0001047469-13-007186.txt : 20130625 0001047469-13-007186.hdr.sgml : 20130625 20130625061110 ACCESSION NUMBER: 0001047469-13-007186 CONFORMED SUBMISSION TYPE: S-1 PUBLIC DOCUMENT COUNT: 107 FILED AS OF DATE: 20130625 DATE AS OF CHANGE: 20130625 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SFX Entertainment, INC CENTRAL INDEX KEY: 0001553588 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AMUSEMENT & RECREATION SERVICES [7900] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1 SEC ACT: 1933 Act SEC FILE NUMBER: 333-189564 FILM NUMBER: 13930798 BUSINESS ADDRESS: STREET 1: 430 PARK AVENUE STREET 2: 6TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 646-561-6400 MAIL ADDRESS: STREET 1: 430 PARK AVENUE STREET 2: 6TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: SFX HOLDING Corp DATE OF NAME CHANGE: 20120705 S-1 1 a2215423zs-1.htm S-1

As filed with the Securities and Exchange Commission on June 25, 2013

Registration No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

SFX ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		7990 (Primary Standard Industrial Classification Code Number)		90-0860047 (I.R.S. Employer Identification No.)

SFX Entertainment, Inc.
430 Park Avenue
New York, New York 10022
(646) 561-6400
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

Robert F.X. Sillerman
Chief Executive Officer and Chairman
SFX Entertainment, Inc.
430 Park Avenue
New York, New York 10022
(646) 561-6400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copies to:


Aron Izower Jason Barr Reed Smith LLP 599 Lexington Avenue New York, New York 10022 (212) 521-5400		Colin Diamond F. Holt Goddard White & Case LLP 1155 Avenue of the Americas New York, New York 10036 (212) 819-8200

Approximate date of commencement of proposed sale to the public:
As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Securities Exchange Act of 1934.


Large accelerated filer o		Accelerated filer o		Non-accelerated filer ý (Do not check if a smaller reporting company)		Smaller reporting company o

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Proposed maximum aggregate offering price(1)(2)	Amount of registration fee



Common Stock, par value $0.001	$175,000,000	$23,870

(1): Includes the additional shares the underwriters have the option to purchase, if any.
(2): Estimated solely for the purpose of computing the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Table of Contents

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.


PRELIMINARY PROSPECTUS	Subject to Completion	June 25, 2013

Shares

SFX Entertainment, Inc.

Common Stock

This is an initial public offering of our common stock. We are offering all of the shares of common stock offered by this prospectus. We expect the public offering price to be between $ and $ per share.

We have applied to list our common stock on the The Nasdaq Global Market under the symbol "SFXE."

We are an "emerging growth company," as defined under the federal securities laws, and, as such, may elect to comply with certain reduced public company reporting requirements for future filings.

Investing in our common stock involves a high degree of risk. Before buying any shares, you should carefully read the discussion of material risks of investing in our common stock in "Risk Factors" beginning on page 13 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

	Per Share	Total


Public offering price	$	$

Underwriting discounts and commissions(1)	$	$

Proceeds, before expenses, to us	$	$

(1): See "Underwriting" for a description of the compensation payable to the Underwriters.

The underwriters may also purchase up to an additional shares of our common stock at the public offering price, less the underwriting discounts and commissions payable by us, to cover over-allotments, if any, within 30 days from the date of this prospectus. If the underwriters exercise this option in full, the total underwriting discounts and commissions will be $ and our total proceeds, after underwriting discounts and commissions but before expenses, will be $ .

The underwriters are offering the common stock as set forth under "Underwriting." Delivery of the shares will be made on or about , 2013.


UBS Investment Bank		Barclays		Jefferies

, 2013

TABLE OF CONTENTS


Prospectus Summary			1
Risk Factors			13
Forward-Looking Statements			46
Use of Proceeds			47
Dividend Policy			48
Capitalization			49
Dilution			50
Unaudited Pro Forma Condensed Combined Consolidated Financial Information			52
Selected Historical Financial Information and Other Data			64
Management's Discussion and Analysis of Financial Condition and Results of Operations			66
Business			88
Management			107
Executive Compensation			114
Certain Relationships and Related Party Transactions			125
Material United States Tax Considerations For Non-United States Holders of Common Stock			128
Principal Stockholders			133
Description of Capital Stock			135
Shares Eligible for Future Sale			144
Underwriting			149
Experts			153
Legal Matters			154
Where You Can Find More Information			154
Index to Consolidated Financial Statements			F-1

Through and including , 2013 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Neither we nor any of the underwriters have authorized anyone to provide any information or to make any representations other than as contained in this prospectus or in any free writing prospectuses we have prepared. We take no responsibility for, and provide no assurance as to the reliability of, any information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

Unless derived from our financial statements or otherwise noted, the Australian Dollar, or AUD, amounts presented in this prospectus are translated at the rate of $1.00 = AUD$1.0847, the exchange rate published by Bloomberg as of June 21, 2013 unless otherwise specified to the contrary.

USE OF MARKET AND INDUSTRY DATA

This prospectus includes market and industry data that we have obtained from third-party sources, including industry publications, as well as industry data prepared by our management on the basis of its knowledge of and experience in the industries in which we operate (including our management's estimates and assumptions relating to such industries based on that knowledge). Management has developed its knowledge of such industries through its experience and participation in these industries. While our management believes the third party sources referred to in this prospectus are reliable, neither we nor our management have independently verified any of the data from such sources referred to in this prospectus or ascertained the underlying economic assumptions relied upon by such sources. Internally prepared and third-party market forecasts, in particular, are estimates only and may be inaccurate, especially over long periods of time. Furthermore, references in this prospectus to any publications, reports, surveys or articles prepared by third parties should not be construed as depicting the complete findings of the entire publication, report, survey or article. The information in any such publication, report, survey or article is not incorporated by reference in this prospectus.

Table of Contents

Prospectus summary

This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information that is important to you. Before investing in our common stock, you should read this prospectus carefully in its entirety, especially the risks of investing in our common stock that we discuss in the "Risk Factors" section of this prospectus and the financial statements and related footnotes beginning on page F-1.

In this prospectus, unless otherwise stated or the context otherwise requires, references to "SFX" and "the Company" refer to SFX Entertainment, Inc. and references to "we," "us," "our" and similar references refer to SFX Entertainment, Inc. together with its consolidated subsidiaries, in each case after giving effect to our completed acquisitions, the planned acquisitions disclosed herein, and the formation of our joint venture. To date, SFX has acquired four businesses and acquired an interest in one joint venture. SFX also expects to complete four acquisitions simultaneously with or shortly after the closing of this offering: its acquisition of a 75% ownership interest in the worldwide business (the "ID&T Business") of ID&T Holding B.V. ("ID&T"), its acquisition of a 60% equity interest in i-Motion GmbH Events & Communication ("i-Motion"), its acquisition of 100% of Totem Onelove Group Pty Ltd and Totem Industries Pty Ltd (collectively, "Totem") and its acquisition of a 70% equity interest in Made Event, LLC and EZ Festivals, LLC (collectively, "Made"). Although we consider these acquisitions to be "probable" within the meaning of Rule 3-05 of Regulation S-X and present information herein on a basis that assumes we complete these acquisitions, their consummation remains subject to closing conditions. Therefore, we cannot provide any assurance that any of our planned acquisitions will be consummated. We discuss the terms of these acquisitions and the conditions to closing in "Risk Factors—Risks Related to Our Acquisition Strategy" and "Business—Our History and Acquisitions—Planned acquisitions."

One of SFX's completed acquisitions is Dayglow LLC and its affiliates (now known as SFX-LIC Operating LLC or "Life in Color"), which for accounting purposes has been determined to be the predecessor entity of SFX. We refer to the results of our predecessor entity as our "Predecessor." SFX is not the same company as, or in any legal way connected to, SFX Entertainment Inc., which was sold to Clear Channel Communications Inc. in 2000, although the Company and SFX Entertainment Inc. do share similar founders and management teams.

COMPANY OVERVIEW

We believe we are the largest producer of live events and entertainment content focused exclusively on the electronic music culture ("EMC"), based on attendance and revenue. We view EMC as a global generational movement driven by a rapidly developing community of avid followers among the millennial generation. Our mission is to enable this movement by providing our fans with the best possible live experiences, music discovery and connectivity with other fans and events. We have significant and growing scale with our global live events and, on a pro forma basis for our completed and planned acquisitions, attracted approximately 2.8 million fans in 2012, a 23.6% increase from 2011. We believe the broad appeal of EMC beyond festival attendance is demonstrated by the deep engagement of our fans, which is evidenced by the time they devote to EMC-related social media and digital activities. For example, our 2012 Tomorrowland festival in Belgium had 7.9 million live views on YouTube and our official Tomorrowland long-form after movies have had over 140 million online views to date.

Table of Contents

entertainment experiences in the world for EMC fans. Many of the festivals we have or will present have a long history and have achieved substantial popularity and success in Europe while also attracting fans globally. For example, Tomorrowland sold out all of its approximately 180,000 tickets to the 2013 festival in Belgium in one second and saw significant demand from U.S.-based fans, each seeking to purchase multiple tickets. To meet the growing demand of the EMC community in the United States and other regions around the world, we plan to introduce some of the most popular festivals and events to certain areas for the first time. At its original location in Amsterdam, Sensation has consistently sold out since its inception in 2000, including all 45,000 tickets for 2013. Our inaugural Sensation event in North America, held in Toronto in May 2013, attracted over 25,000 attendees. We have announced four additional Sensation events in North America for 2013, which will be held in Las Vegas, Miami, New York, and San Francisco, and our first North American Tomorrowland festival, TomorrowWorld, which we will hold in September 2013.

We are also addressing the demand from the growing EMC community for music, engaging content and social connectivity between and around live events. A key component of this initiative is Beatport, which is the principal source of music for EMC DJs and a trusted destination for the growing EMC community. Beatport is a vital channel for over 200,000 registered DJs and artists to launch music and connect with fans. In addition, Beatport has a rapidly growing fan community, with approximately 40 million unique visitors in 2012 (according to Google Analytics), who primarily use the site to discover and stream music, follow DJs and keep abreast of EMC news, information and events.

The global market directly associated with electronic dance music is projected to be approximately $4.5 billion in 2013, according to the International Music Summit Business Report (the "IMS"). Electronic music has a history of over 20 years of mainstream popularity in Europe and has more recently evolved into a widely followed genre of music in the United States and other international markets. For example, total attendance at what are currently the five largest U.S. EMC festivals grew 41% annually from 2007 to 2012 (although there is no guarantee that this growth rate will continue in the future). This compares to 2% annual revenue growth for the overall North American concert market during the same period, according to Pollstar, a concert industry trade publication. Further reflecting this trend, in 2012 the National Academy of Recording Arts and Sciences added a Dance/Electronic category for the Grammy Awards, Billboard launched a Dance/Electronic chart, and in February 2013, a Dance/Electronic song reached #1 on the Billboard Hot 100 chart for the first time. EMC festivals and events typically feature many different artists and DJs as well as elaborate sets, lighting and special effects centered on different creative themes. These festivals and events have become highly experiential and social happenings that are enjoyed by thousands of fans. These experiences, further propelled via social media and shared by millions of fans globally, are at the heart of the generational movement that is EMC.

Our market is characterized by a high degree of ownership fragmentation, and we believe it is well positioned for consolidation. We have a disciplined acquisition strategy that utilizes our in-house expertise and experience to identify, evaluate and integrate acquisitions. We plan to implement best practices across acquired companies and provide active business development, managerial support and financial discipline to achieve operational efficiencies. This will allow us to bring our fans more and better EMC experiences while preserving the unique identities of these events. We have acquired and formed, or plan to acquire simultaneously with or shortly after consummation of this offering, the following businesses in pursuit of this strategy.

Table of Contents

Asset/Status					Description


BEATPORT, LLC "Beatport" Completed	100	%	NA	NA	Principal online resource and destination for EMC DJs and enthusiasts, offering music for purchase in multiple downloadable formats (including uncompressed, high quality audio files) and providing unique music discovery tools for DJs and fans.

Disco Donnie Presents "DDP" Completed	100	%	600 / 8	867	Promoter of EMC events in North America since 2000, including ownership interests in large EMC festivals.

ID&T Holding B.V. "ID&T" Planned	75	%	35 / 29	964	One of the largest content providers and producers of international EMC live events across 19 countries and four continents. ID&T branded festivals include Tomorrowland, Mysteryland, Sensation, Q-Dance, B2S, Decibel and Defqon.1. At the same time as this acquisition, we will increase our interest in the ID&T JV from 51% to 75%.

i-Motion GmbH Events & Communication "i-Motion" Planned	60	%	7 / 5	208	Leading promoter and producer of EMC festivals and events in Germany, with key brands including Nature One, Germany's largest open-air EMC festival.

Life in Color "LIC" Completed	100	%	138 / 4	424	Promoter and organizer of branded events that feature live music by DJs, acrobatic acts and "paint blasts."

Made Event, LLC and EZ Festivals LLC collectively, "Made" Planned	70	%	14 / 1	130	Promoter and producer of EMC festivals and events in the United States, including Electric Zoo, held annually in New York City.

MMG Nightlife LLC "MMG" Completed	80	%	NA	NA	Management company that manages some of the most popular EMC venues in South Beach, Florida.

Totem Onelove Group Pty Ltd and Totem Industries Pty Ltd collectively, "Totem" Planned	100	%	15 / 5	247	Promoter and producer of leading Australian EMC festival, Stereosonic, a five city touring outdoor festival held annually in summer (November/December) in conjunction with a touring and promotion business.

Table of Contents

We have agreed to the following terms in respect of the four planned acquisitions described above. We intend to use the proceeds of this offering to fund the cash portion of the consideration for these acquisitions and consummate them simultaneously with or shortly after the closing of this offering.

•: Under our option (the "ID&T Option") to purchase a 75% ownership interest of the worldwide business of ID&T (the "ID&T Business"), our acquisition of the ID&T Business will cost $50.0 million in cash (including a subsequent $10.0 million payment) plus the cancellation of a $7.5 million debt owed to us by ID&T. These are in addition to the $2.5 million in cash and 2,000,000 shares of common stock we paid to acquire the ID&T Option.
•: Under a term sheet with i-Motion, our initial acquisition of a 60% ownership interest in i-Motion will cost $12.0 million, consisting of $8.0 million in cash and $4.0 million in shares of our common stock at the price to the public in this offering.
•: We have entered into an asset contribution agreement with Totem, under which we have agreed to pay AUD$75.0 million, consisting of AUD$60.0 million (or $55.3 million) in cash and AUD$15.0 million (or $13.8 million) in shares of our common stock at the price to the public in this offering, to acquire 100% of Totem. Under the terms of the agreement, we were obligated to pay an AUD$5.0 million (or $4.8 million as of May 22, 2013) deposit, which we funded on May 22, 2013.
•: Under our term sheet with Made, our acquisition of a 70% ownership interest in Made will cost $35.0 million, consisting of $20.0 million in cash, $5.0 million in our common stock at the lower of $12.75 per share or the price to the public in this offering, and $10.0 million in promissory notes. On June 24, 2013, we advanced $2.5 million towards the purchase price for this transaction. We will be required to purchase the remaining 30% that is not being sold in 2018.

We describe the terms of these planned acquisitions in greater detail under "Business—Our History and Acquisitions—Planned acquisitions."

Although, we consider each of these acquisitions to be a "probable acquisition" for the purposes of Rule 3-05 of Regulation S-X, in each case, there are substantial potential impediments that could cause us to fail to close a given acquisition or otherwise prevent it from being successful. For more information, see "Risk Factors—Risks Related to Our Acquisition Strategy."

Currently, we generate revenue from several sources. These include music sales on Beatport (20% and 34% of total revenue on a pro forma basis for the year ended December 31, 2012 and the three months ended March 31, 2013, respectively), ticket sales and concessions (63% and 54% of total revenue on a pro forma basis for the year ended December 31, 2012 and the three months ended March 31, 2013, respectively), and other sources including promoter, license fees, sponsorship, and management fees (collectively, 17% and 12% of total revenue on a pro forma basis for the year ended December 31, 2012 and the three months ended March 31, 2013, respectively). On a pro forma basis for our completed and probable acquisitions, we generated revenue of $242.0 million and Adjusted EBITDA of $14.6 million and incurred net losses of $48.9 million for the year ended December 31, 2012, and generated revenue of $36.2 million and Adjusted EBITDA of $(9.2) million and incurred net losses of $31.7 million for the three months ended March 31, 2013.

COMPETITIVE STRENGTHS

We believe we are the largest company exclusively focused on the EMC community, with innovative festivals, live events and premier managed venues. In addition, we attract a large and growing community of EMC followers and key influencers around the world.

•: History of creativity and innovation. We create and produce many of the most recognized and well attended EMC festivals and events in the world, including, on a pro forma basis for our probable acquisitions, Tomorrowland, Sensation, Mysteryland, Q-Dance, Stereosonic, Electric Zoo, Decibel,

Table of Contents

Nature One, MayDay, Ruhr-in-Love and Life in Color. At our events and festivals, we use artistic, interactive, performance and visual elements, in addition to the music, to create an all-encompassing and compelling fan experience. For example, Life in Color shows include acrobatic acts and "paint blasts" in addition to DJs, and our other festivals include production elements such as elaborate sets, themes, lasers, fog machines and videos. We believe the appeal of our festivals and events is demonstrated by consistent attendance growth and ticket demand that often outstrips the available capacity. For example, in 2013, Tomorrowland sold out in pre-registration its approximately 180,000 tickets, which was more than triple the tickets it sold in 2009.

•: Active, year-round relationship with the large and growing EMC community. We use social media, engaging content and our online property, Beatport, to maintain an active relationship with trend setters and influencers in the broader EMC community, including professional DJs, bloggers and passionate consumers. Beatport has a large community of influencers, including over 200,000 registered DJs. Beatport also has a Klout score (an aggregated measure of social media activity and influence) of 90 out of 100, comparable with other high profile music services such as Spotify (90) and iTunes (92) as of June 2013. We believe our ability to create closer partnerships between Beatport and the most important EMC festivals and events will enable us to deliver more to the EMC community between and around live events.
•: Substantial global scale and diversification. Our scale and diversification enables us to serve our fans more effectively than other participants in the EMC market that have typically focused on one geographic market or a narrow portfolio of events. On a pro forma basis in 2012, we produced 52 festivals (defined as having an attendance of 10,000 or more fans) and 809 events (defined as having attendance of fewer than 10,000 fans). Together these attracted 2.8 million attendees in 2012 and included large and small scale events, presented in 25 countries on five continents, that targeted different subsets of the EMC community. In addition, our managed EMC venues hosted over 400,000 attendees and our online properties attracted millions of users around the world in the year ended December 31, 2012.
•: Early access to emerging talent and trends. Through our managed venues, Beatport and relationships with influencers, we are able to identify new trends and support new artists, introducing them across our network. Our premier managed EMC venues in South Beach, Florida have proven to be a breeding ground for some of the top DJs in the industry. Similarly, Beatport serves as an important channel for DJs to gain recognition. In addition to influential charts and other discovery tools, Beatport hosts mix contests and other programs to support aspiring DJs. For example, Zedd, one of today's leading DJs, was discovered after he won several remix contests on Beatport and has gone on to play at several of our venues and festivals.
•: Experienced management team. Our management team's reputation and experience in music, live entertainment, consumer internet and related businesses make us a valuable partner to creative talent, independent operators and the EMC community more broadly. Members of our senior management team have previously built businesses in live events and entertainment and executed and integrated a number of acquisitions during their careers. We believe our management's experience strengthens our ability to effectively integrate and operate our acquired businesses.

We are an early stage company that has not yet taken full advantage of these strengths, and we are not yet profitable due to the costs associated with startup activities, including making acquisitions, as well as limited time integrating and managing the businesses we have acquired and intend to acquire.

GROWTH STRATEGY

Our goal is to grow our business by supporting the development of the EMC movement. Key elements of our strategy include the following:

Table of Contents

•: Enhance the fan experience. We strive to continually enhance the experience that new and existing fans enjoy at our live events or online. Our live events include innovative and state-of-the-art sets and performer lineups, featuring both top talent and up-and-coming artists. We are pursuing many initiatives to enhance the fan experience, including continuing to invest in leading edge production, providing smart tickets/event passes, facilitating high quality travel and accommodation logistics, using wireless technologies to ease on-site logistics and social media interaction and featuring quality concessions in partnership with top-tier food and beverage partners. We believe the value of the experiences we offer is compelling enough to attract one or more partners willing to support multiple free events and other fan-friendly initiatives. We are in advanced discussions with several such partners to support these initiatives and enhance the access and experience of our fans. We plan to complement our fans' experience at live events by meeting their demand for information, quality content and connectivity with artists and the broader EMC community away from and around the events.
•: Bring our festivals into new markets and expand current offerings. Many of our EMC festivals and events are well known, have an existing global following and have begun to expand geographically. We are using our considerable resources, including managerial talent and local expertise, to accelerate the expansion of our festivals and events into new geographies, many of which have an underserved EMC fan community. For example, in 2012, Tomorrowland saw demand from approximately 200,000 U.S.-based fans seeking to purchase multiple tickets each, of which only 2,000 were successful. We intend to bring some of the most successful festivals in the world to North America, including TomorrowWorld, the first international version of Tomorrowland, scheduled to be held outside Atlanta in September 2013. In response to increasing demand for our events, we are also expanding some of our festivals by increasing their length and capacity. For example, from 2010 to 2011, Tomorrowland expanded to three days from two days and increased attendance to 60,000 per day (180,000 total) from 45,000 per day (90,000 total).
•: Foster deeper engagement within the EMC community. We believe our scale of festivals and events, combined with our new generation of executive talent, helps us support the growth of the EMC community. Creating and mixing electronic music is a collaborative process that is highly accessible given the ready availability of music and mixing tools. In addition, the music is typically enjoyed as part of a communal experience, which in turn is commonly shared and perpetuated via social media. We seek to improve our fans' experiences by responding to their growing demand to engage with EMC content and the EMC community. We also plan to create closer partnership and integration between our online properties, such as Beatport, and live EMC happenings to enhance the fan experience between and around events.
•: Acquire and integrate leading live event and online properties. We seek to acquire the highest quality festivals, event operators and promoters worldwide, as well as other businesses that are important to the EMC community. We have completed four acquisitions and acquired an interest in one joint venture to date, and we plan to close four more acquisitions on or shortly after the closing of this offering. We are also in active negotiations to acquire several other businesses. To mitigate acquisition risks, we typically seek to retain management teams of the acquired companies under long-term agreements and incentivize them to continue to manage the operations and expansion of the businesses. In addition, we intend to use our senior management's expertise in live events, consumer internet and EMC broadly, to promote best practices across our entire network in order to enhance the fan experience, improve operating and financial performance and ensure the health and safety of our fans, all while allowing producers to maintain creative independence.

Table of Contents

RISKS RELATED TO OUR BUSINESS

Investing in our common stock involves substantial risk. You should carefully consider all of the information in this prospectus prior to investing in our common stock. There are several risks related to our business that are described under the section titled "Risk Factors" elsewhere in this prospectus. Among these important risks are the following:

•: Our success relies, in part, on the strength of our festival and online properties' appeal to fans, and if any of them were to become less popular, our business could suffer.
•: We may be unsuccessful in developing and expanding our music, video and other content offerings.
•: We can give no assurance as to when, or if, we will consummate our planned acquisitions.
•: The number of EMC festivals and events may grow faster than the public's demand which could make it difficult for us to attract customers to our festivals and events.
•: A number of other companies are seeking to make acquisitions in our industry, which may make our acquisition strategy more difficult or expensive to pursue.
•: We may seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing capital stock that would dilute your ownership.
•: We may be unsuccessful in our future acquisition endeavors, if any, which may have an adverse effect on our business; in addition, some of the businesses we acquire may incur significant losses from operations.
•: Our business and growth may suffer if we are unable to attract and retain key officers or employees, including our Chairman and Chief Executive Officer, Robert F.X. Sillerman, including any loss of officers or employees due to illness or other events outside of our control.
•: We are uncertain of our ability to manage our growth.

We are an emerging growth company as defined in Section 2(a)(19) of the Securities Act and Section 3(a)(80) of the Exchange Act. Pursuant to Section 102 of the Jumpstart Our Business Startups Act ("JOBS Act"), we have provided reduced executive compensation disclosure and have omitted a compensation discussion and analysis from this prospectus. Pursuant to Section 107 of the JOBS Act, we have elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.

OUR HISTORY

SFX was incorporated in the State of Delaware on June 5, 2012. Between June 5, 2012 and February 13, 2013, SFX was named SFX Holding Corporation. We started our business on July 7, 2011 as SFX EDM Holdings Corporation which is now a wholly-owned subsidiary of SFX Entertainment, Inc.

Our principal executive offices are located at 430 Park Avenue, New York, New York 10022 and our telephone number is (646) 561-6400.

All trademarks and product names or brands appearing in this prospectus are the property of their respective owners.

Table of Contents

The offering


Common stock offered by us		shares
Common stock outstanding after this offering		shares
Option to purchase additional shares		The underwriters have an option to purchase a maximum of additional shares of our common stock from us to cover over-allotments, if any. The underwriters can exercise this option at any time within 30 days from the date of this prospectus.
Use of proceeds		We estimate that the net proceeds to us from this offering, after deducting underwriting discounts and estimated offering expenses, will be approximately $ million, assuming the shares are offered at $ per share (the midpoint of the price range set forth on the cover of this prospectus).
		• We intend to use $50.0 million to exercise the ID&T Option and close the acquisition of the 75% ownership interest in the ID&T Business, including $10.0 million to pay the second step payment due to ID&T under the ID&T Option.
		• We intend to use $8.0 million to close the acquisition of 60% of the ownership interests in i-Motion.
		• We intend to use AUD$55.0 million (or $50.7 million) to close the acquisition of substantially all of the assets of Totem.
		• We intend to use $17.5 million to close the acquisition of 70% of the ownership interests in Made.
		• We intend to use the balance to fund working capital, capital expenditures and other general corporate purposes, which may include other acquisitions of complementary businesses.
		See "Use of Proceeds."
Risk factors		See "Risk Factors" beginning on page 13 of this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.
Proposed Nasdaq Global Market symbol		"SFXE"

The number of shares of common stock that will be outstanding after this offering is based on 63,592,902 shares outstanding as of June 24, 2013, and excludes:

•: 18,383,000 shares of common stock issuable upon the exercise of options to purchase common stock that were outstanding as of June 24, 2013, with a weighted average exercise price of $4.62 per share, and options to purchase approximately 635,000 shares of common stock with an exercise price equal to the initial public offering price per share in this offering, which we intend to issue immediately prior to the closing of this offering;

Table of Contents

•: 500,000 shares of common stock issuable upon the exercise of warrants to purchase common stock that were outstanding as of June 24, 2013, with a weighted average exercise price of $2.50 per share; and
•: 1,592,000 shares of common stock available for future issuance under our 2013 Equity Compensation Plan.

Unless otherwise indicated, all information in this prospectus:

•: assumes no exercise of the underwriters' option to purchase additional shares; and
•: assumes an initial public offering price of $ per share, the midpoint of the estimated initial public offering price range set forth on the cover of this prospectus.

We also intend to file with the U.S. Securities and Exchange Commission (the "SEC") a registration statement on Form S-1 (the ``resale registration statement") relating to the offering and sale from time to time of up to shares of our common stock by certain of our existing stockholders named as selling stockholders therein. The offer and sale of these shares are not included in the registration statement of which this prospectus is a part, and none of those shares will be included in this offering. In the event that any of the selling stockholders sell shares of our common stock under the resale registration statement, we will not receive any proceeds from those sales. Each of the selling stockholders have signed lock-up agreements with our underwriters that prohibit them, subject to certain exceptions, from selling their shares during the period ending 180 days after the date of this prospectus, and many of them have signed separate lock-up agreements with us. We intend for the resale registration statement to be declared effective by the SEC following the effectiveness of this prospectus and after we have closed one or more of our planned acquisitions.

Table of Contents

Summary historical consolidated financial information and other data

The following table sets forth the summary historical and pro forma consolidated financial information for SFX Entertainment, Inc. (Successor), or "SFX," and the summary historical financial information for Life in Color or "LIC" (Predecessor). The historical results of operations for SFX, as Successor, for the year ended December 31, 2011 do not reflect any of the operations of LIC, as Predecessor. The historical results of operations for SFX, as Successor, for the year ended December 31, 2012 reflect the operations of LIC only from the date of our acquisition of LIC on July 31, 2012.

We derived the summary historical consolidated financial data for SFX as of and for the years ended December 31, 2011 and December 31, 2012 from the audited consolidated financial statements you can find elsewhere in this prospectus. We derived the summary historical consolidated financial data for LIC as of and for the year ended December 31, 2011, for the period from January 1, 2012 through July 31, 2012 and as of July 31, 2012 from the audited consolidated financial statements you can find elsewhere in this prospectus. We derived the summary historical consolidated financial data for SFX as of March 31, 2013 and for the three months ended March 31, 2012 and 2013 from the unaudited consolidated financial statements you can find elsewhere in this prospectus.

We derived the summary unaudited pro forma condensed combined financial data for SFX for the year ended December 31, 2012 and as of and for the three months ended March 31, 2013 from the unaudited pro forma condensed combined financial statements you can find elsewhere in this prospectus. These pro forma financial data give effect to our completed and planned acquisitions, our issuances and sales of equity that have occurred since January 1, 2012, and our borrowing under our First Lien Term Loan Facility, as if each of these had occurred on January 1, 2012 (in the case of the consolidated income data) and on March 31, 2013 (in the case of the consolidated balance sheet data). You should read these data in conjunction with the information set forth under "Unaudited Pro Forma Condensed Combined Financial Information," which describes these transactions and the related adjustments in greater detail.

The financial data set forth below are only a summary and are not complete. They also do not necessarily indicate or represent anything about our future operations. You should read these summary financial data in conjunction with the disclosure under "Use of Proceeds," "Capitalization," "Unaudited Pro Forma Condensed Combined Financial Information," "Selected Historical Financial Information and Other Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and the related notes thereto included elsewhere in this prospectus.

Table of Contents

							SFX Entertainment, Inc. (Successor)

	Life in Color (Predecessor)						SFX Entertainment, Inc. (Successor)
	Life in Color (Predecessor)																					Pro forma Three months ended March 31, 2013
Consolidated statement of comprehensive income data (in 000s except per share amounts)	Year ended December 31, 2011			Seven months ended July 31, 2012			Year ended December 31, 2011			Year ended December 31, 2012			Three months ended March 31, 2012			Three months ended March 31, 2013			Pro forma Year ended December 31, 2012			Pro forma Three months ended March 31, 2013

													(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue	$	9,606		$	10,986		$	—		$	24,815		$	—		$	10,153		$	241,954		$	36,214
Total direct costs		(8,572	)		(8,219	)		—			(23,019	)		—			(7,601	)		(176,090	)		(28,372	)

Gross profit		1,034			2,767			—			1,796			—			2,552			65,864			7,842
Operating expenses
Selling, general and administrative expenses		(1,142	)		(2,323	)		(101	)		(17,026	)		(1,366	)		(14,246	)		(65,797	)		(23,095	)
Depreciation and amortization		(41	)		(95	)		—			(991	)		—			(2,865	)		(48,810	)		(13,289	)

Operating income/(loss)		(149	)		349			(101	)		(16,221	)		(1,366	)		(14,559	)		(48,743	)		(28,542	)
Interest expense		—			—			—			(34	)		—			(3,911	)		(21,156	)		(10,479	)
Other income (expense)		(9	)		13			—			98			—			(942	)		2,788			(1,211	)

Net income/(loss) before provision for income taxes		(158	)		362			(101	)		(16,157	)		(1,366	)		(19,412	)		(67,111	)		(40,232	)
(Provision)/benefit for income taxes		—			—			—			(67	)		—			(572	)		19,165			7,340

Net income/(loss)		(158	)		362			(101	)		(16,224	)		(1,366	)		(19,984	)		(47,946	)		(32,892	)
Less: Net income/(loss) attributable to non-controlling interests		—			—			—			—			—			(878	)		(942	)		(1,185	)

Net income/(loss) attributable to SFX Entertainment, Inc.	$	(158	)	$	362		$	(101	)	$	(16,224	)	$	(1,366	)	$	(19,106	)	$	(48,888	)	$	(31,707	)

Loss per share—basic and diluted		NA			NA		$	—		$	(0.44	)		N/A		($	0.36	)
Weighted average shares outstanding—basic and diluted		NA			NA			—			37,186			N/A			52,929
Other Financial Data:
Adjusted EBITDA(1)	$	(108	)	$	1,235		$	(101	)	$	(13,021	)				$	(6,630	)	$	14,620			(9,220	)

NA—not applicable

	Life in Color (Predecessor)						SFX Entertainment, Inc. (Successor)

Consolidated balance sheet data	December 31, 2011			July 31, 2012			December 31, 2011			December 31, 2012			March 31, 2013			Pro Forma March 31, 2013

													(Unaudited)			(Unaudited)
Cash	$	44		$	182		$	—		$	3,675		$	21,859		$	74,329
Working capital		(595	)		(835	)		(101	)		(18,005	)		(8,132	)		23,581
Total assets		1,111			1,615			—			66,732			240,961			557,043
Deferred revenue		663			830			—			324			3,028			16,034
Total liabilities		1,727			2,107			101			28,059			97,257			172,827
Stockholders' equity (Deficit)		(616	)		(492	)		(101	)		8,879			64,489			363,757

(1)

We define Adjusted EBITDA as net income (loss) before other income (loss), interest expense, income taxes, depreciation and amortization, equity-based compensation expense, and non-recurring items. Adjusted EBITDA is not a recognized term under U.S. generally accepted accounting rules ("GAAP") and does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity.

