Sfx Payment Document

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1 NY 245718505v7 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: SFX ENTERTAINMENT, INC., et al., 1 Debtors. Chapter 11 Case No. 16-10238 (MFW) (Jointly Administered) Hearing Date: April 5, 2016 at 10:30 a.m. Objection Deadline: March 29, 2016 at 4:00 p.m. MOTION OF THE DEBTORS FOR ENTRY OF AN ORDER (I) APPROVING ARTIST CARVE OUT AGREEMENT WITH AGENTS, (II) AUTHORIZING THE ASSUMPTION OF CERTAIN ARTIST AGREEMENTS, AND (III) GRANTING RELATED RELIEF The above-captioned debtors and debtors-in-possession (collectively, the “Debtors”) hereby move the Court (the “Motion”) for entry of an order, substantially in the form attached hereto, pursuant to sections 105(a), 363(b), and 365(a) of title 11 of the United States Code, 11 U.S.C. §§ 101, et seq. (the “Bankruptcy Code”) and Rules 6004 and 6006 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), (i) approving the artist carve out agreement with William Morris Endeavor Entertainment, LLC, AM Only LLC, The Windish Agency, LLC, Paradigm Talent Agency, LLC, and Paradigm Music, LLC (collectively, the “Agents”) substantially in the form annexed hereto as Exhibit 1 (together with all exhibits thereto, the 1 The Debtors in these Chapter 11 Cases, along with the last four (4) digits of each Debtor’s federal tax identification number, if applicable, are: 430R Acquisition LLC (7350); Beatport, LLC (1024); Core Productions LLC (3613); EZ Festivals, LLC (2693); Flavorus, Inc. (7119); ID&T/SFX Mysteryland LLC (6459); ID&T/SFX North America LLC (5154); ID&T/SFX Q-Dance LLC (6298); ID&T/SFX Sensation LLC (6460); ID&T/SFX TomorrowWorld LLC (7238); LETMA Acquisition LLC (0452); Made Event, LLC (1127); Michigan JJ Holdings LLC (n/a); SFX Acquisition, LLC (1063); SFX Brazil LLC (0047); SFX Canada Inc. (7070); SFX Development LLC (2102); SFX EDM Holdings Corporation (2460); SFX Entertainment, Inc. (0047); SFX Entertainment International, Inc. (2987); SFX Entertainment International II, Inc. (1998); SFX Intermediate Holdco II LLC (5954); SFX Managing Member Inc. (2428); SFX Marketing LLC (7734); SFX Platform & Sponsorship LLC (9234); SFX Technology Services, Inc. (0402); SFX/AB Live Event Canada, Inc. (6422); SFX/AB Live Event Intermediate Holdco LLC (8004); SFX/AB Live Event LLC (9703); SFX-94 LLC (5884); SFX-Disco Intermediate Holdco LLC (5441); SFX-Disco Operating LLC (5441); SFXE IP LLC (0047); SFX-EMC, Inc. (7765); SFX-Hudson LLC (0047); SFX-IDT N.A. Holding II LLC (4860); SFX-LIC Operating LLC (0950); SFX-IDT N.A. Holding LLC (2428); SFX-Nightlife Operating LLC (4673); SFX-Perryscope LLC (4724); SFX-React Operating LLC (0584); Spring Awakening, LLC (6390); SFXE Netherlands Holdings Coöperatief U.A. (6812); SFXE Netherlands Holdings B.V. (6898). The Debtors’ business address is 902 Broadway, 15 th Floor, New York, NY 10010. Case 16-10238-MFW Doc 241 Filed 03/17/16 Page 1 of 13

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  • 1 NY 245718505v7

    IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

    In re: SFX ENTERTAINMENT, INC., et al.,1 Debtors.

    Chapter 11

    Case No. 16-10238 (MFW) (Jointly Administered) Hearing Date: April 5, 2016 at 10:30 a.m. Objection Deadline: March 29, 2016 at 4:00 p.m.

    MOTION OF THE DEBTORS FOR ENTRY OF AN ORDER

    (I) APPROVING ARTIST CARVE OUT AGREEMENT WITH AGENTS, (II) AUTHORIZING THE ASSUMPTION OF CERTAIN

    ARTIST AGREEMENTS, AND (III) GRANTING RELATED RELIEF

    The above-captioned debtors and debtors-in-possession (collectively, the Debtors)

    hereby move the Court (the Motion) for entry of an order, substantially in the form attached

    hereto, pursuant to sections 105(a), 363(b), and 365(a) of title 11 of the United States Code, 11

    U.S.C. 101, et seq. (the Bankruptcy Code) and Rules 6004 and 6006 of the Federal Rules

    of Bankruptcy Procedure (the Bankruptcy Rules), (i) approving the artist carve out agreement

    with William Morris Endeavor Entertainment, LLC, AM Only LLC, The Windish Agency, LLC,

    Paradigm Talent Agency, LLC, and Paradigm Music, LLC (collectively, the Agents)

    substantially in the form annexed hereto as Exhibit 1 (together with all exhibits thereto, the

    1 The Debtors in these Chapter 11 Cases, along with the last four (4) digits of each Debtors federal tax identification number, if applicable, are: 430R Acquisition LLC (7350); Beatport, LLC (1024); Core Productions LLC (3613); EZ Festivals, LLC (2693); Flavorus, Inc. (7119); ID&T/SFX Mysteryland LLC (6459); ID&T/SFX North America LLC (5154); ID&T/SFX Q-Dance LLC (6298); ID&T/SFX Sensation LLC (6460); ID&T/SFX TomorrowWorld LLC (7238); LETMA Acquisition LLC (0452); Made Event, LLC (1127); Michigan JJ Holdings LLC (n/a); SFX Acquisition, LLC (1063); SFX Brazil LLC (0047); SFX Canada Inc. (7070); SFX Development LLC (2102); SFX EDM Holdings Corporation (2460); SFX Entertainment, Inc. (0047); SFX Entertainment International, Inc. (2987); SFX Entertainment International II, Inc. (1998); SFX Intermediate Holdco II LLC (5954); SFX Managing Member Inc. (2428); SFX Marketing LLC (7734); SFX Platform & Sponsorship LLC (9234); SFX Technology Services, Inc. (0402); SFX/AB Live Event Canada, Inc. (6422); SFX/AB Live Event Intermediate Holdco LLC (8004); SFX/AB Live Event LLC (9703); SFX-94 LLC (5884); SFX-Disco Intermediate Holdco LLC (5441); SFX-Disco Operating LLC (5441); SFXE IP LLC (0047); SFX-EMC, Inc. (7765); SFX-Hudson LLC (0047); SFX-IDT N.A. Holding II LLC (4860); SFX-LIC Operating LLC (0950); SFX-IDT N.A. Holding LLC (2428); SFX-Nightlife Operating LLC (4673); SFX-Perryscope LLC (4724); SFX-React Operating LLC (0584); Spring Awakening, LLC (6390); SFXE Netherlands Holdings Coperatief U.A. (6812); SFXE Netherlands Holdings B.V. (6898). The Debtors business address is 902 Broadway, 15th Floor, New York, NY 10010.

