SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) JULY 30, 1996
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MAGICWORKS ENTERTAINMENT INCORPORATED
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
2-96614-D 87-0425513
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(Commission File Number) (IRS Employer Identification No.)
930 WASHINGTON AVENUE, 5TH FLOOR
MIAMI BEACH, FLORIDA 33139
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (305) 532-1566
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SHADOW WOOD CORPORATION
1258 EAST MALVERN AVENUE, SALT LAKE CITY, UTAH 84106
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(Former name or former address, if changed since last report)
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ITEMS 1 AND 2. CHANGES IN CONTROL OF THE REGISTRANT AND ACQUISITION OR
DISPOSITION OF ASSETS.
On July 30, 1996, Shadow Wood Corporation, a Delaware corporation now
known as Magicworks Entertainment Incorporated (the "Registrant"), merged (the
"Merger") with Magicworks Entertainment Incorporated, a privately-held Florida
corporation (the "Acquiree"). The Registrant was the survivor of the Merger. The
Merger was consummated pursuant to the terms of an Agreement and Plan of Merger,
dated as of July 24, 1996 (the "Merger Agreement"), by and among the Registrant,
the Acquiree, and Robert L. Wright and Mark Archibald. Pursuant to the Merger,
the Registrant issued one share of its common stock, $.001 par value per share
("Common Stock"), in exchange for each share of common stock of the Acquiree
outstanding immediately prior to the Merger (the "Exchange Ratio"). In
connection with the Merger, the directors of the Acquiree were appointed to
serve as members of the Board of Directors of the Registrant in place of its
former directors, Robert L. Wright and Mark Archibald, each of whom resigned
upon consummation of the Merger. In addition, Messrs. Wright and Archibald
resigned as the officers of the Registrant and the officers of the Acquiree were
appointed officers of the Registrant. As a result of the foregoing, the Board of
Directors and officers of the Registrant now consist of the following persons:
NAME POSITION
- - ---- --------
Brad Krassner Co-Chairman of the Board of Directors
and Chief Executive Officer
Joe Marsh Co-Chairman of the Board of Directors
Lee Marshall President, Chief Operating Officer and
Director
Steven Chaby Chief Financial Officer and Treasurer
Larry Turk Secretary
H. Yale Gutnick Director
The Merger resulted in a change in control of the Registrant. The
21,489,120 shares of Common Stock issued to the shareholders of the Acquiree at
the time of the Merger represent approximately 87% of the Common Stock
outstanding subsequent to the Merger.
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Immediately prior to and in anticipation of the Merger, the Registrant
effectuated a 12.5 to 1 reverse stock split of its then outstanding Common Stock
thereby reducing the outstanding number of shares of Common Stock to 311,180
(the "Reverse Stock Split").
Those persons who currently own five percent or more of the outstanding
shares of Common Stock are as follows:
% OF OUTSTANDING
NAME NO. OF SHARES POSITION SHARES (1)
- - ---- ------------- -------- ----------
Brad Krassner 3,080,879 Co-Chairman of the 14.1%
Board of Directors and
Chief Executive Officer
Joe Marsh 8,384,653 Co-Chairman of the 38.5%
Board of Directors
Lee Marshall 3,403,070 President, Chief 15.6%
Operating Officer,
Director
Glen Bechdel 3,196,941 None 14.7%
- - --------------------------------------------------------------------------------
(1) Based on a total of 21,800,300 shares of Common Stock outstanding
following the transactions described in Item 5, below.
As a result of the Merger, the Registrant, as the survivor of the
Merger, acquired all of the assets (consisting mainly of cash and contract
rights) and liabilities of the Acquiree.
The Exchange Ratio, and the other conditions precedent to the Merger,
including the effectuation of the Reverse Stock Split, were determined in
arm's-length negotiations between the Registrant and the Acquiree. None of the
Acquiree's officers, directors or shareholders were affiliates of the Registrant
prior to the Merger. The principal basis used to determine the number of shares
of Common Stock to be issued by the Registrant to the shareholders of the
Acquiree in the Merger was the percentage of the Registrant's outstanding Common
Stock to be owned by the former shareholders of the Acquiree subsequent to the
Merger, rather than any traditional valuation formula.
ITEM 5. OTHER EVENTS.
In accordance with a Plan and Articles of Merger pursuant to which the
Merger was effectuated (a copy of which is being filed herewith as Exhibit 2.2),
the Registrant amended its Articles of Incorporation to: (i) change its
corporate name to Magicworks Entertainment Incorporated, (ii) increase the
number of authorized shares of Common Stock to 50,000,000,
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and (iii) authorize 5,000,000 shares of preferred stock, $.001 par value, to be
issued in such series and with such rights, preferences and designations as
determined by the Registrant's Board of Directors.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial statements
It is currently impracticable to provide the financial
statements required pursuant to Rule 3.05(b) of Regulation S-X
prior to the due date of this Report. This Report will be
amended within 60 days of the date this Report is filed to
include such financial statements.
(b) Pro forma financial information.
It is currently impracticable to provide the pro forma financial
information required pursuant to Article 11 of Regulation S-X
prior to the due date of this Report. This Report will be
amended within 60 days of the date this Report is filed to
include such pro forma financial information.
(c) Exhibits.
2.1 Agreement and Plan of Merger, dated as of July 24, 1996 by and
among the Registrant, the Acquiree, Robert L. Wright and Mark
Archibald
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2.2 Plan and Articles of Merger of Magicworks Entertainment
Incorporated, a Florida corporation, with and into the
Registrant (f/k/a Shadow Wood Corporation) as filed with the
Secretaries of State of the States of Florida and Delaware.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MAGICWORKS ENTERTAINMENT
INCORPORATED (f/k/a SHADOW WOOD
CORPORATION)
Dated: August 14, 1996 By: /s/ BRAD KRASSNER
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Brad Krassner, Co-Chairman of the
Board of Directors and Chief
Executive Officer
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
AMONG
SHADOW WOOD CORPORATION,
ROBERT L. WRIGHT, MARK ARCHIBALD
AND
MAGICWORKS ENTERTAINMENT INCORPORATED
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TABLE OF CONTENTS
Plan of Merger............................................................. 1
Terms of Merger............................................................ 1
Delivery and Exchange of Shares............................................ 5
Representations of MEI..................................................... 6
Representations of SWC, Wright and Archibald............................... 7
Effective Time; Closing.................................................... 10
Conditions Precedent to the Obligations of MEI............................. 11
Conditions Precedent to the Obligations of SWC............................. 13
Indemnification............................................................ 14
Nature and Survival of Representations..................................... 14
Documents at Closing....................................................... 14
Finder's Fees.............................................................. 16
Miscellaneous.............................................................. 16
Exhibit A - Certificate and Articles of Merger
Exhibit B - MEI Shareholder Schedule
Exhibit C - Investment Letter
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (hereinafter this "Agreement") is
entered into effective as of this ______ day of July, 1996, by and among Shadow
Wood Corporation, a Delaware corporation (hereinafter "SWC"); Robert L. Wright
and Mark Archibald, as majority shareholders and sole officers and directors of
SWC (hereinafter "Wright" and "Archibald" respectively); and Magicworks
Entertainment Incorporated, a Florida corporation (hereinafter "MEI"). SWC and
MEI are sometimes hereinafter collectively referred to herein as the
"Constituent Corporations."