We present Adjusted EBITDA in this prospectus to provide investors with supplemental information regarding our financial results and operating performance. Adjusted EBITDA should not be used as an indicator of, or an alternative to, net income (as determined in accordance with GAAP) as a measure of our operating performance or to net cash provided by operating, investing or financing activities (as determined in accordance with GAAP) or as a measure of our ability to meet cash needs.

We have included Adjusted EBITDA in this prospectus because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short- and long-term operational plans. In particular, the elimination of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business.

We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

Table of Contents

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations include the following:

•

Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

•

Adjusted EBITDA does not consider the potentially dilutive impact of share-based compensation; and

•

other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, limiting their usefulness as a comparative measure.

Because of these and other limitations, you should consider Adjusted EBITDA alongside other GAAP-based financial performance measures, including various cash flow metrics, net income (loss) and other GAAP financial results.

The following table presents a reconciliation of Adjusted EBITDA to our net income (loss), the most comparable GAAP measure, for each of the periods indicated.

							SFX Entertainment, Inc. (Successor)

	Life in Color (Predecessor)						SFX Entertainment, Inc. (Successor)
	Life in Color (Predecessor)																		Pro forma Three months ended March 31, 2013
	Year ended December 31, 2011			Seven months ended July 31, 2012			Year ended December 31, 2011			Year ended December 31, 2012			Three months ended March 31, 2013			Pro forma Year ended December 31, 2012			Pro forma Three months ended March 31, 2013

Net income (loss)	$	(158	)	$	362		$	(101	)	$	(16,224	)	$	(19,984	)	$	(47,946	)	$	(32,892	)
Interest expense		—			—			—			34			3,911			21,156			10,479
Provision for income taxes		—			—			—			67			572			(19,165	)		(7,339	)
Depreciation & amortization		41			95			—			991			2,865			48,810			13,288
Equity-based compensation expense		—			—			—			2,209			5,010			2,209			5,010
Other (income) expense(a)		9			(13	)		—			(98	)					(829	)		1,181
Non-recurring litigation costs		—			—			—			—			53			1,124			447
Non-recurring transaction costs(b)		—			791			—						943			7,792			575
ITDA related to non-consolidated affiliates(c)		—			—			—			—			—			1,469			31

Adjusted EBITDA	$	(108	)	$	1,235		$	(101	)	$	(13,021	)	$	(6,630	)	$	14,620		$	(9,220	)

(a): Other (income) expense represents gain on a sale of assets and other miscellaneous non-recurring items.
(b): These include acquisition related costs at acquired entities. These do not include expenses that SFX incurred in connection with its formation, the evaluation, negotiation and consummation of acquisitions and this offering and the resale shelf registration statement, which were $0, $0, $101, $8,330, $3,069, $8,330, and $3,069, respectively.
(c): Represents ID&T's non-consolidated affiliates share of interest expense, income taxes and depreciation and amortization.

Table of Contents

Risk factors

This offering and an investment in our common stock involves a high degree of risk. You should consider carefully the following risks and other information contained in this prospectus, including the consolidated financial statements and related footnotes appearing at the end of this prospectus, before you decide whether to buy our common stock. If any of the following risks actually occur, they may materially harm our business, prospects, financial condition and results of operations. In this event, the market price of our common stock could decline and you could lose part or all of your investment.

RISKS RELATED TO OUR BUSINESS AND INDUSTRY

Our success relies, in part, on the strength of our festivals, events and online businesses, and if any of them were to become less popular, our business could suffer.

Through our completed and planned acquisitions, we have come to (or plan to) produce, promote and manage some of the world's most recognized electronic music culture, or EMC, festivals, events and online businesses, including Tomorrowland, Sensation, Mysteryland, Q-Dance, Stereosonic, Electric Zoo, Nature One, MayDay, Ruhr-in-Love, Life in Color and Beatport. Our growth strategy relies on the strength of these brands to attract customers to our festivals and events, both through attendance at the original festivals and in new markets, as well as to our online properties. We also rely on the strength of these brands to secure sponsorships and to facilitate growth in revenue from the sale of music and other content, as well as advertising on our online properties. Maintaining the strength of our festivals, events and online businesses will be challenging, and our relationship with our fans could be harmed for many reasons, including the quality of the experience at a particular festival, our competitors developing more popular events or attracting talent from our businesses, adverse occurrences or publicity in connection with an event and changes to public tastes that are beyond our control and difficult to anticipate. If our key properties become less popular with consumers within the EMC community, our growth strategy would be harmed, which could in turn harm our business and financial results.

Maintaining the popularity of our festivals, events and online businesses requires that we anticipate consumer preferences and offer events that appeal to the EMC community. Our customers' preferences and tastes for these events can change and evolve rapidly, and our competitors actively seek to provide new and compelling experiences at their EMC events. If we fail to anticipate or respond quickly to changes in public taste, our festivals and related offerings may become less attractive to consumers.

We can give no assurances as to when we will consummate our planned acquisitions or whether we will consummate them at all.

We intend to close four planned acquisitions simultaneously with or shortly after the closing of this offering and to use the proceeds of this offering to fund the cash portion of the consideration for those acquisitions. However, each of those acquisitions is subject to conditions to closing, including conditions that are beyond our control, and we may not be able to close any of them successfully. In addition, our planned acquisitions are required to be closed within certain timeframes. Specifically, our option (the "ID&T Option") to purchase 75% of the ownership interests of the worldwide business of ID&T (the "ID&T Business") must be closed on or before July 23, 2013 and the Made acquisition must be closed by August 21, 2013. In the case of i-Motion, the exclusivity period permitted under the term sheet has expired. In the case of Totem, we have the right to determine the closing date, which may not be 60 days after the satisfaction of the closing conditions. If we are unable to meet the closing

Table of Contents

Risk factors

deadlines or otherwise unable to close the planned acquisitions, it would significantly alter our business strategy and impede our prospects for growth. If we are unable to close a particular planned acquisition, we will not be able to produce any of the festivals or events or have ownership or licenses of the brands owned or licensed by that acquisition target, which could include Tomorrowland, Sensation, Mysteryland, Decibel, Nature One, MayDay, Ruhr-in-Love, Electric Zoo or others. Further, we may not be able to identify suitable acquisition candidates to replace these acquisitions, and even if we were to do so, we may only be able to consummate them on less advantageous terms.

In addition, if we do not close a particular planned acquisition, we could lose deposits or other amounts we have paid in connection with it. For example, if our acquisition of Totem does not close by September 30, 2013 for any reason other than a breach of the asset contribution agreement by Totem, Totem will be entitled to retain our AUD$5.0 million (or $4.8 million as of May 22, 2013) deposit. Additionally, regardless of whether we do or do not close the ID&T Option, we are required to pay the sellers of the ID&T Business $10 million on August 24, 2013. Further, if we fail to close our acquisition of 70% of the ownership interests in Made by August 21, 2013, the principals of Made may retain the $2.5 million advance, and we may be required to renegotiate the acquisition in its entirety. If we do close our planned acquisitions, each of these acquisitions will be subject to the other risks inherent in our acquisitions, including the risks disclosed herein under "—Risks Related to Our Acquisition Strategy".

We may be unsuccessful in developing and expanding our music, video and other content offerings.

We intend to develop Beatport as a key point of contact between us and the EMC community. However, our plans face a number of challenges and risks. For example, we are in the nascent stage of developing additional media content, such as news, lifestyle videos and blogs, which we believe will be attractive to members of the EMC community, but we may not be successful in developing these offerings. Consumers may also decide to access similar offerings from our competitors. We also intend to increase our consumers' paid access to music, including through downloads. This strategy faces a number of challenges, including illegal downloading and other piracy, which has depressed sales in the music industry generally, competition from mainstream brands, such as iTunes and others and our inability to obtain and retain licenses to supply artist content. We may fail to enhance the consumer experience, deepen engagement with the EMC community or achieve the improvements we seek to make. Any of these occurrences may prevent us from improving our connection to our customers and bringing more traffic to the Beatport website, further developing Beatport as a key point of contact for the EMC community and increasing ticket sales for our festivals and events. If we fail to properly execute our strategy in this area, it will be harder for us to achieve the growth we expect, and our business and financial results may be adversely affected.

We are vulnerable to the potential difficulties associated with rapid growth.

We believe that our future success depends on our ability to manage the rapid growth that we expect to achieve organically and through acquisitions and the demands and additional responsibilities that our growth will place on our management.

The following factors could present us with difficulties:

•: a lack of sufficient executive-level personnel;
•: the inability to develop and monetize our online properties;

Table of Contents

Risk factors

•: an increased administrative burden on our employees;
•: the inability to attract, train, manage and retain the qualified personnel necessary to manage and operate a greater number of festivals, events and other business activities; and
•: the inability to integrate acquired businesses.

If we fail to address these and other challenges associated with our growth, our growth itself may slow or fail to materialize, we may grow without achieving profitability, we may have difficulty with our internal controls and procedures and the quality of our festivals, events and other offerings may decline, among other things. Any of these could harm our business and financial results.

It is possible that the popularity of electronic music and the EMC community will not continue their current growth or even decline.

We have focused our business on the broad market for electronic music and the EMC community, including electronic music festivals and events, venues, sponsorships and ecommerce. Accordingly, our growth strategy is dependent upon the continued growth of the popularity of electronic music and the EMC community. However, this growth is subject to the whims of public taste, which may change over time and become less popular and which may be beyond our control. While interest in electronic music has increased significantly over the past few years, this increase in interest may not continue, and it is possible that the public will not sustain its current level of interest in electronic music. If either were to happen, the demand for and interest in EMC festivals, events and venues and our online properties could fail to meet our expectations or even decline. This would have a material adverse effect on our business and financial results.

The number of EMC festivals and events may grow faster than the public's demand, which could make it difficult for us to attract customers to our festivals and events.

With the growing EMC community, there has been a significant increase in the number of EMC festivals and events caused by the creation of new events and the expansion, both in geography and duration, of existing events. Our growth strategy includes increasing the number of EMC festivals and events we produce each year, as well as increasing the frequency of established events by bringing them to new cities and countries. It is possible that the proliferation of EMC festivals and events will outpace demand. Further, many of the largest festivals attract fans who travel great distances to attend. It is possible that an increase in local availability of quality EMC festivals and events will make it less likely that these fans travel to existing festivals. If either were to occur, it could make it difficult for us to achieve the increase in attendance that is part of our growth strategy or force us to offer tickets at reduced prices, either of which would adversely affect our business and financial results.

In addition, competition for advertising and sponsorships may lead to fewer sponsors of our events or lower sponsorship prices, with a resulting decrease in revenue. Our competitors may offer increased guarantees to artists and more favorable terms and ticketing arrangements to other parties, which we may be unwilling or unable to match. Even if we are willing to match our competitors' terms, the profitability of our events could decline.

If we are forced to cancel or postpone a scheduled festival or event, our business will be adversely impacted and our reputation may be harmed.

We incur a significant amount of up-front costs when we plan and prepare for a festival or event. Accordingly, if a planned festival or event fails to occur, we would lose a substantial amount of sunk

Table of Contents

Risk factors

costs, fail to generate the anticipated revenue and may be forced to issue refunds for tickets sold. If we are forced to postpone a planned festival or event, we would incur substantial additional costs in order to stage the event on a new date, may have reduced attendance and revenue and may have to refund money to ticketholders. In addition, any cancellation or postponement could harm both our reputation and the reputation of the brand under which the festival or event is being held.

We could be compelled to cancel or postpone an event or festival for many reasons, including such things as low attendance, technical problems, issues with permitting or government regulation, as well as extraordinary incidents, such as terrorist attacks, mass-casualty incidents and natural disasters or similar events. We have cancellation insurance policies in place to cover a portion of our losses if we are compelled to cancel an event or festival, but our coverage may not be sufficient and is subject to deductibles. The occurrence of an extraordinary incident at or near the site where a festival or event will be held may make it impossible or difficult to stage the event or make it difficult for attendees to travel to the site of a festival or event. An extraordinary incident may also may make it inappropriate to hold a festival or event at a particular site or at a particular time.

Costs associated with, and our ability to obtain, adequate insurance could adversely affect our profitability and financial condition.

Heightened concerns and challenges regarding property, casualty, liability, artists, business interruption and other insurance coverage have resulted from security incidents, including terrorism, along with varying weather-related conditions and incidents. As a result, we may experience increased difficulty obtaining high policy limits of coverage at reasonable costs, including coverage for acts of terrorism and weather-related property damage.

We cannot guarantee that our insurance policy coverage limits, including insurance coverage for property, casualty, liability, artists and business interruption losses and acts of terrorism, would be adequate under the circumstances should one or multiple events occur at or near any of our venues or events, or that our insurers would have adequate financial resources to pay our related claims. We cannot guarantee that adequate coverage limits will be available, offered at reasonable costs or offered by insurers with sufficient financial soundness. Furthermore, our insurance policies generally do not cover certain activities at our festivals and events, such as pyrotechnics and fireworks although we engage third-party professionals to manage these activities at our events and we are named as additional insureds on their insurance policies. If activities that our insurance policies do not cover result in a significant liability, our financial condition and results of operation could be harmed.

To stage festivals in multiple locations, we may be required to transport complex sets and equipment long distances, which creates increased risk that they will be damaged.

Our larger festivals will require complex sets and other equipment, including those that currently exist, that we construct or that we may purchase from a supplier. We will be required to transport these sets and equipment long distances by land and sea, which creates the risk that they may be damaged or lost if there is an accident or other complication during transport. These sets and equipment are very costly to create and it would be expensive and time consuming to repair or replace them. We have insurance policies in place to cover a portion of our losses for damaged or lost sets and equipment, but our coverage may not be sufficient and is subject to deductibles. Additionally, a supplier's failure to deliver the sets and equipment to us or our loss of these sets and equipment might lead to substantial expenses and could force us to delay or cancel a festival or event. Any of these could adversely affect our business, reputation and financial results.

Table of Contents

Risk factors

There is the risk of personal injuries and accidents in connection with our live music events, which could subject us to personal injury or other claims, increase our expenses and damage our brands.

There are inherent risks in live festivals and events, particularly those like ours, which involve complex staging and special effects. As a result, personal injuries and accidents have occurred in the concert industry, including some that have injured or killed employees and guests. Such incidents at our festival, events or venues could subject us to claims and liabilities, and certain of the businesses we acquired have been subject to such claims. Incidents in connection with our live festivals and events or at any of the venues we manage could also harm our reputation with artists and fans. Any such incident could reduce attendance at our events, causing a decrease in our revenue. While we maintain insurance policies that provide coverage within limits that are sufficient, in management's judgment, to protect us from material financial loss for personal injuries sustained by persons at our venues or accidents in the ordinary course of business, there can be no assurance that such insurance will be adequate at all times and in all circumstances. In particular, if there were to be a major incident involving multiple deaths or injuries at one of our events or venues, it is unlikely our insurance would cover the full liability. We will be responsible for any liabilities not covered by our insurance policies, which would negatively impact our cash flows and results of operations.

In addition, we are subject to state "dram shop" laws and regulations, which generally provide that a person injured by an intoxicated person may seek to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person. Recent litigation of "dram shop" laws and regulations targeted at restaurant chains has resulted in significant judgments, including many recent instances of punitive damages; such laws may be extended to apply to our events and festivals. While we carry liquor liability coverage as part of our existing comprehensive general liability insurance, we may still be subject to a judgment in excess of our insurance coverage, and we may not be able to obtain or continue to maintain such insurance coverage at reasonable costs, if at all. Regardless of whether any claims against us are valid or whether we are liable, we may be adversely affected by publicity resulting from such laws.

Activities or conduct, such as illegal drug use, at our properties or the festivals and events we produce may expose us to liability, cause us to lose business licenses or government approvals or result in adverse publicity.

We are subject to risks associated with activities or conduct, such as drug use at our festivals, events or venues that are illegal or violate the terms of our business licenses. Illegal activities or conduct at any of our events or venues may result in negative publicity or litigation. We have formed a Medical Procedure and Safety Committee, and we are developing, but have not yet finalized, comprehensive policies aimed at ensuring that the operation of each festival and event is conducted in conformance with local, state and federal laws. We have a "no tolerance" policy on illegal drug use in or around our facilities, and we continually monitor the actions of entertainers, fans and our employees to ensure that proper behavioral standards are met. However, such policies, no matter how well designed and enforced, cannot provide absolute assurance that the policies' objectives are achieved. Because of the inherent limitations in all control systems and policies, there can be no assurance that our policies will prevent deliberate acts by persons attempting to violate or circumvent them. Such consequences may increase our costs, result in the loss or termination of leases for our venues by property owners (including governments and other parties that own the land at our venues), result in our inability to get the necessary permits and locations for our events, lower consumer demand for our events, subject us to liability claims, divert management's attention from our business and make an investment in our

Table of Contents

Risk factors

securities unattractive to current and potential investors, thereby lowering our profitability and stock price.

We face intense competition in the live music and media industries, which could adversely affect our business, financial condition and results of operations.

We operate in the highly competitive live music and media industries, and this competition may prevent us from maintaining or increasing our current revenue. The live music industry, including electronic dance music, competes with other forms of entertainment for consumers' discretionary spending. Within the live music industry, we compete with other promoters and venue operators to attract customers and talent to our events and festivals, as well as sponsors and advertisers. Our competitors may engage in more extensive development efforts for large-scale events, undertake more far-reaching marketing campaigns, adopt more aggressive pricing policies and make more attractive offers to existing and potential advertisers and sponsors.

With respect to our media offerings, we compete for the time and attention of our users with other content providers on the basis of a number of factors, including quality of experience, relevance, popularity and diversity of content, ease of use, price, accessibility, perception of the number of advertisements and brand awareness and reputation. We face competition from providers of interactive on-demand audio content and pre-recorded entertainment, such as Apple's iTunes Music Store, RDIO, Rhapsody, Spotify, Pandora and Amazon, which allow online listeners to select the audio content that they stream or purchase. The audio entertainment marketplace continues to rapidly evolve, providing listeners of online music with a growing number of alternatives and new access models. Our current and future competitors in music may have more well-established brand recognition, more established relationships with consumer product manufacturers and content licenses, greater financial, technical and other resources, more sophisticated technologies or more experience in the markets in which we compete. If we are unable to compete successfully for listeners against other providers by maintaining and increasing our presence and visibility, our Beatport music sales may fail to increase as expected or decline and our advertising sales will suffer.

We are subject to substantial governmental regulation, and our failure to comply with these regulations could adversely affect our business, financial condition and results of operations.

Our operations are subject to federal, state and local laws, statutes, rules, regulations, policies and procedures, both domestically and internationally, which are subject to change at any time, governing matters such as:

•: construction, renovation and operation of our venues;
•: licensing, permitting and zoning, including ordinances relating to noise, traffic and pollution;
•: human health, safety and sanitation requirements;
•: the service of food and alcoholic beverages;
•: working conditions, labor, minimum wage and hour, citizenship and employment laws;
•: the United States Americans with Disability Act;
•: the United States Foreign Corrupt Practices Act (FCPA) and similar regulations in other countries;
•: historic landmark rules;

Table of Contents

Risk factors

•: hazardous and non-hazardous waste and other environmental protection laws;
•: sales and other taxes and withholding of taxes;
•: privacy laws and protection of personally identifiable information;
•: marketing activities via the telephone and online; and
•: primary ticketing and ticket resale services.

Our failure to comply with these laws and regulations could result in fines and proceedings against us by governmental agencies and consumers, which if material, could adversely affect our business, financial condition and results of operations. In addition, the promulgation of new laws, rules and regulations could restrict or unfavorably impact our business, which could decrease demand for services, reduce revenue, increase costs and subject us to additional liabilities. For example, some legislatures have proposed laws in the past that would impose potential liability on us and other promoters and producers of live music events for entertainment taxes and for incidents that occur at events, particularly those that involve drugs and alcohol. Additionally, new legislation could be passed that may negatively impact our business.

From time to time, federal, state and local authorities and consumers commence investigations, inquiries or litigation with respect to our compliance with applicable consumer protection, advertising, unfair business practice, antitrust (and similar or related laws) and other laws. We may be required to incur significant legal expenses in connection with the defense of future governmental investigations and litigation.

Our business is subject to the risks of international operations.

Following the closing of this offering and the consummation of our planned acquisitions, we will derive a significant portion of our revenue and earnings from our international operations. Operating in multiple foreign countries involves substantial risk. For example, our business activities subject us to a number of laws and regulations, such as anti-corruption laws, tax laws, foreign exchange controls and cash repatriation restrictions, data privacy and security requirements, environmental laws, labor laws, and anti-competition regulations. As we expand into additional countries, the complexity inherent in complying with these laws and regulations increases, making compliance more difficult and costly and driving up the costs of doing business in foreign jurisdictions. Any failure to comply with foreign laws and regulations could subject us to fines and penalties, make it more difficult or impossible to do business in that country and harm our reputation. In addition, this strategy will require us to operate in countries with different business environments, labor conditions, tax obligations or other costs, and local customs, including some that conflict with each other or with which we are unfamiliar. These could make it more difficult to operate our business successfully in these countries.

Operating in multiple countries also subjects us to risk from currency fluctuations. Our primary exposure to movements in foreign currency exchange rates relates to non-U.S. dollar denominated sales and operating expenses. The weakening of foreign currencies relative to the U.S. dollar adversely affects the U.S. dollar value of our foreign currency-denominated sales and earnings. This could either reduce the U.S. dollar value of our prices or, if we raise prices in the local currency, it could reduce the overall demand for our offerings. Either could adversely affect our revenue. Conversely, a rise in the price of local currencies relative to the U.S. dollar would adversely impact our profitability. This could either increase the U.S. dollar value of our prices or, if we lower prices in the local currency, it could

Table of Contents

Risk factors

increase the overall demand for our offerings. However, the strengthening of foreign currencies may also increase our costs denominated in those currencies, thus adversely affecting gross margins.

At this time we do not use derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign currency exchange rates. Any future use of such hedging activities may not offset any or more than a portion of the adverse financial effects of unfavorable movements in foreign exchange rates over the limited time the hedges are in place.

A deterioration in general economic conditions and their impact on consumer and business spending, particularly by customers in our targeted millennial generation demographic, would adversely affect our revenue and financial results.

Our business and financial results are influenced significantly by general economic conditions, in particular, those conditions affecting discretionary consumer spending and corporate spending. During past economic slowdowns and recessions, many consumers reduced their discretionary spending and advertisers reduced their advertising expenditures. An economic downturn can result in reduced ticket revenue, lower customer spending and more limited and less lucrative sponsorship opportunities.

For consumers, such things as employment levels, fuel prices, interest and tax rates and inflation can significantly impact attendance and spending at our events and their willingness to purchase music from Beatport. For us, these risks may be exacerbated by the fact that our core customer demographic and the majority of attendees at our events and festivals are 18 to 34 years old, and this millennial generation demographic is among the groups most negatively affected by the current economic slowdown. Business conditions, in particular corporate marketing and promotional spending, can also significantly impact our operating results. These factors affect our revenue from sponsorship and advertising. Accordingly, if current economic conditions fail to improve, and especially if they deteriorate, our growth and financial results will be adversely affected.

We may not successfully expand into new geographic markets and businesses, which could adversely affect our business, results of operations and financial condition.

Our growth strategy is based, in part, on the expansion of our festivals and events into new geographic markets where they have not previously taken place and into related lines of business. This strategy entails a number of risks. For example, it is not clear that these new markets will have the demand for these festivals and events that we anticipate, which could adversely affect the ticket sales or pricing for these events. There may also be unforeseen difficulties with holding festivals and events in new markets, including obtaining venues, securing requisite licenses and government approvals, and recruiting artists to the location, among other factors. It is also possible that the audiences in a new location will not find a festival to be as attractive or worthwhile as the audience in the festival's home city. In addition, the demands and time commitment necessary to stage a festival in multiple locations could make it difficult for our management to oversee that festival effectively; for this reason or otherwise, we may fail to replicate the quality of the original festival in its new location. Providing festivals in new locations may also undermine demand for a festival in its original location, because many of the fans of these festivals travel long distances to attend. Finally, EMC fans may prefer their local festivals to ones that we bring from another city or country. The failure to expand our festivals into new geographies would adversely affect our growth and results of operations. Further, because staging festivals in new locations involves substantial expense, we could suffer significant losses if these festivals fail to attract the expected audience in their new locations.

Table of Contents

Risk factors

We also intend to expand into new, related lines of businesses, which will also carry risks, including that the demand for these products may be less than we anticipate and that we may fail to receive a return sufficient to cover our investment in the new business.

Our operations are seasonal and our results of operations vary from quarter to quarter, so our financial performance in certain quarters may not be indicative of, or comparable to, our financial performance in other quarters.

Certain of our businesses are seasonal, and this will impact our results of operations from quarter to quarter. We expect most of our largest festivals and events to occur outdoors, primarily from May through September. As such, we expect our revenues from these events to be higher during the spring and summer, or our second and third quarters, and lower in the winter months, or our first and fourth quarters. Furthermore, because we expect to conduct a limited number of large festivals and events, small variations in this number from quarter to quarter can cause our revenue and net income to vary significantly for reasons that may be unrelated to the performance of our core business. In addition, our Life in Color business produces festivals and events primarily for college campuses, so we expect that the revenues from these activities to be higher during the academic year, which coincides with the first, second and fourth quarters. Furthermore, the venues our MMG business manages generally have higher revenue during the fourth and first quarters as a result of higher travel to Miami during the December holidays, as well as the Winter Music Conference in March. We believe our financial results and cash needs will vary significantly from quarter to quarter depending on, among other things, the timing of EMC festivals and events that are held outdoors, cancellations, ticket on-sales, capital expenditures, seasonal and other fluctuations in our business activity, the timing of guaranteed payments and receipt of ticket sales and fees, financing activities, acquisitions and investments and receivables management. Accordingly, our results for any particular quarter may vary for a number of reasons, including due to the seasonality of our underlying businesses, and we caution investors to evaluate our quarterly results in light of these factors.

We depend on relationships with key event promoters, executives, managers and artists, and adverse changes in these relationships could adversely affect our business, financial condition and results of operations.

Our venue management and event promotion businesses are particularly dependent upon personal relationships, as promoters and executives within entertainment companies such as ours leverage their network of relationships with artists, agents and managers to secure the rights to the performers, celebrities and events that are critical to success. Due to the importance of those industry contacts, the loss of any of our officers or other key personnel who have relationships with artists, agents or managers in the music industry could adversely affect our venue management and event promotion businesses. While we have hiring policies and procedures and conduct background checks of our promoters, executives, managers and artists, they may engage in conduct or have in the past engaged in conduct we do not endorse or that is otherwise improper, which may result in reputational harm to us. In the past, we have terminated our relationships with such personnel, but we cannot provide any assurances that we will learn of misconduct. Also, to the extent artists, agents and managers are replaced with individuals with whom our officers or other key personnel do not have relationships, our competitive position and financial condition could be harmed.

Table of Contents

Risk factors

We rely on key members of management, particularly the Chief Executive Officer and Chairman, Mr. Sillerman, and the loss of their services or investor confidence in them could adversely affect our success, development and financial condition.

Our success depends, to a large degree, upon certain key members of our management, particularly our Chief Executive Officer and Chairman, Robert F.X. Sillerman. Our executive team's expertise and experience in acquiring, integrating and growing businesses, particularly those focused on live music and events, have been and will continue to be a significant factor in our growth and ability to execute our business strategy. In particular, our First Lien Term Loan Facility is personally guaranteed by Mr. Sillerman. If he ceases to serve as our Chief Executive Officer, president, chairman of our board of directors or other equivalent officer, a mandatory prepayment will be triggered under the First Lien Term Loan Facility, which will require us to prepay 30% of any outstanding borrowings thereunder. The loss of any of our executive officers and directors could slow the growth of our business, or it may cease to operate at all, which may result in the total loss of your investment.

We may not be able to attract qualified personnel.

Our ability to expand operations to accommodate our anticipated growth will depend on our ability to attract and retain qualified personnel. However, competition for the types of employees we seek is intense. We face particular challenges in recruiting and retaining personnel who have experience in software engineering, mobile application development and other technical expertise, which is critical to our initiatives. Our ability to meet our business development objectives will depend in part on our ability to recruit, train and retain top quality personnel with advanced skills who understand our technology and business. We cannot provide any assurance that we will be able to attract qualified personnel to execute our business strategies or develop and expand our online properties.

When we acquire new businesses, we typically retain the existing managers and executives of the acquired companies to continue managing and operating the acquired business. We believe that they have the market expertise and network of personal relationships to best implement the growth strategies of the acquired businesses. If we are unable to retain the key personnel of the acquired businesses, we may not be able to achieve the anticipated benefits and synergies of an acquisition. If we are unable to engage and retain the necessary personnel, our business may be materially and adversely affected.

Members of our senior management team, including our Chief Executive Officer, have divided responsibilities and are not required to devote any specified amount of time to our business.

Our Chief Executive Officer and Chairman, Robert F.X. Sillerman, is also the Executive Chairman and Chief Executive Officer of Viggle Inc., which is in the business of developing products and services that encourage consumers to engage with television content. Mr. Sillerman is also a director of Circle Entertainment Inc., which is in the business of developing location-based entertainment venues. Our employment agreement with Mr. Sillerman requires that he devote his time, attention, energy, knowledge, best professional efforts and skills to the duties assigned to him by us, but he is permitted to pursue other professional endeavors and investments that do not violate the terms of his employment agreement, including provisions relative to non-competition and non-solicitation. Mr. Sillerman's employment agreement expressly permits him to engage in certain listed endeavors and investments. Any other professional endeavors to be performed by Mr. Sillerman are subject to the reasonable approval of our board of directors. Importantly, Mr. Sillerman's employment agreement does not require him to devote any specific amount of time to SFX. Accordingly, it is possible that

Table of Contents

Risk factors

Mr. Sillerman will fail to devote the necessary time to our Company. Similarly, under our employment agreements with Mr. Slater, Mr. Finkel, Timothy J. Crowhurst, our President, and Joe Rascoff, our Chief Operating Officer, such officers are permitted to, and such officers have informed us that they intend to, engage in specific endeavors that are listed in their agreements or pre-approved by our board and other endeavors that do not compete with us. Such officers are not contractually required to devote any specified amount of time to our business.

We rely on third-party content, which may not be available to us on commercially reasonable terms or at all.

We contract with third parties to offer their content on our Beatport website. The licensing arrangements with these third parties are generally short-term and do not guarantee the continuation or renewal of these arrangements on reasonable terms, if at all.

We are currently reviewing and from time to time will continue to review, our licensing arrangements and the advisability and requirements for entering into arrangements with Performing Rights Organizations and the alternatives to entering into such arrangements. Some third-party content providers and distributors, currently or in the future, may offer competing products and services and could take action to make it more difficult or impossible for us to license their content. Other content owners, providers or distributors may seek to limit our access to, increase the cost of, or otherwise restrict or prohibit our use of such content. We may be unable to continue to offer a wide variety of content at reasonable prices with acceptable usage rules or continue to expand its geographic reach.

All content on Beatport is currently provided free of digital rights management. If our requirements or business model changes, we may have to develop or license new technology to provide other solutions. There is no assurance that we will be able to develop or license such solutions at a reasonable cost and in a timely manner. In addition, certain countries have passed or may propose and adopt legislation that would force us to license our digital rights management, if any, which could weaken the protection of content and subject us to piracy and also negatively affect arrangements with our content providers.

We may be unable to adequately protect our intellectual property rights or may be accused of infringing upon intellectual property rights of third parties.

We may be unable to detect unauthorized use of, or otherwise sufficiently protect, our intellectual property rights or may be accused of infringing upon intellectual property rights of third parties.

We rely on a combination of laws and contractual restrictions with employees, customers, suppliers and others to establish and protect these proprietary rights. Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use proprietary information, trademarks, or copyrighted material without authorization which, if discovered, might require legal action to correct. Furthermore, the recently acquired assets and the assets we plan to acquire in connection with our planned acquisitions (including brand names and trademark rights), may have been improperly adopted or inadequately protected prior to our acquisitions of them. This could include failures to obtain assignments of ownership or confidentiality agreements from third parties, failures to clear use of trademarks, or other failures to protect trademarks and other proprietary rights. In addition, third parties may independently and lawfully develop similar intellectual property or duplicate our services.