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    1610238160317000000000011

    Docket #0241 Date Filed: 03/17/2016

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    Artist Carve Out Agreement),2 (ii) assuming the Artist Agreements set forth on Exhibit B to

    the Artist Carve Out Agreement (the Assumed Agreements) and pay the cure associated with

    such assumption as set forth on Exhibit B to the Artist Carve Out Agreement (the Cure

    Payment), and (iii) granting related relief. In support of the Motion, the Debtors respectfully

    represent as follows:

    Preliminary Statement

    1. The value of the Debtors estates and their ongoing business depends on their

    continued successful festivals, events and club shows (the Shows). The profitability of these

    Shows hinges, in significant part, on the Artists performing and their ability to attract large

    numbers of fans. The pool of Artists that can reliably attract large numbers of fans to the Shows

    is extremely limited and the vast majority of them are represented by the Agents. Thus, the

    Debtors relationship with the Agents and their represented Artists are vital to a successful

    reorganization.

    2. Since the Petition Date, the Debtors have been negotiating with Agents to ensure

    that the Artists they represent will continue to perform at SFXs Shows. The Agents and Artists

    have required adequate assurance that the Debtors will satisfy their obligations under the Artist

    Agreements. Without such assurance, the Artists have stated they will refuse to perform at

    upcoming SFX festivals and the Agents have refused to book Artists for future Shows. The

    Agents and the Artists have required 100% payment cash in advance of Shows and in certain

    instances 100% payment prior to permitting the Debtors announcement of a particular Artist as

    part of the line up for a Show.

    3. In order to provide the Agents and Artists adequate assurance, the Debtors

    2 Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Artist Carve Out Agreement.

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    negotiated with their DIP Lenders to provide a carve-out (the Operational Carve Out) for

    certain postpetition amounts owed by the Debtors to artists, talent agents and credit card

    processors in an aggregate amount not to exceed $15 million. The Operational Carve Out,

    approved by the Court in the DIP Order (defined below), provides for a carve-out from the liens

    and superpriority claims of the DIP Lenders upon an event of default and subsequent liquidation

    of the DIP Collateral (as defined in the DIP Order) for payments that are set forth in the then

    Approved Budget and certified by the Debtors CRO as an Operational Carve Out Payment.

    In order to fully document the specific Artist Agreements that will be included in the Operational

    Carve Out, the mechanics by which such agreements will be included in the Operational Carve

    Out, and certain other agreements between the parties described below, the Debtors and the

    Agents have negotiated the Artist Carve Out Agreement.

    4. To further provide the Artists and Agents assurance that the Artists will be

    compensated for their postpetition performances, the Debtors have also agreed to assume the

    Assumed Agreements, which are Artist Agreements entered into prior to the Petition Date for

    performances after the Petition Date, and the counterparties to those Assumed Agreements have

    consented to such assumption. Within five (5) Business Days of entry of the order approving

    this Motion, the Debtors will pay as the Cure Payment the amounts necessary to cure any

    prepetition defaults and any unpaid amounts which became due postpetition and will continue to

    pay any additional amounts as they come due under the Assumed Agreements.

    5. Approval of the Artist Carve Out Agreement and assumption of the Assumed

    Agreements provides a meaningful benefit to the Debtors estates and is a sound exercise of their

    business judgment. In recognition of the benefits of the approval of the Artist Carve Out

    Agreement and assumption of the Assumed Agreements, relief sought herein, both the DIP

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    Lenders and the Committee (defined below) have consented to the relief sought herein.

    Status of the Case

    6. On February 1, 2016 (the Petition Date), the Debtors commenced these cases

    (the Chapter 11 Cases) by filing voluntary petitions for relief under chapter 11 of the

    Bankruptcy Code.

    7. The Debtors have continued in possession of their properties and are operating

    and managing their businesses as debtors-in-possession pursuant to sections 1107(a) and 1108 of

    the Bankruptcy Code.

    8. No request has been made for the appointment of a trustee or examiner.

    9. On February 12, 2016, an official committee of unsecured creditors was

    appointed in these Chapter 11 Cases (the Committee) [Docket No. 99].

    Jurisdiction, Venue and Statutory Predicates

    10. The Court has jurisdiction over this Motion pursuant to 28 U.S.C. 157 and

    1334. Venue is proper in this district pursuant to 28 U.S.C. 1408 and 1409. This matter is

    core within the meaning of 28 U.S.C. 157(b)(2).

    11. The statutory predicates for the relief sought herein are sections 105(a), 363(b),

    and 365 of the Bankruptcy Code and Bankruptcy Rules 6004 and 6006.

    Background

    A. General Background

    12. The Debtors along with their non-Debtor affiliates (collectively, SFX) are a

    leading producer of live events and digital entertainment content focused exclusively on

    electronic music culture. The Debtors commenced material operations in 2012 with the intent of

    acquiring and operating companies within the electronic dance music (EDM) industry,

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    specifically those engaged in the promotion and production of live music events, festivals and

    digital offerings attractive to EDM fans in the United States and abroad. Over the next three

    years, the Debtors acquired a number of leading EDM brands, such as TomorrowWorld,

    Beatport, Mysteryland, Sensation and Electric Zoo, and expanded operations worldwide.

    13. Today, the Debtors are actively engaged in the production and promotion of EDM

    festivals and events both domestically and abroad. In addition, Debtors manage large,

    event-driven nightclubs that serve as venues for performances by key electronic music talent.

    The Debtors also offer an online platform for EDM DJs, artists and fans to purchase, share and

    stream music components and to connect with each other.

    14. The Debtors and their 120 non-Debtor subsidiaries operate a business that spans

    the globe, with operations in over 34 countries. The Debtors constitute substantially all of the

    domestic companies comprising SFXs business as well as select foreign subsidiaries. The

    Debtors have more than 325 employees and, together with the non-Debtor entities, have more

    than 625 employees.

    15. The Debtors capital structure is highly levered. In 2015, the Debtors began to

    face significant liquidity issues. While the Debtors attempted to enhance liquidity through a

    September 2015 financing and potential sales of non-strategic assets, the Debtors concluded that

    they needed to restructure their liabilities through a bankruptcy process.

