before or after such
meeting, shall waive such notice. Attendance of a shareholder at a meeting,
either in person or by proxy, shall itself constitute waiver of notice and
waiver of any and all objections to the place and time of the meeting and
manner in which it has been called or convened, except when a shareholder
attends a meeting solely for the purpose of stating, at the beginning of the
meeting, any such objections to the transaction of business. Notice of the time
and place of any adjourned meeting need not be given otherwise than by the
announcement at the meeting at which adjournment is taken.
Section 5. QUORUM. The holders of a majority of the stock issued,
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the shareholders and shall
be requisite for the transaction of business, except as otherwise provided by
law, by the Articles of Incorporation, or by these By-Laws. If, however, such
majority shall not be present or represented at any meeting of the
shareholders, the shareholders entitled to vote thereat, present in person or
by proxy, shall have the power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until the requisite
amount of voting stock shall be present. At such adjourned meeting at which a
quorum shall be present in person or by proxy, any business may be transacted
that might have been transacted at the meeting originally called.
Section 6. VOTING, PROXIES. At every meeting of the shareholders, any
shareholder having the right to vote shall be entitled to vote in person or by
proxy, but no proxy shall be voted after eleven months from its date, unless
said proxy provides for a longer period. Each shareholder shall have one vote
for each share of stock having voting power, registered in his name on the
books of the corporation. If a quorum is present, the affirmative vote of the
majority of the shares represented at the meeting entitled to vote on the
subject matter shall be the act of the shareholders, except as otherwise
provided by law, by the Articles of Incorporation or by these By-Laws.
Section 7. FIXING OF RECORD DATE. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or shareholders entitled to receive payment of
dividends, the Board of Directors may fix in advance a date as the record date
for any such determination of shareholders, such date in any case to be not
less than ten (10) nor more than fifty (50) days prior to the date on which the
particular action, requiring such determination of shareholders, is to be
taken. If no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of dividends, the date on which notice of the
meeting is mailed, or on the date on which the resolution of the Board of
Directors declaring such dividend is adopted, as the case may be, shall be the
record date. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
Section 8. INFORMAL ACTIONS BY SHAREHOLDERS. Any action required to be
taken at a meeting of the shareholders, or any other action which maybe taken
at a meeting of the shareholders, may be taken without a meeting if written
consent, setting forth the action so taken, shall be signed by all the
shareholders entitled to vote with respect to the subject matter thereof. Such
consent shall have the same force and effect as a unanimous vote
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of the shareholders; provided, however, that no consent shall be effective as
approval of a plan of merger or plan of consolidation pursuant to Section
14-2-212 of the Georgia Business Corporation Code unless:
(1) prior to the execution of the consent, the
shareholders shall have been given:
(i) a clear and concise statement that if the
plan of merger or consolidation is
effected, the shareholders dissenting
therefrom are entitled, if they file a
written objection to such plan before the
vote of the shareholders is taken thereon
and comply with the further provisions of
Section 14-2-251 of the Georgia Business
Corporation Code regarding the rights of
dissenting shareholders, to be paid the
fair value of their shares,
(ii) a copy of the plan of merger or
consolidation or an outline of the material
features of the plan, and
(iii) a copy of the most recent annual balance
sheet and annual profit and loss statement
of each of the merging or consolidating
corporations and of each other corporation
securities which are to be delivered
pursuant to the plan of merger or
consolidation; or
(2) the written consent itself conspicuously and
specifically states that waiver of the right to
receive such information is expressly made.
ARTICLE III.
DIRECTORS
Section 1. GENERAL POWERS. Except as may be otherwise provided by any
legal agreement among shareholders, the property and business of the
corporation shall be managed by its Board of Directors. In addition to the
powers and authority expressly conferred by these By-Laws, the Board of
Directors may exercise all such powers of the corporation and do all such
lawful acts and things as are not by law, or by any legal agreement among
shareholders, or by the Articles of Incorporation or by these By-Laws directed
or required to be exercised or done by the shareholders.
Section 2. NUMBER, TENURE, QUALIFICATIONS. The Board of Directors
shall consist of not less than one (1) nor more than five (5) members, the
precise number to be fixed by resolution of the shareholders from time to time;
provided, however, that the event that at least fifty-one percent (51%) of the
stock of the Corporation is held
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by one (1) shareholder, the Board of Directors may consist, of only one member.
Each Director shall hold office until the annual meeting of shareholders held
next after his election and until his successor has been duly elected and has
qualified, or until his earlier resignation, removal from office, or death.
Directors need not be shareholders.
Section 3. VACANCIES, HOW FILLED. If any vacancy shall occur among the
Directors by reason of the resignation, removal or death of a Director, the
remaining Directors shall continue to act, and such vacancies may be filled by
the vote of the majority of the Directors then in office, though less than a
quorum, and if not therefore filled by action of the Directors, may be filled
by the shareholders at any meeting held during the existence of such vacancy. A
Director elected to fill a vacancy shall be elected for the unexpired term of
his predecessor in office.
Section 4. PLACE OF MEETING. The Board of Directors may hold its
meetings at such place or places within or without the State of Georgia as it
may from time to time determine.
Section 5. COMPENSATION. Directors may be allowed such compensation
for attendance at regular or special meetings of the Board of Directors and of
any special meeting or standing committees thereof as may be from time to time
determined by resolution of the Board of Directors.
Section 6. REGULAR MEETINGS. A regular annual meeting of the Board of
Directors shall be held without other notice than this By-Law immediately
after, and at the same place as, the annual meeting of shareholders. The Board
of Directors may provide, by resolution, the time and place within or without
the State of Georgia, for the holding of additional regular meetings without
other notice than such resolution.
Section 7. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman of the Board (if any) or the President
on not less than two (2) days' notice by mail, telegram, cablegram or personal
delivery to each Director and shall be called by the Chairman of the Board (if
any), the President or the Secretary in like manner and on like notice on the
written request of any two (2) or more Directors. Any such special meeting
shall be held at such time and place as shall be stated in the notice of the
meeting.
Section 8. NOTICE, WAIVER BY ATTENDANCE. No notice of a meeting of the
Board of Directors need be given to any Director who signs a waiver of notice
either before or after the meeting. The attendance of a Director at a meeting
shall constitute a waiver of notice of such meeting and waiver of any and all
objections to the place of the meeting, the time of the meeting or the manner
in which it has been called or convened except when a Director states, at the
beginning of the meeting, any such objection or objections to the transaction
of business.
Section 9. QUORUM. At all meetings of the Board of Directors, the
presence of a majority of the Directors shall constitute a quorum for the
transaction of business. In the absence of a quorum a majority of the Directors
present at any meeting may adjourn from time to time until a quorum be had.
Notice of the time and place of any adjourned meeting need only be given by
announcement at the meeting at which adjournment is taken.
Section 10. MANNER OF ACTING. The act of the majority of the
Directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors.
Section 11. EXECUTIVE COMMITTEE. In furtherance and not in limitation
of the powers conferred by statute, the Board of Directors may establish an
Executive Committee of two (2) or more Directors
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constituted and appointed by the Board of Directors from their number who shall
meet when deemed necessary. They shall have authority to exercise all the
powers of the Board which may be lawfully delegated and not inconsistent with
these By-Laws, at any time and when the Board is not in session. The committee
shall elect a Chairman, and a majority of the whole committee shall constitute
a quorum; and the act of a majority of members present at a meeting at which a
quorum is present shall be the act of the committee provided all members of the
committee have had notice of such meeting or waived such notice. Notice of
meetings of the Executive Committee shall be the same as required for a special
meeting of the Board of Directors as outlined in Section 7 of this Article III.
Section 12. ACTION WITHOUT FORMAL MEETING. Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if written consent thereto is
signed by all members of the Board of Directors or of such committee, as the
case may be, and such written consent is filed with the Minutes of the
proceedings of the Board or committee.
Section 13. CONFERENCE CALL MEETINGS. Members of the Board of
Directors, or any committee designated by such Board, may participate in a
meeting of such Board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section shall constitute presence in person at such meeting.
ARTICLE IV.
OFFICERS
Section 1. GENERALLY. The Board of Directors at its first meeting and
at each annual meeting thereafter shall elect the following officers: a
President, a Secretary and a Treasurer. The Board of Directors at any time and
from time to time may elect or appoint such other Officers as it shall deem
necessary, including a Chairman of the Board of Directors, one or more Vice
Presidents, one or more Assistant Vice Presidents, one or more Assistant
Treasurers, and one or more Assistant Secretaries, who shall hold their offices
for such terms as shall be determined by the Board of Directors and shall
exercise such powers and perform such duties as are specified by these By-Laws,
or as shall be determined from time to time by the Board of Directors. Any
person may hold two or more offices, except that no person may hold the office
of President and Secretary. No Officer need be a shareholder.
Section 2. COMPENSATION. The salaries of the Officers of the
corporation shall be fixed by the Board of Directors, except that the Board of
Directors may delegate to any Officer or Officers the power to fix the
compensation of any other Officer.
Section 3. TENURE. Each Officer of the corporation shall hold office
for the term for which he is elected or appointed, and until his successor has
been duly elected or appointed and has qualified, or until his earlier
resignation, removal from office or death. Any Officer may be removed by the
Board of Directors whenever in its judgment the best interest of the
corporation will be served thereby.
Section 4. VACANCIES. A vacancy in any office, because of
resignation, removal or death may be filled by the Board of Directors for the
unexpired portion of the term.
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Section 5. PRESIDENT. The President shall be the principal executive
officer of the corporation and, subject to the control of the Board of
Directors, shall in general manage, supervise and control all of the business
and affairs of the corporation. He shall, when present, preside at all meetings
of all of the stockholders. He may sign, with the Secretary or any other proper
Officer of the corporation thereunto authorized by the Board of Directors,
certificates for shares of the corporation, any deeds, mortgages, bonds,
policies of insurance, contracts, investment certificates, or other instruments
which the Board of Directors has authorized to be executed, except in cases
where signing the execution thereof shall be expressly delegated by the Board
of Directors or by the By-Laws to some other officer or agent of the
corporation, or shall be required by law to be otherwise signed or executed;
and in general shall perform all duties incident to the office of the President
and such other duties as may be prescribed by the Board of Directors from time
to time.
Section 6. VICE PRESIDENTS. In the absence of the President or in the
event of his death or inability or refusal to act, the Vice President (or in
the event there be more than one Vice President, the Vice Presidents in the
order designated at the time of their election, or in the absence of any
designation, then in order of election) shall perform the duties of the
President and, when so acting, shall have all the powers of and be subject to
all the restrictions upon the President. Any Vice President may sign, with the
Secretary or an Assistant Secretary, certificates for shares of the corporation
and shall perform such other duties as shall from time to time be assigned to
him by the President or by the Board of Directors. All Vice Presidents shall
have such other duties as prescribed by the Board of Directors from time to
time.
Section 7. THE SECRETARY. The Secretary shall: (a) attend and keep the
Minutes of the shareholders' meetings and of the Board of Directors' meetings
in one or more books provided for that purpose; (b) see that all notices are
duly given in accordance with the provisions of these By-Laws as required by
law; (c) be custodian of the corporate records and of the seal of the
corporation and see that the seal of the corporation is affixed to all
documents, the execution of which on behalf of the corporation under its seal
is duly authorized; (d) keep a register of the post office address.of each
shareholder which shall be furnished to the Secretary by such shareholder; (e)
sign with the President or a Vice President certificates for shares of the
corporation, the issuance of which shall have been authorized by resolution of
the Board of Directors; (f) have general charge of the stock transfer books of
the corporation; (g) in general perform all duties incident to the office of
the Secretary and such other duties as from time to time may be assigned to him
by the President or the Board of Directors.
Section 8. THE TREASURER. The Treasurer, unless otherwise determined
by the Board of Directors, shall: (a) have charge and custody of and be
responsible for all funds and securities of the corporation; receive and give
receipts for monies due and payable to the corporation from any source
whatsoever, and deposit all such monies in the name of the corporation in such
banks, trust companies or other depositories as shall be selected by the Board
of Directors; and (b) in general perform all the duties incident to the office
of Treasurer and such other duties as from time to time may be assigned by the
Board of Directors.
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Section 9. ASSISTANT OFFICERS. The Assistant Secretaries, when
authorized by the Board of Directors, may sign with the President or a Vice
President certificates for shares of the corporation the issuance of which
shall have been authorized by a resolution of the Board of Directors. The
Assistant Vice Presidents, Secretaries and Treasurers, in general, shall
perform such duties as shall be assigned by the Vice President(s), Secretary or
Treasurer, respectively, or by the President or by the Board of Directors.
ARTICLE V.
CAPITAL STOCK
Section 1. FORM. The interest of each shareholder shall be evidenced
by a certificate representing shares of stock of the corporation, which shall
be in such form as the Board of Directors may from time to time adopt and shall
be numbered and shall be entered in the books of the corporation as they are
issued. Each certificate shall exhibit the holder's name, the number of shares
and class of shares and series, if any, represented thereby, a statement that
the corporation is organized under the laws of the State of Georgia, and the
par value of each share or a statement that the shares are without par value.
Each certificate shall be signed by the President or a Vice President and the
Secretary or an Assistant Secretary and shall be sealed with the seal of the
corporation.
Section 2. TRANSFER. Transfers of stock shall be made on the books of
the corporation only by the person named in the certificate, or by attorney
lawfully constituted in writing, and upon surrender of the certificate thereof,
or in the case of a certificate alleged to have been lost, stolen or destroyed,
upon compliance with the provisions of Section 4, Article V of these By-Laws.
Section 3. RIGHTS OF HOLDER. The corporation shall be entitled to
treat the holder of any share of the corporation as the person entitled to vote
such share, to receive any dividend or other distribution with respect to such
share, and for all other purposes and accordingly shall not be bound to
recognize any equitable or other claim to or interest in such share on the part
of any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by-law.
Section 4. LOST OR DESTROYED CERTIFICATES. Any person claiming a
certificate of stock to be lost, stolen or destroyed shall make an affidavit or
affirmation of the fact in such manner as the Board of Directors may require
and shall if the Board of Directors so requires, give the corporation a bond of
indemnity in the form and amount and with one or more sureties satisfactory to
the Board of Directors, whereupon an appropriate new certificate may be issued
in lieu of the one alleged to have been lost, stolen or destroyed.
ARTICLE VI.
FISCAL YEAR
The fiscal year of the corporation shall be established by the Board
of Directors of the corporation.
ARTICLE VII.
SEAL
The corporate seal shall be in such form as the Board of Directors may
from time to time determine.
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ARTICLE VIII.
ANNUAL STATEMENTS
No later than four months after the close of each fiscal year, and in
any case prior to the next annual meeting of shareholders, the corporation
shall prepare:
(a) A balance sheet showing in reasonable detail the
financial condition of the corporation as of the close of the fiscal year, and
(b) A profit and loss statement showing the results of its
operation during the fiscal year. Upon written request, the corporation shall
mail promptly to any shareholder of record a copy of the most recent such
balance sheet and profit and loss statement.
ARTICLE IX.
INDEMNIFICATION
Section 1. ACTION BY PERSONS OTHER THAN THE CORPORATION. Under the
circumstances prescribed in Sections 3 and 4 of this Article, the corporation
shall indemnify and hold harmless any person who was or is a party or is
threatened to be made a party of any, threatened, pending or completed action,
suit or proceeding, or investigation, whether civil, criminal or administrative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a Director, Officer, employee or agent of the
corporation, or is now serving at the request of the corporation as a Director,
Officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in a manner which he reasonably believed to be in or not opposed to the best
interest of the corporation, and, with respect to criminal action or
proceeding, he had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in a manner which he
reasonably believed to be in or not opposed to the best interest of the
corporation, and with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 2. ACTIONS BY OR IN THE NAME OF THE CORPORATION. Under the
circumstances prescribed in Sections 3 and 4 of this Article, the corporation
shall indemnify and hold harmless any person who was or is a party or is
threatened to be made a party of any, threatened, pending or completed action,
suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that he is or was a Director, Officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
Director, Officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorney's
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the
corporation; except that no indemnification shall be made in respect to any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation, unless and only to the extent that the court in
which such action or suit
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was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expense which the court
shall deem proper.
Section 3. SUCCESSFUL DEFENSE. To the extent that a Director, Officer,
employee or agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Sections
1 and 2 of this Article, or in defense of any claim, issue or matter therein,
he shall be indemnified against expenses (including attorney's fees) actually
and reasonably incurred by him in connection therewith.
Section 4. AUTHORIZATION OF INDEMNIFICATION. Except as provided in
Section 3 of this Article and except as may be ordered by a court, any
indemnification under Sections 1 and 2 of this Article shall be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the Director, Officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth
in Sections 1 and 2. Such determination shall be made:
(1) by the Board of Directors by a majority vote of a quorum
consisting of Directors who were not parties to such action,
suit or proceeding; or
(2) if such a quorum is not obtainable, or, even if obtainable,
if a quorum of disinterested Directors so directs, by the
firm of independent legal counsel then employed by the
corporation, in a written opinion.
Section 5. PREPAYMENT OF EXPENSES. Expenses incurred in defending a
civil or criminal action, suit or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of the Director, Officer, employee or
agent to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation as authorized in this Section.
Section 6. NON-EXCLUSIVE RIGHT. The indemnification and advancement of
expenses provided by this Article shall not be deemed exclusive of any other
right to which the person seeking indemnification or advancement of expenses
hereunder shall be entitled under any resolution or agreement approved by a
majority of the Shareholders entitled to vote thereon and shall inure to the
benefit of the heirs, executors or administrators of such persons; provided,
however, a person shall not be entitled to indemnification or advancement of
expenses under any such agreement or resolution for any liability of such
person to the extent indemnification or advancement of expenses for such
liabilities is prohibited by law particularly including, but without
limitation, the liabilities described in divisions (b)(3)(A)(i) through
(b)(3)(A)(iv) of Code Section 14-2-171.
Section 7. INSURANCE. The corporation may purchase and maintain
insurance on behalf of any person who is or was a Director, Officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a Director, Officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any liability
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this section.
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Section 8. INFORMATION TO SHAREHOLDERS. If any expense or other
amounts are paid by way of indemnification, otherwise than by court order or by
an insurance carrier pursuant to insurance maintained by the corporation, the
corporation shall, not later than the next annual meeting to the shareholders,
unless such meeting is held within three months from the date of such payment,
and, in any event, within fifteen months from the date of such payment, send in
accordance with the manner specified in Section 14-2-113 of the Georgia
Business Corporation Code to its shareholders of record at the time entitled to
vote for the election of Directors, a statement specifying the persons paid,
the amount paid, and the nature and status at the time of such payment of the
litigation or threatened litigation.
ARTICLE X.
NOTICES: WAIVER OF NOTICE
Section 1. NOTICES. Except as otherwise provided in these By-Laws,
whenever under the provisions of these By-Laws notice is required to be given
to any shareholder, Director or Officer, such notice shall be given either by
personal notice or by cable or telegraph, or by mail by depositing the same in
the post office or letter box in a postpaid sealed wrapper, addressed to such
shareholder, Officer or Director at such address as appears on the books of the
corporation, and such notice shall be deemed to be given at the time when the
same shall be thus sent or mailed.
Section 2. WAIVER OF NOTICE. Whenever any notice whatsoever is
required to be given by law, by the Articles of Incorporation or by these
By-Laws, a waiver thereof by the person or persons entitled to said notice
given before or after the time stated therein, in writing, which shall include
a waiver given by telegraph or cable, shall be deemed equivalent thereto. No
notice of any meeting need be given to any person who shall attend such
meeting.
ARTICLE XI.
REIMBURSEMENT OF DISALLOWED
PAYMENTS TO OFFICERS AND EMPLOYEES
In the event any payments to an Officer or employee of this
corporation, such as salary, commission, bonus, interest, rent or entertainment
expenses incurred by him, is thereafter disallowed in whole or in part by the
Internal Revenue Service as a proper deduction for income tax purposes under
Section 162 of the Internal Revenue Code of 1986 (or disallowed under any
similar Code section which may subsequently replace Section 162), such
disallowed payments shall be deemed to be an obligation owed by such Officer or
employee to this corporation. Such disallowed payments shall be reimbursed by
such Officer or employee to this corporation on or before ninety (90) days
following the final determination of such disallowance by the Internal Revenue
Service or entry of the final judgment of such determination if adjudicated. It
shall be the duty of the Board of Directors to enforce reimbursement of each
such amount disallowed, including the withholding from future compensation
payments to such Officer or employee until the amount owed to this corporation
has been recovered.
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ARTICLE XII.
AMENDMENTS
The By-Laws of the corporation may be altered or amended and new
By-Laws may be adopted by the shareholders or by the Board of Directors at any
regular or special meeting of the Board of Directors; provided, however, that,
if such action is to be taken at a meeting of the shareholders, notice of the
general nature of the proposed change in the By-Laws shall have been given in
the notice of a meeting. Action by the shareholders with respect to By-Laws
shall be taken by an affirmative vote of a majority of the shares entitled to
elect Directors, and action by the Directors with respect to By-Laws shall be
taken by an affirmative vote of a majority of all Directors then holding
office.
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CERTIFICATE OF INCORPORATION
OF
IN HOUSE TICKETS, INC.
Under Section 402 of the Business Corporation Law
The undersigned, a natural person, at least twenty-one years of age, for
the purpose of forming a corporation pursuant to the provisions of the Business
Corporation Law of the State of New York, does hereby certify as follows:
FIRST: The name of the corporation is In House Tickets, Inc.
SECOND: The purposes for which it is formed are as follows:
To operate a concert ticket club and otherwise deal in the business
of exploiting, promoting and presenting concert performances and to
conduct business in all related and other areas of the entertainment
industry.
To carry on any similar lawful business which may conveniently be
carried on in connection with the above business purposes, and
generally to perform any and all lawful acts connected therewith or
arising therefrom or incidental thereto, and to do all acts proper
or necessary for the purposes of the business.
THIRD: The office of the corporation is located in the City, County and
State of New York.
FOURTH: The aggregate number of shares which the corporation shall have
authority to issue is two hundred (200) shares of common stock without par
value.
FIFTH: The Secretary of State of the State of New York is hereby
designated as the agent of the corporation upon whom any process in any
action or proceeding against it may be served. The post office address to
which the Secretary of State shall mail a copy of process in any action or
proceeding against the corporation which may be served upon him is: c/o
Eastman and Eastman, 39 West 54th Street, New York, New York.
IN WITNESS WHEREOF, I have made, signed and acknowledged this Certificate
of Incorporation this 23rd day of February, 1981.
/s/ Ron Delsener
------------------------------
Ron Delsener
27 East 67th Street
New York, New York 10021
<PAGE>
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK )
On this 23rd day of February, 1981, before me personally came Ron
Delsener, to me known and known to me to be the individual described in and who
executed the foregoing certificate, and he acknowledged to me that he executed
the same.
/s/ Illegible
-------------------------------
Notary Public
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IN-HOUSE TICKETS, INC.
BY LAWS
ARTICLE ONE
CAPITAL STOCK
SECTION ONE: Share certificates, as approved by the Board of Directors, shall be
issued to shareholders specifying the name of the owner, number of shares, and
date of issue. Each certificate shall be signed by the President and Secretary
with the corporate seal affixed thereon. Each certificate shall be numbered in
the order in which it is issued.
SECTION TWO: Each shareholder shall be entitled to one vote per share of common
stock, unless otherwise stated in Article of Incorporation.
SECTION THREE: Transfer of shares of stock shall be in the transfer ledger of
the corporation. Such transfers shall be done in person or by power of attorney.
Transfers shall be completed on the surrender of the old certificate, duly
assigned.
ARTICLE TWO
SHAREHOLDER'S MEETINGS
SECTION ONE: The annual meeting of the shareholders shall be from time to time,
at the time fixed by the directors held at a place from time to time fixed by
the directors. If the stated day is a weekend day or a legal holiday, the
meeting shall be held on the next succeeding day not a weekend day or a holiday.
SECTION TWO: The place of the annual meeting may be changed by the Board of
Directors within or without the State of incorporation for any given year upon
days notice to the shareholders. Special meetings may be held within or without
of the State of incorporation and at such time as the Board of Directors may
fix.
BY-LAWS 1
<PAGE>
SECTION THREE: Special meetings of the shareholders may be called at any time by
the President or any holder(s) of a majority of the outstanding shares of stock
entitled to vote.
SECTION FOUR: Notice of any special meeting of the shareholders shall be given
to all shareholders to their last known address by registered mail. Notice of
any special meeting of the shareholders shall state the purpose of such meeting.
Notice of a special meeting may be waived in writing either before or after such
meeting.
SECTION FIVE: Unless otherwise provided by law or the Articles of incorporation,
all meetings of the shareholders, action may be taken by a majority vote of the
number of shares entitled to vote as represented by the shareholders present at
such meeting. Directors shall be elected by a plurality vote. A quorum shall
constitute one share over fifty percent of the outstanding shares entitled to
vote as represented by the shareholders present at such meeting. No business may
be transacted without the presence of a quorum. At any time during any
shareholders meeting, if it is determined that a quorum is no longer present,
the meeting shall be then adjourned.
SECTION SIX: Action may be taken by the shareholders without a formal meeting by
consent, if such consent is executed in writing by all of the shareholders
entitled to vote and if allowed under the laws of the State of incorporation.
ARTICLE THREE
DIRECTORS
SECTION ONE: The Board of Directors shall control the full and entire management
of the affairs and business of the corporation. The Board of Directors shall
adopt rules and regulations to manage the affairs and business of the
corporation by resolution at special or the annual meeting. A quorum shall
consist of a majority of the directors. Resolutions adopted and all business
transacted by the Board of Directors shall be done by a majority vote of the
directors present at such meetings.
BY-LAWS 2
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SECTION TWO: The Board of Directors shall consist of 1 member to be elected by
the shareholders at an annual meeting. The term of office shall be one year.
Vacancies may be filled by the Board of Directors prior to the expiration of the
term. Such appointment shall continue until the next annual meeting of
shareholders.
SECTION THREE: The Board of Directors shall meet annually at the same place of
the shareholders meetings immediately following the annual meeting of the
shareholders, special meetings of the Board of Directors may be called by the
President or any two (2) directors on ten (10) days notice, or such other and
further notice as required by the laws of the State of incorporation.
SECTION FOUR: Notice of special or regular meetings of the Board of Directors
other than the annual meeting of the Board of Directors, shall be made by mail
to the last known address of each director. Such notice shall be mailed ten (10)
days prior to such meeting and shall include time and place and reasons for the
meeting. All other requirements of the laws of the State of incorporation for
notices shall be followed.
SECTION FIVE: All directors of the corporation who are present at a meeting of
the Board of Directors shall be deemed to have assented to action taken at such
meeting as to any corporate action taken, unless a director who did not vote in
favor on such action goes on record in the minutes as dissenting. In such a
case, the dissenting director will not be deemed to having assented to the
action taken.
SECTION SIX: Directors may be removed for cause by a majority vote at a meeting
of the shareholders or Directors. Directors may be removed without cause by a
majority vote at a meeting of the shareholders.
BY-LAWS 3
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ARTICLE FOUR
OFFICERS
SECTION ONE: The officers of the corporation shall consist of a President,
Secretary and Treasurer. All officers shall be elected by the Board of Directors
and shall serve a term for compensation as fixed by the Board of Directors. The
Board of Directors may establish other offices as it may be deem fit.
SECTION TWO: The chief executive officer shall be the President. The President
shall have management powers of the corporation. His duties shall include but
are not limited to administration of the corporation presiding over shareholders
meeting including general supervision of the policies of the corporation as well
as general management. The President shall execute contracts, mortgages, loans
and bonds under the seal of the corporation. The President shall have other
powers as determined by the Board of Directors by resolution.
SECTION THREE: The secretary shall keep the minutes of meetings of the Board of
Directors and shareholder meetings. The Secretary shall have charge of the
minute books, seal and stock books of the corporation. The Secretary shall have
other powers as delegated by the President.
SECTION FOUR: The Treasurer shall have the power to manage the financial affairs
of the corporation. The Treasurer shall keep books and records of the financial
affairs and make such available to the President and Board of Directors upon
request. The Treasurer may make recommendations to the officers and directors in
regard to the financial affairs of the corporation.
SECTION FIVE: The Vice-President, if one is appointed by the Board of Directors,
shall have such powers as delegated to him by the President. Upon the inability
to perform by the President, the Vice-President shall serve as President until
such time as the President shall be able to perform or further action by the
Board of Directors. The President shall be deemed unable to perform his duties
upon written notification by the President of such inability or resignation to
the Board of Directors that the President is unable to perform.
BY-LAWS 4
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SECTION SIX: Vacancies shall be filled by the Board of Directors. Until such
time as vacancies are filled the following rules of succession shall apply
without regard to Section Five of this Article. The vice-President shall act as
President, the Treasurer shall act as Secretary, and the Secretary shall act as
Treasurer.
SECTION SEVEN: Assistants to officers may be appointed by the President. These
duties shall be those delegated to them by the President or the Board of
Directors.
SECTION EIGHT: Compensation of the officers shall be determined by the Board of
Directors.
ARTICLE FIVE
CONTRACTS AND INSTRUMENTS OF INDEBTEDNESS
SECTION ONE: No contracts or any instrument of indebtedness shall be executed
without approval by the Board of Directors by resolution. Upon such resolution,
the President shall be authorized to execute contracts or instruments of
indebtedness as specified in the resolution.
SECTION TWO: All checks, drafts or other instruments of indebtedness shall be
executed in the manner as determined by the Board of Directors by resolution.
ARTICLE SIX
CORPORATE SEAL
The seal of the corporation shall be provided by the Board of Directors by
resolution. The seal shall be used by the President or other officers of the
corporation as provided for in these By-Laws.
BY-LAWS 5
<PAGE>
ARTICLE SEVEN
AMENDMENT
These By-Laws may be amended from time to time by a majority vote of
the Board of Directors or by a majority vote of the shareholders. These By-Laws
may be repealed and new By-Laws established in the same manner as amendments.
These By-Laws will continue in full force and effect until amended or repealed
and replaced by new By-Laws.
ARTICLE EIGHT
DIVIDENDS
The Board of Directors may from time to time declare dividends to
the shareholders. These distributions may be in cash or property. No such
dividends may be made out of the capital of the corporation.
BY-LAWS 6
<PAGE>
CERTIFICATE OF INCORPORATION
OF
IRVING PLAZA CONCERTS, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified, and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
FIRST: The name of the corporation (hereinafter called the
"corporation") is IRVING PLAZA CONCERTS, INC.
SECOND: The address, including street, number, city and county, of
the registered office of the corporation in the State of Delaware is 1013 Centre
Road, City of Wilmington 19805, County of New Castle; and the name of the
registered agent of the corporation in the State of Delaware at such address is
Corporation Service Company.
THIRD: 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.
FOURTH: The total number of shares of stock which the corporation
shall have authority to issue is one thousand. The par value of each of such
shares is one cent. All such shares are of one class and are shares of Common
Stock.
FIFTH: The name and the mailing address of the incorporator is as
follows:
NAME MAILING ADDRESS
---- ---------------
Eugene Serban 150 East 58th Street, 19th Floor
New York, NY 10155
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between
this corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
ss.291
1
<PAGE>
of Title 8 of the Delaware Code or on the application of trustees in dissolution
or of any receiver or receivers appointed for this corporation under ss.279 of
Title 8 of the Delaware Code order a meeting of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this corporation, as the case
may be, and also on this corporation.
EIGHTH: For the management of the business and for the conduct of
the affairs of the corporation, and in further definition, limitation, and
regulation of the powers of the corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the affairs of
the corporation shall be vested in its Board of Directors. The
number of directors which shall constitute the whole Board of
Directors shall be fixed by, or in the manner provided in, the
Bylaws. The phrase "whole Board" and the phrase "total number of
directors" shall be deemed to have the same meaning, to wit, the
total number of directors which the corporation would have if there
were no vacancies. No election of directors need be by written
ballot.
2. After the original or other Bylaws of the corporation have been
adopted, amended, or repealed, as the case may be, in accordance
with the provisions of ss.109 of the General Corporation Law of the
State of Delaware, and, after the corporation has received any
payment for any of its stock, the power to adopt, amend, or repeal
the Bylaws of the corporation may be exercised by the Board of
Directors of the corporation; provided, however, that any provision
for the classification of directors of the corporation for staggered
terms pursuant to the provisions of subsections (d) of ss.141 of the
General Corporation Law of the State of Delaware shall be set forth
in an initial Bylaw or in a Bylaw adopted by the stockholders
entitled to vote of the corporation unless provisions for such
classification shall be set forth in this certificate of
incorporation.
3. Whenever the corporation shall be authorized to issue only one
class of stock, each outstanding share shall entitle the holder
thereof to notice of, and the right to vote at, any meeting of
stockholders. Whenever the corporation shall be authorized to issue
more than one class of stock, no outstanding share of any class of
stock which is denied voting power under the provisions of the
certificate of incorporation shall entitle the holder thereof to the
right to vote at any meeting of stockholders
2
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except as the provisions of paragraph (2) of subsection (b) of
ss.242 of the General Corporation Law of the State of Delaware shall
otherwise require; provided, that no share of any such class which
is otherwise denied voting power shall entitle the holder thereof to
vote upon the increase to decrease in the number of authorized
shares of said class.
NINTH: The personal liability of the directors of the corporation is
hereby eliminated to the fullest extent permitted by the provisions of paragraph
(7) of subsection (b) of ss.102 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented.
TENTH: The corporation shall, to the fullest extent permitted by the
provisions of ss.145 of the General Corporation Law of the State of Delaware, as
the same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all of
the expenses, liabilities, or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any Bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee, or agent and shall inure to
the benefit of the heirs, executors, and administrators of such a person.
ELEVENTH: From time to time any of the provisions of this
certificate of incorporation may be amended, altered, or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in force
may be added or inserted in the manner and at the time prescribed by said laws,
and all rights at any time conferred upon the stockholders of the corporation by
this certificate of incorporation are granted subject to the provisions of this
Article ELEVENTH.
Signed on March 14, 1997.
/s/ Eugene Serban
---------------------------
Eugene Serban, Incorporator
3
<PAGE>
BY-LAWS
OF
IRVING PLAZA CONCERTS, INC.
-----------------------------------------------------
ARTICLE I.
OFFICES
1.1 Registered Office: The registered office shall be established
and maintained at and shall be the registered agent of the Corporation in charge
hereof.
1.2 Other Offices: The corporation may have other offices, either
within or without the State of Delaware, at such place or places as the Board of
Directors may from time to time appoint or the business of the corporation may
require, provided, however, that the corporation's books and records shall be
maintained at such place within the continental United States as the Board of
Directors shall from time to time designate.
ARTICLE II
STOCKHOLDERS
2.1 Place of Stockholders' Meetings: All meetings of the
stockholders of the corporation shall be held at such place or places, within or
outside the State of Delaware as may be fixed by the Board of Directors from
time to time or as shall be specified in the respective notices thereof.
2.2 Date and Hour of Annual Meetings of Stockholders: An annual
meeting of stockholders shall be held each year within five months after the
close of the fiscal year of the Corporation.
2.3 Purpose of Annual Meetings: At each annual meeting, the
stockholders shall elect the members of the Board of Directors for the
succeeding year. At any such annual meeting any further proper business may be
transacted.
2.4 Special Meetings of Stockholders: Special meetings of the
stockholders or of any class or series thereof entitled to vote may be called by
the President or by the Chairman of the Board of Directors, or at the request in
writing by stockholders of record owning at least fifty percent (50%) of the
issued and outstanding voting shares of common stock of the corporation.
2.5 Notice of Meetings of Stockholders: Except as otherwise
expressly required or permitted by law, not less than ten days nor more than
sixty days before the date of every stockholders' meeting the Secretary shall
give to each stockholder of record entitled to vote at such meeting, written
notice, served personally by mail or by telegram, stating the place, date and
hour of the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called. Such notice, if mailed shall be deemed
to be given when deposited in the United States mail, postage prepaid, directed
to the stockholder at his address for notices to such stockholder as it appears
on the records of the corporation.
<PAGE>
2.6 Quorum of Stockholders: (a) Unless otherwise provided by the
Certificate of Incorporation or by law, at any meeting of the stockholders, the
presence in person or by proxy of stockholders entitled to cast a majority of
the votes thereat shall constitute a quorum. The withdrawal of any shareholder
after the commencement of a meeting shall have no effect on the existence of a
quorum, after a quorum has been established at such meeting.
(b) At any meeting of the stockholders at which a quorum shall
be present, a majority of voting stockholders, present in person or by proxy,
may adjourn the meeting from time to time without notice other than announcement
at the meeting. In the absence of a quorum, the officer presiding thereat shall
have power to adjourn the meeting from time to time until a quorum shall be
present. Notice of any adjourned meeting, other than announcement at the
meeting, shall not be required to be given except as provided in paragraph (d)
below and except where expressly required by law.
(c) At any adjourned session at which a quorum shall be
present, any business may be transacted which might have been transacted at the
meeting originally called but only those stockholders entitled to vote at the
meeting as originally noticed shall be entitled to vote at any adjournment or
adjournments thereof, unless a new record date is fixed by the Board of
Directors.
(d) If an adjournment is for more than thirty days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
2.7 Chairman and Secretary of Meeting: The President, shall preside
at meetings of the stockholders. The Secretary shall act as secretary of the
meeting or if he is not present, then the presiding officer may appoint a person
to act as secretary of the meeting.
2.8 Voting by Stockholders: Except as may be otherwise provided by
the Certificate of Incorporation or these by-laws, at every meeting of the
stockholders each stockholder shall be entitled to one vote for each share of
voting stock standing in his name on the books of the corporation on the record
date for the meeting. Except as otherwise provided by these by-laws, all
elections and questions shall be decided by the vote of a majority in interest
of the stockholders present in person or represented by proxy and entitled to
vote at the meeting.
2.9 Proxies: Any stockholder entitled to vote at any meeting of
stockholders may vote either in person or by proxy. Every proxy shall be in
writing, subscribed by the stockholder or his duly authorized attorney-in-fact,
but need not be dated, sealed, witnessed or acknowledged.
2.10 Inspectors: The election of directors and any other vote by
ballot at any meeting of the stockholders shall be supervised by at least two
inspectors. Such inspectors may be appointed by the presiding officer before or
at the meeting; or if one or both inspectors so appointed shall refuse to serve
or shall not be present, such appointment shall be made by the officer presiding
at the meeting.
2.11 List of Stockholders: (a) At least ten days before every
meeting of stockholders, the Secretary shall prepare and make a complete list of
the stockholders entitled to vote at the meeting, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder.
(b) During ordinary business hours, for a period of at least
ten days prior to the meeting, such list shall be open to examination by any
stockholder for any purpose germane to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or if not so specified, at the place where the meeting is
to be held.
By-Laws - 2
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(c) The list shall also be produced and kept at the time and
place of the meeting during the whole time of the meeting, and it may be
inspected by any stockholder who is present.
(d) The stock ledger shall be the only evidence as to who are
the stockholders entitled to examine the stock ledger, the list required by this
Section 2.11 or the books of the corporation, or to vote in person or by proxy
at any meeting of stockholders.
2.12 Procedure at Stockholders' Meetings: Except as otherwise
provided by these by-laws or any resolutions adopted by the stockholders or
Board of Directors, the order of business and all other matters of procedure at
every meeting of stockholders shall be determined by the presiding officer.
2.13 Action By Consent Without Meeting: Unless otherwise provided by
the Certificate of Incorporation, any action required to be taken at any annual
or special meeting of stockholders, or any action which may be taken at any
annual or special meeting, may be taken without a meeting, without prior notice
and without a vote, if a consent 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. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing.
ARTICLE III
DIRECTORS
3.1 Powers of Directors: The property, business and affairs of the
corporation shall be managed by its Board of Directors which may exercise all
the powers of the corporation except such as are by the law of the State of
Delaware or the Certificate of Incorporation or these by-laws required to be
exercised or done by the stockholders.
3.2 Number, Method of Election, Terms of Office of Directors: The
number of directors which shall constitute the Board of Directors shall be ( )
unless and until otherwise determined by a vote of a majority of the entire
Board of Directors. Each Director shall hold office until the next annual
meeting of stockholders and until his successor is elected and qualified,
provided, however, that a director may resign at any time. Directors need not be
stockholders.
3.3 Vacancies on Board of Directors Removal: (a) Any director may
resign his office at any time by delivering his resignation in writing to the
Chairman of the Board or to the President. It will take effect at the time
specified therein or, if no time is specified, it will be effective at the
time.of its receipt by the corporation. The acceptance of a resignation shall
not be necessary to make it effective, unless expressly so provided in the
resignation.
(b) Any vacancy in the authorized number of directors may be
filled by majority vote of the stockholders and any director so chosen shall
hold office until the next annual election of directors by the stockholders and
until his successor is duly elected and qualified or until his earlier
resignation or removal.
(c) Any director may be removed with or without cause at any
time by the majority vote of the stockholders given at a special meeting of the
stockholders called for that purpose.
3.4 Meetings of the Board of Directors: (a) The Board of Directors
may hold their meetings, both regular and special, either within or outside the
State of Delaware.
(b) Regular meetings of the Board of Directors may be held at
such time and place as shall from time to time be determined by resolution of
the Board of Directors. No notice of such regular meetings shall
By-Laws - 3
<PAGE>
be required. If the date designated for any regular meeting be a legal holiday,
then the meeting shall be held on the next day which is not a legal holiday.
(c) The first meeting of each newly elected Board of Directors
shall be held immediately following the annual meeting of the stockholders for
the election of officers and the transaction of such other business as may come
before it. If such meeting is held at the place of the stockholders' meeting, no
notice thereof shall be required.
(d) Special meetings of the Board of Directors shall be held
whenever called by direction of the Chairman of the Board or the President or at
the written request of any one director.
(e) The Secretary shall give notice to each director of any
special meeting of the Board of Directors by mailing the same at least three
days before the meeting or by telegraphing, telexing, or delivering the same not
later than the date before the meeting.
Unless required by law, such notice need not include a
statement of the business to be transacted at, or the purpose of, any such
meeting. Any and all business may be transacted at any meeting of the Board of
Directors. No notice of any adjourned meeting need be given. No notice to or
waiver by any director shall be required with respect to any meeting at which
the director is present.
3.5 Quorum and Action: Unless provided otherwise by law or by the
Certificate of Incorporation or these by-laws, a majority of the Directors shall
constitute a quorum for the transaction of business; but if there shall be less
than a quorum at any meeting of the Board, a majority of those present may
adjourn the meeting from time to time. The vote of a majority of the Directors
present at any meeting at which a quorum is present shall be necessary to
constitute the act of the Board of Directors.
3.6 Presiding Officer and Secretary of the Meeting: The President,
or, in his absence a member of the Board of Directors selected by the members
present, shall preside at meetings of the Board. The Secretary shall act as
secretary of the meeting, but in his absence the presiding officer may appoint a
secretary of the meeting.
3.7 Action by Consent Without Meeting: Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes or proceedings of the Board or committee.
3.8 Action by Telephonic Conference: Members of the Board of
Directors, or any Committee designated by such board, may participate in a
meeting of such board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in such a meeting shall
constitute presence in person at such meeting.
3.9 Committees: The Board of Directors shall, by resolution or
resolutions passed by a majority of Directors designate one or more committees,
each of such committees to consist of one or more Directors of the Corporation,
for such purposes as the Board shall determine. The Board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of such committee.
3.10 Compensation of Directors: Directors shall receive such
reasonable compensation for their service on the Board of Directors or any
committees thereof, whether in the form of salary or a fixed fee for attendance
at meetings, or both, with expenses, if any, as the Board of Directors may from
time to time determine. Nothing herein contained shall be construed to preclude
any Director from serving in any other capacity and receiving compensation
therefor.
By-Laws - 4
<PAGE>
ARTICLE IV
OFFICERS
4.1 Officers, Title, Elections, Terms: (a) The elected officers of
the corporation shall be a President, a Treasurer and a Secretary, and such
other officers as the Board of Directors shall deem advisable. The officers
shall be elected by the Board of Directors at its annual meeting following the
annual meeting of the stockholders, to serve at the pleasure of the Board or
otherwise as shall be specified by the Board at the time of such election and
until their successors are elected and qualified.
(b) The Board of Directors may elect or appoint at any time,
and from time to time, additional officers or agents with such duties as it may
deem necessary or desirable. Such additional officers shall serve at the
pleasure of the Board or otherwise as shall be specified by the Board at the
time of such election or appointment. Two or more offices may be held by the
same person.
(c) Any vacancy in any office may be filled for the unexpired
portion of the term by the Board of Directors.
(d) Any officer may resign his office at any time. Such
resignation shall be made in writing and shall take effect at the time specified
therein or, if no time has been specified, at the time of its receipt by the
corporation. The acceptance of a resignation shall not be necessary to make it
effective, unless expressly so provided in the resignation.
(e) The salaries of all officers of the corporation shall be
fixed by the Board of Directors.
4.2 Removal of Elected Officers: Any elected officer may be removed
at any time, either with or without cause, by resolution adopted at any regular
or special meeting of the Board of Directors by a majority of the Directors then
in office.
4.3 Duties: (a) President: The President shall be the principal
executive officer of the corporation and, subject to the control of the Board of
Directors, shall supervise and control all the business and affairs of the
corporation. He shall, when present, preside at all meetings of the stockholders
and of the Board of Directors. He shall see that all orders and resolutions of
the Board of Directors are carried into effect (unless any such order or
resolution shall provide otherwise), and in general shall perform all duties
incident to the office of president and such other duties as may be prescribed
by the Board of Directors from time to time.