RECITALS:
WHEREAS, the boards of directors of SWC and MEI, respectively, deem it
advisable and in the best interests of such corporations and their respective
shareholders that MEI merge with and into SWC pursuant to this Agreement and the
Certificate and Articles of Merger in the form attached hereto as Exhibit "A"
and pursuant to applicable provisions of law (such transaction hereafter
referred to as the "Merger");
WHEREAS, SWC has an authorized capitalization consisting of 250,000,000
shares of $.0001 par value common stock ("SWC Common Stock"), of which 3,889,750
shares are issued and outstanding as of the date hereof; and MEI has an
authorized capitalization consisting of 50,000,000 shares of common stock, $.001
par value ("MEI Common Stock"), of which 19,000,000 shares (excluding shares
sold in the Private Placement described herein), are issued and outstanding as
of the date hereof (the "MEI Historical Shares"). All of said MEI Historical
Shares are owned by the shareholders of MEI as set forth on the attached Exhibit
"B" (hereafter "MEI Historical Shareholders");
NOW THEREFORE, for the mutual consideration set out herein, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
AGREEMENT
1. PLAN OF MERGER. The parties hereto do hereby agree that MEI shall be
merged with and into SWC upon the terms and subject to the conditions set forth
herein. It is the intention of the parties hereto that this transaction qualify
as a tax-free reorganization under Section 368(a) of the Internal Revenue Code
of 1986, as amended, and related sections thereunder.
2. TERMS OF MERGER. In accordance with the provisions of this Agreement
and the requirements of applicable law, MEI shall be merged with and into SWC as
of the Effective Time (as defined in Section 6 hereof), SWC shall be the
surviving corporation in the Merger (hereinafter, the "Surviving Corporation")
and the separate existence of MEI shall cease as of
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the Effective Time. Consummation of the Merger shall be upon the following
terms and subject to the following conditions:
(a) CORPORATE EXISTENCE
(1) From and after the Effective Time, SWC as the Surviving
Corporation shall continue its corporate existence as a Delaware
corporation and (i) it shall thereupon and thereafter possess all
rights, privileges, powers, franchises and property (real, personal and
mixed) of each of the Constituent Corporations; (ii) all debts due to
either of the Constituent Corporations, on whatever account, all causes
in action and all other things belonging to either of the Constituent
Corporations shall be taken and deemed to be transferred to and shall
be vested in the Surviving Corporation by virtue of the Merger without
further act or deed; (iii) the title to any real estate vested by deed
or otherwise, under the laws of any jurisdiction, in either of the
Constituent Corporations, shall not revert or be in any way impaired by
reason of the Merger; and (iv) all rights of creditors and all liens
upon any property of any of the Constituent Corporations shall be
preserved unimpaired, and all debts, liabilities and duties of the
Constituent Corporations shall thenceforth attach to the Surviving
Corporation and may be enforced against it to the same extent as if
such debts, liabilities and duties had been incurred or contracted by
the Surviving Corporation.
(2) From and after the Effective Time, (i) the Certificate of
Incorporation and By-laws of SWC, as existing immediately prior to the
Effective Time, shall be the Certificate of Incorporation and By-laws
of the Surviving Corporation subject to amendments adopted in the
Certificate and Articles of Merger and any subsequent amendments; (ii)
the members of the board of directors of MEI holding office immediately
prior to the Effective Time shall become the members of the board of
directors of the Surviving Corporation, each to serve subject to the
Surviving Corporation's By-laws; (iii) the Surviving Corporation shall
change its name to Magicworks Entertainment Incorporated; and (iv) all
persons who hold executive offices of MEI at the Effective Time shall
be elected by the board of directors of the Surviving Corporation to
hold the same offices of the Surviving Corporation, each to serve
subject to the Surviving Corporation's By-laws.
(b) PRE-MERGER EVENTS AND RECAPITALIZATIONS.
(1) Prior to Closing, MEI shall have received at least
$10,000,000 in gross proceeds (the "Offering") from its private
placement (the "Private Placement") of units (the "Units") of its
securities, each Unit consisting of 5,000 shares of MEI Common Stock
and an unsecured senior convertible note (the "Note" or "Notes"), in
the principal amount of $12,500 as such securities are further
described in MEI's Confidential Private Placement Memorandum dated June
6, 1996, together with all amendments thereof and supplements and
exhibits thereto (the "Memorandum").
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(2) SWC shall have effectuated a recapitalization, including a
12.1 to 1 reverse stock split (the "SWC Reverse Stock Split") and
cancellation of certain shares by Wright and Archibald, wherein at or
prior to the Effective Time, SWC shall have 311,180 shares of SWC
Common Stock issued and outstanding and no other shares of capital
stock or securities convertible into or exercisable for such capital
stock issued or outstanding. All references hereinafter to SWC Common
Stock shall give effect to the SWC Reverse Stock Split unless otherwise
indicated.
(c) CONVERSION OF SECURITIES.
As of the Effective Time each of the following shall occur without
any action on the part of SWC, MEI or the holders of any of the securities of
either of the Constituent Corporations:
(1) Each of the shares of MEI Common Stock issued and
outstanding immediately prior to the Effective Time shall be converted
into one share of SWC Common Stock. All such shares of MEI Common Stock
shall no longer be outstanding and shall automatically be canceled and
shall cease to exist, and each certificate previously evidencing any
such shares shall thereafter represent the right to receive, upon the
surrender of such certificate in accordance with the provisions of
Section 3 hereof, certificates evidencing such number of shares of SWC
Common Stock into which such shares of MEI Common Stock were converted.