    16. A detailed factual background of the Debtors business and operations, as well as

    the events precipitating the commencement of these Chapter 11 Cases, is more fully set forth in

    the Declaration of Michael Katzenstein in Support of the Debtors Chapter 11 Petitions and

    Requests for First Day Relief (the First Day Declaration) [Docket No. 13], which was filed

    on the Petition Date and incorporated herein by reference.

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    17. On March 8, 2016, the Court entered the Final Order Pursuant to 11 U.S.C.

    105, 361, 362, 363, 364, 503 and 507 (I) Authorizing the Debtors to Obtain Senior Secured

    Priming Superpriority Postpetition Financing, (II) Authorizing Use of Cash Collateral,

    (III) Granting Liens and Providing Superpriority Administrative Expense Status, (IV) Granting

    Adequate Protection, (V) Modifying the Automatic Stay, and (VI) Granting Related Relief (as

    may be amended, the DIP Order) [Docket No. 203].

    B. Artist Carve Out Agreements and Artist Agreements

    18. The Debtors do business with the Artists pursuant to short term agreements,

    without long-term agreements governing their relationships. Since the commencement of the

    Chapter 11 Cases, the Agents, and the Artists they represent, have been unwilling to enter into

    agreements with the Debtors without 100% payment in advance and without assurance that their

    agreements with the Debtors will be honored. This has caused disruption in the Debtors

    working capital as well as in their ability to promptly announce the Artist line-up at their Shows.

    To address this problem, the Debtors negotiated with the DIP Lenders for a carve out from the

    DIP Lenders liens and claims to provide security to the Agents and Artists.

    19. Paragraph 29 of the DIP Order provides that the term Carve Out includes:

    (v) postpetition amounts owed by the Debtors to artists, talent agents and credit card processors that are provided for in the Approved Budget and separately approved in writing and designated by the Debtors Chief Restructuring Officer as an Operational Carve Out Payment, in an aggregate amount not to exceed $15 million.

    DIP Order 29.

    20. The Artist Carve Out Agreement is the product of over a month of negotiations

    between the Debtors and the Agents over the terms by which the Operational Carve Out will

    apply to the Artist Agreements for Artists represented by the Agents. In addition to the security

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    being provided to the Artists and Agents through the Operational Carve Out, the Artist Carve

    Out Agreement also provides benefits to the Debtors in that the Agents have agreed to

    reasonable Payment Terms for Artist Agreements during the Chapter 11 Cases and the remaining

    term of the Artist Agreement after consummation of a plan of reorganization for the Debtors.

    The Agents have further agreed (subject to certain conditions set forth in the Artist Carve Out

    Agreement), on behalf of their represented Artists to the assumption and/or assignment of the

    Artist Agreements in a sale or reorganization.

    21. The Artist Carve Out Agreement thus provides a comprehensive solution for a

    going forward business relationship in these Chapter 11 Cases between and among the Debtors,

    the Artists and the Agents.

    Relief Requested

    22. By this Motion, the Debtors seek the entry of an order authorizing the Debtors to

    enter into the Artist Carve Out Agreement and assume the Assumed Agreements in connection

    therewith, and granting such other relief as is just and proper.

    Basis for Relief Requested

    23. The Debtors seek approval of the Artist Carve Out Agreement and authority to

    assume the Assumed Agreements pursuant to sections 363(b) and 365(a) of the Bankruptcy

    Code, which provide that the Debtors may enter into outside the ordinary course transactions and

    assume executory contracts, respectively, provided that the Debtors articulate a valid business

    justification. As discussed below, the Debtors submit the Artist Carve Out Agreement and

    assumption of Assumed Agreements are critical to the Debtors business operations and a proper

    exercise of their business judgment.

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    A. The Artist Carve Out Agreement Is A Valid Exercise of the Debtors Business Judgment

    24. Section 363(b) of the Bankruptcy Code permits a debtor-in-possession to use

    estate property outside the ordinary course of business after notice and a hearing. 11 U.S.C.

    363(b)(1). A debtors decision to enter into an outside the ordinary course transaction is

    protected by the business judgment rule. [T]he business judgment rule is a presumption that in

    making a business decision, the board of directors acted on an informed basis, in good faith and

    in the honest belief that the action taken was in the best interests of the company. Solomon v.

    Armstrong, 747 A.2d 1098, 1111 (Del. Ch. 1999) (quoting Aronson v. Lewis, 473 A.2d 805, 812

    (1984)).

    25. The business judgment rule has vitality in chapter 11 cases and shields a debtors

    management from judicial second-guessing. See Comm. of Asbestos-Related Litigants and/or

    Creditors v. Johns-Manville Corp. (In re Johns-Manville Corp.), 60 B.R. 612, 615-16 (Bankr.

    S.D.N.Y. 1986) ([T]he Code favors the continued operation of a business by a debtor and a

    presumption of reasonableness attaches to a Debtors management decisions.); In re Filenes

    Basement, LLC, Case No. 11-13511 (KJC), 2014 WL 1713416, at *12 (Bankr. D. Del. Apr. 29,

    2014) (Transactions under 363 must be based upon the sound business judgment of the debtor

    or trustee.). Moreover, section 105(a) provides a bankruptcy court with broad powers in the

    administration of a case under the Bankruptcy Code, providing, in relevant part, that [t]he court

    may issue any order, process, or judgment that is necessary or appropriate to carry out the

    provisions of [the Bankruptcy Code]. 11 U.S.C. 105(a).

    26. Entering into Artist Carve Out Agreement is a sound exercise of the Debtors

    business judgment. The Artists are an integral part of the Debtors successful reorganization.

    These Artists cannot timely or efficiently be replaced given the highly unique nature of the

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    Artists popularity and the services they provide. As noted above, the Artists are the driving

    force behind the Debtors Shows; they drive EDM fans to purchase tickets and attend the Shows.

    The inability to enter into Artist Agreements during these Chapter 11 Cases or to maintain

    payment terms with the Artists and Agents would severely and negatively impact the Debtors

    ability to survive.

    27. The Artist Carve Out Agreement provides a comprehensive solution in these

    Chapter 11 Cases. It provides assurances to the Artists and Agents of the Debtors commitment

    to honor obligations under the Artist Agreements, which in turn instills confidence in the SFX

    brand. It moreover mitigates against the risk of Artist cancellation or loss of Artist contracts to

    SFXs competitors.

    28. The Artist Carve Out Agreement also provides consent from the Artists for future

    assignments of their Artist Agreements to the reorganized Debtors or to purchasers of the

    Debtors assets. Moreover, the Payment Terms provided in the Artist Carve Out Agreement for

    postpetition Artist Agreements are reasonable in the industry and benefit the Debtors estates.