(b) Treasurer: The Treasurer shall (1) have charge and custody
of and be responsible for all funds and securities of the Corporation; (2)
receive and give receipts for moneys due and payable to the corporation from any
source whatsoever; (3) deposit all such moneys in the name of the corporation in
such banks, trust companies, or other depositories as shall be selected by
resolution of the Board of Directors; and (4) in general perform all duties
incident to the office of treasurer and such other duties as from time to time
may be assigned to him by the President or by the Board of Directors. He shall,
if required by the Board of Directors, give a bond for the faithful discharge of
his duties in such sum and with such surety or sureties as the Board of
Directors shall determine.
(c) Secretary: The Secretary shall (1) keep the minutes of the
meetings of the stockholders, the Board of Directors, and all committees, if
any, of which a secretary shall not have been appointed, in one or more books
provided for that purpose; (2) see that all notices are duly given in accordance
with the provisions of these by-laws and as required by law; (3) be custodian of
the corporate records and of the seal of the corporation and see that the seal
of the corporation is affixed to all documents, the execution of which on behalf
of the corporation under its seal, is duly authorized; (4) keep a register of
the post office address of each stockholder which shall be furnished to the
Secretary by such stockholder; (5) have general charge of stock transfer books
of the Corporation; and (6) in general
By-Laws - 5
<PAGE>
perform all duties incident to the office of secretary and such other duties as
from time to time may be assigned to him by the President or by the Board of
Directors.
ARTICLE V
CAPITAL STOCK
5.1 Stock Certificates: (a) Every holder of stock in the corporation
shall be entitled to have a certificate signed by, or in the name of, the
corporation by the President and by the Treasurer or the Secretary, certifying
the number of shares owned by him.
(b) If such certificate is countersigned by a transfer agent
other than the corporation or its employee, or by a registrar other than the
corporation or its employee, the signatures of the officers of the corporation
may be facsimiles, and, if permitted by law, any other signature may be a
facsimile.
(c) In case any officer who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the corporation
with the same effect as if he were such officer at the date of issue.
(d) Certificates of stock shall be issued in such form not
inconsistent with the Certificate of Incorporation as shall be approved by the
Board of Directors, and shall be numbered and registered in the order in which
they were issued.
(e) All certificates surrendered to the corporation shall be
canceled with the date of cancellation, and shall be retained by the Secretary,
together with the powers of attorney to transfer and the assignments of the
shares represented by such certificates, for such period of time as shall be
prescribed from time to time by resolution of the Board of Directors.
5.2 Record Ownership: A record of the name and address of the holder
of such certificate, the number of shares represented thereby and the date of
issue thereof shall be made on the corporation's books. The corporation shall be
entitled to treat the holder of any share of stock as the holder in fact
thereof, and accordingly shall not be bound to recognize any equitable or other
claim to or interest in any share on the part of any other person, whether or
not it shall have express or other notice thereof, except as required by law.
5.3 Transfer of Record Ownership: Transfers of stock shall be made
on the books of the corporation only by direction of the person named in the
certificate or his attorney, lawfully constituted in writing, and only upon the
surrender of the certificate therefor and a written assignment of the shares
evidenced thereby. Whenever any transfer of stock shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of the
transfer if, when the certificates are presented to the corporation for
transfer, both the transferor and the transferee request the corporation to do
so.
5.4 Lost, Stolen or Destroyed Certificates: Certificates
representing shares of the stock of the corporation shall be issued in place of
any certificate alleged to have been lost, stolen or destroyed in such manner
and on such terms and conditions as the Board of Directors from time to time may
authorize.
5.5 Transfer Agent: Registrar: Rules Respecting Certificates: The
corporation may maintain one or more transfer offices or agencies where stock of
the corporation shall be transferable. The corporation may also maintain one or
more registry offices where such stock shall be registered. The Board of
Directors may make such rules and regulations as it may deem expedient
concerning the issue, transfer and registration of stock certificates.
By-Laws - 6
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5.6 Fixing Record Date for Determination of Stockholders of Record:
The Board of Directors may fix, in advance, a date as the record date for the
purpose of determining stockholders entitled to notice of, or to vote at, any
meeting of the stockholders or any adjournment thereof, or the stockholders
entitled to receive payment of any dividend or other distribution or the
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or to express consent to corporate
action in writing without a meeting, or in order to make a determination of the
stockholders for the purpose of any other lawful action. Such record date in any
case shall be not more than sixty days nor less than ten days before the date of
a meeting of the stockholders, nor more than sixty days prior to any other
action requiring such determination of the stockholders. A determination of
stockholders of record entitled to notice 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.
5.7 Dividends: Subject to the provisions of the Certificate of
Incorporation, the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the capital
stock of the corporation as and when they deem expedient. Before declaring any
dividend there may be set apart out of any funds of the corporation available
for dividends, such sum or sums as the Board of Directors from time to time in
their discretion deem proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
Board of Directors shall deem conducive to the interests of the corporation.
ARTICLE VI
SECURITIES HELD BY THE CORPORATION
6.1 Voting: Unless the Board of Directors shall otherwise order, the
President, the Secretary or the Treasurer shall have full power and authority,
on behalf of the corporation, to attend, act and vote at any meeting of the
stockholders of any corporation in which the corporation may hold stock, and at
such meeting to exercise any or all rights and powers incident to the ownership
of such stock and to execute on behalf of the corporation a proxy or proxies
empowering another or others to act as aforesaid. The Board of Directors from
time to time may confer like powers upon any other person or persons.
6.2 General Authorization to Transfer Securities Held by the
Corporation:
(a) Any of the following officers, to wit: the President and
the Treasurer shall be, and they hereby are, authorized and empowered to
transfer, convert, endorse, sell, assign, set over and deliver any and all
shares of stock, bonds, debentures, notes, subscription warrants, stock purchase
warrants, evidence of indebtedness, or other securities now or hereafter
standing in the name of or owned by the corporation, and to make, execute and
deliver, under the seal of the corporation, any and all written instruments of
assignment and transfer necessary or proper to effectuate the authority hereby
conferred.
(b) Whenever there shall be annexed to any instrument of
assignment and transfer executed pursuant to and in accordance with the
foregoing paragraph (a), a certificate of the Secretary of the corporation in
office at the date of such certificate setting forth the provisions of this
Section 6.2 and stating that they are in full force and effect and setting forth
the names of persons who are then officers of the corporation, then all persons
to whom such instrument and annexed certificate shall thereafter come, shall be
entitled, without further inquiry or investigation and regardless of the date of
such certificate, to assume and to act in reliance upon the assumption that the
shares of stock or other securities named in such instrument were theretofore
duly and properly transferred, endorsed, sold, assigned, set over and delivered
by the corporation, and that with respect to such securities the authority of
these provisions of the by-laws and of such officers is still in full force and
effect.
By-Laws - 7
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ARTICLE VII
MISCELLANEOUS
7.1 Signatories: All checks, drafts or other orders for the payment
of money, notes or other evidences of indebtedness issued in the name of the
corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
7.2 Seal: The seal of the corporation shall be in such form and
shall have such content as the Board of Directors shall from time to time
determine.
7.3 Notice and Waiver of Notice: Whenever any notice of the time,
place or purpose of any meeting of the stockholders, directors or a committee is
required to be given under the law of the State of Delaware, the Certificate of
Incorporation or these by-laws, a waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or after the holding
thereof, or actual attendance at the meeting in person or, in the case of any
stockholder, by his attorney-in-fact, shall be deemed equivalent to the giving
of such notice to such persons.
7.4 Indemnity: The corporation shall indemnify its directors,
officers and employees to the fullest extent allowed by law, provided, however,
that it shall be within the discretion of the Board of Directors whether to
advance any funds in advance of disposition of any action, suit or proceeding,
and provided further that nothing in this section shall be deemed to obviate the
necessity of the Board of Directors to make any determination that
indemnification of the director, officer or employee is proper under the
circumstances because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of Section 145 of the Delaware General Corporation Law.
7.5 Fiscal Year: Except as from time to time otherwise determined by
the Board of Directors, the fiscal year of the corporation shall end on .
By-Laws - 8
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CERTIFICATE OF INCORPORATION
OF
MURAT CENTER CONCERTS, INC.
The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and promoting the purposes
hereinafter stated, under the provisions and subject to the requirements of the
laws of the State of Delaware (particularly Chapter 1, Title 8 of the Delaware
Code and that acts amendatory thereof and supplemental thereto, and known,
identified, and referred to as the "General Corporation Law of the State of
Delaware), hereby certifies that:
FIRST: The name of the corporation (hereinafter called the
"corporation") is Murat Center Concerts, Inc.
SECOND: The address, including street, number, city and
county, of the registered office of the corporation in the State of Delaware is
1013 Centre Road, City of Wilmington, 19805, County of New Castle; and the name
of the registered agent of the corporation in the State of Delaware at such
address is Corporation Service Company.
THIRD: 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.
FOURTH: The total number of shares of stock which the
corporation shall have authority to issue is one hundred. The par value of each
of such shares is one cent. All such shares are of one class and are shares of
Common Stock.
FIFTH: The name and the mailing address of the incorporator
is as follows:
NAME MAILING ADDRESS
---- ---------------
Deborah Goldman-Levi 150 East 58th Street, 19th Floor
New York, NY 10155
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class of them and/or between
this corporation and its stockholders or any class of them any court of
equitable jurisdiction within the State of Delaware may, on the application in
a summary way of this corporation or of any creditor or stockholder thereof or
on the application of any receiver or receivers appointed for this corporation
under ss.291of Title 8 of the Delaware Code or on the application of trustees
in dissolution or of any receiver or receivers appointed for this corporation
under ss.279 of Title 8 of the Delaware Code order a meeting of the creditors
or class of creditors, and/or of the stockholders or class of stockholders of
this corporation, as the case may be, to be summoned in such manner as the said
court directs. If a majority in number representing three fourths in value of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be, agree to any compromise
or arrangement and to any reorganization of this corporation as consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this corporation, as the case
may be, and also on this corporation.
EIGHTH: For the management of the business and for the
conduct of the affairs, of the corporation, and in further definition,
limitation, and regulation of the powers of the corporation and of its
directors and of its
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stockholders or any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the
affairs of the corporation shall be vested in its Board of
Directors. The number of directors which shall constitute the
whole Board of Directors shall be fixed by, or in the manner
provided in the Bylaws. The phrase "whole Board" and the
phrase "total number of director" shall be deemed to have the
same meaning, to wit, the total number of directors which the
corporation would have if there were no vacancies. No
election of directors need be by written ballot.
2. After the original or other Bylaws of the corporation have
been adopted, amended, or repealed, as the case may be, in
accordance with the provisions of ss. 109 of the General
Corporation Law of the State of Delaware, and after the
corporation has received any payment for any of its stock,
the power to adopt, amend, or repeal the Bylaws of the
corporation may be exercised by the Board of Directors of the
corporation; provided, however that any provision for the
classification of directors of the corporation for staggered
terms pursuant to the provisions of subsections (d) of ss.
141 of the General Corporation Law of the State of Delaware
shall be set forth in an initial Bylaw or in a Bylaw adopted
by the stockholders entitled to vote of the corporation
unless provisions for such classification shall be set forth
in this certificate of incorporation.
3. Whenever the corporation shall be authorized to issue only
one class of stock each outstanding share shall entitle the
holder thereof to notice of, and the right to vote at, any
meeting of stockholders. Whenever the corporation shall be
authorized to issue more than one class of stock, no
outstanding share of any class of stock which is denied
voting power under the provisions of the certificate of
incorporation shall entitle the holder thereof to the right
to vote at any meeting of stockholders except as the
provisions of paragraph (2) of subsection (b) of ss.242 of
the General Corporation Law of the State of Delaware shall
otherwise require; provided, that no share of any such class
which is otherwise denied voting power shall entitle the
holder thereof to vote upon the increase or decrease in the
number of authorized shares of said class.
NINTH: The personal liability of the directors of the
corporation is hereby eliminated to the fullest extent permitted by the
provisions of paragraph (7) of subsection (b) of ss.102 of the General
Corporation Law of the State of Delaware, as the same may be amended and
supplemented.
TENTH: The corporation shall, to the fullest extent permitted
by the provisions of ss. 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
person whom it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities, or other matters referred to
in or covered by said section, and the indemnification provided for herein
shall not be deemed exclusive of any other rights to which those indemnified
may be entitled under any Bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
ELEVENTH: From time to time any of the provisions of this
certificate of incorporation may be amended, altered, or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in force
may be added or inserted in the manner and at the time prescribed by said laws,
and all rights at any time conferred upon the stockholders of the corporation
by this certificate of incorporation are granted subject to the provisions of
this Article ELEVENTH.
Signed on April 22,1997
/s/ Deborah Goldman - Levi
----------------------------------
Deborah Goldman-Levi, Incorporator
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BY-LAWS
OF
MURAT CENTER CONCERTS, INC.
ARTICLE I
OFFICES
1.1 Registered Office: The registered office shall be established and
maintained at and shall be the registered agent of the Corporation in charge
hereof.
1.2 Other Offices: The corporation may have other offices, either
within or without the State of Delaware, at such place or places as the Board
of Directors may from time to time appoint or the business of the corporation
may require, provided, however, that the corporation's books and records shall
be maintained at such place within the continental United States as the Board
of Directors shall from time to time designate.
ARTICLE II
STOCKHOLDERS
2.1 Place of Stockholders' Meetings: All meetings of the stockholders
of the corporation shall be held at such place or places, within or outside the
State of Delaware as may be fixed by the Board of Directors from time to time
or as shall be specified in the respective notices thereof.
2.2 Date and Hour of Annual Meetings of Stockholders: An annual
meeting of stockholders shall be held each year within five months after the
close of the fiscal year of the Corporation.
2.3 Purpose of Annual Meetings: At each annual meeting, the
stockholders shall elect the members of the Board of Directors for the
succeeding year. At any such annual meeting any further proper business may be
transacted.
2.4 Special Meetings of Stockholders: Special meetings of the
stockholders or of any class or series thereof entitled to vote may be called
by the President or by the Chairman of the Board of Directors, or at the
request in writing by stockholders of record owning at least fifty (50%)
percent of the issued and outstanding voting shares of common stock of the
corporation.
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2.5 Notice of Meetings of Stockholders: Except as otherwise expressly
required or permitted by law, not less than ten days nor more than sixty days
before the date of every stockholders' meeting the Secretary shall give to each
stockholder of record entitled to vote at such meeting, written notice, served
personally by mail or by telegram, stating the place, date and hour of the
meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Such notice, if mailed shall be deemed to be given
when deposited in the United States mail, postage prepaid, directed to the
stockholder at his address for notices to such stockholder as it appears on the
records of the corporation.
2.6 Quorum of Stockholders: (a) Unless otherwise provided by the
Certificate of Incorporation or by law, at any meeting of the stockholders, the
presence in person or by proxy of stockholders entitled to cast a majority of
the votes thereat shall constitute a quorum. The withdrawal of any shareholder
after the commencement of a meeting shall have no effect on the existence of a
quorum, after a quorum has been established at such meeting.
(b) At any meeting of the stockholders at which a quorum shall be
present, a majority of voting stockholders, present in person or by proxy, may
adjourn the meeting from time to time without notice other than announcement at
the meeting. In the absence of a quorum, the officer presiding thereat shall
have power to adjourn the meeting from time to time until a quorum shall be
present. Notice of any adjourned meeting, other than announcement at the
meeting, shall not be required to be given except as provided in paragraph (d)
below and except where expressly required by law.
(c) At any adjourned session at which a quorum shall be present, any
business may be transacted which might have been transacted at the meeting
originally called but only those stockholders entitled to vote at the meeting
as originally noticed shall be entitled to vote at any adjournment or
adjournments thereof, unless a new record date is fixed by the Board of
Directors.
(d) If an adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
2.7 Chairman and Secretary of Meeting: The President, shall preside at
meetings of the stockholders. The Secretary shall act as secretary of the
meeting or if he is not present, then the presiding officer may
appoint a person to act as secretary of the meeting.
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2.8 Voting by Stockholders: Except as may be otherwise provided by the
Certificate of Incorporation or these by-laws, at every meeting of the
stockholders each stockholder shall be entitled to one vote for each share of
voting stock standing in his name on the books of the corporation on the record
date for the meeting. Except as otherwise provided by these by-laws, all
elections and questions shall be decided by the vote of a majority in interest
of the stockholders present in person or represented by proxy and entitled to
vote at the meeting.
2.9 Proxies: Any stockholder entitled to vote at any meeting of
stockholders may vote either in person or by proxy. Every proxy shall be in
writing, subscribed by the stockholder or his duly authorized attorney-in-fact,
but need not be dated, sealed, witnessed or acknowledged.
2.10 Inspectors: The election of directors and any other vote by
ballot at any meeting of the stockholders shall be supervised by at least two
inspectors. Such inspectors may be appointed by the presiding officer before or
at the meeting; or if one or both inspectors so appointed shall refuse to serve
or shall not be present, such appointment shall be made by the officer
presiding at the meeting.
2.11 List of Stockholders: (a) At least ten days before every meeting
of stockholders, the Secretary shall prepare and make a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder.
(b) During ordinary business hours, for a period of at least ten days
prior to the meeting, such list shall be open to examination by any stockholder
for any purpose germane to the meeting, either at a place within the city where
the meeting is to be held, which place shall be specified in the notice of the
meeting, or if not so specified, at the place where the meeting is to be held.
(c) The list shall also be produced and kept at the time and place of
the meeting during the whole time of the meeting, and it may be inspected by
any stockholder who is present.
(d) The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list required by this
Section 2.11 or the books of the corporation, or to vote in person or by proxy
at any meeting of stockholders.
2.12 Procedure at Stockholders' Meetings: Except as otherwise provided
by these by-laws or any resolutions adopted by the stockholders or Board of
Directors, the order of business and all other matters of procedure
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at every meeting of stockholders shall be determined by the presiding officer.
2.13 Action By Consent Without Meeting: Unless otherwise
provided by the Certificate of Incorporation, any action required to be taken
at any annual or special meeting of stockholders, or any action which may be
taken at any annual or special meeting, may be taken without a meeting, without
prior notice and without a vote, if a consent 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. Prompt notice of the taking of the corporate action without
a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
3.1 Powers of Directors: The property, business and affairs
of the corporation shall be managed by its Board of Directors which may
exercise all the powers of the corporation except such as are by the law of the
State of Delaware or the Certificate of Incorporation or these by-laws required
to be exercised or done by the stockholders.
3.2 Number, Method of Election, Terms of Office of Directors:
The number of directors which shall constitute the Board of Directors shall be
( ) unless and until otherwise determined by a vote of a majority of the entire
Board of Directors. Each Director shall hold office until the next annual
meeting of stockholders and until his successor is elected and qualified,
provided, however, that a director may resign at any time. Directors need not
be stockholders.
3.3 Vacancies on Board of Directors: Removal: (a) Any
director may resign his office at any time by delivering his resignation in
writing to the Chairman of the Board or to the President. It will take effect
at the time specified therein or, if no time is specified, it will be effective
at the time of its receipt by the corporation. The acceptance of a resignation
shall not be necessary to make it effective, unless expressly so provided in
the resignation.
(b) Any vacancy in the authorized number of directors may be
filled by majority vote of the stockholders and any director so chosen shall
hold office until the next annual election of directors by the stockholders and
until his successor is duly elected and qualified or until his earlier
resignation or removal.
(c) Any director may be removed with or without cause at any
time by the majority vote of the stockholders given at a special meeting of the
stockholders called for that purpose.
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3.4 Meetings of the Board of Directors: (a) The Board of Directors may
hold their meetings, both regular and special, either within or outside the
State of Delaware.
(b) Regular meetings of the Board of Directors may be held at such
time and place as shall from time to time be determined by resolution of the
Board of Directors. No notice of such regular meetings shall be required. If
the date designated for any regular meeting be a legal holiday, then the
meeting shall be held on the next day which is not a legal holiday.
(c) The first meeting of each newly elected Board of Directors shall
be held immediately following the annual meeting of the stockholders for the
election of officers and the transaction of such other business as may come
before it. If such meeting is held at the place of the stockholders' meeting,
no notice thereof shall be required.
(d) Special meetings of the Board of Directors shall be held whenever
called by direction of the Chairman of the Board or the President or at the
written request of any one director.
(e) The Secretary shall give notice to each director of any special
meeting of the Board of Directors by mailing the same at least three days
before the meeting or by telegraphing, telexing, or delivering the same not
later than the date before the meeting.
Unless required by law, such notice need not include a statement of
the business to be transacted at, or the purpose of, any such meeting. Any and
all business may be transacted at any meeting of the Board of Directors. No
notice of any adjourned meeting need be given. No notice to or waiver by any
director shall be required with respect to any meeting at which the director is
present.
3.5 Quorum and Action: Unless provided otherwise by law or by the
Certificate of Incorporation or these by-laws, a majority of the Directors
shall constitute a quorum for the transaction of business; but if there shall
be less than a quorum at any meeting of the Board, a majority of those present
may adjourn the meeting from time to time. The vote of a majority of the
Directors present at any meeting at which a quorum is present shall be
necessary to constitute the act of the Board of Directors.
3.6 Presiding Officer and Secretary of the Meeting: The President, or,
in his absence a member of the Board of Directors selected by the members
present, shall preside at meetings of the Board. The Secretary shall act as
secretary of the meeting, but in his absence the presiding officer may appoint
a secretary of the meeting.
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3.7 Action by Consent Without Meeting: Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes or proceedings of the Board or committee.
3.8 Action by Telephonic Conference: Members of the Board of
Directors, or any committee designated by such board, may participate in a
meeting of such board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in such a meeting shall
constitute presence in person at such meeting.
3.9 Committees: The Board of Directors shall, by resolution or
resolutions passed by a majority of Directors designate one or more committees,
each of such committees to consist of one or more Directors of the Corporation,
for such purposes as the Board shall determine. The Board may designate one or
more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of such committee.
3.10 Compensation of Directors: Directors shall receive such
reasonable compensation for their service on the Board of Directors or any
committees thereof, whether in the form of salary or a fixed fee for attendance
at meetings, or both, with expenses, if any, as the Board of Directors may from
time to time determine. Nothing herein contained shall be construed to preclude
any Director from serving in any other capacity and receiving compensation
therefor.
ARTICLE IV
OFFICERS
4.1 Officers, Title, Elections, Terms: (a) The elected officers of the
corporation shall be a President, a Treasurer and a Secretary, and such other
officers as the Board of Directors shall deem advisable. The officers shall be
elected by the Board of Directors at its annual meeting following the annual
meeting of the stockholders, to serve at the pleasure of the Board or otherwise
as shall be specified by the Board at the time of such election and until their
successors are elected and qualified.
(b) The Board of Directors may elect or appoint at any time, and from
time to time, additional officers or agents with such duties as it may deem
necessary or desirable. Such additional officers shall serve at the pleasure of
the Board or otherwise as shall be specified by the Board at the time of such
election or appointment. Two
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or more offices may be held by the same person.
(c) Any vacancy in any office may be filled for the unexpired portion
of the term by the Board of Directors.
(d) Any officer may resign his office at any time. Such resignation
shall be made in writing and shall take effect at the time specified therein
or, if no time has been specified, at the time of its receipt by the
corporation. The acceptance of a resignation shall not be necessary to make it
effective, unless expressly so provided in the resignation.
(e) The salaries of all officers of the corporation shall be fixed by
the Board of Directors.
4.2 Removal of Elected Officers: Any elected officer may be removed at
any time, either with or without cause, by resolution adopted at any regular or
special meeting of the Board of Directors by a majority of the Directors then
in office.
4.3 Duties: (a) President: The President shall be the principal
executive officer of the corporation and, subject to the control of the Board
of Directors, shall supervise and control all the business and affairs of the
corporation. He shall, when present, preside at all meetings of the
stockholders and of the Board of directors. He shall see that all orders and
resolutions of the Board of Directors are carried into effect (unless any such
order or resolution shall provide otherwise), and in general shall perform all
duties incident to the office of president and such other duties as may be
prescribed by the Board of Directors from time to time.
(b) Treasurer: The Treasurer shall (1) have charge and custody of and
be responsible for all funds and securities of the Corporation; (2) receive and
give receipts for moneys due and payable to the corporation from any source
whatsoever; (3) deposit all such moneys in the name of the corporation in such
banks, trust companies, or other depositories as shall be selected by
resolution of the Board of Directors; and (4) in general perform all duties
incident to the office of treasurer and such other duties as from time to time
may be assigned to him by the President or by the Board of Directors. He shall
if required by the Board of Directors, give a bond for the faithful discharge
of his duties in such sum and with such surety or sureties as the Board of
Directors shall determine.
(c) Secretary: The Secretary shall (1) keep the minutes of the
meetings of the stockholders, the Board of Directors, and all committees, if
any, of which a secretary shall not have been appointed, in one or more books
provided for that purpose; (2) see that all notices are duly given in
accordance with the provisions of these by-laws and as required by law; (3) be
custodian of the corporate records and of the seal of
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the corporation and see that the seal of the corporation is affixed to all
documents, the execution of which on behalf of the corporation under its seal,
is duly authorized; (4) keep a register of the post office address of each
stockholder which shall be furnished to the Secretary by such stockholder; (5)
have general charge of stock transfer books of the Corporation; and (6) in
general perform all duties incident to the office of secretary and such other
duties as from time to time may be assigned to him by the President or by the
Board of Directors.
ARTICLE V
CAPITAL STOCK
5.1 Stock Certificates: (a) Every holder of stock in the corporation
shall be entitled to have a certificate signed by, or in the name of, the
corporation by the President and by the Treasurer or the Secretary, certifying
the number of shares owned by him.
(b) If such certificate is countersigned by a transfer agent other
than the corporation or its employee, or by a registrar other than the
corporation or its employee, the signatures of the officers of the corporation
may be facsimiles, and, if permitted by law, any other signature may be a
facsimile.
(c) In case any officer who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer before
such certificate is issued, it may be issued by the corporation with the same
effect as if he were such officer at the date of issue.
(d) Certificates of stock shall be issued in such form not
inconsistent with the Certificate of Incorporation as shall be approved by the
Board of Directors, and shall be numbered and registered in the order in which
they were issued.
(e) All certificates surrendered to the corporation shall be canceled
with the date of cancellation, and shall be retained by the Secretary, together
with the powers of attorney to transfer and the assignments of the shares
represented by such certificates, for such period of time as shall be
prescribed from time to time by resolution of the Board of Directors.
5.2 Record Ownership: A record of the name and address of the holder
of such certificate, the number of shares represented thereby and the date of
issue thereof shall be made on the corporation's books. The corporation shall
be entitled to treat the holder of any share of stock as the holder in fact
thereof, and accordingly shall not be bound to recognize any equitable or other
claim to or interest in any share on the part of any other person, whether
8
<PAGE>
or not it shall have express or other notice thereof, except as required by
law.
5.3 Transfer of Record Ownership: Transfers of stock shall be made on
the books of the corporation only by direction of the person named in the
certificate or his attorney, lawfully constituted in writing, and only upon the
surrender of the certificate therefor and a written assignment of the shares
evidenced thereby. Whenever any transfer of stock shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of the
transfer if, when the certificates are presented to the corporation for
transfer, both the transferor and the transferee request the corporation to do
so.
5.4 Lost, Stolen or Destroyed Certificates: Certificates representing
shares of the stock of the corporation shall be issued in place of any
certificate alleged to have been lost, stolen or destroyed in such manner and
on such terms and conditions as the Board of Directors from time to time may
authorize.
5.5 Transfer Agent; Registrar; Rules Respecting Certificates: The
corporation may maintain one or more transfer offices or agencies where stock
of the corporation shall be transferable. The corporation may also maintain one
or more registry offices where such stock shall be registered. The Board of
Directors may make such rules and regulations as it may deem expedient
concerning the issue, transfer and registration of stock certificates.
5.6 Fixing Record Date for Determination of Stockholders of Record:
The Board of Directors may fix, in advance, a date as the record date for the
purpose of determining stockholders entitled to notice of, or to vote at, any
meeting of the stockholders or any adjournment thereof, or the stockholders
entitled to receive payment of any dividend or other distribution or the
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or to express consent to corporate
action in writing without a meeting, or in order to make a determination of the
stockholders for the purpose of any other lawful action. Such record date in
any case shall be not more than sixty days nor less than ten days before the
date of a meeting of the stockholders, nor more than sixty days prior to any
other action requiring such determination of the stockholders. A determination
of stockholders of record entitled to notice 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.
5.7 Dividends: Subject to the provisions of the Certificate of
Incorporation, the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the
capital stock of the corporation as and when they deem expedient. Before
declaring any dividend there may be set apart out of any funds of the
corporation available for dividends, such sum or sums as the Board of Directors
from time to time in
9
<PAGE>
their discretion deem proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
Board of Directors shall deem conducive to the interests of the corporation.
ARTICLE VI
SECURITIES HELD BY THE CORPORATION
6.1 Voting: Unless the Board of Directors shall otherwise order, the
President, the Secretary or the Treasurer shall have full power and authority,
on behalf of the corporation, to attend, act and vote at any meeting of the
stockholders of any corporation in which the corporation may hold stock, and at
such meeting to exercise any or all rights and powers incident to the ownership
of such stock, and to execute on behalf of the corporation a proxy or proxies
empowering another or others to act as aforesaid. The Board of Directors from
time to time may confer like powers upon any other person or persons.
6.2 General Authorization to Transfer Securities Held by the
Corporation (a) Any of the following officers, to wit: the President and the
Treasurer shall be, and they hereby are, authorized and empowered to transfer,
convert, endorse, sell, assign, set over and deliver any and all shares of
stock, bonds, debentures, notes, subscription warrants, stock purchase
warrants, evidence of indebtedness, or other securities now or hereafter
standing in the name of or owned by the corporation, and to make, execute and
deliver, under the seal of the corporation, any and all written instruments of
assignment and transfer necessary or proper to effectuate the authority hereby
conferred.
(b) Whenever there shall be annexed to any instrument of assignment
and transfer executed pursuant to and in accordance with the foregoing
paragraph (a), a certificate of the Secretary of the corporation in office at
the date of such certificate setting forth the provisions of this Section 6.2
and stating that they are in full force and effect and setting forth the names
of persons who are then officers of the corporation, then all persons to whom
such instrument and annexed certificate shall thereafter come, shall be
entitled, without further inquiry or investigation and regardless of the date
of such certificate, to assume and to act in reliance upon the assumption that
the shares of stock or other securities named in such instrument were
theretofore duly and properly transferred, endorsed, sold, assigned, set over
and delivered by the corporation, and that with respect to such securities the
authority of these provisions of the by-laws and of such officers is still in
full force and effect.
10
<PAGE>
ARTICLE VII
MISCELLANEOUS
7.1 Signatories: All checks, drafts or other orders for the payment of
money, notes or other evidences of indebtedness issued in the name of the
corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
7.2 Seal: The seal of the corporation shall be in such form and shall
have such content as the Board of Directors shall from time to time determine.
7.3 Notice and Waiver of Notice: Whenever any notice of the time,
place or purpose of any meeting of the stockholders, directors or a committee
is required to be given under the law of the State of Delaware, the Certificate
of Incorporation or these by-laws, a waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or after the holding
thereof, or actual attendance all the meeting in person or, in the case of any
stockholder, by his attorney-in-fact, shall be deemed equivalent to the giving
of such notice to such persons.
7.4 Indemnity: The corporation shall indemnify its directors, officers
and employees to the fullest extent allowed by law, provided, however, that it
shall be within the discretion of the Board of Directors whether to advance any
funds in advance of disposition of any action, suit or proceeding, and provided
further that nothing in this section 7.4 shall be deemed to obviate the
necessity of the Board of Directors to make any determination that
indemnification of the director, officer or employee is proper under the
circumstances because he has met the applicable standard of conduct set forth
in subsections (a) and (b) of Section 145 of the Delaware General Corporation
Law.
7.5 Fiscal Year: Except as from time to time otherwise determined by
the Board of Directors, the fiscal year of the corporation shall end on.
11
<PAGE>
CERTIFICATE OF LIMITED PARTNERSHIP
OF
MURAT CENTER CONCERTS, L.P.
This Certificate of Limited Partnership of Murat Center Concerts, L.P.
(the "Limited Partnership") is being executed by the undersigned for the
purpose of forming a limited partnership pursuant to the Delaware Revised
Uniform Limited Partnership Act.
1. The name of the limited partnership is Murat Center
Concerts, L.P.
2. The address of the registered office of the Limited Partnership in
Delaware is 1013 Centre Road, Wilmington, Delaware 19805. The Limited
Partnership's registered agent at that address is Corporation Service Company.
3. The name and address of the general partner is:
NAME ADDRESS
---- -------
Murat Center Concerts, Inc. 150 East 58th Street, 19th Floor
New York, NY 10155
IN WITNESS WHEREOF, the undersigned, constituting the sole general
partner of the Limited Partnership, has caused this Certificate of Limited
Partnership to be duly executed as of June 10, 1997.
MURAT CENTER CONCERTS, L.P.
By: Murat Center Concerts. Inc.,
as General Partner
By: /s/ Robert F. X. Sillerman
---------------------------------
Robert F. X. Sillerman
Executive Chairman
<PAGE>
CERTIFICATE OF INCORPORATION
OF
NEDERLANDER OF CONNECTICUT, INC.
The undersigned, as incorporator under the Stock Corporation Act of
the State of Connecticut, certifies as follows:
FIRST. The name of the corporation is Nederlander of Connecticut,
Inc.
SECOND. The purpose of the corporation is to engage in any lawful
act or activity for which corporations may be formed under the Stock Corporation
Act of the State of Connecticut.
THIRD. The designation of each class of shares, the authorized
number of shares of each such class and the par value of each share thereof, are
as follows:
The corporation shall have one (1) class of stock designated as
Common Stock and consisting of Twenty Thousand (20,000) authorized shares. Each
share of common stock shall be without par value.
FOURTH. The terms, limitations and relative rights and preferences
of each class of shares and series thereof, or an express grant of authority to
the board of directors pursuant to Section 33-341(b) of the Connecticut Stock
Corporation Act are as follows:
None
FIFTH. The minimum amount of stated capital with which the
corporation shall commence business is One Thousand Dollars ($1,000.00).
SIXTH. The duration of this corporation is unlimited.
SEVENTH. The personal liability for a director to the corporation or
its shareholders for monetary damages for breach of duty as a director shall be
limited to an amount equal to the amount of compensation received by the
director for serving the corporation during the calendar year in which the
violation occurred (and if the director received no such compensation from the
corporation during the calendar year of the violation, such director shall have
no liability to the corporation or its shareholders for breach of duty) if such
breach did not:
(A) involve a knowing and culpable violation of law by the
director
<PAGE>
(B) enable the director or an Associate, as defined in subdivision
(3) of Section 33-374d of the Connecticut Stock Corporation
Act as in effect at the time of the violation, to receive an
improper personal economic gain;
(C) show a lack of good faith and a conscious disregard for the
duty of the director to the corporation under the
circumstances in which the director was aware that his conduct
or omission created an unjustifiable risk of serious injury to
the corporation:
(D) constitute a sustained and unexecuted pattern of inattention
that amounted to an abdication of the director's duty to the
corporation; or
(E) create liability under Section 33-321 of the Connecticut Stock
Corporation Act as in effect at the time of the violation.
Any repeal or modification of this Article Seventh shall not
adversely affect any right or protection of a director of the corporation
existing at the time of such repeal or modification.
Nothing contained in this Article Seventh shall be construed to deny
the directors of the corporation any of the benefits provided by subsection (e)
of Section 33-313 of the Connecticut Stock Corporation Act, as in effect at the
time of the violation.
Dated at New York, New York, this 11th day of October, 1993.
I hereby declare, under the penalties of false statement, that the
statement made in the foregoing certificate are true.
/s/ Alan S. Cohen
-------------------
Alan S. Cohen
Incorporator
2
<PAGE>
APPOINTMENT OF STATUTORY AGENT FOR SERVICE
DOMESTIC CORPORATION
61-6 Rev. 6/88
Secretary of the State
State of Connecticut
<TABLE>
<S> <C> <C> <C> <C>
Name of Corporation: Nederlander of Connecticut. Inc. Complete All Blanks
- ----------------------------------------------------------------------------------------------------------
The above corporation appoints as its statutory agent for service, one of the following:
- ----------------------------------------------------------------------------------------------------------
Name of Natural Persons Who is Resident of Connecticut Business Address Zip Code
Residence Address Zip Code
- ----------------------------------------------------------------------------------------------------------
Name of Connecticut Corporation Address of Principal Office in Conn. (If
none, enter address of appointee's
statutory agent for service)
- ----------------------------------------------------------------------------------------------------------
Name of Corporation Address of Principal Office in Conn.
(Not organized under the Laws of Conn.*) (If none, enter "Secretary of the State of
Conn.")
The Prentice-Hall Corporation System, Inc. 30 High Street
Hartford, Connecticut 06103
- ----------------------------------------------------------------------------------------------------------
* Which has procured a Certificate of Authority to transact business or conduct affairs in this state.
- ----------------------------------------------------------------------------------------------------------
AUTHORIZATION
- ----------------------------------------------------------------------------------------------------------
Name of Incorporator (Print or Type) Signed (Incorporator) Date
Original Appointment
(Must be Signed Alan S. Cohen /s/ Alan S. Cohen October 11, 1993
by a majority of -----------------------------------------------------------------------------------
Incorporators) Name of Incorporator (Print or Type) Signed (Incorporator)
-----------------------------------------------------------------------------------
Name of Incorporator (Print or Type) Signed (Incorporator)
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Subsequent Appointment Name of President, Vice President or Secretary Date
-----------------------------------------------------------------------------------
Signed (President, or Vice President or Secretary)
-----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Acceptance: Name of Statutory Agent for Service (Print or Type) Signed (Statutory Agent for Service)
The Prentice-Hall Corporation System, Inc. By: /s/ Jamie Hall
By: Jamie Hall, Assistant Secretary
- ----------------------------------------------------------------------------------------------------------
For Official Use Only Rec; CC:
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
Please provide filer's name and complete address for mailing receipt
</TABLE>
<PAGE>
CERTIFICATE OF AMENDMENT
STOCK CORPORATION
Office of the Secretary of the State
1-97
- --------------------------------------------------------------------------------
Space
FILING #0001702516 PG 01 0F 02 VOL B-00115
FILED 03/07/1997 11:21 AM PAGE 01482
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
- --------------------------------------------------------------------------------
1. NAME OF CORPORATION:
Nederlander of Connecticut, Inc.
- --------------------------------------------------------------------------------
2. THE CERTIFICATE OF INCORPORATION IS (check A., B. or C.):
X A. AMENDED
B. AMENDED AND RESTATED.
C. RESTATED.
- --------------------------------------------------------------------------------
3. TEXT OF EACH AMENDMENT RESTATEMENT:
FIRST The name of the corporation is NOC, Inc.
(Please reference an 8 1/2 X 11 attachment if additional space is needed)
- --------------------------------------------------------------------------------
<PAGE>
1-97
- --------------------------------------------------------------------------------
Space
FILING #0001702516 PG 02 OF 02 VOL B-00115
FILED 03/07/1997 11:21 AM PAGE 01483
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
================================================================================
4. VOTE INFORMATION (check A., B. or C.)
X A. The resolution was approved by shareholders as follows:
(set forth all voting information required by Conn. Gen. Stat. section
33-800 as amended in the space provided below)
Designation: Class A Common Stock (the sole class of stock entitled to vote)
Number of outstanding shares: 300
Number of votes entitled to be cast: 300
Number of votes represented at the meeting: 300 (action was taken by unanimous
written consent)
Total number of undisputed votes cast for the amendment: 300
The number cast for the amendment was sufficient for approval.
- --------------------------------------------------------------------------------
B. The amendment was adopted by the board of directors without
shareholders action. No shareholder vote was required for adoption.
C. The amendment was adopted by the incorporators without shareholder
action. No shareholder vote was required for adoption.
- --------------------------------------------------------------------------------
5. EXECTUTION
- --------------------------------------------------------------------------------
Dated this 28th day of February, 1997
- --------------------------------------------------------------------------------
Robert E. Nederlander President /s/ Robert E. Nederlander
- --------------------------------------------------------------------------------
Print or type name of signatory Capacity of signatory Signature
- --------------------------------------------------------------------------------
2
<PAGE>
FILING #0001705193 PG 01 OF 193 VOL B-00116
FILED 03/20/1997 03:00 PM PAGE 03367
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
CERTIFICATE OF MERGER
of
NOC-ACQUISITION CORP.
with and into
NOC, INC.
1. Attached hereto as Exhibit A is the Agreement of Merger by and
among NOC Acquisition Corp. (the "Terminating Corporation"), NOC, INC., formerly
known as Nederlander of Connecticut, Inc., (the "Surviving Corporation"), each a
Connecticut corporation, and the other parties signatory thereto, together with
the Amendment of Agreement of Merger and the Second Amendment of Agreement of
Merger.
2. The Plan has been approved and adopted by the shareholders of
each of the Terminating Corporation and the Surviving Corporation in accordance
with Section 33-817 of the Connecticut Business Corporations Act (the "Act") in
the following manner:
Terminating Corporation
-----------------------
Outstanding Shares (all Common) 1,000
Number of Votes Entitled to be Cast 1,000
Vote Required for Adoption 667
Vote Favoring Adoption 1,000
Surviving Corporation
---------------------
Outstanding Shares - Class A Common 300
Outstanding Shares - Class B Common 700
Number of Votes Entitled to be Cast 1,000
Vote Required for Adoption 667
Vote Favoring Adoption 1,000
<PAGE>
FILING #0001705193 PG 02 OF 193 VOL B-00116
FILED 03/20/1997 03:00 PM PAGE 03368
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
IN WITNESS WHEREOF, the parties hereto have caused this Certificate
of Merger to be executed as of the 19th day of March, 1997.
NOC, INC., formerly known as
Nederlander of Connecticut, Inc.
By /s/ Robert E. Nederlander
--------------------------------
Name: Robert E. Nederlander
Title: President
NOC-ACQUISITION CORP.
By
Name:
Title:
2
<PAGE>
FILING #0001705193 PG 03 OF 193 VOL B-00116
FILED 03/20/1997 03:00 PM PAGE 03369
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
IN WITNESS WHEREOF, the parties hereto have caused this Certificate
of Merger to be executed as of the 19th day of March, 1997.
NOC, INC., formerly known as
Nederlander of Connecticut, Inc.
By
Name:
Title:
By /s/ Howard J. Tytel
--------------------------------
Name: Howard J. Tytel
Title: Executive Vice President
2
<PAGE>
CERTIFICATE OF AMENDMENT
STOCK CORPORATION
Office of the Secretary of the State
1-97
- --------------------------------------------------------------------------------
Space
FILING #0001702516 PG 01 0F02 VOL B-00115
FILED 03/07/1997 11:21 AM PAGE 01482
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
================================================================================
1. NAME OF CORPORATION:
Nederlander of Connecticut, Inc.
- --------------------------------------------------------------------------------
2. THE CERTIFICATE OF INCORPORATION IS (check A., B. or C.):
X A. AMENDED
B. AMENDED AND RESTATED.
C. RESTATED.
- --------------------------------------------------------------------------------
3. TEXT OF EACH AMENDMENT/RESTATEMENT:
FIRST The name of the corporation is NOC, Inc.
(Please reference an 8 1/2 X 11 attachment if additional space is needed)
- --------------------------------------------------------------------------------
<PAGE>
L 1241 0710 160311A002 l0/27/93RH37010 75.00
A282335A004 1l/16/93RH37100 25.00
160311A002 l0/27/93RH37100 25.00
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
NEDERLANDER OF CONNECTICUT, INC.
Pursuant to Section 33-360 of the Stock Corporation Act
of the State of Connecticut
The undersigned, the sole incorporator of Nederlander of Connecticut,
Inc., a Connecticut corporation (the "Corporation"), hereby certifies as
follows:
1. The name of the corporation is Nederlander of Connecticut, Inc.
2. The Certificate of Incorporation of the Corporation was filed in the
office of the Secretary of the State of Connecticut on October 12, 1993.
3. Article Third of the Certificate of Incorporation is amended to read in
its entirety as follows:
"THIRD. The designation of each class of shares, the
authorized number of shares of each such class and the par value of
each share thereof, are as follows:
"(a) The corporation shall have the authority to issue 20,000
shares, consisting of 10,000 shares of class A common stock, each of
which shall be without par value, and 10,000 shares of class B
common stock, each of which shall be without par value.
"(b) Each shares of class A common stock and class B common stock
shall be identical in all respects, except as follows:
"(i) Except as required by the law of the state of
Connecticut, the shares of class B common stock shall not be
entitled to vote upon or participate in any action taken by the
corporation or its shareholders or be entitled to notice of any
meeting of shareholders, and the entire voting power for the
election of directors and for all other purposes shall be vested
exclusively in the holders of class A common stock."
<PAGE>
VOL 1241 0711
4. This corporation has not received any payment for any shares of its
stock nor are there any subscribers for such shares. This amendment was duly
adopted in accordance with the provisions of section 33-360(b)(1) of the Stock
Corporation Act of the State of Connecticut.
Dated: October 26, 1993
I being the Sole Incorporator hereby declare, under the penalties of false
statement, that the statements made in the foregoing Certificate are true.
/s/ Alan S. Cohen
---------------------------------
Alan S. Cohen, Sole Incorporator
2
<PAGE>
BY-LAWS
of
NEDERLANDER OF CONNECTICUT, INC.