We will apply to register, or secure by contract when appropriate, our trademarks and service marks as they are developed and used and reserve and register domain names as we deem appropriate. While we

Table of Contents

Risk factors

vigorously protect our trademarks, service marks and domain names as we deem appropriate, effective trademark protection may not be available or may not be sought in every country in which we operate, and contractual disputes may affect the use of marks governed by private contract. Similarly, not every variation of a domain name may be available or be registered, even if available. Our failure to protect our intellectual property rights in a meaningful manner or challenges to related contractual rights could result in the erosion of brand names or the loss of rights to our owned or licensed marks and limit our ability to control marketing on or through the internet using our various domain names or otherwise, which could adversely affect our business, financial condition, and results of operations. In addition, the loss of, or inability to otherwise obtain, rights to use third-party trademarks and service marks, including the loss of exclusive rights to use third-party trademarks in territories where we present festivals, could adversely affect our business or otherwise result in competitive harm.

From time to time, we are subject to legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of the trademarks, copyrights, patents and other intellectual property or proprietary rights of third parties. The legal proceedings and claims include notices provided to us by content owners of users' violation of the Digital Millennium Copyright Act, which obligate us to investigate and remove infringing user content from the Beatport site. We also face a risk that content licensors may bring claims for copyright infringement or breach of contract if Beatport users exceed the scope of the content licenses. Because EMC involves remixing and sampling of others' music, and because such remixes are typically performed publicly, if our content license agreements do not grant us or our users sufficient use rights, or if we facilitate the performance of music for which we do not have a license, our supply of such content on Beatport could expose us to claims of copyright infringement. We may not be able to successfully defend against such claims, which may result in a limitation on our ability to use the intellectual property subject to these claims and also might require us to enter into settlement or license agreements, pay costly damage awards or face an injunction prohibiting us from using the affected intellectual property in connection with our services.

In addition, litigation may be necessary in the future to enforce our intellectual property rights, protect trade secrets or determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business, financial condition and results of operations. Patent litigation tends to be particularly protracted and expensive.

Moreover, we use open source software in connection with Beatport. Some open source software licenses require users who distribute open source software as part of their own software product to publicly disclose all or part of the source code to such software product or make available any derivative works of the open source code on unfavorable terms or at no cost. While we have assessed the use of open source software in Beatport to ensure that we have not used open source software in a manner that would require us to disclose the source code to the related technology, use requiring such disclosure could inadvertently occur and any requirement to disclose our proprietary source code could be harmful to Beatport.

Regulatory and business practice developments relating to personal information of our customers and/or failure to adequately protect the personal information of our customers may adversely affect our business.

The businesses we have acquired or intend to acquire in the future maintain, or have arrangements with third parties who maintain, information on customers who purchase tickets and other products electronically through their individual websites or otherwise register on the website for access to the content provided. We are in the process of evaluating the information collected to understand if we

Table of Contents

Risk factors

can aggregate and reuse the contact information to inform these individuals of upcoming events, offerings and other products and services that we believe enhance the fan experience. Data protection laws and regulation may impair our ability to use this data in such ways, as certain uses may be prohibited. The use of such customer information is a significant part of our growth strategy in the future. The collection, storage and use of customer information is subject to regulation in many jurisdictions, including the United States and the European Union, and this regulation is becoming more prevalent and stringent. Further, there is a risk that data protection regulators may seek jurisdiction over our activities even in locations in which we do not have an operating entity. This may arise in a number of ways, either because we are conducting direct marketing activities in a particular jurisdiction and the local laws apply to and are enforceable against us, or because one of our databases is controlling the processing of information within that jurisdiction. We are developing but have not yet finalized a comprehensive policy aimed at ensuring adequate protection of our customers' personal information and compliance with applicable law. There is a risk that we will be unable to successfully adopt and implement this policy, which may give rise to liabilities or increased costs. In addition, we could face liability if the third parties to which we grant access to our customer data were to misuse or expose it.

In some countries, the use of cookies and other information placed on users' internet browsers or users' computing devices is currently regulated, regardless of the information contained within or referred to by the cookie. Specifically, in the European Union, this is now subject to national laws being introduced pursuant to the amended Directive 2002/58 on Privacy and Electronic Communications. The effect of these measures may require users to provide explicit consent to such a cookie being used. The laws being introduced pursuant to this measure are not finalized in every European Member State, and we have not determined what effect this could have on our business when we place the cookie on the user's computer or when a third party does so. The effect may be to limit the amount of information we receive in relation to each use of the service and/or to limit our ability to link this information to a unique identity, which would adversely effect our business and financial condition.

In the United States, the Federal Trade Commission ("FTC") is starting to exercise greater authority over how online consumer data is collected and maintained by businesses. Prompted by the FTC's recommendation regarding online tracking, a number of federal legislative proposals have been introduced that would allow users to opt out of online monitoring. A number of states have passed similar legislation and some states are becoming more active in enforcing these laws to protect consumers.

The laws in this area are complex and developing rapidly. For instance, we are aware that there is a proposal for a new general law within Europe, the General Data Protection Regulation, which is likely to be introduced within three years. The proposed regulation is still under discussion, and we have not yet assessed the full effect of these proposals if enacted into law in their current form. There is a risk that internet browsers, operating systems, or other applications might be modified by their developers in response to proposed legislation to limit or block our ability to access information about our users. It is possible that existing or future regulations could make it difficult or impossible for us to collect or use our customer information in the way we would like which would impede our growth strategy and potentially reduce the revenue we hope to generate. It is also possible that we could be found to have violated regulations relating to customer data, which could result in us being sanctioned, suffering fines or other punishment, being restricted in our activities and/or suffering reputational harm. Any of the foregoing could adversely affect our business and financial results.

Table of Contents

Risk factors

We may be subject to disruptions, failures or cyber attacks in our information technology systems and network infrastructures that could have a material adverse effect on us.

We maintain and rely extensively on information technology systems and network infrastructures for the effective operation of our businesses. Techniques used to gain unauthorized access to private networks are constantly evolving, and we may be unable to anticipate or prevent unauthorized access to data pertaining to our customers, including credit card and debit card information and other personally identifiable information. Like all Internet services, our Beatport service, which is supported by our own systems and those of third-party vendors, is vulnerable to computer viruses, Internet worms, break-ins, phishing attacks, attempts to overload servers with denial-of-service or other attacks and similar disruptions from unauthorized use of our and third-party vendor computer systems, any of which could lead to system interruptions, delays or shutdowns, causing loss of critical data or the unauthorized access to personally identifiable information. If an actual or perceived breach of security occurs of our systems or a vendor's systems, we may face civil liability and public perception of our security measures could be diminished, either of which would negatively affect our ability to attract customers, which in turn would harm our efforts to attract and retain advertisers. We also would be required to expend significant resources to mitigate the breach of security and to address related matters.

Further, a disruption, infiltration or failure of our information technology systems or any of our data centers including the systems and data centers of our third-party vendors as a result of software or hardware malfunctions, computer viruses, cyber-attacks, employee theft or misuse, power disruptions, natural disasters or accidents could cause breaches of data security and loss of critical data, which in turn could materially adversely affect our business. In addition, our ability to integrate, expand, and update our information technology infrastructure is important for our contemplated growth, and any failure to do so could have an adverse effect on our business.

We cannot fully control the actions of third parties who may have access to the customer data we collect and the customer data collected by our third party vendors. The contemplated integration of our Beatport services with applications provided by third parties represents a significant growth opportunity for us, but we may not be able to control such third parties' use of customer data. We may be unable to monitor or control such third parties and the third parties having access to our other websites in their compliance with the terms of our privacy policies, terms of use, and other applicable contracts, and we may be unable to prevent unauthorized access to, or use or disclosure of, customer information. Any such misuse could hinder or prevent our efforts with respect to growth opportunities and could expose us to liability or otherwise adversely affect our business. In addition, these third parties may become the victim of security breaches or have practices that may result in a breach, and we could be responsible for those third party acts or failures to act.

Any failure, or perceived failure, by us or the prior owners of acquired businesses to maintain the security of data relating to our customers and employees, to comply with our posted privacy policies, our predecessors' posted policies, laws and regulations, rules of self-regulatory organizations, industry standards and contractual provisions to which we or they may be bound, could result in the loss of confidence in us, or result in actions against us by governmental entities or others, all of which could result in litigation and financial losses, and could potentially cause us to lose customers, advertisers, revenue and employees.

Table of Contents

Risk factors

We depend on our ability to lease venues for our events, and if we are unable to do so on acceptable terms, or at all, our results of operations could be adversely affected.

Our business requires access to venues to generate revenue from live EMC events. For these events, we generally lease and operate a number of venues under various agreements which include leases or licenses with third parties or booking agreements, which are agreements where we contract to book the events at a venue for a specific period of time. Some of the leases may be between us and governmental entities. Our long-term success will depend in part on the availability of venues, our ability to lease these venues and our ability to enter into booking agreements upon their expiration. As many of these agreements are with third parties over whom we have little or no control, including the government, we may be unable to renew these agreements or enter into new agreements on acceptable terms or at all, and may be unable to obtain favorable agreements with venues. We may continue to expand our operations through the development of live music venues and the expansion of existing live music venues, which poses a number of risks, including:

•: desirable sites for live music venues may be unavailable or costly;
•: the attractiveness of our venue locations may deteriorate over time; and
•: we may be unable to obtain or we may lose local government permits or approvals necessary to use a particular venue.

We depend upon unionized labor for the provision of some services at our events and any work stoppages or labor disturbances could disrupt our business.

Certain of the employees at some of the venues we manage and other independent contractors hired to assist at our festivals and events may be subject to collective bargaining agreements. The applicable union agreements typically expire and may require negotiation in the ordinary course of business. Upon the expiration of any such collective bargaining agreements, however, our partners may be unable to negotiate new collective bargaining agreements on terms favorable, and our business operations may be interrupted as a result of labor disputes or difficulties and delays in the process of renegotiating such collective bargaining agreements. In addition, our business operations at one or more of our venues may also be interrupted as a result of labor disputes by outside unions attempting to unionize a venue even though there is not unionized labor at that venue currently. A work stoppage at one or more of our owned and/or operated venues or at our promoted events could have a material adverse effect on our business, results of operations, and financial condition. We cannot predict the effect that a potential work stoppage would have on our business.

Our limited operating history makes it difficult to evaluate our current business and future prospects, and we may be unsuccessful in executing our business model.

We began operations as SFX EDM Holdings Corporation on July 7, 2011 and were incorporated as SFX Entertainment, Inc. in Delaware in June 2012. Without giving effect to our Predecessor, we have generated limited revenue, and our operations have consisted exclusively of indentifying, negotiating with and acquiring four companies (including our Predecessor), forming one joint venture and conducting negotiations and due diligence to acquire additional companies. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a developing company starting a new business enterprise, the difficulties that may be encountered with integrating acquired companies and the highly competitive environment in which we operate. Because we have a limited operating history, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenue to fully meet our expenses and support our anticipated activities.

Table of Contents

Risk factors

We have had a history of losses, and we may be unable to achieve or sustain profitability.

We have never been profitable. We experienced net losses of $0.1 million for the period from inception to December 31, 2011, $16.2 million for the year ended December 31, 2012, and $19.1 million for the period ended March 31, 2013. We expect we will continue to incur net losses in 2013 and significant future expenses as we develop and expand our business. In addition, as a public company, we will incur additional significant legal, accounting and other expenses that we do not incur as a private company and that are not reflected in our existing financial statements. These increased expenditures will make it harder for us to achieve and maintain future profitability. We may incur significant losses in the future for a number of reasons, including unsuccessful acquisitions, costs of integrating new businesses, expenses, difficulties, complications, delays and other unknown events. Accordingly, we may not be able to achieve or sustain profitability.

RISKS RELATED TO OUR ACQUISITION STRATEGY

A number of other companies are seeking to make acquisitions in our industry, which may make our acquisition strategy more difficult or expensive to pursue.

The emergence and growth of the EMC has brought increased media attention, and a number of companies and investors have begun making acquisitions of EMC businesses or announced their intention to do so. We compete with many of these companies, and certain of them have greater financial resources than we do for pursuing and consummating acquisitions and to further develop and integrate acquired businesses. Our strategy relies on our ability to consummate a substantial number of acquisitions to foster the growth of our core business and to establish ourselves in other geographic regions and related businesses in which we do not currently operate. The increased focus on acquisitions of EMC companies may impede our ability to acquire these companies because they choose another acquirer. It could also increase the price that we must pay for these companies. Either of these outcomes could reduce our growth, harm our business and prevent us from achieving our strategic goals.

We may be unsuccessful in identifying suitable acquisition candidates which may negatively impact our competitive position and our growth strategy.

In addition to organic growth, our future growth will be driven by our selective acquisition of additional businesses focused on the EMC community, our competitors and complementary businesses. Our growth through acquisitions, to date, has consisted of four acquisitions and one joint venture, and we are in discussions to acquire additional businesses including our planned acquisitions. We may be unable to identify other suitable targets for future acquisition or acquire businesses at favorable prices, which would negatively impact our growth strategy. We may not be able to execute our growth strategy through organic expansion, and if we are unable to identify and successfully acquire new businesses complementary to ours, we may not be able to expand into new geographic markets, develop our online properties or achieve profitability.

The due diligence process that we undertake in connection with acquisitions may not reveal all facts that may be relevant in connection with an investment.

Before making acquisitions and other investments, we conduct due diligence of the target company that we deem reasonable and appropriate based on the facts and circumstances applicable to each acquisition. The objective of the due diligence process is to assess the investment opportunities based on the facts and circumstances surrounding an investment or acquisition. When conducting due diligence, we may be required to evaluate important and complex business, financial, tax, accounting,

Table of Contents

Risk factors

environmental and legal issues. The due diligence process may at times be subjective with respect to newly-organized companies for which only limited information is available. Accordingly, we cannot be certain that the due diligence investigation that we conduct with respect to any investment or acquisition opportunity will reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity. For example, instances of fraud, accounting irregularities and other deceptive practices can be difficult to detect. Executive officers, directors and employees may be named as defendants in litigation involving a company we are acquiring or have acquired. Even if we conduct extensive due diligence on a particular investment or acquisition, we may fail to uncover all material issues relating to such investment, including regarding the controls and procedures of a particular target or the full scope of its contractual arrangements. We rely on our due diligence to identify potential liabilities in the businesses we acquire, including such things as potential or actual lawsuits, contractual obligations or liabilities imposed by government regulation. However, our due diligence process may not uncover these liabilities, and where we identify a potential liability, we may incorrectly believe that we can consummate the acquisition without subjecting ourselves to that liability. For each of our acquired businesses, other than Beatport, we have acquired only the assets of the business and not assumed the liabilities. Nonetheless, it is possible that we could still be subject to litigation in respect of these acquired businesses. If our due diligence fails to identify issues specific to an investment or acquisition, we may obtain a lower return from that transaction than the investment would return or otherwise subject ourselves to unexpected liabilities. We may also be forced to write-down or write-off assets, restructure our operations or incur impairment or other charges that could result in our reporting losses. Charges of this nature could contribute to negative market perceptions about us or our shares of common stock.

We may face difficulty in integrating the operations of the businesses we have acquired and may acquire in the future.

Acquisitions have been and will continue to be an important component of our growth strategy; however, we will need to integrate these acquired businesses successfully in order for our growth strategy to succeed and for our Company to become profitable. We will implement, and the management teams of the acquired businesses will adopt, our policies, procedures and best practices, and cooperate with each other in scheduling events, booking talent and in other aspects of their operations. We may face difficulty with the integration of the businesses we acquire, such as coordinating geographically dispersed organizations, integrating personnel with disparate business backgrounds and combining different corporate cultures. Many of the businesses we acquire are not profitable, and we are relying on their adoption of our best practices to operate their businesses more efficiently to achieve and maintain profitability. However, we may fail in implementing our policies and procedures, or the policies and procedures may not be effective or provide the results we anticipate for a particular business. Further, we will be relying on these policies and procedures in preparing our financial and other reports as a public company, so any failure of acquired businesses to properly adopt these policies and procedures could impair our public reporting. Management of the businesses we acquire may not have the operational or business expertise that we require to successfully implement our policies, procedures and best practices.

We note in particular that the auditors for our Predecessor, Disco Productions, Inc. (now operating as SFX Disco Operating LLC) ("DDP"), MMG, i-Motion, Made and Totem identified material weaknesses in the internal controls of these businesses that relate to the proper application of accrual based accounting under GAAP. As of March 31, 2013, our Predecessor, DDP, and MMG constitute 6.4%, 57.6% and 13.3%, respectively, of our revenue. Further, we expect that future target companies may also have material weaknesses in internal controls prior to our acquiring them. The Public Company Accounting Oversight Board ("PCAOB") defines a material weakness as a deficiency, or a

Table of Contents

Risk factors

combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We will be relying on the proper implementation of our policies and procedures to remedy these material weaknesses, and prevent any potential material misstatements in our financial reporting. Any such misstatement could adversely affect the trading price of our common stock, cause investors to lose confidence in our reported financial information, and subject us to civil and criminal fines and penalties. A part of our growth strategy involves expanding our festivals and events into new markets. As a result, festivals and events from different businesses will be operating in similar geographic areas and/or at similar times of year, often for the first time, and these businesses will need to coordinate their strategies to avoid competing with each other for attendees or talent. If our acquired companies fail to integrate in these important ways, or we fail to adequately understand the business operations of our acquired companies, our growth and financial results will suffer.

In addition, our growth strategy also includes the development of online properties that we intend to integrate across all of our acquired businesses. This will require, among other things, the integration of the individual websites and databases of each business we have or will acquire. This will be a complex undertaking that may prove more difficult, expensive and time consuming than we expect. Even if we are able to achieve this integration, it may not achieve the benefits we anticipate. If we fail to do this properly and in a timely manner, it could harm our revenue and relationship with our fans.

We typically retain the management of the businesses we acquire and rely on them to continue running their businesses, which leaves us vulnerable in the event they leave our company.

We seek to acquire businesses that have strong management teams that will continue to run the business after the acquisition. We often rely on these individuals to conduct the day-to-day operations of and pursue the growth of these acquired businesses. Although we typically seek to sign employment agreements with the managers of acquired businesses, it remains possible that these individuals will leave our organization. This would harm the prospects of the businesses they manage, potentially causing us to lose money on our investment and harming our growth and financial results.

Our investments in the ID&T Business and our existing joint venture with ID&T could be adversely affected by any disputes that may arise between us and our joint venture partners and our exposure to potential losses from the actions of our joint venture partners.

Upon consummation of the transactions contemplated by the ID&T Option, we will directly own a 75% ownership interest in the ID&T Business and indirectly own a 75% ownership interest in the ID&T JV.

Under the terms of our joint venture arrangement with ID&T regarding the ID&T JV we have appointed (and have the right to appoint) a co-Chief Executive Officer and the Chief Financial Officer of the ID&T JV, and ID&T has appointed (and has the right to appoint) a co-Chief Executive Officer and the Chief Creative Officer, who has creative control over the brands that the ID&T JV uses and the events for which they are used.

Under the terms of the ID&T Option, we have the right to appoint a co-Chief Executive Officer and the Chief Financial Officer of ID&T, and the other ID&T interest holders have the right to appoint a co-Chief Executive Officer and the Chief Creative Officer of ID&T, who will have creative control over the brands that ID&T uses and the events for which they are used. The ID&T Option also requires that each of the ID&T JV and ID&T be generally managed by a board of directors or board

Table of Contents

Risk factors

of managers. Although we will be entitled to appoint a majority of the board of each of the ID&T JV and ID&T, most board decisions will require the consent of the managers appointed by the other ID&T interest holders, and accordingly, our ability to control key decisions relating to the operation and development of ID&T will be limited. If we and the other ID&T interest holders have substantial disagreement about the management of the ID&T JV and ID&T (including with respect to operating budgets), then our dispute will be resolved by binding arbitration. Any substantial disagreement between us and the other ID&T interest holders regarding the ID&T JV and ID&T could be a distraction to the proper management of the ID&T JV and ID&T and could cause one or both of their respective businesses and financial results to suffer.

The ID&T Option describes the circumstances under which we and the other ID&T interest holders are permitted to transfer our respective interests in the ID&T JV and the ID&T Business. Under certain circumstances, if the other ID&T interest holders exercise a put right, we will be required to purchase the interests of such holders in ID&T. For more information on the ID&T Option and the put right, see "Business—Our History and Acquisitions—Planned acquisitions." Furthermore, the terms of the ID&T Option and the JV arrangement require us, under certain circumstances, to purchase all or a portion of our common stock that the other ID&T interest holders own.

Our involvement in the ID&T JV and the ID&T Business is subject to certain additional risks, including the following.

•: The success of the ID&T JV and the ID&T Business relies in large part on the strength of the ID&T brands. Accordingly, the ID&T JV and the ID&T Business are dependent upon the ability of ID&T personnel to properly manage those brands, and any deterioration in the quality of those brands could adversely affect the business of the ID&T JV and the ID&T Business.
•: We have certain funding obligations under the ID&T JV, and the ID&T Option requires us to provide funding under certain circumstances with respect to the ID&T Business. These funding obligations might restrict the amount of capital that we have available to fund other aspects of our operations.
•: If we or the other ID&T interest holders are unwilling or unable to provide the ID&T JV or the ID&T Business with needed capital, then one or both of the ID&T JV's and the ID&T Business' businesses and financial results could suffer and could become insolvent, destroying the value of our investment.
•: The terms of the ID&T JV agreement restrict, and the terms of the ID&T Option require the restriction of, our ability to transfer our interests in the ID&T JV and the ID&T Business.
•: If the other ID&T interest holders validly exercise their right to require us to purchase the other ID&T interest holders' interests in SFX or in ID&T, we will be required to use or obtain capital to effect such purchase, which could put a strain on our financial resources.

Our current and any future joint ventures are or will be subject to certain risks inherent in these investments.

Investments in joint ventures involve certain unique risks, including, among others, risks relating to:

•: potential disagreements with our joint venture partner about how to manage the joint venture;
•: the lack of full control of the joint venture's management, and therefore its actions;
•: the possibility that our joint venture partner might have or develop business interests or strategies that are contrary to ours;

Table of Contents

Risk factors

•: the potential need for us to fund future capital to the joint venture, as loans to the joint venture, as capital contributions to the joint venture, or otherwise;
•: the possible financial distress or insolvency of our joint venture partner, which could lead to our having to contribute its share of additional capital to the joint venture;
•: the cost of litigation or arbitration (including damage to reputation) in the event of a dispute with our joint venture partner;
•: negative business and financial performance of the joint venture because of substantial disagreements with our joint venture partner; and
•: preemptive dissolution of the joint venture because we or our joint venture partner choose, or become obligated, to acquire the equity interests of the other in the joint venture.

Federal and state taxation of business combinations may discourage business combinations.

Federal and state tax consequences are major considerations in any acquisition or business combination we may undertake. Currently, such transactions may be structured to result in tax-free treatment to both companies, pursuant to various federal and state tax provisions. We intend to structure any business combination to minimize the federal and state tax consequences to both us and the target entity; however, there can be no assurance that any particular business combination will meet the statutory requirements of a tax-free reorganization or that we will obtain the intended tax-free treatment upon a transfer of stock or assets. A non-qualifying reorganization could result in the imposition of both federal and state taxes, which may have an adverse effect on us and our target company, reduce the future value of the shares and potentially discourage a business combination.

We may seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing capital stock that would dilute your ownership.

We have financed our operations and acquisitions in large part by issuing shares of our common stock. We expect to continue to do so in the future, which would significantly reduce the percentage ownership of our then existing stockholders, including investors in this offering. Furthermore, any future issuances by us of equity securities may be at or below the prevailing market price of our common stock and in any event may have a dilutive impact on your ownership interest, which could cause the market price of our common stock to decline. In addition, we could issue securities in respect of future transactions that have rights, preferences and privileges senior to those of our common stock. The holders of any of our debt securities or term loans would also have rights superior to the rights of our common stockholders.

We may be required to issue additional shares if certain of our acquired businesses achieve earnout thresholds, and such issuances would dilute your ownership.

We may be required to issue additional shares of our common stock to the sellers of certain acquired businesses if those businesses achieve earnout thresholds, as described below.

•: The former owners of MMG are entitled to receive an earnout payment based on the EBITDA of the business and assets of SFX Nightlife for the year ended December 31, 2014. If this EBITDA equals or exceeds $5,270,000, the earnout payment will equal (1) $5,059,200 multiplied by (2) the actual EBITDA for the year ended December 31, 2014, divided by $5,270,000. If the EBITDA for the year ended December 31, 2014 is less than $5,270,000 but exceeds $3,372,000, the earnout payment will equal (1) $4,216,000 multiplied by (2) the difference between the actual EBITDA and $3,372,000 divided by $1,898,000. If the EBITDA is equal to or less than $3,372,000 for the year

Table of Contents

Risk factors

ended December 31, 2014, the former owners of MMG will not receive an earnout payment. Any earnout payment will be composed of 80% cash and 20% shares of our common stock at a price equal to a 30-day volume weighted average closing price per share if our shares are traded on any national securities exchange or the over-the-counter bulletin board.

•: For a period of five years beginning in the year ended December 31, 2013, ID&T will be entitled to receive 100,000 warrants to purchase shares of our common stock each year if the ID&T JV has achieved an EBITDA of $7.0 million or more in the prior fiscal year. The warrant exercise price will equal the fair market value as determined in good faith by our board of directors but, after our initial public offering, based on our stock's 30-day weighted average closing price.

We have incurred significant indebtedness in connection with our growth strategy, which may grow with future acquisitions, and this increases risk for holders of our common stock and could adversely affect our profitability and financial condition.

At the closing of this offering, we will have a significant amount of debt. As of June 24, 2013, we owed $64.5 million under our First Lien Term Loan Facility, which matures on September 15, 2014 (which may be extended to March 13, 2015 if certain conditions occur). We caution you that we may not have the funds necessary to pay principal and interest on our First Lien Term Loan Facility when it matures. Although we may seek to refinance this debt, we may not be able to do so on acceptable terms or at all. Any failure to pay these debts as they mature would adversely affect our business and the price of our common stock.

If there were an event of default under the First Lien Term Loan Facility, the lenders could elect to declare all amounts outstanding thereunder to be due and payable immediately, with such acceleration being automatic upon certain events of default. It is possible that, if the defaulted debt is accelerated, our assets and cash flow may not be sufficient to fully repay the indebtedness or borrowings under our outstanding debt instruments, and we cannot assure you that we would be able to refinance or restructure the payments on those debt securities. In the event we are unable to repay the First Lien Term Loan Facility upon maturity, or earlier upon any default, holders of our debt, including lenders under the First Lien Term Loan Facility, will have a senior claim on the assets of certain of our subsidiaries ahead of holders of our common stock.

As we continue growing our business and complete additional acquisitions, it is possible that we will increase the amount of our First Lien Term Loan Facility or otherwise incur additional indebtedness, which could have the effect of increasing the risks described above.

RISKS RELATED TO OUR INDEBTEDNESS

Our First Lien Term Loan Facility requires us to make certain mandatory prepayments of principal and interest, which will reduce our ability to use that cash flow to fund our operations, capital expenditures and future business opportunities.

Our First Lien Term Loan Facility requires our indirectly held wholly-owned subsidiary, SFX Intermediate Holdco II LLC (the "Borrower") to make mandatory prepayments (collectively, the "Mandatory Prepayments") equal to:

•: 75.0% of the annual excess cash flow of our wholly-owned subsidiary SFX Intermediate Holdco I LLC ("Holdings") and its subsidiaries, which are substantially all of our current businesses for the year ended December 31, 2013, five days after audited financials are delivered;

Table of Contents

Risk factors

•: 100% of the net proceeds from certain asset sales, casualty events, and debt issuances by Holdings and its subsidiaries (in each case, other than to the extent permitted under the First Lien Term Loan Facility); and
•: 30.0% of the outstanding borrowings within 60 days of the date Mr. Sillerman either announces he will not serve, ceases serving as or is incapable of serving as the chairman of our board of directors, our president, our chief executive officer or other equivalent officer.

Any amounts required to be applied to Mandatory Prepayments under our First Lien Term Loan Facility as described above, would not be available to us for any other purpose, including to fund our future operations, capital expenditures and investments in future business opportunities, which may severely limit our liquidity and adversely affect our ability to grow our business and/or take advantage of unanticipated business opportunities.

Our First Lien Term Loan Facility includes negative covenants that restrict certain of our subsidiaries' ability to operate their business, and this may impede our ability to respond to changes in our business or take certain important actions.

Our First Lien Term Loan Facility includes customary restrictive covenants, subject to certain materiality thresholds and exceptions, including covenants limiting Holdings' and its subsidiaries' ability to:

•: incur certain types of indebtedness and liens;
•: merge with, make an investment in or acquire property or assets of another company;
•: make capital expenditures;
•: pay dividends;
•: repurchase shares of our outstanding stock;
•: negative pledge;
•: modify certain documents;
•: make loans;
•: dispose of assets;
•: prepay the principal on any other indebtedness;
•: liquidate, wind up or dissolve; or
•: enter into certain transactions with affiliates.

These restrictions could limit our ability to take certain actions necessary to properly grow and manage our business, such as obtaining future financing, making needed capital expenditures, responding to and withstanding future downturns in our business or the economy in general or otherwise conducting corporate activities that are necessary or desirable. Holdings and its subsidiaries are generally not permitted to make dividends or cash distributions to us or to finance the operations of us or any of our subsidiaries that are not subsidiaries of Holdings. We may also be prevented from taking advantage of business opportunities that arise because of limitations these restrictive covenants impose on us. If it becomes necessary or desirable to obtain a waiver or amendment of these covenants, it may be costly or time consuming for us to do so, and we may not be able to obtain a waiver or amendment on any terms at all. A breach of any of these covenants or restrictions, even as a result of events beyond our control, could result in an event of default under the First Lien Term Loan Facility.

Table of Contents

Risk factors

Fluctuations in interest rates could adversely affect our liquidity, interest expense and financial results.

Our First Lien Term Loan Facility has variable interest rates. If any of the variable rates increase, our debt service costs will increase. Increased debt service costs would adversely affect our cash flow. To the extent these interest rates increase, our interest expense may increase, and we may have difficulty making interest payments and funding our other costs. While we may enter into interest hedging contracts, we may not be able to do so on a cost-effective basis, any hedging transactions it might enter into may not achieve their intended purpose and shifts in interest rates may have a material adverse effect on our business, financial condition and/or results of operations.

Certain events could lead to our First Lien Term Loan Facility being in default or otherwise require us to pay principal and accrued interest on this debt prior to its maturity.

Our First Lien Term Loan Facility includes events of default if we breach our loan covenants and upon the occurrence of certain events. This could cause us to be required to immediately repay the principal and accrued interest owing under this facility.

For example, Mr. Sillerman has entered into a guarantee agreement (the "Sillerman Guarantee") with Barclays Bank PLC, as collateral agent for the benefit of the other lender parties, in which he personally guaranteed all our obligations under the First Lien Term Loan Facility. We will be in default of the First Lien Term Loan Facility if the Sillerman Guarantee ceases to be in full force and effect or if Mr. Sillerman breaches any material term of the Sillerman Guarantee. An event of default will also occur upon a change in control. A change in control is defined in the First Lien Term Loan Facility to include the occurrence of any of the following: (i) Holdings ceases to be wholly-owned, directly or indirectly, by us or Borrower ceases to be directly wholly-owned by Holdings; (ii) at any time prior to our initial public offering (so long as we raise net proceeds of at least $100 million) Mr. Sillerman and certain affiliates and senior management cease to own, directly or indirectly, at least 40% of our outstanding voting equity or any "person" or "group" other than Mr. Sillerman and certain affiliates and senior management beneficially own a greater percentage of our voting equity than Mr. Sillerman and certain affiliates; (iii) at any time after our initial public offering (so long as we raise net proceeds of at least $100 million) Mr. Sillerman and certain affiliates and senior management cease to own, directly or indirectly, at least 30% of our outstanding voting equity or a greater percentage of our voting equity than Mr. Sillerman and certain affiliates and senior management; or (iv) the majority of the seats (other than vacant seats) on our board of directors cease to be occupied by persons who were, on March 15, 2013, either members of our board of directors or nominated for election by a majority of our board of directors or whose election or nomination was previously approved by a majority of such directors.

Table of Contents

Risk factors

RISKS RELATED TO OUR COMMON STOCK AND THIS OFFERING

Some of our stockholders have repurchase rights that require us to purchase their shares under certain conditions, and our financial position would be adversely impacted if those stockholders exercise those rights.

We have granted certain repurchase rights to the holders of our stock. The terms of these repurchase rights, including information with respect to their expiration, are set forth in the table below.