    The Debtors are afforded liquidity, as Artists will no longer require upfront payment in full

    immediately upon confirmation of an agreement if the obligations under their respective Artist

    Agreement are included in the Operational Carve Out. Accordingly, the Debtors decision to

    enter into Artist Carve Out Agreement satisfies the business judgment rule.

    B. Assumption of the Assumed Agreements Is in the Best Interests of the Debtors Estates and Is a Sound Exercise of the Debtors Business Judgment

    29. The Debtors further seek authority, pursuant to section 365(a) of the Bankruptcy

    Code, to assume the Assumed Agreements. Section 365(a) of the Bankruptcy Code provides that

    a debtor-in-possession, subject to the courts approval, may assume or reject an executory

    contract or unexpired lease of the debtor. 11 U.S.C. 365(a). The purpose behind allowing

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    the assumption or rejection of executory contracts is to permit the trustee or debtor in possession

    to use valuable property of the estate and to renounce title to and abandon burdensome

    property. Orion Pictures Corp. v. Showtime Networks, Inc. (In re Orion Pictures Corp.), 4

    F.3d 1095, 1098 (2d Cir. 1993) (quoting 2 Collier on Bankruptcy 365.01[1] (15th ed. 1993)).

    30. The assumption or rejection of an executory contract or unexpired lease is subject

    to review under the same business judgment standard as discussed above. If a debtor has

    exercised reasonable business judgment, the court should approve the proposed contract

    assumption. See In re Mkt. Square Inn, Inc., 978 F.2d 116, 121 (3d Cir. 1992) (the resolution of

    [the] issue of assumption or rejection will be a matter of business judgment by the bankruptcy

    court); Comput. Sales Intl, Inc. v. Fed. Mogul (In re Fed. Mogul Global, Inc.), 293 B.R. 124,

    126 (Bankr. D. Del. 2003) (explaining that under the business judgment standard, a court should

    defer to a debtors contract rejection, unless that decision is the product of bad faith or a gross

    abuse of discretion).

    31. The Debtors decision to assume the Assumed Agreements is an exercise of their

    sound business judgment. Assuming the Assumed Agreements maintains the existing business

    relationships and secures the Artists performances for upcoming SFX Shows. The Debtors

    cannot afford any risk that Artists will not perform at SFX festivals, as such may result in festival

    cancelation or SFX signing lesser-known artists. Assumption of the Assumed Agreements

    counteracts these risks, and allows the Shows to go on. Assuming the Artist Agreements will

    thus preserve and maximize the value of the Debtors estates and is supported by the Debtors

    business judgment.

    32. Certain of the Assumed Agreements required payments prior to the Petition Date

    that remained unpaid as of the Petition Date. In addition, although the Debtors have continued to

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    honor their Artist Agreements in the ordinary course since the Petition Date, some of the

    Assumed Agreements have payments that have become due after the Petition Date that have not

    yet been paid. In connection with the assumption of the Assumed Agreements the Debtors will

    pay the Cure Payment set forth on Exhibit B to the Artist Carve Out Agreement for each

    Assumed Agreement.

    33. Ultimately, the Debtors inability to maintain relationships with the Artists, their

    most critical creditors, during the pendency of these Chapter 11 Cases, would irreparably harm

    the Debtors businesses, and damage the Debtors going concern value. Accordingly, entry into

    the Artist Carve Out Agreement and assumption of the related Assumed Agreements are a sound

    exercise of the Debtors business judgment and therefore authorized pursuant to sections 363(b)

    and 365 of the Bankruptcy Code.

    Relief from Bankruptcy Rules 6004(h) and 6006(d)

    34. To the extent Bankruptcy Rules 6004(h) and 6006(d) apply, the Debtors submit

    that cause exists to waive the stays imposed by these Bankruptcy Rules. The Debtors need

    immediate access to Artist talent and cannot afford delays in announcing headline acts. As

    discussed in more detail above, the identities of the Artists are a significant factor that dictates a

    festivals profitability. A further delay in contracting with Artists impacts ticket sales for SFX

    festivals and creates more financial risk that a Show will be unprofitable. Accordingly, the

    Debtors submit that cause exists to waive the stays imposed by Bankruptcy Rules 6004(h) and

    6006(d).

    Consent to Jurisdiction

    35. Pursuant to Rule 9013-1(f) of the Local Rules of Bankruptcy Practice and

    Procedure of the United States Bankruptcy Court for the District of Delaware, the Debtors

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    consent to the entry of a final judgment or order with respect to this Motion if it is determined

    that the Court would lack Article III jurisdiction to enter such final order or judgment absent

    consent of the parties.

    Notice

    36. Notice of this Motion has been given to the following parties or, in lieu thereof, to

    their counsel, if known: (a) the Office of the United States Trustee for the District of Delaware;

    (b) counsel to the DIP Lenders and counsel to the Ad Hoc Group; (c) counsel to the Committee;

    (d) those parties requesting notice pursuant to Bankruptcy Rule 2002; and (e) counsel to the

    Agents. The Debtors submit that, in light of the nature of the relief requested, no other or further

    notice need be given.

    No Prior Request

    37. No prior motion for the relief requested herein has been filed in this or any other

    court; provided however that the relief sought herein relates to the Operational Carve Out which

    was approved by the Court in the DIP Order.

    Conclusion

    WHEREFORE, the Debtors respectfully request that this Court enter an order,

    substantially in the form attached hereto, granting the relief requested herein and granting the

    Debtors such other and further relief as is just and proper.

    Dated: March 17, 2016

    GREENBERG TRAURIG, LLP

    /s/ Dennis A. Meloro Dennis A. Meloro (DE Bar No. 4435 The Nemours Building 1007 North Orange Street, Suite 1200 Wilmington, Delaware 19801 Telephone: (302) 661-7000 Facsimile: (302) 661-7360 Email: [email protected]

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    -and-

    Nancy A. Mitchell (admitted pro hac vice) Maria J. DiConza (admitted pro hac vice) Nathan A. Haynes (admitted pro hac vice) MetLife Building 200 Park Avenue New York, NY 10166 Telephone: (212) 801-9200 Facsimile: (212) 801-6400 Email: [email protected] [email protected] [email protected] Counsel to the Debtors and Debtors-in-Possession

    Case 16-10238-MFW Doc 241 Filed 03/17/16 Page 13 of 13

  • 1

    IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

    In re: SFX ENTERTAINMENT, INC., et al.,1

    Debtors.