ARTICLE I
Location of Corporation
Section 1. The principal office of this corporation shall be located in
the City of Hartford, County of Hartford, State of Connecticut.
Section 2. This corporation may also have offices at such other places
within and without the State as the Board of Directors may, from time to time
designate, or as the business of the corporation may, from time to time require.
ARTICLE II
Shareholders
Section 1. Annual Meeting. The annual meeting of the Shareholders of this
Corporation, commencing with the year 1988, for the election of Directors and
for the transaction of such other business as may properly come before the
meeting, shall be held at the principal office of this corporation, or at such
other place as may be designated from time to time, on the third Monday in
September of each year at 10:00 o'clock in the a.m., or in the event that the
same shall fall on a legal holiday, then upon the next succeeding business day.
Section 2. Delayed Annual Meeting. If, for any reason the annual meeting
of the shareholders shall not be held within the period hereinbefore designated,
such meeting may be called by the Chairman or President and held as a special
meeting, and the same proceedings may be had thereat as at an annual meeting.
Section 3. Order of Business. The order of business at the annual meeting
of the shareholders shall be as follows:
(a) Roll call
(b) Reading of notice and proof of mailing
(c) Reading and disposal of any unapproved minutes
(d) Annual reports of officers and committee
(e) Election of Directors
(f) Transaction of other business as follows:
Unfinished business
New business
(g) Adjournment
provided that in the absence of any objection, the presiding officer may vary
the order of business at his discretion.
Section 4. Special Meetings. A special meeting of the shareholders may be
called to be held at such time and place as may be designated by the Chairman or
President or a majority of the Board of Directors, or not less than an aggregate
of Ten (10%) Percent of the issued and outstanding shares of stock of the
corporation having the right to vote at such special meeting. The method by
which such meeting may be called is as follows:
Upon receipt of a specification in writing setting forth the date and
objects of such proposed special meeting, signed by the Chairman or
President or a majority of the Board of Directors, or not less than an
aggregate of
<PAGE>
Ten (10%) Percent of the outstanding shares of stock of the corporation
having a right to vote at such special meeting, the Secretary of this
corporation shall prepare, sign and mail the notice requisite to such
meeting.
Section 5. Notice of Meetings. Written notice of the time, place and
purpose of every meeting of the shareholders of this corporation shall be served
either personally or by mail not less than Ten (10) nor more than Sixty (60)
Days before said meeting upon each shareholder of record of the corporation
entitled to vote at such meeting. All notices required to be given by any
provision of these By-Laws shall state the authority pursuant to which they are
issued as, "by order of" the `Chairman' or the `President' or `Board of
Directors' or `Shareholders'," as the case may be, and shall bear the written or
printed signature of the Secretary.
Section 6. Waiver of Notice. Notice of the time, place and purpose of any
meeting of the shareholders of this corporation may be waived by telegram,
radiogram, cablegram or other writing either before or after such meeting has
been held.
Section 7. Quorum. Except as provided in the Articles of Incorporation or
by law, at every meeting of the shareholders, the holders of record of a
majority of the issued and outstanding shares of stock of the corporation
entitled to vote at such meeting, whether present in person or represented by
proxy, shall constitute a quorum. If less than a quorum shall be present at any
meeting of shareholders, those holders of record of outstanding shares of stock
of the corporation entitled to vote at such meeting, present in person or
represented by proxy, may adjourn the meeting from time to time without further
notice other than by announcement at the meeting until a quorum shall have been
obtained, at which time any business may be transacted which might have been
transacted at the meeting as first convened, had there been a quorum.
Section 8. Record Date. The Board of Directors shall have power to close
the stock transfer books of the corporation for a period not less than Ten (10)
nor more than Sixty (60) Days preceding the original date fixed for any meeting
of the shareholders or the date for the payment of any dividend or the date for
the allotment of rights or the date when any change or conversion or exchange of
capital stock shall go into effect. In lieu of closing the stock transfer books
as aforesaid, the Board of Directors may fix in advance a date not less than Ten
(10) nor more than Sixty (60) Days preceding the original date fixed for any
meeting of shareholders, or the date for the payment of any dividend, or the
date for the allotment of rights or the date when any change or conversion or
exchange of capital stock shall go into effect, as a record date for the
determination of the shareholders entitled to notice of, and to vote at any such
meeting, or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of any such change,
conversion or exchange of capital stock. In such case shareholders and only such
shareholders as shall be shareholders of record on the date so fixed, shall be
entitled to such notice of, and vote at, such meeting, or to receive payment of
such dividend, or to receive such allotment of rights, or to exercise such
rights, as the case may be, notwithstanding any transfer of any stock on the
books of the corporation or otherwise after any such record date fixed as
aforesaid. Nothing in this Section shall affect the rights of a shareholder and
his transferee or transferror as between themselves.
Section 9. Voting Rights. At all times, each holder of record of common
stock of the corporation shall be entitled to one vote in person or by proxy for
each share of common stock standing in his name on the books of the corporation;
subject, however, to the full effect of the limitations imposed by the fixed
record date for determination of shareholders set forth in Section 8 of this
Article and in the Articles of Incorporation.
Section 10. Vote by Shareholder Corporation. Any other corporation owning
voting shares of this corporation may vote the same by the president of such
corporation, or by proxy appointed by him, unless some other person shall be
appointed to vote such shares by resolution of the Board of Directors of such
shareholder corporation, and provided a certified copy of such resolution shall
be presented to the meeting.
Section 11. Inspectors of Election. Whenever any person entitled to vote
at a meeting of the shareholders of this corporation shall request the
appointment of inspectors, the Chairman of the meeting shall appoint not more
than
2
<PAGE>
Three (3) inspectors who need not be shareholders. If the right of any person to
vote at such meeting shall be challenged, the inspectors shall determine such
right. The inspectors shall receive and count the votes either upon an election
or for the decision of any question, and shall determine the result. Their
certificate of any vote shall be prima facie evidence thereof.
Section 12. Inspection of List of Shareholders and Minutes. Upon Ten (10)
Days' notice, a person who is a shareholder of record of the corporation may
examine, for any proper purpose, in person or by agent or attorney, during usual
business hours, minutes of shareholders meeting and the record of shareholders,
and make extracts therefrom.
Section 13. Proxies. No proxy shall be deemed operative unless and until
the proxy snail be in writing and signed by the stockholder and filed with the
corporation. In the absence of limitation to the contrary contained in the
proxy, the same shall extend to all meetings of the shareholders and shall
remain in force Three (3) Years from its date, and no longer.
Section 14. Mailing. Any notice required by law or by any provision of
these By-Laws to be given to the shareholders, or to the Directors, or to any
officer of the corporation shall be deemed to be sufficient to be given by
depositing the same in a post office box in the United States mail, in a sealed,
postpaid wrapper, clearly addressed to such Director or officer at his last
known address, or to such shareholder, at such shareholder's address appearing
on the stock certificate of the corporation, and such notice shall be deemed to
have been given and duly served at the time of such mailing.
ARTICLE IV
Directors
Section 1. Number, Election and Tenure. The business, property, and
affairs of this corporation shall be managed by a Board of Directors, composed
of not less than one (1) Member nor more than Three (3) Members.
Each Director shall hold office until the next annual meeting of
shareholders and until their successors are elected and qualified; subject,
however, to prior resignation, death, or removal as provided by these By-Laws or
by law. The number of Directors may be changed from time to time by a resolution
adopted by a majority of the members of the Board of Directors, at any meeting
duly called in accordance with these By-Laws. Directors need not be residents of
the State of Michigan, or shareholders in order to qualify as a Director or
Directors. The number of Directors which shall compose the first Board of
Directors shall be One (1).
Section 2. Vacancies and Removal. If the office of any Director shall
become vacant between annual meetings by reason of death or resignation,
retirement, disqualification, removal from office, or otherwise, the remaining
Directors shall constitute the Board of Directors until such vacancy is filled
by the Board of Directors or the shareholders. The remaining Directors may, by a
majority vote, elect a Director to a vacancy created by either the death,
resignation, retirement, disqualification, removal from office, or otherwise, of
any Director or by an increase in the number of Directors, any Director so
elected shall hold office until the next meeting of the shareholders, and until
his successor shall have been duly elected by the shareholders. Any Director may
resign at any time. The Directors shall have the right at any time to remove any
Director of this corporation, with or without cause, at any meeting of the
Directors called for that purpose, by majority vote of the Directors. If a
Director be removed or if the number of Directors be increased, Director(s) to
fill the vacancy or vacancies so created shall be elected in the manner
prescribed by these By-Laws to hold office until the next annual meeting of the
shareholders, and until his or their successors shall have been duly elected.
Section 3. Organizational Meeting. At the place of holding the annual
meeting of shareholders and immediately following the same, the Board of
Directors as constituted upon final adjournment of such annual meeting, shall
convene without notice, for the purpose of electing officers and transacting any
other business properly brought
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before it; provided that the organizational meeting in any year may be held at a
different time and place than that herein provided by consent of a majority of
the Directors of such new Board.
Section 4. Regular Meetings. Regular meetings of the Board of Directors,
other than the organization meeting of the Board, shall be held at such time and
place as the Board of Directors shall, from time to time, determine by
resolution of the Board or by Waiver of Notice and Consent. No notice of regular
meetings of the Board shall be required.
Section 5. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board, or the President, or any two of the
Directors in office at the time of the call, whenever in his or their judgment
it may be necessary, by giving notice, either personally or by mail or telegram,
of the time and place of such meeting. Any action taken at any such meeting
shall not be invalidated for want of notice if such notice shall be waived as
herein provided.
Section 6. Waiver of Notice. Except as provided herein, notice of the
time, place and purpose of any meeting of the Board of Directors of this
corporation may be waived in writing or by telegram, radiogram, cablegram,
telephone call or other similar communication, either before or after the
meeting has been held. Neither the business to be transacted at, nor the purpose
of, a regular or special meeting of the Board of Directors need be specified in
the Notice or Waiver of Notice of the meeting.
Section 7. Quorum and Voting. A majority of the Directors then in office
shall constitute a quorum for the transaction of business. If there shall be
less than a quorum present at any meeting of the Board of Directors, a majority
of the Directors present may adjourn the meeting from time to time without
notice other than announcement at the meeting until a quorum shall be present,
at which time any business may be transacted which might have been transacted at
the meeting as first convened had there been a quorum present. The acts a
majority of the Directors present at any meeting at which a quorum is present
shall be the acts of the Board unless otherwise provided by law, the Articles of
Incorporation or the By-Laws. At all meetings of the Board of Directors, each
Director shall have one (1) Vote.
Section 8. Compensation. Directors shall not receive any stated salary for
their services as Directors, but by resolution of the Board of Directors a fixed
fee and expenses of attendance may be allowed for attendance at each meeting.
Nothing herein contained shall be construed to preclude any Director from
serving the corporation in any other capacity as an officer, agent, attorney or
otherwise, and receiving compensation therefor.
Section 9. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, employee or employees, to enter into any contract or
other instrument on behalf of this corporation, and such authority may be
general or confined to specific instances. When the execution of any contract,
conveyance, or other instrument has been authorized without specification of the
executing officer, the Chairman or President and/or any Vice President of this
corporation may execute in the name and in behalf of this corporation and may
affix the corporate seal thereto.
Section 10. Election of Officers. The Board of Directors of the
corporation shall select a Chairman, President, a Secretary and a Treasurer and
may select one or more Vice Presidents, Assistant Secretaries and Assistant
Treasurers, and such other officers as the Board of Directors may see fit. None
of said officers need be a Director. The Board of Directors shall have power to
appoint such other officer and agents as the Board may deem necessary for the
transaction of the business of the corporation, including the power to appoint
one or more attorneys-in-fact to convey or deal with corporate real estate.
Section 11. Removal of Officers and Agents. Any officers or agents may be
removed by the Board of Directors at any time, with or without cause.
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Section 12. Delegation of Powers. For any reason deemed sufficient by the
Board of Directors, whether occasioned by absence or otherwise, the Board may
delegate all or any of the powers and duties of any officer to any other officer
or Director.
Section 13. Bonds. The Board of Directors may require any officer,
employee or agent to file with the corporation a satisfactory bond conditioned
for the faithful performance of his duties.
Section 14. Presumption of Assent. A Director of the corporation who is
present at a meeting of the Board of Directors at which action on any
corporation matter is taken, shall be presumed to assent to all action taken at
such meeting unless his dissent shall be entered in the minutes of the meeting
or unless he shall file his written dissent to such action with the person
acting as the secretary of the meeting before the adjournment of the meeting.
Such right to dissent shall not apply to a Director who voted in favor of such
action.
Section 15. Additional Powers. In addition to the powers and authorities
by these By-Laws expressly conferred upon it, the Board of Directors may
exercise all such powers of the corporation and do all such lawful acts and
things as are not by statute or by the Articles of Incorporation, or by these
By-Laws, directed or required to be exercised or done by the Shareholders.
ARTICLE V
Committees
Section 1. Committee of Directors. The Board of Directors may, by
resolution or resolutions passed by a majority of the whole Board of Directors,
designate one (1) or more committees, each committee to consist of one (1) or
more of the members of the Board of Directors of the corporation, which, to the
extent provided in said resolution or resolutions, shall have and may exercise
the powers of the Board of Directors and the management of the business and
affairs of the corporation, and may have power to authorize the seal of the
corporation to be affixed to all papers, which may require it, provided that no
committee shall be empowered to borrow money, declare dividends, elect officers,
or to fill vacancies in the Board of Directors or Executive Committee, or do
anything in violation of law or the Articles of Incorporation. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board of Directors. The committee shall keep
regular minutes of the proceedings and report the same to the Board of Directors
when required. Such committee or committees shall exist at the pleasure of the
Board of Directors and the members thereof may be removed at any time, with or
without cause, by vote of a majority of the members of the Board of Directors.
Meetings of such committees may be held without notice of the time, place or
objectives and shall be held at such times and places within or without the
State of Incorporation as each such respective committee from time to time
determines.
Section 2. Transaction of Committee Business. A majority of the members of
each such committee shall be necessary for the transaction of any business and
at any stated or special meeting of each such committee may exercise any or all
of its powers and any business which shall come before any stated or special
meeting may be transacted thereat, provided a majority of the members of each
such committee is present, but in every case the affirmative vote of a majority
of all the members of each such committee shall be necessary to any action by it
taken. All actions of each such committee shall be reported to the Board of
Directors at its meeting next succeeding such action and shall be subject to
revision or alteration by the Board of Directors, provided that no rights of any
third person shall be affected thereby.
Section 3. Power to Appoint Executive Committee. The Board of Directors
shall have power to appoint, by resolution, an Executive Committee composed of
one (1) or more Directors who, to the extent provided in such resolution, shall
have and exercise the authority of the Board of Directors and the management of
the business of the corporation between meetings of the Board; subject, however,
to the statutes of this State and the Articles of Incorporation.
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ARTICLE VI
Action by Unanimous Written Consent
Notwithstanding any other provisions of these By-Laws, if and when the
Directors or stockholders of this corporation shall severally or collectively
consent in writing to any action to be taken by the corporation, such action
shall be as valid a corporate action as though it had been authorized at a
meeting of the Board of Directors or stockholders respectively, whether such
consent is given before or after the action is taken, and said consent in
writing and the action taken thereon shall be evidenced by appropriate
memorandum in the minute books of this corporation; and the execution of said
consent in writing by any Director or stockholder shall constitute a waiver of
the notice requirements set forth in the statutes of the state of incorporation
of this corporation, or by By-Laws of this corporation which might otherwise
invalidate said action.
ARTICLE VII
Officers
Section 1. Chairman of the Board. The Chairman of the Board shall be the
chief executive officer of the corporation and shall preside at all meetings of
the Shareholders and the Board of Directors. He shall have general supervision
of the business, affairs and property of the corporation; subject, however, to
the control of the Board of Directors. He shall be ex officio a member of all
standing committees. Except where, by law, the signature of the President is
required, the Chairman shall possess the same power as the President to sign all
certificates, contracts and other instruments of the corporation, and he may
appoint and discharge agents and employees. He shall have such other powers and
perform such other duties as the Board of Directors may from time to time
prescribe.
Section 2. President. The President shall direct the operations of the
company and be responsible to the Chairman of the Board. He shall, in the
absence of the Chairman of the Board, preside at all meetings of the
shareholders and directors. He shall have and exercise all the powers and
authority of the Chairman of the Board in the event of the chairman's absence or
inability to act or during a vacancy in the office of the chairman of the Board.
He shall also have such other duties and responsibilities as shall be assigned
to him by the Chairman or Board of Directors. The President also may execute
contracts in the name of the company, and appoint and discharge agents and
employees. Except as herein otherwise provided, the President shall perform all
other duties incident to his office.
Section 3. Vice Presidents. The Board of Directors may select one or more
Vice Presidents who, subject to the control of the Chairman or President, shall
have such powers and duties as may be assigned to each of them by the Board of
Directors. Such Vice Presidents as are Directors, in the order of their
seniority, shall perform the duties and exercise the powers of the President
during the absence of disability of the President.
Section 4. Secretary. The Secretary shall be selected by the Board of
Directors. Subject to the control of the Chairman or President, he shall attend
all meetings of the shareholders and of the Board of Directors, and shall
preserve in books of the corporation true minutes of the proceedings at all such
meetings. He shall give all notices required by statute, By-Laws or resolution.
He shall safely keep in his custody the seal of the corporation, and shall have
such additional powers and duties as may be assigned to him by the Board of
Directors.
Section 5. Treasurer. The Treasurer shall be selected by the Board of
Directors. Subject to the control of the Chairman or President, he shall have
care and custody of all corporate funds, securities and evidence of
indebtedness, and shall keep in books belonging to the corporation, full and
accurate accounts of all receipts and disbursements. He shall deposit all
moneys, securities and other valuable effects in the name of the corporation in
such depositories as may be designated for that purpose by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered by
the Board, taking proper vouchers for such disbursements, and shall render to
the meetings of the Board and whenever requested by them, an account of all his
transactions as Treasurer. He shall, in general, perform all duties to
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the office of Treasurer and shall have such additional powers and duties as may
be assigned to him by the Board of Directors.
Section 6. Assistant Secretary. The Board of Directors may select one or
more Assistant Secretaries. Subject to the control of the Chairman or President
and the Secretary, the Assistant Secretary shall have such powers and perform
such duties as may be assigned to him by the Board of Directors. The Assistant
Secretary, in the absence or disability of the Secretary, shall perform the
duties and exercise the powers of the Secretary.
Section 7. Assistant Treasurer. The Board of Directors may select one or
more Assistant Treasurers. Subject to the control of the Chairman or President
and the Treasurer, the Assistant Treasurer shall have such powers and perform
such duties as may be assigned to him by the Board of Director. The Assistant
Treasurer, in the absence or disability of the Treasurer, shall perform the
duties and exercise the powers of the Treasurer.
Section 8. Tenure of Office. The officers of the corporation shall hold
office until the next organization meeting of the Board of Directors and until
their successors are chosen and qualified, except in case of resignation, death
or removal. The Board of Directors may remove any officer at any time with or
without cause by a majority vote of the members of the Board of Directors in
office at the time. A vacancy, however created, in any office may be filled by
election by the Board of Directors.
Section 9. Other Officers. The Board of Directors is authorized to
delegate the duties of any officers to any other officer, and generally to
control the action of the officers and to require the performance of duties in
addition to those mentioned herein.
Section 10. Delegation of Duties. The Board of Directors is authorized to
delegate the duties of any officers to any other officer, and generally to
control the action of the officers and to require the performance of duties in
addition to those mentioned herein.
Section 11. Compensation. The Board of Directors is authorized to
determine or to provide the method of determining the compensation of all
officers. No officer shall be prevented from receiving such compensation by
reason of the fact that he is also a Director.
Section 12. Signing Checks and other Instruments. The Board of Directors
is authorized to determine or provide the method of determining how checks,
notes, bills of exchange and similar instruments shall be signed, countersigned
or endorsed, which method shall be in accordance with all applicable laws and
regulations imposed on the corporation.
Section 13. Returns and Statements. It shall be the duty of each officer
of this corporation to make and file any and all returns, reports, lists, or
statements required by law to be made and filed by him, and to make full report
to the Board of Directors respecting the affairs of the corporation in his
charge whenever he may be requested to do so.
Section 14. Surety Bonds Required for Officers. Each officer shall, upon
the request of the Board of Directors, deliver to the President of the
corporation and shall keep in force, a bond, in form, amount and with a surety
or sureties satisfactory to the Board, conditioned for faithful performance of
the duties of his office and for restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and property of whatever kind in his possession or under his
control belonging to the corporation.
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ARTICLE VIII
Indemnification of Officers, Directors and Others
Section 1. Indemnification - Third Party Action. The corporation shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is or was a director
or officer of the corporation, or is or was serving at the request of the
corporation as a director of officer of another corporation, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner reasonable believed to be
in or not opposed to the best interests of the corporation or its shareholders,
and with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the corporation or its
Shareholders, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 2. Indemnification - Actions in the Right of the Corporation. The
corporation shall indemnification person who was or is a party to or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director of officer of the corporation,
or is or was serving at the request of the corporation as a director or officer
of another corporation, against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation or its
shareholders and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court shall
deem proper.
Section 3. Indemnification - Payments. To the extent that a director or
officer of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Sections 1 or 2 above,
or in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
(1) Any indemnification under Sections 1 or 2 above (unless ordered by a
court) shall be made by the corporation only as authorized in the specific case
upon a determination that indemnification of the director, officer, employee or
agent is proper in the circumstances because he has met the applicable standard
of conduct set forth in Sections 1 and 2 above. Such determination shall be made
in either of the following ways:
(a) By the Board by a majority vote of a quorum consisting of directors
who were not parties to such action, suit or proceeding.
(b) If such quorum is not obtainable, or, even if obtainable, a quorum
of disinterested directors so directs, by independent legal counsel
in a written opinion.
(c) By a majority of the shareholders.
Section 4. Indemnification - Expense Advances. Expenses incurred in
defending a civil or criminal action, suit or proceeding described in Sections 1
or 2 above, may be paid by the corporation in advance of the final disposition
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of such action, suit or proceeding as authorized in the manner provided in
Subsection (1) of Section 3 above, upon receipt of an undertaking by or on
behalf of the director, officer, employee or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
corporation.
Section 5. Indemnification - Validity of Provisions. Nothing contained in
Sections 1 through 4 above shall affect any rights to indemnification to which
persons other than directors and officers may be entitled by contract or
otherwise by law. The indemnification provided in sections 1 through 4 above
continues as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such person.
Section 6. Indemnification - Insurance. A corporation shall have power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the corporation
would have power to indemnify him against such liability under Sections 1
through 5 above.
Section 7. Indemnification - Constituent Corporations. For the purposes of
Section 1 through 6 above, references to the corporation include all constituent
corporations absorbed in a consolidation or merger and the resulting or
surviving corporation, so that a person who is or was a director, officer,
employee or agent of such constituent corporation or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise shall stand in the same position under the provisions of this Section
with respect to the resulting or surviving corporation as he would if he had
served the resulting or surviving corporation in the same capacity.
ARTICLE IX
Capital Stock
Section 1. Certificates. Every shareholder of this corporation shall be
entitled to a certificate of his shares of stock in the corporation signed by
the chairman or President or a Vice President and the Secretary, or the
Treasurer or the Assistant Secretary or the Assistant Treasurer, certifying the
number and class of shares represented by such certificates, which certificates
shall state the terms and provisions of all classes of shares; provided that
where such certificates are signed by a transfer agent or an assistant transfer
agent, or by a registrar, the signature of any such President, Vice President,
Secretary, Assistant Secretary, Treasurer or Assistant Treasurer, may be a
facsimile. In case any officer or officers, who shall have signed or whose
facsimile signature or signatures shall have been used on any such certificate
or certificates, shall cease to be such officer or officers of the corporation,
whether because of death, resignation, or otherwise, before such certificate of
certificates shall have been delivered by the corporation, such certificate or
certificates may nevertheless be adopted by the corporation and delivered as
though the person or persons who signed such certificate or certificates or
whole facsimile signature or signatures shall have been used thereon and not
ceased to be such officer or officers of the corporation.
Section 2. Transfer Agents, Registrars, and Dividend Disbursing Agents.
The Board of Directors may from time to time by resolution appoint One (1) or
more Incorporated Transfer Agents and/or Registrars (who may or may not be the
same corporation) for the shares of the corporation and the Board of Directors
from time to time, by resolution, may appoint a Dividend Disbursing Agent to
disburse any and all dividends authorized by the Board of Directors payable upon
the shares of the corporation.
Section 3. Transfers. Such certificates for shares shall be transferable
in person or by attorney upon the records of the corporation, but except as
hereinafter provided, no transfer of shares shall be entered upon such records
until the previous certificate given for the same shall have been surrendered
and cancelled. If any certificate for shares is lost or
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destroyed, the Board of Directors may authorize the issuance of a new
certificate in place thereof, upon such terms and conditions as it, in its sole
discretion, may deem advisable upon satisfactory proof of such loss or
destruction and the giving of a suitable bond of indemnity or other security
against loss by reason thereof.
Section 4. Protection of Company. The corporation shall have the right to
treat the registered holder of any share as the absolute owner thereof, and
shall not be bound to recognize any equitable or other claim to, or interest in,
such share on the part of any other person, whether or not the corporation shall
have express or other notice thereof save as may be otherwise provided by the
laws of the state of incorporation, and the corporation shall not be liable to
any firm, person or corporation as the result of the exercise of these rights.
Section 5. Regulations. The Board of Directors shall have power and
authority to make such rules and regulations as the Board shall deem expedient
regulating the issue, transfer and registration of certificates for shares of
this corporation.
ARTICLE X
Dividends and Reserves
Section 1. Dividends or other Distribution, and Reserves. The Board of
Directors shall have the power and authority to declare dividends or make other
distributions from any source permitted by law. In determining Surplus, the
judgment of the Board of Directors shall be conclusive in the absence of bad
faith or gross negligence. Dividends or other distributions may be paid in cash,
in its bonds or its property, including the shares or bonds of other
corporations, on its outstanding shares of stock.
Section 2. Reserves. The Board of Directors shall have power and authority
to set apart, out of any funds available for dividends, such reserve or
reserves, for any proper purpose, as the Board, in its discretion, shall
approve; and the Board shall have power and authority to abolish any reserve
created by the Board.
ARTICLE XI
Execution of Instruments
Section 1. Money Instruments. All checks, drafts and orders for payment of
money shall be signed in the name of the corporation, and shall be signed by
such officer(s) or agent(s) and in such manner including the use of a single
facsimile signature as the Board of Directors shall from time to time designate
for that purpose.
Section 2. Other Investments. The Board of Directors shall have power to
designate the officers and agents who have authority to execute any contract,
conveyance or other instrument or document in behalf of this corporation. When
the execution of any contract, conveyance or other instrument or document has
been authorized without specification of the executing officers, the Chairman of
the President may execute the same in the name and behalf of this corporation
and may affix the corporate seal thereto, or any Vice President and the
Secretary, or Assistant Secretary may execute the same in the name and behalf of
this corporation and may affix the corporate seal thereto.
Section 3. Loans. No loan shall be contracted on behalf of the corporation
and no evidence of indebtedness shall be issued in its name in excess of
$100,000.00 unless authorized by a resolution of the Board of Directors. Such
authority may be general or confined to specific instances.
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ARTICLE XII
Corporate Seal
Section 1. The fiscal year of this corporation shall be as determined by
the Board of Directors.
ARTICLE XIV
Amendment of By-Laws
Section 1. Except as otherwise specifically provided by law or by the
Articles of Incorporation, the Board of Directors shall have the power to make
and alter any By-Law or By-Laws, including the fixing and altering of the number
of Directors.
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CERTIFICATE OF INCORPORATION
Stock Corporation
STATE OF CONNECTICUT
Secretary of the State
The undersigned incorporator hereby forms a corporation under the
Stock Corporation Act of the State of Connecticut:
1. The name of the corporation is Northeast Ticketing Company.
2. The nature of the business to be transacted, or the purposes to be
promoted or carried out by the corporation, are as follows:
To engage in computerized ticketing business in the State of
Connecticut or within 100 miles of Hartford, Connecticut.
3. The designation of each class of shares, the authorized number of
shares of each such class, and the par value (if any) of each share thereof,
are as follows:
The corporation has one class of 1,000 authorized shares of
common stock, with a par value of $ 1.00 per share.
4. The terms, limitations and relative rights and preferences of each
class of shares and series thereof (if any), or an express grant of authority
to the board of directors pursuant to Section 33-341, Conn. Gen. Stat., are as
follows:
No shareholder shall be entitled as of right to purchase or subscribe
for any unissued shares of the corporation whether now or hereafter
authorized or whether of a class now existing or of a class hereafter
created, or to purchase or subscribe for any bonds, certificates of
indebtedness, debentures, or other obligations convertible into shares
of the corporation.
5. The minimum amount of stated capital with which the corporation
shall commence business is One Thousand Dollars ($1, 000).
6. Any action that may be taken by shareholders at a meeting of
shareholders may be taken without a meeting of shareholders by consent, in
writing, setting forth the action to be taken, signed by persons (or their
authorized attorneys) holding shares representing at least that portion of the
voting power of shares entitled to vote on such action as would be required to
approve such action at a meeting at which all shareholders entitled to vote
thereon were present; provided, however, that the approval of such action by
consent is not prohibited by, and such consent is obtained in accordance with,
the general corporate law of Connecticut in effect at the time consent is
sought.
7. The personal liability of a director of the corporation to the
corporation or its shareholders for monetary damages for breach of duty as a
director of the corporation shall be limited to the full extent permitted by
the Stock Corporation Act of the State of Connecticut or any other applicable
laws presently or hereafter in effect. Without limiting the effect of the
preceding sentence, no director of the corporation shall be personally liable
to the corporation or any of its shareholders for monetary damages for breach
of duty as a director of the corporation in an amount greater than the
compensation received by the director for serving the corporation during the
year of the violation if such breach did not (i) involve a knowing and culpable
violation of law by the director; (ii) enable the director, or an associate, as
defined in subdivision (3) of Section 33-374d of the Stock Corporation Act of
the State of Connecticut to receive an improper personal economic gain; (iii)
show a lack of good faith and a conscious disregard for the duty of the
director to the corporation under circumstances in which the director was aware
that his conduct or omission created an
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unjustifiable risk of serious injury to the corporation; (iv) constitute a
sustained and unexcused pattern of inattention that amounted to an abdication
of the director's duty to the corporation; or (v) create liability under
Section 33-321 of the Stock Corporation Act of the State of Connecticut.
Dated in Hartford, Connecticut this 15 day of December, 1994.
I hereby declare, under the penalties of false statement, that the
statements made in the foregoing certificate are true.
/s/ Karen A. Molitor
------------------------------
Karen A. Molitor, Incorporator
- 2 -
<PAGE>
BYLAWS OF NORTHEAST TICKETING COMPANY
Adopted by the Incorporator on December 15, 1994.
ARTICLE I
Offices
Section 1.1
The principal office and other offices of the corporation shall be within
or without the State of Connecticut as the Board of Directors may determine or
as the business of the corporation may require.
ARTICLE II
Meetings of Shareholders
Section 2.1 Place of Meeting
Each meeting of the shareholders shall be held at the principal office of
the corporation or at such other place within or without the State of
Connecticut as the Board of Directors or other authority calling the meeting may
designate.
Section 2.2 Annual Meeting
An annual meeting of the shareholders to elect directors and to
transact other business shall be held at 3:00 p.m. on the second Monday in
January, or at such other date and time as the Board of Directors may designate.
Section 2.3 Special Meetings
A special meeting of the shareholders for any proper purpose or purposes
may be called by the President, or Board of Directors at such date and time as
the authority calling the meeting shall designate. The President shall call and
duly notice a special meeting of the shareholders within fifteen (15) days after
receiving a written request made by the holders of at least one-tenth of the
voting power of all shares entitled to vote at the meeting. Failing such, any of
the requesting holders may call and notice such meeting. Business transacted at
any special meeting of shareholders shall be limited to the purposes stated in
the notice of such meeting.
Section 2.4 Notice of Meetings and Waiver
Written notice of each meeting of the shareholders, stating the place,
date, time and purpose or purposes of the meeting shall be mailed, postage
prepaid, to each shareholder of record entitled to vote at each meeting. The
notice shall be mailed to each shareholder at his last known address as it
appears on the stock records of the corporation not less than seven (7) nor more
than fifty (50) days before the meeting.
At an annual meeting of shareholders, any matter relating to the affairs
of the corporation may be brought up for action except the following matters
which may only be acted upon if stated in the meeting notice: (1) adoption,
amendment or repeal of bylaws, and (2) matters, other than election of
directors, for which a vote of shareholders is expressly required by the
Connecticut General Statutes.
Notice of any shareholders' meeting may be waived in writing, either
before or after the meeting, by the person or persons entitled to receive such
notice. Any shareholder who attends a meeting in person without protesting the
lack
<PAGE>
of proper notice prior to the commencement thereof shall be deemed to have
waived notice of such meeting. The Secretary shall cause any written waiver of
notice to be filed with the records of the meeting.
Section 2.5 Quorum
The holders of a majority of the shares entitled to vote at any meeting of
the shareholders shall constitute a quorum for such meeting. If less than a
majority of the shares entitled to vote shall be represented at any meeting, a
majority of shares in fact represented may adjourn the meeting from time to time
without further notice.
Section 2.6 Proxies
At any meeting of the shareholders, any shareholder entitled to vote may
do so in person or by one or more agents authorized by a written, dated proxy
executed by such shareholder and filed with the Secretary of the corporation
before or at the time of the meeting. The corporation shall treat any such proxy
which has been duly executed and filed with the Secretary as effective until it
receives (i) a duly executed written instrument revoking it, (ii) a duly
executed proxy bearing a later date, or (iii) written notice of the death or
incapacity of the person who executed the proxy. No proxy shall be valid for
more than eleven (11) months after its execution unless otherwise provided
therein and in no event, except in the case of an irrevocable proxy, shall a
proxy be valid for more than ten (10) years after its execution.
Section 2.7 Voting List
At least five days before each meeting of the shareholders for which
notice is given, the Secretary of the corporation shall make or cause to be
made, a complete alphabetical list or record of the shareholders entitled to
vote at the meeting, showing the last known address of and the number of shares
held by each. Such list shall be kept available for inspection at the principal
office of the corporation for the five days prior to the meeting and at the
meeting.
Section 2.8 Voting
Except to the extent that voting rights of shares of any class are
increased, limited or denied by the Certificate of Incorporation, each
outstanding share shall be entitled to one vote on each matter submitted to a
vote at a meeting of shareholders.
A majority of votes represented at any meeting of the shareholders and
entitled to vote on an issue shall decide such issue except when a greater vote
is required by law, by the Certificate of Incorporation or by these Bylaws.
Section 2.9 Transaction of Business without Meetings
Any action that may be taken by the shareholders at a meeting of the
shareholders may be taken without a meeting by consent, in writing, setting
forth the action to be taken, signed by shareholders (or their authorized
attorneys) holding shares representing at least that portion of the voting power
of shares entitled to vote on such action as would be required to approve such
action at a meeting at which all shareholders entitled to vote thereon were
present; provided, however, that the approval of such action by consent is not
prohibited by, and such consent is obtained in accordance with, the general
corporate law of Connecticut in effect at the time such consent is sought. The
Secretary shall file such consent or consents with the minutes of meetings of
shareholders.
<PAGE>
ARTICLE III
Board of Directors
Section 3.1 General Authority
The business, property and affairs of the corporation shall be managed by
or under the direction of its Board of Directors.
Section 3.2 Number of Directorship
There shall be not fewer than three (3) nor more than five (5)
directorships; provided that at any time all the issued and outstanding shares
of the stock of the corporation are owned beneficially and of record by fewer
than three (3) shareholders, the number of directorships may be fewer than three
(3) shareholders, the number of directorships may be fewer than three (3) but
not fewer than the number of shareholders. Subject to the above, the actual
number of directorships for each year shall be fixed by resolution of the
shareholders or, in the absence thereof, shall be the number of directors
actually elected by the shareholders; provided that a reduction, by shareholder
resolution, of the number of directorships shall not remove any director
currently in office or shorten his term. It is not required that directors be
Connecticut residents or shareholders of the corporation.
Section 3.3 Election and Term of Office
Directors shall be elected by the shareholders at the first meeting of
shareholders held for such purpose and at each subsequent annual meeting of the
shareholders. Each director shall hold office for the term for which he or she
is elected and until his or her successor has been elected and qualified, except
that a director shall cease to be in office upon his or her death, resignation,
lawful removal or issuance of a court order decreeing that he or she is no
longer a director in office.
Section 3.4 Vacancies
The remaining directors, although less than a quorum, may fill any vacancy
in the Board of Directors other than one caused either by an increase in the
number of directorships or by a removal of a director by the shareholders. A
vacancy filled by the remaining directors shall be filled until the expiration
of the term of the director whose place is vacant or until a successor director
is elected by the shareholders, whichever occurs first.
Section 3.5 Meetings
(a) Regular Meetings. A regular meeting of the Board of directors shall be
held without notice immediately after and at the same place as the annual
meeting of the shareholders unless the Board of Directors shall have designated
another place, date and time for such meeting and all directors have been
notified of such other place, date and time. The Board of Directors may hold
additional regular meetings by a resolution establishing the place, date and
time thereof and may hold such meetings without further notice provided that a
copy of such resolution shall be given to each director at least three (3) days
prior to the holding of any regular meetings scheduled thereby.
(b) Special Meetings. Special meetings of the Board of Directors may be
held at any place, date and time when called by either the President or any two
directors. Notice of the place, date and time thereof shall be given to each
director at least three (3) days prior to such meeting, either orally or in
writing mailed to the director's last known address.
(c) Waiver of Notice. Notice of any meeting of the Board of Directors may
be waived in writing, either before or after the meeting, by the person or
persons entitled to such notice. Any Director who attends a meeting
<PAGE>
of the Board of Directors without protesting the lack of proper notice prior to
the commencement thereof, shall be deemed to have waived notice of such meeting.
Section 3.6 Quorum
A majority of the directors shall constitute a quorum for the transaction
of business at any meeting of the Board of Directors. The act of the majority of
the directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors unless the act of a greater number is required by law
or by these Bylaws. If less than a quorum is present at a meeting, the majority
of the directors present may adjourn the meeting from time to time without
further notice.
Section 3. Transaction of Business without Meetings
If all the directors consent in writing to an action taken or to be taken
by the corporation and the number of such directors constitutes a quorum for the
action, such action shall have the same force and effect as if it had been
authorized at a meeting of the Board of Directors. The Secretary shall file each
such consent with the minutes of the meetings of the Board.
Section 3.8 Participation by Telephone
A director or a member of a committee of the Board of Directors may
participate in a meeting of the Board of Directors or of such committee by means
of conference telephone or similar communications equipment enabling all
directors or members of such Committee, as the case may be, to hear one another,
and participation in a meeting pursuant to this subsection shall constitute
presence in person at such meeting.
Section 3.9 Removal of Directors
Any director may be removed from office at any time, with or without
cause, by the affirmative vote of a majority of the shareholders entitled to
vote for the election of such director.
Section 3.10 Committees
The Board of Directors, by the affirmative vote of a majority of the
entire Board, may appoint an Executive Committee and such other committees
composed of two or more directors as the Board may deem proper. Such committee
shall have and may exercise all such authority of the Board of Directors as
shall be provided in such resolution.
Section 3.11 Committee Meetings
Meetings of the Executive Committee and of other committees of the Board
of Directors may be called by either the President or any of the members of such
committee upon at least one (1) day's written or oral notice of the place, date
and time. The notice need not state the purpose of such meeting. A majority of
the committee members shall constitute a quorum for the transaction of business,
and if a quorum exists, the action of the majority of those present shall at any
meeting shall be the action of the committee. Each committee shall keep minutes
of its proceedings.
Section 3.12 Compensation
The Board of Directors may set the compensation for directors, the
Chairman of the Board, the President, any Vice Presidents, the Secretary and the
Treasurer and may cause directors to be reimbursed for the reasonable expenses
incurred in connection with attendance at meetings of the Board of Directors and
committees thereof.
<PAGE>
ARTICLE IV
Officers
Section 4.1 Election and Term of Office
At its first meeting and following each annual meeting of the
shareholders, the Board of Directors shall elect a President and a Secretary,
and at such meeting or any other meeting may elect a Chairman of the Board, one
or more Vice Presidents, a Treasurer and such other officers and assistant
officers as the Board of Directors may deem proper. The Chairman of the Board,
if any, shall be elected from the members of the Board of Directors. Any two or
more offices may be held by the same person except the offices of President and
Secretary. An officer's term of office shall end upon the election of his or her
successor. Any officer may be removed by the Board of Directors at any time,
with or without cause. A vacancy in any office may be filled by the Board of
Directors for the unexpired portion of the term thereof.
Section 4.2 Chairman of the Board
The Chairman of the Board, if any, shall preside at meetings of the
shareholders and the Board of Directors and shall have such other duties and
powers as may be assigned to him or her by the Board of Directors from time to
time.
Section 4.3 President
The President shall preside at meetings of the shareholders and the Board
of Directors in the absence of the Chairman of the Board, shall be the chief
operating officer of the corporation and shall have all the powers and duties as
from time to time may be assigned to him or her by the Board of Directors.
Section 4.4 The Vice Presidents
Any Vice President may be designated by the Board of Directors to perform
the duties of the President in case of absence, death or inability to act of
such officer. Each Vice President shall have such other and duties as may be
assigned to him or her from time to time by the President or the Board of
Directors.
Section 4.5 The Secretary
The Secretary shall keep the minutes of the meetings of the shareholders
and the Board of Directors, shall be the custodian of the corporate records and
the seal of the corporation, and shall perform all the duties incident to the
office of Secretary and such other duties as may be assigned to him or her from
time to time by the President or the Board of Directors.
Section 4.6 The Treasurer
The Treasurer shall have charge and custody of and be responsible for the
cash, funds, notes and securities of the corporation and for the deposit of all
monies in the name of the corporation in such banks, trust companies, or other
depositories as shall be selected in accordance with the provisions of these
Bylaws, and shall perform all the duties incident to the office of Treasurer and
such other duties as may be assigned to him or her from time to time by the
President or the Board of Directors.
<PAGE>
Section 4.7 Assistant and Other Officers
Any Assistant Secretary or Assistant Treasurer, in the absence of the
Secretary or the Treasurer, respectively, shall perform the duties which such
officers are required to perform, and they and any other junior officers shall
have such other powers and duties as may be assigned to them from time to time
by the President or any designated superior officer.
ARTICLE V
Loans, Checks and Deposits
Section 5.1 Loans
No loans in excess of One Million Dollars ($1,000,000) shall be contracted
on behalf of the corporation and no evidences of indebtedness in excess of One
Million Dollars ($1,000,000) shall be issued in its name unless authorized by a
resolution of the Board of Directors. Such authority may be general or confined
to specific instances.
Section 5.2 Checks, Drafts, etc.
All checks, drafts or orders for the payment of money, notes, bills of
exchange and other evidence of indebtedness issued in the name of the
corporation shall be signed or endorsed with the signatures or facsimile
signatures of such officers or agents of the corporation as the Board of
Directors shall from time to time designate by name or title, or in lieu of any
action by the Board, as the President shall designate.
Section 5.3 Deposits
All funds of the corporation not otherwise employed shall be deposited
from time to time to the credit of the corporation in such banks, trust
companies or other depositories as the Board of Directors may select or, in lieu
of any action by the Board of Directors, as the Treasurer may select.
ARTICLE VI
Stock
Section 6.1 Stock Certificates
Certificates representing shares of stock of the corporation shall be in
such form as the Board of Directors may determine, shall be signed by either the
President or a Vice President and by either the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary and shall bear the seal or
facsimile seal of the corporation; provided that, when any certificate is signed
by a transfer agent, transfer clerk or registrar on behalf of the corporation,
the signatures of such officers may be facsimiles thereof.
Section 6.2 Transfer of Stock
Shares of the common stock of the corporation shall be transferable only
on the books of the corporation by a written assignment signed by the holder of
record thereof, his or her legally constituted attorney or his or her legal
representative upon surrender of the certificate or certificates therefor.
<PAGE>
The Board of Directors may make such additional rules and regulations as
it may deem expedient concerning the issuance, transfer and registration of
certificates for shares of stock of the corporation provided such shall not be
inconsistent with these Bylaws.
Section 6.3 Declaration of Dividends: Dividend Record Date
Dividends may be declared within the discretion of the Board of Directors
as may be permitted by law. Whenever the Board of Directors declares a dividend
payable to shareholders, it shall set a record date for the purpose of
determining the shareholders entitled to such dividend. Upon the close of
business of the record date, the Secretary of the corporation shall establish a
list of all shareholders entitled to such dividend.
Section 6.4 Lost, Stolen or Destroyed Certificates
The Board of Directors may, in case any share certificate is lost, stolen,
destroyed or mutilated, authorize the issuance of a replacement certificate upon
such proof, terms and conditions, including reasonable bonding or
indemnification of the corporation, as the Board shall determine.