Holder(s) of Repurchase Right	Number of Shares	Price	Relevant Date and Trigger Events

Baron Small Cap Fund	2,500,000	$4.00/share	We have agreed to repurchase these shares upon Baron's election if the SEC has not declared effective a registration statement covering the resale of the shares of our common stock held by this investor by January 15, 2013. This investor has not exercised its repurchase right. If we become required to repurchase these shares, we must do so over a ten-month period on a pro rata basis. We believe this repurchase right will expire and be unexercisable following the effectiveness of the resale registration statement that we are filing with the SEC shortly after the filing of this prospectus.
Entertainment Events Funding LLC	4,000,000	$2.50/share	We have agreed to repurchase these shares if the SEC has not declared effective a registration statement covering the resale of the shares of our common stock held by this investor by January 15, 2013. This investor has not exercised its repurchase right. If we are required to repurchase these shares, we must do so over a ten-month period on a pro rata basis. These repurchase rights are based on the "most favored nation" rights we granted Entertainment Events Funding LLC under its subscription agreement, which require that (until immediately prior to our initial public offering), we provide to them the same right or benefit we provide to a third-party purchasing or receiving our common stock. We believe this repurchase right will expire and be unexercisable following the effectiveness of the resale registration statement that we are filing with the SEC shortly after the filing of this prospectus.
Disco Productions	1,000,000	$5.00/share	We have agreed to repurchase these shares if we do not have a registration statement declared effective or our shares are not registered pursuant to Section 12 of the Exchange Act by June 30, 2014. We believe this repurchase right will expire and be unexercisable following the closing of this initial public offering.

Table of Contents

Risk factors

Holder(s) of Repurchase Right	Number of Shares	Price	Relevant Date and Trigger Events

ID&T	All shares and warrants held by ID&T issued to them in connection with the ID&T JV (this could include up to 2.0 million shares; warrants to purchase 500,000 shares; and, for a period of 5 years beginning the year ended December 31, 2013, 100,000 warrants to purchase shares of our common stock if the ID&T JV has achieved an EBITDA of $7.0 million or more in the prior fiscal year)	$10.0 million	We have agreed to repurchase these securities if we do not complete our initial public offering by May 26, 2014. We believe this repurchase right will expire and be unexercisable following the closing of this initial public offering.
ID&T	2,000,000	$10.00/share	We have agreed to repurchase these shares if we do not complete our initial public offering by March 20, 2014. We believe this repurchase right will expire and be unexercisable following the closing of this initial public offering.
Former equity holders of Beatport	5,000,000	$5.00/share	On or after March 15, 2014, the former equity holders of Beatport will have the right to require us to repurchase from them the shares of our common stock issued as consideration in the merger. This right will not apply to any shares that have been registered in our initial public offering at an initial offering price of at least $5.00 per share or in a subsequent resale registration or are subsequently eligible for resale under Rule 144 following such initial public offering. We believe this repurchase right will expire and be unexercisable following the effectiveness of the resale registration statement that we are filing with the SEC shortly after the filing of this prospectus.

Table of Contents

Risk factors

Holder(s) of Repurchase Right	Number of Shares	Price	Relevant Date and Trigger Events

Insight Venture Partners V, L.P. Insight Venture Partners V (Employee Co-Investors), L.P. Insight Venture Partners (Cayman) V, L.P.	Up to 1,000,000	$10.00/share	On or after March 15, 2014, these parties can require us to repurchase shares of our common stock that we have not registered in our initial public offering or registered in a resale registration following such initial public offering, or that are not eligible for resale under Rule 144 following such initial public offering. If prior to the date that these shares are registered for resale or become subsequently eligible for resale under Rule 144 following our initial public offering, we enter into an agreement for the acquisition by any third party of beneficial ownership of more than 50% of the voting power in our voting shares (including by merger or consolidation) or the sale of all of our assets to a third-party in one or a series of related transactions, then this repurchase right will automatically accelerate and become exercisable. If we do not pay these investors the repurchase price of $10.00 per share within ten business days following receipt of notice from the investors of their exercise of this repurchase right, then the repurchase price will increase at a rate of 10% per annum (compounded quarterly) until the date of payment. We believe this repurchase right will expire and be unexercisable following the effectiveness of the resale registration statement that we are filing with the SEC shortly after the filing of this prospectus.
Totem	Number of shares to be equal to the quotient of AUD$15.0 million (or $13.8 million) divided by our initial public offering share price	Initial Public Offering Share Price	Upon closing of our acquisition of Totem, we are obligated to issue Totem the number of shares equal to the quotient obtained by dividing AUD$15.0 million (or $13.8 million) by our initial public offering share price. We granted Totem the right, during the 30 calendar day period beginning on the second anniversary of the closing date, to require us to repurchase at our initial public offering price per share all of the shares of our common stock that we issued to Totem as consideration under the asset contribution agreement.

In addition, we granted to the former owners of MMG a put right exercisable at any time between January 1, 2015 and June 30, 2015 to require us to acquire their 20% non-dilutable interest in our subsidiary, SFX-Nightlife Operating LLC. The consideration to be paid by us upon exercise of the put right would be equal to 20% of the product of SFX-Nightlife's EBITDA for the 2014 fiscal year multiplied by 6.

If any of these holders of our shares exercise their repurchase rights, we may not have sufficient cash reserves to pay the amount due. If we are able to pay these amounts, the payment may impede our ability to fund other aspects of our business, including potential acquisitions, capital expenditures, other investments or our working capital requirements, which would harm our operating results and the price of our common stock.

Table of Contents

Risk factors

Our Chief Executive Officer and Chairman has the ability to control all matters submitted to stockholders for approval.

Our Chief Executive Officer and Chairman of our board of directors, Robert F.X. Sillerman, beneficially owns shares of our common stock, in the aggregate, representing approximately 57.0% of our outstanding capital stock as of June 24, 2013. As a result, he controls all matters submitted to our stockholders for approval, as well as our management and affairs. This concentration of voting power could delay or prevent an acquisition of our company on terms that other stockholders may desire.

Although we do not plan to take advantage of the "controlled company" exemption from certain NASDAQ corporate governance requirements, if we elect to do so in the future, our stockholders will not have the same protections afforded to stockholders of other companies.

Under the NASDAQ rules, a company of which more than 50% of the voting power is held by another person or group of persons acting together is a "controlled company" and may elect not to comply with certain NASDAQ corporate governance requirements. Robert F.X. Sillerman, who is our founder, Chief Executive Officer and Chairman of our board of directors controls 57.0% of our voting power, and as such, we are eligible to take advantage of the "controlled company" exemption. We currently do not intend to rely on this exemption, but we may elect to do so in the future. If we were to elect to be treated as a "controlled company" in the future, we would be exempt from certain NASDAQ corporate governance requirements, including the requirements that (1) a majority of the board of directors consist of independent directors, (2) compensation of officers be determined or recommended to the board of directors by a majority of its independent directors or by a compensation committee that is composed entirely of independent directors and (3) director nominees be selected or recommended by a majority of the independent directors or by a nominating committee composed solely of independent directors. If we decide to take advantage of the controlled company exemption to certain NASDAQ corporate governance requirements, our stockholders will not have the same protections afforded to stockholders of companies that are subject to all of the NASDAQ corporate governance requirements.

We are an emerging growth company within the meaning of the Securities Act of 1933, and as such, we will take advantage of certain modified disclosure requirements.

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, or the Exchange Act, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, the listing requirements of NASDAQ, and other applicable securities rules and regulations. The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.

However, we are an "emerging growth company" within the meaning of the rules under the Securities Act of 1933, as amended, or the Securities Act. For as long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including not being required to comply with the independent auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Table of Contents

Risk factors

We intend to take advantage of these reporting exemptions until we are no longer an emerging growth company.

We would cease to be an emerging growth company upon the earliest of: (1) the first fiscal year following the fifth anniversary of this offering, (2) the first fiscal year after our annual gross revenue is $1 billion or more, (3) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities or (4) as of the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeds $700 million as of the end of the second quarter of that fiscal year.

We cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an emerging growth company within the meaning of the rules under the Securities Act, and we will take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards as they become applicable to public companies. We cannot predict if investors will find our common stock less attractive because we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

If you purchase shares of common stock in this offering, you will suffer immediate dilution of your investment.

We expect the initial public offering price of our common stock to be substantially higher than the net tangible book value per share of our common stock immediately after this offering. Therefore, if you purchase shares of our common stock in this offering, you will pay a price per share that substantially exceeds our net tangible book value per share after this offering. Based on an assumed initial public offering price of $ per share, which is the midpoint of the price range listed on the cover page of this prospectus, you will experience immediate dilution of $ per share, representing the difference between our net tangible book value per share after giving effect to this offering and the assumed initial public offering price. In addition, purchasers of common stock in this offering will have contributed approximately % of the aggregate price paid by all purchasers of our stock but will own only approximately % of our common stock outstanding after this offering. See "Dilution" for more detail.

Future sales of our common stock may cause our stock price to fall.

If our existing stockholders sell a large amount of our common stock following this offering, the market price of our common stock could decline significantly. In addition, the perception in the public market that our existing stockholders might sell shares of common stock could depress the market price of our common stock, whether or not they actually do so or plan to do so.

Immediately after this offering, shares of our common stock will be outstanding. This includes the shares of common stock that we are selling in this offering, which will be freely tradable in the

Table of Contents

Risk factors

public market immediately after this offering (unless purchased by an "affiliate," as such term is defined in Rule 144 under the Securities Act).

We expect that the remaining shares, representing % of our total outstanding shares of common stock following this offering, will become available for resale in the public market as shown in the chart below. Our directors and executive officers, the holders of all of our outstanding shares and vested options and participants in the directed share program have signed lock-up agreements with the underwriters covering a period of 180 days following the date of this prospectus. UBS Securities LLC, Barclays Capital Inc. and Jefferies LLC may, in their sole discretion and without notice, waive the provisions of these lock-up agreements in respect of all or any portion of these shares of common stock. As restrictions on resale end, the market price of our shares of common stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of common stock or other securities.

Number of Shares and % of Total Outstanding		Date Available for Sale Into Public Market


shares or %		On the date of this prospectus. All of these shares are subject to lock-up agreements signed with the underwriters, and shares, or %, are subject to lock-up agreements signed with us.

shares or %		Upon the effectiveness of a registration statement we have filed on form S-1 to cover the resale of these shares from time to time in the future. We expect this registration statement to become effective on or shortly after the closing date of this offering. All of these shares are subject to lock-up agreements signed with the underwriters, and shares, or %, are subject to lock-up agreements signed with us.

shares or %		Up to and including 180 days after the date of this prospectus. All of these shares are subject to lock-up agreements signed with the underwriters, and shares, or %, are subject to lock-up agreements signed with us.

shares or %		More than 180 days after the date of this prospectus, of which shares, or %, are subject to volume, manner of sale and other limitations under Rule 144. All of these shares are subject to lock-up agreements signed with the underwriters, and shares, or %, are subject to lock-up agreements signed with us.

In addition, shares of common stock will be eligible for sale upon exercise of vested options. Following this offering, we intend to file a registration statement on Form S-8 under the Securities Act to register all of the shares of common stock subject to outstanding options under our 2013 Equity Compensation Plan. See "Executive compensation—Equity incentives." Once these shares are registered, they can be sold in the public market upon issuance, subject to restrictions under the securities laws applicable to resales by affiliates.

For more information about the terms of the lock-up agreements our shareholders have agreed to with the underwriters and with us, and for more details about possible future sales of these shares, see "Shares Eligible for Future Sale."

All remaining shares of common stock held by existing stockholders, and any shares of our common stock purchased by affiliates in this offering pursuant to the directed share program described below under "Underwriting—Directed Share Program," will be subject to the restrictions imposed by Rule 144 under the Securities Act. Restricted securities may be sold in the public market only if

Table of Contents

Risk factors

registered under the Securities Act or if they qualify for an exemption from registration under Rules 144 or 701 under the Securities Act, which rules are summarized below, or another exemption.

An active, liquid and orderly trading market for our common stock may not develop, the price of our stock may be volatile, and you could lose all or part of your investment.

Prior to this offering, there has been no public market for shares of our common stock. The initial public offering price of our common stock will be determined through negotiations with the underwriters. This price will not necessarily reflect the price at which investors in the market will be willing to buy and sell our shares of common stock following this offering. In addition, the trading price of our common stock following this offering is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. The market price of our common stock may decline below the initial offering price, and you may not be able to sell your common stock at or above the price you paid in this offering, or at all.

Prior to this offering, there has been no public market for our common stock, and we cannot assure you that a market for our common stock will develop or that the market price of shares of our common stock will not decline following the offering.

We cannot assure you that a trading market will develop for our common stock after this offering or, if one develops, that such trading market can be sustained. We intend to apply to have our common stock listed on the Nasdaq Global Market, but we cannot assure you that our application will be approved. In addition, we cannot predict the prices at which our common stock will trade. The initial public offering price for our common stock will be determined through our negotiations with the underwriters based on numerous factors, including the information set forth in this prospectus, our prospects and the prospects of our industry, an assessment of our management, our prospects for future earnings, the general condition of the securities markets, the recent market prices of, and demand for, publicly traded common stock of generally comparable companies and other factors deemed relevant by the underwriters and us. Neither we nor the underwriters can assure you that the initial public offering price will bear any relationship to the market price at which our common stock may trade after our initial public offering. Shares of companies offered in an initial public offering often trade at a discount to the initial offering price due to underwriting discounts and commissions and related offering expenses.

If securities or industry analysts publish inaccurate or unfavorable research about our business, our stock price could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, our common stock price would likely decline.

We do not intend to pay dividends for the foreseeable future.

We have never declared or paid cash dividends on our capital stock. We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our common stock if the market price of our common stock increases. See "Dividend Policy."

Table of Contents

Risk factors

The market price of our common stock may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial purchase price.

If you purchase shares of our common stock in the offering, you may not be able to resell those shares at or above the purchase price. The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

•: actual or anticipated fluctuations in our revenue and other operating results;
•: the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;
•: actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;
•: additional shares of our common stock being sold into the market by us or our existing stockholders or the anticipation of such sales;
•: announcements by us or our competitors of significant events or features, technical innovations, acquisitions, strategic partnerships, joint ventures or capital commitments;
•: changes in operating performance and stock market valuations of companies in our industry;
•: price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;
•: lawsuits threatened or filed against us;
•: developments in new legislation and pending lawsuits or regulatory actions, including interim or final rulings by judicial or regulatory bodies; and
•: other events or factors, including those resulting from war or incidents of terrorism, or responses to these events.

We have identified material weaknesses in our internal controls over financial reporting that, if not properly remediated, could result in material misstatements in our financial statements in future periods.

We are not currently required to comply with Section 404 of the Sarbanes-Oxley Act, and are therefore not required to make an assessment of the effectiveness of our internal controls over financial reporting for that purpose. However, in connection with the audit of our consolidated financial statements as of and for the year ended December 31, 2012, we identified certain deficiencies relating to our internal control over financial reporting that constitute a material weakness under standards established by the PCAOB.

The PCAOB defines a material weakness as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis.

Table of Contents

Risk factors

We have identified the following material weaknesses.

•: A lack of contemporaneous documentation in connection with awards of stock based compensation. This resulted in our treating certain awards granted in 2012 as having been granted in 2013 for accounting purposes.
•: Improperly characterizing certain acquisition transactions as having closed prior to our obtaining the control necessary for such a characterization. These acquisition transactions subsequently failed to close.
•: An unusually large amount of audit adjustments noted and recorded in connection with the 2012 audit, primarily in respect of accruals, cut offs and purchase accounting for consummated business transactions. In addition, certain significant transactions were not accounted for properly, one of which resulted in our restating our 2012 results to move certain amounts previously included in equity to temporary equity. We believe that this was related, in part, to a lack of sufficient staff with appropriate training in GAAP and SEC rules and regulations with respect to financial reporting functions, as well as the lack of robust accounting systems.

We have taken and will take a number of actions to correct these material weaknesses including, but not limited to, adding experienced accounting and financial personnel, retaining third party consultants to review our internal controls and recommend improvements, implementing improvements to our closing procedures and consolidation processes, and improving our accounting software as it relates to accounts payable. For more information, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Internal Control Over Financial Reporting." We may need to take additional measures to fully mitigate these issues, and the measures we have taken, and expect to take, to improve our internal controls may not be sufficient to address the issues identified, to ensure that our internal controls are effective or to ensure that the identified material weakness or other material weaknesses will not result in a material misstatement of our annual or interim financial statements. In addition, other material weaknesses may be identified in the future. If we are unable to correct deficiencies in internal controls in a timely manner, our ability to record, process, summarize and report financial information accurately and within the time periods specified in the rules and forms of the SEC will be adversely affected. This failure could negatively affect the market price and trading liquidity of our common stock, cause investors to lose confidence in our reported financial information, subject us to civil and criminal investigations and penalties, and generally materially and adversely impact our business and financial condition.

In addition, we and the auditors for our Predecessor, DDP, MMG, i-Motion, Made and Totem have identified a material weakness in the internal controls of each of these businesses that relates to the proper application of accrual based accounting under GAAP. To remedy these material weaknesses and prevent any potential material misstatements in our financial reporting we will be relying on the proper implementation of our policies and procedures, the hiring of new accounting staff at the acquired business and at the corporate level, and the implementation of our accounting software at our acquired companies and improvements to that software generally. However, it is possible that these efforts will be unsuccessful with regard to the internal controls of one or more of these businesses. Further, future target companies may also have material weakness in internal controls prior to our acquiring them.

Table of Contents

Risk factors

If we are unable to implement and maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, which could adversely affect the market price of our common stock.

As a public company, we will be required to maintain internal controls over financial reporting and to report any material weaknesses in such internal controls. As a public company, we will eventually be required to furnish a report by management on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404. We are in the process of designing, implementing and testing the internal control over financial reporting required to comply with this obligation, which process is time consuming, costly and complicated. If in the future we identify material weaknesses in our internal control over financial reporting, including at some of our acquired companies, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.

We will incur increased costs as a result of operating as a public company, particularly once we cease to be an emerging growth company, and our management will be required to devote substantial time to new compliance initiatives.

As a public reporting company, we will incur significant legal, accounting, and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act and rules subsequently implemented by the SEC and NASDAQ, on which we plan to seek to list our common stock for trading, have imposed various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantial costs to maintain the same or similar coverage.

Pursuant to Section 404, we will be required to furnish a report by our management on our internal control over financial reporting, including, once we cease to be an emerging growth company, an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed time period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that neither we nor, when required, our independent registered public accounting firm will be able to conclude within the prescribed timeframe that our internal control over financial reporting is effective as required by Section 404. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

Table of Contents

Forward-looking statements

This prospectus contains forward-looking statements within the meaning of the U.S. federal securities laws, which involve substantial risks and uncertainties. The forward-looking statements are contained principally in the sections entitled "Prospectus Summary," "Risk Factors," "Unaudited Pro Forma Condensed Combined Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business." These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described in the section captioned "Risk Factors."

In some cases, you can identify forward-looking statements by terms such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "would" and similar expressions intended to identify forward-looking statements. These statements include, but are not limited to, statements regarding:

•: our ability to integrate the companies we have acquired and plan to acquire in the future;
•: our ability to close the acquisitions of our planned acquisition targets;
•: our ability to identify and acquire leading EMC-related businesses;
•: our belief that the EMC community will grow;
•: our ability to increase the number of festivals and events we produce;
•: our ability to effectively partner Beatport more closely with live events;
•: our ability to produce festivals and events in-house through our joint venture with ID&T and our planned acquisitions;
•: our ability to grow our music and video retailing efforts;
•: our ability to make, and the expected timing of, payments on our senior secured first lien credit agreement, as amended (the "First Lien Term Loan Facility");
•: our ability to grow EMC festival attendance;
•: our belief that additional or alternative venues will be readily available if necessary;
•: our belief that our liability insurance will provide sufficient protection;
•: our belief that our capital expenditure requirements and liquidity needs will be met; and
•: our ability to grow our online properties.

Forward-looking statements reflect our current views with respect to future events and are based on assumptions and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Also, forward-looking statements represent our estimates and assumptions only as of the date of this prospectus. You should read this prospectus and the documents that we filed as exhibits to the registration statement of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

Table of Contents

Use of proceeds

We estimate that the net proceeds to us from our issuance and sale of shares of common stock in this offering will be approximately $ million (or approximately $ million if the underwriters exercise their option to purchase additional shares of common stock in full), assuming an initial public offering price of $ per share, which is the midpoint of the price range listed on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and offering expenses payable by us.

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share would increase (decrease) our net proceeds from this offering by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions.

We intend to use the net proceeds we receive from this offering as follows:

•: $50.0 million to exercise the ID&T Option and close the acquisition of the 75% ownership interest in the ID&T Business, including $10.0 million to pay the second step payment due to ID&T under the ID&T Option;
•: $8.0 million to close the acquisition of 60% of the ownership interests in i-Motion;
•: AUD$55.0 million (or $50.7 million) to close the acquisition of substantially all of the assets of Totem;
•: $17.5 million to close the acquisition of 70% of the ownership interests in Made; and
•: the balance, if any, to fund working capital, capital expenditures and other general corporate purposes, which may include other acquisitions of complementary businesses.

For additional information regarding our liquidity and outstanding indebtedness, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition (the Registrant)—Liquidity and Capital Resources."

This expected use of net proceeds of this offering represents our intentions based upon our current plans and business conditions. Our management will retain broad discretion over the allocation of any net proceeds used for capital expenditures or other general corporate purposes.

Pending use of the proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade and interest-bearing instruments.

Table of Contents

Dividend policy

We have not paid any dividends on our common stock to date and do not anticipate paying any dividends on our common stock in the foreseeable future. We intend to retain earnings, if any, for the future operation and expansion of our business. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon our results of operations, cash requirements, financial condition, contractual restrictions, restrictions imposed by applicable laws and other factors that our board of directors may deem relevant.

Table of Contents

Capitalization

The following table sets forth our capitalization as of March 31, 2013:

•: on an actual basis;
•: on a pro forma basis giving effect to our planned acquisitions, our borrowing of an additional $15.0 million under our First Lien Term Loan Facility and the application of those proceeds as described herein, our issuance of shares of our common stock in private placements since March 31, 2013 and the termination of rights held by certain of our existing stockholders to cause us to repurchase their shares; and
•: on a pro forma, as adjusted basis to give further effect to the issuance and sale by us of shares of our common stock in this offering at an assumed price to the public of $ per share, the midpoint of the estimated public offering price range set forth on the cover of this prospectus, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

You should read the following table in conjunction with "Use of Proceeds," "Selected Historical and Pro Forma Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical consolidated financial statements and unaudited pro forma financial information and related notes thereto appearing elsewhere in this prospectus.

	As of March 31, 2013

($ in 000s)	Actual			Pro Forma			Pro Forma As Adjusted

Debt:
Current portion of long-term debt		5,513			15,513
Mandatorily redeemable non-controlling interest		—			23,378
First Lien Term Loan Facility		48,526			63,226

Total debt	$	54,039		$	102,117		$

Temporary Equity:
Redeemable non-controlling interest		4,835			4,835
Redeemable common stock		74,380			15,624
Shareholders' Equity:
Common stock		45			62
Additional paid-in capital		77,464			364,640
Due from shareholders		(36	)		(1,536	)
Non controlling interest		22,447			36,022
Accumulated deficit		(35,431	)		(35,431	)

Total Equity		64,489			363,757

Total Capitalization	$	197,743		$	486,333		$

Table of Contents

Dilution

If you invest in our common stock in this offering, your ownership interest will be diluted to the extent of the difference between the price per share to the public in this offering and the net tangible book value per share of common stock upon the completion of this offering. Dilution results from the fact that the per share offering price of the common stock is substantially in excess of the book value per share attributable to the existing stockholders for presently outstanding stock.

Our net tangible book value per share represents our total tangible assets less total liabilities, which is our net tangible book value, divided by our weighted average shares outstanding. As of March 31, 2013, our net tangible book value was approximately $(10.4) million, or $(0.20) per share.

After giving effect to the sale of our common stock at an assumed initial public offering price of $ per share (the midpoint of the price range set forth on the cover of this prospectus), and after deducting underwriting discounts and commissions and estimated offering expenses payable by us, our net tangible book value as of March 31, 2013 would have been approximately $ million, or $ per share.

This represents an immediate increase in net tangible book value of $ per share to our existing stockholders and an immediate dilution of $ per share to new investors purchasing shares of common stock at the price to the public in this offering.

The following table illustrates this dilution to new investors on a per share basis.


Assumed initial public offering price per share		$
Net tangible book value per share as of March 31, 2013, before giving effect to this offering	$
Increase in net tangible book value per share attributable to the sale of shares in this offering	$

Net tangible book value per share after this offering		$

Dilution in net tangible book value per share to new investors		$

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share (the midpoint of the price range set forth on the cover of this prospectus) would increase (decrease) our net tangible book value after this offering by $ million and increase (decrease) the dilution to new investors by $ per share, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters exercise their option to purchase additional shares in full from us, the net tangible book value after the offering would be $ per share, the increase in the net tangible book value per share to existing shareholders would be $ and the dilution per share to new investors would be $ per share, in each case assuming an initial public offering price of $ per share (the midpoint of the price range set forth on the cover page of this prospectus).

The following table summarizes, as of March 31, 2013, the total number of shares of our common stock we issued and sold, the total consideration we received and the average price per share paid to us by our existing stockholders and to be paid by new investors purchasing shares of our common stock in this offering. The table assumes an initial public offering price of $ per share (the

Table of Contents

Dilution

midpoint of the price range set forth on the cover of this prospectus) and deducts underwriting discounts and commissions and estimated offering expenses payable by us.

	Shares purchased				Total consideration

	Shares purchased				Total consideration				Average price per share
	Number	Percent			Amount	Percent			Average price per share

Existing stockholders				%	$			%	$
New investors									$

Total			100.0	%	$		100.0	%

Each $1.00 increase or decrease in the assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, the total consideration paid by new investors and total consideration paid by all stockholders by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions payable by us. In addition, to the extent any outstanding options or warrants to purchase common stock or convertible preferred stock are exercised, new investors will experience further dilution.

Except as otherwise indicated, the above discussion and tables assume no exercise of the underwriters' option to purchase additional shares. If the underwriters exercise their option to purchase additional shares in full from us, our existing stockholders would own % and our new investors would own % of the total number of shares of our common stock outstanding upon the completion of this offering.

Table of Contents

Unaudited pro forma condensed combined financial information

We prepared the following unaudited pro forma condensed combined financial statements by applying certain pro forma adjustments to the historical consolidated financial statements of SFX Entertainment, Inc. The pro forma adjustments give effect to the following transactions (the "Transactions"):

•: our acquisition on July 31, 2012 of Dayglow LLC and its affiliates ("Dayglow") (now operating as SFX-Life in Color, LLC, or "LIC"), which is our Predecessor;
•: our acquisition on June 19, 2012 of Disco Productions, Inc. (now operating as SFX-Disco Operating LLC) ("DDP");
•: our acquisition on December 31, 2012 of an 80% ownership interest in MMG Nightlife, LLC ("MMG");
•: the January 1, 2013 creation of ID&T JV North America ("ID&T JV"), in which we hold a 51% interest, and our planned acquisition of an additional 24% interest;
•: our acquisition on March 15, 2013 of BEATPORT, LLC ("Beatport");
•: our planned acquisition of a 75% ownership interest in ID&T Holding B.V. ("ID&T");
•: our planned acquisition of a 60% ownership interest in the i-Motion GmbH Events & Communication ("i-Motion"), with a commitment to acquire the remaining 40% in 2015;
•: our planned acquisition of Totem Onelove Group Pty Ltd and Totem Industries Pty Ltd ("Totem");
•: our planned acquisition of a 70% ownership interest in Made Event, LLC and EZ Festivals, LLC (collectively, "Made"), with a commitment to acquire the remaining 30% in 2018;
•: our borrowing of $49.5 million under the First Lien Term Loan Facility ("First Lien Term Loan Facility") on March 15, 2013 and the amendment for an additional borrowing of $15.0 million on June 5, 2013;
•: a $10.0 million private placement of equity on April 1, 2013;
•: the estimated net proceeds from this offering and the application of the estimated proceeds therefrom, as described under "Use of Proceeds;" and
•: the simultaneous registration for the resale by selling stockholders of certain shares of common stock issued in connection with acquisitions and in private placement transactions.

The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2012 and for the three months ended March 31, 2013 gives effect to the Transactions as if each of them had occurred on January 1, 2012. The unaudited pro forma condensed combined balance sheet as of March 31, 2013 gives effect to each of our planned acquisitions, our amendment and additional borrowing under our First Lien Term Loan Facility, the private placement of equity, this offering and the use of proceeds therefrom, and the registration for the resale of shares by the selling stockholders. As if each of them had occurred on March 31, 2013.

These pro forma condensed combined financial statements include adjustments for our planned acquisitions because we believe each of these acquisitions are probable under the standards of Rule 3-05 of Regulation S-X. We note that these acquisitions have not been consummated and may never be consummated, including due to reasons outside of our control. See "Risk Factors—Risks Related to Our Acquisition Strategy" and "Business—Our History and Acquisitions—Planned acquisitions" for more information.

Table of Contents

Unaudited pro forma condensed combined financial information

The historical financial statements of SFX Entertainment, Inc. and each of the businesses acquired or whose acquisition is planned appear elsewhere in this prospectus, with the exception of the interim financial statements of Totem as of and for the three months ended March 31, 2013. These are not required to be included in this prospectus because Totem is a foreign entity. We have based the historical financial information for those periods for Totem on preliminary results for the quarter as reported by its management.

Our determination to consider LIC to be our Predecessor was based on several factors. First, the acquisitions of LIC and DDP were negotiated simultaneously, with DDP closing only six weeks in advance of the LIC acquisition. Second, LIC's historical operations as a producer of live EMC events and festivals are more representative of the core operations around which we are building our global EMC platform than DDP's historical operations as a promoter of live EMC events. Finally, the purchase price for our acquisition of LIC was $12.1 million, which was larger than the $9.0 million purchase price for our acquisition of DDP.

We have based the pro forma adjustments upon available information and certain assumptions that we believe are reasonable under the circumstances. We describe in greater detail the assumptions underlying the pro forma adjustments in the accompanying notes, which you should read in conjunction with these unaudited pro forma condensed combined financial statements. In many cases, we based these assumptions on preliminary information and estimates. The actual adjustments to our audited consolidated financial statements will depend upon a number of factors and additional information that will be available on or after the closing date of this offering. Accordingly, the actual adjustments that will appear in our financial statements will differ from these pro forma adjustments, and those differences may be material.

We will account for each of the acquisitions in the Transactions using the acquisition method of accounting for business combinations under U.S. GAAP. Under the acquisition method of accounting, the total consideration paid is allocated to an acquired company's tangible and intangible assets, liabilities, and any non-controlling interest based on their estimated fair values as of the acquisition date. As of the date of this prospectus, we have not completed the valuation studies necessary to finalize the acquisition date fair values of the assets acquired and liabilities assumed and the related allocation of purchase price for ID&T JV and Beatport. Accordingly, the values of the assets and liabilities set forth in these unaudited pro forma condensed combined financial statements for these businesses are preliminary. We have not completed the Transactions for our planned acquisitions and therefore the estimated purchase price and fair value of the assets acquired and liabilities assumed is preliminary. Once we complete our final valuation processes, for both our consummated and planned acquisitions, we may report changes to the value of the assets acquired and liabilities assumed, as well as the amount of goodwill, and those changes could differ materially from what we present here.

We provide these unaudited pro forma condensed combined financial statements for informational purposes only. These unaudited pro forma condensed combined financial statements do not purport to represent what our results of operations or financial condition would have been had the Transactions actually occurred on the assumed dates, nor do they purport to project our results of operations or financial condition for any future period or future date. You should read these unaudited pro forma condensed combined financial statements in conjunction with "Use of Proceeds," "Capitalization," "Selected Historical Financial Information and Other Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and the historical financial statements, including the related notes thereto, appearing elsewhere in this prospectus.