    Chapter 11

    Case No. 16-10238 (MFW) (Jointly Administered) Objection Deadline: March 29, 2016 at 4:00 p.m. Hearing Date: April 5, 2016 at 10:30 a.m.

    NOTICE OF MOTION

    PLEASE TAKE NOTICE that the above-captioned debtors and debtors-in-possession

    (collectively, the Debtors) filed the Motion of the Debtors for Entry of an Order (I) Approving

    Artist Carve Out Agreement with Agencies, (II) Authorizing the Assumption of Certain Artist

    Agreements, and (III) Granting Related Relief (the Motion) with the United States Bankruptcy

    Court for the District of Delaware (the Court).

    PLEASE TAKE FURTHER NOTICE that any response or objection to the relief

    sought in the Motion must be filed with the Court, 824 North Market Street, 3rd Floor,

    Wilmington, Delaware 19801 on or before MARCH 29, 2016, AT 4:00 P.M. PREVAILING

    EASTERN TIME.

    PLEASE TAKE FURTHER NOTICE that at the same time, you must also serve a

    copy of the response or objection upon: (i) the Debtors, 902 Broadway, 15th Floor, New York,

    NY 10010 (Attn: Michael Katzenstein); (ii) the Debtors counsel, (a) Greenberg Traurig, LLP,

    The Nemours Building, 1007 North Orange Street, Suite 1200, Wilmington, DE 19801 (Attn:

    1 The Debtors in these Chapter 11 Cases, along with the last four (4) digits of each Debtors federal tax identification number,

    if applicable, are: 430R Acquisition LLC (7350); Beatport, LLC (1024); Core Productions LLC (3613); EZ Festivals, LLC (2693); Flavorus, Inc. (7119); ID&T/SFX Mysteryland LLC (6459); ID&T/SFX North America LLC (5154); ID&T/SFX Q-Dance LLC (6298); ID&T/SFX Sensation LLC (6460); ID&T/SFX TomorrowWorld LLC (7238); LETMA Acquisition LLC (0452); Made Event, LLC (1127); Michigan JJ Holdings LLC (n/a); SFX Acquisition, LLC (1063); SFX Brazil LLC (0047); SFX Canada Inc. (7070); SFX Development LLC (2102); SFX EDM Holdings Corporation (2460); SFX Entertainment, Inc. (0047); SFX Entertainment International, Inc. (2987); SFX Entertainment International II, Inc. (1998); SFX Intermediate Holdco II LLC (5954); SFX Managing Member Inc. (2428); SFX Marketing LLC (7734); SFX Platform & Sponsorship LLC (9234); SFX Technology Services, Inc. (0402); SFX/AB Live Event Canada, Inc. (6422); SFX/AB Live Event Intermediate Holdco LLC (8004); SFX/AB Live Event LLC (9703); SFX-94 LLC (5884); SFX-Disco Intermediate Holdco LLC (5441); SFX-Disco Operating LLC (5441); SFXE IP LLC (0047); SFX-EMC, Inc. (7765); SFX-Hudson LLC (0047); SFX-IDT N.A. Holding II LLC (4860); SFX-LIC Operating LLC (0950); SFX-IDT N.A. Holding LLC (2428); SFX-Nightlife Operating LLC (4673); SFX-Perryscope LLC (4724); SFX-React Operating LLC (0584); Spring Awakening, LLC (6390); SFXE Netherlands Holdings Coperatief U.A. (6812); SFXE Netherlands Holdings B.V. (6898). The Debtors business address is 902 Broadway, 15th Floor, New York, NY 10010.

    Case 16-10238-MFW Doc 241-1 Filed 03/17/16 Page 1 of 3

  • 2

    Dennis Meloro, Esq.) and (b) Greenberg Traurig, LLP, The Metlife Building, 200 Park Avenue,

    38th Floor, New York, NY 10166 (Attn: Nancy A. Mitchell, Esq., Maria J. DiConza, Esq. and

    Nathan A. Haynes, Esq.); (iii) counsel for the DIP Lenders and DIP Agent, (a) Stroock &

    Stroock & Lavan LLP, 180 Maiden Lane, New York, NY 10038 (Attn: Kristopher M. Hansen,

    Esq., Jonathan D. Canfield, Esq., and Joshua M. Siegel, Esq.) and (b) Young Conaway Stargatt

    & Taylor, LLP, 1000 N. King Street, Wilmington, DE 19801 (Attn: Matthew Lunn, Esq. and

    Robert Poppiti, Esq.); (iv) the Office of the U.S. Trustee, 844 King Street, Suite 2207, Lockbox

    35, Wilmington, DE 19801 (Attn: Hannah McCollum, Esq.); and (v) proposed counsel to the

    Official Committee of Unsecured Creditors, (a) Pachulski Stang Ziehl & Jones LLP, 150

    California Street, 15th Floor, San Francisco, CA 94111 (Attn: Debra I. Grassgreen, Esq. and

    Joshua M. Fried, Esq.) and (b) Pachulski Stang Ziehl & Jones LLP, 919 N. Market Street, 17th

    Floor, Wilmington, DE 19801 (Attn: Bradford J. Sandler, Esq. and Colin R. Robinson, Esq.).

    PLEASE TAKE FURTHER NOTICE THAT A HEARING TO CONSIDER THE

    RELIEF SOUGHT IN THE MOTION WILL BE HELD ON APRIL 5, 2016 AT 10:30 A.M.

    PREVAILING EASTERN TIME BEFORE THE HONORABLE MARY F. WALRATH AT

    THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE,

    824 MARKET STREET, 5TH FLOOR, COURTROOM NO. 4, WILMINGTON, DELAWARE

    19801.

    Dated: March 17, 2016 GREENBERG TRAURIG, LLP

    /s/ Dennis A. Meloro Dennis A. Meloro (DE Bar No. 4435) The Nemours Building 1007 North Orange Street, Suite 1200 Wilmington, Delaware 19801 Telephone: (302) 661-7000 Facsimile: (302) 661-7360 Email: [email protected]

    -and-

    Case 16-10238-MFW Doc 241-1 Filed 03/17/16 Page 2 of 3

  • 3

    Nancy A. Mitchell (admitted pro hac vice) Maria J. DiConza (admitted pro hac vice) Nathan A. Haynes (admitted pro hac vice) Greenberg Traurig, LLP MetLife Building 200 Park Avenue New York, NY 10166 Telephone: 212-801-9200 Facsimile: 212-801-6400 Email: [email protected] [email protected] [email protected] Counsel for the Debtors and Debtors-in-Possession

    Case 16-10238-MFW Doc 241-1 Filed 03/17/16 Page 3 of 3

  • NY 245718505v7

    IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

    In re: SFX ENTERTAINMENT, INC., et al.,1 Debtors.