ARTICLE VII
Miscellaneous
Section 7.1 Amendments
Except as is otherwise provided by law or in the Certificate of
Incorporation, these Bylaws may be amended or repealed or new bylaws may be
adopted, either by a unanimous vote of the directors, or by the affirmative vote
of the holders of two-thirds (2/3) of the shares of the common stock of the
corporation entitled to vote thereon. Bylaws adopted or amended by the Board of
Directors shall be subject to amendment or repeal by the shareholders. Bylaws
adopted by the shareholders, if the adopting resolution shall so expressly
state, may not be amended or repealed by the Board of Directors. This Section
may not be amended or repealed by the Board of Directors.
Section 7.2 Corporate Seal
The seal of the corporation shall have inscribed thereon the name of the
corporation, the word "Seal" and the word "Connecticut".
Section 7.3 Fiscal Year
The fiscal year of the corporation shall be fixed, and shall be subject to
change, by the Board of Directors.
/s/ Karen A. Molitor
------------------------------
Karen A. Molitor, Incorporator
<PAGE>
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION
OF
PACE CONCERTS, INC.
Pursuant to the provisions of Article 4.04 of the Texas Business Corporation
Act, PACE Concerts, Inc., a Texas corporation (the "Corporation"), hereby adopts
the following Articles of Amendment to its Articles of Incorporation to change
the name of the Corporation.
ARTICLE ONE. The name of the Corporation is PACE Concerts, Inc.
ARTICLE TWO. The following amendment to the Articles of Incorporation was
adopted by the shareholders of the Corporation as of December 19, 1996:
Article I of the Articles of Incorporation is hereby amended to read in
its entirety as follows:
"ARTICLE I
The name of the corporation is Old PCI, Inc."
ARTICLE THREE. The number of shares of Common Stock of the Corporation
outstanding and entitled to vote was 1,000 at the time of the adoption of this
amendment.
ARTICLE FOUR. The holder of all the shares of Common Stock outstanding and
entitled to vote has signed a written consent to the adoption of this amendment.
Dated as of the 20th day of December, 1996.
PACE CONCERTS, INC.
By: /s/ Jeffry B. Lewis
-------------------------------
Jeffry B. Lewis, Secretary
1
<PAGE>
ARTICLES OF INCORPORATION
OF
PACE CONCERTS, INC,
I, the undersigned natural person, over the age of eighteen (18) years and
a citizen of the State of Texas, acting as incorporator of a corporation under
the Texas Business Corporation Act, hereby adopt the following Articles of
Incorporation for such corporation.
ARTICLE ONE.
The name of the corporation is PACE CONCERTS, INC.
ARTICLE TWO.
The Corporation shall have a perpetual existence.
ARTICLE THREE.
The purposes for which the corporation is organized are the transaction
of any and all lawful business for which corporations may be incorporated under
the Texas Business Corporation Act.
ARTICLE FOUR.
The aggregate number of shares which the corporation shall have authority
to issue is 1,000,000 shares of the par value of $0.01 each.
ARTICLE FIVE.
The corporation will not commence business until it has received for the
issuance of its shares consideration of the value of One Thousand Dollars
($1,000.00), consisting of money, labor done, or property actually received.
ARTICLE SIX.
The corporation may acquire its own shares and may reissue such shares as
provided by law.
ARTICLE SEVEN.
The address of its initial registered office is 515 Post Oak Blvd., Suite
300, Houston, Texas 77027 and the name of its initial registered agent at such
address is Jeffry B. Lewis.
ARTICLE EIGHT.
The number of Directors shall be fixed by the bylaws of the corporation,
and until changed by the bylaws, the number of directors constituting the Board
of Directors is 2 and the names and addresses of the persons who are to serve as
Directors until the first annual meeting of the shareholders or until their
successors are elected and qualified is:
Brian E. Becker
515 Post Oak Blvd.
Suite 300
Houston, Texas 77027
2
<PAGE>
Louis Messina
515 Post Oak Blvd.
Suite 300
Houston, Texas 77027
ARTICLE NINE.
The corporation may enter into contracts or transact business with one or more
of its directors or officers, or with any corporation, firm or association in
which any of its directors or officers are stockholders, directors, officers,
members, employees or otherwise interested; and no such contract or other
transaction shall be void or voidable or otherwise affected by reason of such
directorship or office in the corporation or such interest in such other firm,
corporation or association, notwithstanding that a director or directors having
such interest are present and counted in determining the existence of a quorum
at a meeting of the Board of Directors of the corporation, and notwithstanding
that the vote of such director or directors shall have been necessary to
authorize, approve, ratify, or otherwise obligate the corporation upon such
contract or transaction, provided that the fact of such interest shall be
disclosed or otherwise known to the Board of Directors, or a majority thereof at
the meeting of the Board of Directors which acts upon or in reference to such
contract or transaction; nor shall any director or officer be liable to account
to the corporation for any profits realized by or from or through any such
transaction or contract of the corporation by reason of such directorship,
office or interest, except as otherwise provided in the bylaws of the
corporation.
ARTICLE TEN.
The name and address of the incorporator is:
Michael F. Rogers
333 Clay Avenue, Suite 800
Houston, Texas 77002
ARTICLE ELEVEN.
The corporation reserves the right to amend, alter, change or repeal any
provision contained in these Articles of Incorporation in the manner now or
hereafter prescribed by statute, and all rights conferred upon shareholders
herein are granted subject to this reservation.
ARTICLE TWELVE.
To fullest extent permitted by applicable law, no director of the
corporation shall be liable to the corporation or any of its shareholders for
monetary damages for an act or omission in the director's capacity as a
director. To the fullest extent permitted by applicable law, the corporation
shall indemnify and advance expenses, prior to the final disposition of the
proceeding, to a director, and may, upon the determination of the Board of
Directors, indemnify and advance expenses, prior to the final disposition of the
proceeding, to an officer, employee, agent or person who is or was serving at
the request of the corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent or similar functionary of another foreign
or domestic corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise, who was, is or is threatened to be
made a defendant or respondent in any proceeding.
IN WITNESS WHEREOF, I have signed this instrument of this 30th day of
September, 1991.
Incorporator:
/s/ Michael F. Rogers
------------------------------
Michael F. Rogers
3
<PAGE>
ARTICLES OF INCORPORATION
OF
PACE AEP ACQUISITION, INC.
I, the undersigned natural person, over the age of eighteen (18) years,
acting as incorporator of a corporation under the Texas Business Corporation
Act, hereby adopt the following Articles of Incorporation for such corporation.
ARTICLE ONE.
The name of the corporation is PACE AEP ACQUISITION, INC.
ARTICLE TWO.
The period of its duration is perpetual.
ARTICLE THREE.
The purpose for which the corporation is organized is the transaction of
any and all lawful business for which corporations may be incorporated under the
Texas Business Corporation Act.
ARTICLE FOUR.
The aggregate number of shares which the corporation shall have authority
to issue, and which shall comprise its total capitalization, is One Hundred
Thousand (100,000) shares of common stock having a par value of $0.01 per share.
ARTICLE FIVE.
The corporation will not commence business until it has received for the
issuance of its shares consideration of the value of at least ONE THOUSAND AND
NO/100 DOLLARS ($1,000.00), consisting of money, labor done or property actually
received.
ARTICLE SIX.
The street address of the initial registered office of the corporation is
515 Post Oak Blvd., Suite 300, Houston, Texas 77027, and the name of its initial
registered agent at such address is Jeffry B. Lewis.
ARTICLE SEVEN.
The number of directors shall be fixed in the manner provided in the
bylaws of the corporation. The number of directors constituting the initial
Board of Directors shall be one (1) and the name and address of such person
constituting the initial Board of Directors, who is to serve as director until
the first annual meeting of the shareholders or until his successors are elected
and qualify, is:
Allen J. Becker 515 Post Oak Blvd., Suite 300
Houston, Texas 77027
In the event the initial director (or all of the initial members of the Board of
Directors, if more than one) dies, becomes legally incapacitated or resigns
prior to the issuance of any shares, the incorporator may appoint a substitute
initial director or directors to serve as set forth above.
<PAGE>
ARTICLE EIGHT.
To the fullest extent permitted by applicable law, including to the
fullest extent permitted by Article 1302-7.06 of the Texas Miscellaneous
Corporation Laws Act, any successor to or modification of such article, or any
other applicable statute or judicial or administrative decision, no director of
the corporation shall be liable to the corporation or any of its shareholders
for monetary damages for an act or omission in the director's capacity as a
director. To the fullest extent permitted by applicable law, including to the
fullest extent permitted by Article 2.02-1 of the Texas Business Corporation
Act, any successor to or modification of such article, or any other applicable
statute or judicial or administrative decision, the corporation shall indemnify,
reimburse and advance expenses prior to the final disposition of the proceeding
to, each director, former director or officer of the Corporation who was, is or
is threatened to be made a defendant or respondent in any proceeding, and shall
indemnify, reimburse and advance expenses prior to the final disposition of the
proceeding to, each director, former director, officer, employee, agent, or
person who is or was serving at the request of the corporation as a director,
officer, partner, venturer, proprietor, trustee, employee, agent or similar
functionary of another foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other enterprise,
who was, is or is threatened to be made a defendant or respondent in any
proceeding. Any repeal or amendment of this Article shall be prospective only,
and shall not adversely affect any right of any person existing at the time of
such repeal or amendment.
ARTICLE NINE.
The name and address of the incorporator is:
Michael F. Rogers
Gardere Wynne Sewell & Riggs, L.L.P.
333 Clay Avenue, 8th Floor
Houston, Texas 77002-4086
ARTICLE TEN.
The right of cumulative voting of shares is hereby expressly prohibited.
ARTICLE ELEVEN.
No shareholder of the corporation shall have any preemptive right to
acquire additional, unissued or treasury shares of the corporation, or
securities of the corporation convertible into or carrying a right, option or
warrant to subscribe to or acquire shares, whether now or hereafter authorized,
which may at any time be issued, sold or offered for sale by the corporation.
IN WITNESS WHEREOF, I have signed these Articles of Incorporation on this
2nd day of February, 1998.
Incorporator:
/s/ Michael F. Rogers
--------------------------------------
MICHAEL F. ROGERS
-2-
<PAGE>
BYLAWS
OF
PACE AEP ACQUISITION, INC.
ARTICLE I.
OFFICES
Section 1. Registered Office. Until the Board of Directors otherwise
determines, the registered office of the Corporation required by the Texas
Non-Profit Corporation Act to be maintained in the State of Texas, shall be the
principal place of business of the Corporation, but such registered office may
be changed from time to time by the Board of Directors in the manner provided by
law and need not be identical to the principal place of business of the
Corporation.
Section 2. Other Offices. The Corporation may also have offices at such
other places or locations, within or without the State of Texas, as the Board of
Directors may, by resolution, from time to time determine or the business of the
Corporation may require.
ARTICLE II.
BOARD OF DIRECTORS
Section 1. Board of Directors. The business, property and affairs of the
Corporation shall be managed and controlled by the Board of Directors and,
subject to such restrictions, if any, as may be imposed by law, the Articles of
Incorporation or by these Bylaws, the Board of Directors may, and are fully
authorized to, exercise all the powers of the Corporation. Directors need not be
residents of the State of Texas.
In addition to the powers and authority expressly conferred on the Board
of Directors by law, the Articles of Incorporation or any amendment thereof, by
these Bylaws or any amendment thereof, the Board may exercise all the powers of
the Corporation and do all such lawful acts and things as may be done by the
Corporation under the laws of the State of Texas, the Articles of Incorporation,
and these Bylaws.
Section 2. Number of Directors. The number of directors shall be one (1)
but the number of directors may be increased or decreased (provided such
decrease does not shorten the term of any incumbent director) from time to time
by amendment to the Bylaws of the Corporation.
Section 3. Term. Except as otherwise provided in Section 5 of this Article
III, each director shall hold office until removed in accordance with the
provisions of these Bylaws or he resigns. Each director shall qualify by
accepting his election to office either expressly or by acting as a director.
Section 4. Resignation. Any director or officer of the Corporation may
resign at any time as provided in Section 4 of Article VII of these Bylaws.
Section 5. Vacancy and Increase. Any vacancy or vacancies occurring in the
Board of Directors may be filled by the affirmative vote of a majority of the
remaining directors though less than a quorum of the Board of Directors.
Section 6. Removal. Subject to Art. 2.15 of the Texas Non-Profit
Corporation Act, the directors of the Corporation, and each of them, may be
removed from office from time to time and at any time with or without cause, by
a vote of the majority of the Board of Directors, including the Director whose
position is in dispute, at any meeting thereof at which a quorum is present; and
any vacancy or vacancies in the Board resulting therefrom may be filled by the
remaining directors, though less than a quorum.
<PAGE>
Section 7. Offices and Records. The directors may have or establish one or
more offices of the Corporation and keep the books and records of the
Corporation, except as otherwise provided by statute, at the principal place of
business of the Corporation. The Corporation shall maintain current true and
accurate financial records with full and correct entries made with respect to
all financial transactions of the Corporation, including all income and
expenditures, in accordance with generally accepted accounting practices. Based
on these records, the Board of Directors shall annually prepare or approve a
report of the financial activity of the Corporation for the preceding year. The
report shall conform to accounting standards as promulgated by the American
Institute of Certified Public Accountants and shall include a statement of
support, revenue, and expenses and changes in fund balances, a statement of
functional expenses, and balance sheets for all funds. All records of the
Corporation shall be kept for at least three years after the closing of each
fiscal year and shall be available to the public for inspection and copying
during normal business hours.
Section 8. Meeting of Directors. Meetings of the Board of Directors,
regular or special, may be held either within or without the State of Texas.
Section 9. Election of Officers. At the first meeting of the Board of
Directors in each year at which a quorum shall be present, held next after the
annual meeting of shareholders, the Board of Directors shall proceed to the
election of the officers of the Corporation.
Section 10. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such times and places as shall be designated or determined from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required.
Section 11. Special Meetings. Special meetings of the Board of Directors
shall be held whenever and wherever called or provided to be held by the
President or by any two of the directors for the time being in office if the
number of directors shall be five (5) or more or by any one of the directors for
the time being in office if the number of directors shall be four (4) or less,
and at the place, day and hour determined by the officer or the director(s)
calling or providing for the holding of the particular meeting, in each
instance, and such determination may be conclusively evidenced in a call, waiver
of notice or other communication signed by such officer or such director(s).
Section 12. Notice. The Secretary or an Assistant Secretary shall, but in
the event of the absence of the Secretary or an Assistant Secretary or the
failure, inability, refusal or omission on the part of the Secretary or an
Assistant Secretary so to do, any other officer of the Corporation may, give
notice of each special meeting, and of the place, day and hour of the particular
meeting, in person or by mail, or by telephone, telegraph or other means of
communication, at least three (3) days before the meeting to each director. The
attendance of a director at any meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express purpose
of objecting to the transaction of any business on the ground that the meeting
is not lawfully called or convened.
Section 13. Business to be Transacted. Neither the business to be
transacted at, nor the purpose or purposes of, any regular or special meeting of
the Board of Directors need be specified in the notice or any waiver or waivers
of notice of such meeting. Any and all business of any nature or character
whatsoever may be transacted and action may be taken thereon at any such first
meeting or at any other meeting, regular or special, of the Board of Directors.
At any meeting at which every director shall be present, even though without any
notice, any business may be transacted.
Section 14. Quorum - Adjournment if Quorum is not Present. A majority of
the number of directors fixed by these Bylaws shall constitute a quorum for the
transaction of any and all business, but if at any meeting, regular or special,
or any first meeting, of the Board of Directors there be less than a quorum
present, a majority of those present, or if only one director be present, then
such director, may adjourn the meeting from time to time without notice, other
than by announcement at the meeting, until a quorum shall be present at the
meeting. A majority of the directors present at any meeting of the Board of
Directors, or if only one director be present, then such director may adjourn
any meeting of the Board from time to time without notice, other than by
announcement at such meeting of the time and place at which the meeting will
reconvene, until the transaction of any and all business submitted or proposed
to be submitted to such meeting or any adjournment or adjournments thereof shall
have been completed. The act of a majority of the
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<PAGE>
directors present at any meeting of the Board of Directors at which a quorum is
in attendance shall constitute the act of the Board of Directors unless the act
of a greater number is required by the Articles of Incorporation or by these
Bylaws.
Section 15. Order of Business. At all meetings of the Board of Directors
business shall be transacted in such order as from time to time the Board of
Directors may determine. At all meetings of the Board of Directors the President
shall preside and in the absence of the President, a Vice President shall
preside, but if neither the President nor a Vice-President shall be present or
if neither shall for any reason preside at any meeting of the Board, then a
Chairman shall be chosen by the Board from among the directors present and such
Chairman so chosen shall preside at the meeting.
The Secretary of the Corporation, or in his absence, an Assistant
Secretary, shall act as Secretary of the meetings of the Board of Directors, but
in the absence of the Secretary and an Assistant Secretary, or if for any reason
neither acts as Secretary thereof, the presiding officer shall appoint any
person of his choice to act, and such person shall act as Secretary of the
meeting.
Section 16. Presumption of Assent. A director of the Corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action unless his
dissent shall be entered in the minutes of the meeting or unless he shall file
his written dissent to such action with the person acting as the Secretary of
the meeting before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
Section 17. Compensation. Directors, as such, shall not be entitled to
receive any fixed sums or stated salaries for their services, but, by resolution
of the Board, a fixed sum and expenses of attendance, if any, may be provided
and allowed by the Board of Directors for attendance at meetings of the Board,
whether regular or special, or first meetings; provided that nothing herein
contained shall, or shall be construed so as to, preclude any director from
serving the Corporation in any other capacity or receiving compensation
therefor. Members of special or standing committees may be allowed a fixed sum
and expenses of attendance, if any, at committee meetings.
Section 18. Consent and Telephone Meetings. Any action required or
permitted to be taken at any annual or special meeting of Directors of the
Corporation may be taken without a meeting, without prior notice, and without a
vote, if the consent in writing, setting forth the action so taken, shall be
signed by all of the Directors of the Corporation. Pursuant to proper notice or
waiver thereof, any regular or special meeting of the Directors may be held by
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in
such a meeting shall constitute presence in person at such meeting and waiver of
notice of such meeting, except where a person participates in the meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
ARTICLE III.
OFFICERS' AND DIRECTORS' SERVICES,
CONFLICTING INTERESTS AND INDEMNIFICATION
Section 1. Services. No director and, unless otherwise determined by the
Board of Directors, no officer of this Corporation shall be required to devote
his time or any particular portion of his time or render services or any
particular services exclusively to this Corporation. Each and every director
and, unless otherwise determined by the Board of Directors, each and every
officer of this Corporation shall be entirely free to engage, participate and
invest in any and all such businesses, enterprises and activities, either
similar or dissimilar to the business, enterprise and activities of this
Corporation, without breach of duty to this Corporation and without
accountability or liability to this Corporation in any event or under any
circumstances or conditions.
Each and every director and, unless otherwise determined by the Board of
Directors, each and every officer of this Corporation shall, respectively, be
entirely free to act for, serve and represent any other corporation or
corporations, entity or entities, and any person or persons, in any capacity or
capacities, and be or become a director or officer, or both,
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of any other corporation or corporations, entity or entities, irrespective of
whether or not the business, purposes, enterprises and activities, or any of
them, thereof be similar or dissimilar to the business, purposes, enterprises
and activities, or any of them, of this Corporation, without breach of duty to
this Corporation or to its shareholders and without accountability or liability
of any character or description to this Corporation or to its shareholders in
any event or under any circumstances or conditions.
Section 2. Directors' and Officers' Interests in Contracts. No contract or
other transaction between the Corporation and one or more of its directors or
officers, or between the Corporation and any firm or partnership of which one or
more of its directors or officers are members or employees or in which they are
otherwise interested, or between the Corporation and any corporation or
association or other entity in which one or more of this Corporation's directors
or officers are shareholders, members, directors, officers or employees or in
which they are otherwise interested, shall be void or voidable by reason of or
as a result of such connection with or holding an office or offices as director
or officer or as directors or officers of this Corporation or such interest in
or in connection with such other firm, partnership, corporation, association or
other entity, notwithstanding the presence of such director or directors,
officer or officers, at the meeting of the Board of Directors of this
Corporation which acts upon or in reference to any such contract or other
transaction, and notwithstanding his or their participation in such action, if
(i) the fact of such interest shall be disclosed or known to the Board of
Directors and the Board of Directors shall authorize, approve or ratify such
contract or other transaction by vote of a majority of the directors present,
such interested director or directors to be counted in calculating the majority
necessary to carry such vote, or if (ii) the fact of such interest shall be
disclosed or known to the shareholders and the shareholders either by written
consent or by vote of holders of record of a majority of all the outstanding
shares of stock entitled to vote shall authorize, approve or ratify such
contract or other transaction; nor shall any director or officer be responsible
to, or liable to account to, this Corporation for any profits realized by or
from or through any such contract or other transaction of the Corporation so
authorized, ratified or approved, by reason of such interest or his being or
having been a director or officer, or both, of this Corporation. Nothing herein
contained shall create responsibility or liability in or in connection with any
such event or events or prevent the authorization, ratification or approval of
such contracts or other transactions in any other manner permitted by law or by
statute. This section shall not be construed to invalidate any contract or other
transaction which would otherwise be valid under the common or statutory law
applicable thereto.
Section 3. Non-Liability of Directors and Officers in Certain Cases. No
director or officer or member of the Executive Committee shall be liable for his
acts as such if he is excused from liability under any present or future
provision or provisions of the Texas Business Corporation Act; and, in addition,
to the fullest extent now or hereafter permitted by the Texas Business
Corporation Act, each officer or director or member of the Executive Committee
shall in the discharge of any duty imposed or power conferred upon him by the
Corporation, be fully protected if, in the exercise of ordinary care, he acted
in good faith and in reliance upon the written opinion of an attorney for the
Corporation, the books of account or reports made to the Corporation by any of
its officials or by an independent certified public accountant or by an
appraiser selected with reasonable care by the Board of Directors or by such
Committee, or in reliance upon other records of the Corporation.
Section 4. Indemnification of Directors and Officers. Each director and
each officer or former director or officer of this Corporation shall be, and
hereby is, indemnified by the Corporation against liabilities imposed upon him
and expenses actually and reasonably incurred by him (including attorneys' fees)
in connection with any claim made against him, or the defense of any action,
suit or proceeding to or in which he is or may be made a party by reason of his
being or having been such director or officer, including such sums as
independent counsel selected by the Board of Directors shall deem reasonable
payment made in settlement of any such claim, action, suit or proceeding
primarily with a view of avoiding expenses of litigation; provided, however,
that no director or officer or former director or officer shall be indemnified
with respect to matters as to which he shall be adjudged in such action, suit or
proceeding to be liable for negligence or misconduct with respect to any matters
in which indemnity is sought. Such right of indemnification shall be in addition
to, but shall not exclude, any other rights to which directors or officers may
be entitled.
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ARTICLE IV.
EXECUTIVE AND OTHER COMMITTEES
The Board of Directors, by resolution or resolutions adopted by a majority
of the number of directors fixed by these Bylaws, may designate two or more
directors to constitute an Executive Committee, or such other committees as the
Board of Directors may provide and in like manner may discontinue any such
committee. The members of such committees shall, respectively, hold office only
during the pleasure of the Board of Directors. Such committees, to the extent
provided in such resolution or resolutions, shall have and may exercise all of
the authority of the Board of Directors in the business and affairs of the
Corporation during intervals between meetings of the Board of Directors except
where action of the Board of Directors is specified by the Texas Non-Profit
Corporation Act or other applicable law and may authorize the seal of the
Corporation to be affixed to all instruments, papers and documents which may
require it; except that such committees shall have no power (a) to elect
directors, (b) to alter, amend or repeal these Bylaws or any resolution or
resolutions of the Board of Directors designating any such committee, or (c) to
appoint or replace any member of any such committee. Regular meetings of any
such committee shall be held at such time and place as the committee may
determine, and special meetings may be called at any time by an officer of the
Corporation or by any member of the committee. No notice of any meeting of any
committee shall be required, and a majority of the members of the committee
shall constitute a quorum for the transaction of business. Minutes of all such
meetings shall be kept and presented to the Board of Directors upon request. The
designation of any such committee and the delegation thereto of authority shall
not operate to relieve the Board of Directors, or any member thereof, of any
responsibility imposed upon it or him by law.
ARTICLE V.
OFFICERS
Section 1. Principal Officers. The officers of the Corporation shall be
chosen by the Board of Directors. The officers shall be a President, a
Secretary, a Treasurer, one or more Vice-Presidents, and such number of
Assistant Secretaries and Assistant Treasurers, as the Board may from time to
time determine or elect. Any person may hold two or more offices at the same
time, except the offices of President and Secretary.
Section 2. Additional Officers. The Board may appoint such other officers,
agents and factors as it shall deem necessary.
Section 3. Terms of Officers. Each officer shall hold his office until his
successor shall have been duly elected and qualified or until his death or until
he shall resign or shall have been removed in the manner hereinafter provided.
Section 4. Removal. Any officer or agent or member of the Executive
Committee elected or appointed by the Board of Directors may be removed by the
Board of Directors whenever in its judgment the best interests of the
Corporation will be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed. Election or
appointment of an officer or agent shall not of itself create contract rights.
Section 5. Vacancies. A vacancy in the office of any officer may be filled
by the vote of a majority of the directors then in office for the unexpired
portion of the term for the person with respect to which a vacancy has occurred,
in each instance.
Section 6. Powers and Duties of Officers. The officers so chosen shall
perform the duties and exercise the powers expressly conferred or provided for
in these Bylaws, as well as the usual duties and powers incident to such office,
respectively, and such other duties and powers as may be assigned to them from
time to time by the Board of Directors or by the President.
Section 7. Chairman of the Board. The Board of Directors may select from
among its members a Chairman of the Board who may, if so selected, preside at
all meetings of the Board of Directors and approve the minutes of all
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proceedings thereat, and he shall be available to consult with and advise the
officers of the Corporation with respect to the conduct of the business and
affairs of the Corporation.
Section 8. The President. The President, subject to the control of the
Board of Directors, shall be the chief executive officer of the Corporation and
shall have general executive charge, management and control of the affairs,
properties and operations of the Corporation in the ordinary course of its
business, with all such duties, powers and authority with respect to such
affairs, properties and operations as may be reasonably incident to such
responsibilities; he may appoint or employ and discharge employees and agents of
the Corporation and fix their compensation; he may make, execute, acknowledge
and deliver any and all contracts, leases, deeds, conveyances, assignments,
bills of sale, transfers, releases and receipts, any and all mortgages, deeds of
trust, indentures, pledges, chattel mortgages, liens and hypothecations, and any
and all bonds, debentures and notes, and any and all other obligations and
encumbrances and any and all other instruments, documents and papers of any kind
or character for and on behalf of and in the name of the Corporation, and, with
the Secretary or an Assistant Secretary, he may sign all certificates for shares
of the capital stock of the Corporation; he shall do and perform such other
duties and have such additional authority and powers as from time to time may be
assigned to or conferred upon him by the Board of Directors.
Section 9. Vice-Presidents. In the absence of the President or in the
event of his disability or refusal to act, the Vice-President (or in the event
there be more than one Vice-President, the Vice-Presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the 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 him by the President or by the Board of Directors of the
Corporation. Any action taken by a Vice-President in the performance of the
duties of the President shall be conclusive evidence of the absence or inability
to act of the President at the time such action was taken.
Section 10. Treasurer. The Treasurer shall have custody of all the funds
and securities of the Corporation which come into his hands. When necessary or
proper, he may endorse on behalf of the Corporation, for collection, checks,
notes and other obligations and shall deposit the same to the credit of the
Corporation in such bank or banks or depositories as shall be selected or
designated by or in the manner prescribed by the Board of Directors. He may sign
all receipts and vouchers for payments made to the Corporation, either alone or
jointly with such officer as may be designated by the Board of Directors.
Whenever required by the Board of Directors he shall render a statement of his
cash account. He shall enter or cause to be entered, punctually and regularly,
on the books of the Corporation to be kept by him or under his supervision or
direction for that purpose, full and accurate accounts of all moneys received
and paid out by, for or on account of the Corporation. He shall at all
reasonable times exhibit his books and accounts and other financial records to
any director of the Corporation during business hours. He shall have such other
powers and duties as may be conferred upon or assigned to him by the Board of
Directors. The Treasurer shall perform all acts incident to the position of
Treasurer subject always to the control of the Board of Directors. He shall, if
required by the Board of Directors, give such bond for the faithful discharge of
his duties in such form and amounts as the Board of Directors may require.
Section 11. Assistant Treasurers. Each Assistant Treasurer shall have the
usual powers and duties pertaining to his office, together with such other
powers and duties as may be conferred upon or assigned to him by the Board of
Directors. The Assistant Treasurers shall have and exercise the powers of the
Treasurer during that officers absence or inability to act.
Section 12. Secretary. The Secretary (1) shall keep the minutes of all
meetings of the Board of Directors and the minutes of all meetings of the
shareholders, in books provided for that purpose, (2) shall attend to the giving
and serving of all notices, (3) may sign with the President or a Vice-President
in the name of the Corporation and/or attest the signatures of either to, all
contracts, conveyances, transfers, assignments, encumbrances, authorizations and
all other instruments, documents and papers, of any and every description
whatsoever, of or executed for or on behalf of the Corporation and affix the
seal of the Corporation thereto, (4) may sign with the President or a Vice
President all certificates for shares of the capital stock of the Corporation
and affix the corporate seal of the Corporation thereto, (5) shall have charge
of and maintain and keep or supervise and control the maintenance and keeping of
the stock certificate books, transfer books and stock ledgers and such other
books and papers as the Board of Directors may authorize, direct
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or provide for, all of which shall at all reasonable times be open to the
inspection of any director, upon request, at the office of the Corporation
during business hours, (6) shall in general perform all the duties incident to
the office of Secretary, and (7) shall have such other powers and duties as may
be conferred upon or assigned to him by the Board of Directors; subject always
to the control of the Board of Directors.
Section 13. Assistant Secretaries. Each Assistant Secretary shall have the
usual powers and duties pertaining to his office, together with such other
powers and duties as may be conferred upon or assigned to him by the Board of
Directors or the Secretary. The Assistant Secretaries shall have and exercise
the powers of the Secretary during that officer's absence or inability to act.
ARTICLE VI.
BOOKS, DOCUMENTS AND ACCOUNTS
The Board of Directors shall have power to keep the books, documents and
accounts of the Corporation outside of the State of Texas, except that a record
of its shareholders, giving the names and addresses of all shareholders and the
number and class of shares held by each shall be kept at its registered office
or principal place of business, or at the office of its transfer agent or
registrar and the original or a duplicate stock ledger shall at all times be
kept within the State of Texas.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 1. Fiscal Year. The fiscal year of the Corporation shall be such
as the Board of Directors shall, by resolution, provide or establish or such as
the President shall determine subject to approval of the Board.
Section 2. Seal. The seal of the Corporation shall be in such form as the
Board of Directors shall prescribe, and may be used by causing It or a facsimile
thereof to be impressed, affixed, printed, or reproduced in any other manner.
Section 3. Notice and Waiver of Notice. Whenever any notice whatever is
required to be given to any shareholder or director under the provisions of the
Texas Business Corporation Act or under the provisions of these Bylaws or the
Articles of Incorporation of this Corporation, said notice shall be deemed to be
sufficient if given by depositing the same in a post office box in a sealed
post-paid wrapper addressed to the person or persons entitled thereto at their
post office addresses, respectively, as same appear on the books or other
records of the Corporation, and such notice shall be deemed to have been given
and received if given in any other manner or by any other means authorized or
provided for elsewhere in these Bylaws. A waiver or waivers of notice, signed by
the person or persons entitled to such notice, whether before or after the time
stated therein, shall be equivalent to the giving of such notice.
Section 4. Resignations. Any director or officer may resign at any time.
Each such resignation shall be made in writing and shall take effect at the time
specified therein, or, if no time be specified, at the time of its receipt by
either the Board of Directors or the President or the Secretary. The acceptance
of a resignation shall not be necessary to make it effective, unless expressly
so provided in the resignation.
Section 5. Securities of Other Corporations. The President or any
Vice-President of the Corporation shall have power and authority to transfer,
endorse for transfer, vote, consent or take any other action with respect to any
securities of another issuer which may be held or owned by the Corporation and
to make, execute and deliver any waiver, proxy or consent with respect to any
such securities.
Section 6. Depositories. Funds of the Corporation not otherwise employed
shall be deposited from time to time in such banks or other depositories as
either the Board of Directors or the President or the Treasurer may select or
approve.
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Section 7. Signing of Checks, Notes, etc. In addition to and cumulative
of, but in nowise limiting or restricting, any other provision or provisions of
these Bylaws which confer any authority relative thereto, all checks, drafts and
other orders for the payment of money or moneys out of funds of the Corporation
and all notes and other evidences of indebtedness of the Corporation shall be
signed on behalf of the Corporation, in such manner, and by such officer or
officers, person or persons, as shall from time to time be determined or
designated by or pursuant to resolution or resolutions of the Board of
Directors; provided, however, that if, when, after and as authorized or provided
for by resolution or resolutions of the Board of Directors the signature or
signatures of any such officer or officers, person or persons, may be facsimile
or facsimiles, engraved or printed, and shall have the same force and effect and
bind the Corporation as though such officer or officers, person or persons, had
signed the same personally, and, in event of the death, disability, removal or
resignation of any such officer or officers, person or persons, if the Board of
Directors shall so determine or provide, as though and with the same effect as
if such death, disability, removal or resignation had not occurred.
Section 8. Persons. Wherever used or appearing in these Bylaws, pronouns
of the masculine gender shall include the persons of the female sex as well as
the neuter gender and the singular shall include the plural wherever
appropriate.
Section 9. Laws and Statutes. Wherever used or appearing in these Bylaws,
the words "law" or "laws" or "statute" or "statutes," respectively, shall mean
and refer to laws and statutes, or a law or a statute, of the State of Texas, to
the extent only that such is or are expressly applicable, except where otherwise
expressly stated or the context requires that such words not be so limited.
Section 10. Headings. The headings of the Articles and Sections of these
Bylaws are inserted for convenience of reference only and shall not be deemed to
be a part thereof or used in the construction or interpretation thereof.
ARTICLE VIII.
AMENDMENTS
These Bylaws may, from time to time, be added to, changed, altered,
amended or repealed or new Bylaws may be made or adopted by the affirmative vote
of at least a majority of the Directors present at any annual or regular or
special meeting of the Board of Directors.
WITNESS the signature of its duly authorized secretary effective this 9th
day of February, 1998.
/s/Jeffrey B. Lewis
---------------------------
JEFFREY B. LEWIS, Secretary
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ARTICLES OF INCORPORATION
OF
PACE AMPHITHEATRES, INC.
The undersigned natural person of the age of eighteen years or more,
acting as incorporator of the corporation under the Texas Business Corporation
Act, does hereby adopt the following Articles of Incorporation for such
corporation:
ARTICLE ONE
The name of the corporation is FACE AMPHITHEATRES, INC.
ARTICLE TWO
The period of its duration is perpetual.
ARTICLE THREE
The purpose or purposes for which the corporation is organized is to
engage in the transaction of any or all lawful business for which corporations
may be incorporated under the Texas Business Corporation Act.
ARTICLE FOUR
The aggregate number of shares which the corporation shall have authority
to issue is 100,000 shares of $0.01 par value common stock.
ARTICLE FIVE
The corporation will not commence business until it has received for
issuance of its shares consideration of the value of one Thousand Dollars
($1,000.00) consisting of money, labor done or property actually received which
sum is not less than One Thousand Dollars ($1,000.00).
ARTICLE SIX
The street address of its initial registered office is 4543 Post Oak
Place, Suite 200, Houston, TX 77027, and the name of its initial registered
agent at such address is Allen Becker.
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ARTICLE SEVEN
The number of directors of the corporation may be fixed by the by-laws.
The directors constituting the initial board of directors who are to serve as
directors until successor or successors are elected and qualified are:
Sidney Shlenker 4543 Post Oak Place
Suite 200
Houston, TX 77027
Allen Becker same as above
ARTICLE EIGHT
The name and address of the incorporator is:
Delanie M. Lundgren 1212 Guadalupe, Ste 102
Austin, TX 78701
IN WITNESS WHEREOF, I have hereunto set my hand, this the 15th day of
January, 1988.
/s/ Delanie M. Lundgren
-----------------------
DELANIE M. LUNDGREN
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BYLAWS OF
PACE AMPHITHEATRES, INC.
(the "Company")
ARTICLE I
Offices
Section 1. 1. Offices. The principal business office of the Company
shall be at 4543 Post Oak Place Drive, Suite 200, Houston, Texas. The Company
may have such other business offices within or without the State of Texas as the
board of directors may from time to time establish.
ARTICLE II
Capital Stock
Section 2.1. Certificate Representing Shares. Shares of the capital
stock of the Company shall be represented by certificates in such form or forms
as the board of directors may approve, provided that such form or forms shall
comply with all applicable requirements of law or of the articles of
incorporation. Such certificates shall be signed by the president or a vice
president, and by the secretary or an assistant secretary, of the Company and
may be sealed with the seal of the Company or imprinted or otherwise marked with
a facsimile of such seal. The signature of any or all of the foregoing officers
of the Company may be represented by a printed facsimile thereof. If any officer
whose signature, or a facsimile thereof, shall have been set upon any
certificate shall cease, prior to the issuance of such certificate, to occupy
the position in right of which his signature, or facsimile thereof, was so set
upon such certificate, the Company may nevertheless adopt and issue such
certificate with the same effect as if such officer occupied such position as of
such date of issuance; and issuance and delivery of such certificate by the
Company shall constitute adoption thereof by the Company. The certificates shall
be consecutively numbered, and as they are issued, a record of such issuance
shall be entered in the books of the Company.
Section 2.2. Stock Certificate Book and Shareholders of Record. The
secretary of the Company shall maintain, among other records, a stock
certificate book, the stubs in which shall set forth the names and addresses of
the holders of all issued shares of the Company, the number of shares held by
each, the number of certificates representing such shares, the date of issue of
such certificates, and whether or not such shares originate from original issue
or from transfer. The names and addresses of shareholders as they appear on the
stock certificate book shall be the official list of shareholders of record of
the Company for all purposes. The Company shall be entitled to treat the holder
of record of any shares as the owner thereof for all purposes, and shall not be
bound to recognize any equitable or other claim to, or interest in, such shares
or any rights deriving from such shares on the part of any other person,
including, but without limitation, a purchaser, assignee, or transferee, unless
and until such other person becomes the holder of record of such shares, whether
or not the Company shall have either actual or constructive notice of the
interest of such other person.
Section 2.3. Shareholder's Change of Name or Address. Each
shareholder shall promptly notify the secretary of the Company, at its principal
business office, by written notice sent by certified mail, return receipt
requested, of any change in name or address of the shareholder from that as it
appears upon the official list of shareholders of record of the Company. The
secretary of the Company shall then enter such changes into all affected Company
records, including, but not limited to, the official list of shareholders of
record.
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Section 2.4. Transfer of Stock. The shares represented by any
certificate of the Company are transferable only on the books of the Company by
the holder of record thereof or by his duly authorized attorney or legal
representative upon surrender of the certificate for such shares, properly
endorsed or assigned. The board of directors may make such rules and regulations
concerning the issue, transfer, registration and replacement of certificates as
they deem desirable or necessary.
Section 2.5. Transfer Agent and Registrar. The board of directors
may appoint one or more transfer agents or registrars of the shares, or both,
and may require all share certificates to bear the signature of a transfer agent
or registrar, or both.
Section 2.6. Lost, Stolen or Destroyed Certificates. The Company may
issue a new certificate for shares of stock in the place of any certificate
theretofore issued and alleged to have been lost, stolen or destroyed, but the
board of directors may require the owner of such lost, stolen or destroyed
certificate, or his legal representative, to furnish an affidavit as to such
loss, theft, or destruction and to give a bond in such form and substance, and
with such surety or sureties, with fixed or open penalty, as the board may
direct, in order to indemnify the Company and its transfer agents and
registrars, if any, against any claim that may be made on account of the alleged
loss, theft or destruction of such certificate.
Section 2.7. Fractional Shares. Only whole shares of the stock of
the Company shall be issued. In case of any transaction by reason of which a
fractional share might otherwise be issued, the directors, or the officers in
the exercise of powers delegated by the directors, shall take such measures
consistent with the law, the articles of incorporation and these bylaws,
including (for example, and not by way of limitation) the payment in cash of an
amount equal to the fair value of any fractional share, as they may deem proper
to avoid the issuance of any fractional share.
ARTICLE III
The Shareholders
Section 3.1. Annual Meeting. Commencing in the calendar year 1988,
the annual meeting of the shareholders, for the election of directors and for
the transaction of such other business as may properly come before the meeting,
shall be held at the principal office of the Company, at 10:00 a.m. local time,
on March 15 of each year unless such day is a legal holiday, in which case such
meeting shall be held at such hour on the first day thereafter which is not a
legal holiday; or at such other place and time as may be designated by the board
of directors. Failure to hold any annual meeting or meetings shall not work a
forfeiture or dissolution of the Company.
Section 3.2. Special Meetings. Except as otherwise provided by law
or by the articles of incorporation, special meetings of the shareholders may be
called by the chairman of the board of directors, the president, any one of the
directors, or the holders of at least ten percent of all the shares having
voting power at such meeting, and shall be held at the principal office of the
Company or at such other place, and at such time, as may be stated in the notice
calling such meeting. The record date for determining shareholders entitled to
call a special meeting is the date on which the first shareholder signs the
notice of that meeting. Business transacted at any special meeting of
shareholders shall be limited to the purpose stated in the notice of such
meeting given in accordance with the terms of section 3.3.
Section 3.3. Notice of Meetings - Waiver. Written or printed notice
of each meeting of shareholders, stating the place, day and hour of any meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten nor more than
sixty days before the date of such meeting, either personally or by mail, by or
at the direction of the president, the secretary, or the persons calling the
meeting, to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail addressed to the shareholder at his address as it appears on the
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stock transfer books of the Company, with postage thereon prepaid. Such further
or earlier notice shall be given as may be required by law. The signing by a
shareholder of a written waiver of notice of any shareholders' meeting, whether
before or after the time stated in such waiver, shall be equivalent to the
receiving by him of all notice required to be given with respect to such
meeting. Attendance by a shareholder, whether in person or by proxy, at a
shareholders' meeting shall constitute a waiver of notice of such meeting. No
notice of any adjournment of any meeting shall be required.
Section 3.4. Discharge of Notice Requirement. The notice provided
for in Section 3.3. of these bylaws is not required to be given to any
shareholder if either notice of two consecutive annual meetings and all notices
of meetings held during the period between such annual meetings or all payments,
provided that there were at least two such payments and all payments were sent
by first class mail, of distributions or interest on securities during a
twelve-month period have been mailed to such shareholder, addressed to the
address as shown on the records of the Company and have been returned
undeliverable. Any action or meeting taken or held without notice to such a
shareholder shall have the same force and effect as if the notice had been duly
given and any articles or document filed with the Secretary of State pursuant to
action taken may state that notice was duly given to all persons to whom notice
was required to be given. The requirement that notice be given to such a
shareholder shall be reinstated if such shareholder delivers to the Company a
written notice setting forth his then current address.
Section 3.5. Closing of Transfer Books and Fixing Record Date. For
the purpose of determining shareholders entitled to notice of, or to vote at,
any meeting of shareholders or any adjournment thereof, or shareholders entitled
to receive a distribution by the Company (other than a distribution involving a
purchase or redemption by the Company of any of its own shares) or a share
dividend, or in order to make a determination of shareholders for any other
proper purpose, the board of directors of the Company may provide that the stock
transfer books shall be closed for a stated period in no case to exceed sixty
days. If the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least the ten days immediately preceding such
meeting. In lieu of closing the stock transfer books, the board of directors may
fix in advance a date as the record date for any such determination of
shareholders, such date in no case to be more than sixty days nor, in the case
of a meeting of shareholders, less than ten days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
If the stock transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive a distribution (other than a
distribution involving a purchase or redemption by the corporation of any of its
own shares) or a share dividend, the date on which notice of the meeting is
mailed or the date on which the resolution of the board of directors declaring
such distribution or share dividend is adopted, as the case may be, shall be the
record date of such determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made, as
provided in this section, such determination shall apply to any adjournment
thereof except where the determination has been made through the closing of
stock transfer books and the stated period of closing has expired.
Section 3.6. Distributions and Share Ownership as of Record Date.
Distributions of cash, tangible property or intangible property made or payable
by the Company, whether in liquidation or from earnings, profits, assets or
capital, including all distributions that were payable but not paid to the
registered owner of the shares, his heirs, successors or assigns but that are
now being held in suspense by the Company or that were paid or delivered by it
into an escrow account or to a trustee or custodian, shall be payable by the
Company, escrow agent, trustee or custodian to the person registered as owner of
the shares in the Company's stock transfer books as of the record date
determined for that distribution, as provided in Section 3.5. of these bylaws,
his heirs, successors or assigns. The person in whose name the shares are or
were registered in the stock transfer books of the Company as of the record date
shall be deemed to be the owner of the shares registered in his name at that
time.
Section 3.7. Voting List. The officer or agent having charge of the
stock transfer books for shares of the Company shall make, at least ten days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, arranged in
alphabetical order, with the address of and the number of shares held by each,
which list, for a period of ten days prior to such meeting, shall be kept on
file
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at the registered office of the Company and shall be subject to lawful
inspection by any shareholder at any time during the usual business hours. Such
list shall also be produced and kept open at the time and place of the meeting
and shall be subject to the inspection of any shareholder during the whole time
of the meeting. Failure to comply with this section shall not affect the
validity of any action taken at such meeting.