The holders of such certificates previously evidencing shares of MEI
Common Stock outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such shares of MEI Common
Stock except the right to receive from SWC, after surrender of such
certificates, shares of SWC Common Stock in accordance with this
Section and as otherwise provided herein or by applicable law;
(2) Any shares of MEI Common Stock held in the treasury of MEI
immediately prior to the Effective Time shall automatically be canceled
and extinguished without any conversion thereof and no payment shall be
made with respect thereto;
(3) In fulfillment of the obligation of MEI to issue
securities underlying the Units sold in the Private Placement to
purchasers in the Private Placement, SWC shall issue on the terms and
subject to the conditions set forth in the Memorandum: (a) shares of
SWC Common Stock on the basis of one share for each share of MEI Common
Stock sold in the Private Placement and (b) an unsecured senior
convertible Note in the principal amount of $12,500 for each unsecured
senior convertible note sold in the Private Placement. The terms of the
Notes shall be as described in the Memorandum and in the form of such
Notes as attached thereto as exhibits, and SWC hereby agrees to assume
all responsibility, upon Closing, to implement the sinking fund and
other arrangements as defined and contemplated in the Memorandum,
including, without limitation, the obligation to issue SWC Common Stock
in the event of conversion of the Notes or the obligation to issue
redeemable common stock purchase warrants in the event
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of prepayment of the Notes under certain circumstances set forth in the
Memorandum. The Units and all securities underlying and issuable in
connection with the Units are sometimes hereinafter referred to as the
"Assumed Securities".
(4) Subject to completion of the Offering in the Private
Placement, SWC shall, at Closing, issue to Capital Growth
International, L.L.C. ("CGI") or its designees, after giving effect to
the SWC Reverse Stock Split, 488,820 shares of SWC Common Stock and
Placement Agent Warrants to purchase 500,000 shares of SWC Common Stock
under the terms and conditions further described and defined in the
Memorandum.
(5) The 311,180 shares of SWC Common Stock (after giving
effect to the SWC Reverse Stock Split) previously issued and
outstanding prior to the Merger will remain issued and outstanding;
(6) At Closing, there shall be no securities other than those
described in the Memorandum or Exhibit "B", attached hereto and by this
reference incorporated herein, that are convertible into or exercisable
or exchangeable for shares of MEI Common Stock or SWC Common Stock.
(d) ASSUMPTION OF OBLIGATIONS.
As of the Effective Time:
(1) SWC shall assume all of MEI's obligations relating to the
Assumed Securities, so that such obligations shall become obligations
of SWC. Each Assumed Security shall continue to have, and be subject
to, the same terms and conditions set forth in the Memorandum. SWC
shall reserve for issuance the number of shares of SWC Common Stock
that will become issuable upon the conversion, prepayment or exercise
of such Assumed Securities pursuant to this Section 2(d);
(2) The Certificate and Articles of Merger shall amend the
Certificate of Incorporation of SWC to (i) change its corporate name to
Magicworks Entertainment Incorporated, (ii) authorize 5,000,000 shares
of preferred stock, $.001 par value, to be issued in such series and
with such rights, preferences and designations as determined by SWC's
Board of Directors, and (iii) reduce the authorized shares of SWC
Common Stock to 50,000,000 shares, $.001 par value.
(3) SWC shall assume all responsibilities to file one or more
registration statements with the Securities and Exchange Commission
(the "Commission") and applicable state agencies to register certain
securities as described in the Memorandum.
(4) Subject to consummating the Offering and closing the
Merger, SWC, to the extent agreed upon by MEI and CGI as described in
the Memorandum, shall continue the Private Placement upon the terms and
conditions set forth in the Memorandum.
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(e) OTHER MATTERS.
(1) Except for the recapitalization of SWC described in
Section 2(b) hereof, including the SWC Reverse Stock Split, there shall
be no stock dividend, stock split, recapitalization, issuance of, or
exchange of shares with respect to or rights issued in respect of,
SWC's capital stock after the date hereof and there shall be no
dividends paid on SWC's capital stock after the date hereof, in each
case through and including the Effective Time.
(2) MEI shall have received all requisite board of directors
and shareholder approval of all matters set forth herein and no MEI
Historical Shareholder shall have exercised any dissenters rights under
applicable law.
(3) SWC shall have received all requisite board of directors
and shareholder approval of the matters set forth herein and no SWC
shareholder shall have exercised any dissenters rights under applicable
law.
(4) Wright and Archibald do hereby agree, subject to the terms
hereof, to respectively vote their shares of SWC Common Stock in favor
of the Merger and the other matters described herein.
(5) To the extent any shareholder of either of the Constituent
Corporations exercises dissenting shareholder rights, the parties
hereto may elect by mutual consent to proceed with the Merger.
3. DELIVERY AND EXCHANGE OF SHARES. At or as soon as practicable
after the Effective Time:
(a) MEI will use its reasonable efforts to cause the MEI
Historical Stockholders to surrender for cancellation certificates or
instruments representing their shares of MEI Common Stock, against
delivery of like securities of SWC for which the MEI securities are to
be converted in the Merger. Until surrendered and exchanged as herein
provided, each outstanding instrument which, prior to the Effective
Time, represented a MEI security shall be deemed for all corporate
purposes to evidence a like security of SWC into which the MEI security
shall have been so converted.
(b) On or before Closing, SWC shall irrevocably direct its
transfer agent to issue, as soon as practicable, all SWC Common Stock
as described herein and such direction shall constitute delivery of
such securities for purposes of completing the Private Placement and
the Merger. At Closing, SWC shall deliver the Notes to the purchasers
thereof in the Private Placement or shall cause the delivery of said
Notes as soon as practicable after Closing.
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4. REPRESENTATIONS OF MEI. MEI hereby represents and warrants as of the
date hereof as follows, which warranties and representations shall also be true
as of the Effective Time:
(a) Except as noted on Exhibit "B", the MEI Historical
Stockholders listed on the attached Exhibit "B" are the sole owners of
record and beneficially of the issued and outstanding shares of MEI
Common Stock. MEI has no other shares of capital stock outstanding
other than shares issued in the Private Placement.
(b) The issued and outstanding shares of MEI Common Stock are
duly authorized, validly issued, fully-paid and nonassessable.
(c) The unaudited financial statements for the three months
ended March 31, 1996 and 1995, and the audited financial statements as
of December 31, 1994 and 1995 and for the years ended December 31,
1993, 1994, and 1995, of MEI which have been delivered to SWC
(hereinafter collectively referred to as the "MEI Financial
Statements") are complete in all material respects and fairly present
the financial condition of MEI as of the respective dates thereof and
the results of its operations for the periods covered, subject, in the
case of the unaudited interim statements, to normal year-end audit
adjustments. There are no material liabilities or obligations, either
fixed or contingent, not disclosed in the MEI Financial Statements or
in any exhibit thereto or notes thereto other than contracts or
obligations in the ordinary course of business and obligations in
respect of the Notes; and no such contracts or obligations in the
ordinary course of business constitute liens or other liabilities which
materially adversely alter the financial condition of MEI as reflected
in the MEI Financial Statements. MEI has good title to all assets shown
on the MEI Financial Statements subject only to dispositions and other
transactions in the ordinary course of business, the disclosures set
forth therein and liens and encumbrances disclosed therein or of
record. The MEI Financial Statements have been prepared in accordance
with generally accepted accounting principles consistently applied
(except as may be indicated therein or in the notes thereto).