    Chapter 11

    Case No. 16-10238 (MFW) (Jointly Administered)

    ORDER (I) APPROVING ARTIST CARVE OUT AGREEMENTS WITH THE AGENTS, (II) AUTHORIZING THE ASSUMPTION OF CERTAIN

    ARTIST AGREEMENTS, AND (III) GRANTING RELATED RELIEF

    Upon the motion, dated March 15, 2016 (the Motion)2 filed by the above-captioned

    debtors and debtors-in-possession (collectively, the Debtors), pursuant to sections 105(a),

    363(b), and 365(a) of title 11 of the United States Code, 11 U.S.C. 101, et seq. (the

    Bankruptcy Code), authorizing the Debtors to enter into the Artist Carve Out Agreement with

    the Agents, substantially in the form annexed hereto as Exhibit 1, and assume certain Artist

    Agreements; and the Court having jurisdiction to consider the Motion and the relief requested

    therein in accordance with 28 U.S.C. 157 and 1334 and the Amended Standing Order of

    Reference from the United States District Court for the District of Delaware, dated as of

    1 The Debtors in these Chapter 11 Cases, along with the last four (4) digits of each Debtors federal tax

    identification number, if applicable, are: 430R Acquisition LLC (7350); Beatport, LLC (1024); Core Productions LLC (3613); EZ Festivals, LLC (2693); Flavorus, Inc. (7119); ID&T/SFX Mysteryland LLC (6459); ID&T/SFX North America LLC (5154); ID&T/SFX Q-Dance LLC (6298); ID&T/SFX Sensation LLC (6460); ID&T/SFX TomorrowWorld LLC (7238); LETMA Acquisition LLC (0452); Made Event, LLC (1127); Michigan JJ Holdings LLC (n/a); SFX Acquisition, LLC (1063); SFX Brazil LLC (0047); SFX Canada Inc. (7070); SFX Development LLC (2102); SFX EDM Holdings Corporation (2460); SFX Entertainment, Inc. (0047); SFX Entertainment International, Inc. (2987); SFX Entertainment International II, Inc. (1998); SFX Intermediate Holdco II LLC (5954); SFX Managing Member Inc. (2428); SFX Marketing LLC (7734); SFX Platform & Sponsorship LLC (9234); SFX Technology Services, Inc. (0402); SFX/AB Live Event Canada, Inc. (6422); SFX/AB Live Event Intermediate Holdco LLC (8004); SFX/AB Live Event LLC (9703); SFX-94 LLC (5884); SFX-Disco Intermediate Holdco LLC (5441); SFX-Disco Operating LLC (5441); SFXE IP LLC (0047); SFX-EMC, Inc. (7765); SFX-Hudson LLC (0047); SFX-IDT N.A. Holding II LLC (4860); SFX-LIC Operating LLC (0950); SFX-IDT N.A. Holding LLC (2428); SFX-Nightlife Operating LLC (4673); SFX-Perryscope LLC (4724); SFX-React Operating LLC (0584); Spring Awakening, LLC (6390); SFXE Netherlands Holdings Coperatief U.A. (6812); SFXE Netherlands Holdings B.V. (6898). The Debtors business address is 902 Broadway, 15th Floor, New York, NY 10010.

    2 Capitalized terms used but not defined herein shall have the meanings given to them in the Motion.

    Case 16-10238-MFW Doc 241-2 Filed 03/17/16 Page 1 of 10

  • 2 NY 245718505v7

    February 29, 2012; and due and adequate notice of the Motion having been given; and it

    appearing that no other or further notice need be provided; and the Court having heard the

    statements of counsel regarding the Motion and having determined that the legal and factual

    bases set forth in the Motion establish just cause for the relief granted herein; and it appearing

    that the relief requested by this Motion is in the best interests of the Debtors estates, their

    creditors and other parties in interest; and after due deliberation and sufficient cause appearing

    therefor,

    IT IS HEREBY ORDERED THAT:

    1. The Motion is GRANTED as set forth herein.

    2. The Debtors are authorized to enter into the Artist Carve Out Agreement,

    substantially in the form annexed hereto as Exhibit 1, which immediately shall be binding on the

    parties upon execution. The failure to describe specifically or include any particular provision of

    the Artist Carve Out Agreements or related documents in the Motion or this Order shall not

    diminish or impair the effectiveness of such provision.

    3. The Artist Agreements identified on Exhibit B to the Artist Carve Out Agreement

    are hereby deemed assumed, effective upon entry of this Order. The Assumed Agreements shall

    be binding and enforceable against the parties thereto in accordance with their terms.

    4. Within five (5) business days of entry of this Order, the Debtors shall pay the

    Cure Payment and any unpaid amounts which became due postpetition through entry of the

    Order. The Debtors execution of the Artist Carve Out Agreement and payments set forth in this

    paragraph shall satisfy the requirements of section 365 of the Bankruptcy Code for cure of all

    defaults under the Assumed Agreement and provide adequate assurance of future performance of

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  • 3 NY 245718505v7

    the Assumed Agreements. After entry of this Order the Debtors shall continue to pay any

    additional amounts as they come due under the Assumed Agreements.

    5. Notwithstanding anything to the contrary contained herein, any payment made or

    to be made, and authorization contained in this Order shall be subject to the requirements

    imposed on the Debtors under any approved debtor-in-possession financing facility, any order

    regarding the Debtors postpetition financing or use of cash collateral, and any budget in

    connection therewith.

    6. The terms and the conditions of this Order shall be immediately effective and

    enforceable upon its entry.

    7. The Debtors are hereby authorized and empowered to take all actions necessary to

    implement the relief requested in this Order.

    8. This Court shall retain jurisdiction with respect to all matters arising from or

    related to the implementation and/or interpretation of this Order, the DIP Order, and the Artist

    Carve Out Agreement.