Section 3.8. Quorum and Officers. Except as otherwise provided by
law, by the articles of incorporation or by these bylaws, the holders of a
majority of the shares entitled to vote and represented in person or by proxy
shall constitute a quorum at a meeting of shareholders, but the shareholders
present at any meeting, although representing less than a quorum, may from time
to time adjourn the meeting to some other day and hour, without notice other
than announcement at the meeting. The shareholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum. The vote of the
holders of a majority of the shares entitled to vote and thus represented at a
meeting at which a quorum is present shall be the act of the shareholders'
meeting, unless the vote of a greater number is required by law. The chairman of
the board shall preside at, and the secretary shall keep the records of, each
meeting of shareholders, and in the absence of either such officer, his duties
shall be performed by any other officer authorized by these bylaws or any person
appointed by resolution duly adopted at the meeting.
Section 3.9. Voting at Meetings. Each outstanding share shall be
entitled to one vote on each matter submitted to a vote at a meeting of
shareholders except to the extent that the articles of incorporation or the laws
of the State of Texas provide otherwise.
Section 3.10. Proxies. A shareholder may vote either in person or by
proxy executed in writing by the shareholder, or by his duly authorized
attorney-in-fact. No proxy shall be valid after eleven (11) months from the date
of its execution unless otherwise provided in the proxy. A proxy shall be
revocable unless the proxy form conspicuously states that the proxy is
irrevocable and the proxy is coupled with an interest.
Section 3.11. Balloting. Upon the demand of any shareholder, the
vote upon any question before the meeting shall be by ballot. At each meeting
inspectors of election may be appointed by the presiding officer of the meeting,
and at any meeting for the election of directors, inspectors shall be so
appointed on the demand of any shareholder present or represented by proxy and
entitled to vote in much election of directors. No director or candidate for the
office of director shall be appointed as such inspector. The number of votes
cast by shares in the election of directors shall be recorded in the minutes.
Section 3.12. Voting Rights, Prohibition of Cumulative Voting for
Directors. Each outstanding share of common stock shall be entitled to one (1)
vote upon each matter submitted to a vote at a meeting of shareholders. No
shareholder shall have the right to cumulate his votes for the election of
directors- but each share shall be entitled to one vote in the election of each
director. In the case of any contested election for any directorship, the
candidate for such position receiving a plurality of the votes cast in such
election shall be elected to such position. Section 3.13. Record of
Shareholders. The Company shall keep at its principal business office, or the
office of its transfer agents or registrars, a record of its shareholders,
giving the names and addresses of all shareholders and the number and class of
the shares held by each.
Section 3.14. Action Without Meetinq. Any action required by statute
to be taken at a meeting of the shareholders of the Company, or any action which
may be taken at a meeting of the shareholders, may be taken without a meeting if
a consent in writing, setting forth the action so taken, shall be signed by all
of the shareholders entitled to vote with respect to the subject matter thereof
and such consent shall have the same force and effect as a unanimous vote of the
shareholders. Any such signed consent, or a signed copy thereof, shall be placed
in the minute book of the Company.
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ARTICLE IV
The Board of Directors
Section 4.1. Number, Qualifications and Term. The business and
affairs of the Company shall be managed and controlled by the board of
directors; and, subject to any restrictions imposed by law, by the articles of
incorporation, or by these bylaws, the board of directors may exercise all the
powers of the Company. The board of directors shall consist of two members. Such
number may be increased or decreased by amendment of these bylaws, provided that
no decrease shall effect a shortening of the term of any incumbent director.
Directors need not be residents of Texas or shareholders of the Company absent
provision to the contrary in the articles of incorporation or laws of the State
of Texas. Except as otherwise provided in section 4.3. of these bylaws, each
position on the board of directors shall be filled by election at the annual
meeting of shareholders. Any such election shall be conducted in accordance with
section 3.9. of these bylaws. Each person elected a director shall hold office,
unless removed in accordance with section 4.2. of these bylaws, until the next
annual meeting of the shareholders and until his successor shall have been duly
elected and qualified.
Section 4.2. Removal. Any director or the entire board of directors
may be removed from office, with or without cause, at any special meeting of
shareholders by the affirmative vote of a majority of the shares of the
shareholders present in person or by proxy and entitled to vote at such meeting,
if notice of the intention to act upon such matter shall have been given in the
notice calling such meeting. If the notice calling such meeting shall have so
provided, the vacancy caused by such removal may be filled at such meeting by
the affirmative vote of a majority in number of the shares of the shareholders
present in person or by proxy and entitled to vote.
Section 4.3. Vacancies. Any vacancy occurring in the board of
directors may be filled by the vote of a majority of the remaining directors,
even if such remaining directors comprise less than a quorum of the board of
directors. A director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office. Any position on the board of
directors to be filled by reason of an increase in the number of directors shall
be filled by the vote of a majority of the directors, election at an annual
meeting of the shareholders, or at a special meeting of shareholders duly called
for such purpose, provided that the board of directors may fill no more than two
such directorships during the period between any two successive annual meetings
of shareholders.
Section 4.4. Regular Meetings. Regular meetings of the board of
directors shall be held immediately following each annual meeting of
shareholders, at the place of such meeting, and at such other times and places
as the board of directors shall determine. No notice of any kind of such regular
meetings needs to be given to either old or new members of the board of
directors.
Section 4.5. Special Meetings. Special meetings of the board of
directors shall be held at any time by call of the chairman of the board, the
president, the secretary or any two directors. The secretary shall give notice
of each special meeting to each director at his usual business or residence
address by mail at least three days before the meeting or in person, by
telegraph or telephone at least one day before such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
with postage thereon prepaid. Except as otherwise provided by law, by the
articles of incorporation, or by these bylaws, such notice need not specify the
business to be transacted at, or the purpose of, such meeting. No notice shall
be necessary for any adjournment of any meeting. The signing of a written waiver
of notice of any special meeting by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be equivalent to
the receiving of such notice. Attendance of a director at a meeting shall also
constitute a waiver of notice of such meeting, except where a director attends a
meeting for the ex press and announced purpose of objecting to the transaction
of any business on the ground that the meeting is not lawfully called or
convened.
Section 4.6. Quorum. A majority of the number of directors fixed by
these bylaws shall constitute a quorum for the transaction of business and the
act of not less than a majority of such quorum of the
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directors shall be required in order to constitute the act of the board of
directors, unless the act of a greater number shall be required by law, by the
articles of incorporation or by these bylaws.
Section 4.7. Procedure at Meetings. The board of directors, at each
regular meeting held immediately following the annual meeting of shareholders,
shall appoint one of their number as chairman of the board of directors. Failure
to designate a chairman of the board shall be deemed a designation of the
president to perform the functions of the chairman of the board. The chairman of
the board shall preside at meetings of the board. In his absence at any meeting,
any officer authorized by these bylaws or any member of the board selected by
the members present shall preside. The secretary of the Company shall act as
secretary at all meetings of the board. In his absence, the presiding officer of
the meeting may designate any person to act as secretary. At meetings of the
board of directors, the business shall be transacted in such order as the board
may from time to time determine.
Section 4.8. Presumption of Assent. Any director of the Company who
is present at a meeting of the board of directors at which action on any
corporate matter is taken shall be presumed to have assented to the action taken
unless his dissent shall be entered in the minutes of the meeting or unless he
shall file his written dissent to such action with the person acting as the
secretary of the meeting before the adjournment thereof or shall forward such
dissent by registered mail to the secretary of the Company immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
Section 4.9. Action Without a Meeting. Any action required by
statute to be taken at a meeting of the directors of the Company, or which may
be taken at such meeting, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by each director
entitled to vote at such meeting, and such consent shall have the same force and
effect as a unanimous vote of the directors. Such signed consent, or a signed
copy thereof, shall be placed in the minute book of the Company. Any such
consent may be executed in one or more counterparts, each of which shall be
deemed an original and all of which taken together shall be one consent.
Section 4.10. Compensation. Directors as such shall not receive any
stated salary for their service, but by resolution of the board of directors, a
fixed sum and reimbursement for reasonable expenses of attendance, if any, may
be allowed for attendance at each regular or special meeting of the board of
directors or at any meeting of the executive committee of directors, if any, to
which such director may be elected in accordance with the following section
4.11; but nothing herein shall preclude any director from serving the Company in
any other capacity or receiving compensation therefor.
Section 4.11. Executive Committee. The board of directors, by
resolution adopted by a majority of the full board of directors, may designate
an executive committee, which committee shall consist of two or more of the
directors of the Company. Such executive committee may exercise such authority
of the board of directors in the business and affairs of the Company as the
board of directors may, by resolution duly adopted, delegate to it except as
prohibited by law. The designation of such committee and the delegation thereto
of authority shall not operate to relieve the board of directors, or any member
thereof, of any responsibility imposed upon it or him by law. Any member of the
executive committee may be removed by the board of directors. The executive
committee shall keep regular minutes of its proceedings and report the same to
the board of directors when required. The minutes of the proceedings of the
executive committee shall be placed in the minute book of the Company. Members
of the executive committee shall receive such compensation as may be approved by
the board of directors and will be reimbursed for reasonable expenses actually
incurred by reason of membership on the executive committee.
Section 4.12. Other Committees. The board of directors, by
resolution adopted by a majority of the full board of directors, may appoint one
or more committees of two or more directors each. Such committees may exercise
such authority of the board of directors in the business and affairs of the
Company as the board of directors may, by resolution duly adopted, delegate,
except as prohibited by law. The designation of any committee and the delegation
thereto of authority shall not operate to relieve the board of directors, or any
member thereof, of any responsibility imposed on it or him by law. Any member of
a committee may be removed at any time by the board of
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directors. Members of any such committees shall receive such compensation as may
be approved by the board of directors and will be reimbursed for reasonable
expenses actually incurred by reason of membership on a committee.
ARTICLE V
Officers
Section 5.1. Number. The officers of the Company shall consist of a
president, one or more vice presidents, a secretary and a treasurer; and, in
addition, such other officers and assistant officers and agents as may be deemed
necessary or desirable. Officers shall be elected or appointed by the board of
directors. Any two or more offices may be held by the same person. In its
discretion, the board of directors may leave unfilled any office except those of
president, treasurer and secretary.
Section 5.2. Election; Term; Qualification. Officers shall be chosen
by the board of directors annually at the meeting of the board of directors
following the annual shareholders' meeting. Each officer shall hold office until
his successor has been chosen and qualified, or until his death, resignation, or
removal.
Section 5.3. Removal. Any officer or agent elected or appointed by
the board of directors may be removed by the board of directors whenever in its
judgment the best interests of the Company will be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. Election or appointment of an officer or agent shall not of itself
create any contract rights.
Section 5.4. Vacancies. Any vacancy in any office for any cause may
be filled by the board of directors at any meeting.
Section 5.5. Duties. The officers of the Company shall have such
powers and duties, except as modified by the board of directors, as generally
pertain to their offices, respectively, as well as such powers and duties as
from time to time shall be conferred by the board of directors and by these
bylaws.
Section 5.6. The Chairman of the Board. The chairman of the board
shall be the chief executive officer of the Company and shall have general
direction of the affairs of the Company and general supervision over its several
officers, subject however, to the control of the board of directors. He shall at
each annual meeting, and from time to time, report to the shareholders and to
the board of directors all matters within his knowledge which, in his opinion,
the interest of the Company may require to be brought to the notice of such
persons. He may sign, with the secretary or an assistant secretary, any or all
certificates of stock of the Company. He shall preside at all meetings of the
shareholders, shall sign and execute in the name of the Company (i) all
contracts or other instruments authorized by the board of directors, and (ii)
all contracts or instruments in the usual and regular course of business,
pursuant to section 6.2 hereof, except in cases when the signing and execution
thereof shall be expressly delegated or permitted by the board or by these
bylaws to some other officer or agent of the Company; and, in general, shall
perform all duties incident to the office of the chairman of the board, and such
other duties as from time to time may be assigned to him by the board of
directors or as are prescribed by these bylaws.
Section 5.7. The President. The president shall be the chief
operating officer of the Company. The president shall perform all duties
incident to the office of the president and chief operating officer and such
other duties as may from time to time be assigned to him by the board of
directors or the chairman of the board. The president may sign with the
secretary or an assistant secretary certificates of stock of the Company. At the
request of the chairman of the board or in his absence or disability, the
president shall perform the duties of the chairman of the board, subject to all
restrictions upon such office. Any action taken by the president in the
performance of the duties of the chairman of the board shall be conclusive
evidence of the absence or inability to act of the chairman of the board at the
time such action was taken.
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Section 5.8. The Vice Presidents. At the request of the president,
or in his absence or disability, the vice presidents, in the order of their
election, shall perform the duties of the president, and, when so acting, shall
have all the powers of, and be subject to all restrictions upon, the president.
Any action taken by a vice president in the performance of the duties of the
president shall be conclusive evidence of the absence or inability to act of the
president at the time such action was taken. The vice presidents shall perform
such other duties as may, from time to time, be assigned to them by the board of
directors or the president. A vice president may sign, with the secretary or an
assistant secretary, certificates of stock of the Company.
Section 5.9. Secretary. The secretary shall keep the minutes of all
meetings of the shareholders, of the board of directors, and of the executive
committee, if any, of the board of directors, in one or more books provided for
such purpose and shall see that all notices are duly given in accordance with
the provisions of these bylaws or as required by law. He shall be custodian of
the corporate records and of the seal (if any) of the Company and see, if the
Company has a seal, that the seal of the Company is affixed to all documents the
execution of which on behalf of the Company under its seal is duly authorized;
shall have general charge of the stock certificate books, transfer books and
stock ledgers, and such other books and papers of the Company as the board of
directors may direct, all of which shall; at all reasonable times, be open to
the examination of any director, upon application at the office of the Company
during business hours; and in general shall perform all duties and exercise all
powers incident to the office of the secretary and such other duties and powers
as the board of directors or the president from time to time may assign to or
confer on him.
Section 5.10. Treasurer. The treasurer shall keep complete and
accurate records of account, showing at all times the financial condition of the
Company. He shall be the legal custodian of all money, notes, securities and
other valuables which may from time to time come into the possession of the
Company. He shall furnish at meetings of the board of directors, or whenever
requested, a statement of the financial condition of the Company, and shall
perform such other duties as these bylaws ay require or the board of directors
may prescribe.
Section 5.11. Assistant Officers. Any assistant secretary or
assistant treasurer appointed by the board of directors shall have power to
perform, and shall perform, all duties incumbent upon the secretary or treasurer
of the Company, respectively, subject to the general direction of such
respective officers, and shall perform such other duties as these bylaws may
require or the board of directors may prescribe.
Section 5.12. Salaries. The salaries or other compensation of the
officers shall be fixed from time to time by the board of directors. No officer
shall be prevented from receiving such salary or other compensation by reason of
the fact that he is also a director of the Company.
Section 5.13. Bonds of Officers. The board of directors may secure
the fidelity of any officer of the Company by bond or otherwise, on such terms
and with such surety or sureties, conditions, penalties or securities as shall
be deemed proper by the board of directors.
Section 5.14. Delegation. The board of directors may delegate
temporarily the powers and duties of any officer of the Company, in case of his
absence or for any other reason, to any other officer, and may authorize the
delegation by any officer of the Company of any of his powers and duties to any
agent or employee, subject to the general supervision of such officer.
ARTICLE VI
Miscellaneous
Section 6.1. Distributions. Distributions, subject to the provisions
of the articles of incorporation and to limitations set forth by law, if any,
may be declared by the board of directors at any regular or special meeting.
Distributions may be in the form of a dividend, including a share dividend, a
purchase or redemption by the Company, directly or indirectly, of any of its own
shares or a payment by the Company in liquidation of all or a portion of its
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assets. A distribution may not be made if it would render the Company insolvent
or if it exceeds the surplus of the Company, except as otherwise allowed by law.
Subject to limitations upon the authority of the board of directors
imposed by law or by the articles of incorporation, the declaration of and
provision for payment of dividends shall be at the discretion of the board of
directors.
Section 6.2. Contracts. The president shall have the power and
authority to execute, on behalf of the Company, contracts or instruments in the
usual and regular course of business, and in addition the board of directors may
authorize any officer or officers, agent or agents, of the Company to enter into
any contract or execute and deliver any instrument in the name of and on behalf
of the Company, and such authority may be general or confined to specific
instances. Unless so authorized by the board of directors or by these bylaws, no
officer, agent or employee shall have any power or authority to bind the Company
by any contract or engagement, or to pledge its credit or to render it
pecuniarily liable for any purpose or in any amount.
Section 6.3. Checks, Drafts, etc. All checks, drafts, or other
orders for the payment of money, notes, or other evidences of indebtedness
issued in the name of the Company shall be signed by such officers or employees
of the Company as shall from time to time be authorized pursuant to these bylaws
or by resolution of the board of directors.
Section 6.4. Depositories. All funds of the Company shall be
deposited from time to time to the credit of the Company in such banks or other
depositories as the board of directors may from time to time designate, and upon
such terms and conditions as shall be fixed by the board of directors. The board
of directors may from time to time authorize the opening and maintaining within
any such depository as it may designate, of general and special accounts, and
may make such special rules and regulations with respect thereto as it may deem
expedient.
Section 6.5. Endorsement of Stock Certificates. Subject to the
specific directions of the board of directors, any share or shares of stock
issued by any corporation and owned by the Company, including reacquired shares
of the Company's own stock, may, for sale or transfer, be endorsed in the name
of the Company by the president or any vice president; and such endorsement may
be attested or witnessed by the secretary or any assistant secretary either with
or without the affixing thereto of the corporate seal.
Section 6.6. Corporate Seal. The corporate seal, if any, shall be in
such form as the board of directors shall approve, and such seal, or a facsimile
thereof, may be impressed on, affixed to, or in any manner reproduced upon,
instruments of any nature required to be executed by officers of the Company.
Section 6. 7. Fiscal Year. The fiscal year of the Company shall
begin and end on such dates as the board of directors at any time shall
determine.
Section 6.8. Books and Records. The Company shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders and board of directors, and shall keep at its registered
office or principal place of business, or at the office of its transfer agent or
registrar, a record of its shareholders, giving the names and addresses of all
shareholders and the number and class of the shares held by each.
Section 6.9. Resignations. Any director or officer may resign at any
time. Such resignations shall be made in writing and shall take effect at the
time specified therein, or, if no time is specified, at the time of its receipt
by the president or secretary. The acceptance of a resignation shall not be
necessary to make it effective, unless expressly so provided in the resignation.
Section 6.10. Indemnification of Officers and Directors. The Company
shall indemnify to the full extent allowed by law any person who was or is a
party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, any appeal in such an action, suit, or
proceeding, and any inquiry or investigation that could lead to such an action,
suit or proceeding by reason of the fact that he is or was a director, officer,
employee, or agent of the Company, or is or was
9
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serving at the request of the Company as a director, officer, employee, partner,
venturer, proprietor, trustee, agent, or similar functionary of another
corporation, partnership, joint venture, trust, other enterprise, or employee
benefit plan. This indemnification shall, to the extent permitted by law, be
against judgments, penalties, fines, settlements and reasonable expenses
actually incurred in connection with such investigation, action, suit or
proceeding but if the person is found liable to the Company or is found liable
on the basis that personal benefit was improperly received by the person,
indemnification shall be limited to reasonable expenses actually incurred by the
person in connection with the proceeding and shall not be made in respect of any
proceedings in which the person shall have been found liable for willful or
intentional misconduct in the performance of his duty to the Company. A person
acting in his official capacity as a director of the Company must have conducted
himself in good faith and reasonably believed his actions to have been in the
Company's best interests. A person acting in any other capacity must have
conducted himself in good faith and reasonably have believed his actions were
not opposed to the Company's best interests. In the case of any criminal
proceeding, indemnification requires that the person indemnified have had no
reasonable cause to believe his conduct was unlawful.
Any indemnification under this section shall be made by the Company
only as authorized in the specific case upon a determination that
indemnification is proper because the director, officer, employee or agent has
met the applicable standard of conduct as set forth in the laws of the State of
Texas, and the amount of indemnification (before or after termination of the
proceedings) shall be made only as set forth in the laws of the State of Texas.
Such determinations shall be made as set forth in the laws of the State of
Texas.
Any indemnification of or advance of expenses to any officer,
director, employee, or agent of the Company shall be reported in writing to the
shareholders with or before the notice or waiver of notice of the next
shareholder's meeting or with or before the next submission to shareholders of a
consent to action without a meeting pursuant to section 3.14 hereof and, in any
case, within the twelve-month period immediately following the date of the
indemnification or advance.
Any right of indemnification granted by this section 6.10 shall be
in addition to and not in lieu of any other such right to which any director or
officer of the Company may at any time be entitled under the law of the State of
Texas; and if any indemnification which would otherwise be granted by this
section 6.10 shall be disallowed by any competent court or administrative body
as illegal or against public policy, then any director or officer with respect
to whom such adjudication was made, and any other officer or director, shall be
indemnified to the fullest extent permitted by law and public policy, it being
the express intent of the Company to indemnify its officers, directors,
employees and agents to the fullest extent possible in conformity with these
bylaws, all applicable laws, and public policy.
Section 6.11. Indemnity Insurance. The Company may purchase and
maintain insurance or another arrangement on behalf of a person who is or was a
director, officer, employee or agent of the Company or who is or, was serving at
the request of the Company as a director, officer, partner, venturer,
proprietor, trustee, employee, agent or similar functionary of another foreign
or domestic corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan, or other enterprise, against any liability asserted
against him and incurred by him in such capacity or arising out of his status as
such a person, whether or not the Company would have the power to indemnify him
against that liability under these bylaws or the laws of the State of Texas. If
the insurance or other arrangement is with a person or entity that is not
regularly engaged in the business of providing insurafice coverage, the
insurance or arrangement may provide for payment of a liability with respect to
which the Company would not have the power to indemnify the person only if the
shareholders of the Company approve the inclusion of coverage for the additional
liability.
Section 6.12. Meetings by Telephone. Subject to the provisions
required or permitted by these bylaws or the laws of the State of Texas for
notice of meetings, shareholders, members of the board of directors, or members
of any committee designated by the board of directors may participate in and
hold any meeting required or permitted under these bylaws by telephone or
similar communications equipment by means of which all persons partici pating in
the meeting can hear each other. Participation in a meeting pursuant to this
section shall constitute presence in person at such a meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
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ARTICLE VII
Amendments
Section 7.1. Amendments. These bylaws may be altered, amended, or
repealed, or new bylaws may be adopted, by a majority of the board of directors
at any duly held meeting of directors, provided that notice of such proposed
action shall have been contained in the notice of any such meeting, unless the
articles of incorporation or the laws of the State of Texas reserve the power
exclusively to the shareholders in whole or in part, or the shareholders in
amending, repealing or adopting a particular bylaw expressly provide that the
board of directors may not amend or repeal that bylaw. Unless the articles of
incorporation or a bylaw adopted by the shareholders provides otherwise as to
all or some portion of the Company's bylaws, the holders of a majority of the
shares represented at any duly held meeting of the shareholders, provided that
notice of such proposed action shall have been contained in the notice of any
such meeting, may amend, repeal or adopt the Company's bylaws.
Certificate by Secretary
The undersigned, being the secretary of PACE AMPHITHEATRES, INC.,
hereby certifies that the foregoing code of bylaws was duly adopted by the
directors of said corporation effective on January ___, 1988.
In Witness Whereof, I have signed this certification on this the____
day of January, 1988.
-------------------------------
John Rubey, Secretary
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ARTICLES OF INCORPORATION
OF
PACE AMPHITHEATER MANAGEMENT, INC.
I, the undersigned natural person, over the age of eighteen (18) years and
a citizen of the State of Texas, acting as incorporator of a corporation under
the Texas Business Corporation Act, hereby adopt the following Articles of
Incorporation for such corporation.
ARTICLE ONE.
The name of the corporation is PACE AMPHITHEATER MANAGEMENT, INC.
ARTICLE TWO.
The corporation shall have a perpetual existence.
ARTICLE THREE.
The purposes for which the corporation is organized are the transaction of
any and all lawful business for which corporations may be incorporated under the
Texas Business Corporation Act.
ARTICLE FOUR.
The aggregate number of shares which the corporation shall have authority
to issue is 1,000,000 shares of the par value of $0.01 each.
ARTICLE FIVE.
The corporation will not commence business until it has received for the
issuance of its shares consideration of the value of One Thousand Dollars
($1,000.00), consisting of money, labor done, or property actually received.
ARTICLE SIX.
The corporation may acquire its own shares and may reissue such shares as
provided by law.
ARTICLE SEVEN.
The address of its initial registered office is 515 Post Oak Boulevard,
Suite 300, Houston, Texas 77027, and the name of its initial registered agent at
such address is Jeffry B. Lewis.
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<PAGE>
ARTICLE EIGHT.
The number of Directors shall be fixed by the bylaws of the corporation,
and until changed by the bylaws, the number of directors constituting the Board
of Directors is 2 and the names and addresses of the persons who are to serve as
Directors until the first annual meeting of the shareholders or until their
successors are elected and qualified is:
Miles C. Wilkin
515 Post Oak Blvd., Suite 300
Houston, Texas 77027
Brian E. Becker
515 Post Oak Blvd., Suite 300
Houston, Texas 77027
ARTICLE NINE.
The corporation may enter into contracts or transact business with one or
more of its directors or officers, or with any corporation, firm or association
in which any of its directors or officers are stockholders, directors, officers,
members, employees or otherwise interested; and no such contract or other
transaction shall be void or voidable or otherwise affected by reason of such
directorship or office in the corporation or such interest in such other firm,
corporation or association, notwithstanding that a director or directors having
such interest are present and counted in determining the existence of a quorum
at a meeting of the Board of Directors of the corporation, and notwithstanding
that the vote of such director or directors shall have been necessary to
authorize, approve, ratify, or otherwise obligate the corporation upon such
contract or transaction, provided that the fact of such interest shall be
disclosed or otherwise known to the Board of Directors, or a majority thereof at
the meeting of the Board of Directors which acts upon or in reference to such
contract or transaction; nor shall any director or officer be liable to account
to the corporation for any profits realized by or from or through any such
transaction or contract of the corporation by reason of such directorship,
office or interest, except as otherwise provided in the bylaws of the
corporation.
ARTICLE TEN.
The name and address of the incorporator is:
Michael F. Rogers
333 Clay Ave., Suite 800
Houston, Texas 77002
ARTICLE ELEVEN.
The corporation reserves the right to amend, alter, change or repeal any
provision contained in these Articles of Incorporation in the manner now or
hereafter prescribed by statute, and all rights conferred upon shareholders
herein are granted subject to this reservation.
ARTICLE TWELVE.
To the fullest extent permitted by applicable law, no director of the
corporation shall be liable to the corporation or any of its shareholders for
monetary damages for an act or omission in the director's capacity as a
director. To the fullest extent permitted by applicable law, the corporation
shall indemnify and advance expenses, prior to the final
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<PAGE>
disposition of the proceeding, to a director, and may, upon the determination of
the Board of Directors, indemnify and advance expenses, prior to the final
disposition of the proceeding, to an officer, employee, agent or person who is
or was serving at the request of the corporation as a director, officer,
partner, venturer, proprietor, trustee, employee, agent or similar functionary
of another foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise, who was, is or
is threatened to be made a defendant or respondent in any proceeding.
ARTICLE THIRTEEN.
The right of cumulative voting of shares is hereby expressly prohibited.
ARTICLE FOURTEEN.
No shareholder of the corporation shall have any preemptive right to
acquire additional, unissued or treasury shares of the corporation, or
securities of the corporation convertible into or carrying a right, option or
warrant to subscribe to or acquire shares, whether now or hereafter authorized,
which may at any time be issued, sold or offered for sale by the corporation.
IN WITNESS WHEREOF, I have signed this instrument on this 27th day of
October, 1992.
Incorporator:
/s/ Michael F. Rogers
-------------------------------
Michael F. Rogers
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<PAGE>
BYLAWS
OF
PACE AMPHITHEATER MANAGEMENT, INC.
ARTICLE I
Section 1. The registered office of the corporation shall be located in
Harris County, Texas.
Section 2. The corporation may also have offices at such other places both
within or without the State of Texas as the Board of Directors may from time to
time determine or the business of the corporation may require.
ARTICLE II
Section 1. All meetings of the shareholders for the election of directors
shall be held at such time and place, within or without the State of Texas, as
shall be stated in the notice of the meeting or in a duly executed waiver of
notice thereof.
Section 2. The annual meeting of the shareholders shall be held within
thirty (30) days of the close of the corporation's fiscal year.
Section 3. Notice of any meeting of Directors or shareholders may be
waived by written waiver of all persons entitled to vote therein. Unless so
waived, notice of any meeting shall be given to each person entitled to vote
thereon in writing, either personally, or by delivery to the address of such
person as indicated by the latest records of the corporation, not more than
thirty (30) days nor less than forty-eight (48) hours prior to the time set
forth such meeting.
ARTICLE III
Section 1. The management of the corporation shall be the duty of the
Board of Directors which shall exercise all powers and do all acts and things
not required by law to be done by the shareholders.
Section 2. The number of directors shall not be less than one nor more
than seven, none of whom need be shareholders or residents of any particular
state. Directors shall be elected at the annual meeting of shareholders and
shall hold office until the next annual meeting of shareholders. The number of
Directors may be increased or decreased at any meeting of the shareholders, but
no decrease in the number of Directors shall serve to shorten the term of any
incumbent Director. Any Director, or Directors, may, however, be removed with or
without cause at any meeting of shareholders by majority vote of the shares then
entitled to vote, provided that notice of the proposed action is given in the
notice or waiver of notice of such meeting. Election of Directors shall be by
plurality vote. Cumulative voting shall not be permitted.
Section 3. Meetings of the Board of Directors, regular or special, may be
held within or without the State of Texas. The annual meeting of the Board of
Directors shall take place immediately following the annual shareholders
meeting, at the same place, without further notice. Regular meetings of the
Board of Directors shall take place on the call of the President or any one
director.
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<PAGE>
ARTICLE IV
Officers of the corporation shall be elected by the Board of Directors and
shall serve until removed by the Board of Directors. The officers of the
corporation shall be the President, the Secretary, and such other officers as
the Board of Directors shall elect, if any. Any person may hold two or more
offices.
ARTICLE V
Shares in the form prescribed by the Board of Directors shall be issued
for lawful consideration (not less than par value) and to such persons as the
Board of Directors may determine from time to time. In the absence of fraud, the
judgment of the Board of Directors as to the value received for shares issued
shall be conclusive.
ARTICLE VI
The corporation shall indemnify, to the extent permitted by Article 2.02-1
of the Texas Business Corporation Act, any person who is or was a director,
officer, agent or employee of the corporation.
APPROVED by the initial directors this 29th day of October, 1993.
ATTEST:
/s/ Jeffry B. Lewis
- -------------------------------
Jeffry B. Lewis, Secretary
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<PAGE>
ARTICLES OF INCORPORATION
OF
PACE BAYOU PLACE, INC.
I, the undersigned natural person, over the age of eighteen (18)
years, acting as incorporator of a corporation under the Texas Business
Corporation Act, hereby adopt the following Articles of Incorporation for such
corporation.
ARTICLE ONE.
The name of the corporation is PACE Bayou Place, Inc.
ARTICLE TWO.
The period of its duration is perpetual.
ARTICLE THREE.
The purpose for which the corporation is organized is the transaction
of any and all lawful business for which corporations may be incorporated under
the Texas Business Corporation Act.
ARTICLE FOUR.
The aggregate number of shares which the corporation shall have
authority to issue, and which shall comprise its total capitalization, is One
Hundred Thousand (100,000) shares of common stock having a par value of $0.01
per share.
ARTICLE FIVE.
The corporation will not commence business until it has received for
the issuance of its shares consideration of the value of at least ONE THOUSAND
AND NO/100 DOLLARS ($1,000.00), consisting of money, labor done or property
actually received.
<PAGE>
ARTICLE SIX.
The street address of the initial registered office of the corporation
is 515 Post Oak Blvd., Suite 300, Houston, Texas 77027, and the name of its
initial registered agent at such address is Jeffry B. Lewis.
ARTICLE SEVEN.
The number of directors shall be fixed in the manner provided in the
bylaws of the corporation. The number of directors constituting the initial
Board of Directors shall be one (1) and the name and address of such person
constituting the initial Board of Directors, who is to serve as director until
the first annual meeting of the shareholders or until his successors are
elected and qualify, is:
Allen J. Becker 515 Post Oak Blvd., Suite 300
Houston, Texas 77027
In the event the initial director (or all of the initial members of the Board
of Directors, if more than one) dies, becomes legally incapacited or resigns
prior to the issuance of any shares, the incorporator may appoint a substitute
initial director or directors to serve as set forth above.
ARTICLE EIGHT.
To the fullest extent permitted by applicable law, including to the
fullest extent permitted by Article 1302-7.06 of the Texas Miscellaneous
Corporation Laws Act, any successor to or modification of such article, or any
other applicable statute or judicial or administrative decision, no director of
the corporation shall be liable to the corporation or any of its shareholders
for monetary damages for an act or omission in the director's capacity as a
director. To the fullest extent permitted by applicable law, including to the
fullest extent permitted by Article 2.02-1 of the Texas Business Corporation
Act, any successor to or modification of such article, or any other applicable
statute or judicial or administrative decision, the corporation shall
indemnify, reimburse and advance expenses prior to the final disposition of the
proceeding to, each director, former director or officer of the Corporation who
was, is or is threatened to be made a defendant or respondent in any
proceeding, and shall indemnify, reimburse and advance expenses prior to the
final disposition of the proceeding to, each director, former director,
officer, employee, agent, or person who is or was serving at the request of the
corporation as a director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another foreign or domestic
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise, who was, is or is threatened to be made a
defendant or respondent in any proceeding. Any repeal or amendment of this
Article shall be prospective only, and shall not adversely affect any right of
any person existing at the time of such repeal or amendment.
2
<PAGE>
ARTICLE NINE.
The name and address of the incorporator is:
Michael F. Rogers
Gardere Wynne Sewell & Riggs, L.L.P.
333 Clay Avenue, 8th Floor
Houston, Texas 77002-4086
ARTICLE TEN.
The right of cumulative voting of shares is hereby expressly
prohibited.
ARTICLE ELEVEN.
No shareholder of the corporation shall have any preemptive right to
acquire additional, unissued or treasury shares of the corporation, or
securities of the corporation convertible into or carrying a right, option or
warrant to subscribe to or acquire shares, whether now or hereafter authorized,
which may at any time be issued, sold or offered for sale by the corporation.
IN WITNESS WHEREOF, I have signed these Articles of Incorporation on
this 26th day of June, 1997.
Incorporator:
/s/Michael F. Rogers
-------------------------------------
MICHAEL F. ROGERS
3
<PAGE>
BYLAWS
OF
PACE BAYOU PLACE, INC.
ARTICLE I.
OFFICES
Section 1. Registered Office. Until the Board of Directors otherwise
determines, the registered office of the Corporation required by the Texas
Non-Profit Corporation Act to be maintained in the State of Texas, shall be the
principal place of business of the Corporation, but such registered office may
be changed from time to time by the Board of Directors in the manner provided
by law and need not be identical to the principal place of business of the
Corporation.
Section 2. Other Offices. The Corporation may also have offices at
such other places or locations, within or without the State of Texas, as the
Board of Directors may, by resolution, from time to time determine or the
business of the Corporation may require.
ARTICLE II.
BOARD OF DIRECTORS
Section 1. Board of Directors. The business, property and affairs of
the Corporation shall be managed and controlled by the Board of Directors and,
subject to such restrictions, if any, as may be imposed by law, the Articles of
Incorporation or by these Bylaws, the Board of Directors may, and are fully
authorized to, exercise all the powers of the Corporation. Directors need not
be residents of the State of Texas.
In addition to the powers and authority expressly conferred on the
Board of Directors by law, the Articles of Incorporation or any amendment
thereof, by these Bylaws or any amendment thereof, the Board may exercise all
the powers of the Corporation and do all such lawful acts and things as may be
done by the Corporation under the laws of the State of Texas, the Articles of
Incorporation, and these Bylaws.
Section 2. Number of Directors. The number of directors shall be one
(1) but the number of directors may be increased or decreased (provided such
decrease does not shorten the term of any incumbent director) from time to time
by amendment to the Bylaws of the Corporation.
Section 3. Term. Except as otherwise provided in Section 5 of this
Article III, each director shall hold office until removed in accordance with
the provisions of these Bylaws or he resigns. Each director shall qualify by
accepting his election to office either expressly or by acting as a director.
<PAGE>
Section 4. Resignation. Any director or officer of the Corporation may
resign at any time as provided in Section 4 of Article VII of these Bylaws.
Section 5. Vacancy and Increase. Any vacancy or vacancies occurring in
the Board of Directors may be filled by the affirmative vote of a majority of
the remaining directors though less than a quorum of the Board of Directors.
Section 6. Removal. Subject to Art. 2.15 of the Texas Non-Profit
Corporation Act, the directors of the Corporation, and each of them, may be
removed from office from time to time and at any time with or without cause, by
a vote of the majority of the Board of Directors, including the Director whose
position is in dispute, at any meeting thereof at which a quorum is present;
and any vacancy or vacancies in the Board resulting therefrom may be filled by
the remaining directors, though less than a quorum.
Section 7. Offices and Records. The directors may have or establish
one or more offices of the Corporation and keep the books and records of the
Corporation, except as otherwise provided by statute, at the principal place of
business of the Corporation. The Corporation shall maintain current true and
accurate financial records with full and correct entries made with respect to
all financial transactions of the Corporation, including all income and
expenditures, in accordance with generally accepted accounting practices. Based
on these records, the Board of Directors shall annually prepare or approve a
report of the financial activity of the Corporation for the preceding year. The
report shall conform to accounting standards as promulgated by the American
Institute of Certified Public Accountants and shall include a statement of
support, revenue, and expenses and changes in fund balances, a statement of
functional expenses, and balance sheets for all funds. All records of the
Corporation shall be kept for at least three years after the closing of each
fiscal year and shall be available to the public for inspection and copying
during normal business hours.
Section 8. Meeting of Directors. Meetings of the Board of Directors,
regular or special, may be held either within or without the State of Texas.
Section 9. Election of Officers. At the first meeting of the Board of
Directors in each year at which a quorum shall be present, held next after the
annual meeting of shareholders, the Board of Directors shall proceed to the
election of the officers of the Corporation.
Section 10. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as shall be designated or
determined from time to time by resolution of the Board of Directors. Notice of
such regular meetings shall not be required.
Section 11. Special Meetings. Special meetings of the Board of
Directors shall be held whenever and wherever called or provided to be held by
the President or by any two of the directors for the time being in office if
the number of directors shall be five (5) or more or by any one of the
directors for the time being in office if the number of directors shall be four
(4) or less, and at the place, day and hour determined by the officer or the
director(s) calling or providing for the holding of the particular meeting, in
each
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<PAGE>
instance, and such determination may be conclusively evidenced in a call,
waiver of notice or other communication signed by such officer or such
director(s).
Section 12. Notice. The Secretary or an Assistant Secretary shall, but
in the event of the absence of the Secretary or an Assistant Secretary or the
failure, inability, refusal or omission on the part of the Secretary or an
Assistant Secretary so to do, any other officer of the Corporation may, give
notice of each special meeting, and of the place, day and hour of the
particular meeting, in person or by mail, or by telephone, telegraph or other
means of communication, at least three (3) days before the meeting to each
director. The attendance of a director at any meeting shall constitute a waiver
of notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
Section 13. Business to be Transacted. Neither the business to be
transacted at, nor the purpose or purposes of, any regular or special meeting
of the Board of Directors need be specified in the notice or any waiver or
waivers of notice of such meeting. Any and all business of any nature or
character whatsoever may be transacted and action may be taken thereon at any
such first meeting or at any other meeting, regular or special, of the Board of
Directors. At any meeting at which every director shall be present, even though
without any notice, any business may be transacted.
Section 14. Quorum - Adjournment if Quorum is not Present. A majority
of the number of directors fixed by these Bylaws shall constitute a quorum for
the transaction of any and all business, but if at any meeting, regular or
special, or any first meeting, of the Board of Directors there be less than a
quorum present, a majority of those present, or if only one director be
present, then such director, may adjourn the meeting from time to time without
notice, other than by announcement at the meeting, until a quorum shall be
present at the meeting. A majority of the directors present at any meeting of
the Board of Directors, or if only one director be present, then such director
may adjourn any meeting of the Board from time to time without notice, other
than by announcement at such meeting of the time and place at which the meeting
will reconvene, until the transaction of any and all business submitted or
proposed to be submitted to such meeting or any adjournment or adjournments
thereof shall have been completed. The act of a majority of the directors
present at any meeting of the Board of Directors at which a quorum is in
attendance shall constitute the act of the Board of Directors unless the act of
a greater number is required by the Articles of Incorporation or by these
Bylaws.
Section 15. Order of Business. At all meetings of the Board of
Directors business shall be transacted in such order as from time to time the
Board of Directors may determine. At all meetings of the Board of Directors the
President shall preside and in the absence of the President, a Vice President
shall preside, but if neither the President nor a Vice-President shall be
present or if neither shall for any reason preside at any meeting of the Board,
then a Chairman shall be chosen by the Board from among the directors present
and such Chairman so chosen shall preside at the meeting.
The Secretary of the Corporation, or in his absence, an Assistant
Secretary, shall act as Secretary of the meetings of the Board of Directors,
but in the absence of the Secretary and an Assistant
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<PAGE>
Secretary, or if for any reason neither acts as Secretary thereof, the
presiding officer shall appoint any person of his choice to act, and such
person shall act as Secretary of the meeting.
Section 16. Presumption of Assent. A director of the Corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
unless his dissent shall be entered in the minutes of the meeting or unless he
shall file his written dissent to such action with the person acting as the
Secretary of the meeting before the adjournment thereof or shall forward such
dissent by registered mail to the Secretary of the Corporation immediately
after the adjournment of the meeting. Such right to dissent shall not apply to
a director who voted in favor of such action.
Section 17. Compensation. Directors, as such, shall not be entitled to
receive any fixed sums or stated salaries for their services, but, by
resolution of the Board, a fixed sum and expenses of attendance, if any, may be
provided and allowed by the Board of Directors for attendance at meetings of
the Board, whether regular or special, or first meetings; provided that nothing
herein contained shall, or shall be construed so as to, preclude any director
from serving the Corporation in any other capacity or receiving compensation
therefor. Members of special or standing committees may be allowed a fixed sum
and expenses of attendance, if any, at committee meetings.
Section 18. Consent and Telephone Meetings. Any action required or
permitted to be taken at any annual or special meeting of Directors of the
Corporation may be taken without a meeting, without prior notice, and without a
vote, if the consent in writing, setting forth the action so taken, shall be
signed by all of the Directors of the Corporation. Pursuant to proper notice or
waiver thereof, any regular or special meeting of the Directors may be held by
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in
such a meeting shall constitute presence in person at such meeting and waiver
of notice of such meeting, except where a person participates in the meeting
for the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
ARTICLE III.
OFFICERS' AND DIRECTORS' SERVICES,
CONFLICTING INTERESTS AND INDEMNIFICATION
Section 1. Services. No director and, unless otherwise determined by
the Board of Directors, no officer of this Corporation shall be required to
devote his time or any particular portion of his time or render services or any
particular services exclusively to this Corporation. Each and every director
and, unless otherwise determined by the Board of Directors, each and every
officer of this Corporation shall be entirely free to engage, participate and
invest in any and all such businesses, enterprises and activities, either
similar or dissimilar to the business, enterprise and activities of this
Corporation, without breach of duty to this Corporation and without
accountability or liability to this Corporation in any event or under any
circumstances or conditions.
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Each and every director and, unless otherwise determined by the Board
of Directors, each and every officer of this Corporation shall, respectively,
be entirely free to act for, serve and represent any other corporation or
corporations, entity or entities, and any person or persons, in any capacity or
capacities, and be or become a director or officer, or both, of any other
corporation or corporations, entity or entities, irrespective of whether or not
the business, purposes, enterprises and activities, or any of them, thereof be
similar or dissimilar to the business, purposes, enterprises and activities, or
any of them, of this Corporation, without breach of duty to this Corporation or
to its shareholders and without accountability or liability of any character or
description to this Corporation or to its shareholders in any event or under
any circumstances or conditions.
Section 2. Directors' and Officers' Interests in Contracts. No
contract or other transaction between the Corporation and one or more of its
directors or officers, or between the Corporation and any firm or partnership
of which one or more of its directors or officers are members or employees or
in which they are otherwise interested, or between the Corporation and any
corporation or association or other entity in which one or more of this
Corporation's directors or officers are shareholders, members, directors,
officers or employees or in which they are otherwise interested, shall be void
or voidable by reason of or as a result of such connection with or holding an
office or offices as director or officer or as directors or officers of this
Corporation or such interest in or in connection with such other firm,
partnership, corporation, association or other entity, notwithstanding the
presence of such director or directors, officer or officers, at the meeting of
the Board of Directors of this Corporation which acts upon or in reference to
any such contract or other transaction, and notwithstanding his or their
participation in such action, if (i) the fact of such interest shall be
disclosed or known to the Board of Directors and the Board of Directors shall
authorize, approve or ratify such contract or other transaction by vote of a
majority of the directors present, such interested director or directors to be
counted in calculating the majority necessary to carry such vote, or if (ii)
the fact of such interest shall be disclosed or known to the shareholders and
the shareholders either by written consent or by vote of holders of record of a
majority of all the outstanding shares of stock entitled to vote shall
authorize, approve or ratify such contract or other transaction; nor shall any
director or officer be responsible to, or liable to account to, this
Corporation for any profits realized by or from or through any such contract or
other transaction of the Corporation so authorized, ratified or approved, by
reason of such interest or his being or having been a director or officer, or
both, of this Corporation. Nothing herein contained shall create responsibility
or liability in or in connection with any such event or events or prevent the
authorization, ratification or approval of such contracts or other transactions
in any other manner permitted by law or by statute. This section shall not be
construed to invalidate any contract or other transaction which would otherwise
be valid under the common or statutory law applicable thereto.