(d) Except as described in the Memorandum, since March 31,
1996, there have not been any material adverse changes in the financial
position of MEI except changes arising in the ordinary course of
business, which changes will in no event materially and adversely
affect the financial position of MEI.
(e) Except as described in the Memorandum, MEI is not a party
to any material pending litigation or, to its best knowledge, any
governmental investigation or proceeding, not reflected in the MEI
Financial Statements, and to its best knowledge, no material
litigation, claims, assessments or any governmental proceedings are
threatened or contemplated against MEI or respecting the transactions
contemplated by this Agreement.
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(f) MEI is in good standing in its state of incorporation, and
is in good standing and duly qualified to do business in each state
where required to be so qualified except where the failure to so
qualify would have no material adverse effect on MEI.
(g) MEI has filed (or, by the Effective Time, will have filed)
all material tax returns (or extensions thereof) due or required to be
filed prior to the Effective Time and has (or will have) paid or made
adequate provisions for all taxes or assessments which have become due
as of the Effective Time.
(h) MEI is not materially in breach of any material agreement
to which it is a party. MEI has previously given SWC copies or access
thereto of all material written contracts, commitments and/or
agreements to which MEI is a party including all relationships or
dealings with related parties or affiliates
(i) MEI will have, at the Effective Time, only those
subsidiary corporations described in the Memorandum.
(j) MEI has made and hereby agrees to make its corporate
financial records, minute books, and other corporate documents and
records available for review to present management of SWC prior to the
Effective Time, during reasonable business hours and on reasonable
notice.
(k) The execution of this Agreement does not, and the
consummation of the transactions contemplated hereby, will not,
materially violate or breach any material agreement or contract to
which MEI is a party and has been duly authorized by all necessary
corporate action on the part of MEI.
(l) MEI need not obtain the consent of any individual, firm,
corporation, partnership, limited liability company, association,
trust, estate, court, arbitrator, tribunal, governmental,
quasi-governmental or public agency commission, board, bureau,
instrumentality, authority or any other entity to enter into this
Agreement or consummate the transactions contemplated hereby.
(m) All information regarding MEI which is set forth in the
Memorandum is true, complete and accurate in all material respects as
of the date of the Memorandum and the Effective Time.
5. REPRESENTATIONS OF SWC, WRIGHT AND ARCHIBALD. SWC, Wright and
Archibald hereby jointly and severally represent and warrant as of the date
hereof as follows, each of which representations and warranties shall continue
to be true as of the Effective Time:
(a) As of the Closing, the shares of SWC Common Stock to be
issued and delivered hereunder and upon exchange, prepayment, exercise
or conversion of any instrument delivered hereunder will, when so
issued and delivered, constitute, duly
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authorized, validly and legally issued shares of SWC Common Stock,
fully-paid and nonassessable. All other securities of SWC to be
delivered hereunder have been duly authorized and validly and legally
issued.
(b) The copies of SWC's Certificate of Incorporation and
By-laws heretofore delivered to MEI are true and complete copies of
those documents as in effect as of the date hereof.
(c) SWC has the corporate power to enter into this Agreement
and to perform its obligations hereunder. The execution and delivery of
this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by the board of directors of SWC and
duly approved by the shareholders of SWC and no other corporate
proceedings on the part of SWC are necessary to authorize the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby. This Agreement constitutes the valid and binding
obligation of SWC, Wright and Archibald enforceable against each of
them in accordance with its terms. The execution and performance of
this Agreement and the consummation of the transactions contemplated
hereby will not constitute a material breach of any agreement,
indenture, mortgage, license or other instrument or document to which
SWC, Wright or Archibald is a party or by which any of them or any of
their assets is bound and will not violate any judgment, decree, order,
writ, law, rule, statute, or regulation applicable to SWC, Wright or
Archibald or their respective properties. The execution and performance
of this Agreement and the consummation of the transactions contemplated
hereby will not violate or conflict with any provision of the
Certificate of Incorporation or By-laws of SWC.
(d) SWC has delivered to MEI a true and complete copy of its
(i) Annual Report on Form 10-K for the year ended December 31, 1995, as
properly filed with the Securities and Exchange Commission, and (ii)
its reports on Form 10-Q for the periods ended March 31, 1996,
September 30, 1995, June 30, 1995, and March 31, 1995, as properly
filed with the Securities and Exchange Commission. As of their
respective dates, such reports (the "SWC Reports") did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstance under which they were made, not
misleading. The audited financial statements and unaudited interim
financial statements included in such reports have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis (except as may be indicated therein or in the notes
thereto) and fairly present the financial position of SWC as of the
dates thereof and the results of its operations and changes in
financial position for the periods then ended subject, in the case of
the unaudited interim financial statements, to normal year-end audit
adjustments. There are no liabilities or obligations of SWC, either
fixed or contingent, not disclosed in the SWC Reports.
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(e) Since March 31, 1996, there have not been any material
adverse changes in the condition, financial or otherwise of SWC, except
payment of its ordinary routine expenses, which has not resulted in the
creation of any debt, liability or other obligation of SWC. Except as
expressly contemplated herein, since March 31, 1996, SWC has not (i)
issued or sold, or agreed to issue or sell, any of its capital stock,
options, warrants, rights or calls to purchase such stock, any
securities convertible or exchangeable into such capital stock or other
corporate securities, or effected any subdivision or other
recapitalization affecting its capital stock; (ii) mortgaged, pledged
or subjected to any lien, pledge, charge or other encumbrance any of
its properties or assets or permitted any of its property or assets to
be subjected to any lien, pledge, charge or other encumbrance; (iii)
sold, assigned or transferred or agreed to sell, assign or transfer any
of its assets; (iv) entered into any transaction; (v) declared, paid or
set aside any dividends or distributions or payments on its capital
stock, or redeemed or repurchased, or agreed to redeem or repurchase,
any shares of its capital stock; (vi) made any loans or advances to any
person, or assumed, guaranteed, endorsed, or otherwise become
responsible for the obligations of any person; or (vii) incurred any
indebtedness for borrowed money.
(f) SWC is not a party to or the subject of any pending
litigation, claims, or governmental investigation or proceeding not
reflected in the SWC Financial Statements or otherwise disclosed
herein, and there are no lawsuits, claims, assessments, investigations,
or similar matters, to the best knowledge of SWC, Wright and Archibald,
threatened or contemplated against or affecting SWC, its properties or
respecting the transactions contemplated by this Agreement.