    Dated: _____________________, 2016

    HONORABLE MARY F. WALRATH UNITED STATES BANKRUPTCY JUDGE

    Case 16-10238-MFW Doc 241-2 Filed 03/17/16 Page 3 of 10

  • NY 245718505v7

    Exhibit 1

    Artist Carve Out Agreement

    Case 16-10238-MFW Doc 241-2 Filed 03/17/16 Page 4 of 10

  • NY 245700050v8

    ARTIST CARVE OUT LANGUAGE GENERAL TERMS AGREEMENT

    SFX Entertainment, Inc., and several of its affiliates (collectively, the Company), filed voluntary petitions for relief under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court) on February 1, 2016 (the Petition Date) in the case captioned, In re SFX Entertainment, Inc., et al., Case No. 16-10238 (MFW) (Bankr. D. Del) (jointly administered) (the Chapter 11 Cases). Through this General Terms Agreement (the Agreement), the Company and William Morris Endeavor Entertainment, LLC, AM Only LLC, The Windish Agency, LLC, Paradigm Talent Agency, LLC, and Paradigm Music, LLC (separately Agent, together Agents) representing producers and artists that are key to the Companys business (the Artists), desire to memorialize the terms to be included in existing and all future agreements (together, the Artist Agreements) and state as follows: 1. On March 8, 2016, the Bankruptcy Court entered the Final Order Pursuant to 11 U.S.C. 105, 361, 362, 363, 364, 503 and 507 (i) Authorizing the Debtors to Obtain Senior Secured Priming Superpriority Postpetition Financing, (ii) Authorizing Use of Cash Collateral, (iii) Granting Liens And Providing Superpriority Administrative Expense Status, (iv) Granting Adequate Protection, and (v) Modifying the Automatic Stay (as may be amended, the DIP Order) [Dkt. No. 203]. Among other things, the DIP Order provides for a carve-out (the Operational Carve Out) from the liens and superpriority claims of the DIP Lenders (as defined in the DIP Order) for post-petition amounts owed by the Debtors to artists, talent agents and credit card processors (all hereinafter referred to as Counterparty or Counterparties) that are provided for in the Approved Budget and separately approved in writing and designated by the Companys Chief Restructuring Officer (the CRO) as an Operational Carve Out Payment, in an aggregate amount not to exceed $15 million (the Operational Carve Out Cap). For avoidance of doubt, the Operational Carve Out provides only for a carve-out from the liens and superpriority claims of the DIP Lenders upon an event of default and subsequent liquidation of the DIP Collateral (as defined in the DIP Order) and not a guarantee of payment by the DIP Lenders. 2. If an Artist Agreement is approved in writing and designated by the CRO to be included in the Operational Carve Out, then in order to be included in the Operational Carve Out, each Counterparty must agree as follows: (i) that it will provide services to the Company according to the payment terms agreed to prior to the Petition Date, or if no such terms were agreed to prior to the Petition Date, provided in Exhibit A attached hereto (the Payment Terms) during the Chapter 11 Cases, (ii) that it will continue to honor the Payment Terms and other terms of each Artist Agreement included in the Operational Carve Out after consummation of any plan of reorganization in these Chapter 11 Cases that provides for the ongoing operation of the Company, and (iii) that it will consent to the assumption and assignment of their agreements with the Company to the reorganized company or the purchaser of the assets related to the festival, event or club show for the applicable Artist Agreement that has been included in the Operational Carve Out if (x) information is provided that is reasonable under the circumstances to allow the Counterparty to confirm that the assignee has the financial wherewithal to fulfill the Artist Agreement, and (y) the Counterparty is provided with at least seven (7) business days notice of

    Case 16-10238-MFW Doc 241-2 Filed 03/17/16 Page 5 of 10

  • NY 245700050v8

    the proposed assignment of any Artist Agreement (unless such advance notice is impractical under the circumstances in which case the Company shall use best efforts to provide as much advance notice as possible), and (z) the Counterparty cannot articulate a commercially reasonable basis for refusal to agree to perform for the proposed assignee; provided, however, that in the event the Counterparty does not consent to such assignment, the remaining payments under applicable Artist Agreement (including, but not limited to, any and all rejection damages) will no longer be subject to the Operational Carve Out. In addition, the Counterparties to the Artist Agreements listed on Exhibit B consent to the assumption by the Debtors of such agreements. 3. As consideration for these promises by the undersigned, the Company represents and warrants as follows: (i) all amounts due under each Artist Agreement which is included in the Operational Carve Out, including, but not limited to, any and all rejection damages for Operational Carve Out Payments related to contracts that are cancelled by the Company for any reason or no reason, subject to the terms of the applicable Artist Agreement, are less than the Operational Carve Out Cap, (ii) CRO shall (a) confirm in writing the amount remaining available under the Operational Carve Out Cap (the Operational Carve Out Balance) 1 within forty-eight (48) hours of receipt of a request from one or more Counterparties for such information; provided however, that the CRO shall not have to provide such information more than once per week, and (b) provide to Counterparties that have Artist Agreements within the Operational Carve Out notice by email within forty-eight (48) hours after determining that the Operational Carve Out Balance is less than $1.5 million, (iii) the Company shall assume each and every pre-petition Artist Agreement included in Exhibit B, and shall file a motion to assume no later than ten (10) days after execution of this Agreement and diligently pursue its approval and make all past due payments under such assumed Artist Agreement promptly upon receiving Bankruptcy Court approval, (iv) in the event the Company seeks to assume and/or assign any Artist Agreement to a third party, (x) the Company shall inform the Counterparty as soon as practicable upon identifying the assignee, of the name of the proposed assignee(s), and provide any relevant financial information to allow Counterparty to confirm adequate assurance of future performance and (y) if reasonable under the circumstances, the Counterparty may demand adequate assurance of future performance under such Artist Agreement. 4. Each and every Artist Agreement shall contain the following language or the following language shall be attached to each and every Artist Agreement included in the Operational Carve Out:

    1 The Operational Carve Out Balance shall be determined each time the CRO approves an Artist Agreement as an Operational Carve Out Payment. In determining the Operational Carve Out Balance, the Company shall add all Guarantee amounts for all Artist Agreements approved for inclusion in the Operational Carve Out to provide the Counterparty assurance that the full unpaid Guarantee is included within the Operational Carve Out Cap even if the performance included thereunder is in the future. New Artist Agreements and Guarantees must be viewed as later in time than an already approved Artist Agreements/Guarantees, even if payment under the newly-presented Artist Agreement is due earlier than the payment to be made under the prior-approved Artist Agreements. The Operational Carve-Out Balance will be reduced automatically by the entire amount of the Guarantee, even if a portion of the Guarantee is not yet due, and the Operational Carve-Out Balance will be increased automatically by any payment made under any Artist Agreement that is an Operational Carve-Out Payment.