Section 3. Non-Liability of Directors and Officers in Certain Cases.
No director or officer or member of the Executive Committee shall be liable for
his acts as such if he is excused from liability under any present or future
provision or provisions of the Texas Business Corporation Act; and, in
addition, to the fullest extent now or hereafter permitted by the Texas
Business Corporation Act, each officer or director or member of the Executive
Committee shall in the discharge of any duty imposed or power conferred upon
him by the Corporation, be fully protected if, in the exercise of ordinary
care, he acted in good faith and in reliance upon the written opinion of an
attorney for the Corporation, the books of account or reports made to the
Corporation by any of its officials or by an independent certified public
accountant or by an appraiser selected
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with reasonable care by the Board of Directors or by such Committee, or in
reliance upon other records of the Corporation.
Section 4. Indemnification of Directors and Officers. Each director
and each officer orformer director or officer of this Corporation shall be, and
hereby is, indemnified by the Corporation against liabilities imposed upon him
and expenses actually and reasonably incurred by him (including attorneys'
fees) in connection with any claim made against him, or the defense of any
action, suit or proceeding to or in which he is or may be made a party by
reason of his being or having been such director or officer, including such
sums as independent counsel selected by the Board of Directors shall deem
reasonable payment made in settlement of any such claim, action, suit or
proceeding primarily with a view of avoiding expenses of litigation; provided,
however, that no director or officer or former director or officer shall be
indemnified with respect to matters as to which he shall be adjudged in such
action, suit or proceeding to be liable for negligence or misconduct with
respect to any matters in which indemnity is sought. Such right of
indemnification shall be in addition to, but shall not exclude, any other
rights to which directors or officers may be entitled.
ARTICLE IV.
EXECUTIVE AND OTHER COMMITTEES
The Board of Directors, by resolution or resolutions adopted by a
majority of the number of directors fixed by these Bylaws, may designate two or
more directors to constitute an Executive Committee, or such other committees
as the Board of Directors may provide and in like manner may discontinue any
such committee. The members of such committees shall, respectively, hold office
only during the pleasure of the Board of Directors. Such committees, to the
extent provided in such resolution or resolutions, shall have and may exercise
all of the authority of the Board of Directors in the business and affairs of
the Corporation during intervals between meetings of the Board of Directors
except where action of the Board of Directors is specified by the Texas
Non-Profit Corporation Act or other applicable law and may authorize the seal
of the Corporation to be affixed to all instruments, papers and documents which
may require it; except that such committees shall have no power (a) to elect
directors, (b) to alter, amend or repeal these Bylaws or any resolution or
resolutions of the Board of Directors designating any such committee, or (c) to
appoint or replace any member of any such committee. Regular meetings of any
such committee shall be held at such time and place as the committee may
determine, and special meetings may be called at any time by an officer of the
Corporation or by any member of the committee. No notice of any meeting of any
committee shall be required, and a majority of the members of the committee
shall constitute a quorum for the transaction of business. Minutes of all such
meetings shall be kept and presented to the Board of Directors upon request.
The designation of any such committee and the delegation thereto of authority
shall not operate to relieve the Board of Directors, or any member thereof, of
any responsibility imposed upon it or him by law.
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ARTICLE V.
OFFICERS
Section 1. Principal Officers. The officers of the Corporation shall
be chosen by the Board of Directors. The officers shall be a President, a
Secretary, a Treasurer, one or more Vice-Presidents, and such number of
Assistant Secretaries and Assistant Treasurers, as the Board may from time to
time determine or elect. Any person may hold two or more offices at the same
time, except the offices of President and Secretary.
Section 2. Additional Officers. The Board may appoint such other
officers, agents and factors as it shall deem necessary.
Section 3. Terms of Officers. Each officer shall hold his office until
his successor shall have been duly elected and qualified or until his death or
until he shall resign or shall have been removed in the manner hereinafter
provided.
Section 4. Removal. Any officer or agent or member of the Executive
Committee elected or appointed by the Board of Directors may be removed by the
Board of Directors whenever in its judgment the best interests of the
Corporation will be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed. Election or
appointment of an officer or agent shall not of itself create contract rights.
Section 5. Vacancies. A vacancy in the office of any officer may be
filled by the vote of a majority of the directors then in office for the
unexpired portion of the term for the person with respect to which a vacancy
has occurred, in each instance.
Section 6. Powers and Duties of Officers. The officers so chosen shall
perform the duties and exercise the powers expressly conferred or provided for
in these Bylaws, as well as the usual duties and powers incident to such
office, respectively, and such other duties and powers as may be assigned to
them from time to time by the Board of Directors or by the President.
Section 7. Chairman of the Board. The Board of Directors may select
from among its members a Chairman of the Board who may, if so selected, preside
at all meetings of the Board of Directors and approve the minutes of all
proceedings thereat, and he shall be available to consult with and advise the
officers of the Corporation with respect to the conduct of the business and
affairs of the Corporation.
Section 8. The President. The President, subject to the control of the
Board of Directors, shall be the chief executive officer of the Corporation and
shall have general executive charge, management and control of the affairs,
properties and operations of the Corporation in the ordinary course of its
business, with all such duties, powers and authority with respect to such
affairs, properties and operations as may be reasonably incident to such
responsibilities; he may appoint or employ and discharge employees and agents
of the Corporation and fix their compensation; he may make, execute,
acknowledge and deliver any and all
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contracts, leases, deeds, conveyances, assignments, bills of sale, transfers,
releases and receipts, any and all mortgages, deeds of trust, indentures,
pledges, chattel mortgages, liens and hypothecations, and any and all bonds,
debentures and notes, and any and all other obligations and encumbrances and
any and all other instruments, documents and papers of any kind or character
for and on behalf of and in the name of the Corporation, and, with the
Secretary or an Assistant Secretary, he may sign all certificates for shares of
the capital stock of the Corporation; he shall do and perform such other duties
and have such additional authority and powers as from time to time may be
assigned to or conferred upon him by the Board of Directors.
Section 9. Vice-Presidents. In the absence of the President or in the
event of his disability or refusal to act, the Vice-President (or in the event
there be more than one Vice-president, the Vice-Presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the 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 him by the President or by the Board of Directors of
the Corporation. Any action taken by a Vice-President in the performance of the
duties of the President shall be conclusive evidence of the absence or
inability to act of the President at the time such action was taken.
Section 10. Treasurer. The Treasurer shall have custody of all the
funds and securities of the Corporation which come into his hands. When
necessary or proper, he may endorse on behalf of the Corporation, for
collection, checks, notes and other obligations and shall deposit the same to
the credit of the Corporation in such bank or banks or depositories as shall be
selected or designated by or in the manner prescribed by the Board of
Directors. He may sign all receipts and vouchers for payments made to the
Corporation, either alone or jointly with such officer as may be designated by
the Board of Directors. Whenever required by the Board of Directors he shall
render a statement of his cash account. He shall enter or cause to be entered,
punctually and regularly, on the books of the Corporation to be kept by him or
under his supervision or direction for that purpose, full and accurate accounts
of all moneys received and paid out by, for or on account of the Corporation.
He shall at all reasonable times exhibit his books and accounts and other
financial records to any director of the Corporation during business hours. He
shall have such other powers and duties as may be conferred upon or assigned to
him by the Board of Directors. The Treasurer shall perform all acts incident to
the position of Treasurer subject always to the control of the Board of
Directors. He shall, if required by the Board of Directors. give such bond for
the faithful discharge of his duties in such form and amounts as the Board of
Directors may require.
Section 11. Assistant Treasurers. Each Assistant Treasurer shall have
the usual powers and duties pertaining to his office, together with such other
powers and duties as may be conferred upon or assigned to him by the Board of
Directors. The Assistant Treasurers shall have and exercise the powers of the
Treasurer during that officer's absence or inability to act.
Section 12. Secretary. The Secretary (1) shall keep the minutes of all
meetings of the Board of Directors and the minutes of all meetings of the
shareholders, in books provided for that purpose, (2) shall attend to the
giving and serving of all notices, (3) may sign with the President or a
Vice-President in the name of the Corporation and/or attest the signatures of
either to, all contracts, conveyances, transfers, assignments, encumbrances,
authorizations and all other instruments, documents and papers, of any and
every description
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<PAGE>
whatsoever, of or executed for or on behalf of the Corporation and affix the
seal of the Corporation thereto, (4) may sign with the President or a Vice
President all certificates for shares of the capital stock of the Corporation
and affix the corporate seal of the Corporation thereto, (5) shall have charge
of and maintain and keep or supervise and control the maintenance and keeping
of the stock certificate books, transfer books and stock. ledgers and such
other books and papers as the Board of Directors may authorize, direct or
provide for, all of which shall at all reasonable times be open to the
inspection of any director, upon request, at the office of the Corporation
during business hours, (6) shall in general perform all the duties incident to
the office of Secretary, and (7) shall have such other powers and duties as may
be conferred upon or assigned to him by the Board of Directors; subject always
to the control of the Board of Directors.
Section 13. Assistant Secretaries. Each Assistant Secretary shall have
the usual powers and duties pertaining to his office, together with such other
powers and duties as may be conferred upon or assigned to him by the Board of
Directors or the Secretary. The Assistant Secretaries shall have and exercise
the powers of the Secretary during that officer's absence or inability to act.
ARTICLE VI.
BOOKS, DOCUMENTS AND ACCOUNTS
The Board of Directors shall have power to keep the books, documents
and accounts of the Corporation outside of the State of Texas, except that a
record of its shareholders, giving the names and addresses of all shareholders
and the number and class of shares held by each shall be kept at its registered
office or principal place of business, or at the office of its transfer agent
or registrar and the original or a duplicate stock ledger shall at all times be
kept within the State of Texas.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 1. Fiscal Year. The fiscal year of the Corporation shall be
such as the Board of Directors shall, by resolution, provide or establish or
such as the President shall determine subject to approval of the Board.
Section 2. Seal. The seal of the Corporation shall be in such form as
the Board of Directors shall prescribe, and may be used by causing It or a
facsimile thereof to be impressed, affixed, printed, or reproduced in any other
manner.
Section 3. Notice and Waiver of Notice. Whenever any notice whatever
is required to be given to any shareholder or director under the provisions of
the Texas Business Corporation Act or under the provisions of these Bylaws or
the Articles of Incorporation of this Corporation, said notice shall be deemed
to be sufficient if given by depositing the same in a post office box in a
sealed post-paid wrapper addressed to the person or persons entitled thereto at
their post office addresses, respectively, as same appear on the books or other
records of the Corporation, and such notice shall be deemed to have been given
and received if given in any other manner or by any other means authorized or
provided for elsewhere in these Bylaws. A
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waiver or waivers of notice, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be equivalent to
the giving of such notice.
Section 4. Resignations. Any director or officer may resign at any
time. Each such resignation shall be made in writing and shall take effect at
the time specified therein, or, if no time be specified, at the time of its
receipt by either the Board of Directors or the President or the Secretary. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
Section 5. Securities of Other Corporations. The President or any
Vice-President of the Corporation shall have power and authority to transfer,
endorse for transfer, vote, consent or take any other action with respect to
any securities of another issuer which may be held or owned by the Corporation
and to make, execute and deliver any waiver, proxy or consent with respect to
any such securities.
Section 6. Depositories. Funds of the Corporation not otherwise
employed shall be deposited from time to time in such banks or other
depositories as either the Board of Directors or the President or the Treasurer
may select or approve.
Section 7. Signing of Checks, Notes, etc. In addition to and
cumulative of, but in nowise limiting or restricting, any other provision or
provisions of these Bylaws which confer any authority relative thereto, all
checks, drafts and other orders for the payment of money or moneys out of funds
of the Corporation and all notes and other evidences of indebtedness of the
Corporation shall be signed on behalf of the Corporation, in such manner, and
by such officer or officers, person or persons, as shall from time to time be
determined or designated by or pursuant to resolution or resolutions of the
Board of Directors; provided, however, that if, when, after and as authorized
or provided for by resolution or resolutions of the Board of Directors the
signature or signatures of any such officer or officers, person or persons, may
be facsimile or facsimiles, engraved or printed, and shall have the same force
and effect and bind the Corporation as though such officer or officers, person
or persons, had signed the same personally, and, in event of the death,
disability, removal or resignation of any such officer or officers, person or
persons, if the Board of Directors shall so determine or provide, as though and
with the same effect as if such death, disability, removal or resignation had
not occurred.
Section 8. Persons. Wherever used or appearing in these Bylaws,
pronouns of the masculine gender shall include the persons of the female sex as
well as the neuter gender and the singular shall include the plural wherever
appropriate.
Section 9. Laws and Statutes. Wherever used or appearing in these
Bylaws, the words "law" or "laws" or "statute" or "statutes," respectively,
shall mean and refer to laws and statutes, or a law or a statute, of the State
of Texas, to the extent only that such is or are expressly applicable, except
where otherwise expressly stated or the context requires that such words not be
so limited.
Section 10. Headings. The headings of the Articles and Sections of
these Bylaws are inserted for convenience of reference only and shall not be
deemed to be a part thereof or used in the construction or interpretation
thereof.
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ARTICLE VIII.
AMENDMENTS
These Bylaws may, from time to time, be added to, changed, altered,
amended or repealed or new Bylaws may be made or adopted by the affirmative
vote of at least a majority of the Directors present at any annual or regular
or special meeting of the Board of Directors.
WITNESS the signature of its duly authorized secretary effective this
30th day of June, 1997.
/s/ JEFFRY B. LEWIS
----------------------------
JEFFRY B. LEWIS, Secretary
<PAGE>
ARTICLES OF INCORPORATION
OF
PACE COMMUNICATIONS, INC.
I, the undersigned natural person, over the age of eighteen (18)
years, acting as incorporator of a corporation under the Texas Business
Corporation Act, hereby adopt the following Articles of Incorporation for such
corporation.
ARTICLE ONE.
The name of the corporation is PACE Communications, Inc.
ARTICLE TWO.
The period of its duration is perpetual.
ARTICLE THREE.
The purpose for which the corporation is organized is the
transaction of any and all lawful business for which corporations may be
incorporated under the Texas Business Corporation Act.
ARTICLE FOUR.
The aggregate number of shares which the corporation shall have
authority to issue, and which shall comprise its total capitalization, is One
Hundred Thousand (100,000) shares of common stock having a par value of $0.01
per share.
ARTICLE FIVE.
The corporation will not commence business until it has received for
the issuance of its shares consideration of the value of at least ONE THOUSAND
AND NO/100 DOLLARS ($1,000.00), consisting of money, labor done or property
actually received.
ARTICLE SIX.
The street address of the initial registered office of the
corporation is 515 Post Oak Blvd., Suite 300, Houston, Texas 77027, and the name
of its initial registered agent at such address is Jeffery B. Lewis.
ARTICLE SEVEN.
The number of directors shall be fixed in the manner provided in the
bylaws of the corporation. The number of directors constituting the initial
Board of Directors shall be one (1) and the name and address of such person
<PAGE>
constituting the initial Board of Directors, who is to serve as director until
the first annual meeting of the shareholders or until his successors are elected
and qualify, is:
Allen J. Becker 515 Post Oak Blvd., Suite 300
Houston, Texas 77027
In the event the initial director (or all of the initial members of
the Board of Directors, if more than one) dies, becomes legally incapacitated or
resigns prior to the issuance of any shares, the incorporator may appoint a
substitute initial director or directors to serve as set forth above.
ARTICLE EIGHT.
To the fullest extent permitted by applicable law, including to the
fullest extent permitted by Article 1302-7.06 of the Texas Miscellaneous
Corporation Laws Act, any successor to or modification of such article, or any
other applicable statute or judicial or administrative decision, no director of
the corporation shall be liable to the corporation or any of its shareholders
for monetary damages for an act or omission in the director's capacity as a
director. To the fullest extent permitted by applicable law, including to the
fullest extent permitted by Article 2.02-1 of the Texas Business Corporation
Act, any successor to or modification of such article, or any other applicable
statute or judicial or administrative decision, the corporation shall indemnify,
reimburse and advance expenses prior to the final disposition of the proceeding
to, each director, former director or officer of the Corporation who was, is or
is threatened to be made a defendant or respondent in any proceeding, and shall
indemnify, reimburse and advance expenses prior to the final disposition of the
proceeding to, each director, former director, officer, employee, agent, or
person who is or was serving at the request of the corporation as a director,
officer, partner, venturer, proprietor, trustee, employee agent or similar
functionary of another foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other enterprise,
who was, is or is threatened to be made a defendant or respondent in any
proceeding. Any repeal or amendment of this Article shall be prospective, only,
and shall not adversely affect any right of any person existing at the time of
such repeal or amendment.
ARTICLE NINE.
The name and address of the incorporator is:
Michael F. Rogers
Gardere Wynne Sewell & Riggs, L.L.P.
333 Clay Avenue, 8th Floor
Houston, Texas 77002-4086
ARTICLE TEN.
The right of cumulative voting of shares is hereby expressly
prohibited.
ARTICLE ELEVEN.
No shareholder of the corporation shall have any preemptive
right to acquire additional, unissued or treasury shares of the corporation, or
securities of the corporation convertible into or carrying a right, option or
warrant to subscribe to or acquire shares, whether now or hereafter authorized,
which may at any time be issued, sold or offered for sale by the corporation.
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IN WITNESS WHEREOF, I have signed these Articles of Incorporation on
this 30th day of July, 1997.
Incorporator:
/s/ Michael F. Rogers
---------------------------------
Michael F. Rogers
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BYLAWS
OF
PACE COMMUNICATIONS, INC.
ARTICLE I.
OFFICES
Section 1. Registered Office. Until the Board of Directors otherwise
determines, the registered office of the Corporation required by the Texas
Non-Profit Corporation Act to be maintained in the State of Texas, shall be the
principal place of business of the Corporation, but such registered office may
be changed from time to time by the Board of Directors in the manner provided by
law and need not be identical to the principal place of business of the
Corporation.
Section 2. Other Offices. The Corporation may also have offices at such
other places or locations, within or without the State of Texas, as the Board of
Directors may, by resolution, from time to time determine or the business of the
Corporation may require.
ARTICLE II.
BOARD OF DIRECTORS
Section 1. Board of Directors. The business, property and affairs of the
Corporation shall be managed and controlled by the Board of Directors and,
subject to such restrictions, if any, as may be imposed by law, the Articles of
Incorporation or by these Bylaws, the Board of Directors may, and are fully
authorized to, exercise all the powers of the Corporation. Directors need not be
residents of the State of Texas.
In addition to the powers and authority expressly conferred on the Board
of Directors by law, the Articles of Incorporation or any amendment thereof, by
these Bylaws or any amendment thereof, the Board may exercise all the powers of
the Corporation and do all such lawful acts and things as may be done by the
Corporation under the laws of the State of Texas, the Articles of Incorporation,
and these Bylaws.
Section 2. Number of Directors. The number of directors shall be one (1)
but the number of directors may be increased or decreased (provided such
decrease does not shorten the term of any incumbent director) from time to time
by amendment to the Bylaws of the Corporation.
Section 3. Term. Except as otherwise provided in Section 5 of this Article
III, each director shall hold office until removed in accordance with the
provisions of these Bylaws or he resigns. Each director shall qualify by
accepting his election to office either expressly or by acting as a director.
Section 4. Resignation. Any director or officer of the Corporation may
resign at any time as provided in Section 4 of Article VII of these Bylaws.
Section 5. Vacancy and Increase. Any vacancy or vacancies occurring in the
Board of Directors may be filled by the affirmative vote of a majority of the
remaining directors though less than a quorum of the Board of Directors.
Section 6. Removal. Subject to Art. 2.15 of the Texas Non-Profit
Corporation Act, the directors of the Corporation, and each of them, may be
removed from office from time to time and at any time with or without cause, by
a vote of the majority of the Board of Directors, including the Director whose
position is in dispute, at any meeting
<PAGE>
thereof at which a quorum is present; and any vacancy or vacancies in the Board
resulting therefrom may be filled by the remaining directors, though less than a
quorum.
Section 7. Offices and Records. The directors may have or establish one or
more offices of the Corporation and keep the books and records of the
Corporation, except as otherwise provided by statute, at the principal place of
business of the Corporation. The Corporation shall maintain current true and
accurate financial records with full and correct entries made with respect to
all financial transactions of the Corporation, including all income and
expenditures, in accordance with generally accepted accounting practices. Based
on these records, the Board of Directors shall annually prepare or approve a
report of the financial activity of the Corporation for the preceding year. The
report shall conform to accounting standards as promulgated by the American
Institute of Certified Public Accountants and shall include a statement of
support, revenue, and expenses and changes in fund balances, a statement of
functional expenses, and balance sheets for all funds. All records of the
Corporation shall be kept for at least three years after the closing of each
fiscal year and shall be available to the public for inspection and copying
during normal business hours.
Section 8. Meeting of Directors. Meetings of the Board of Directors,
regular or special, may be held either within or without the State of Texas.
Section 9. Election of Officers. At the first meeting of the Board of
Directors in each year at which a quorum shall be present, held next after the
annual meeting of shareholders, the Board of Directors shall proceed to the
election of the officers of the Corporation.
Section 10. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such times and places as shall be designated or determined from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required.
Section 11. Special Meetings. Special meetings of the Board of Directors
shall be held whenever and wherever called or provided to be held by the
President or by any two of the directors for the time being in office if the
number of directors shall be five (5) or more or by any one of the directors for
the time being in office if the number of directors shall be four (4) or less,
and at the place, day and hour determined by the officer or the director(s)
calling or providing for the holding of the particular meeting, in each
instance, and such determination may be conclusively evidenced in a call, waiver
of notice or other communication signed by such officer or such director(s).
Section 12. Notice. The Secretary or an Assistant Secretary shall, but in
the event of the absence of the Secretary or an Assistant Secretary or the
failure, inability, refusal or omission on the-part of the Secretary or an
Assistant Secretary so to do, any other officer of the Corporation may, give
notice of each special meeting, and of the place, day and hour of the particular
meeting, in person or by mail, or by telephone, telegraph or other means of
communication, at least three (3) days before the meeting to each director. The
attendance of a director at any meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express purpose
of objecting to the transaction of any business on the ground that the meeting
is not lawfully called or convened.
Section 13. Business to be Transacted. Neither the business to be
transacted at, nor the purpose or purposes of, any regular or special meeting of
the Board of Directors need be specified in the notice or any waiver or waivers
of notice of such meeting. Any and all business of any nature or character
whatsoever may be transacted and action may be taken thereon at any such first
meeting or at any other meeting, regular or special, of the Board of Directors.
At any meeting at which every director shall be present, even though without any
notice, any business may be transacted.
Section 14. Quorum - Adjournment if Quorum is not Present. A majority of
the number of directors fixed by these Bylaws shall constitute a quorum for the
transaction of any and all business, but if at any meeting, regular or special,
or any first meeting, of the Board of Directors there be less than a quorum
present, a majority of those present, or if only one director be present, then
such director, may adjourn the meeting from time to time without notice, other
than by announcement at the meeting, until a quorum shall be present at the
meeting. A majority of the directors present
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at any meeting of the Board of Directors, or if only one director be present,
then such director may adjourn any meeting of the Board from time to time
without notice, other than by announcement at such meeting of the time and place
at which the meeting will reconvene, until the transaction of any and all
business submitted or proposed to be submitted to such meeting or any
adjournment or adjournments thereof shall have been completed. The act of a
majority of the directors present at any meeting of the Board of Directors at
which a quorum is in attendance shall constitute the act of the Board of
Directors unless the act of a greater number is required by the Articles of
Incorporation or by these Bylaws.
Section 15. Order of Business. At all meetings of the Board of Directors
business shall be transacted in such order as from time to time the Board of
Directors may determine. At all meetings of the Board of Directors the President
shall preside and in the absence of the President, a Vice President shall
preside, but if neither the President nor a Vice-President shall be present or
if neither shall for any reason preside at any meeting of the Board, then a
Chairman shall be chosen by the Board from among the directors present and such
Chairman so chosen shall preside at the meeting.
The Secretary of the Corporation, or in his absence, an Assistant
Secretary, shall act as Secretary of the meetings of the Board of Directors, but
in the absence of the Secretary and an Assistant Secretary, or if for any reason
neither acts as Secretary thereof, the presiding officer shall appoint any
person of his choice to act, and such person shall act as Secretary of the
meeting.
Section 16. Presumption of Assent. A director of the Corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action unless his
dissent shall be entered in the minutes of the meeting or unless he shall file
his written dissent to such action with the person acting as the Secretary of
the meeting before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
Section 17. Compensation. Directors, as such, shall not be entitled to
receive any fixed sums or stated salaries for their services, but, by resolution
of the Board, a fixed sum and expenses of attendance, if any, may be provided
and allowed by the Board of Directors for attendance at meetings of the Board,
whether regular or special, or first meetings; provided that nothing herein
contained shall, or shall be construed so as to, preclude any director from
serving the Corporation in any other capacity or receiving compensation
therefor. Members of special or standing committees may be allowed a fixed sum
and expenses of attendance, if any, at committee meetings.
Section 18. Consent and Telephone Meetings. Any action required or
permitted to be taken at any annual or special meeting of Directors of the
Corporation may be taken without a meeting, without prior notice, and without a
vote, if the consent in writing, setting forth the action so taken, shall be
signed by all of the Directors of the Corporation. Pursuant to proper notice or
waiver thereof, any regular or special meeting of the Directors may be held by
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in
such a meeting shall constitute presence in person at such meeting and waiver of
notice of such meeting, except where a person participates in the meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
ARTICLE III.
OFFICERS' AND DIRECTORS' SERVICES,
CONFLICTING INTERESTS AND INDEMNIFICATION
Section 1. Services. No director and, unless otherwise determined by the
Board of Directors, no officer of this Corporation shall be required to devote
his time or any particular portion of his time or render services or any
particular services exclusively to this Corporation. Each and every director
and, unless otherwise determined by the Board of Directors, each and .every
officer of this Corporation shall be entirely free to engage, participate and
invest in any and all such businesses, enterprises and activities, either
similar or dissimilar to the business, enterprise and activities
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of this Corporation, without breach of duty to this Corporation and without
accountability or liability to this Corporation in any event or under any
circumstances or conditions.
Each and every director and, unless otherwise determined by the Board of
Directors, each and every officer of this Corporation shall, respectively, be
entirely free to act for, serve and represent any other corporation or
corporations, entity or entities, and any person or persons, in any capacity or
capacities, and be or become a director or officer, or both, of any other
corporation or corporations, entity or entities, irrespective of whether or not
the business, purposes, enterprises and activities, or any of them, thereof be
similar or dissimilar to the business, purposes, enterprises and activities, or
any of them, of this Corporation, without breach of duty to this Corporation or
to its shareholders and without accountability or liability of any character or
description to this Corporation or to its shareholders in any event or under any
circumstances or conditions.
Section 2. Directors' and Officers' Interests in Contracts. No contract or
other transaction between the Corporation and one or more of its directors or
officers, or between the Corporation and any firm or partnership of which one or
more of its directors or officers are members or employees or in which they are
otherwise interested, or between the Corporation and any corporation or
association or other entity in which one or more of this Corporation's directors
or officers are shareholders, members, directors, officers or employees or in
which they are otherwise interested, shall be void or voidable by reason of or
as a result of such connection with or holding an office or offices as director
or officer or as directors or officers of this Corporation or such interest in
or in connection with such other firm, partnership, corporation, association or
other entity, notwithstanding the presence of such director or directors,
officer or officers, at the meeting of the Board of Directors of this
Corporation which acts upon or in reference to any such contract or other
transaction, and notwithstanding his or their participation in such action, if
(i) the fact of such interest shall be disclosed or known to the Board of
Directors and the Board of Directors shall authorize, approve or ratify such
contract or other transaction by vote of a majority of the directors present,
such interested director or directors to be counted in calculating the majority
necessary to carry such vote, or if (ii) the fact of such interest shall be
disclosed or known to the shareholders and the shareholders either by written
consent or by vote of holders of record of a majority of all the outstanding
shares of stock entitled to vote shall authorize, approve or ratify such
contract or other transaction; nor shall any director or officer be responsible
to, or liable to account to, this Corporation for any profits realized by or
from or through any such contract or other transaction of the Corporation so
authorized, ratified or approved, by reason of such interest or his being or
having been a director or officer, or both, of this Corporation. Nothing herein
contained shall create responsibility or liability in or in connection with any
such event or events or prevent the authorization, ratification or approval of
such contracts or other transactions in any other manner permitted by law or by
statute. This section shall not be construed to invalidate any contract or other
transaction which would otherwise be valid under the common or statutory law
applicable thereto.
Section 3. Non-Liability of Directors and Officers in Certain Cases. No
director or officer or member of the Executive Committee shall be liable for his
acts as such if he is excused from liability under any present or future
provision or provisions of the Texas Business Corporation .Act; and, in
addition, to the fullest extent now or hereafter permitted by the Texas Business
Corporation Act, each officer or director or member of the Executive Committee
shall in the discharge of any duty imposed or power conferred upon him by the
Corporation, be fully protected if, in the exercise of ordinary care, he acted
in good faith and in reliance upon the written opinion of an attorney for the
Corporation, the books of account or reports made to the Corporation by any of
its officials or by an independent certified public accountant or by an
appraiser selected with reasonable care by the Board of Directors or by such
Committee, or in reliance upon other records of the Corporation.
Section 4. Indemnification of Directors and Officers. Each director and
each officer or former director or officer of this Corporation shall be, and
hereby is, indemnified by the Corporation against liabilities imposed upon him
and expenses actually and reasonably incurred by him (including attorneys' fees)
in connection with any claim made against him, or the defense of any action,
suit or proceeding to or in which he is or may be made a party by reason of his
being or having been such director or officer, including such sums as
independent counsel selected by the Board of Directors shall deem reasonable
payment made in settlement of any such claim, action, suit or proceeding
primarily with a view of avoiding expenses of litigation; provided, however,
that no director or officer or former director or officer shall
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be indemnified with respect to matters as to which he shall be adjudged in such
action, suit or proceeding to be liable for negligence or misconduct with
respect to any matters in which indemnity is sought. Such right of
indemnification shall be in addition to, but shall not exclude, any other rights
to which directors or officers may be entitled.
ARTICLE IV.
EXECUTIVE AND OTHER COMMITTEES
The Board of Directors, by resolution or resolutions adopted by a majority
of the number of directors fixed by these Bylaws, may designate two or more
directors to constitute an Executive Committee, or such other committees as the
Board of Directors may provide and in like manner may discontinue any such
committee. The members of such committees shall, respectively, hold office only
during the pleasure of the Board of Directors. Such committees, to the extent
provided in such resolution or resolutions, shall have and may exercise all of
the authority of the Board of Directors in the business and affairs of the
Corporation during intervals between meetings of the Board of Directors except
where action of the Board of Directors is specified by the Texas Non-Profit
Corporation Act or other applicable law and may authorize the seal of the
Corporation to be affixed to all instruments, papers and documents which may
require it; except that such committees shall have no power (a) to elect
directors, (b) to alter, amend or repeal these Bylaws or any resolution or
resolutions of the Board of Directors designating any such committee, or (c) to
appoint or replace any member of any such committee. Regular meetings of any
such committee shall be held at such time and place as the committee may
determine, and special meetings may be called at any time by an officer of the
Corporation or by any member of the committee. No notice of any meeting of any
committee shall be required, and a majority of the members of the committee
shall constitute a quorum for the transaction of business. Minutes of all such
meetings shall be kept and presented to the Board of Directors upon request. The
designation of any such committee and the delegation thereto of authority shall
not operate to relieve the Board of Directors, or any member thereof, of any
responsibility imposed upon it or him by law.
ARTICLE V.
OFFICERS
Section 1. Principal Officers. The officers of the Corporation shall be
chosen by the Board of Directors. The officers shall be a President, a
Secretary, a Treasurer, one or more Vice-Presidents, and such number of
Assistant Secretaries and Assistant Treasurers, as the Board may from time to
time determine or elect. Any person may hold two or more offices at the same
time, except the offices of President and Secretary.
Section 2. Additional Officers. The Board may appoint such other officers,
agents and factors as it shall deem necessary.
Section 3. Terms of Officers. Each officer shall hold his office until his
successor shall have been duly elected and qualified or until his death or until
he shall resign or shall have been removed in the manner hereinafter provided.
Section 4. Removal. Any officer or agent or member of the Executive
Committee elected or appointed by the Board of Directors may be removed by the
Board of Directors whenever in its judgment the best interests of the
Corporation will be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed. Election or
appointment of an officer or agent shall not of itself create contract rights.
Section 5. Vacancies. A vacancy in the office of any officer may be filled
by the vote of a majority of the directors then in office for the unexpired
portion of the term for the person with respect to which a vacancy has occurred,
in each instance.
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Section 6. Powers and Duties of Officers. The officers so chosen shall
perform the duties and exercise the powers expressly conferred or provided for
in these Bylaws, as well as the usual duties and powers incident to such office,
respectively, and such other duties and powers as may be assigned to them from
time to time by the Board of Directors or by the President.
Section 7. Chairman of the Board. The Board of Directors may select from
among its members a Chairman of the Board who may, if so selected, preside at
all meetings of the Board of Directors and approve the minutes of all
proceedings thereat, and he shall be available to consult with and advise the
officers of the Corporation with respect to the conduct of the business and
affairs of the Corporation.
Section 8. The President. The President, subject to the control of the
Board of Directors, shall be the chief executive officer of the Corporation and
shall have general executive charge, management and control of the affairs,
properties and operations of the Corporation in the ordinary course of its
business, with all such duties, powers and authority with respect to such
affairs, properties and operations as may be reasonably incident to such
responsibilities; he may appoint or employ and discharge employees and agents of
the Corporation and fix their compensation; he may make, execute, acknowledge
and deliver any and all contracts, leases, deeds, conveyances, assignments,
bills of sale, transfers, releases and receipts, any and all mortgages, deeds of
trust, indentures, pledges, chattel mortgages, liens and hypothecations, and any
and all bonds, debentures and notes, and any and all other obligations and
encumbrances and any and all other instruments, documents and papers of any kind
or character for and on behalf of and in the name of the Corporation, and, with
the Secretary or an Assistant Secretary, he may sign all certificates for shares
of the capital stock of the Corporation; he shall do and perform such other
duties and have such additional authority and powers as from time to time may be
assigned to or conferred upon him by the Board of Directors.
Section 9. Vice-Presidents. In the absence of the President or in the
event of his disability or refusal to act, the Vice-President (or in the event
there be more than one Vice-President, the Vice-Presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the 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 him by the President or by the Board of Directors of the
Corporation. Any action taken by a Vice-President in the performance of the
duties of the President shall be conclusive evidence of the absence or inability
to act of the President at the time such action was taken.
Section 10. Treasurer. The Treasurer shall have custody of all the funds
and securities of the Corporation which come into his hands. When necessary or
proper, he may endorse on behalf of the Corporation, for collection, checks,
notes and other obligations and shall deposit the same to the credit of the
Corporation in such bank or banks or depositories as shall be selected or
designated by or in the manner prescribed by the Board of Directors. He may sign
all receipts and vouchers for payments made to the Corporation, either alone or
jointly with such officer as may be designated by the Board of Directors.
Whenever required by the Board of Directors he shall render a statement of his
cash account. He shall enter or cause to be entered, punctually and regularly,
on the books of the Corporation to be kept by him or under his supervision or
direction for that purpose, full and accurate accounts of all moneys received
and paid out by, for or on account of the Corporation. He shall at all
reasonable times exhibit his books and accounts and other financial records to
any director of the Corporation during business hours. He shall have such other
powers and duties as may be conferred upon or assigned to him by the Board of
Directors. The Treasurer shall perform all acts incident to the position of
Treasurer subject always to the control of the Board of Directors. He shall, if
required by the Board of Directors, give such bond for the faithful discharge of
his duties in such form and amounts as the Board of Directors may require.
Section 11. Assistant Treasurers. Each Assistant Treasurer shall have the
usual powers and duties pertaining to his office, together with such other
powers and duties as may be conferred upon or assigned to him by the Board of
Directors. The Assistant Treasurers shall have and exercise the powers of the
Treasurer during that officer's absence or inability to act.
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Section 12. Secretary. The Secretary (1) shall keep the minutes of all
meetings of the Board of Directors and the minutes of all meetings of the
shareholders, in books provided for that purpose, (2) shall attend to the giving
and serving of all notices, (3) may sign with the President or a Vice-President
in the name of the Corporation and/or attest the signatures of either to, all
contracts, conveyances, transfers, assignments, encumbrances, authorizations and
all other instruments, documents and papers, of any and every description
whatsoever, of or executed for or on behalf of the Corporation and affix the
seal of the Corporation thereto, (4) may sign with the President or a Vice
President all certificates for shares of the capital stock of the Corporation
and affix the corporate seal of the Corporation thereto, (5) shall have charge
of and maintain and keep or supervise and control the maintenance and keeping of
the stock certificate books, transfer books and stock ledgers and such other
books and papers as the Board of Directors may authorize, direct or provide for,
all of which shall at all reasonable times be open to the inspection of any
director, upon request, at the office of the Corporation during business hours,
(6) shall in general perform all the duties incident to the office of Secretary,
and (7) shall have such other powers and duties as may be conferred upon or
assigned to him by the Board of Directors; subject always to the control of the
Board of Directors.
Section 13. Assistant Secretaries. Each Assistant Secretary shall have the
usual powers and duties pertaining to his office, together with such other
powers and duties as may be conferred upon or assigned to him by the Board of
Directors or the Secretary. The Assistant Secretaries shall have and exercise
the powers of the Secretary during that officer's absence or inability to act.
ARTICLE VI.
BOOKS, DOCUMENTS AND ACCOUNTS
The Board of Directors shall have power to keep the books, documents and
accounts of the Corporation outside of the State of Texas, except that a record
of its shareholders, giving the names and addresses of all shareholders and the
number and class of shares held by each shall be kept at its registered office
or principal place of business, or at the office of its transfer agent or
registrar and the original or a duplicate stock ledger shall at all times be
kept within the State of Texas.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 1. Fiscal Year. The fiscal year of the Corporation shall be such
as the Board of Directors shall, by resolution, provide or establish or such as
the President shall determine subject to approval of the Board.
Section 2. Seal. The seal of the Corporation shall be in such form as the
Board of Directors shall prescribe, and may be used by causing it or a facsimile
thereof to be impressed, affixed, printed, or reproduced in any other manner.
Section 3. Notice and Waiver of Notice. Whenever any notice whatever is
required to be given to any shareholder or director under the provisions of the
Texas Business Corporation Act or under the provisions of these Bylaws or the
Articles of Incorporation of this Corporation, said notice shall be deemed to be
sufficient if given by depositing the same in a post office box in a sealed
post-paid wrapper addressed to the person or persons entitled thereto at their
post office addresses, respectively, as same appear on the books or other
records of the Corporation, and such notice shall be deemed to have been given
and received if given in any other manner or by any other means authorized or
provided for elsewhere in these Bylaws. A waiver or waivers of notice, signed by
the person or persons entitled to such notice, whether before or after the time
stated therein, shall be equivalent to the giving of such notice.
Section 4. Resignations. Any director or officer may resign at any time.
Each such resignation shall be made in writing and shall take effect at the time
specified therein, or, if no time be specified, at the time of its receipt by
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either the Board of Directors or the President or the Secretary. The acceptance
of a resignation shall not be necessary to make it effective, unless expressly
so provided in the resignation.
Section 5. Securities of Other Corporations. The President or any
Vice-President of the Corporation shall have power and authority to transfer,
endorse for transfer, vote, consent or take any other action with respect to any
securities of another issuer which may be held or owned by the Corporation and
to make, execute and deliver any waiver, proxy or consent with respect to any
such securities.
Section 6. Depositories. Funds of the Corporation not otherwise employed
shall be deposited from time to time in such banks or other depositories as
either the Board of Directors or the President or the Treasurer may select or
approve.
Section 7. Signing of Checks, Notes, etc. In addition to and cumulative
of, but in nowise limiting or restricting, any other provision or provisions of
these Bylaws which confer any authority relative thereto, all checks, drafts and
other orders for the payment of money or moneys out of funds of the Corporation
and all notes and other evidences of indebtedness of the Corporation shall be
signed on behalf of the Corporation, in such manner, and by such officer or
officers, person or persons, as shall from time to time be determined or
designated by or pursuant to resolution or resolutions of the Board of
Directors; provided, however, that if, when, after and as authorized or provided
for by resolution or resolutions of the Board of Directors the signature or
signatures of any such officer or officers, person or persons, may be facsimile
or facsimiles, engraved or printed, and shall have the same force and effect and
bind the Corporation as though such officer or officers, person or persons, had
signed the same personally, and, in event of the death, disability, removal or
resignation of any such officer or officers, person or persons, if the Board of
Directors shall so determine or provide, as though and with the same effect as
if such death, disability, removal or resignation had not occurred.
Section 8. Persons. Wherever used or appearing in these Bylaws, pronouns
of the masculine gender shall include the persons of the female sex as well as
the neuter gender and the singular shall include the plural wherever
appropriate.
Section 9. Laws and Statutes. Wherever used or appearing in these Bylaws,
the words "law" or "laws" or "statute" or "statutes," respectively, shall mean
and refer to laws and statutes, or a law or a statute, of the State of Texas, to
the extent only that such is or are expressly applicable, except where otherwise
expressly stated or the context requires that such words not be so limited.
Section 10. Headings. The headings of the Articles and Sections of these
Bylaws are inserted for convenience of reference only and shall not be deemed to
be a part thereof or used in the construction or interpretation thereof.
ARTICLE VIII.
AMENDMENTS
These Bylaws may, from time to time, be added to, changed, altered,
amended or repealed or new Bylaws may be made or adopted by the affirmative vote
of at least a majority of the Directors present at any annual or regular or
special meeting of the Board of Directors.
WITNESS the signature of its duly authorized secretary effective this 30th
day of July, 1997.
/s/ Jeffry B. Lewis
--------------------------
JEFFRY B. LEWIS, Secretary
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ARTICLES OF INCORPORATION
OF
PACE CONCERTS GP, INC.
The undersigned, being a natural person of the age of eighteen (18) years
or more, acting as the incorporator of a corporation under the Texas Business
Corporation Act, hereby adopts the following Articles of Incorporation for such
corporation:
ARTICLE I
The name of the corporation is PACE Concerts GP, Inc.
ARTICLE II
The period of its duration is perpetual.
ARTICLE III
The purpose for which the corporation is organized is to transact any and
all lawful business for which corporations may be incorporated under the Texas
Business Corporation Act.
ARTICLE IV
The street address of the initial registered office of the corporation is
515 Post Oak Boulevard, Suite 300, Houston, Texas 77027, and the name of the
initial registered agent of the corporation at such address is Jeffry B. Lewis.
ARTICLE V
The corporation is authorized to issue one class of capital stock to be
designated Common Stock. The aggregate number of shares which the corporation
shall have authority to issue is One Thousand (1,000) shares of Common Stock,
$.01 par value.
ARTICLE VI
Cumulative voting in the election of directors is expressly prohibited.
ARTICLE VII
No shareholder of the corporation will by reason of his holding shares of
stock of the corporation have any preemptive or preferential rights to purchase
or subscribe to any shares of any class of stock of the corporation, or any
notes, debentures, bonds, warrants, options or other securities of the
corporation, now or hereafter to be authorized.
ARTICLE VIII
The corporation will not commence business until it has received for the
issuance of its shares consideration of the value of One Thousand Dollars
($1,000.00), consisting of money paid, labor done or property actually received,
which property actually received shall have a value of not less than One
Thousand Dollars ($1,000.00).
<PAGE>
ARTICLE IX
The number of directors shall be fixed in the manner provided in the
Bylaws of the corporation. The initial Board of Directors will consist of one
director, and the name and address of the person who is to serve as director
until the first annual meeting of shareholders or until his successor is elected
and qualified is:
Name Address
---- -------
Allen J. Becker 515 Post Oak Boulevard
Suite 300
Houston, Texas 77027
ARTICLE X
To the fullest extent permitted by Texas statutory or decisional law, as
the same exists or may hereafter be amended or interpreted, a director of the
corporation shall not be liable to the corporation or its shareholders for any
act or omission in such director's capacity as a director. Any repeal or
amendment of this Article, or adoption of any other provision of these Articles
of Incorporation inconsistent with this Article, by the shareholders of the
corporation shall be prospective only and shall not adversely affect any
limitation on the liability to the corporation or its shareholders of a director
of the corporation existing at the time of such repeal, amendment or adoption of
an inconsistent provision.
ARTICLE XI
Any action which may be taken at any annual or special meeting of
shareholders may be taken without a meeting, without prior notice, and without a
vote, if a written consent or consents, setting forth the action so taken, is
signed by the holders of shares having not less than the minimum number of votes
necessary to take such action at a meeting at which the holders of all shares
entitled to vote on the action were present and voted.