(g) SWC is duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the corporate
power to own its property and to carry on its business as now being
conducted and is duly qualified to do business in any jurisdiction
where so required except where the failure to so qualify would have no
material adverse effect.
(h) SWC has filed all federal, state, county and local income,
excise, property and other tax, governmental and/or related returns,
forms, or reports, which are due or required to be filed by it prior to
the date hereof and has paid all taxes, fees, or assessments which have
or may become due pursuant to such returns or pursuant to any
assessments received. SWC is not delinquent or obligated for any tax,
penalty, interest, delinquency or charge.
(i) SWC's authorized capital stock consists of: (i)
250,000,000 shares of SWC Common Stock, $.0001 par value, of which
3,889,750 shares are presently issued and outstanding. These 3,889,000
outstanding shares shall be reduced on or before the Effective Date to
311,180 shares as the result of the SWC Reverse Stock Split, as
provided herein. All outstanding shares of SWC Common Stock are duly
authorized, validly issued, fully-paid and nonassessable. There are no
existing options, calls,
9
<PAGE>
warrants, preemptive rights or commitments of any character relating to
the issued or unissued capital stock or other securities of SWC and no
outstanding securities convertible into or exercisable for SWC Common
Stock.
(j) The corporate financial records, minute books, and other
corporate documents and records of SWC have been made and shall
continue to be made available to MEI prior to and after the Effective
Time.
(k) SWC has not breached, nor is there any pending, or to the
knowledge of management, any threatened claim that SWC has breached,
any of the terms or conditions of any agreements, contracts or
commitments to which it is a party or by which it or its properties is
bound. SWC hereby represents that it is not a party to any material
agreement, contract or commitment, written or oral, other than
appointment documents with its transfer agent, and that it has
disclosed to MEI all relationships or dealings with related parties or
affiliates.
(l) SWC need not obtain the consent of any individual, firm,
corporation, partnership, limited liability company, association,
trust, estate, court, arbitrator, tribunal, governmental,
quasi-governmental or public agency commission, board bureau,
instrumentality, authority or any other entity to enter into this
Agreement or consummate the transactions contemplated hereby.
(m) SWC has complied with the provisions for registration, or
exemption therefrom, under the Securities Act of 1933 and all
applicable blue sky laws in connection with its initial public stock
offering and all other sales by it of its securities. There are no
outstanding, pending or threatened stop orders or other actions or
investigations relating to any stock issuances by SWC.
(n) The SWC Common Stock is currently eligible for quotation
on the NASD Electronic Bulletin Board and there are no stop orders in
effect with respect thereto.
(o) All information regarding SWC which is set forth in the
Memorandum or otherwise used in connection with the Private Placement
is true, complete and accurate in all material respects as of the date
of the Memorandum and the Effective Date.
(p) As of the Effective Time, SWC shall have no debts,
liabilities, commitments or obligations except current expenses
incurred in connection with the transactions contemplated by this
Agreement. Such expenses will be handled in accordance with Section
13(l) hereof.
6. EFFECTIVE TIME; CLOSING. Subject to the conditions precedent
outlined herein, immediately after the closing of the Offering, which shall
occur on such date as is mutually determined by MEI, SWC and CGI (subject to the
terms and conditions of the Memorandum), SWC shall cause to be filed an executed
copy of the Certificate and Articles of Merger with the
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appropriate offices of both the State of Delaware and the State of Florida at
which time (the "Effective Time") the Merger shall become effective (the
"Closing" or "Closing Date").
7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF MEI. All obligations of
MEI under this Agreement are subject to the fulfillment unless waived in writing
by MEI prior to or at the Closing and/or the Effective Time, as the case may be,
of each of the following conditions:
(a) The representations and warranties by or on behalf of SWC,
Wright and Archibald contained in this Agreement or in any certificate
or document delivered pursuant to the provisions hereof shall be true
and correct in all material respects at the Effective Time and Closing
as though such representations and warranties were made at and as of
such times.
(b) SWC shall have performed and complied with all covenants,
agreements, and conditions set forth in, and shall have executed and
delivered all documents required by this Agreement to be performed or
complied with or executed and delivered by it prior to or at the
Effective Time and/or the Closing as the case may be.
(c) On or before the Effective Time, the shareholders of SWC
shall have approved in accordance with applicable law the execution and
delivery of this Agreement and the consummation of the transactions
contemplated herein.
(d) On or before the Effective Time, SWC shall have delivered
certified copies of resolutions of the directors and shareholders of
SWC approving and authorizing the execution, delivery and performance
of this Agreement and authorizing all of the necessary and proper
action to enable SWC to comply with the terms of this Agreement
including the election of MEI's nominees to the board of directors of
SWC and all matters outlined herein.
(e) At the Effective Time, the Merger shall be permitted by
applicable state law and SWC shall have sufficient shares of its
capital stock authorized to complete the Merger.
(f) At the Effective Time, Wright and Archibald shall have
resigned in writing from their positions as directors and officers of
SWC upon the election and appointment of the MEI nominees as directors
and officers of SWC.
(g) At the Closing, all instruments and documents delivered to
MEI pursuant to the provisions hereof shall be reasonably satisfactory
to legal counsel for each of MEI and CGI.
(h) SWC shall have completed the recapitalization referred to
in Section 2(b) hereof prior to Closing. At the Effective Time, SWC
shall have authorized capital stock consisting of 50,000,000 shares of
common stock with a par value of $.001 per share,
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and 5,000,000 shares of $.001 par value preferred stock to be issued
with such rights and preferences as determined by the board of
directors, none of which shall be issued and outstanding.
(i) The SWC Common Stock to be issued at Closing will be
validly issued, nonassessable and fully-paid under Delaware law and
will be issued in compliance with all applicable federal and state
securities laws.
(j) Prior to the Effective Time, MEI shall have received the
advice of its tax advisor that this transaction is a tax free
reorganization as to MEI and the MEI shareholders.
(k) Prior to the Effective Time, MEI shall have received all
approvals and consents from any and all parties necessary to consummate
the transactions contemplated hereby and its shareholders.
(l) Prior to the Effective Time, SWC shall have delivered to
MEI an opinion of its counsel dated as of the Closing Date to the
effect that:
(i) SWC is a corporation duly organized, validly
existing and in good standing under the laws of the State
of Delaware;
(ii) This Agreement has been duly authorized,
executed and delivered by SWC and is a valid and binding
obligation of SWC enforceable in accordance with its terms;
(iii) SWC through its board of directors and
stockholders has taken all corporate action necessary to
authorize the execution and delivery by it of this Agreement,
its performance under this Agreement and the consummation of
the transactions contemplated hereby.