Table of Contents

SFX Entertainment, Inc. and Subsidiaries

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of March 31, 2013

(in 000s)	SFX Entertainment, Inc.			ID&T		i-Motion		Totem			Made		Acquisition Related Pro Forma Adjustments			Pro Forma for Acquisitions			IPO Proceeds			Consolidated Pro Forma Results

Assets
Cash	$	21,859		$	18,792	$	537	$	5,072		$	517	$	(130,698	)(1)	$	(83,921	)	$	158,250	(1)	$	74,329
Accounts receivable		1,586			2,111		418		170			1,451		(584	)(2)		5,152			—			5,152
Due from related parties		2,085			1,948		82		280			—		—			4,395			—			4,395
Due from promoters		1,856			—		—		—			—		—			1,856			—			1,856
Prepaid expenses		3,454			—		387		255			293		—			4,389			—			4,389
Other current assets		618			58,868		816		20					(49,818	)(3)		10,504			—			10,504

Total current assets		31,458			81,719		2,240		5,797			2,261		(181,100	)		(57,625	)		158,250			100,625

Property, plant and equipment, net		3,349			2,494		362		282			66		—			6,553			—			6,553
Goodwill		50,072			—		—		—			—		60,414	(4)		110,486			—			110,486
Intangible assets, net		104,043			392		22		19			—		181,244	(4)		285,720			—			285,720
Other assets		52,039			3,817		211		—			—		(2,408	)(1)		53,659			—			53,659

Total assets	$	240,961		$	88,422	$	2,835	$	6,098		$	2,327	$	58,150		$	398,793		$	158,250		$	557,043

Liabilities and Equity
Accounts payable and accrued expenses	$	13,202		$	6,491	$	592	$	4,058		$	1,150	$	(584	)(2)	$	24,909			—		$	24,909
Notes payable		5,513			—		—		—			—		10,000	(6)		15,513			—			15,513
Label and royalties payable		12,861			—		—		—			—		—			12,861			—			12,861
Deferred revenue		3,028			11,033		761		157			1,055		—			16,034			—			16,034
Due to related parties		2,366			31,590		1		—			—		(30,025	)(3)		3,932			—			3,932
Other current liabilities		2,620			912		253		4			6		—			3,795			—			3,795

Total current liabilities		39,590			50,026		1,607		4,219			2,211		(20,609	)		77,044			—			77,044

Long-term debt		(0	)		—		—		38			—		—			38			—			38
Deferred tax liabilities		545			—		—		—			—		—			545			—			545
First lien term loan		48,526			—		—		—			—		14,700	(1)		63,226			—			63,226
Mandatorily redeemable non-controlling interest		—			—		—		—			—		23,378	(8)		23,378			—			23,378
Other liabilities		8,596			—		—		—			—		—			8,596			—			8,596

Total liabilities		97,257			50,026		1,607		4,257			2,211		17,469			172,827			—			172,827

Commitments and contingencies		—			—		—		—			—		—			—			—			—
Redeemable Common Stock		74,380			—		—		—			—		(58,756	)(8)		15,624			—			15,624
Redeemable non-controlling interest		4,835			—		—		—			—					4,835			—			4,835
Stockholder's equity/(deficit)
Common stock		45			37		64		1			—		(85	)(8)		62			—			62
APIC		77,464			8,679		—		1,904			—		118,343	(8)		206,390			158,250	(1)		364,640
Due from stockholder for stock subscription		(36	)		—		—		—			—		(1,500	)(8)		(1,536	)		—			(1,536	)
Non-controlling interests		22,447			83		—		—			—		13,492	(8)		36,022			—			36,022
Accumulated equity / (deficit)		(35,431	)		29,597		1,164		(64	)		116		(30,813	)(8)		(35,431	)		—			(35,431	)

Total liabilities and stockholders' equity	$	240,961		$	88,422	$	2,835	$	6,098		$	2,327	$	58,150		$	398,793		$	158,250		$	557,043

Table of Contents

SFX Entertainment, Inc. and Subsidiaries

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the three months ended March 31, 2013

(in 000s except per share amounts)	SFX Entertainment, Inc.			BEATPORT 01/01 - 03/15			ID&T			i-Motion			Totem			Made			Pro Forma Adjustments			Consolidated Pro Forma Results


Revenue	$	10,153		$	10,025		$	3,233		$	820		$	10,453		$	1,530			—		$	36,214
Direct costs		(7,601	)		(7,089	)		(2,493	)		(510	)		(9,371	)		(1,308	)		—			(28,372	)

Gross profit		2,552			2,936			740			310			1,082			222			—			7,842
Selling, general and administrative expenses		(14,246	)		(3,097	)		(4,420	)		(650	)		(439	)		(231	)		(12	)(2)		(23,095	)
Depreciation		(118	)		(347	)		(193	)		(28	)		—			—			—			(686	)
Amortization		(2,747	)		(16	)		—			(4	)		(14	)		—			(9,822	)(5)		(12,603	)

Operating income/(loss)		(14,559	)		(524	)		(3,873	)		(372	)		629			(9	)		(9,834	)		(28,542	)

Other income/(expense)		(942	)		(263	)		34,844			59						—			(34,909	)(2)		(1,211	)
Interest income/(expense)		(3,911	)		6			8						(10	)		—			(6,572	)(7)		(10,479	)
(Provision)/benefit for income tax		(572	)		(52	)		905			87						—			6,972	(10)		7,340

Net Income/(loss)		(19,984	)		(833	)		31,884			(226	)		619			(9	)		(44,343	)		(32,892	)

Less: Net income/(loss) attributable to noncontrolling interests		(878	)		—			(1	)		—			—			—			(306	)(9)		(1,185	)

Net income/(loss) attributable to SFX Entertainment, Inc.	$	(19,106	)	$	(833	)	$	31,885		$	(226	)	$	619		$	(9	)	$	(44,037	)	$	(31,707	)

Loss Per Share—Basic and Diluted	$	(0.36	)																		(12)
Weighted Average Shares Outstanding		52,929																			(11)

Table of Contents

SFX Entertainment, Inc. and Subsidiaries

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the year ended December 31, 2012

(in 000s except per share amounts)	SFX Entertainment, Inc.			Life in Color (1/1/12 - 7/31/12)			Disco Productions (1/1/12 - 6/19/12)			MMG (1/1/12 - 12/31/12)			BEATPORT			ID&T			i-Motion			Totem			Made			Pro Forma Adjustments			Consolidated Pro Forma Results


Revenue	$	24,815		$	10,986		$	12,888		$	4,588		$	48,461		$	67,406		$	14,689		$	42,303		$	18,056		$	(2,238	)(2)	$	241,954
Direct costs		(23,019	)		(8,219	)		(12,616	)		—			(33,393	)		(48,140	)		(8,827	)		(30,020	)		(14,094	)		2,238	(2)		(176,090	)

Gross profit		1,796			2,767			272			4,588			15,068			19,266			5,862			12,283			3,962			—			65,864
Selling, general and administrative expenses		(17,026	)		(2,323	)		(1,046	)		(2,011	)		(14,641	)		(18,923	)		(3,482	)		(5,891	)		(1,040	)		586	(2)		(65,797	)
Depreciation		(75	)		(95	)		—			—			(1,277	)		(1,533	)		(107	)		—			(66	)		—			(3,153	)
Amortization		(916	)		—			—			—			(483	)		—			(13	)		(76	)		—			(44,169	)(5)		(45,657	)

Operating income/(loss)		(16,221	)		349			(774	)		2,577			(1,333	)		(1,190	)		2,260			6,316			2,856			(43,583	)		(48,743	)

Other income/(expense)		98			13			26			21			(78	)		2,556			152			—			—			—			2,788
Interest income/(expense)		(34	)		—			(373	)		—			37			203			24			(27	)		1			(20,987	)(7)		(21,156	)
(Provision)/benefit for income tax		(67	)		—			—			—			(160	)		(98	)		(777	)		14			(145	)		20,398	(10)		19,165

Net income/(loss)		(16,224	)		362			(1,121	)		2,598			(1,534	)		1,471			1,659			6,303			2,712			(44,172	)		(47,946	)

Less: Net income attributable to noncontrolling interests		—			—			—			—			—			73			—			—			—			869	(9)		942

Net income/(loss) attributable to SFX Entertainment, Inc.	$	(16,224	)	$	362		$	(1,121	)	$	2,598		$	(1,534	)	$	1,398		$	1,659		$	6,303		$	2,712		$	(45,041	)	$	(48,888	)

Loss Per Share—Basic and Diluted	$	(0.44	)																											(12)
Weighted Average Shares Outstanding		37,186																												(11)

Table of Contents

SFX Entertainment, Inc. and Subsidiaries

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
($ in 000s, except per share amounts)

In connection with our four planned acquisitions, we have preliminary agreements reflecting the following terms.

•: We acquired an option (the "ID&T Option") to buy a 75% ownership interest in ID&T and will also increase our ownership in the ID&T JV, from 51% to 75%. We paid $2,500 in cash and issued 2,000,000 shares of our common stock to acquire the option. The exercise price of the ID&T Option is $50,000 in cash (including $10,000 payable 90 days after we receive certain financial statements from ID&T and $40,000 payable upon closing) and 2,000,000 shares of our common stock. In addition, we would relinquish our right to be repaid the $7,500 we advanced ID&T in connection with the ID&T JV.
•: We have agreed in principle to acquire a 60% ownership interest in i-Motion for $8,000 in cash and $4,000 in shares of common stock, at the initial offering price of our common stock in this offering. In addition, we would be obligated to buy the remaining 40% interest after the end of 2014 at a price equal to 40% of 5.5 times the average EBITDA for i-Motion for 2013 and 2014, which would be paid two-thirds in cash and one-third in shares of common stock. For the purposes of these pro forma condensed combined financial statements, we consider our obligation to purchase the remaining equity in this business as making that non-controlling interest mandatorily redeemable, and accordingly, we characterize it as a liability of ours.
•: We have entered into an asset contribution agreement to acquire 100% of the Totem business for AUD$60,000 in cash and AUD$15,000 in shares of common stock valued at the price to the public in this offering. The seller has the right to put these shares back to us on the second anniversary of the closing of this acquisition, therefore these shares will be treated as temporary equity.
•: We have agreed in principle to acquire a 70% ownership interest in Made for $20,000 in cash, $5,000 in shares of common stock, and a $10,000 promissory note to be paid at the earlier of March 31, 2014 or the completion of the 2013 audit. The common shares issued would be valued at the greater of the price to the public in this offering and $12.75. We would be obligated to buy the remaining 30% of Made in 2018 at a price equal to 30% of 10 times the average EBITDA for Made for 2017, which will be paid in cash, or, if the total amount payable exceeds $10 million, 80% in cash and 20% in shares of common stock. For the purposes of these pro forma condensed combined financial statements, we consider our obligation to purchase the remaining equity in this business as making that non-controlling interest mandatorily redeemable, and accordingly, we characterize it as a liability of ours. In addition, the minority interest holders are entitled to receive annually 40% of net income in 2013 and 30% thereafter until the final payment in 2018.

Unless otherwise noted, dollar amounts presented in this section are translated from the Australian Dollar (AUD) and Euro (EUR) using the following rates:




Profit & Loss
Fiscal Year: 2012	1.286	1.036
Fiscal Quarter: Q1 2013	1.321	1.039
Balance Sheet
Period Ending: 3/31/13	1.282	1.042

Table of Contents

SFX Entertainment, Inc. and Subsidiaries

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)
($ in 000s, except per share amounts)

FOOTNOTES:

(1)

The pro forma adjustment to cash reflects:

a.: the net proceeds of this offering; plus
b.: the cash we received, net of expenses, from the private issuances of equity that occurred on April 1, 2013, and the additional borrowing under the amendment to our First Lien Term Loan Facility, less
c.: the cash we expect to pay in connection with our pending acquisitions and the cash on the balance sheet of the targeted businesses that we do not expect to receive as part of the acquisition.


Net IPO proceeds				$	158,250

Pro forma adjustments to cash:
Common stock issuance April 1, 2013		10,000
Net proceeds 2nd draw of term loan(a)		14,608
Made Acquisition cash consideration		(20,000	)
Totem Acquisition cash consideration		(62,496	)
ID&T Option cash consideration		(50,000	)
i-Motion acquisition cash consideration		(8,000	)
ID&T cash not acquired		(14,810	)

Total net pro forma adjustments to cash	$	(130,698	)

(a): The second draw of the term loan reflects $15,000 in borrowing, net of $300 in original issue discount and $92 in deferred charges (which are reflected as an adjustment to other assets).
(b): $2,500 paid to ID&T on March 20, 2013 for the ID&T Option, which was recorded at cost, in other assets was applied as part of the purchase price.

(2): Elimination of Intercompany Transactions—We made adjustments to the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2012 to eliminate transactions between LIC and DDP for the period prior to our acquisition of LIC in the amount of $2,238. From time to time, LIC and DDP have participated and will participate in the promotion and production of certain events. The revenues and costs associated with these events create intercompany amounts that will be eliminated as part of our consolidated financial statements for periods after July 31, 2012, the first date that both LIC and DDP were our consolidated subsidiaries. The adjustments in the unaudited pro forma condensed combined financial statements eliminate the intercompany amounts between the two entities on the same basis for periods prior to that date.

We made adjustments to the unaudited pro forma condensed combined balance sheet to eliminate payables and receivables between ID&T and the ID&T JV at March 31, 2013 of $584 relating to licensing fees payable to ID&T from the ID&T JV's formation costs.

Table of Contents

SFX Entertainment, Inc. and Subsidiaries

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)
($ in 000s, except per share amounts)

We adjusted the unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2013 to eliminate an approximately $34,909 gain that ID&T recognized related to their sale of the 51% ownership in the ID&T JV to us.

We eliminated approximately $12 and $586 in licensing fees for the three months ended March 31, 2013 and the year ended December 31, 2012, respectively, associated with intellectual property that i-Motion licenses, but that we will acquire as part of the acquisition. Therefore, we have included amortization expense for the intellectual property in these unaudited pro forma condensed combined financial statements.

(3): Assets and Liabilities Not Acquired—We adjusted the unaudited pro forma condensed combined balance sheet to eliminate approximately $49,818 of other current assets held by ID&T that will not be included in the ID&T acquisition. These include $42,126 in our securities and related instruments and $7,692 in receivable from ID&T shareholders. In addition, we eliminated approximately $30,025 in liabilities recorded by ID&T for (i) our prepayment in relation to the ID&T Option and (ii) the $7,500 advance we provided ID&T against future earnings of the ID&T JV.
(4): Purchase Price Allocation/Goodwill—Under acquisition accounting, we recognize the assets and liabilities acquired at their fair value on the acquisition date, with any excess in purchase price over these values being allocated to goodwill.
: For our four planned acquisitions, management has made an initial fair value estimate of the assets acquired and liabilities assumed as of March 31, 2013. These initial estimates will likely differ from the final valuation, once we have consummated the acquisition and received the valuation report of a third-party expert; and this difference could be material. We have made no adjustments to the fair value of the assets acquired (other than intangible assets) and liabilities assumed. We believe that due to the short term nature of the majority of the assets acquired and liabilities assumed that their carrying values, as included in the historical financial statements of the entities, approximates their respective fair values. The acquired goodwill for these acquisitions is primarily related to synergies with our combined businesses and assembled workforce.
: We also engaged an expert to value the assets acquired and liabilities assumed of our acquisitions that occurred in 2012 and during the three months ended March 31, 2013. The valuations for the acquisitions that occurred in the first quarter of 2013 have not been completed and therefore the results could differ from the final valuations. These preliminary valuations and the results of operations from these businesses are included in our actual financial statements from the date of their respective acquisitions.

Table of Contents

SFX Entertainment, Inc. and Subsidiaries

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)
($ in 000s, except per share amounts)

: The following table shows the preliminary purchase price, estimated acquisition-date fair values of the acquired assets and liabilities assumed, non-controlling interest, and calculation of goodwill for the planned acquisitions as of March 31, 2013, the date of our most recent balance sheet.

	ID&T			i-Motion			Totem			Made			Total


Cash consideration	$	52,500		$	8,000		$	62,496		$	20,000		$	142,996
Forgiveness of advance		7,500			—			—			—			7,500
Note to seller		—			—			—			10,000			10,000
Common stock		14,380			4,000			15,624			5,882			39,886
Common shares to be issued		2,000

Total Purchase Price	$	74,380		$	12,000		$	78,120		$	35,882		$	200,382

Net tangible assets acquired		23,404			2,812			6,079			2,326			34,621
Liabilities assumed		(20,001	)		(1,607	)		(4,257	)		(2,211	)		(28,076	)
Goodwill		23,865			4,693			19,070			12,786			60,414
Intangible assets		71,988			14,102			57,228			38,359			181,677
Mandatorily redeemable non-controlling Interest		—			(8,000	)		—			(15,378	)		(23,378	)
Non-controlling interest		(24,876	)		—			—			—			(24,876	)

Total purchase price allocation	$	74,380		$	12,000		$	78,120		$	35,882		$	200,382

(5): Intangible Assets—We based the estimated useful lives of the most significant acquired intangible assets on the amount and timing in which we expect to receive an economic benefit. We assigned these intangible assets useful lives ranging from 3 - 7 years based upon a number of factors, including contractual agreements, consumer awareness and economic factors pertaining to the combined companies.
: The estimates are preliminary and therefore fair values and weighted-average useful lives of the intangibles assets for the planned acquisitions will likely differ from the final estimates of fair value and useful lives. The estimates of fair value and weighted-average useful lives could be impacted by a variety of factors including legal, regulatory, contractual, competitive, economic or other factors. Increased knowledge about these factors could result in a change to the estimate fair value of these intangible assets and/or the weighted-average useful lives from what we have assumed in these unaudited pro forma condensed combined financial statements. In addition, the combined effect of any such changes could result in a significant increase or decrease to related amortization expense estimates.
: The figures set forth below do not reflect the value of any intangible assets to the extent already set forth in the historical financial statements of the acquired businesses.

	ID&T		i-Motion		Totem		Made		Total


Fan Database	$	14,319	$	2,838	$	11,442	$	7,672	$	36,271	3
Trademarks / names		44,066		9,856		40,065		23,015		117,002	7
Non Compete Agreements		13,603		1,408		5,721		7,672		28,404	5

*Total Intangible Assets*	$	71,988	$	14,102	$	57,228	$	38,359	$	181,677

: We amortize intangible assets over their estimated useful life. The amortization of intangible assets shown below assumes the assets were acquired on January 1, 2012 and amortized over the period

Table of Contents

SFX Entertainment, Inc. and Subsidiaries

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)
($ in 000s, except per share amounts)

associated with each statement of income. For DDP, LIC, MMG, and Beatport the additional amortization expense only covers the periods prior to their acquisition.




Three Months Ended March 31, 2013	—	—	—	3,447	659	1,214	2,657	1,845	9,822
Year Ended December 31, 2012	609	420	2,885	13,789	2,636	5,845	10,605	7,380	44,169

(6): Note Payable—Reflects two notes payable in aggregate amount of $10,000 to be incurred in connection with the acquisition of Made that become due on March 31, 2014 or any earlier date on which Made's 2013 audited financial statements are available.
(7): Long-Term Debt—On March 15, 2013, we entered into our First Lien Term Loan Facility having a principal amount of $49,500 and bearing a variable interest rate. The rate utilized to calculate the adjustment to pro forma interest expense was 8.75%, which is the current rate in effect under our First Lien Term Loan Facility. In addition, Mr. Sillerman provided a personal guarantee of our First Lien Term Loan Facility. The value associated with the warrants and common stock issued in connection with the personal guarantee was $25,430, which is amortized over the life of the loan as interest expense along with related transaction costs. On June 5, 2013, we borrowed an additional $15,000 under our First Lien Term Loan Facility, for a total principal amount of $64,500.
: In connection with our First Lien Term Loan Facility, our unaudited pro forma condensed combined statement of income includes an adjustment to interest expense, as follows.
: For the year ended December 31, 2012:


Interest on First Lien Term Loan Facility	$	5,644
Original issue discount on First Lien Term Loan Facility and amortization of Mr. Sillerman's guarantee		15,343

Total adjustment interest expense	$	20,987

: For the three months ended March 31, 2013:

For the period from January 1 - March 15, 2013


Interest on $49,500 First Lien Term Loan Facility	$	902
$49,500 First Lien Term Loan Facility original issue discount, deferred financing fees and amortization of Mr. Sillerman's guarantee		5,263

		6,165

For the three months ended March 31, 2013


Interest on $15,000 First Lien Term Loan Facility	$	328
$15,000 First Lien Term Loan Facility original issue discount and amortization of deferred financing fees		79

		407

Total interest expense	$	6,572

Table of Contents

SFX Entertainment, Inc. and Subsidiaries

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)
($ in 000s, except per share amounts)

(8): Adjustments to Equity—The following table details the pro forma adjustments to equity accounts, temporary equity, and mandatorily redeemable non-controlling interest.

	Common Stock			APIC			Non-Controlling Interest		Accumulated Equity/Deficit			Due from Shareholders			Total Equity			Redeemable Common Stock			Mandatory Redeemable NCI (Liab.)


ID&T	$	(37	)	$	24,502		$	13,492	$	(29,597	)		—		$	8,360			—			—
i-Motion		(64	)		4,000			—		(1,164	)		—			2,772			—			8,000
Made		—			5,882			—		(116	)		—			5,766			—			15,378
Totem		(1	)		(1,904	)		—		64			—			(1,841	)		15,624			—
Termination of repurchase put		17			75,863			—		—			(1,500	)		74,380			(74,380	)		—
April 1, 2013 Issuance		—			10,000			—		—			—			10,000			—			—
																—

Total	$	(85	)	$	118,343		$	13,492	$	(30,813	)	$	(1,500	)	$	99,437		$	(58,756	)	$	23,378

Initial Public Offering		—		$	158,250			—		—			—		$	158,250			—			—

(9): Non-controlling Interests—The MMG acquisition was for the purchase of an 80% ownership stake in MMG, the ID&T acquisition will be for 75% ownership, and the ID&T JV will be for an increase to 75%. The unaudited pro forma condensed combined statement of income accounts for the non-controlling interest we will not be acquiring as follows.

	12/31/2012		3/31/2013


Net Income—MMG	$	2,598		N/A
Net Income Attributable to Non-Controlling Interest—MMG 20%	$	520		N/A
Net Income—ID&T*	$	1,398	$	(3,025	)
Net Income Attributable to Non-Controlling Interest—ID&T 25%	$	350	$	(756	)
Net Income—ID&T JV		N/A	$	(1,875	)
Net Income Attributable to Non-Controlling Interest—ID&T JV 25%		N/A	$	(469	)
Amount already recorded 49%		N/A	$	(919	)

Adjustment 24%		N/A	$	450

Total Non-Controlling Interests	$	869	$	(306	)

*: Excludes the gain of $34,909 from ID&T's sale of 51% of ID&T JV to us (See footnote 2).

(10): Provision for Income Tax—The income tax effects reflected in the pro forma adjustments are based on an estimated statutory rate of 38%.
(11): Weighted Average Shares Outstanding—The pro forma weighted average shares outstanding takes into account our common shares outstanding on December 31, 2012 and March 31, 2013 and

Table of Contents

SFX Entertainment, Inc. and Subsidiaries

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)
($ in 000s, except per share amounts)

adds to that amount common shares issued after that date in respect to the Transactions. In each case, we assume that the shares were issued and became outstanding on January 1, 2012.

	Common Shares

	December 31, 2012		March 31, 2013

Common Shares outstanding at period end:		48,261,027		62,262,902
Acquisitions:
Beatport		5,000,000
Shares issued for ID&T JV		2,000,000
Shares issued for ID&T Option		2,000,000
Shares issued for i-Motion
Shares issued for Made
Shares issued for Totem
Private placements
January 8, 2013		2,000,000
February 11, 2013		1,000,000
February 22, 2013		2,000,000
April 1, 2013		1,000,000		1,000,000
Shares issued in IPO

Total pro forma weighted average shares outstanding

(12): Earnings Per Share—The following table details the pro forma adjustments to EPS based upon the assumed distribution of net income to the non-controlling interest in the planned acquisition of Made.

	Year Ended December 31, 2012			Three Months Ended March 31, 2013


Net loss attributable to SFX Entertainment, Inc.	$	(48,888	)	$	(31,707	)
Less: Distribution to Made NCI*		814			—

Net loss attributable to SFX Entertainment, Inc. after distribution to NCI	$	(49,702	)	$	(31,707	)

Weighted average shares outstanding and used in the computation of basic net income per share

Net loss attributable to SFX Entertainment, Inc. common shareholders per share—basic	$			$

*: Assumed 30% dividend for the year ended December 31, 2012. No dividend is provided for the three months ended March 31, 2013.

Table of Contents

Selected historical financial information and other data

The following table sets forth the selected historical financial information for SFX Entertainment, Inc. or "SFX" (Successor), and the selected historical financial information for Life in Color or "LIC" (Predecessor). The historical results of operations for SFX, as Successor, for the year ended December 31, 2011 do not reflect any of the operations of LIC, as Predecessor. The historical results of operations for SFX, as Successor, for the year ended December 31, 2012 reflect the operations of LIC only from the date of SFX's acquisition of LIC on July 31, 2012.

We derived the selected historical consolidated financial data for SFX as of and for the years ended December 31, 2011 and 2012 from the audited consolidated financial statements you can find elsewhere in this prospectus. We derived the selected historical consolidated financial data for LIC as of and for the year ended December 31, 2011, as of and for the period from January 1, 2012 and as of July 31, 2012 from the audited consolidated financial statements you can find elsewhere in this prospectus. We derived the selected historical consolidated financial data for SFX as of March 31, 2013 and for the three months ended March 31, 2012 and March 31, 2013 from the unaudited consolidated financial statements you can find elsewhere in this prospectus.

You should read these selected financial data in conjunction with the disclosure under "Use of Proceeds," "Capitalization," "Unaudited Pro Forma Condensed Combined Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and the related notes thereto included elsewhere in this prospectus.

Table of Contents

Selected historical financial information and other data

	Life in Color (Predecessor)						SFX Entertainment, Inc. (Successor)

Consolidated statement of comprehensive income data (in 000s except per share amounts)	Year ended December 31, 2011			Seven months ended July 31, 2012			Year ended December 31, 2011			Year ended December 31, 2012			Three months ended March 31, 2012			Three months ended March 31, 2013

Revenue	$	9,606		$	10,986		$	—		$	24,815		$	—		$	10,153
Total direct costs		(8,572	)		(8,219	)		—			(23,019	)		—			(7,601	)

Gross profit		1,034			2,767			—			1,796			—			2,552
Operating expenses
Selling, general and administrative expenses		(1,142	)		(2,323	)		(101	)		(17,026	)		(1,366	)		(14,246	)
Depreciation and amortization		(41	)		(95	)		—			(991	)		—			(2,865	)
Operating income/(loss)		(149	)		349			(101	)		(16,221	)		(1,366	)		(14,559	)
Interest expense		—			—			—			(34	)		—			(3,911	)
Other income/(expense)		(9	)		13			—			98			—			(942	)

Net income (loss) before provision for income taxes		(158	)		362			(101	)		(16,157	)		(1,366	)		(19,412	)
Provision for income taxes		—						—			67			—			572

Net income/(loss)		(158	)		362			(101	)		(16,224	)		(1,366	)		(19,984	)
Less: Net income/(loss) attributable to non-controlling interests		—			—			—			—			—			(878	)

Net income attributable to SFX Entertainment, Inc.	$	(158	)	$	362		$	(101	)	$	(16,244	)	$	(1,366	)	$	(19,106	)

Loss per share—basic and diluted		NA			NA		$	—		$	(0.44	)		NA		$	(0.36	)
Weighted average shares outstanding—basic and diluted		NA			NA			—			37,186			NA			52,929

NA—not applicable

	Life in Color (Predecessor)						SFX Entertainment, Inc. (Successor)

Consolidated balance sheet data	December 31, 2011			July 31, 2012			December 31, 2011			December 31, 2012			March 31, 2013

Cash	$	44		$	182		$	—		$	3,675			21,859
Working capital		(595	)		(835	)		(101	)		(18,005	)		(8,132	)
Total assets		1,111			1,615			—			66,732			240,961
Deferred revenue		663			830			—			324			3,028
Total liabilities		1,727			2,107			101			28,059			97,257
Stockholders' equity (deficit)		(616	)		(492	)		(101	)		8,879			64,489

Table of Contents

Management's discussion and analysis of financial condition and results of operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements, the financial statements for Life in Color, LLC as our predecessor, and related notes appearing elsewhere in this prospectus. Unless otherwise stated or the context otherwise requires, references to "SFX" and "the Company" refer to SFX Entertainment, Inc. and references to "we," "us," "our" and similar references refer to SFX Entertainment, Inc. together with its consolidated subsidiaries, in each case after giving effect to our completed acquisitions, the planned acquisitions disclosed herein, and the formation of our joint venture. To date, SFX has acquired four businesses and acquired an interest in one joint venture. SFX also expects to complete four acquisitions simultaneously with or shortly after the closing of this offering: its acquisition of 75% of the worldwide business (the "ID&T Business") of ID&T Holding B.V. ("ID&T"), its acquisition of a 60% equity interest in i-Motion GmbH Events & Communication ("i-Motion"), its acquisition of 100% of Totem Onelove Group Pty Ltd and Totem Industries Pty Ltd (collectively, "Totem") and its acquisition of a 70% equity interest in Made Event, LLC and EZ Festivals, LLC (collectively, "Made"). Although we consider these acquisitions to be "probable" within the meaning of Rule 3-05 of Regulation S-X and present information herein on a basis that assumes we complete these acquisitions, their consummation remains subject to closing conditions. Therefore, we cannot provide any assurance that any of these planned acquisitions will be consummated. We discuss the terms of these acquisitions and the conditions to closing in "Risk Factors—Risks Related to Our Acquisition Strategy" and "Business—Our History and Acquisitions—Planned acquisitions."

The following discussion contains "forward-looking statements" that reflect our future plans, estimates, beliefs, and expected performance. We caution that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. See "Risk Factors" and "Forward-Looking Statements."

OVERVIEW

Table of Contents

Management's discussion and analysis of financial condition and results of operations

to the 2013 festival in Belgium in one second and saw significant demand from U.S.-based fans, each seeking to purchase multiple tickets. To meet the growing demand of the EMC community in the United States and other regions around the world, we plan to introduce some of the most popular festivals and events to certain areas for the first time. At its original location in Amsterdam, Sensation has consistently sold out since its inception in 2000, including all 45,000 tickets for 2013. Our inaugural Sensation event in North America, held in Toronto in May 2013, attracted over 25,000 attendees. We have announced four additional Sensation events in North America for 2013, which will be held in Las Vegas, Miami, New York, and San Francisco, and our first North American Tomorrowland festival, TomorrowWorld, which we will hold in September 2013.

We started our business in July 2011 and were incorporated in Delaware in June 2012. Our operations and assets consist almost entirely of businesses that we acquired during 2012 and 2013. These include:

•: our acquisition on July 31, 2012, of Dayglow LLC and its affiliates, now operating as SFX-LIC Operating LLC ("Life in Color" or "LIC"), which, on a combined basis, is our Predecessor;
•: our acquisition on June 19, 2012, of Disco Productions, Inc., now operating as SFX-Disco Operating LLC ("DDP");
•: our acquisition on December 31, 2012, of an 80% ownership interest in MMG Nightlife LLC ("MMG");
•: our acquisition on March 15, 2013 of BEATPORT, LLC ("Beatport"); and
•: our entry into a joint venture with ID&T Holding B.V. ("ID&T"), in which we own a 51% interest, with ID&T holding the remaining 49% (the "ID&T JV"); we will consolidate the results of operations of the joint venture, which commenced operations in 2013.

We have agreed to terms in respect of the four planned acquisitions described above: our exercise of our option to purchase of a 75% ownership interest of the worldwide business of ID&T (the "ID&T Business"), our acquisition of a 60% ownership interest of i-Motion, our asset contribution agreement with Totem and our acquisition of a 70% ownership interest of Made. We intend to use the proceeds of this offering to fund the cash portion of the consideration for these acquisitions and consummate them simultaneously with or shortly after the closing of this offering.

•: Under the ID&T Option, our acquisition of the ID&T Business will cost $50.0 million in cash (including a $10.0 million payment payable upon ID&T's delivery of certain financial information) plus the cancelation of a $7.5 million debt owed to us by ID&T. These are in addition to the $2.5 million in cash and 2,000,000 shares of common stock we paid to acquire the ID&T Option.
•: Under an agreed upon term sheet we entered into with i-Motion, we will pay $12.0 million, consisting of $8.0 million in cash and $4.0 million in shares of our common stock at the initial offering price of our common stock in this offering, to acquire 60% of the equity interests of i-Motion.
•: We have entered into an asset contribution agreement with Totem, under which we have agreed to pay AUD$75.0 million, consisting of AUD$60.0 million (or $55.3 million) in cash and AUD$15.0 million (or $13.8 million) in shares of our common stock at the initial offering price of our common stock in this offering, to acquire 100% of Totem. Under the terms of the agreement, we were obligated to pay an AUD$5.0 million (or $4.8 million as of May 22, 2013) deposit, which we funded on May 22, 2013.
•: Under a binding term sheet we entered into with Made, we will pay $35.0 million, consisting of $20.0 million in cash, $5.0 million in our common stock at the lower of $12.75 per share or the initial public offering price in this offering, and $10.0 million in promissory notes, to acquire 70% of the equity interests of Made. We will be required to purchase the remaining 30% that is not being sold in 2018. On June 24, 2013, we advanced $2.5 million towards the purchase price for this transaction.

Table of Contents

Management's discussion and analysis of financial condition and results of operations

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

We currently generate revenue from ticket sales, concessions of food, beverages and merchandise, promoter and management fees, sponsorships, music sales and advertising. On a pro forma basis for the year ended December 31, 2012, we derived 80.0% of our revenue from live events, including ticket sales, artist bookings, food, beverage and merchandise concessions, single-event sponsorships and promoter and management fees. During the same period, we derived 20.0% from digital music sales.