ARTICLE XII
The name of the incorporator is as follows:
Name Address
---- -------
E. Leigh Sutton 1601 Elm Street
Suite 3000
Dallas, Texas 75201
IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 20th
day of December, 1996.
/s/ E. Leigh Sutton
-----------------------------
E. Leigh Sutton
<PAGE>
ARTICLE I
OFFICES
Section 1. Principal Office. The principal office of the Corporation shall
be in Dallas County, Texas, or such other county as the Board of Directors may
from time to time designate.
Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the State of Texas as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE II
SHAREHOLDERS
Section 1. Time and Place of Meetings. Meetings of the shareholders shall
be held at such time and at such place, within or without the State of Texas, as
shall be determined by the Board of Directors.
Section 2. Annual Meetings. Annual meetings of shareholders shall be held
on such date and at such time as shall be determined by the Board of Directors.
At each annual meeting the shareholders shall elect a Board of Directors and
transact such other business as may properly be brought before the meeting.
Section 3. Special Meetings. Special meetings of the shareholders may be
called at any time by the Chief Executive Officer, the President or the Board of
Directors, and shall be called by the Chief Executive Officer, the President or
the Secretary at the request in writing of the holders of not less than ten
percent (10%) of the voting power represented by all the shares issued,
outstanding and entitled to be voted at the proposed special meeting, unless the
Articles of Incorporation provide for a different percentage, in which event
such provision of the Articles of Incorporation shall govern. Such request shall
state the purpose or purposes of the proposed meeting. Business transacted at
special meetings shall be confined to the purposes stated in the notice of the
meeting.
Section 4. Notice. Written or printed notice stating the place, day and
hour of any shareholders' meeting and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not less
than ten nor more than 60 days before the date of the meeting, either personally
or by mail, by or at the direction of the Chief Executive Officer, President,
Secretary or the officer or person calling the meeting, to each shareholder
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, postage prepaid, addressed
to the shareholder at his address as it appears on the share transfer records of
the Corporation.
Section 5. Closing of Share Transfer Records and Fixing Record Dates for
Matters Other than Consents to Action. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any distribution or
share dividend, or in order to make a determination of shareholders for any
other proper purpose (other than determining shareholders entitled to consent to
action by shareholders proposed to be taken without a meeting of shareholders),
the Board of Directors of the Corporation may provide that the share transfer
records shall be closed for a stated period but not to exceed, in any case, 60
days. If the share transfer records shall be closed for the purpose of
determining shareholders, such records shall be closed for at least ten days
immediately preceding such meeting. In lieu of closing the share transfer
records, the Board of Directors may fix in advance a date as the record date for
any such determination of shareholders, such date in any case to be not more
than 60 days and, in the case of a meeting of shareholders, not less than ten
days prior to the date on which the particular action requiring such
determination of shareholders is to be taken. If the share transfer records are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a distribution (other than a distribution
involving a purchase or redemption by the Corporation of any of its own shares)
or share dividend, the date on which notice of the meeting is mailed or the date
on which the resolution of the Board of Directors declaring such distribution or
share
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dividend is adopted, as the case may be, shall be the record date for such
determination of shareholders. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in this section,
such determination shall apply to any adjournment thereof except where the
determination has been made through the closing of share transfer records and
the stated period of closing has expired.
Section 6. Fixing Record Dates for Consents to Action. Unless a record
date shall have previously been fixed or determined pursuant to this Section 6,
whenever action by shareholders is proposed to be taken by consent in writing
without a meeting of shareholders, the Board of Directors may fix a record date
for the purpose of determining shareholders entitled to consent to that action,
which record date shall not precede, and shall not be more than ten days after,
the date upon which the resolution fixing the record date is adopted by the
Board of Directors. If no record date has been fixed by the Board of Directors
and the prior action of the Board of Directors is not required by the Texas
Business Corporation Act (herein called the "Act"), the record date for
determining shareholders entitled to consent to action in writing without a
meeting shall be the first date on which a signed written consent setting forth
the action taken or proposed to be taken is delivered to the Corporation as
provided in Section 10 of this Article II. Delivery shall be by hand or by
certified or registered mail, return receipt requested. Delivery to the
Corporation's principal place of business shall be addressed to the President or
the Chief Executive Officer of the Corporation. If no record date shall have
been fixed by the Board of Directors and prior action of the Board of Directors
is required by the Act, the record date for determining shareholders entitled to
consent to action in writing without a meeting shall be at the close of business
on the date on which the Board of Directors adopts a resolution taking such
prior action.
Section 7. List of Shareholders. The officer or agent of the Corporation
having charge of the share transfer records for shares of the Corporation shall
make, at least ten days before each meeting of the shareholders, a complete list
of the shareholders entitled to vote at such meeting or any adjournment thereof,
arranged in alphabetical order, with the address of and the number of voting
shares held by each, which list, for a period of ten days prior to such meeting,
shall be kept on file at the registered office or principal place of business of
the Corporation and shall be subject to inspection by any shareholder at any
time during the usual business hours of the Corporation. Such list shall also be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any shareholder during the whole time of the meeting. The
original share transfer records shall be prima facie evidence as to who are the
shareholders entitled to examine such list or "transfer records or to vote at
any meeting of shareholders. Failure to comply with the requirements of this
Section 7 shall not affect the validity of any action taken at such meeting.
Section 8. Quorum. With respect to any matter, a quorum shall be present
at a meeting of shareholders if the holders of shares having a majority of the
voting power represented by all issued and outstanding shares entitled to vote
on that matter are present in person or represented by proxy, unless otherwise
provided by the Articles of Incorporation in accordance with the Act. Once a
quorum is present at a meeting of shareholders, the shareholders represented in
person or by proxy at the meeting may conduct such business as may properly be
brought before the meeting until it is adjourned, and the subsequent withdrawal
from the meeting of any shareholder or the refusal of any shareholder
represented in person or by proxy to vote shall not affect the presence of a
quorum at the meeting. If, however, a quorum shall not be present at any meeting
of shareholders, the shareholders entitled to vote, present in person or
represented by proxy, shall have power to adjourn the meeting, without notice
(other than announcement at the meeting at which the adjournment is taken of the
time and place of the adjourned meeting), until such time and to such place as
may be determined by a vote of the holders of a majority of the shares
represented in person or by proxy at such meeting until a quorum shall be
present. At such adjourned meeting at which a quorum is present, any business
may be transacted which might have been transacted at the meeting as originally
noticed.
Section 9. Voting. When a quorum is present at any meeting, the vote of
the holders of a majority of the shares entitled to vote on a matter, present in
person or represented by proxy at such meeting, shall decide such matter brought
before such meeting, other than the election of directors or a matter for which
the affirmative vote of the holders of a specified portion of the shares
entitled to vote is required by the Act, and shall be the act of the
shareholders, unless otherwise provided by the Articles of Incorporation or
these Bylaws in accordance with the Act.
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Unless otherwise provided in the Articles of Incorporation or these Bylaws
in accordance with the Act, directors of the Corporation shall be elected by a
plurality of the votes cast by the holders of shares entitled to vote in the
election of directors at a meeting of shareholders at which a quorum is present.
At every meeting of the shareholders, each shareholder shall be entitled
to such number of votes, in person or by proxy, for each share having voting
power held by such shareholder, as is specified in the Articles of Incorporation
(including the resolution of the Board of Directors (or a committee thereof)
creating such shares), except to the extent that the voting rights of the shares
of any class or series are limited or denied by the Articles of Incorporation.
At each election of directors, every shareholder shall be entitled (a) to cast,
in person or by proxy, the number of votes to which the shares owned by him are
entitled for as many persons as there are directors to be elected and for whose
election he has a right to vote or (b) unless prohibited by the Articles of
Incorporation and subject to the immediately succeeding sentence of this
paragraph, to cumulate the votes to which the shares owned by him are entitled
by giving one candidate as many votes as the number of such directors multiplied
by the shares owned by him shall equal or by distributing such votes on the same
principle among any number of such candidates. Cumulative voting shall not be
allowed in an election of directors unless a shareholder who intends to cumulate
his votes shall have given written notice of such intention to the Secretary of
the Corporation on or before the day preceding the election at which such
shareholder intends to cumulate his votes; all shareholders entitled to vote
cumulatively may cumulate their votes if any shareholder gives such written
notice. Every proxy shall be in writing and be executed by the shareholder. A
telegram, telex, cablegram, or similar transmission by the shareholder, or a
photographic, photostatic, facsimile, or similar reproduction of a writing
executed by the shareholder, shall be treated as an execution in writing for the
purposes of this Section 9. No proxy shall be valid after 11 months from the
date of its execution unless otherwise provided therein. Each proxy shall be
revocable unless (i) the proxy form conspicuously states that the proxy is
irrevocable, and (ii) the proxy is coupled with an interest, as defined in the
Act and other Texas law.
Shares standing in the name of another corporation may be voted by such
officer, agent or proxy as the bylaws of such corporation may prescribe or, in
the absence of such provision, as the board of directors of such corporation may
determine.
Shares held by an administrator, executor, guardian or conservator may be
voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name as trustee.
Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without being transferred into his name, if such authority is contained
in an appropriate order of the court that appointed the receiver.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Treasury shares, shares of the Corporation's stock owned by another
corporation the majority of the voting stock of which is owned or controlled by
the Corporation, and shares of its own stock held by the Corporation in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
Section 10. Action by Consent. Any action required or permitted to be
taken at a meeting of the shareholders may be taken without a meeting, without
prior notice, and without a vote if a consent in writing, setting forth the
action so taken, shall be signed by all of the shareholders entitled to vote
with respect to the action that is the subject of the consent.
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In addition, if the Articles of Incorporation so provide, any action
required or permitted to be taken at a meeting of the shareholders 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
holder or holders of shares having not less than the minimum number of votes
that would be necessary to take such action at a meeting at which the holders of
all shares entitled to vote on the action were present and voted. Prompt notice
of the taking of any action by shareholders without a meeting by less than
unanimous written consent shall be given to those shareholders who did not
consent in writing to the action.
Every written consent signed by the holders of less than all the shares
entitled to vote with respect to the action that is the subject of the consent
shall bear the date of signature of each shareholder who signs the consent. No
written consent signed by the holders of less than all the shares entitled to
vote with respect to the action that is the subject of the consent shall be
effective to take the action that is the subject of the consent unless, within
60 days after the date of the earliest dated consent delivered to the
Corporation as set forth below in this Section 10, the consent or consents
signed by the holder or holders of shares having not less than the minimum
number of votes that would be necessary to take the action that is the subject
of the consent are delivered to the Corporation by delivery to its registered
office, registered agent, principal place of business, transfer agent,
registrar, exchange agent, or an officer or agent of the Corporation having
custody of the records in which proceedings of meetings of shareholders are
recorded. Delivery shall be by hand or certified or registered mail, return
receipt requested. Delivery to the Corporation's principal place of business
shall be addressed to the President or the Chief Executive Officer of the
Corporation.
A telegram, telex, cablegram, or similar transmission by a shareholder, or
a photographic, photostatic, facsimile, or similar reproduction of a writing
signed by a shareholder, shall be regarded as signed by the shareholder for the
purposes of this Section 10.
Section 11. Presence at Meetings by Means of Communications Equipment.
Shareholders may participate in and hold a meeting of the shareholders by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and participation
in a meeting pursuant to this Section II shall constitute presence in person at
such meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
ARTICLE III
DIRECTORS
Section 1. Number of Directors. The number of directors of the Corporation
shall be fixed from time to time by resolution of the Board of Directors, but in
no case shall the number of directors be less than one. Until otherwise fixed by
resolution of the Board of Directors, the number of directors shall be the
number stated in the Articles of Incorporation. No decrease in the number of
directors shall ha~e the effect of reducing the term of any incumbent director.
Directors shall be elected at each annual meeting of the shareholders by the
holders of shares entitled to vote in the election of directors, except as
provided in Section 2 of this Article III, and each director shall hold office
until the annual meeting of shareholders following his election or until his
successor is elected and qualified. Directors need not be residents of the State
of Texas or shareholders of the Corporation.
Section 2. Vacancies. Subject to other provisions of this Section 2, any
vacancy occurring in the Board of Directors may be filled by election at an
annual or special meeting of the shareholders called for that purpose or by the
affirmative vote of a majority of the remaining directors, though the remaining
directors may constitute less' than a quorum of the Board of Directors as fixed
by Section 8 of this Article III. A director elected to fill a vacancy shall be
elected for the unexpired term of his predecessor in office. Any directorship to
be filled by reason of an increase in the number of directors shall be filled by
election at an annual meeting or at a special meeting of shareholders called for
that purpose or may be filled by the Board of Directors for a term of office
continuing only until the next election of
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one or more directors by the shareholders; provided that the Board of Directors
may not fill more than two such directorships during the period between any two
successive annual meetings of shareholders. Shareholders holding a majority of
shares then entitled to vote at an election of directors may, at any time and
with or without cause, terminate the term of office of all or any of the
directors by a vote at any annual or special meeting called for that purpose.
Such removal shall be effective immediately upon such shareholder action even if
successors are not elected simultaneously, and the vacancies on the Board of
Directors caused by such action shall be filled only by election by the
shareholders.
Notwithstanding the foregoing, whenever the holders of any class or series
of shares or group of classes or series of shares are entitled to elect one or
more directors by the provisions of the Articles of Incorporation, only the
holders of shares of that class or series or group shall be entitled to vote for
or against the removal of any director elected by the holders of shares of that
class or series or group; and any vacancies in such directorships and any newly
created directorships of such class or series or group to be filled by reason of
an increase in the number of such directors may be filled by the affirmative
vote of a majority of the directors elected by such class or series or group
then in office or by a sole remaining director so elected, or by the vote of the
holders of the outstanding shares of such class or series or group, and such
directorships shall not in any case be filled by the vote of the remaining
directors or the holders of the outstanding shares as a whole unless otherwise
provided in the Articles of Incorporation.
Section 3. General Powers. The powers of the Corporation shall be
exercised by or under the authority of, and the business and affairs of the
Corporation shall be managed under the direction of, its Board of Directors,
which may do or cause to be done all such lawful acts and things, as are not by
the Act, the Articles of Incorporation or these Bylaws directed or required to
be exercised or done by the shareholders.
Section 4. Place of Meetings. The Board of Directors of the Corporation
may hold meetings, both regular and special, either within or without the State
of Texas.
Section 5. Annual Meetings. The first meeting of each newly elected Board
of Directors shall be held, without further notice, immediately following the
annual meeting of shareholders at the same place, unless by the majority vote or
unanimous consent of the directors then elected and serving, such time or place
shall be changed.
Section 6. Regular Meetings. Regular meetings of the Board of Directors
may be held with or without notice at such time and place as the Board of
Directors may determine by resolution.
Section 7. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the Chief Executive Officer and shall be
called by the Secretary on the written request of a majority of the incumbent
directors. The person or persons authorized to call special meetings of the
Board of Directors may fix the place for holding any special meeting of the
Board of Directors called by such person or persons. Notice of any special
meeting shall be given at least 24 hours previous thereto if given either
personally (including written notice delivered personally or telephone notice)
or by telex, telecopy, telegram or other means of immediate communication, and
at least 72 hours previous thereto if given by written notice mailed or
otherwise transmitted to each director at the address of his business or
residence. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting. Any director may waive notice of any
meeting, as provided in Section 2 of Article IV of these Bylaws. The attendance
of a director at a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose of objecting
to the transaction of any business on the ground that the meeting is not
lawfully called or convened.
Section 8. Quorum and Voting. At all meetings of the Board of Directors,
the presence of a majority of the number of directors fixed in the manner
provided in Section I of this Article III shall constitute a quorum for the
transaction of business, unless a different number or portion is required by
law, the Articles of Incorporation, or these Bylaws. At all meetings of
committees of the Board of Directors (if one or more be designated in the manner
described in Section 9 of this Article III), the presence of a majority of the
number of directors fixed from time to time by resolution of the Board of
Directors to serve as members of such committees shall constitute a quorum for
the
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transaction of business. The affirmative vote of at least a majority of the
directors present and entitled to vote at any meeting of the Board of Directors
or a committee of the Board of Directors at which there is a quorum shall be the
act of the Board of Directors or the committee, except as may be otherwise
specifically provided by the Act, the Articles of Incorporation or these Bylaws.
Directors may not vote by proxy at any meeting of the Board of Directors.
Directors with an interest in a business transaction of the Corporation and
directors who are directors or officers or have a financial interest in any
other corporation, partnership, association or other organization with which the
Corporation is transacting business may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or of a committee of the
Board of Directors to authorize such business transaction. If a quorum shall not
be present at any meeting of the Board of Directors or a committee thereof, a
majority of the directors present thereat may adjourn the meeting, without
notice other than announcement at the meeting, until such time and to such place
as may be determined by such majority of directors, until a quorum shall be
present.
Section 9. Committees of the Board of Directors. The Board of Directors
may, by resolution passed by a majority of the whole Board of Directors,
designate from among its members one or more committees, each of which shall be
composed of one or more of its members, and may designate one or more of its
members as alternate members of any committee, who may, subject to any
limitations imposed by the Board of Directors, replace absent or disqualified
members at any meeting of that committee. Any such committee, to the extent
provided in the resolution of the Board of Directors designating the committee
or in the Articles of Incorporation or these Bylaws, shall have and may exercise
all of the authority of the Board of Directors of the Corporation, except where
action of the Board of Directors is required by the Act or by the Articles of
Incorporation. Any member of a committee of the Board of Directors may be
removed, for or without cause, by the affirmative vote of a majority of the
whole Board of Directors. If any vacancy or vacancies occur in a committee of
the Board of Directors caused by death, resignation, retirement,
disqualification, removal from office or otherwise, the vacancy or vacancies
shall be filled by the affirmative vote of a majority of the whole Board of
Directors. Such con-unittee or committees shall have such name or names as may
be designated by the Board of Directors and shall keep regular minutes of their
proceedings and report the same to the Board of Directors when required.
Section 10. Compensation of Directors. Unless otherwise provided by
resolution of the Board of Directors, directors, as members of the Board of
Directors or of any committee thereof, shall not be entitled to receive any
stated salary for their services. Nothing herein contained, however, shall be
construed to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.
Section 11. Action by Unanimous Consent. Any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if a written consent, setting forth the action so
taken, is signed by all the members of the Board of Directors or the committee,
as the case may be, and such 'ATitten consent shall have the same force and
effect as a unanimous vote at a meeting of the Board of Directors.
Section 12. Presence at Meetings bv Means of Communications Equipment.
Members of the Board of Directors of the Corporation or any committee designated
by the Board of Directors, may participate in and hold a meeting of such board
or committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this Section 12 shall
constitute presence in person at such meeting, except where a person
participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
ARTICLE IV
NOTICES
Section 1. Form of Notice. Whenever under the provisions of the Act, the
Articles of Incorporation or these Bylaws, notice is required to be given to any
director or shareholder, and no provision is made as to how such
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notice shall be given, it shall not be construed to mean personal notice
exclusively, but any such notice may be given in writing, by mail, postage
prepaid, or by telex, telecopy, or telegram, or other means of immediate
communication, addressed or transmitted to such director or shareholder at such
address as appears on the books of the Corporation. Any notice required or
permitted to be given by mail shall be deemed to be given at the time when the
same be thus deposited, postage prepaid, in the United States mail as aforesaid.
Any notice required or permitted to be given by telex, telecopy, telegram, or
other means of irnmediate communication shall be deemed to be given at the time
of actual delivery.
Section 2. Waiver. Whenever under the provisions of the Act, the Articles
of Incorporation or these Bylaws, any notice is required to be given to any
director or shareholder of the Corporation, a waiver thereof in writing signed
by the person or persons entitled to such notice, whether before or after the
time stated in such notice, shall be equivalent to the giving of such notice.
Section 3. When Notice Unnecessary. Whenever, under the provisions of the
Act, the Articles of Incorporation or these Bylaws, any notice is required to be
given to any shareholder, such notice need not be given to the shareholder if:
(a) notice of two consecutive annual meetings and all notices of
meetings held during the period between those annual meetings, if
any, or
(b) all (but in no event less than two) payments (if sent by first class
mail) of distributions or interest on securities during a 12-month
period,
have been mailed to that person, addressed at his address as shown on the
records of the Corporation, and have been returned undeliverable. Any action or
meeting taken or held without notice to such a person shall have the same force
and effect as if the notice had been duly given. If such a person delivers to
the Corporation a written notice setting forth his then current address, the
requirement that notice be given to that person shall be reinstated.
ARTICLE V
OFFICERS
Section 1. General. The elected officers of the Corporation shall be a
President and a Secretary. The Board of Directors may also elect or appoint a
Chairman of the Board, one or more Vice Presidents, one or more Assistant Vice
Presidents, one or more Assistant Secretaries, a Treasurer, one or more
Assistant Treasurers, and such other officers as may be deemed necessary, all of
whom shall also be officers. Two or more offices may be held by the same person.
Section 2. Election. The Board of Directors shall elect the officers of
the Corporation at each annual meeting of the Board of Directors. The Board of
Directors may appoint such other officers and agents as it shall deem necessary
and shall determine the salaries of all officers and agents from time to time.
The officers shall hold office until their successors are chosen and qualified.
No officer need be a member of the Board of Directors except the Chairman of the
Board, if one be elected. Any officer elected or appointed by the Board of
Directors may be removed, with or without cause, at any time by a majority vote
of the whole Board. Election or appointment of an officer or agent shall not of
itself create contract rights.
Section 3. Chairman of the Board. The Chairman of the Board, if any, shall
be the Chief Executive Officer of the Corporation and, subject to the provisions
of these Bylaws, shall have general supervision of the affairs of the
Corporation and shall have general and active control of all its business. He
shall preside, when present, at all meetings of shareholders and at all meetings
of the Board of Directors. He shall see that all orders and resolutions of the
Board of Directors and the shareholders are carried into effect. He shall have
general authority to execute bonds,
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deeds and contracts in the name of the Corporation and affix the corporate seal
thereto; to sign stock certificates; to cause the employment or appointment of
such employees and agents of the Corporation as the proper conduct of operations
may require, and to fix their compensation, subject to the provisions of these
Bylaws; to remove or suspend any employee or agent who shall have been employed
or appointed under his authority or under authority of an officer subordinate to
him; to suspend for cause, pending final action by the authority which shall
have elected or appointed him, any officer subordinate to the Chairman of the
Board; and, in general, to exercise all the powers and authority usually
appertaining to the chief executive officer of a corporation, except as
otherwise provided in these Bylaws.
Section 4. President. In the absence of a Chairman of the Board, the
President shall be the ranking and Chief Executive Officer of the Corporation,
and shall have the duties and responsibilities, and the authority and power, of
the Chairman of the Board. The President shall be the Chief Operating Officer of
the Corporation and as such shall have, subject to review and approval of the
Chairman of the Board, if one be elected, the responsibility for the operation
of the Corporation and the authority of the Chairman of the Board.
Section 5. Vice Presidents. In the absence of the President or in the
event of his inability or refusal to act, the Vice President, if any (or in the
event there be more than one, the Vice Presidents in the order designated or, in
the absence of any designation, then in the order of their election), shall
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. The Vice
President shall perform such other duties and have such other powers as the
Board of Directors, the Chief Executive Officer or the Chief Operating Officer
may from time to time prescribe. The Vice President in charge of finance, if
any, shall also perform the duties and assume the responsibilities described in
Section 9 of this Article for the Treasurer, and shall report directly to the
Chief Executive Officer of the Corporation.
Section 6. Assistant Vice Presidents. In the absence of a Vice President
or in the event of his inability or refusal to act, the Assistant Vice
President, if any (or, if there be more than one, the Assistant Vice Presidents
in the order designated or, in the absence of any designation, then in the order
of their election), shall perform the duties and exercise the powers of that
Vice President, and shall perform such other duties and have such other powers
as the Board of Directors, the Chief Executive Officer, the Chief Operating
Officer or the Vice President under whose supervision he is appointed may from
time to time prescribe.
Section 7. Secretary. The Secretary shall attend and record minutes of the
proceedings of all meetings of the Board of Directors and any committees thereof
and all meetings of the shareholders. He shall file the records of such meetings
in one or more books to be kept by him for that purpose. Unless the Corporation
has appointed a transfer agent or other agent to keep such a record, the
Secretary shall also keep at the Corporation's registered office or principal
place of business a record of the original issuance of shares issued by the
Corporation and a record of each transfer of those shares that have been
presented to the Corporation for registration of transfer. Such records shall
contain the names and addresses of all past and current shareholders of the
Corporation and the number and class of shares issued by the Corporation held by
each of them. He shall give, or cause to be given, notice of all meetings of the
shareholders and special meetings of the Board of Directors, and shall perform
such other duties as may be prescribed by the Board of Directors or the Chief
Executive Officer, under whose supervision he shall be. He shall have custody of
the corporate seal of the Corporation and he, or an Assistant Secretary, shall
have authority to affix the same to any instrument requiring it, and when so
affixed, it may be attested by his signature or by the signature of such
Assistant Secretary. The Board of Directors may give general authority to any
other officer to affix the seal of the Corporation and to attest the affixing by
his signature. The Secretary shall keep and account for all books, documents,
papers and records of the Corporation except those for which some other officer
or agent is properly accountable. He shall have authority to sign stock
certificates and shall generally perform all the duties usually appertaining to
the office of the secretary of a corporation.
Section 8. Assistant Secretaries. In the absence of the Secretary or in
the event of his inability or refusal to act, the Assistant Secretary, if any
(or, if there be more than one, the Assistant Secretaries in the order
designated or, in the absence of any designation, then in the order of their
election), shall perform the duties and exercise the powers
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of the Secretary and shall perform such other duties and have such other powers
as the Board of Directors, the Chief Executive Officer or the Secretary may from
time to time prescribe.
Section 9. Treasurer. The Treasurer, if any (or the Vice President in
charge of finance, if one be elected), shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors. He shall
disburse the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the Chief Executive Officer and the Board of Directors, at its regular meetings,
or when the Board of Directors so requires, an account of all his transactions
as Treasurer and of the financial condition of the Corporation. If required by
the Board of Directors, he shall give the Corporation a bond (which shall be
renewed every six years) in such sum and with such surety or sureties as shall
be satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration of the Corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the Corporation. The Treasurer shall be under the
supervision of the Vice President in charge of finance, if any, and he shall
perform such other duties as may be prescribed by the Board of Directors, the
Chief Executive Officer or any such Vice President in charge of finance.
Section 10. Assistant Treasurers. In the absence of the Treasurer or in
the event of his inability or refusal to act, the Assistant Treasurer, if one be
elected (or, if there shall be more than one, the Assistant Treasurer in the
order designated or, in the absence of any designation, then in the order of
their election), shall perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such other powers as the
Board of Directors, the Chief Executive Officer or the Treasurer may from time
to time prescribe.
Section 11. Bonding. If required by the Board of Directors, all or certain
of the officers shall give the Corporation a bond, in such form, in such sum and
with such surety or sureties as shall be satisfactory to the Board, for the
faithful performance of the duties of their office and for the restoration to
the Corporation, in case of their death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in their possession or under their control belonging to the Corporation.
ARTICLE VI
CERTIFICATES REPRESENTING SHARES
Section 1. Form of Certificates. The Corporation shall deliver
certificates representing all shares to which shareholders are entitled.
Certificates representing shares of the Corporation shall be in such form as
shall be approved and adopted by the Board of Directors and shall be numbered
consecutively and entered in the share transfer records of the Corporation as
they are issued. Each certificate shall state on the face thereof that the
Corporation is organized under the laws of the State of Texas, the name of the
registered holder, the number and class of shares, and the designation of the
series, if any, which said certificate represents, and either the par value of
the shares or a statement that the shares are without par value. Each
certificate shall also set forth on the back thereof a full or summary statement
of matters required by the Act or the Articles of Incorporation to be described
on certificates representing shares, and shall contain a conspicuous statement
on the face thereof referring to the matters set forth on the back thereof
Certificates shall be signed by the Chairman of the Board, President or any Vice
President and the Secretary or any Assistant Secretary, and may be sealed with
the seal of the Corporation. Either the seal of the Corporation or the
signatures of the Corporation's officers or both may be facsimiles. In case any
officer or officers who have signed, or whose facsimile signature or signatures
have been used on such certificate or certificates, shall cease to be such
officer or officers of the Corporation, whether because of death, resignation or
otherwise, before such certificate or certificates have been delivered by the
corporation or its agents, such certificate or certificates may nevertheless be
issued and delivered as though the person or persons who signed the certificate
or certificates or whose facsimile signature or signatures have been used
thereon had not ceased to be such officer or officers of the Corporation.
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Section 2. Lost Certificates. The Corporation may direct that a new
certificate be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate to be lost or
destroyed. When authorizing the issue of a new certificate, the Board of
Directors, in its discretion and as a condition precedent to the issuance
thereof, may require the owner of the lost or destroyed certificate, or his
legal representative, to advertise the same in such manner as it shall require
and/or give the Corporation a bond in such form, in such sum, and with such
surety or sureties as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed,
Section 3. Transfer of Shares. Shares of stock shall be transferable only
on the share transfer records of the Corporation by the holder thereof in person
or by his duly authorized attorney. Subject to any restrictions on transfer set
forth in the Articles of Incorporation, these Bylaws or any agreement among
shareholders to which this Corporation is a party or has notice, upon surrender
to the Corporation or to the transfer agent of the Corporation of a certificate
representing shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Corporation or the transfer agent of the Corporation to issue a new certificate
to the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 4. Registered Shareholders. Except as otherwise provided in the
Act or other Texas law, the Corporation shall be entitled to regard the person
in whose name any shares issued by the Corporation are registered in the share
transfer records of the Corporation at any particular time (including, without
limitation, as of the record date fixed pursuant to Section 5 or Section 6 of
Article II hereof) as the owner of those shares and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof.
ARTICLE IX
AMENDMENTS TO BYLAWS
Unless otherwise provided by the Articles of Incorporation or a bylaw
adopted by the shareholders of the Corporation, these Bylaws may be amended or
repealed, or new Bylaws may be adopted, at any meeting of the shareholders of
the Corporation or of the Board of Directors at which a quorum is present, by
the affirmative vote of the holders of a majority of the shares or the
directors, as the case may be, present at such meeting.
CERTIFICATION
I, Jeffry B. Lewis, Secretary of the Corporation, hereby certify that the
foregoing is a true, accurate and complete copy of the Bylaws of PACE Concerts
GP, Inc. adopted by its Board of Directors as of December 31, 1996.
/s/Jeffrey B. Lewis
--------------------------
Jeffry B. Lewis, Secretary
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CERTIFICATE OF
LIMITED PARTNERSHIP
FOR
PACE CONCERTS, LTD.
1. Name of Partnership: PACE Concerts, Ltd.
2. Address of Registered Office: 515 Post Oak Boulevard, Suite 300, Houston,
Texas 77027
3. Name and Address of Registered Agent. Jeffry B. Lewis
515 Post Oak Boulevard, Suite 300
Houston, Texas 77027
4. Address of Principal Office: 515 Post Oak Boulevard, Suite 300, Houston,
Texas 77027
5. General Partner:
(a) Name: PACE Concerts GP, Inc.
Mailing Address: 515 Post Oak Boulevard, Suite 300, Houston, Texas
77027
Street Address of Business or Residence (if different from above):
Same as mailing address
EXECUTED this 23rd day of December, 1996.
GENERAL PARTNER:
PACE CONCERTS GP, INC.
By: /s/ Rodney L. Eckerman
-----------------------------
Rodney L. Eckerman, President
<PAGE>
ARTICLES OF INCORPORATION
OF
PACE ENTERTAINMENT GP, CORP.
The undersigned, being a natural person of the age of eighteen (18)
years or more, acting as the incorporator of a corporation under the Texas
Business Corporation Act, hereby adopts the following Articles of Incorporation
for such corporation.
ARTICLE I
The name of the corporation is PACE Entertainment GP, Corp.
ARTICLE II
The period of its duration is perpetual.
ARTICLE III
The purpose for which the corporation is organized is to transact any
and all lawful business for which corporations may be incorporated under the
Texas Business Corporation Act.
ARTICLE IV
The street address of the initial registered office of the corporation
is 515 Post Oak Boulevard, Suite 300, Houston, Texas 77027, and the name of the
initial registered agent of the corporation at such address is Jeffry B. Lewis.
ARTICLE V
The corporation is authorized to issue one class of capital stock to
be designated Common Stock. The aggregate number of shares which the
corporation shall have authority to issue is One Thousand (1,000) shares of
Common Stock, $.01 par value.
ARTICLE VI
Cumulative voting in the election of directors is expressly
prohibited.
ARTICLE VII
No shareholder of the corporation will by reason of his holding shares
of stock of the corporation have any preemptive or preferential rights to
purchase or subscribe to any shares of any class of stock of the corporation,
or any notes, debentures, bonds, warrants, options or other securities of the
corporation, now or hereafter to be authorized.
ARTICLE VIII
The corporation will not commence business until it has received for
the issuance of its shares consideration of the value of One Thousand Dollars
($1,000.00), consisting of money paid, labor done or property actually
received, which property actually received shall have a value of not less than
One Thousand Dollars ($1,000.00).
<PAGE>
ARTICLE IX
The number of directors shall be fixed in the manner provided in the
Bylaws of the corporation. The initial Board of Directors will consist of one
director, and the name and address of the person who is to serve as director
until the first annual meeting of shareholders or until his successor is
elected and qualified is;
Name Address
---- -------
Allen J. Becker 515 Post Oak Boulevard
Suite 300
Houston, Texas 77027
ARTICLE X
To the fullest extent permitted by Texas statutory or decisional law,
as the same exists or may hereafter be amended or interpreted, a director of
the corporation shall not be liable to the corporation or its shareholders for
any act or omission in such director's capacity as a director. Any repeal or
amendment of this Article, or adoption of any other provision of these Articles
of Incorporation inconsistent with this Article, by the shareholders of the
corporation shall be prospective only and shall not adversely affect any
limitation on the liability to the corporation or its shareholders of a
director of the corporation existing at the time of such repeal, amendment or
adoption of an inconsistent provision.
ARTICLE XI
Any action which may be taken at any annual or special meeting of
shareholders may be taken without a meeting, without prior notice, and without
a vote, if a written consent or consents, setting forth the action so taken, is
signed by the holders of shares having not less than the minimum number of
votes necessary to take such action at a meeting at which the holders of all
shares entitled to vote on the action were present and voted.
ARTICLE XII
The name and address of the incorporator is as follows:
Name Address
---- -------
E. Leigh Sutton 1601 Elm Street
Suite 3000
Dallas, Texas 75201
IN WITNESS WHEREOF, the undersigned has hereunto set her hand this
20th day of December, 1996.
/s/ E. Leigh Sutton
-------------------
E. Leigh Sutton
2
<PAGE>
BYLAWS
OF
PACE ENTERTAINMENT GP, CORP.
(A TEXAS CORPORATION)
December 31, 1996
<PAGE>
ARTICLE I
OFFICES
Section 1. Principal Office. The principal office of the Corporation
shall be in Dallas County, Texas, or such other county as the Board of
Directors may from time to time designate.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Texas as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
ARTICLE II
SHAREHOLDERS
Section 1. Time and Place of Meetings. Meetings of the shareholders
shall be held at such time and at such place, within or without the State of
Texas, as shall be determined by the Board of Directors.
Section 2. Annual Meetings. Annual meetings of shareholders shall be
held on such date and at such time as shall be determined by the Board of
Directors. At each annual meeting the shareholders shall elect a Board of
Directors and transact such other business as may properly be brought before
the meeting.
Section 3. Special Meetings. Special meetings of the shareholders may
be called at any time by the Chief Executive Officer, the President or the
Board of Directors, and shall be called by the Chief Executive Officer, the
President or the Secretary at the request in writing of the holders of not less
than ten percent (10%) of the voting power represented by all the shares
issued, outstanding and entitled to be voted at the proposed special meeting,
unless the Articles of Incorporation provide for a different percentage, in
which event such provision of the Articles of Incorporation shall govern. Such
request shall state the purpose or purposes of the proposed meeting. Business
transacted at special meetings shall be confined to the purposes stated in the
notice of the meeting.
Section 4. Notice. Written or printed notice stating the place, day
and hour of any shareholders' meeting and, in the case of a special meeting,
the purpose or purposes for which the meeting is called, shall be delivered not
less than ten nor more than 60 days before the date of the meeting, either
personally or by mail, by or at the direction of the Chief Executive Officer,
President, Secretary or the officer or person calling the meeting, to each
shareholder entitled to vote at such meeting. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail, postage
prepaid, addressed to the shareholder at his address as it appears on the share
transfer records of the Corporation.
Section 5. Closing of Share Transfer Records and Fixing Record Dates
for Matters Other than Consents to Action. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any distribution or
share dividend, or in order to make a determination of shareholders for any
other proper purpose (other than determining shareholders entitled to consent
to action by shareholders proposed to be taken without a meeting of
shareholders), the Board of Directors of the Corporation may provide that the
share transfer records shall be closed for a stated period but not to exceed,
in any case, 60 days. If the share transfer records shall be closed for the
purpose of determining shareholders, such records shall be closed for at least
ten days immediately preceding such meeting. In lieu of closing the share
transfer records, the Board of Directors may fix in advance a date as the
record date for any such determination of shareholders, such date in any case
to be not more than 60 days and, in the case of a meeting of shareholders, not
less than ten days prior to the date on which the particular action requiring
such determination of shareholders is to be taken. If the share transfer
records are not closed and no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of shareholders, or
shareholders entitled to receive payment of a distribution (other than a
distribution involving a purchase or redemption by the Corporation of any of
its own shares) or share dividend, the date on which notice of the meeting is
mailed or the date on which the resolution of the Board of Directors declaring
such distribution or share
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dividend is adopted, as the case may be, shall be the record date for such
determination of shareholders. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in this section,
such determination shall apply to any adjournment thereof except where the
determination has been made through the closing of share transfer records and
the stated period of closing has expired.
Section 6. Fixing Record Dates for Consents to Action. Unless a record
date shall have previously been fixed or determined pursuant to this Section 6,
whenever action by shareholders is proposed to be taken by consent in writing
without a meeting of shareholders, the Board of Directors may fix a record date
for the purpose of determining shareholders entitled to consent to that action,
which record date shall not precede, and shall not be more than ten days after,
the date upon which the resolution fixing the record date is adopted by the
Board of Directors. If no record date has been fixed by the Board of Directors
and the prior action of the Board of Directors is not required by the Texas
Business Corporation Act (herein called the "Act"), the record date for
determining shareholders entitled to consent to action in writing without a
meeting shall be the first date on which a signed written consent setting forth
the action taken or proposed to be taken is delivered to the Corporation as
provided in Section 10 of this Article II. Delivery shall be by hand or by
certified or registered mail, return receipt requested. Delivery to the
Corporation's principal place of business shall be addressed to the President
or the Chief Executive Officer of the Corporation. If no record date shall have
been fixed by the Board of Directors and prior action of the Board of Directors
is required by the Act, the record date for determining, shareholders entitled
to consent to action in writing without a meeting shall be at the close of
business on the date on which the Board of Directors adopts a resolution taking
such prior action.
Section 7. List of Shareholders. The officer or agent of the
Corporation having charge of the share transfer records for shares of the
Corporation shall make, at least ten days before each meeting of the
shareholders, a complete list of the shareholders entitled to vote at such
meeting or any adjournment thereof, arranged in alphabetical order, with the
address of and the number of voting shares held by each, which list, for a
period of ten days prior to such meeting, shall be kept on file at the
registered office or principal place of business of the Corporation and shall
be subject to inspection by any shareholder at any time during the usual
business hours of the Corporation. Such list shall also be produced and kept
open at the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the meeting. The
original share transfer records shall be prima facie evidence as to who are the
shareholders entitled to examine such list or transfer records or to vote at
any meeting of shareholders. Failure to comply with the requirements of this
Section 7 shall not affect the validity of any action taken at such meeting.
Section 8. Quorum. With respect to any matter, a quorum shall be
present at a meeting of shareholders if the holders of shares having a majority
of the voting power represented by all issued and outstanding shares entitled
to vote on that matter are present in person or represented by proxy, unless
otherwise provided by the Articles of Incorporation in accordance with the Act.
Once a quorum is present at a meeting of shareholders, the shareholders
represented in person or by proxy at the meeting may conduct such business as
may properly be brought before the meeting until it is adjourned, and the
subsequent withdrawal from the meeting of any shareholder or the refusal of any
shareholder represented in person or by proxy to vote shall not affect the
presence of a quorum at the meeting. If, however, a quorum shall not be present
at any meeting of shareholders, the shareholders entitled to vote, present in
person or represented by proxy, shall have power to adjourn the meeting,
without notice (other than announcement at the meeting at which the adjournment
is taken of the time and place of the adjourned meeting), until such time and
to such place as may be determined by a vote of the holders of a majority of
the shares represented in person or by proxy at such meeting until a quorum
shall be present. At such adjourned meeting at which a quorum is present, any
business may be transacted which might have been transacted at the meeting as
originally noticed.
Section 9. Voting. When a quorum is present at any meeting, the vote
of the holders of a majority of the shares entitled to vote on a matter,
present in person or represented by proxy at such meeting, shall decide such
matter brought before such meeting, other than the election of directors or a
matter for which the affirmative vote of the holders of a specified portion of
the shares entitled to vote is required by the Act, and shall be the act of the
shareholders, unless otherwise provided by the Articles of Incorporation or
these Bylaws in accordance with the Act.
2
<PAGE>
Unless otherwise provided in the Articles of Incorporation or these
Bylaws in accordance with the Act, directors of the Corporation shall be
elected by a plurality of the votes cast by the holders of shares entitled to
vote in the election of directors at a meeting of shareholders at which a
quorum is present.
At every meeting of the shareholders, each shareholder shall be
entitled to such number of votes, in person or by proxy, for each share having
voting power held by such shareholder, as is specified in the Articles of
Incorporation (including the resolution of the Board of Directors (or a
committee thereof) creating, such shares), except to the extent that the voting
rights of the shares of any class or series are limited or denied by the
Articles of Incorporation. At each election of directors, every shareholder
shall be entitled (a) to cast, in person or by proxy, the number of votes to
which the shares owned by him are entitled for as many persons as there are
directors to be elected and for whose election he has a right to vote or (b)
unless prohibited by the Articles of Incorporation and subject to the
immediately succeeding sentence of this paragraph, to cumulate the votes to
which the shares owned by him are entitled by giving one candidate as many
votes as the number of such directors multiplied by the shares owned by him
shall equal or by distributing such votes on the same principle among any
number of such candidates. Cumulative voting shall not be allowed in an
election of directors unless a shareholder who intends to cumulate his votes
shall have given written notice of such intention to the Secretary of the
Corporation on or before the day preceding the election at which such
shareholder intends to cumulate his votes; all shareholders entitled to vote
cumulatively may cumulate their votes if any shareholder gives such written
notice. Every proxy shall be in writing and be executed by the shareholder. A
telegram, telex, cablegram, or similar transmission by the shareholder, or a
photographic, photostatic, facsimile, or similar reproduction of a writing
executed by the shareholder, shall be treated as an execution in writing for
the purposes of this Section 9. No proxy shall be valid after 11 months from
the date of its execution unless otherwise provided therein. Each proxy shall
be revocable unless (i) the proxy form conspicuously states that the proxy is
irrevocable, and (ii) the proxy is coupled with an interest, as defined in the
Act and other Texas law.
Shares standing in the name of another corporation may be voted by
such officer, agent or proxy as the bylaws of such corporation may prescribe
or, in the absence of such provision, as the board of directors of such
corporation may determine.
Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such
shares into his name. Shares standing in the name of a trustee may be voted by
him, either in person or by proxy, but no trustee shall be entitled to vote
shares held by him without a transfer of such shares into his name as trustee.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without being transferred into his name, if such authority is
contained in an appropriate order of the court that appointed the receiver.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Treasury shares, shares of the Corporation's stock owned by another
corporation the majority of the voting stock of which is owned or controlled by
the Corporation, and shares of its own stock held by the Corporation in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
Section 10. Action by Consent. Any action required or permitted to be
taken at a meeting of the shareholders may be taken without a meeting, without
prior notice, and without a vote if a consent in writing, setting forth the
action so taken, shall be signed by all of the shareholders entitled to vote
with respect to the action that is the subject of the consent.
In addition, if the Articles of Incorporation so provide, any action
required or permitted to be taken at a meeting of the shareholders may be taken
without a meeting, without prior notice, and without a vote if a consent or
consents
3
<PAGE>
in writing, setting forth the action so taken, shall be signed by the holder or
holders of shares having not less than the minimum number of votes that would
be necessary to take such action at a meeting at which the holders of all
shares entitled to vote on the action were present and voted. Prompt notice of
the taking of any action by shareholders without a meeting by less than
unanimous written consent shall be given to those shareholders who did not
consent in writing to the action.
Every written consent signed by the holders of less than all the
shares entitled to vote with respect to the action that is the subject of the
consent shall bear the date of signature of each shareholder who signs the
consent. No written consent signed by the holders of less than all the shares
entitled to vote with respect to the action that is the subject of the consent
shall be effective to take the action that is the subject of the consent
unless, within 60 days after the date of the earliest dated consent delivered
to the Corporation as set forth below in this Section 10, the consent or
consents signed by the holder or holders of shares having not less than the
minimum number of votes that would be necessary to take the action that is the
subject of the consent are delivered to the Corporation by delivery to its
registered office, registered agent, principal place of business, transfer
agent, registrar, exchange agent, or an officer or agent of the Corporation
having custody of the records in which proceedings of meetings of shareholders
are recorded. Delivery shall be by hand or certified or registered mail, return
receipt requested. Delivery to the Corporation's principal place of business
shall be addressed to the President or the Chief Executive Officer of the
Corporation.