(iv) The documents executed and delivered to MEI
hereunder are valid and binding in accordance with their terms
and vest in the shareholders of MEI, all right, title and
interest in and to the shares of SWC's Common Stock and the
Notes to be issued pursuant to Section 2 hereof, and the
shares of SWC Common Stock when issued will be duly and
validly issued, fully-paid and nonassessable; and
(v) The execution, performance and delivery of this
Agreement by SWC and the consummation of the transactions
contemplated hereby do not conflict with the Certificate of
Incorporation of SWC or its By-laws, or any agreement of which
counsel is aware, or any law, rule, writ or decree of any
government body, and there are no consents of any third party
required in connection therewith except the approval of the
Company's Board of Directors and shareholders.
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(vi) SWC has the corporate power to execute, deliver
and perform its obligations under this Agreement.
(vii) Legal counsel for SWC is not aware of any
liabilities, claims or lawsuits involving SWC, or any of its
assets or the transactions contemplated hereby.
(viii) In connection with the issuance of SWC
securities to persons who were purchasers in the Private
Placement, the shares of SWC Common Stock issuable upon
conversion of the Notes have been duly authorized for issuance
and reserved by SWC and will, when issued and delivered,
against payment of the consideration therefor, be validly
issued and outstanding, fully-paid and nonassessable, and will
not be subject to preemptive rights.
(ix) Upon filing the Certificate and Articles of
Merger with the Secretary of State of the State of Delaware
and the Secretary of State of the State of Florida, the Merger
will be effective under the laws of the States of Delaware and
Florida in accordance with the terms of this Agreement.
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SWC. All obligations of SWC
under this Agreement are subject to the fulfillment, unless waived by SWC prior
to or at the Closing, of each of the following conditions:
(a) The representations and warranties by MEI contained in
this Agreement or in any certificate or document delivered pursuant to
the provisions hereof shall be true in all material respects at and as
of the Closing as though such representations and warranties were made
at and as of such time.
(b) MEI shall have performed and complied with, in all
material respects, all covenants, agreements, and conditions required
by this Agreement to be performed or complied with by them prior to or
at the Closing;
(c) MEI shall deliver on behalf of the MEI Historical
Shareholders, a letter commonly known as an "Investment Letter," in
substantially the form attached hereto as Exhibit "C", acknowledging
that the shares of SWC Common Stock are being acquired for investment
purposes.
(d) MEI shall have consummated the Offering.
(e) MEI shall deliver an opinion of its legal counsel to the
effect that:
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(i) MEI is a corporation duly organized, validly
existing and in good standing under the laws of the state of
its incorporation and is duly qualified to do business in any
jurisdiction where so required except where the failure to so
qualify would have no material adverse impact on the company;
(ii) MEI has the corporate power to carry on its
business as now being conducted; and
(iii) This Agreement has been duly authorized,
executed and delivered by MEI.
9. INDEMNIFICATION. For a period of two years from the Closing, SWC,
Wright and Archibald agree to jointly and severally indemnify and hold harmless
MEI, and MEI agrees to indemnify and hold harmless SWC, Wright and Archibald
against and in respect of any liability, damage or deficiency, all actions,
suits, proceedings, demands, assessments, judgments, costs and expenses
including reasonable attorney's fees incident to any of the foregoing, resulting
from any material misrepresentations made by an indemnifying party to an
indemnified party, an indemnifying party's breach of covenant or warranty or an
indemnifying party's nonfulfillment (unless waived in writing by the party
claiming indemnification) of any agreement hereunder, or from any material
misrepresentation in or omission from any certificate furnished or to be
furnished hereunder.
10. NATURE AND SURVIVAL OF REPRESENTATIONS. All representations,
warranties and covenants made by any party in this Agreement shall survive the
Closing and the consummation of the transactions contemplated hereby for two
years from the Closing. All of the parties hereto are executing and carrying out
the provisions of this Agreement in reliance solely on the representations,
warranties and covenants and agreements contained in this Agreement and not upon
any investigation upon which it might have made or any representation, warranty,
agreement, promise or information, written or oral, made by the other party or
any other person other than as specifically set forth herein.
11. DOCUMENTS AT CLOSING. At the Closing, the following documents shall
be delivered:
(a) MEI will deliver, or will cause to be delivered, to SWC the
following:
(i) a certificate executed by the duly designated
officers of MEI to the effect that all representations and
warranties made by MEI under this Agreement are true and
correct in all material respects as of the Closing, the same
as though originally given to SWC on said date;
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<PAGE>
(ii) a certificate from the State of Florida dated at
or about the Closing to the effect that MEI is in good
standing under the laws of said state;
(iii) Investment Letters in the form attached hereto
as Exhibit "C" executed by each MEI Historical Shareholder;
(iv) such other instruments, documents and
certificates, if any, as are required to be delivered pursuant
to the provisions of this Agreement;
(v) executed copies of the Certificate and Articles
of Merger shall have been delivered prior to Closing for
filing on the date of Closing; and certified copies of
resolutions by the shareholders and directors of MEI
authorizing the transactions contemplated hereby;
(vi) the legal opinion required by Section 7(l)
hereof; and
(vii) all other items, the delivery of which is a
condition precedent to the obligations of SWC, as set forth
herein.
(b) SWC will deliver or cause to be delivered to MEI:
(i) irrevocable instructions to its transfer agent to
issue certificates representing the Common Stock, and any
other instrument, to be issued as a part of the Merger and as
described in the Memorandum;
(ii) a certificate of the President and Secretary of
SWC to the effect that all representations and warranties of
SWC, Wright and Archibald made under this Agreement are true
and correct as of the Closing, the same as though originally
given to MEI on said date;
(iii) certified copies of resolutions adopted by
SWC's board of directors and stockholders authorizing the
Merger and all related matters;
(iv) certificate from the Secretary of State of the
State of Delaware dated at or about the Closing Date to the
effect that SWC is in good standing under the laws of said
state;
(v) the legal opinion of SWC's counsel as required by
Section 8(e) hereof;
(vi) such other instruments and documents as are
required to be delivered pursuant to the provisions of this
Agreement;
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<PAGE>
(vii) written resignations of Wright and Archibald
as the officers and directors of SWC; and
(viii) all other items, the delivery of which is a
condition precedent to the obligations of MEI, as set forth
herein.
12. FINDER'S FEES. SWC, Wright and Archibald, jointly and severally
represent and warrant to MEI, and MEI represents and warrants to each of SWC,
Wright and Archibald that none of them, or any party acting on their behalf, has
incurred (other than the potential liability described under the heading "Legal
Proceedings" in the Memorandum) any liabilities, either express or implied, to
any "broker" of "finder" or similar person in connection with this Agreement or
any of the transactions contemplated hereby. In this regard, SWC, Wright and
Archibald and MEI, jointly and severally, on the one hand, and MEI on the other
hand, will indemnify and hold the other harmless from any claim, loss, cost or
expense whatsoever (including reasonable fees and disbursements of counsel) from
or relating to any such express or implied liability.