On a pro forma basis for the three months ended March 31, 2013, we derived 65.9% of our revenue from live events, including ticket sales, artist bookings, food, beverage and merchandise concessions, single-even sponsorships and promoter and management fees. During the same period we derived 34.1% from digital music sales.

On a pro forma basis for the year ended December 31, 2012, we generated revenue of $193.5 million from live events, of which $152.7 million, or 78.9%, was from ticket sales and concessions, and $40.8 million, or 21.1% was from other sources, including promoter and management fees. On a pro forma combined basis for the year ended December 31, 2012, we produced and promoted a total of 861 live events, including 52 festivals of greater than 10,000 attendees. Total attendance at our festivals and events was approximately 2.8 million, and we hosted several events weekly at our managed EMC venues attracting another 400,000 attendees. On a pro forma combined basis, our live events had a gross margin of 26.3%.

On a pro forma basis for the three months ended March 31, 2013, we generated revenue of $23.9 million from live events, of which $19.7 million, or 82.5%, was from ticket sales and concessions, and $4.2 million, or 17.5% was from other sources, including promoter and management fees. On a pro forma combined basis for the three months ended March 31, 2013, we produced and promoted a total of 157 live events, including 4 festivals of greater than 10,000 attendees. Total attendance at our festivals and events was approximately 299,000. On a pro forma combined basis, our live events had a gross margin of 17.6%.

As we integrate the businesses we have acquired and our planned acquisitions, in the medium and long-term, we anticipate meaningful growth in our live event revenue, primarily due to growing the number of large festivals around the world and increasing the total number of attendees at such festivals and other events. For example in North America, through our existing ID&T JV, we will produce the TomorrowWorld festival outside of Atlanta in September 2013. We have already held one Sensation event in Toronto, Canada. We intend to hold additional Sensation and Q-Dance events in other North American cities, and intend to introduce Mysteryland and other festivals in the future. In addition, we plan to bring these and other events to new regions around the world. We also plan to develop additional revenue streams around these events.

In 2012 and the three months ended March 31, 2013, the majority of our revenue consisted of ticket sales. A significantly smaller portion of our live event revenue in 2012 and the three months ended March 31, 2013, was derived from the sale of food, beverages and merchandise. For indoor festival events, the venue owner typically retains any revenue attributable to food and beverage sales; however, for outdoor festivals we generally operate the concessions and retain the food and beverage revenue. In the medium- to long-term, we expect continued growth in live event attendance, in particular large-scale outdoor festivals, to drive meaningful growth in food and beverage revenue. In addition, we expect to continue our strategy of acquiring live event production companies in 2013 and beyond, which would increase our live event revenue.

We expect the gross margin for our live events to increase in the near and medium-term as festivals become more established, as initiation and start-up costs are eliminated, and attendance grows.

Table of Contents

Management's discussion and analysis of financial condition and results of operations

On a pro forma basis for the year ended December 31, 2012, we generated $48.5 million in revenue from music sales with a gross margin of 31.1% and for the three months ended March 31, 2013, we generated $12.3 million in revenue from music sales with a gross margin of 29.6%. The majority of our music revenue is derived from the sale of professional quality uncompressed audio files via Beatport, which DJs require to produce and perform new electronic music tracks. We believe that in the near and medium-term, revenue from our online properties, including Beatport, will experience significant growth as we introduce new content, products and access offerings to address growing demand within the EMC community.

QUARTERLY TRENDS

Our results of operations, and in particular the revenue we generate from a given activity, varies substantially from quarter to quarter. We expect most of our largest festivals to occur outdoors primarily in warmer months. For example, ID&T stages most of its festivals in August and September in Europe, and Totem stages most of its festivals in November and December in Australia. As such, we expect our revenues from these festivals to be higher during the third and fourth quarters, and lower in the first and second quarters. Further, because we expect to conduct a limited number of large festivals, small variations in this number from quarter to quarter can cause our revenue and net income to vary significantly for reasons that may be unrelated to the performance of our core business. Other portions of our business are generally not subject to seasonal fluctuation or experience much lower seasonal fluctuation, such as MMG, which receives higher revenues in the winter months in Miami, and LIC, which is more active during the school year. Overall, on a pro forma basis for our planned acquisitions, we currently expect our revenue to be higher in our third and fourth quarters than in our first and second quarters. In the future, we expect these fluctuations to change and perhaps become less pronounced as we grow our business, stage more festivals and events, including in the Southern Hemisphere, and acquire additional businesses. We believe our cash needs will vary significantly from quarter to quarter depending on, among other things, the timing of festivals and events, cancellations, ticket on-sales, capital expenditures, seasonal and other fluctuations in our business activity, the timing of guaranteed payments and receipt of ticket sales and fees, financing activities, acquisitions and investments and receivables management.

BASIS AND PRESENTATION

Our acquisition of DDP and LIC were negotiated simultaneously, with DDP closing only six weeks prior to the LIC acquisition. Because LIC and DDP were acquired contemporaneously, we focused on the core operations of each company, as well as the purchase price in the respective transaction to determine which company we should treat as our predecessor company. LIC's historical operations as a producer of live EMC events and festivals are more representative of the core operations around which we are building our global EMC business. The purchase price for LIC totaled $12.1 million. DDP's historical operations were more focused on the promotion of live EMC events to the exclusion of large-scale festivals. The purchase price for DDP totaled $9.0 million. Upon review of these facts and discussions with our advisors, we determined that LIC was our predecessor ("Predecessor").

Based on the current status of our corporate evolution and our designation of LIC as our predecessor, we have presented this Management's Discussion and Analysis of Financial Condition and Results of Operations as follows:

(1): a discussion of the results of operations of our Predecessor, LIC, for the seven months ended July 31, 2012, (the last day of operations of our Predecessor) and the nine months ended September 30, 2011;

Table of Contents

Management's discussion and analysis of financial condition and results of operations

(2): a discussion of the results of operations of our Predecessor, LIC, for each of the years ended December 31, 2011, and December 31, 2010;
(3): a discussion of the results of operations of SFX Entertainment, Inc. and subsidiaries (the "Registrant") for the year ended December 31, 2012 and for the three months ended March 31, 2013;
(4): a discussion of the results of operations of the Registrant for the period from July 7, 2011 (Inception) through December 31, 2011; and
(5): a discussion of the financial condition of the Registrant.

PREDECESSOR

On July 31, 2012, we acquired our Predecessor and Advanced Concert Productions LLC. At the time of this transaction, our Predecessor was a promoter and organizer of branded events that featured live DJs, acrobatic acts and "paint blasts," during which participants were sprayed with colorful, harmless paint to provide a more interactive experience. Advanced Concert Productions LLC was the production company for our Predecessor's live events.

Our Predecessor principally derived its revenue from ticket sales to events that it promoted and produced and recognized this revenue at the time the event occurred. When our Predecessor acted as the principal promoter of an event and took on the risks and rewards of such event, it recognized the gross revenue from ticket sales. When it acted as agent and did not bear the risks of such event, it recognized only its net share of revenue.

Our Predecessor's principal costs of generating revenue were direct operating expenses associated with the promotion and production of events, including venue costs, artist performance fees, travel expenses, show-specific advertising and marketing, ticketing processing fees, and other show-related production expenses.

RESULTS OF OPERATIONS—PREDECESSOR

Seven months ended July 31, 2012 (last day of operations of our Predecessor) and the nine months ended September 30, 2011

Revenue

Our Predecessor's revenue increased by $4.7 million, or 75.0%, to $11.0 million for the seven months ended July 31, 2012 from $6.3 million for the nine months ended September 30, 2011. The increase in revenue is primarily attributable to increases in the number of events, attendees per event, and average ticket price earned per attendee. Our Predecessor generated $9.9 million in ticket revenue (89.9% of total revenue), $0.5 million in licensing fees (4.6% of total revenue), and $0.6 million in other revenue (5.5% of total revenue) for the seven months ended July 31, 2012.

The number of events during the seven months ended July 31, 2012 increased to 90 from 51 events for the nine months ended September 30, 2011 due to new market penetration. Total attendance increased to approximately 236,773 for the seven months ended July 31, 2012, from 163,299 for the nine months ended September 30, 2011, an increase of 73,474, or 45.0%, due to an increasing number of events.

Table of Contents

Management's discussion and analysis of financial condition and results of operations

Direct operating expenses

Our Predecessor's direct operating expenses increased by $3.3 million, or 68.7%, to $8.2 million for the seven months ended July 31, 2012 from $4.9 million for the nine months ended September 30, 2011. The increase in direct operating expenses is primarily attributable to increases in production and venue costs of $1.7 million, artist and talent costs of $0.7 million, and promotional costs of $0.7 million associated with the increased number of events.

Selling, general, and administrative expenses

Our Predecessor's selling, general, and administrative expenses increased by $1.7 million, or 283.3%, to $2.3 million for the seven months ended July 31, 2012 from $0.6 million for the nine months ended September 30, 2011. The increase is primarily attributable to increases in professional services fees of $0.8 million incurred in conjunction with the sale of our Predecessor to us and an increase in payroll expense of $0.4 million due to increased headcount.

Depreciation and amortization

Our Predecessor's depreciation and amortization increased by $0.1 million for the seven months ended July 31, 2012 compared to the nine months ended September 30, 2011. The increase resulted from additions of approximately $0.4 million in property, plant and equipment.

Year ended December 31, 2011 compared to year ended December 31, 2010

Revenue

Our Predecessor's revenue increased by $8.5 million, or 749.3%, to $9.6 million for the year ended December 31, 2011 from $1.1 million for the year ended December 31, 2010. This increase is primarily attributable to an increase in the size and number of events as well as increased attendance at its events. Our Predecessor entered new markets and hosted larger capacity events in key cities during 2011. Our Predecessor hosted 75 events in 2011.

Our Predecessor generated $9.3 million in ticket revenue (96.7% of total revenue), and $0.1 million in licensing fees (1.2% of total revenue) for the year ended December 31, 2011.

Direct operating expenses

Our Predecessor's direct operating expenses increased by $7.7 million, or 928.6%, to $8.6 million for the year ended December 31, 2011 from $0.8 million for the year ended December 31, 2010. The increase in direct operating expenses is primarily attributable to increases in production and venue costs of $5.3 million, artist and talent costs of $1.2 million, and promotional costs of $0.7 million associated with the increased number of events.

Selling, general, and administrative expenses

Our Predecessor's selling, general, and administrative expenses increased by $0.9 million, or 355.4%, to $1.1 million for the year ended December 31, 2011 from $0.3 million for the year ended December 31, 2010. The increase is primarily attributable to increases in payroll of $0.6 million, reflecting headcount additions associated with corporate growth as our Predecessor increased its number of events in the year ended December 31, 2011.

Table of Contents

Management's discussion and analysis of financial condition and results of operations

Other expenses (income)

Other expenses totaled $8,000 for the year ended December 31, 2011 compared to other income of $25,000 for the year ended December 31, 2010. In 2010, other income included a gain on the forgiveness of a loan totaling $21,000, which was the primary driver of the year over year change.

RESULTS OF OPERATIONS—SUCCESSOR

We started our business on July 7, 2011, and we did not have any significant operations in the year ended December 31, 2011 and the three months ended March 31, 2012 other than $(0.6) million in corporate related costs. As such, we have not provided a comparison of our results of operations for the year ended December 31, 2012 to 2011 and for the three months ended March 31, 2013 to 2012 because such a comparison would not be meaningful.

For the three months ended March 31, 2013

Revenue

Revenue for the three months ended March 31, 2013 totaled $10.2 million, of which we generated $7.9 million (77.3% of total revenue) from festivals and live events that we produced, promoted or managed, including 149 events, including one festival of greater than 10,000 attendees. Total attendance at our festivals and events was approximately 235,000 attendees. In addition, $2.3 million of revenue was contributed from our digital music sales (22.7% of total revenue).

Musical talent costs

Musical talent costs consist of fees paid to performing artists at festivals and venues. For the three months ended March 31, 2013 music talent costs totaled $3.2 million related to our live events.

Production costs

Production costs consist of costs incurred to produce events, including crew and material costs associated with staging and construction, venue costs, promotional, merchandising and travel costs, as well as Beatport's royalty and other digital music sales related expenses. For the three months ended March 31, 2013 production costs totaled $4.4 million, of this approximately $2.8 million in connection with our 149 live events. Beatport incurred $1.6 million of production costs predominately related to royalty fees.

Depreciation and amortization

Depreciation and amortization was associated with property, plant and equipment additions with depreciable lives ranging from three to seven years. Amortization expense represents the amortization of intangible assets from the date of acquisition. For the three months ended March 31, 2013, depreciation and amortization totaled $2.9 million primarily associated with the same drivers as for the fiscal year, but with an additional expenses of approximately $0.7 million related to the amortization of management agreements and $1.5 million in amortization related to the intangible assets of our recent acquisitions of Beatport and the ID&T JV.

Selling, general, and administrative expenses

Selling, general, and administrative expenses for the three months ended March 31, 2013 totaled $14.2 million, of which $3.8 million included legal, accounting, and professional fees and $5.0 million of non-cash stock based compensation expenses.

Table of Contents

Management's discussion and analysis of financial condition and results of operations

Provision for Income Taxes

Provision for income taxes for the three months ended March 31, 2013 totaled $0.6 million.

Year ended December 31, 2012

Our consolidated financial statements for the year ended December 31, 2012 include costs associated with our formation and startup costs, costs associated with identifying and evaluating our initial target acquisitions, and the results of operations for DDP beginning on June 20, 2012 and for LIC beginning on August 1, 2012, the day after their respective dates of acquisition.

Revenue

Revenue for the year ended December 31, 2012 totaled $24.8 million. This revenue was generated primarily from ticket sales related to the festivals and events that were produced and promoted by two of our acquired entities, DDP and LIC, after we acquired them. For the year ended December 31, 2012, we produced and promoted a total of 353 events, including eight festivals of greater than 10,000 attendees. Total attendance at our festivals and events was approximately 701,000. For the year ended December 31, 2012, we generated $22.9 million in ticket revenue (92.4% of total revenue), and $1.9 million from other sources (7.6% of total revenue).

Musical talent costs

Musical talent costs consist of fees paid to performing artists at festivals and venues. Musical talent costs for the year ended December 31, 2012 totaled $8.0 million. For the three months ended March 31, 2013 music talent costs totaled $3.2 million related to our live events.

Production costs

Production costs consist of costs incurred to produce events, including crew and material costs associated with staging and construction, venue costs, promotional, merchandising and travel costs, as well as Beatport's royalty and other digital music sales related expenses. Production costs for the year ended December 31, 2012 totaled $15.0 million, all related to our live events.

Depreciation and amortization

Depreciation and amortization for the year ended December 31, 2012 totaled $1.0 million and was associated with property, plant and equipment additions with depreciable lives ranging from three to seven years. Amortization expense represents the amortization of intangible assets from the date of acquisition through December 31, 2012.

Selling, general, and administrative expenses

Selling, general, and administrative expenses for the year ended December 31, 2012 totaled $17.0 million, of which $8.2 million included legal, accounting, and advisory fees incurred primarily in connection with our formation and the evaluation and negotiation of acquisitions. In addition, selling general and administrative expenses included $2.2 million of non-cash stock based compensation expense and $2.3 million of salary expense.

Provision for Income Taxes

Provision for income taxes for the year ended December 31, 2012 of $0.1 million resulted primarily from deferred taxes related to timing differences offset by a valuation allowance.

Table of Contents

Management's discussion and analysis of financial condition and results of operations

For the period from July 7, 2011 (inception) through December 31, 2011

General and administrative expenses

We incurred expenses of $0.1 million for the period from July 7, 2011 (Inception) through December 31, 2011. These expenses were primarily legal expenses incurred in connection with our formation. We incurred no expenses for the year ended December 31, 2010 as we did not begin operations until July 2011.

FINANCIAL CONDITION—SUCCESSOR

Liquidity and capital resources

We have funded our operations from July 7, 2011 (Inception) through June 5, 2013, including our acquisitions, with $62.5 million in net proceeds raised from the issuance of equity and $64.5 million of debt incurred.

As of December 31, 2012, we had cash and cash equivalents totaling $3.7 million.

On December 31, 2012, we issued a promissory note to Robert F.X. Sillerman in the principal amount of $7.0 million. The note's interest rate was 9% per annum and had a maturity date of March 31, 2013. As of April 3, 2013, the promissory note was fully repaid.

On December 31, 2012, we acquired certain assets and liabilities of MMG for $16.9 million. The purchase price comprised $5.0 million in cash, a 0.24% promissory note in the principal amount of $8.5 million, having a maturity date of February 28, 2013, and $3.4 million in our common stock valued at $5.00 per share. On March 15, 2013, we made a payment of $3.0 million to MMG and the promissory note was amended and restated to provide that the remaining amount of $5.5 million plus interest will mature and be payable on May 15, 2013.

On January 8, 2013, we closed a private placement transaction with an investor in which we issued 2,000,000 shares of common stock at a price per share of $5.00 for $10.0 million in net proceeds.

On February 22, 2013, we closed a private placement transaction with an investor in which we issued 2,000,000 shares of common stock at a price per share of $5.00 for $10.0 million in net proceeds.

On March 15, 2013, we acquired Beatport in a merger transaction for $58.6 million, consisting of $33.6 million in cash and $25.0 million in our stock valued at $5.00 per share.

On March 20, 2013, we entered into an option agreement with ID&T (the "ID&T Option") whereby we obtained the right to purchase a 75% equity interest in the ID&T Business. We paid $2.5 million in cash and issued 2,000,000 shares of our common stock to acquire the ID&T Option. The exercise price of the ID&T Option is $50.0 million in cash (including $10.0 million due 90 days after delivery by ID&T of audited financial statements for 2012). Additionally, to exercise the ID&T Option we must relinquish our right to be repaid by ID&T the $7.5 million we advanced to ID&T on March 15, 2013, which was to be repaid to us from ID&T's future distributions from the ID&T JV.

On April 1, 2013, we closed a private placement transaction with investors in which we issued 1,000,000 shares of common stock at a price per share of $10.00 for an aggregate purchase price of $10.0 million.

At December 31, 2012, we issued a secured promissory note in the principal amount of $8.5 million as part of the acquisition of certain assets and liabilities of MMG. On March 15, 2013 a payment of $3.0 million was made to Nightlife Holding, LLC and the promissory note was amended and restated

Table of Contents

Management's discussion and analysis of financial condition and results of operations

to provide that the remaining amount of $5.5 million plus interest will be payable on May 15, 2013. On May 15, 2013 the note was fully paid off.

On May 22, 2103, we paid Totem a deposit of AUD$5.0 million (or $4.8 million as of May 22, 2013) as acquisition consideration.

On June 24, 2013, we paid a deposit of $2.5 million to Made as acquisition consideration.

Based on our current business plan, we believe that the combination of our current sources of liquidity, the proceeds from private sales of our common stock, the proceeds from this offering and the proceeds from the First Lien Term Loan Facility will be sufficient to meet our anticipated cash needs for at least the next 12 months. We are in advanced discussions with a number of commercial lenders regarding a new $65.0 million revolving credit facility that would replace our First Lien Term Loan Facility and potentially an incremental facility. The new revolving credit facility would be conditioned on the completion of this initial public offering and would be closed concurrently with the closing of this initial public offering.

We intend to continue to acquire additional companies in the live events and consumer Internet industries, and we are currently in the process of exploring a variety of financing options in conjunction with consummating further acquisitions. There can be no assurance that we will be able to successfully raise the capital required to complete future acquisitions.

If our current estimates of revenue, expenses or capital or liquidity requirements change or are inaccurate, or if cash generated from operations is insufficient to satisfy our liquidity requirements, we may seek to sell additional equity or debt securities, or arrange debt financing. In addition, we may seek additional financing to give us financial flexibility to pursue attractive acquisition or investment opportunities that may arise in the future. We cannot be certain that additional funds will be available to us on favorable terms when required, or at all.

First lien term loan facility

On March 15, 2013, certain of our subsidiaries entered into a $49.5 million term loan facility (the "First Lien Term Loan Facility") with Barclays Bank PLC as administrative agent and Barclays Bank PLC, UBS Securities LLC, and Jefferies Group LLC as lenders. The borrower under the First Lien Term Loan Facility is our indirect, wholly-owned subsidiary SFX Intermediate Holdco II LLC (the "Borrower). The First Lien Term Loan Facility is guaranteed by SFX Intermediate Holdco I LLC, the immediate parent company of the Borrower ("Holdings"), the Borrower, LIC, Pita I, LLC, Beatport, Beatport Japan, LLC, SFX-Nightlife Operating LLC, SFX-IDT N.A. Holding LLC, the ID&T JV, ID&T/SFX Q-Dance LLC, ID&T/SFX Sensation LLC, ID&T/SFX Mysteryland LLC, ID&T/SFX TomorrowWorld LLC and all of Holdings' future subsidiaries (the "Guarantors"), and by Mr. Sillerman as further described below. The First Lien Term Loan Facility is secured by a first-priority security interest in all the existing and future assets of the Borrower and the Guarantors.

Mr. Sillerman entered into a guarantee agreement (the "Sillerman Guarantee") with Barclays Bank PLC, as collateral agent for the benefit of the other lender parties, in which he personally guaranteed all our obligations under the First Lien Term Loan Facility.

On June 5, 2013 the First Lien Term Loan Facility was amended (the "Amendment") to increase the facility amount by $15 million, to a total of $64.5 million. The Guarantors reaffirmed their guarantees of the First Lien Term Loan Facility in the Amendment, and Mr. Sillerman entered into an amendment to the Sillerman Guarantee to reaffirm his guarantee thereunder in connection with the Amendment.

Table of Contents

Management's discussion and analysis of financial condition and results of operations

Borrowings under the First Lien Term Loan Facility bear interest, at the Borrower's option, at a rate per annum equal to either (a) (i) a rate per annum equal to the highest of (1) the rate of interest per annum publicly announced from time to time by the Administrative Agent under the First Lien Term Loan Facility as its prime rate in effect on such day at its principal office in New York City, (2) (x) the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published by the Federal Reserve Bank of New York on the business day next succeeding such day plus (y) 0.50%, (3) (x) a rate per annum equal to (I) the offered rate which appears on the page of the Reuters Screen which displays an average British Bankers Association Interest Settlement Rate (such page currently being LIBOR01 page) for deposits in U.S. dollars being delivered in the London interbank market for a one-month term, determined by the Administrative Agent under the First Lien Term Loan Facility as of approximately 11:00 a.m. (London, England time) two Business Days prior to the applicable borrowing or conversion date divided by (II) one minus the applicable reserve percentage (with a rate floor of 1.25% per annum) plus (y) 1.00% and (4) 2.25% per annum, plus (a) 6.50% per annum or (b) (i) a rate per annum equal to (1) for each one, two, three or six month (or if agreed to by all the lenders under the First Lien Term Loan Facility, nine or twelve months) interest period as selected by the Borrower, the offered rate which appears on the page of the Reuters Screen which displays an average British Bankers Association Interest Settlement Rate (such page currently being LIBOR01 page) for deposits (for delivery on the first day of such interest period) with a term equivalent to such interest period in U.S. dollars, determined by the Administrative Agent under the First Lien Term Loan Facility as of approximately 11:00 a.m. (London, England time), two Business Days prior to the commencement of such interest period divided by (2) one minus the applicable reserve percentage (with a rate floor of 1.25% per annum) plus (ii) 7.50% per annum. Upon the occurrence and during the continuance of any Event of Default under the First Lien Term Loan Facility, all outstanding borrowings thereunder will automatically bear interest at a rate per annum equal to the applicable interest rate plus 2.00% per annum.

The First Lien Term Loan Facility matures on September 15, 2014, provided that the maturity date will be extended to March 13, 2015 if we contribute to the Borrower at least $50.0 million of proceeds from our initial public offering (so long as we raise net proceeds of at least $100.0 million) and the Borrower uses such proceeds to make a prepayment equal to at least 50.0% of the borrowings then outstanding under the First Lien Term Loan Facility.

The Borrower may prepay the First Lien Term Loan Facility at any time without penalty, subject to breakage costs. The Borrower is also required to make prepayments (subject to certain basket amounts and exceptions) (collectively, the "Mandatory Prepayments") equal to:

•: 75.0% of the annual excess cash flow of Holdings and its subsidiaries for the year-ended December 31, 2013;
•: 100% of the net proceeds from certain asset sales, casualty events, and debt issuances, by Holdings and its subsidiaries; and
•: 30.0% of the outstanding borrowings within 60 days of the date Mr. Sillerman either announces he will not serve as our chairman, president, chief executive officer, or equivalent officer, ceases serving as our chairman, president, chief executive officer, or equivalent officer, or is incapable of serving as our chairman, president, chief executive officer, or equivalent officer.

Table of Contents

Management's discussion and analysis of financial condition and results of operations

Lien Term Loan Facility; and requirements to join future subsidiaries of Holdings as guarantors and secured parties. The First Lien Term Loan Facility includes customary restrictive covenants, subject to certain materiality thresholds and exceptions, including covenants limiting the Borrower and the loan parties' ability to

•: incur certain types of indebtedness and liens;
•: merge with, make an investment in or acquire property or assets of another company;
•: make capital expenditures;
•: pay dividends;
•: repurchase shares of our outstanding stock;
•: a negative pledge;
•: modifying certain documents;
•: make loans;
•: dispose of assets;
•: prepay the principal on other indebtedness;
•: liquidate, wind up or dissolve; or
•: enter into certain transactions with affiliates.

The First Lien Term Loan Facility does not include any financial covenants.

The First Lien Term Loan Facility includes customary events of default, subject to certain materiality thresholds and cure periods, including: the Sillerman Guarantee ceasing to be in full force and effect or Mr. Sillerman breaching any material term of the Sillerman Guarantee; or a change in control occurring. A change in control is defined in the First Lien Term Loan Facility to include the occurrence of any of the following: (i) Holdings ceases to be wholly-owned directly or indirectly, by us or Borrower ceases be directly wholly-owned by Holdings; (ii) at any time prior to our initial public offering (so long as we raise net proceeds of at least $100 million) and for any reason whatsoever, Mr. Sillerman and certain affiliates and senior management cease to own, directly or indirectly, at least 40% of our outstanding voting equity or any "person" or "group" own a greater percentage of our voting equity than beneficially owned by Mr. Sillerman and certain affiliates and senior management; (iii) at any time after our initial public offering (so long as we raise net proceeds of at least $100 million) and for any reason whatsoever, Mr. Sillerman and certain affiliates cease to own, directly or indirectly, at least 30% of our outstanding voting equity or any "person" or "group" other than Mr. Sillerman and certain affiliates and senior management beneficially own a greater percentage of our voting equity than beneficially owned by Mr. Sillerman and certain affiliates and senior management; or (iv) the majority of the seats (other than vacant seats) on our board of directors cease to be occupied by persons who either were members of our board of directors on March 15, 2013 or were nominated for election by a majority of our board of directors who were directors at the time of the closing of the First Lien Term Loan Facility or whose election or nomination for election was previously approved by a majority of such directors.

Table of Contents

Management's discussion and analysis of financial condition and results of operations

Cash flows

Year ended December 31, 2012

Cash flows from operating activities

Cash used in operating activities totaled $6.6 million for the year ended December 31, 2012 and were principally attributable to the operations of DDP and LIC, whose results have been included since their respective dates of acquisition in 2012 and corporate overhead. The principal driver of this was our net loss of $16.2 million, partially offset by non-cash expense of $2.2 million plus changes in our working capital of $6.8 million.

No cash was used by operating activities for the period from July 7, 2011 (Inception) to December 31, 2011. While we incurred legal expenses of $0.1 million in conjunction with our formation during this period, the expenses were accrued at December 31, 2011 and not settled in cash until the following year. We incurred no expenses in 2010, as we did not begin operations until July 2011.

Cash flows from investing activities

Cash used by investing activities totaled $29.2 million for the year ended December 30, 2012. Cash totaling $16.1 million was used to fund the purchase of our three acquisitions in 2012, DDP, MMG and LIC, and $0.6 million was used to fund the purchase of equipment used in the production of events. $12.5 million was used to fund our investment in the ID&T JV.

There was no cash used in investing activities for the period from July 7, 2011 (Inception) to December 31, 2011.

Cash flows from financing activities

Cash provided by financing activities for the year ended December 31, 2012 totaled $39.5 million, and was comprised of the net proceeds from the issuance of our common stock of $32.5 million and proceeds from notes payable of $7.0 million.

There was no cash used for financing activities for the period from July 7, 2011 (Inception) to December 31, 2011.

For the three months ended March 31, 2013

Cash flows from operating activities

Cash used in operating activities totaled $6.7 million for the three months ended March 31, 2013 and was principally attributable to our net loss of $20.0 million, partially offset by non-cash depreciation and amortization expense of $2.9 million, $5.0 million in stock compensation expense, and $4.1 million of interest and deferred income tax provisions less a decrease in working capital of $1.3 million.

No cash was used by operating activities for the three months ended March 31, 2012. While we incurred legal, formation, and general operating expenses of $1.4 million in conjunction with our formation during this period, the expenses were accrued at March 31, 2012 and not settled in cash until a later date.

Cash flows from investing activities

Cash used by investing activities totaled $35.5 million for the three months ended March 31, 2013. Cash totaling $21.9 million was used to fund the purchase of Beatport, net of cash acquired,

Table of Contents

Management's discussion and analysis of financial condition and results of operations

$2.5 million to acquire the ID&T Option, $3.0 million payment for the Nightlife Holdings, LLC note, a $7.5 million advance to ID&T and $0.6 million to purchase equipment and software.

There was no cash used in investing activities for the three months ended March 31, 2012.

Cash flows from financing activities

Cash provided by financing activities for the three months ended March 3, 2013 totaled $60.4 million, and was comprised of the net proceeds from the issuance of our common stock of $20.0 million, net proceeds from the First Lien Term Loan Facility of $47.0, and the payment of a related party note of $6.6 million.

There was no cash used for financing activities for the three months ended March 31, 2012.

Capital expenditures

Our capital expenditures for the year ended December 31, 2012 was $0.6 million for the companies that we owned as of December 31, 2012.

Contractual and commercial commitments

Our contractual obligations as of March 31, 2013 are as follows.

	Payments due by period

($ in 000s)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years

Senior Secured Credit Facility(a)	$	56,399	$	4,733	$	51,666	$	—	$	—
Notes payable(b)		5,513		5,513		—		—		—
Operating leases(c)		2,929		1,113		1,815		—		—
Other long-term obligations(d)		2,500		—		2,500		—		—

Total	$	66,400	$	11,360	$	55,981	$	—	$	—

(a): On March 15, 2013, our subsidiary, SFX Intermediate Holdco II LLC, entered into a credit agreement with Barclays Bank PLC and other lenders, which provided for a $49.5 million senior secured first lien term loan facility. The First Lien Term Loan Facility matures on September 15, 2014, provided that the maturity date will be extended to March 13, 2015 if we contribute to the Borrower at least $50.0 million of proceeds from our initial public offering (so long as we raise net proceeds of at least $100.0 million) and the Borrower uses such proceeds to make a prepayment equal to at least 50.0% of the borrowings then outstanding under the First Lien Term Loan Facility.
(b): This is the remaining portion of the note we executed with the former equity holders of Nightlife Holdings LLC as part of the purchase agreement at December 31, 2012. The note accrues interest at a 0.22% rate and was paid off on May 15, 2013.
(c): The operating leases include the following: our corporate headquarters in New York the ID&T JV's corporate office in New York; Beatport's offices in Colorado, Los Angeles, Luxembourg and Germany; LIC's corporate office and operating lease warehouse facility in Florida; MMG's corporate office in Florida; and Disco's corporate office in North Carolina.
(d): Other long-term obligations includes contingent consideration for the former owners of Nightlife Holdings LLC. The amount disclosed in the table is based on projected 2014 EBITDA (as defined in our agreement with the former owners of MMG).

Table of Contents

Management's discussion and analysis of financial condition and results of operations

Our contractual obligations on a pro forma basis as of March 31, 2013, are as follows.

	Payments due by period

($ in 000s)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years

Senior Secured Credit Facility(a)	$	73,073	$	5,751	$	67,322	$	—	$	—
Notes payable(b)		—		—		—		—		—
Operating leases		2,928		1,113		1,815		—		—
Purchasing obligations(c)		23,378				8,000				15,378
Other long-term obligations		2,500		—		2,500		—		—

Total	$	101,879	$	6,864	$	79,637	$	—	$	15,378

(a): On June 5, 2013, we drew down an additional $15.0 million on this loan facility.
(b): The Note that was outstanding with the former shareholders of Nightlife Holdings at March 31, 2013 was paid off in full on May 15, 2013.
(c): The purchasing obligations include the following; upon closing the i-Motion transaction, we will be required to purchase the remaining 40% that is not being sold for an estimated fair value of $8.0 million by December 2014; and upon closing the planned Made acquisition, we will be required to purchase the remaining 30% that is not being sold for an estimated $15.4 million in 2018.