A telegram, telex, cablegram, or similar transmission by a
shareholder, or a photographic, photostatic, facsimile, or similar reproduction
of a writing signed by a shareholder, shall be regarded as signed by the
shareholder for the purposes of this Section 10.
Section 11. Presence at Meetings by Means of Communications Equipment.
Shareholders may participate in and hold a meeting of the shareholders by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and participation
in a meeting pursuant to this Section 11 shall constitute presence in person at
such meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
ARTICLE III
DIRECTORS
Section 1. Number of Directors. The number of directors of the
Corporation shall be fixed from time to time by resolution of the Board of
Directors, but in no case shall the number of directors be less than one. Until
otherwise fixed by resolution of the Board of Directors, the number of
directors shall be the number stated in the Articles of Incorporation. No
decrease in the number of directors shall have the effect of reducing the term
of any incumbent director. Directors shall be elected at each annual meeting of
the shareholders by the holders of shares entitled to vote in the election of
directors, except as provided in Section 2 of this Article III, and each
director shall hold office until the annual meeting of shareholders following
his election or until his successor is elected and qualified. Directors need
not be residents of the State of Texas or shareholders of the Corporation.
Section 2. Vacancies. Subject to other provisions of this Section 2,
any vacancy occurring in the Board of Directors may be filled by election at an
annual or special meeting of the shareholders called for that purpose or by the
affirmative vote of a majority of the remaining directors, though the remaining
directors may constitute less than a quorum of the Board of Directors as fixed
by Section 8 of this Article III. A director elected to fill a vacancy shall be
elected for the unexpired term of his predecessor in office. Any directorship
to be filled by reason of an increase in the number of directors shall be
filled by election at an annual meeting or at a special meeting of shareholders
called for that purpose or may be filled by the Board of Directors for a term
of office continuing only until the next election of one or more directors by
the shareholders; provided that the Board of Directors may not fill more than
two such directorships during the period between any two successive annual
meetings of shareholders. Shareholders holding a majority of shares then
entitled to vote at an election of directors may, at any time and with or
without cause, terminate
4
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the term of office of all or any of the directors by a vote at any annual or
special meeting called for that purpose. Such removal shall be effective
immediately upon such shareholder action even if successors are not elected
simultaneously, and the vacancies on the Board of Directors caused by such
action shall be filled only by election by the shareholders.
Notwithstanding the foregoing, whenever the holders of any class or
series of shares or group of classes or series of shares are entitled to elect
one or more directors by the provisions of the Articles of Incorporation, only
the holders of shares of that class or series or group shall be entitled to
vote for or against the removal of any director elected by the holders of
shares of that class or series or group; and any vacancies in such
directorships and any newly created directorships of such class or series or
group to be filled by reason of an increase in the number of such directors may
be filled by the affirmative vote of a majority of the directors elected by
such class or series or group then in office or by a sole remaining director so
elected, or by the vote of the holders of the outstanding shares of such class
or series or group, and such directorships shall not in any case be filled by
the vote of the remaining directors or the holders of the outstanding shares as
a whole unless otherwise provided in the Articles of Incorporation.
Section 3. General Powers. The powers of the Corporation shall be
exercised by or under the authority of, and the business and affairs of the
Corporation shall be managed under the direction of, its Board of Directors,
which may do or cause to be done all such lawful acts and things, as are not by
the Act, the Articles of Incorporation or these Bylaws directed or required to
be exercised or done by the shareholders.
Section 4. Place of Meetings. The Board of Directors of the
Corporation may hold meetings, both regular and special, either within or
without the State of Texas.
Section 5. Annual Meetings. The first meeting of each newly elected
Board of Directors shall be held, without further notice, immediately following
the annual meeting of shareholders at the same place, unless by the majority
vote or unanimous consent of the directors then elected and serving, such time
or place shall be changed.
Section 6. Regular Meetings. Regular meetings of the Board of
Directors may be held with or without notice at such time and place as the
Board of Directors may determine by resolution.
Section 7. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Chief Executive Officer and
shall be called by the Secretary on the written request of a majority of the
incumbent directors. The person or persons authorized to call special meetings
of the Board of Directors may fix the place for holding any special meeting of
the Board of Directors called by such person or persons. Notice of any special
meeting shall be given at least 24 hours previous thereto if given either
personally (including written notice delivered personally or telephone notice)
or by telex, telecopy, telegram or other means of immediate communication, and
at least 72 hours previous thereto if given by written notice mailed or
otherwise transmitted to each director at the address of his business or
residence. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting. Any director may waive notice of
any meeting, as provided in Section 2 of Article IV of these Bylaws. The
attendance of a director at a meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express purpose
of objecting to the transaction of any business on the ground that the meeting
is not lawfully called or convened.
Section 8. Quorum and Voting. At all meetings of the Board of
Directors, the presence of a majority of the number of directors fixed in the
manner provided in Section 1 of this Article III shall constitute a quorum for
the transaction of business, unless a different number or portion is required
by law, the Articles of Incorporation, or these Bylaws. At all meetings of
committees of the Board of Directors (if one or more be designated in the
manner described in Section 9 of this Article III), the presence of a majority
of the number of directors fixed from time to time by resolution of the Board
of Directors to serve as members of such committees shall constitute a quorum
for the transaction of business. The affirmative vote of at least a majority of
the directors present and entitled to vote at any meeting of the Board of
Directors or a committee of the Board of Directors at which there is a quorum
shall be the act of the Board of Directors or the committee, except as may be
otherwise specifically provided by the Act, the Articles of Incorporation or
these Bylaws. Directors may not vote by proxy at any meeting of the Board of
Directors. Directors
5
<PAGE>
with an interest in a business transaction of the Corporation and directors who
are directors or officers or have a financial interest in any other
corporation, partnership, association or other organization with which the
Corporation is transacting business may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or of a committee of the
Board of Directors to authorize such business transaction. If a quorum shall
not be present at any meeting of the Board of Directors or a committee thereof,
a majority of the directors present thereat may adjourn the meeting, without
notice other than announcement at the meeting, until such time and to such
place as may be determined by such majority of directors, until a quorum shall
be present.
Section 9. Committees of the Board of Directors. The Board of
Directors may, by resolution passed by a majority of the whole Board of
Directors, designate from among its members one or more committees, each of
which shall be composed of one or more of its members, and may designate one or
more of its members as alternate members of any committee, who may, subject to
any limitations imposed by the Board of Directors, replace absent or
disqualified members at any meeting of that committee. Any such committee, to
the extent provided in the resolution of the Board of Directors designating the
committee or in the Articles of Incorporation or these Bylaws, shall have and
may exercise all of the authority of the Board of Directors of the Corporation,
except where action of the Board of Directors is required by the Act or by the
Articles of Incorporation. Any member of a committee of the Board of Directors
may be removed, for or without cause, by the affirmative vote of a majority of
the whole Board of Directors. If any vacancy or vacancies occur in a committee
of the Board of Directors caused by death, resignation, retirement,
disqualification, removal from office or otherwise, the vacancy or vacancies
shall be filled by the affirmative vote of a majority of the whole Board of
Directors. Such committee or committees shall have such name or names as may be
designated by the Board of Directors and shall keep regular minutes of their
proceedings and report the same to the Board of Directors when required.
Section 10. Compensation of Directors. Unless otherwise provided by
resolution of the Board of Directors, directors, as members of the Board of
Directors or of any cominittee thereof, shall not be entitled to receive any
stated salary for their services. Nothing herein contained, however, shall be
construed to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.
Section 11. Action by Unanimous Consent. Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if a written consent, setting
forth the action so taken, is signed by all the members of the Board of
Directors or the committee, as the case may be, and such written consent shall
have the same force and effect as a unanimous vote at a meeting of the Board of
Directors.
Section 12. Presence at Meetings by Means of Communications Equipment.
Members of the Board of Directors of the Corporation or any committee
designated by the Board of Directors, may participate in and hold a meeting of
such board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section 12 shall constitute presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
ARTICLE IV
NOTICES
Section 1. Form of Notice. Whenever under the provisions of the Act,
the Articles of Incorporation or these Bylaws, notice is required to be given
to any director or shareholder, and no provision is made as to how such notice
shall be given, it shall not be construed to mean personal notice exclusively,
but any such notice may be given in writing, by mail, postage prepaid, or by
telex, telecopy, or telegram, or other means of immediate communication,
addressed or transmitted to such director or shareholder at such address as
appears on the books of the Corporation. Any notice required or permitted to be
given by mail shall be deemed to be given at the time when the same be thus
deposited, postage prepaid, in the United States mail as aforesaid. Any notice
required or permitted to be given by telex,
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telecopy, telegram, or other means of immediate communication shall be deemed
to be given at the time of actual delivery.
Section 2. Waiver. Whenever under the provisions of the Act, the
Articles of Incorporation or these Bylaws, any notice is required to be given
to any director or shareholder of the Corporation, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before or
after the time stated in such notice, shall be equivalent to the giving of such
notice.
Section 3. When Notice Unnecessary. Whenever, under the provisions of
the Act, the Articles of Incorporation or these Bylaws, any notice is required
to be given to any shareholder, such notice need not be given to the
shareholder if
(a) notice of two consecutive annual meetings and all notices of meetings
held during the period between those annual meetings, if any, or
(b) all (but in no event less than two) payments (if sent by first class
mail) of distributions or interest on securities during a 12-month
period,
have been mailed to that person, addressed at his address as shown on the
records of the Corporation, and have been returned undeliverable. Any action or
meeting taken or held without notice to such a person shall have the same force
and effect as if the notice had been duly given. If such a person delivers to
the Corporation a written notice setting forth his then current address, the
requirement that notice be given to that person shall be reinstated.
ARTICLE V
OFFICERS
Section 1. General. The elected officers of the Corporation shall be a
President and a Secretary. The Board of Directors may also elect or appoint a
Chairman of the Board, one or more Vice Presidents, one or more Assistant Vice
Presidents, one or more Assistant Secretaries, a Treasurer, one or more
Assistant Treasurers, and such other officers as may be deemed necessary, all
of whom shall also be officers. Two or more offices may be held by the same
person.
Section 2. Election. The Board of Directors shall elect the officers
of the Corporation at each annual meeting of the Board of Directors. The Board
of Directors may appoint such other officers and agents as it shall deem
necessary and shall determine the salaries of all officers and agents from time
to time. The officers shall hold office until their successors are chosen and
qualified. No officer need be a member of the Board of Directors except the
Chairman of the Board, if one be elected. Any officer elected or appointed by
the Board of Directors may be removed, with or without cause, at any time by a
majority vote of the whole Board. Election or appointment of an officer or
agent shall not of itself create contract rights.
Section 3. Chairman of the Board. The Chairman of the Board, if any,
shall be the Chief Executive Officer of the Corporation and, subject to the
provisions of these Bylaws, shall have general supervision of the affairs of
the Corporation and shall have general and active control of all its business.
He shall preside, when present, at all meetings of shareholders and at all
meetings of the Board of Directors. He shall see that all orders and
resolutions of the Board of Directors and the shareholders are carried into
effect. He shall have general authority to execute bonds, deeds and contracts
in the name of the Corporation and affix the corporate seal thereto; to sign
stock certificates; to cause the employment or appointment of such employees
and agents of the Corporation as the proper conduct of operations may require,
and to fix their compensation, subject to the provisions of these Bylaws; to
remove or suspend any employee or agent who shall have been employed or
appointed under his authority or under authority of an officer
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subordinate to him; to suspend for cause, pending final action by the authority
which shall have elected or appointed him, any officer subordinate to the
Chairman of the Board; and, in general, to exercise all the powers and
authority usually appertaining to the chief executive officer of a corporation,
except as otherwise provided in these Bylaws.
Section 4. President. In the absence of a Chairman of the Board, the
President shall be the ranking and Chief Executive Officer of the Corporation,
and shall have the duties and responsibilities, and the authority and power, of
the Chairman of the Board. The President shall be the Chief Operating Officer
of the Corporation and as such shall have, subject to review and approval of
the Chairman of the Board, if one be elected, the responsibility for the
operation of the Corporation and the authority of the Chairman of the Board.
Section 5. Vice Presidents. In the absence of the President or in the
event of his inability or refusal to act, the Vice President, if any (or in the
event there be more than one, the Vice Presidents in the order designated or,
in the absence of any designation, then in the order of their election), shall
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. The Vice
President shall perform such other duties and have such other powers as the
Board of Directors, the Chief Executive Officer or the Chief Operating Officer
may from time to time prescribe. The Vice President in charge of finance, if
any, shall also perform the duties and assume the responsibilities described in
Section 9 of this Article for the Treasurer, and shall report directly to the
Chief Executive Officer of the Corporation.
Section 6. Assistant Vice Presidents. In the absence of a Vice
President or in the event of his inability or refusal to act, the Assistant
Vice President, if any (or, if there be more than one, the Assistant Vice
Presidents in the order designated or, in the absence of any designation, then
in the order of their election), shall perform the duties and exercise the
powers of that Vice President, and shall perform such other duties and have
such other powers as the Board of Directors, the Chief Executive Officer, the
Chief Operating Officer or the Vice President under whose supervision he is
appointed may from time to time prescribe.
Section 7. Secretary. The Secretary shall attend and record minutes of
the proceedings of all meetings of the Board of Directors and any committees
thereof and all meetings of the shareholders. He shall file the records of such
meetings in one or more books to be kept by him for that purpose. Unless the
Corporation has appointed a transfer agent or other agent to keep such a
record, the Secretary shall also keep at the Corporation's registered office or
principal place of business a record of the original issuance of shares issued
by the Corporation and a record of each transfer of those shares that have been
presented to the Corporation for registration of transfer. Such records shall
contain the names and addresses of all past and current shareholders of the
Corporation and the number and class of shares issued by the Corporation held
by each of them. He shall give, or cause to be given, notice of all meetings of
the shareholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or the
Chief Executive Officer, under whose supervision he shall be. He shall have
custody of the corporate seal of the Corporation and he, or an Assistant
Secretary, shall have authority to affix the same to any instrument requiring
it, and when so affixed, it may be attested by his signature or by the
signature of such Assistant Secretary. The Board of Directors may give general
authority to any other officer to affix the seat of the Corporation and to
attest the affixing by his signature. The Secretary shall keep and account for
all books, documents, papers and records of the Corporation except those for
which some other officer or agent is properly accountable. He shall have
authority to sign stock certificates and shall generally perform all the duties
usually appertaining to the office of the secretary of a corporation.
Section 8. Assistant Secretaries. In the absence of the Secretary or
in the event of his inability or refusal to act, the Assistant Secretary, if
any (or, if there be more than one, the Assistant Secretaries in the order
designated or, in the absence of any designation, then in the order of their
election), shall perform the duties and exercise the powers of the Secretary
and shall perform such other duties and have such other powers as the Board of
Directors, the Chief Executive Officer or the Secretary may from time to time
prescribe.
Section 9. Treasurer. The Treasurer, if any (or the Vice President in
charge of finance, if one be elected), shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts
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<PAGE>
and disbursements in books belonging to the Corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the
Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and
shall render to the Chief Executive Officer and the Board of Directors, at its
regular meetings, or when the Board of Directors so requires, an account of all
his transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, he shall give the
Corporation a bond (which shall be renewed every six years) in such sum and
with such surety or sureties as shall be satisfactory to the Board of Directors
for the faithful performance of the duties of his office and for the
restoration of the Corporation, in case of his death, resignation, retirement
or removal from office, of all books, papers, vouchers, money and other
property of whatever kind in his possession or under his control belonging to
the Corporation. The Treasurer shall be under the supervision of the Vice
President in charge of finance, if any, and he shall perform such other duties
as may be prescribed by the Board of Directors, the Chief Executive Officer or
any such Vice President in charge of finance.
Section 10. Assistant Treasurers. In the absence of the Treasurer or
in the event of his inability or refusal to act, the Assistant Treasurer, if
one be elected (or, if there shall be more than one, the Assistant Treasurer in
the order designated or, in the absence of any designation, then in the order
of their election), shall perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such other powers as the
Board of Directors, the Chief Executive Officer or the Treasurer may from time
to time prescribe.
Section 11. Bonding. If required by the Board of Directors, all or
certain of the officers shall give the Corporation a bond, in such form, in
such sum and with such surety or sureties as shall be satisfactory to the
Board, for the faithful performance of the duties of their office and for the
restoration to the Corporation, in case of their death, resignation, retirement
or removal from office, of all books, papers, vouchers, money and other
property of whatever kind in their possession or under their control belonging
to the Corporation.
ARTICLE VI
CERTIFICATES REPRESENTING SHARES
Section 1. Form of Certificates. The Corporation shall deliver
certificates representing all shares to which shareholders are entitled.
Certificates representing shares of the Corporation shall be in such form as
shall be approved and adopted by the Board of Directors and shall be numbered
consecutively and entered in the share transfer records of the Corporation as
they are issued. Each certificate shall state on the face thereof that the
Corporation is organized under the laws of the State of Texas, the name of the
registered holder, the number and class of shares, and the designation of the
series, if any, which said certificate represents, and either the par value of
the shares or a statement that the shares are without par value. Each
certificate shall also set forth on the back thereof a full or summary
statement of matters required by the Act or the Articles of Incorporation to be
described on certificates representing shares, and shall contain a conspicuous
statement on the face thereof referring to the matters set forth on the back
thereof. Certificates shall be signed by the Chairman of the Board, President
or any Vice President and the Secretary or any Assistant Secretary, and may be
sealed with the seal of the Corporation. Either the seal of the Corporation or
the signatures of the Corporation's officers or both may be facsimiles. In case
any officer or officers who have signed, or whose facsimile signature or
signatures have been used on such certificate or certificates, shall cease to
be such officer or officers of the Corporation, whether because of death,
resignation or otherwise, before such certificate or certificates have been
delivered by the Corporation or its agents, such certificate or certificates
may nevertheless be issued and delivered as though the person or persons who
signed the certificate or certificates or whose facsimile signature or
signatures have been used thereon had not ceased to be such officer or officers
of the Corporation.
Section 2. Lost Certificates. The Corporation may direct that a new
certificate be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate to be lost or
destroyed. When authorizing the issue of a new certificate, the Board of
Directors, in its discretion and as a condition precedent to the issuance
thereof, may require the owner of the lost or destroyed certificate, or his
legal representative, to advertise the same in such manner as it shall require
and/or
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<PAGE>
give the Corporation a bond in such form, in such sum, and with such surety or
sureties as it may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.
Section 3. Transfer of Shares. Shares of stock shall be transferable
only on the share transfer records of the Corporation by the holder thereof in
person or by his duly authorized attorney. Subject to any restrictions on
transfer set forth in the Articles of Incorporation, these Bylaws or any
agreement among shareholders to which this Corporation is a party or has
notice, upon surrender to the Corporation or to the transfer agent of the
Corporation of a certificate representing shares duly endorsed or accompanied
by proper evidence of succession, assignment or authority to transfer, it shall
be the duty of the Corporation or the transfer agent of the Corporation to
issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
Section 4. Registered Shareholders. Except as otherwise provided in
the Act or other Texas law, the Corporation shall be entitled to regard the
person in whose name any shares issued by the Corporation are registered in the
share transfer records of the Corporation at any particular time (including,
without limitation, as of the record date fixed pursuant to Section 5 or
Section 6 of Article II hereof) as the owner of those shares and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or not it shall
have express or other notice thereof.
ARTICLE VII
INDEMNIFICATION
Section 1. General. The Corporation shall indemnify persons who are or
were a director or officer of the Corporation both in their capacities as
directors and officers of the Corporation and, if serving at the request of the
Corporation as a director, officer, trustee, employee, agent or similar
functionary of another foreign or domestic corporation, trust, partnership,
joint venture, sole proprietorship, employee benefit plan or other enterprise,
in each of those capacities, against any and all liability and reasonable
expense that may be incurred by them in connection with or resulting from (a)
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, arbitrative or investigative (collectively, a
"Proceeding"), (b) an appeal in such a Proceeding, or (c) any inquiry or
investigation that could lead to such a Proceeding, all to the full extent
permitted by Article 2.02-1 of the Act. The Corporation shall pay or reimburse,
in advance of the final disposition of the Proceeding, to all persons who are
or were a director or officer of the Corporation all reasonable expenses
incurred by such person who was, is or is threatened to be made a named
defendant or respondent in a Proceeding to the full extent permitted by Article
2.02-1 of the Act. The Corporation may indemnify persons who are or were an
employee or agent (other than a director or officer) of the Corporation, or
persons who are not or were not employees or agents of the Corporation but who
are or were serving at the request of the Corporation as a director, officer,
trustee, employee, agent or similar functionary of another foreign or domestic
corporation, trust, partnership, joint venture, sole proprietorship, employee
benefit plan or other enterprise (collectively, along with the directors and
officers of the Corporation, such persons are referred to herein as "Corporate
Functionaries") against any and all liability and reasonable expense that may
be incurred by them in connection with or resulting from (a) any Proceeding,
(b) an appeal in such a Proceeding, or (c) any inquiry or investigation that
could lead to such a Proceeding, all to the full extent permitted by Article
2.02-1 of the Act. The rights of indemnification provided for in this Article
VII shall be in addition to all rights to which any Corporate Functionary may
be entitled under any agreement or vote of shareholders or as a matter of law
or otherwise.
Section 2. Insurance. The Corporation may purchase or maintain
insurance on behalf of any Corporate Functionary against any liability asserted
against him and incurred by him in such a capacity or arising out of his status
as a Corporate Functionary, whether or not the Corporation would have the power
to indemnify him or her against the liability under the Act or these Bylaws;
provided, however, that if the insurance or other arrangement is with a person
or entity that is not regularly engaged in the business of providing insurance
coverage, the insurance or arrangement may provide for payment of a liability
with respect to which the Corporation would not have the power to indemnify the
person only if including coverage for the additional liability has been
approved by the shareholders of the
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<PAGE>
Corporation. Without limiting the power of the Corporation to procure or
maintain any kind of insurance or arrangement, the Corporation may, for the
benefit of persons indemnified by the Corporation, (i) create a trust fund,
(ii) establish any form of self-insurance, (iii) secure its indemnification
obligation by grant of any security interest or other lien on the assets of the
Corporation, or (iv) establish a letter of credit, guaranty or surety
arrangement. Any such insurance or other arrangement may be procured,
maintained or established within the Corporation or its affiliates or with any
insurer or other person deemed appropriate by the Board of Directors of the
Corporation regardless of whether all or part of the stock or other securities
thereof are owned in whole or in part by the Corporation. In the absence of
fraud, the judgment of the Board of Directors of the Corporation as to the
terms and conditions of such insurance or other arrangement and the identity of
the insurer or other person participating in an arrangement shall be
conclusive, and the insurance or arrangement shall not be voidable and shall
not subject the directors approving the insurance or arrangement to liability,
on any ground, regardless of whether directors participating in approving such
insurance or other arrangement shall be beneficiaries thereof.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Distributions and Share Dividends. Distributions or share
dividends to the shareholders of the Corporation, subject to the provisions of
the Act and the Articles of Incorporation and any agreements or obligations of
the Corporation, if any, may be declared by the Board of Directors at any
regular or special meeting. Distributions may be declared and paid in cash or
in property (other than shares or rights to acquire shares of the Corporation),
provided that all such declarations and payments of distributions, and all
declarations and issuances of share dividends, shall be in strict compliance
with all applicable laws and the Articles of Incorporation.
Section 2. Reserves. There may be created by resolution of the Board
of Directors out of the surplus of the Corporation such reserve or reserves as
the Board of Directors from time to time, in its discretion, deems proper to
provide for contingencies, or to equalize distributions or share dividends, or
to repair or maintain any property of the Corporation, or for such other proper
purpose as the Board shall deem beneficial to the Corporation, and the Board
may increase, decrease or abolish any reserve in the same manner in which it
was created.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be
determined by the Board of Directors.
Section 4. Seal. The Corporation shall have a seal which may be used
by causing it or a facsimile thereof to be impressed or affixed or in any
manner reproduced. Any officer of the Corporation shall have authority to affix
the seal to any document requiring it.
Section 5. Resignation. Any director, officer or agent of the
Corporation may resign by giving written notice to the President or the
Secretary. The resignation shall take effect at the time specified therein, or
immediately if no time is specified therein. Unless specified in such notice,
the acceptance of such resignation shall not be necessary to make it effective.
ARTICLE IX
AMENDMENTS TO BYLAWS
Unless otherwise provided by the Articles of Incorporation or a bylaw
adopted by the shareholders of the Corporation, these Bylaws may be amended or
repealed, or new Bylaws may be adopted, at any meeting of the shareholders of
the Corporation or of the Board of Directors at which a quorum is present, by
the affirmative vote of the holders of a majority of the shares or the
directors, as the case may be, present at such meeting.
11
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CERTIFICATION
I, Jeffry B. Lewis, Secretary of the Corporation, hereby certify that
the foregoing is a true, accurate and complete copy of the Bylaws of PACE
Entertainment GP, Corp. adopted by its Board of Directors as of December 31,
1996.
/s/ Jeffry B. Lewis,
-------------------------------
Jeffry B. Lewis, Secretary
12
<PAGE>
EXHIBIT 12.1
SFX ENTERTAINMENT, INC.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------
PREDECESSOR
--------------------------------
PRO FORMA
1993 1994 1995 1996 1997 1997
------ -------- ------ -------- -------- -----------
(DOLLARS IN THOUSANDS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Net income (loss) before provision
for income taxes..................... $ 66 $1,417 $160 $(409) $4,304 $(13,725)
Equity income (loss) from
investments, net of distributions ... -- 73 2 16 (479) (5,377)
Interest expense...................... 148 144 144 60 1,590 47,296
Portion of rents representative of an
interest factor...................... 258 268 278 291 918 2,864
------ -------- ------ -------- -------- -----------
Total earnings....................... $472 $1,902 $584 $ (42) $6,333 $ 31,058
====== ======== ====== ======== ======== ===========
Fixed Charges:
Interest expense...................... $148 $ 144 $144 $ 60 $1,590 $ 47,296
Portion of rents representative of an
interest factor...................... 258 268 278 291 918 2,864
------ -------- ------ -------- -------- -----------
Total fixed charges.................. $406 $ 412 $422 $ 351 $2,508 $ 50,160
====== ======== ====== ======== ======== ===========
Ratio of earnings to combined fixed
charges and preferred stock
dividends (deficiency in the coverage
of combined fixed charges by
earnings before fixed charges)(a) .... 1.2x 4.6x 1.4x $(393) 2.5x $(19,102)
====== ======== ====== ======== ======== ===========
- ------------
(a) For the purposes of the ratio of earnings to combined fixed charges,
earnings were calculated by adding pretax income, interest expense,
amortization of debt issuance costs, and the portion of rents
representative of an interest factor. Combined fixed charges consist of
interest expense, and the portion of rents representative of an
interest factor. For the periods in which earnings were insufficient to
cover combined fixed charges, the dollar amount of coverage deficiency,
instead of the ratio is disclosed.
</TABLE>
<PAGE>
EXHIBIT 23.2
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to
the use of our reports dated (i) March 5, 1998 for SFX Entertainment, Inc.;
(ii) October 2, 1997 for Delsener/Slater, Ltd. and Affiliated Companies;
(iii) December 13, 1996, for PACE Entertainment Corporation and Subsidiaries;
(iv) March 20, 1998 for the Contemporary Group; (v) March 18, 1998 for SJS
Entertainment Corporation; (vi) November 20, 1997 for The Album Network, Inc.
and Affiliated Companies; (vii) March 20, 1998 for BG Presents, Inc. and
Subsidiaries; and (viii) March 13, 1998 for Concert/Southern Promotions and
Affiliated Companies in the Registration Statement (Form S-4) and related
Prospectus of SFX Entertainment, Inc. for the registration of $350,000,000
9 1/8% Senior Subordinated Notes due 2008.
/s/ Ernst & Young LLP
Ernst & Young LLP
New York, New York
April 13, 1998
<PAGE>
EXHIBIT 23.3
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
on the combined financial statements of Connecticut Performing Arts, Inc. and
Connecticut Performing Arts Partners dated March 17, 1997 (and to all
references to our Firm) included in or made a part of this registration
statement on Form S-4.
/s/ Arthur Andersen
LLP
Hartford, Connecticut
April 15, 1998
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports on the consolidated financial statements of PACE Entertainment
Corporation and subsidiaries dated December 15, 1997 (except with respect to
the matters discussed in Note 12, as to which the date is December 22, 1997)
and Pavilion Partners dated December 15, 1997 (except with respect to the
matters discussed in Note 11, as to which the date is December 22, 1997), and
to all references to our Firm included in or made a part of this registration
statement of SFX Entertainment, Inc.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Houston, Texas
April 14, 1998
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
on the combined financial statements of Deer Creek Partners, L.P. (formerly
Sand Creek Partners, L.P.) and Murat Centre, L.P. dated September 29, 1997
(and to all references to our firm) included in or made a part of the
registration statement on Form S-4 of SFX Entertainment, Inc.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Indianapolis, Indiana,
April 13, 1998.
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated February 27, 1998, on the financial statements of Riverport Performing
Arts Centre, Joint Venture, as of and for the years ended December 31, 1997
and 1996, (and all references to our firm) included in this registration
statement on Form S-4.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri
April 15, 1998
<PAGE>
EXHIBIT 23.4
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-4 of our report dated December 12, 1996,
relating to the financial statements of Pavilion Partners, which appears in
such Prospectus. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Houston, Texas
April 14, 1998
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Executive Vice President and Director of: SFX Entertainment, Inc.
Dated: April 16, 1998 /s/ D. Geoffrey Armstrong
---------------------------
D. Geoffrey Armstrong
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Director of: PACE AEP Acquisition, Inc.
PACE Amphitheater Management, Inc.
PACE Amphitheaters, Inc.
PACE Bayou Place, Inc.
PACE Communications, Inc.
PACE Concerts GP, Inc.
PACE Concerts, Ltd.
PACE Entertainment Corporation
PACE Entertainment GP Corp.
PACE Entertainment Group, Ltd.
PACE Milton Keynes, Inc.
PACE Motor Sports, Inc.
PACE Music Group, Inc.
PACE Productions, Inc.
PACE Theatrical Group, Inc.
PACE Touring, Inc.
PACE U.K. Holding Corporation
PACE Variety Entertainment, Inc.
PEC, Inc.
Dated: April 13, 1998 /s/ Allen Becker
-------------------------
Allen Becker
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Director of: PACE AEP Acquisition, Inc.
PACE Amphitheater Management, Inc.
PACE Amphitheaters, Inc.
PACE Bayou Place, Inc.
PACE Communications, Inc.
PACE Concerts GP, Inc.
PACE Concerts, Ltd.
PACE Entertainment Corporation
PACE Entertainment GP Corp.
PACE Entertainment Group, Ltd.
PACE Milton Keynes, Inc.
PACE Motor Sports, Inc.
PACE Music Group, Inc.
PACE Productions, Inc.
PACE Theatrical Group, Inc.
PACE Touring, Inc.
PACE U.K. Holding Corporation
PACE Variety Entertainment, Inc.
PEC, Inc.
SFX Entertainment, Inc.
Dated: April 13, 1998 /s/ Brian Becker
------------------------
Brian Becker
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
indivudally and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Director of: PACE Variety Entertainment, Inc.
/s/ Gary Becker
-----------------------
Dated: April 16, 1998 Gary Becker
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
<S> <C> <C>
Vice President or Chief Financial SFX Entertainment, Inc. Old PCI, Inc.
Officer (principal financial and AKG, Inc. PACE AEP Acquisition, Inc.
principal accounting officer) of: Ardee Festivals N.J., Inc. PACE Amphitheaters, Inc.
Ardee Productions, Ltd. PACE Amphitheater Management, Inc.
Atlanta Concerts, Inc. PACE Bayou Place, Inc.
Beach Concerts, Inc. PACE Communications, Inc.
BG Presents, Inc. PACE Concerts GP, Inc.
Bill Graham Enterprises, Inc. PACE Concerts, Ltd.
Bill Graham Management, Inc. PACE Entertainment Corporation
Bill Graham Presents, Inc. PACE Entertainment GP Corp.
Broadway Concerts, Inc. PACE Entertainment Group, Ltd.
Cooley and Conlon Management Co. PACE Milton Keynes, Inc.
Concerts, Inc. PACE Motor Sports, Inc.
Connecticut Amphitheater Development PACE Music Group, Inc.
Corporation PACE Productions, Inc.
Connecticut Concerts, Incorporated PACE Theatrical Group, Inc.
Contemporary Group Acquisition Corp. PACE Touring, Inc.
Contemporary Group, Inc. PACE U.K. Holding Corporation
Contemporary Marketing, Inc. PACE Variety Entertainment, Inc.
Contemporary Productions, Incorporated PEC, Inc.
Contemporary Sports, Incorporated Polaris Amphitheatre Concerts, Inc.
Deer Creek Amphitheater Concerts, Inc. PTG-Florida, Inc.
Delsener/Slater Enterprises, Ltd. QN Corp.
Dumb Deal, Inc. SFX Broadcasting of the Midwest, Inc.
Entertainment Performing Arts, Inc. SFX Concerts, Inc.
Exit 116 Revisited, Inc. Shoreline Amphitheatre, Ltd.
Festival Productions, Inc. SJS Entertainment Corporation
Fillmore Corporation SM/PACE, Inc.
Fillmore Fingers, Inc. Southern Promotions, Inc.
FPI Concerts, Inc. Sunshine Designs, Inc.
High Cotton, Inc. Suntex Acquisition, Inc.
In House Tickets, Inc. The Album Network Inc.
Irving Plaza Concerts, Inc. Touring Productions, Inc.
Murat Center Concerts, Inc. Tuneful Company, Inc.
NOC, Inc. Wolfgang Records
and as a Director of: SFX Entertainment, Inc.
BG Presents, Inc.
Entertainment Performing Arts, Inc.
SJS Entertainment Corporation
Dated: April 16, 1998 /s/ Thomas P. Benson
----------------------------------
Thomas P. Benson
</TABLE>
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
President and Director of: Irving Plaza Concerts, Inc.
/s/ Bill Brusca
------------------------
Dated: April 14, 1998 Bill Brusca
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
indivudally and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Director of: AKG, Inc.
BG Presents, Inc.
Bill Graham Enterprises, Inc.
Bill Graham Presents, Inc.
Bill Graham Management, Inc.
Fillmore Corporation
Fillmore Fingers, Inc.
Shoreline Amphitheatre, Ltd.
Wolfgang Records
/s/ Nicholas P. Clainos
------------------------------
Dated: April 16, 1998 Nicholas P. Clainos
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Co-President and Director of: Atlanta Concerts, Inc.
Cooley and Conlon Mangement Co.
High Cotton, Inc.
Southern Promotions, Inc.
/s/ Peter Conlon
------------------------
Dated: April 10, 1998 Peter Conlon
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Co-President of: Atlanta Concerts, Inc.
Cooley and Conlon Mangement Co.
High Cotton, Inc.
Southern Promotions, Inc.
/s/ Alex Cooley
--------------------------
Dated: April 16, 1998 Alex Cooley
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Co-President, Co-Chief Executive
Officer and Director of: Ardee Festivals N.J., Inc.
Ardee Productions, Ltd.
Beach Concerts, Inc.
Broadway Concerts, Inc.
Connecticut Amphitheater Development Corp.
Connecticut Concerts, Incorporated
Connecticut Performing Arts, Inc.
Conn Ticketing Company
Delsener/Slater Enterprises, Ltd.
Dumb Deal, Inc.
Exit 116 Revisited, Inc.
FPI Concerts, Inc.
In House Tickets, Inc.
NOC, Inc.
Northeast Ticketing Company
QN Corp.
SFX Concerts, Inc.
Southeast Ticketing Company
Dated: April 10, 1998 /s/ Ron Delsener
------------------------
Ron Delsener
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Director of: SFX Entertainment, Inc.
Dated: April 16, 1998 /s/ Edward F. Dugan
-----------------------
Edward F. Dugan
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Director of:
AKG, Inc.
American Broadway, Inc.
Atlanta Concerts, Inc.
Ardee Festivals N.J., Inc.
Ardee Productions, Ltd.
Beach Concerts, Inc.
BGP Acquisition, LLC
BG Presents, Inc.
Bill Graham Enterprises, Inc.
Bill Graham Management, Inc.
Bill Graham Presents, Inc.
Broadway Concerts, Inc.
Concerts, Inc.
Connecticut Amphitheater Development Corp.
Connecticut Concerts, Incorporated
Connecticut Performing Arts, Inc.
Connecticut Performing Arts Partners
Conn Ticketing Company
Contemporary Group Acquisition Corp.
Deer Creek Amphitheater Concerts, Inc.
Deer Creek Amphitheater Concerts, LP
Delsener/Slater Enterprises, Ltd.
Dumb Deal, Inc.
Entertainment Performing Arts, Inc.
Exit 116 Revisited, Inc.
Festival Productions, Inc.
Fillmore Corporation
Fillmore Fingers, Inc.
FPI Concerts, Inc.
GSAC Partners
In House Tickets, Inc.
Irving Plaza Concerts, Inc.
Murat Center Concerts, Inc.
Murat Center Concerts, LP
NOC, Inc.
Northeast Ticketing Company
Old PCI, Inc.
PACE AEP Acquisition, Inc.
PACE Amphitheater Management, Inc.
PACE Amphitheaters, Inc.
PACE Bayou Place, Inc.
PACE Communications, Inc.
PACE Concerts GP, Inc.
PACE Concerts, Ltd.
PACE Entertainment Corporation
PACE Entertainment GP Corp.
PACE Entertainment Group, Ltd.
PACE Milton Keynes, Inc.
PACE Motor Sports, Inc.
PACE Music Group, Inc.
PACE Productions, Inc.
PACE Theatrical Group, Inc.
PACE Touring, Inc.
PACE U.K. Holding Corporation
PACE Variety Entertainment, Inc.
Pavilion Partners
PEC, Inc.
Polaris Amphitheater Concerts, Inc.
PTG-Florida, Inc.
QN Corp.
SFX Broadcasting of the Midwest, Inc.
SFX Concerts, Inc.
SFX Entertainment, Inc.
SFX Network Group, LLC
Shoreline Amphitheatre Ltd.
Shoreline Amphitheatre Partners
SM/PACE, Inc.
Southeast Ticketing Company
Sunshine Concerts, LLC
<PAGE>
Sunshine Designs, Inc.
Sunshine Designs, LP
Suntex Acquisition, Inc.
Suntex Acquisition, LP
Touring Productions, Inc.
Tuneful Company, Inc.
Westbury Music Fair, LLC
Wolfgang Records
Dated: April 16, 1998
/s/ Michael G. Ferrel
---------------------------
Michael G. Ferrel
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Executive Vice President and Director of: American Broadway, Inc.
PACE Variety Entertainment, Inc.
Dated: April 16, 1998 /s/ Kraig Fox
---------------------
Kraig Fox
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Director of: SFX Entertainment, Inc.
Dated: April 16, 1998 /s/ Paul Kramer
----------------------------
Paul Kramer
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Vice President, Assistant General Counsel and SFX Entertainment, Inc.
Director of:
Dated: April 16, 1998 /s/ Richard A. Liese
-------------------------
Richard A. Liese
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Chief Executive Officer
and President of: Deer Creek Amphitheater Concerts, Inc.
Murat Center Concerts, Inc.
Polaris Amphitheater Concerts, Inc.
SFX Broadcasting of the Midwest, Inc.
Sunshine Designs, Inc.
Suntex Acquisition, Inc.
Dated: April 16, 1998 /s/ P. David Lucas
-------------------------
P. David Lucas
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Director of: SFX Entertainment, Inc.
Dated: April 13, 1998 /s/ James F. O'Grady, Jr.
---------------------------------
James F. O'Grady, Jr.
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Director of: AKG, Inc.
BG Presents, Inc.
Bill Graham Enterprises, Inc.
Bill Graham Presents, Inc.
Bill Graham Management, Inc.
Fillmore Corporation
Fillmore Fingers, Inc.
Shoreline Amphitheatre, Ltd.
Wolfgang Records
/s/ Gregg D. Perloff
---------------------------
Dated: April 10, 1998 Gregg D. Perloff
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Director of: AKG, Inc.
BG Presents, Inc.
Bill Graham Enterprises, Inc.
Bill Graham Presents, Inc.
Bill Graham Management, Inc.
Fillmore Corporation
Fillmore Fingers, Inc.
Shoreline Amphitheatre, Ltd.
Wolfgang Records
/s/ Franklin D. Rockwell, Jr.
----------------------------------
Dated: April 10, 1998 Franklin D. Rockwell, Jr.
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Co-President, Co-Chief Executive
Officer and Director of: Ardee Festivals N.J., Inc.
Ardee Productions, Ltd.
Beach Concerts, Inc.
Broadway Concerts, Inc.
Connecticut Amphitheater Development Corp.
Connecticut Concerts, Incorporated
Connecticut Performing Arts, Inc.
Conn Ticketing Company
Delsener/Slater Enterprises, Ltd.
Dumb Deal, Inc.
Exit 116 Revisited, Inc.
FPI Concerts, Inc.
In House Tickets, Inc.
NOC, Inc.
Northeast Ticketing Company
QN Corp.
SFX Concerts, Inc.
Southeast Ticketing Company
Dated: April 16, 1998 /s/ Mitch Slater
----------------------
Mitch Slater
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
<TABLE>
<S> <C> <C>
Executive Chairman, principal executive Fillmore Corporation PACE Variety Entertainment, Inc.
officer and Director of: Fillmore Fingers, Inc. Pavilion Partners
FPI Concerts, Inc. PEC, Inc.
AKG, Inc. GSAC Partners Polaris Amphitheater Concerts, Inc.
American Broadway, Inc. In House Tickets, Inc. PTG-Florida, Inc.
Atlanta Concerts, Inc. Irving Plaza Concerts, Inc. QN Corp.
Ardee Festivals N.J., Inc. Murat Center Concerts, Inc. SFX Broadcasting of the Midwest, Inc.
Ardee Productions, Ltd. Murat Center Concerts, LP SFX Concerts, Inc.
Beach Concerts, Inc. NOC, Inc. SFX Entertainment, Inc.
BGP Acquisition, LLC Northeast Ticketing Company SFX Network Group, LLC
BG Presents, Inc. Old PCI, Inc Shoreline Amphitheatre Ltd.
Bill Graham Enterprises, Inc. PACE AEP Acquisition, Inc. Shoreline Amphitheatre Partners
Bill Graham Management, Inc. PACE Amphitheater Management, Inc.. SM/PACE, Inc.
Bill Graham Presents, Inc. PACE Amphitheaters, Inc. Southeast Ticketing Company
Broadway Concerts, Inc. PACE Bayou Place, Inc. Sunshine Concerts, LLC
Concerts, Inc. PACE Communications, Inc. Sunshine Designs, Inc.
Connecticut Amphitheater Development Corp. PACE Concerts GP, Inc. Sunshine Designs, LP
Connecticut Concerts, Incorporated PACE Concerts, Ltd. PACE Suntex Acquisition, Inc.
Connecticut Performing Arts, Inc. PACE Entertainment Corporation Suntex Acquisition, LP
Connecticut Performing Arts Partners PACE Entertainment GP Corp. Touring Productions, Inc.
Conn Ticketing Company PACE Entertainment Group, Ltd. Tuneful Company, Inc.
Contemporary Group Acquisition Corp. PACE Milton Keynes, Inc. Westbury Music Fair, LLC
Deer Creek Amphitheater Concerts, Inc. PACE Motor Sports, Inc. Wolfgang Records
Deer Creek Amphitheater Concerts, LP PACE Music Group, Inc.
Delsener/Slater Enterprises, Ltd. PACE Productions, Inc.
Dumb Deal, Inc. PACE Theatrical Group, Inc.
Entertainment Performing Arts, Inc. PACE Touring, Inc.
Exit 116 Revisited, Inc. PACE U.K. Holding Corporation
Festival Productions, Inc.
</TABLE>
Dated: April 16, 1998 /s/ Robert F.X. Sillerman
------------------------------
Robert F.X. Sillerman
<PAGE>
POWER OF ATTORNEY FOR
REGISTRATION STATEMENT ON FORM S-4
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby
appoints Robert F.X. Sillerman and Howard J. Tytel and each of them, as
attorneys-in-fact for the undersigned (with full power of substitution and
resubstitution), for and in the name, place and stead of the undersigned,
individually and in the capacities stated below, to sign and file with the
Securities and Exchange Commission under the Securities Act of 1933, a
Registration Statement on Form S-4 (the "Registration Statement"), for the
purpose of registering the SFX Entertainment, Inc. offer to exchange its 9 1/8%
Senior Subordinated Notes due 2008 for all its outstanding 9 1/8% Senior
Subordinated Notes due 2008 and any and all amendments, supplements and
exhibits to any such Registration Statement, including post-effective
amendments, and any and all documents required to be filed with any state
securities regulating board or commission pertaining to such Registration
Statement or securities covered thereby, hereby granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in order to
effectuate the same as fully and to all intents and purposes as each of the
undersigned might or could do if personally present, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or any
of their substitutes, may do or cause to be done by virtue hereof.
Director of American Broadway, Inc. and PACE variety Entertainment, Inc.
Dated: April 16, 1998 /s/ Peter Strauss
---------------------------
Peter Strauss