13. MISCELLANEOUS.
(a) FURTHER ASSURANCES. At any time, and from time to time,
after the Closing Date, each party will execute such additional
instruments and take such action as may be reasonably requested by the
other party to confirm or perfect title to any property transferred
hereunder or otherwise to carry out the intent and purposes of this
Agreement.
(b) WAIVER. Any failure on the part of any party hereto to
comply with any of its obligations, agreements or conditions hereunder
may be waived in writing by the party to whom such compliance is owed.
(c) TERMINATION. All obligations hereunder may be terminated
at the discretion of either party's Board of Directors if (i) the
conditions to such party's obligation to consummate the Merger
specified in Sections 7 or 8, as the case may be, are not met by July
31, 1996, unless unanimously extended in the manner set forth in the
Memorandum, or (ii) any of the representations, warranties, covenants
or agreements made herein by the other parties hereto have been
materially breached.
(d) AMENDMENT. This Agreement may be amended only in writing
as agreed to by all parties hereto.
(e) NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given if delivered
in person or sent by prepaid first class registered or certified mail,
return receipt requested to the following addresses:
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Magicworks Entertainment Incorporated
Attn: Brad Krassner
930 Washington Avenue
Miami Beach, Florida 33139
Shadow Wood Corporation
Attn: Mark Archibald
1288 East Malvern Avenue
Salt Lake City, Utah 84106
(f) HEADINGS. The section headings in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(g) COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
(h) BINDING EFFECT. This Agreement shall be binding upon
the parties hereto and inure to the benefit of the parties, their
respective heirs, administrators, executors, successors and assigns.
(i) ENTIRE AGREEMENT. The Memorandum and Agreement and the
attached Exhibits, including the Certificate and Articles of Merger
attached hereto as Exhibit "A" constitute the entire agreement of the
parties with respect to the subject matter hereof and the transactions
contemplated hereby. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind
as conditions or inducements to the execution hereof.
(j) TIME. Time is of the essence.
(k) SEVERABILITY. If any part of this Agreement is deemed to
be unenforceable the balance of the Agreement shall remain in full
force and effect.
(l) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
(m) ASSIGNMENT. The rights and obligations of the parties
to this Agreement may not be assigned unless consented to in writing
by the other party.
(n) FINANCIAL RESPONSIBILITY AND COSTS. If the Merger is
consummated, all fees, expenses and out-of-pocket costs and expenses
associated therewith shall be borne by the Surviving Corporation from
the proceeds of the Private Placement. If the Merger is terminated
prior to the Effective Time, all fees, expenses and out-of-pocket costs
and expenses, including, without limitation, fees and disbursements of
counsel, financial
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advisors and accountants, incurred by the parties hereto shall be borne
solely and entirely by the party that has incurred such costs and
expenses. The fees, expenses and costs of SWC shall not exceed $35,000
not including transfer agent fees and costs for printing new
certificates, issuance of new certificates and mailing a post-closing
letter to shareholders of the Surviving Corporation.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
SHADOW WOOD CORPORATION
By: ------------------------------------
Robert L. Wright, President
By: ------------------------------------
Mark Archibald, Secretary/Treasurer
By: ------------------------------------
Robert L. Wright, Individually
By: ------------------------------------
Mark Archibald, Individually
MAGICWORKS ENTERTAINMENT
INCORPORATED
By: ------------------------------------
Brad L. Krassner,
Co-Chairman of the Board
By: ------------------------------------
Joe Marsh,
Co-Chairman of the Board
18
Exhibit 2.2
CERTIFICATE AND ARTICLES OF MERGER
OF
MAGICWORKS ENTERTAINMENT INCORPORATED
A FLORIDA CORPORATION
INTO
SHADOW WOOD CORPORATION
A DELAWARE CORPORATION
THE UNDERSIGNED CORPORATIONS DO HEREBY CERTIFY:
FIRST: That the name and state of incorporation of each of the
constituent corporations (the "Constituent Corporations") of the merger (the
"Merger") is as follows:
NAME STATE OF INCORPORATION
Magicworks Entertainment Incorporated Florida
Shadow Wood Corporation Delaware
SECOND: That an Agreement and Plan of Merger between the Constituent
Corporations has been approved, adopted, certified, executed and acknowledged by
each of the Constituent Corporations in accordance with Section 252 of the
Delaware General Corporation Law and the requirements of Florida law and that
upon filing this document with the Secretary of State of Florida and the
Secretary of State of Delaware, the Merger shall be effective (the "Effective
Time").
THIRD: Shadow Wood Corporation ("SWC" or the "Surviving Corporation")
has an authorized capitalization consisting of 250,000,000 shares of $.0001 par
value common stock ("SWC Common Stock"), of which 3,889,750 shares are issued
and outstanding as of the date of execution hereof; and Magicworks Entertainment
Incorporated ("MEI") has an authorized capitalization consisting of 50,000,000
shares of common stock, $.001 par value ("MEI Common Stock"), of which
19,000,000 shares are issued and outstanding as of the date hereof.
FOURTH: The surviving corporation of the Merger is Shadow Wood
Corporation, a Delaware corporation.
<PAGE>
FIFTH: The Plan of Merger and the terms and conditions of the Merger
and the manner and basis of converting the shares of the Constituent
Corporations is as follows:
(a) CORPORATE EXISTENCE
(1) From and after the Effective Time, the Surviving
Corporation shall continue its corporate existence as a Delaware
corporation and (i) it shall thereupon and thereafter possess all
rights, privileges, powers, franchises and property (real, personal and
mixed) of each of the Constituent Corporations; (ii) all debts due to
either of the Constituent Corporations, on whatever account, all causes
in action and all other things belonging to either of the Constituent
Corporations shall be taken and deemed to be transferred to and shall
be vested in the Surviving Corporation by virtue of the Merger without
further act or deed; (iii) the title to any real estate vested by deed
or otherwise, under the laws of any jurisdiction, in either of the
Constituent Corporations, shall not revert or be in any way impaired by
reason of the Merger; and (iv) all rights of creditors and all liens
upon any property of any of the Constituent Corporations shall be
preserved unimpaired, and all debts, liabilities and duties of the
Constituent Corporations shall thenceforth attach to the Surviving
Corporation and may be enforced against it to the same extent as if
such debts, liabilities and duties had been incurred or contracted by
the Surviving Corporation.