    Case 16-10238-MFW Doc 241-2 Filed 03/17/16 Page 6 of 10

  • NY 245700050v8

    I am the Chief Restructuring Officer of SFX Entertainment, Inc. and its related companies (the "Debtors"), debtors in the bankruptcy cases entitled In re: SFX Entertainment, Inc., et al., Case No. 16-10238. Pursuant to the Final DIP Order [Dkt No. 203], I affirm and certify, under penalties of perjury, that the dollar amounts to be paid hereunder (the Guarantee) are provided for in the Approved Budget, and have been hereby separately approved in writing and designated by me, as CRO, as an Operational Carve Out Payment (as defined in the Final DIP Order), and, to date, the aggregate amount of the Operational Carve Out Payments which remain unpaid, inclusive of the payments under this Agreement, do not exceed $15 million. In addition, on behalf of the estate of the undersigned Debtor, the terms of this Agreement [including the attached Addendum A and Artist Rider] are approved. 5. The Company shall use commercially reasonable efforts to review all new Artist Agreements promptly to determine whether such Artist Agreement shall be included in the Operational Carve Out and to provide the CRO certification no later than two (2) business days of presentment of the applicable Artist Agreement. 6. In the event any proposed post-Petition Date Artist Agreement is not approved as within the Operational Carve Out and in the event the Company wishes to have the Artist Agreement fulfilled, the Company shall remit full payment of the Guarantee on the earlier of (i) the execution of the Artist Agreement, or (ii) the announcement of the performance described in the Artist Agreement. 7. Any dispute with respect to this Agreement, the DIP Order and/or the Operational Carve Out shall be determined by the Bankruptcy Court. 8. Signatories: a. The undersigned Agent hereby certifies that it is the duly authorized representative of the Producer (f/s/o Artist) identified in each Artist Agreement submitted for approval for the purpose of binding the Producer (f/s/o Artist) to the terms hereof. b. The undersigned CRO hereby certifies that he is the duly authorized representative of the Company and the Estate in the Chapter 11 Cases for the purpose of binding the Company and the Estate to the terms hereof.

    Case 16-10238-MFW Doc 241-2 Filed 03/17/16 Page 7 of 10

  • NY 245700050v8

    Exhibit A

    Payment Terms

    NOTE: The following payment terms are applicable to all Artist Agreements included in the Operational Carve Out that did not have agreed Payment Terms prior to the Petition

    Date. For those Post-Petition or Assumed Artist Agreements not included in the Operational Carve Out, Producer (defined herein) shall be entitled to full payment on the

    earlier of execution of the Artist Agreement or announcement of the performance.

    Festivals and Events (greater than 10,000 capacity): Headliners Deposits & Payments: Provided that Producer (defined as the Artist-loan out organization which is party to the Artist Agreement), is not in breach of any of Producers material obligations and in consideration for Producers furnishing the services of Artists performance (including, but not limited to: exclusivity of Artists performance within a certain geographic area and during a certain time; advertising of the performance (including use of Artists name, likeness, and image); solicitation of sponsorships and ticket sales based upon Artists name, likeness, and image, and personal performance at the contracted-for engagement) (collectively, the Event), Company shall pay the fee owed to Producer for Artists performance (the Guarantee) as follows: 25% before announcement of the lineup; 50% thirty (30) days before the Event Date (herein defined as the date on which the Festival or similar Event commences), and 25% not less than five (5) business days prior to the Event Date. Notwithstanding the foregoing, if Producer fails to perform its obligations (unless such failure is explicitly excused hereunder or in the Artist Agreement) or communicates its intention to not perform its obligations, Company has no obligation to pay the Guarantee. In any event, Producer shall be entitled to a reasonable opportunity to cure any alleged or actual breach (such cure to occur no later than within two (2) business days prior to the Event Date). In the event the Company cancels a performance not otherwise excused under the Artist Agreement, the Guarantee shall become due and payable in full immediately. The foregoing is subject to the standard terms set forth in any Artist Agreement issued on behalf of Producer (including, without limitation, payment in the event the performance or Event is cancelled due to a force majeure event or inclement weather), such terms not to be materially altered or amended unless specifically agreed to in writing. Non-Headliners Deposits & Payments: Provided that Producer is not in breach of any of Producers material obligations and in consideration for Producer furnishing the services of Artists performance (including, but not limited to: exclusivity of Artists performance within a certain geographic area and during a certain time; advertising of the performance (including use of Artists name, likeness, and image); solicitation of sponsorships and ticket sales based upon Artists name, likeness, and image, and personal performance at the contracted-for engagement) (collectively, the Event), Company shall pay the fee owed to Producer for Artists performance (the Guarantee) as follows: 15% before announcement of the lineup; 40% thirty (30) days before the Event Date, and 45% not less than five (5) business days prior to the Event Date. Notwithstanding the foregoing, if Producer fails to sufficiently perform its obligations (unless such failure is explicitly excused hereunder or in any Artist Agreement) or communicates its intention to not perform its obligations, Company has no obligation to pay the Guarantee. In any event, Producer shall be entitled to a reasonable opportunity to cure any alleged or actual breach (such cure to occur not later than

    Case 16-10238-MFW Doc 241-2 Filed 03/17/16 Page 8 of 10

  • NY 245700050v8 2

    within two (2) business days prior to the Event Date). In the event the Company cancels a performance not otherwise excused under the Artist Agreement, the Guarantee shall become due and payable in full immediately. The foregoing is subject to the standard terms set forth in any Artist Agreement on behalf of Producer (including, without limitation, payment in the event the performance or Event is cancelled due to a force majeure event or inclement weather), such terms not to be materially altered or amended unless specifically agreed to in writing. Events (for venues of 10,000 capacity or less) or Club Shows: Deposits & Payments: Provided that Producer is not in breach of any of Producers material obligations and in consideration for Producers furnishing the services of Artists performance (including, but not limited to: exclusivity of Artists performance within a certain geographic area and during a certain time; advertising of the performance (including use of Artists name, likeness, and image); solicitation of sponsorships and ticket sales based upon Artists name, likeness, and image, and personal performance at the contracted-for engagement) (collectively, the Event), Company shall pay the fee owed to Producer for Artists performance (the Guarantee) as follows: 20% before announcement of the lineup; 40% thirty (30) days before the Event Date, and 40% not less than five (5) business days prior to the Event Date. Notwithstanding the foregoing, if Producer fails to sufficiently perform his or her obligations (unless such failure is explicitly excused hereunder or in any Artist Agreement) or communicates its intention to not perform its obligations, Company has no obligation to pay the Guarantee. In any event, Producer shall be entitled to a reasonable opportunity to cure any alleged or actual breach (such cure to occur not later than within two (2) business days prior to the Event Date). In the event the Company cancels a performance not otherwise excused under the Artist Agreement, the Guarantee shall become due and payable in full immediately. The foregoing is subject to the standard terms set forth in the Artist Agreement on behalf of the Producer (including, without limitation, payment in the event the performance or Event is cancelled due to a force majeure event or inclement weather) such terms not to be materially altered or amended unless specifically agreed to in writing.

    Case 16-10238-MFW Doc 241-2 Filed 03/17/16 Page 9 of 10

  • NY 245700050v8 3

    Exhibit B

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