INTERNAL CONTROL OVER FINANCIAL REPORTING

In connection with the audit of our consolidated financial statements as of and for the year ended December 31, 2012, we identified the following material weaknesses in our internal control over financial reporting.

•: A lack of contemporaneous documentation in connection with awards of stock based compensation. This resulted in treating certain awards informally communicated to recipients in 2012 as having been granted in 2013 for accounting purposes.
•: Improperly characterizing certain acquisition transactions as having closed prior to us obtaining the control necessary for such a characterization. These acquisition transactions subsequently failed to close.
•: There were an unusually large amount of closing adjustments in connection with the audit for the year ended December 31, 2012, primarily in respect of accruals, cut-offs and purchase accounting. In addition, certain significant transactions were not accounted for properly. Further, we restated our previously issued consolidated financial statements as of and for the year ended December 31, 2012 to correct classification for certain shares of common stock and non-controlling interest. We determined that certain shares of common stock were issued in 2012 with redemption features, which should have been classified as temporary equity in accordance with the provisions of ASC 480-10-S99 for public companies. Additionally, in connection with the acquisition of MMG, we entered into a contract which allows us to call the remaining interest we do not own, as well as providing that the minority interest holder may put their interest to us at a multiple of six times 20% of SFX Nightlife's 2014 EBITDA. Similarly, we determined that the non-controlling interest should have been classified as redeemable non-controlling interest and included as part of temporary equity, as required for public companies. We believe that these issues are related, in part, to a lack of

Table of Contents

Management's discussion and analysis of financial condition and results of operations

sufficient staff with appropriate training in GAAP and SEC rules and regulations with respect to financial reporting functions, as well as the lack of robust accounting systems.

In addition, the auditors for our Predecessor, DDP and MMG have identified a material weakness in the internal controls of each of these businesses that relates to the proper application of accrual based accounting under GAAP.

We believe that measures we have already implemented, and additional measures we expect to implement in the future, will remediate these material weaknesses in our internal control over financial reporting and in the internal controls of our acquired businesses. To date, we have taken, or are in the process of taking, the following actions.

•: Adding new accounting and financial personnel, both as senior managers and as junior staff. To date, we have hired several senior members of our accounting and finance team, including hiring a new Chief Financial Officer with over 20 years of experience in finance and capital markets, a Chief Accounting Officer with over 30 years of financial management and audit experience, a Director of SEC reporting with over ten years of experience in public accounting and a corporate treasurer with 25 years of relevant experience. We intend to hire additional experienced personnel to work as senior members of our accounting team and have also hired or will hire several staff accountants to work both at the corporate level and at our acquired businesses.
•: Engaging the services of an accounting controls expert with over 40 years of accounting experience, including 22 years as controller of a music publishing company. This individual is acting as a consultant to assist us in analyzing and implementing controls and processes at our acquired companies and to review our operations and make recommendations regarding systems and procedures.
•: Engaging an accounting firm to provide an outsourced internal audit function, with a view to providing internal control procedure recommendations and support for documenting our compliance with Sarbanes-Oxley.
•: Hiring a general counsel and an associate general counsel and appointing a full board of directors that includes a compensation committee and independent compensation expert and that has a formal policy regarding the issuance of stock based compensation.
•: Implementing improvements to our closing procedures and consolidation processes and improvements to our accounting software as it relates to accounts payable. We have also purchased an enterprise-wide accounting system that we plan to implement during the course of 2013, including at acquired companies.

We plan to continue to evaluate our internal controls and make enhancements as appropriate. If we are unable to correct deficiencies in internal controls in a timely manner, our ability to record, process, summarize and report financial information accurately and within the time periods specified in the rules and forms of the SEC will be adversely affected. See "Risk Factors—We have identified material weaknesses in our internal controls over financial reporting that, if not properly remediated, could result in material misstatements in our financial statements in future periods."

Notwithstanding these material weaknesses, we believe that our restated consolidated financial statements included elsewhere in this prospectus fairly represent our consolidated financial position as of, and our consolidated results of operations for the year ended December 31, 2012.

Off-balance sheet arrangements

We had no off-balance sheet arrangements or guarantees of third-party obligations at March 31, 2013, December 31, 2012 and December 31, 2011.

Table of Contents

Management's discussion and analysis of financial condition and results of operations

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our consolidated financial statements are prepared in accordance with GAAP. In connection with the preparation of our consolidated financial statements, we are required to make assumptions and estimates about future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and the related disclosures. We base our assumptions, estimates, and judgments on historical experience, current trends, and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. On a regular basis, we review the accounting policies, assumptions, estimates, and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates and such differences could be material.

Our significant accounting policies are discussed in Note 1 of our consolidated financial statements. We believe that the following are the most critical to understanding and evaluating our reported financial results. We have reviewed these critical accounting estimates and related disclosures with our Audit Committee.

Stock-Based Compensation

We measure and recognize expense for stock-based compensation based on the grant date fair value of the award on a straight-line basis over the requisite service period. Because our stock is not publicly traded, we must estimate the fair value of our common stock for purposes of determining the fair value of our option awards, as discussed in "—Valuations of Common Stock" below. Determining the fair value of stock-based awards at the grant date requires judgment. We use the Black-Scholes option pricing model to determine the fair value of our stock option awards. We used a third-party valuation firm to perform the option pricing under the Black-Scholes model. The determination of the grant date fair value of our stock option awards using an option pricing model is affected by the estimated fair value per share of the common stock underlying those options as well as assumptions regarding a number of other complex and subjective variables. These variables include the risk-free interest rates, expected dividends, our expected stock price volatility over the expected term of the options, and stock option exercise and cancellation behaviors, which are estimated as follows:

•: Risk-Free Interest Rate. The risk-free interest rate assumption used is based on observed market interest rates appropriate for the term of employee options.
•: Dividend Yield. We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, we used an expected dividend yield of zero.
•: Expected Volatility. Because we do not have a trading history for our common stock, we have estimated the expected stock price volatility for our common stock by taking the average historic price volatility for industry peers based on price observations over a period equivalent to the expected term of the stock option grants. Industry peers consist of public companies in the live event industry. We intend to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of our own common stock share price becomes available, or unless circumstances change such that the identified companies are no longer similar to us, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation.
•: Expected Term. We estimated the expected term for a "plain vanilla" option using the simplified method allowed under current guidance, which uses the midpoint between the graded vesting period and the contractual termination date.

Table of Contents

Management's discussion and analysis of financial condition and results of operations

We used the following assumptions in our application of the Black-Scholes option pricing model for the periods presented in the table below:

	March 31,	December 31,

	2013	2012	2011

Risk-free interest rate	0.84%-1.47%	0.77%-1.40%	N/A
Dividend yield	—	—	N/A
Volatility factors	60%	60%	N/A
Weighted average expected life (in years)	5-7.6	5-7.6	N/A

In addition, ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We applied an estimated forfeiture rate.

Future expense amounts for any particular period could be affected by changes in our assumptions or changes in market conditions.

Valuations of Common Stock

We are required to estimate the fair value of the common stock underlying our share-based awards when performing the fair value calculations with the Black-Scholes option-pricing model. The fair value of the common stock underlying our share-based awards was determined by our board of directors, with input from management and evidence of fair value based on the prior sales of company stock method. We believe that our board of directors has the relevant experience and expertise to determine the fair value of our common stock. Our board of directors determined the fair value of our common stock on the date of grant based on a number of factors including:

•: amounts recently paid by investors for our stock in an arm's-length transactions;
•: numerous arms-length negotiations related to acquisitions where a portion of the purchase price was satisfied with shares of our common stock;
•: future financial and business growth projections;

The prior sales of company stock or back-solve method estimates value by considering any prior arm's length sales of the company's equity. When considering prior sales of the company's equity, the valuation considers the size of the equity sale, the relationship of the parties involved in the transaction, the timing of the equity sale, and the financial condition of the company at the time of the sale.

Table of Contents

Management's discussion and analysis of financial condition and results of operations

The following table summarizes, by grant date, information regarding stock options granted from January 1, 2012 through March 31, 2013.

Grant Date		Issuance Date(1)	Exercise Price		Fair Value per share of common stock		Aggregate Grant Date Fair Value


October 18, 2012	2,000,000	March 1, 2012	$	2.00	$	5.00	$	7,429,557
December 1, 2012	112,500	August 20, 2012	$	2.00	$	5.00	$	420,151
December 1, 2012	112,500	August 20, 2012	$	4.00	$	5.00	$	343,491
November 13, 2012	400,000	October 18, 2012	$	2.00	$	5.00	$	1,495,640
December 18, 2012	625,000	December 18, 2012	$	4.00	$	5.00	$	1,849,660
February 22, 2013	275,000	April 23, 2013	$	5.00	$	5.00	$	778,522
February 22, 2013	7,500	February 23, 2013	$	5.00	$	5.00	$	10,217
February 22, 2013	850,000	October 18, 2012	$	2.00	$	5.00	$	3,138,602
February 22, 2013	3,500,000	March 1, 2012	$	2.00	$	5.00	$	13,001,724
February 23, 2013	3,000	December 18, 2012	$	4.00	$	5.00	$	8,439
February 23, 2013	150,000	October 2, 2012	$	4.00	$	5.00	$	440,220
February 23, 2013	200,000	October 18, 2012	$	4.00	$	5.00	$	619,267
February 23, 2013	500,000	October 18, 2012	$	4.00	$	5.00	$	1,504,375
February 23, 2013	7,500	July 2, 2012	$	3.00	$	5.00	$	24,546
February 23, 2013	10,000	May 17, 2012	$	3.00	$	5.00	$	32,728

(1): In some cases, contemporaneous documentation of these grants could not be located. While some of these grants were documented at a later date in 2012, some were not fully documented until 2013. As a result of the issues with respect to contemporaneous documentation of our option grants, we recorded compensation expense with respect to option grants at the time it was believed that the documentation of such grants met all key criteria under ASC Topic 718 and could be evidenced (referred to in the table above as the "Grant Date"). In some cases this was 2013 and accordingly, 2012 contains no expense related to those stock option awards. However, for administrative and legal purposes the company has utilized the "issuance" date for a number of purposes, including the determination of the vesting period.

In utilizing the prior sales of company stock method, we considered recent sales of its common stock with new investors the most relevant in estimating the fair value of its common stock since we are not in distress and each party has the best incentive to not overpay or oversell its securities. We also considered all events that were known or knowable at the transaction date, including significant value-creating milestones that could affect the value of its common stock. For all of the options granted during 2012 and the three months ended March 31, 2013, we used $5.00 per share of common stock to calculate the stock-based compensation expense for the options. The board of directors determined, with input from management, based on sales of common stock with unrelated third parties during this time period that $5.00 per common share represented fair value. At the time of grant we did not choose to obtain a contemporaneous valuation of our common stock from a third-party valuation specialist, in the judgment of the board of directors, with input from management, the multiple third party transactions at $5.00 per common share during this period represented the best indicator of fair value.

However, we did subsequently hire an unrelated third-party valuation specialist to value the shares of our common stock at October 28, 2012, December 31, 2012, and March 31, 2013. The valuation analysis was not used in place of the methodology discussed above, but as a reference point to confirm

Table of Contents

Management's discussion and analysis of financial condition and results of operations

that the valuation of $5.00 per share was reasonable. The range of fair values provided by the specialist at each of these dates is as follows:

	Low		High


October 28, 2012	$	3.73	$	5.29
December 31, 2012	$	4.17	$	5.98
March 31, 2013	$	5.78	$	8.59

The board of directors, with input from management, concluded that $5.00 per share of common stock was the appropriate value to utilize in determining the fair value of each of the stock option grants. The $5.00 value we used is within the range of fair value provided by the valuation specialist for October 28, 2012 and December 31, 2012, for all options granted from October 28, 2012 through December 31, 2012. The valuation at March 31, 2013, has a fair value range in excess of the $5.00 per share, but we believe that $5.00 per share is the appropriate valuation for shares granted between January 1, 2013 and February 23, 2013, as we completed several third-party sales of common stock at $5.00 per share during this period. In addition, we do not believe that the fair value of its shares increased until March 15, 2013, through March 31, 2013, when it completed the acquisition of the ID&T JV and the acquisition of Beatport, which greatly increased our value.

Revenue recognition

Revenue from festivals and events are recognized when the performance occurs. Ticket sales and any sponsorship revenue collected in advance of an event date are recorded as deferred revenue.

We evaluate the criteria outlined in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Subtopic 605-45, "Revenue Recognition—Principal Agent Considerations," in determining whether it is appropriate to record the gross amount of revenue and related costs or the net revenue. Under this accounting guidance, if we are the primary obligor to perform the services being sold, have general inventory risk as it pertains to recruiting and compensating the talent, have the ability to control the ticket pricing, have discretion in selecting the talent, are involved in the production of the event, generally bear the majority of the credit or collection risk, or have several but not all of these indicators, revenue is recorded gross. If we do not have several of these indicators, we record revenue or losses on a net basis.

Allowances for doubtful accounts

We record a provision for doubtful accounts based on historical experience and a detailed assessment of the collectability of our accounts receivable. To assist with the estimate, our management considers certain factors such as historical experience, industry data, credit quality, age of accounts receivable balances, and current economic conditions that may affect a customer's ability to pay. In cases where we become aware of circumstances that may impair a specific customer's ability to meet its financial obligations, we record a specific allowance against amounts due from the customer and thereby reduce the net recognized receivable to the amount we reasonably believe will be collected. There is significant judgment involved in estimating the allowance for doubtful accounts.

Goodwill

Table of Contents

Management's discussion and analysis of financial condition and results of operations

value of the reporting unit to its net book value, including goodwill. If the net book value exceeds its fair value, then we would perform the second step of the goodwill impairment test to determine the amount of the impairment loss. When performing the valuation of our goodwill, we make assumptions regarding our estimated future cash flows to determine the fair value of our business. If our estimates or related assumptions change in the future, we may be required to record impairment loss related to our goodwill. We have not recognized any goodwill impairments since our inception.

Impairment of long-lived assets

We assess the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured first by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, an impairment loss would be recognized. When measuring the recoverability of these assets, we will make assumptions regarding our estimated future cash flows expected to be generated by the assets. If our estimates or related assumptions change in the future, we may be required to impair these assets. We have not recognized any impairment of long-lived assets to date.

Income taxes

We account for our income taxes in accordance with the liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. Management must make assumptions, judgments, and estimates to determine our current provision for income taxes and also our deferred tax assets and liabilities as well as any valuation allowance to be recorded against a deferred tax asset.

Our assumptions, judgments, and estimates relative to the current provision for income taxes take into account current tax laws, our interpretation of current tax laws, and possible outcomes of current and future audits conducted by domestic tax authorities. We have established reserves for income taxes to address potential exposures involving tax positions that could be challenged by tax authorities. Although we believe our assumptions, judgments, and estimates are reasonable, changes in tax laws or our interpretation of tax laws, and the resolution of potential tax audits could significantly impact the amounts provided for income taxes in our financial statements.

Our assumptions, judgments, and estimates relative to the value of a deferred tax asset take into account predictions of the amount and category of future taxable income, such as income from operations or capital gains income. Actual operating results and the underlying amount and category of income in future years could render our current assumptions, judgments, and estimates of recoverable net deferred taxes inaccurate. Any of the assumptions, judgments, and estimates mentioned above could cause our actual income tax obligations to differ from our estimates, thus materially impacting our financial position and results of operations.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. Our primary market risk exposure is in the area of interest rate risk. We incur interest expense on borrowing outstanding under the First Lien Term Loan Facility. The First Lien Term Loan Facility has variable interest rates.

Table of Contents

Management's discussion and analysis of financial condition and results of operations

Loan Facility as its prime rate in effect on such day at its principal office in New York City, (2) (x) the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published by the Federal Reserve Bank of New York on the business day next succeeding such day plus (y) 0.50%, (3) (x) a rate per annum equal to (I) the offered rate which appears on the page of the Reuters Screen which displays an average British Bankers Association Interest Settlement Rate (such page currently being LIBOR01 page) for deposits in U.S. dollars being delivered in the London interbank market for a one-month term, determined by the Administrative Agent under the First Lien Term Loan Facility as of approximately 11:00 a.m. (London, England time) two Business Days prior to the applicable borrowing or conversion date divided by (II) one minus the applicable reserve percentage (with a rate floor of 1.25% per annum) plus (y) 1.00% and (4) 2.25% per annum, plus (ii) 6.50% per annum or (b) (i) a rate per annum equal to (1) for each one, two, three or six month (or if agreed to by all the lenders under the First Lien Term Loan Facility, nine or twelve months) interest period as selected by the Borrower, the offered rate which appears on the page of the Reuters Screen which displays an average British Bankers Association Interest Settlement Rate (such page currently being LIBOR01 page) for deposits (for delivery on the first day of such interest period) with a term equivalent to such interest period in U.S. dollars, determined by the Administrative Agent under the First Lien Term Loan Facility as of approximately 11:00 a.m. (London, England time), two Business Days prior to the commencement of such interest period divided by (2) one minus the applicable reserve percentage (with a rate floor of 1.25% per annum) plus (ii) 7.50% per annum.

As of June 15, 2013, the interest rate was 8.75%. Based on our borrowings at June 15, 2013, assuming a 1% increase over such 8.75%, our annual interest cost would increase $0.6 million.

Our operations, at this time, are not subject to risks of material foreign currency fluctuations, nor do we use derivative financial instruments in our investment practices. We place our marketable investments in instruments that meet high credit quality standards. As our operations expand globally, we may become exposed to the risk that our earnings and cash flows could be adversely impacted by fluctuations in foreign exchange prices. At March 31, 2013, we were not a party to any derivative financial instruments.

RECENTLY ISSUED AND ADOPTED ACCOUNTING PRONOUNCEMENTS

On April 5, 2012, the JOBS Act became law, modifying regulations on capital raising efforts for companies defined as emerging growth companies and expanding opportunities for raising private capital. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

In September 2011, the FASB issued Accounting Standards Update ("ASU") No. 2011-08, "Testing Goodwill for Impairment" that amended the guidance on goodwill impairment testing to allow companies to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If, as a result of the qualitative assessment, an entity determines that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. The amendment is effective for fiscal years beginning after December 15, 2011, but early adoption is permitted. Such guidance will be applicable to any such interim or annual impairment assessments performed after January 1, 2012.

Table of Contents

Business

INTRODUCTION

We present leading EMC festivals and events, including Tomorrowland, Sensation, Mysteryland, Q-Dance, Stereosonic, Electric Zoo, Decibel, Nature One, MayDay, Ruhr-in-Love and Life in Color, many of which have more than a decade of history, passionate followers and vibrant social communities. We are continually investing in our festivals and events to add new and exciting creative elements, expand into new markets, and launch new events, all in order to provide the best entertainment experiences in the world for EMC fans. Many of the festivals we have or will present have a long history and have achieved substantial popularity and success in Europe while also attracting fans globally. For example, Tomorrowland sold out all of its approximately 180,000 tickets to the 2013 festival in Belgium in one second and saw significant demand from U.S.-based fans, each seeking to purchase multiple tickets. To meet the growing demand of the EMC community in the United States and other regions around the world, we plan to introduce some of the most popular festivals and events to certain areas for the first time. At its original location in Amsterdam, Sensation has consistently sold out since its inception in 2000, including all 45,000 tickets for 2013. Our inaugural Sensation event in North America, held in Toronto in May 2013, attracted over 25,000 attendees. We have announced four additional Sensation events in North America for 2013, which will be held in Las Vegas, Miami, New York, and San Francisco, and our first North American Tomorrowland festival, TomorrowWorld, which we will hold in September 2013.

Table of Contents

Business

reflecting this trend, in 2012 the National Academy of Recording Arts and Sciences added a Dance/Electronic category for the Grammy Awards, Billboard launched a Dance/Electronic chart, and in February 2013, a Dance/Electronic song reached #1 on the Billboard Hot 100 chart for the first time. EMC festivals and events typically feature many different artists and DJs as well as elaborate sets, lighting and special effects centered on different creative themes. These festivals and events have become highly experiential and social happenings that are enjoyed by thousands of fans. These experiences, further propelled via social media and shared by millions of fans globally, are at the heart of the generational movement that is EMC.

We were founded by Robert F.X. Sillerman and our senior management team has extensive global experience in entertainment, consumer internet and music-related businesses, including working with creative talent, producing and promoting live events and acquiring and integrating companies. Our team also includes a new generation of promoters, producers and executives who are innovators and leaders in the EMC community with established businesses and experience in creating spectacular events that host tens of thousands of people. These team members are generally managers or former owners of our acquired companies and partnerships who received equity in SFX as consideration when we acquired their businesses.

Asset/Status					Description


BEATPORT, LLC "Beatport" Completed	100	%	NA	NA	Principal online resource and destination for EMC DJs and enthusiasts, offering music for purchase in multiple downloadable formats (including uncompressed, high quality audio files) and providing unique music discovery tools for DJs and fans.

Disco Donnie Presents "DDP" Completed	100	%	600 / 8	867	Promoter of EMC events in North America since 2000, including ownership interests in large EMC festivals.

Table of Contents

Business

Asset/Status					Description


ID&T Holding B.V. "ID&T" Planned	75	%	35 / 29	964	One of the largest content providers and producers of international EMC live events across 19 countries and four continents. ID&T branded festivals include Tomorrowland, Mysteryland, Sensation, Q-Dance, B2S, Decibel and Defqon.1. At the same time as this acquisition, we will increase our interest in the ID&T JV from 51% to 75%.

I-Motion GmbH Events & Communication "i-Motion" Planned	60	%	7 / 5	208	Leading promoter and producer of EMC festivals and events in Germany, with key brands including Nature One, Germany's largest open-air EMC festival.

Life in Color "LIC" Completed	100	%	138 / 4	424	Promoter and organizer of branded events that feature live music by DJs, acrobatic acts and "paint blasts."

Made Event, LLC and EZ Festivals LLC collectively, "Made" Planned	70	%	14 / 1	130	Promoter and producer of EMC festivals and events in the United States, including Electric Zoo, held annually in New York City.

MMG Nightlife LLC "MMG" Completed	80	%	NA	NA	Management company that manages some of the most popular EMC venues in South Beach, Florida.

Totem Onelove Group Pty Ltd and Totem Industries Pty Ltd collectively, "Totem" Planned	100	%	15 / 5	247	Promoter and producer of leading Australian EMC festival, Stereosonic, a five city touring outdoor festival held annually in summer (November/December) in conjunction with a touring and promotion business.

We describe the terms of these acquisitions in greater detail under "Business—Our History and Acquisitions—Planned acquisitions". Although, we consider each of these acquisitions to be a "probable acquisition" for the purposes of Rule 3-05 of Regulation S-X, it is possible that we will fail close these acquisitions or that they will otherwise fail to be successful. For more information, see "Risk Factors—Risks Related to Our Acquisition Strategy."

Table of Contents

Business

March 31, 2013, respectively), and other sources including promoter, license fees, sponsorship, and management fees (collectively, 17% and 12% of total revenue on a pro forma basis for the year ended December 31, 2012 and the three months ended March 31, 2013, respectively). On a pro forma basis for our completed and probable acquisitions, we generated revenue of $242.0 million and Adjusted EBITDA of $14.6 million and incurred net losses of $48.9 million for the year ended December 31, 2012, and generated revenue of $36.2 million and Adjusted EBITDA of $(9.2) million and incurred net losses of $31.7 million for the three months ended March 31, 2013.

COMPETITIVE STRENGTHS

•: History of creativity and innovation. We create and produce many of the most recognized and well attended EMC festivals and events in the world, including, on a pro forma basis for our probable acquisitions, Tomorrowland, Sensation, Mysteryland, Q-Dance, Stereosonic, Electric Zoo, Decibel, Nature One, MayDay, Ruhr-in-Love and Life in Color. At our events and festivals, we use artistic, interactive, performance and visual elements, in addition to the music, to create an all-encompassing and compelling fan experience. For example, Life in Color shows include acrobatic acts and "paint blasts" in addition to DJs, and our other festivals include production elements such as elaborate sets, themes, lasers, fog machines and videos. We believe the appeal of our festivals and events is demonstrated by consistent attendance growth and ticket demand that often outstrips the available capacity. For example, in 2013, Tomorrowland sold out in pre-registration its approximately 180,000 tickets, which was more than triple the tickets it sold in 2009.
•: Active, year-round relationship with the large and growing EMC community. We use social media, engaging content and our online property, Beatport, to maintain an active relationship with trend setters and influencers in the broader EMC community, including professional DJs, bloggers and passionate consumers. Beatport has a large community of influencers, including over 200,000 registered DJs. Beatport also has a Klout score (an aggregated measure of social media activity and influence) of 90 out of 100, comparable with other high profile music services such as Spotify (90) and iTunes (92) as of June 2013. We believe our ability to create closer partnerships between Beatport and the most important EMC festivals and events will enable us to deliver more to the EMC community between and around live events.
•: Substantial global scale and diversification. Our scale and diversification enables us to serve our fans more effectively than other participants in the EMC market that have typically focused on one geographic market or a narrow portfolio of events. On a pro forma basis in 2012, we produced 52 festivals (defined as having an attendance of 10,000 or more fans) and 809 events (defined as having attendance of fewer than 10,000 fans). Together these attracted 2.8 million attendees in 2012 and included large and small scale events, presented in 25 countries on five continents, that targeted different subsets of the EMC community. In addition, our managed EMC venues hosted over 400,000 attendees and our online properties attracted millions of users around the world in the year ended December 31, 2012.
•: Early access to emerging talent and trends. Through our managed venues, Beatport and relationships with influencers, we are able to identify new trends and support new artists, introducing them across our network. Our premier managed EMC venues in South Beach, Florida have proven to be a breeding ground for some of the top DJs in the industry. Similarly, Beatport serves as an important channel for DJs to gain recognition. In addition to influential charts and other discovery tools, Beatport hosts mix contests and other programs to support aspiring DJs. For

Table of Contents

Business

example, Zedd, one of today's leading DJs, was discovered after he won several remix contests on Beatport and has gone on to play at several of our venues and festivals.

•: Experienced management team. Our management team's reputation and experience in music, live entertainment, consumer internet and related businesses make us a valuable partner to creative talent, independent operators and the EMC community more broadly. Members of our senior management team have previously built businesses in live events and entertainment and executed and integrated a number of acquisitions during their careers. We believe our management's experience strengthens our ability to effectively integrate and operate our acquired businesses.

GROWTH STRATEGY

Our goal is to grow our business by supporting the development of the EMC movement. Key elements of our strategy include the following.

•: Enhance the fan experience. We strive to continually enhance the experience that new and existing fans enjoy at our live events or online. Our live events include innovative and state-of-the-art sets and performer lineups, featuring both top talent and up-and-coming artists. We are pursuing many initiatives to enhance the fan experience, including continuing to invest in leading edge production, providing smart tickets/event passes, facilitating high quality travel and accommodation logistics, using wireless technologies to ease on-site logistics and social media interaction and featuring quality concessions in partnership with top-tier food and beverage partners. We believe the value of the experiences we offer is compelling enough to attract one or more partners willing to support multiple free events and other fan-friendly initiatives. We are in advanced discussions with several such partners to support these initiatives and enhance the access and experience of our fans. We plan to complement our fans' experience at live events by meeting their demand for information, quality content and connectivity with artists and the broader EMC community away from and around the events.
•: Bring our festivals into new markets and expand current offerings. Many of our EMC festivals and events are well known, have an existing global following and have begun to expand geographically. We are using our considerable resources, including managerial talent and local expertise, to accelerate the expansion of our festivals and events into new geographies, many of which have an underserved EMC fan community. For example, in 2012, Tomorrowland saw demand from approximately 200,000 U.S.-based fans seeking to purchase multiple tickets each, of which only 2,000 were successful. We intend to bring some of the most successful festivals in the world to North America, including TomorrowWorld, the first international version of Tomorrowland, scheduled to be held outside Atlanta in September 2013. In response to increasing demand for our events, we are also expanding some of our festivals by increasing their length and capacity. For example, from 2010 to 2011, Tomorrowland expanded to three days from two days and increased attendance to 60,000 per day (180,000 total) from 45,000 per day (90,000 total).
•: Foster deeper engagement within the EMC community. We believe our scale of festivals and events, combined with our new generation of executive talent, helps us support the growth of the EMC community. Creating and mixing electronic music is a collaborative process that is highly accessible given the ready availability of music and mixing tools. In addition, the music is typically enjoyed as part of a communal experience, which in turn is commonly shared and perpetuated via social media. We seek to improve our fans' experiences by responding to their growing demand to engage with

Table of Contents

Business

EMC content and the EMC community. We also plan to create closer partnership and integration between our online properties, such as Beatport, and live EMC happenings to enhance the fan experience between and around events.

•: Acquire and integrate leading live event and online properties. We seek to acquire the highest quality festivals, event operators and promoters worldwide, as well as other businesses that are important to the EMC community. We have completed four acquisitions and acquired an interest in one joint venture to date, and we plan to close four more acquisitions on or shortly after the closing of this offering. We are also in active negotiations to acquire several other businesses. To mitigate acquisition risks, we typically seek to retain management teams of the acquired companies under long-term agreements and incentivize them to continue to manage the operations and expansion of the businesses. In addition, we intend to use our senior management's expertise in live events, consumer internet and EMC broadly, to promote best practices across our entire network in order to enhance the fan experience, improve operating and financial performance and ensure the health and safety of our fans, all while allowing producers to maintain creative independence.

OUR PRINCIPAL ASSETS

Our business is comprised of premier live entertainment festivals, events and select premier managed EMC venues and online properties, including the following.

•

ID&T and ID&T North America JV—We currently own 51% of the ID&T JV, which is the exclusive owner of North American rights to all festival brands operated by ID&T, including Sensation, TomorrowWorld, Mysteryland, Decibel and Q-Dance, among others. We own an option to acquire 75% of the worldwide business of ID&T (the "ID&T Business") and to increase our ownership of the ID&T JV to 75%. Once consummated, this acquisition would enable us to produce approximately 60 global dance events across 20 countries and five continents. ID&T is one of the world's largest content providers and producers of international EMC live events, having held 64 festivals and events in 2012 that attracted approximately 964,000 fans. These festivals and events include the following.

•: Tomorrowland and TomorrowWorld—Founded in 2005, Tomorrowland is an annual fantasy-themed outdoor festival held by ID&T in Belgium. Tomorrowland was recently voted the best music event globally at the International Dance Music Awards at the 2013 Winter Music Conference and, in 2013, was voted best major festival at the European Festival Awards. The festival attracted over 180,000 attendees in 2012, and, to date, has more than 140 million online views of its official long-form after movies, over 3 million Facebook likes and 7.9 million live views over YouTube of its 2012 festival. Tickets to the Tomorrowland 2013 festival sold out within one second. TomorrowWorld is the North American name for Tomorrowland and our ID&T JV will produce the inaugural TomorrowWorld event in Chattahoochee, Georgia (outside Atlanta) from September 27, 2013 through September 29, 2013. In the first month following announcement, over 200,000 fans preregistered to purchase up to four tickets each for TomorrowWorld. ID&T holds its interest in Tomorrowland through its 50% ownership in a joint venture with its Belgian partners.
•: Sensation—Sensation is a premier touring EMC event typically held in indoor arenas. Staged with world class acrobats and pyrotechnics, Sensation has a signature visual style where all fans and artists dress in white. The original Sensation event was held exclusively in the Amsterdam Arena for a period of five years until 2005. Sensation now tours in 18 countries across Asia, Europe and the Americas, has 770,000 Facebook likes and attracted over 250,000 attendees during 2012. Prior to the formation of the ID&T JV, ID&T held the first Sensation event in the United States, which attracted over 22,000 attendees over two nights at the Barclays Center in

Table of Contents

Business

Brooklyn, New York. Our ID&T JV has the exclusive rights to produce all Sensation events in North America, and we have announced five North American events for 2013. Our inaugural Sensation event, held in Toronto in May 2013, attracted over 25,000 attendees. The remaining Sensation events will be held in Las Vegas, Miami, New York and San Francisco.

•: Mysteryland—Mysteryland is a large-scale fantasy-themed outdoor festival held annually in the Netherlands and Chile. Mysteryland Netherlands 2012 attracted over 60,000 fans to a one-day event, and Mysteryland Chile 2012 attracted over 40,000 fans over two days. Our ID&T JV plans to produce Mysteryland events in North America starting in 2014.
•: Q-Dance—Q-Dance caters to fans of "hard style" electronic music, which is characterized by increased beats per minute. Q-Dance has a robust online offering of news, streaming audio, video and event promotions. Q-Dance's primary music festival is Defqon.1, which attracted approximately 54,000 attendees in the Netherlands and 25,000 in Australia in 2012. In total, Q-Dance held 11 events in 2012 that attracted more than 205,000 fans. Our ID&T JV has the exclusive rights to produce all Q-Dance events in North America and intends to hold events in 2013.
•: Decibel—Founded in 2002 by b2s, of which ID&T currently owns 50%. Decibel is a two-day outdoor, "hard style" festival held annually in The Netherlands in August. Attendance at the 2012 event was approximately 50,000, and in 2013, the event sold out within one hour.