(2) From and after the Effective Time, (i) the Certificate of
Incorporation and By-laws of SWC, as existing immediately prior to the
Effective Time, shall be the Certificate of Incorporation and By-Laws
of the Surviving Corporation subject to amendments adopted herein and
any subsequent amendments; (ii) the members of the Board of Directors
of MEI holding office immediately prior to the Effective Time shall
become the members of the Board of Directors of the Surviving
Corporation, each to serve subject to the Surviving Corporation's
Bylaws; (iii) the Surviving Corporation shall change its name to
Magicworks Entertainment Incorporated; (iv) all persons who hold
executive offices of MEI at the Effective Time shall be elected by the
board of directors of the Surviving Corporation to hold the same
offices of the Surviving Corporation, each to serve subject to the
Surviving Corporation's By-laws.
(b) CONVERSION OF SECURITIES
As of the Effective Time and without any action on the part of the
Constituent Corporations or the holders of any of the securities of either of
these corporations each of the events set forth below shall occur. All
capitalized terms are defined in the Agreement and Plan of Merger referred to in
the EIGHTH article hereof:
(1) Each of the MEI Historical Shares issued and outstanding
immediately prior to the Effective Time shall be converted into one
share of SWC Common Stock. All such shares of MEI Common Stock shall no
longer be outstanding and shall automatically be canceled and shall
cease to exist, and each certificate previously evidencing any such
shares shall thereafter represent the right to receive certificates
evidencing such number of shares of SWC Common Stock into which such
shares of MEI Common Stock were converted. The holders of such
certificates previously evidencing shares of MEI Common Stock
outstanding immediately prior to the Effective Time shall cease to have
any rights with
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<PAGE>
respect to such shares of MEI Common Stock except as otherwise provided
herein or by applicable law;
(2) Any shares of MEI Common Stock held in the treasury of MEI
immediately prior to the Effective Time shall automatically be canceled
and extinguished without any conversion thereof and no payment shall be
made with respect thereto;
(3) In fulfillment of the obligation of MEI to issue
securities underlying Units sold in its Private Placement to purchasers
in the Private Placement, SWC shall issue on the terms and subject to
the conditions set forth in the Memorandum: (a) shares of SWC Common
Stock on the basis of one share for each share of MEI Common Stock sold
in the Private Placement, (b) an unsecured senior convertible note
("Note" or Notes") in the principal amount of $12,500 for each Note
sold in the Private Placement. The terms of the Notes shall be as
described in the Memorandum and in the form as attached to the
Memorandum as an exhibit, and SWC hereby agrees to assume all
responsibility, upon Closing, to implement the sinking fund and other
arrangements as defined and contemplated in the Memorandum, including,
without limitation, the obligation to issue SWC Common Stock in the
event of conversion of the Notes or the obligation to issue redeemable
common stock purchase warrants in the event of prepayment of the Notes
under certain circumstances;
(4) Subject to completion of the sale of at least $10,000,000
in Units in the Private Placement, SWC shall issue to Capital Growth
International, LLC ("CGI") or its designees, after giving effect to the
SWC reverse stock split, 488,820 shares of SWC Common Stock and
Warrants to purchase 500,000 shares of SWC Common Stock under the terms
and conditions of the Placement Agent Agreement between MEI and CGI
dated June 14, 1996, and as described in the Memorandum.
(5) The 311,180 shares of SWC Common Stock previously issued
and outstanding prior to the Merger will remain issued and outstanding;
(6) At Closing, there shall be no securities convertible into
or exercisable or exchangeable for shares of SWC or MEI Common Stock
except as described in the Memorandum.
SIXTH: Voting results for the Merger are as follows:
(a) SHADOW WOOD CORPORATION. The Agreement and Plan of Merger (the
"Plan") was submitted to certain stockholders of Shadow Wood Corporation by the
board of directors on July 2, 1996, and out of 3,889,750 shares of common stock
entitled to vote on the Plan, 3,490,250 (89%) shares approved the plan by
written consent, resulting in approval of the Plan.
(b) MAGICWORKS ENTERTAINMENT INCORPORATED The Plan was submitted to
certain stockholders of Magicworks Entertainment Incorporated by the board of
directors on June 22, 1996, and out of 19,000,000 shares of common stock
entitled to vote on the Plan, 19,000,000 (100%) shares approved the Plan by
written consent, resulting in approval of the Plan.
(c) GENERAL. The number of votes cast for the Plan by each group was
sufficient under Florida and
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Delaware law for approval by that voting group.
SEVENTH: The Certificate of Incorporation of Shadow Wood Corporation
shall be the Certificate of Incorporation of the Surviving Corporation and is
hereby amended as follows:
1. Article I is amended to read as follows:
ARTICLE I
NAME
The name of the corporation is Magicworks Entertainment Incorporated.
2. Article IV is amended to read as follows:
ARTICLE IV
CAPITALIZATION
The aggregate number of shares which this Corporation shall have
authority to issue is :
(a) COMMON STOCK. The Corporation shall have authority to issue
50,000,000 shares of common stock having a par value of $.001 per
share. All shares of common stock shall have the same rights and shall
not be liable to any further call or assessment and shall have no
pre-emptive rights.
(b) PREFERRED STOCK. The Corporation shall have authority to issue
5,000,000 shares of preferred stock, $.001 par value, which may be
issued in one or more series and with such rights, preferences and
designations as determined by the Corporation's board of directors. All
shares of any one series shall be alike in every particular.
EIGHTH: The Agreement and Plan of Merger dated July 24, 1996, between
SWC and MEI is on file at the principal place of business of SWC at 930
Washington Avenue, Miami Beach, Florida 33139, and will be furnished on request
without cost to any stockholder of either of the Constituent Corporations.
NINTH: Upon this Merger becoming effective, the Surviving Corporation
acknowledges that it is deemed, under Florida law:
(a) To appoint the Secretary of State as its agent for service of
process in a proceeding to enforce any obligation or the rights of
dissenting shareholders of each domestic corporation party to the
merger or share exchange; and
(b) To agree that it will promptly pay to the dissenting
shareholders of each domestic corporation party to the merger or share
exchange the amount, if any, to which they are entitled under Section
607.1302, Florida Statutes.
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SHADOW WOOD CORPORATION
By: /s/ ROBERT L. WRIGHT
----------------------------------------------
Robert L. Wright, President
By: /s/ MARK ARCHIBALD
----------------------------------------------
Mark Archibald, Secretary
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MAGICWORKS ENTERTAINMENT INCORPORATED
By: /s/ LEE MARSHALL
---------------------------------------------
Lee Marshall, President
By: /s/ LARRY TURK
---------------------------------------------
Larry Turk, Secretary
6