•

Life in Color—LIC produces medium to large-size, single-day events around a network of college campuses and major cities. These events feature live DJs, acrobatics and "paint blasts," during which participants are sprayed with colorful, harmless paint to provide them with a more interactive, exciting and distinctive experience. LIC had over 420,000 attendees across 142 events in 2012. Starting in 2013, LIC has implemented a strategy in larger geographic markets to use higher capacity venues to consolidate events historically held at multiple smaller venues. In 2012, we held our first LIC event outside the United States and in 2013 we intend to continue to expand internationally.

•

Disco Donnie Presents—DDP organizes and promotes hundreds of EMC-focused events at venues across North America each year. In 2012, DDP produced or promoted over 600 events and festivals that attracted over 850,000 fans in total. We believe DDP adds significant value by increasing our connection to the EMC community, including promoters and operators, in local markets throughout North America.

•

Miami Marketing Group—MMG manages several top EMC venues in Miami. Under its arrangements with the venue owners, MMG earns management fees based on revenue and profit. We believe our venue management increases our engagement with the EMC community and connects us to vibrant, new EMC trends and up-and-coming DJs. We manage the following venues in Miami.

•: LIV—Exclusive, 22,000 square foot lounge/venue at the Fontainebleau Miami Beach hotel, which attracts top DJ talent for performances several times a week.
•: LIV Sun Life Stadium—10,000 square foot venue and skybox seating overlooking the west end zone in Sun Life Stadium, home of the Miami Dolphins.
•: STORY—New 29,000 square foot multi-level venue that opened on December 26, 2012, in Miami Beach.

•

i-Motion—i-Motion is a leading promoter and producer of EMC festivals and events in Europe, predominantly in Germany. We have agreed to terms with i-Motion in respect of an acquisition of

Table of Contents

Business

60% of its ownership interests. i-Motion held 12 events and festivals in 2012 and its key festivals include the following:

•: Nature One—Germany's largest outdoor EMC festival. It is a two night music festival, held in August, hosting over 80,000 fans.
•: Ruhr-In-Love—An annual one day music festival held in June in Olga Park, Germany. The festival had over 40,000 visitors in 2012.
•: Mayday Festival—An annual one day music festival in April taking place in Germany with over 22,000 visitors in 2012. Founded in 1991, Mayday is one of Germany's oldest and largest indoor electronic music events. Mayday has been exported to Poland, Belarus and Russia.

•: Totem—Totem is a leading promoter and producer of EMC festivals and events in Australia. We have signed an asset contribution agreement with Totem to acquire the assets it uses in its business. Totem's largest festival is Stereosonic, a five-city touring outdoor festival held annually in November and December. In 2012, Stereosonic attracted approximately 194,000 attendees, making it one of Australia's largest EMC festivals. Totem also produced/promoted 15 additional EMC events/tours in 2012, as well as the 2013 Australian tour of Swedish House Mafia. In addition, Totem is an important booking agent of international EMC artists and venues throughout Australia.
•: Made—Made is a leading promoter and producer of EMC festivals and events in the United States Made's largest festival is Electric Zoo, which is held annually in New York City over Labor Day weekend. In 2012, Electric Zoo attracted over 100,000 attendees over three days to its site on Randall's Island. We have signed a binding term sheet with Made pursuant to which we will acquire a 70% ownership interest in Made, with a commitment to acquire the remaining 30% in 2018.
•: Beatport—Founded in 2004, Beatport is the principal source of music for EMC DJs and a destination for the growing EMC community. DJs come to Beatport for professional quality, uncompressed audio files, which they require to produce and perform live electronic music tracks. Beatport offers over 2.5 million tracks from over 22,000 labels, and its free music samples generate approximately four million streams daily, driven by its electronic music charts, which are a popular source for music discovery. Beatport also provides access to music and industry news, music reviews, podcasts, videos, DJ profiles, event listings and venue details. In 2012, Beatport had approximately 40 million unique visitors according to Google Analytics. With its growing consumer audience, Beatport is a channel for over 200,000 registered DJs and a platform for new artist discovery. Beatport and our other online properties provide us with a direct connection to the key individuals that influence the broader EMC community, such as DJs, and to reach the EMC community and fans directly.
•: Other Online Properties—In addition to Beatport, our festivals, events and managed EMC venues have an online presence and engage directly with their fans, including from their own websites and through social media. Fans can visit these websites to purchase tickets to events, watch videos and obtain up-to-date news. Across our online properties, including Beatport, we had over 5.3 million registered users as of March 31, 2013. We believe our ability to directly engage these fans provide substantial benefits to our understanding of the EMC community.

INDUSTRY OVERVIEW

The global market directly associated with electronic dance music is projected to be approximately $4.5 billion in 2013, according to IMS. Rising global interest in electronic music complemented by the power of social media and viral content has enabled the rapid growth of large-format, live EMC events. EMC fans are primarily "digital and social natives" who attend festivals and events for the shared live experience, and are highly engaged with festivals and artists via social media and other

Table of Contents

Business

online and mobile platforms. This millennial generation leads the market in social media connectivity, digital media consumption, user-generated content creation, as well as mobile and online commerce.

History and evolution of electronic music culture

Electronic dance music is one of the most popular music genres in the world among the millennial generation. It is created by artists and DJs, using digital techniques, often in front of a live audience. Within this genre there are numerous subgenres including Dance, Drum and Bass, Dubstep, House, Techno and Trance, which often influence and integrate elements from each other. It has a history of over 20 years of mainstream popularity in Europe and has more recently evolved into a widely accepted and commercially successful genre of music in the United States and other international markets.

The growing popularity of the genre in the United States is becoming more evident. In 2012, the National Academy of Recording Arts and Sciences added a Dance/Electronic category for the Grammy Awards, Billboard launched a Dance/Electronic chart, and in February 2013, a Dance/Electronic song reached #1 on the Billboard Hot 100 chart for the first time. In a 2012 EMI Music Group survey, 29% of U.S. respondents described themselves as having passion for the genre, implying a fan base of 74 million and representing a 21% increase from the prior year. According to the Nielsen Company & Billboard's 2012 Music Industry Report, Dance/Electronic music had the highest growth of all music genres with a 35.6% increase in digital music track sales in the United States in 2012 compared to the prior year.

Live events

Live events, particularly festivals, are at the center of the EMC experience. Festivals are a global phenomenon, having been popular in Europe for over 20 years. The festival concept, particularly in EMC, is relatively new in the United States and other international markets. In the United States, the largest EMC festivals are generally less than ten years old but have been growing rapidly. Total attendance at what are currently the five largest U.S. EMC festivals grew 41% annually from 2007 to 2012 (although there can be no guarantee these growth rates will continue in the future). This compares to 2% annual revenue growth for the overall North American concert market during the same period, according to Pollstar, a concert industry trade publication. As EMC festivals become well-known, tickets typically sell out quickly, often before an artist line up is even announced. According to figures provided by ID&T, its Tomorrowland festival in Belgium saw demand from 2 million ticket buyers to purchase up to four tickets each for the 100,000-ticket allotment made available to international ticket buyers.

EMC festivals and events typically feature many different artists and DJs performing alongside elaborate sets, lighting and special effects centered on different creative themes. These festivals and events have become highly experiential and social happenings that are shared by thousands of fans. We believe the EMC festival business is characterized by a high degree of ownership fragmentation and is well positioned for consolidation.

EMC and connectivity

EMC grew from the popularity of electronic music and the associated evolution of the fan community. Members of the fan community connected to festivals and events, artists and DJs, and thereby stay informed about upcoming festivals and events, as well as new tracks. The proliferation of connected mobile devices and social media has fueled the propensity of fans to share experiences at live events and discover, listen to and share music.

Table of Contents

Business

EMC artists are increasingly adept at reaching their fan base using social media and using that channel to market events at which they are appearing. Leading artist David Guetta has more than 43 million Facebook fans and more than 10 million Twitter followers as of June 2013. Top electronic dance music artists have doubled their Twitter fan bases over 2012 compared to 2011. In addition, according to a 2012 report by Ticketfly, social media drove six times more ticket sales for EMC events than non-EMC events from January 2012 to July 2012.

Key characteristics of electronic music

We believe there are several factors that distinguish this genre of music from others.

•: Fan loyalty to leading EMC festivals. Leading EMC festivals feature high-end productions, state-of-the-art sets, lighting and special effects and extensive artist lineups. As a result of the emphasis on the broader experiential aspects of EMC shows, attendance is often driven by the festival or event's reputation, testimonials from prior attendees and "chatter" within the online community, rather than specific artists. The power of reputation and fan engagement is evidenced by the speed at which leading festivals sell out, the ability to pre-sell tickets for festivals and events before announcing artist lineups and festivals' social media recognition. Because of their strong reputations and vibrant communities, successful EMC festivals and events have demonstrated long staying power and less dependence on individual "star" talent.
•: Global appeal. Because the majority of tracks have limited vocal lyrics and are comprised mainly of electronic beats and sounds, electronic music has global appeal and is easily transferrable across countries. For example, ID&T's 2012 Tomorrowland festival had visitors from over 75 countries and ID&T's Sensation now tours in 19 countries including the United States. This is indicative of the large global following for EMC live entertainment and recorded content, including international markets where there are currently limited EMC festivals and events.
•: Lower cost structure than traditional music. Electronic music is created digitally and often in front of a live audience. As a result, and unlike other music genres, the electronic music industry is not driven by sales of studio-produced albums, and therefore the music has lower production costs and lead time. Social media, live performances and online sites like Beatport are the primary marketing and distribution channels for electronic music. As blogs, a growing online community, recommendations of friends and word of mouth have become key drivers of artist and festival success, the need for traditional record labels' costly artist and repertoire functions is greatly reduced. The comparatively low cost and simple nature of production makes electronic music a highly accessible platform and therefore attracts a large number of aspiring DJ's. In addition, the enormous availability of files from which to sample, and the iterative community collaboration involved in the development of electronic music results in an accelerated pace of creation and a short average life of individual tracks.

OUR HISTORY AND ACQUISITIONS

SFX Entertainment, Inc. was incorporated in the State of Delaware on June 5, 2012. Between June 5, 2012 and February 13, 2013, we were named SFX Holding Corporation. We started our business on July 7, 2011 as SFX EDM Holdings Corporation, which is now a wholly-owned subsidiary of SFX Entertainment, Inc.

Completed acquisitions

Throughout 2012 and 2013, we implemented an expansion plan by acquiring independent EMC event promoters, production companies, venue operators and an online music destination. As of the date of

Table of Contents

Business

this prospectus, we completed the acquisition of four companies and formed one joint venture, as detailed below.

Disco Productions, Inc. (now operating as SFX-Disco Operating LLC or "DDP")—DDP promotes and produces EMC events, including shows and festivals, throughout the country. On June 19, 2012, we acquired substantially all of the assets DDP used in connection with its business, including (i) rights to festival names, domain names, and customer lists, (ii) rights under commercial contracts with third parties, including performers who will perform at events, and (iii) rights under its arrangements with co-promoters of events. We paid $9.0 million as consideration, composed of $4.0 million in cash and $5.0 million in shares of our common stock, including $1.0 million currently held as a liability on our balance sheet.

Dayglow LLC and Affiliates (now operating as Life in Color or "LIC")—LIC (our Predecessor) provides branded entertainment services, including organizing and hosting paint parties, social events (including nightclub parties), and festivals featuring live entertainment, such as acrobatic acts, paint blasts, and DJ performances. On July 31, 2012, we acquired substantially all of the assets LIC used in connection with its business. This acquisition also included the acquisition of the assets and liabilities of Advanced Concert Productions LLC, the production company for LIC's live events. The assets we acquired in this acquisition included (i) office equipment/furniture and video, lighting, sound, and related equipment, (ii) rights to domain names, website material, and trademarks, and (iii) rights under commercial contracts with third parties, including rental/venue/lease contracts and agreements with artists, performers, or other service providers performing services at events.

We paid approximately $12.1 million as consideration for LIC, composed of $8.1 million in cash and $3.9 million in shares of our common stock. Furthermore, our subsidiary entered into employment agreements with the former owners of LIC to manage and operate the business and serve in various executive positions of LIC, including its chief executive officer, managing partner, event director, and production director.

MMG Nightlife, LLC ("MMG")—MMG operates three nightlife venues in South Florida pursuant to management agreements, including LIV, STORY (which has an oral management agreement) and LIV Sun Life Stadium. On December 31, 2012, we acquired substantially all of the assets MMG used in connection with its nightlife operations and management business, including (i) domain names, (ii) trademarks and copyrights, (iii) office equipment, and (iv) rights under commercial contracts, including its management and services agreements.

We hold an 80% ownership stake in our subsidiary (SFX-Nightlife Operating LLC) that purchased the acquired assets and the sellers of MMG hold the remaining 20% interest. We paid approximately $16.9 million as consideration, composed of $5.0 million in cash, a 0.24% promissory note in the principal amount of $8.5 million (which has been fully repaid) and $3.4 million of shares of our common stock. In addition, the former owners of MMG are entitled to receive an earnout payment based on the EBITDA of the business and assets of SFX Nightlife Operating LLC for the year ended December 31, 2014. If this EBITDA exceeds $5,270,000, the earnout payment will equal (1) $5,059,200 multiplied by (2) the actual EBITDA for the year ended December 31, 2014, divided by $5,270,000. If the EBITDA for the year ended December 31, 2014 is less than $5,270,000 but exceeds $3,372,000, the earnout payment will equal (1) $4,216,000 multiplied by (2) the difference between the actual EBITDA and $3,372,000 divided by $1,898,000. If the EBITDA is less than $3,372,000 for the year ended December 31, 2014, the former owners of MMG will not receive an earnout payment. Any earnout payment will be composed of 80% cash and 20% shares of our common stock at a price equal to (i) a 30-day volume-weighted average closing price per share if our shares are traded on any national securities exchange or the over-the-counter bulletin board, or (ii) the price per share determined in good faith by our board of directors if our shares are not listed on any

Table of Contents

Business

national securities exchange or the over-the-counter bulletin board. In addition, we granted to the former owners of MMG a put right exercisable at any time between January 1, 2015 and June 30, 2015 to require us to acquire their 20% non-dilutable interest in our subsidiary, SFX-Nightlife Operating LLC. The consideration to be paid by us upon exercise of the put right would be equal to 20% of the product of SFX-Nightlife's EBITDA for the 2014 fiscal year multiplied by 6. The amount of the earnout consideration and the consideration payable under the repurchase right are each subject to increase based on a predetermined formula if the future combined federal and New Jersey long-term capital gains tax rates applicable to the former owners of MMG increase from their 2012 levels.

BEATPORT, LLC ("Beatport")—Beatport is an all-purpose online destination for our EMC fans, including a leading global music download store. On March 15, 2013, we acquired Beatport in a merger transaction. We paid $58.6 million as consideration, composed of $33.6 million in cash and 5.0 million shares of our common stock at an assumed price of $5.00 per share. 1.2 million of these shares are currently being held in an indemnity escrow account. If there are any losses for which the sellers of Beatport are required to indemnify us under the merger agreement, such sellers' indemnification obligation will first be satisfied by releasing the shares held in the indemnity escrow account. Our recourse for losses under the merger agreement, other than as a result of fraud or breach of certain representations, is capped at $6.5 million. We also entered into employment agreements with multiple principal employees of Beatport to manage the Beatport business.

Joint venture

ID&T JV North America ("ID&T JV")—We and ID&T formed a joint venture in October 2012 that has an exclusive license to use and promote all ID&T festivals and events in North America. ID&T is the largest content provider and producer of international EMC live events. We also have economic rights to share in the proceeds of any ID&T events held in North America when such events are not permitted to be assigned to the joint venture. Featured events in North America will include Mysteryland, TomorrowWorld, Sensation, and Q-Dance. We have a 51% ownership interest in the joint venture.

In connection with the joint venture, we paid ID&T $12.5 million in cash on October 30, 2012. Upon the signing of a definitive joint venture agreement on March 15, 2013 (i) we made a $7.5 million non-recourse loan to ID&T, which is to be repaid out of ID&T's interest in the distributions from the joint venture, (ii) we issued to ID&T fully vested warrants to purchase 500,000 shares of our common stock, having an exercise price of $2.50 per share, and (iii) we issued to ID&T 2.0 million shares of our common stock. For a period of five years beginning in the year ended December 31, 2013, ID&T will also be entitled to receive 100,000 warrants to purchase shares of our common stock each year if the joint venture has achieved an EBITDA of $7.0 million or more in the prior fiscal year. The warrant exercise price will equal the fair market value as our determined by our board of directors but, after our initial public offering, based on our stock's 30-day weighted average closing price.

The joint venture's board of directors consists of four directors, and we and ID&T each have the right to appoint two directors. In addition, we are entitled to appoint the co-Chief Executive Officer and Chief Financial Officer of the joint venture, and ID&T is entitled to appoint the other co-Chief Executive Officer and the Chief Creative Officer (who will have creative control over the brands that the joint venture uses and the events for which they are used).

Additionally, we will have the right to purchase any of the shares of our common stock issued to ID&T in connection with the ID&T JV at a price of $35.00 per share, to the extent held by ID&T, for a period beginning January 1, 2013 and ending on January 1, 2016, and at a price of $50.00 per share, to the extent held by ID&T, for a period beginning January 2, 2016 and ending on (and including) January 1, 2018. If we do not complete an initial public offering by May 26, 2014, then

Table of Contents

Business

ID&T has the right to require us to purchase, for an aggregate purchase price of $10.0 million, all of the shares and warrants held by ID&T that were issued to it in connection with the ID&T JV.

Planned acquisitions

ID&T Holding B.V. ("ID&T")—On March 20, 2013, we entered into an option agreement (the "ID&T Option") with ID&T whereby we obtained the right to purchase a 75% ownership interest in ID&T's business worldwide (the "ID&T Business"). In addition, we would also increase our ownership of the ID&T JV from 51% to 75%. We paid $2.5 million in cash and issued 2.0 million shares of our common stock to acquire the ID&T Option. The exercise price of the ID&T Option is $40.0 million in cash (subject to certain adjustments), and we will also relinquish our right to be repaid $7.5 million we advanced to ID&T on March 15, 2013. In addition we will be required to pay $10.0 million within 90 days of ID&T's delivery of required audited financial statements which occurred on May 24, 2013. We plan to exercise the ID&T Option and close the acquisition of the 75% ownership interest in the ID&T Business on or shortly after the closing of this offering.

Under the terms of the ID&T Option, ID&T was required to provide to us audited financial statements of its business that are substantially compliant with SEC rules as soon as practicable. We received ID&T's audited financial statements on May 24, 2013, and we have 60 days within which to pay the exercise price and consummate the transaction.

i-Motion GmbH Events & Communication ("i-Motion")—On October 10, 2012, we signed a term sheet relating to the acquisition of i-Motion, which is a leading promoter and producer of EMC festivals and events in Europe with key brands including Nature One, Germany's largest open-air EMC festival. Under the term sheet, we will acquire a 60% ownership interest in i-Motion in exchange for $12.0 million in consideration, composed of $8.0 million in cash and $4.0 million in shares of our common stock at the initial offering price of our common stock in this offering. We plan to close the acquisition in i-Motion on or shortly after the closing of this offering. In addition, we will become obligated to purchase the remaining 40% interest in i-Motion after preparation of its 2014 audited financial statements at a price equal to 5.5 times 40% of the average of i-Motion's 2013 and 2014 EBITDA. Two-thirds of this additional consideration would be payable in cash with the remaining portion in shares of our common stock at the then prevailing market price per share.

Totem Onelove Group Pty Ltd. and Totem Industries Pty Ltd. (collectively, "Totem")—On May 15, 2013, we entered into an asset contribution agreement with Totem and their respective affiliates pursuant to which Totem agreed to sell to us substantially all of the assets Totem uses in connection with its business. Totem promotes and produces Stereosonic, a five city touring outdoor festival.

The purchase price consists of AUD$60.0 million (or $55.3 million) in cash and AUD$15.0 million (or $13.8 million) in our common stock valued at the price per share to the public in this offering. Under the terms of the agreement, we funded an AUD$5.0 million (or $4.8 million as of May 22, 2013) deposit on May 22, 2013. The deposit will be released to Totem on the earlier of June 30, 2013 or the closing of the acquisition and, at the closing of the acquisition and will be credited towards the AUD$60.0 million (or $55.3 million) cash portion of the purchase price. We also granted Totem a right to require us to repurchase at all (but not less than all) of the shares of our common stock that we issued to Totem as consideration under the asset contribution agreement at the price per share to the public in this offering. This right will be exercisable during the 30 calendar day period beginning on the second anniversary of the closing date. The repurchase right will be exercisable beginning on the second anniversary of the closing date and continuously for 30 days thereafter, and the payment for such repurchased shares must be made by us within 45 days after we receive notice from Totem of its election to exercise its repurchase right.

100

Table of Contents

Business

The asset contribution agreement contains working capital and assumed employee liability adjustments. It also contains adjustments to the cash payment due at closing based on the business' EBITDA for the fiscal year ended June 30, 2013, as follows.

•: if EBITDA for such period exceeds AUD$11.2 million (or $10.3 million), our cash payment at closing will increase by an amount equal to seven multiplied by the difference between EBITDA for the fiscal year ended June 30, 2013 less AUD$11.2 million (or $9.9 million); or
•: if EBITDA for such period is less than or equal to AUD$10.8 million (or $9.9 million), our cash payment at closing will decrease by an amount equal to seven multiplied by the difference between AUD$10.8 million (or $9.9 million) less EBITDA for the fiscal year ended June 30, 2013.

The asset contribution agreement contains customary representations, warranties and covenants. The closing of the transaction is subject to certain closing conditions, including Totem providing audited financial statements for the fiscal years ended December 31, 2011 and December 31, 2012, as well as unaudited financial statements for the interim periods ended March 31, 2013 and June 30, 2013.

If the closing does not occur by September 30, 2013 due to a breach of the asset contribution agreement by Totem that causes a failure of any of the conditions to our obligation to close the transaction as of that date, the AUD$5.0 million ($4.8 million as of May 22, 2013) deposit must be returned to us no later than January 28, 2014. If the closing does not occur for any other reason, Totem will be entitled to retain the deposit.

Made Event, LLC & EZ Festivals, LLC (collectively, "Made")—On April 23, 2013, we signed term sheets relating to the acquisition of Made Event, LLC ("Made LLC") and EZ Festivals, LLC ("EZ Festivals"), which together are the owners and producers of the Electric Zoo Festival, an annual electronic dance music festival held in New York City at Randall's Island Park. On June 23, 2013, we entered into a letter agreement with Made in which we paid a $2.5 million advance and the parties agreed to extend the closing date to August 21, 2013. Under the term sheets, we will acquire 100% of the membership interests of Made LLC and EZ Festivals in two increments. At the first closing, we will acquire a 70% ownership interest in Made LLC and EZ Festivals for (i) $20.0 million in cash, (ii) $5.0 million in shares of our common stock valued at the lesser of (y) $12.75 per share or (z) the price per share to the public in this offering, and (iii) two promissory notes in the aggregate amount of $10.0 million, each having a maturity date of March 2014. At the second closing, which shall occur not later than March 18, 2018, we will acquire the remaining 30% ownership interests for a payment equal to the greater of $10.0 million or 30% of the businesses' EBITDA for 2017 multiplied by ten (subject to certain adjustments). If the second closing purchase price is equal to $10.0 million, such payment shall be made solely in cash and if the second closing purchase price is greater than $10.0 million, the payment shall consist of 80% in cash and 20% in shares of our common stock (at a volume weighted average price per share at the time of issuance).

In addition, the former owners of Made will be entitled to receive earnout payments as follows: (i) a one-time payment to the two former owners of Made in an aggregate amount equal to 40% of the net income of the business for the year ended December 31, 2013, and (ii) annual payments to the two former owners of Made in an aggregate amount equal to 30% of the net income of the business for each of the years ended December 31, 2014, 2015, 2016 and 2017, respectively. Each such earnout distribution, if any, shall be excluded from the calculation of the EBITDA of the business for purposes of determining the purchase price at the second closing. The first earnout payment, if any, shall be paid on March 31, 2014 with respect to the net income of the business for the year ended December 31, 2013, with each subsequent earnout payment, if any, to be paid every March 31 for such prior year until the final earnout payment, if any, is paid on March 31, 2018.

101

Table of Contents

Business

We plan to close the acquisition of the 70% ownership interest in Made on or shortly after the closing of our initial public offering. We are required to close the acquisition by August 21, 2013. The $2.5 million advance shall be credited against the cash purchase price to be paid by us at closing if we close by August 21, 2013. If we fail to close by the end of August 21, 2013, other than due to fault by one of the two principals of Made, the principals may retain the advance.

COMPETITION

The broader market for live entertainment is highly competitive. We believe that we compete primarily on the basis of our EMC focus and the unique creative elements, combined with high production value of our events, festivals and managed venues. In our music business, we distinguish ourselves from competition through the breadth and professional nature of our electronic-focused offering. We believe that our primary strengths include:

•: the quality of service we deliver to all constituencies within the EMC community including fans, artists and DJs;
•: our track record in promoting and producing large EMC events in our markets;
•: our strong relationships with artists, DJs, booking agents, promoters, venue operators and ticketing agents;
•: the span and influence of our fan community;
•: our premier managed EMC venues; and
•: the availability of uncompressed music tracks which we supply to DJs to produce and perform music.

In the markets in which we promote festivals and events, we face competition from promoters and venue operators. We believe that barriers to entry in the promotion services business are low and that certain local promoters are increasingly expanding the geographic scope of their operations.

Our main competitors in the live music industry include Live Nation, AEG, Warehouse Live, Insomniac, Kaos Entertainment, C3 Concerts, Real Music Events, Slow Motion Music, SDC, Gritsy and Reverse, in addition to numerous smaller regional companies that operate in our markets. Our competitors compete with us in all regions and cities for tickets sales, artist bookings, EMC fans and concert attendees, venues, sponsorships and production equipment. Some of our competitors whose preliminary business is outside of EMC are larger companies with significant operations and a higher profile in the industry. However, we have expertise in the live music industry and the electronic dance music genre, in particular, and we work with the leading EMC promoters in the world, which helps us to be competitive in this industry.

With respect to our Beatport business, we face competition from providers of interactive on-demand audio and video content, and pre-recorded entertainment, such as Apple's iTunes Music Store, Rdio, Rhapsody, Spotify, Pandora, Amazon and other digital content providers that allow online listeners to select the audio content that they stream or purchase. However, we believe the breadth and professional nature of our electronic music-focused offering is unique. Our primary source of music sales revenue is derived from uncompressed audio files which DJs require for production and performance. Beatport is the premier destination for such professional quality offerings.

102

Table of Contents

Business

GOVERNMENT REGULATION

Our operations are subject to federal, state, and local laws statutes, rules, regulations, policies and procedures both domestically and internationally, governing matters such as:

•: construction, renovation and operation of our venues;
•: licensing, permitting and zoning, including ordinances relating to noise, traffic and pollution;
•: human health, safety and sanitation requirements;
•: the service of food and alcoholic beverages;
•: working conditions, labor, minimum wage and hour, citizenship and employment laws;
•: the United States Americans with Disabilities Act (ADA);
•: the United States Foreign Corrupt Practice Act (FCPA) and similar regulations in other countries;
•: historic landmark rules;
•: hazardous and non-hazardous waste and other environmental protection laws;
•: sales and other taxes and withholding of taxes;
•: privacy laws and protection of personally identifiable information;
•: marketing activities via the telephone and online; and
•: primary ticketing and ticket resale services.

We believe that we are in material compliance with these laws. There are many complex regulations relating to food service in our venues. A variety of regulations at various governmental levels relating to the handling, preparation and serving of food, the cleanliness of food production facilities and the hygiene of food-handling personnel are enforced primarily at the local public health department level. Above all, we are committed to maintaining the highest standards of safety, health and security for our fans at every one of our events and venues.

We also must comply with applicable licensing laws, as well as state and local service laws, commonly called dram shop statutes. Dram shop statutes generally prohibit serving alcoholic beverages to certain persons, such as an individual who is intoxicated or a minor. If we violate dram shop laws, we may be liable to third parties for the acts of the customer. Although we generally hire outside vendors to provide these services at our larger operated venues and regularly sponsor training programs designed to minimize the likelihood of such a situation, we cannot guarantee that intoxicated or minor customers will not be served or that liability for their acts will not be imposed on us.

We are also required to comply with the ADA and certain state statutes and local ordinances that, among other things, require that places of public accommodation, including both existing and newly constructed venues, be accessible to customers with disabilities. The ADA requires that venues be constructed to permit persons with disabilities full use of a live entertainment venue. The ADA may also require that certain modifications be made to existing venues to make them accessible to customers and employees who are disabled. In order to comply with the ADA and other similar ordinances, we may face substantial capital expenditures in the future.

We are required to comply with the laws of the countries we operate in and also the FCPA regarding anti-bribery regulations. These regulations make it illegal for us to pay, promise to pay, or receive money or anything of value to, or from, any government or foreign public official for the purpose of directly or indirectly obtaining or retaining business. This ban on illegal payments and bribes also applies to agents or intermediaries who use funds for purposes prohibited by the statute.

103

Table of Contents

Business

From time to time, governmental bodies have proposed legislation that could have an effect on our business. For example, some legislatures have proposed laws in the past that would impose potential liability on us and other promoters and producers of live music events for entertainment taxes and for incidents that occur at our events, particularly relating to drugs and alcohol. More recently, some jurisdictions have proposed legislation that would restrict ticketing methods and mandate ticket inventory disclosure.

PRIVACY POLICY

As a company conducting business on the internet, we are subject to a number of foreign and domestic laws and regulations relating to information security, data protection and privacy, among other things. Many of these laws and regulations are still evolving and could be interpreted in ways that could harm our business. In the area of information security and data protection, the laws in several states require companies to implement specific information security controls to protect certain types of personally identifiable information. Likewise, all but a few states have laws in place requiring companies to notify users if there is a security breach that compromises certain categories of their personally identifiable information. Any failure on our part to comply with these laws may subject us to significant liabilities.

We are also subject to federal and state laws regarding privacy of listener data. Our privacy policy and terms of use describe our practices concerning the use, transmission and disclosure of listener information and are posted on our website. Any failure to comply with our posted privacy policy or privacy-related laws and regulations could result in proceedings against us by governmental authorities or others, which could harm our business. Further, any failure by us to adequately protect the privacy or security of our Beatport users' information could result in a loss of confidence in our service among existing and potential users, and ultimately, in a loss of users and advertising customers, which could adversely affect our business.

We collect and use certain types of information from our customers in accordance with the privacy policies posted on our websites. We collect personally identifiable information directly from Beatport users when they register to use our service, fill out their listener profiles, post comments, use our service's social networking features, participate in polls and contests and sign up to receive email newsletters. We may also obtain information about our Beatport users from other Beatport users and third parties. We also collect information from customers using our other websites in order to provide ticketing services and other user support. Our policy is to use the collected information to customize and personalize our offerings for Beatport users and other customers and to enhance the listeners' experience when using our service.

We also use automated data collection technology, such as tracking cookies, to collect non-personally identifiable information in order to provide artists appropriate royalties and help us track listener interactions with our services. Third-party advertisers and service partners may also use tracking technologies in order to collect non-personally identifiable information regarding use of our platforms. We make privacy controls available to our Beatport users to allow them to control whether certain information that they post on their profile pages is visible to other Beatport users and to the public. Even where these settings are exercised, a listener's stations remain searchable, including by the listener's email address.

We have implemented commercially reasonable physical and electronic security measures to protect against the loss, misuse, and alteration of personally identifiable information. No security measures are perfect or impenetrable, and we may be unable to anticipate or prevent unauthorized access to our customers' personally identifiable information.

104

Table of Contents

Business

INTELLECTUAL PROPERTY

It is our practice to protect our trademarks and other original and acquired intellectual property. Our subsidiaries currently hold, or have recently acquired, over twenty trademarks registered on the Principal Register of the United States for a number of our brands, with over thirteen applications pending on the Principal Register. Our subsidiaries have also applied for registration of over fifteen trademark applications in multiple foreign jurisdictions. We are in the process of updating trademark and domain name registries to reflect ownership of recently acquired intellectual property. We believe that our trademarks and other proprietary rights have significant value and are important to our brand-building efforts and the marketing of our services. We cannot predict, however, whether steps taken by us to protect our proprietary rights will be adequate to prevent infringement or misappropriation of these rights.

Upon the consummation of our planned acquisitions, we believe that we will hold 650 trademarks registered or applied for worldwide.

LEGAL PROCEEDINGS

We are subject to various legal proceedings and claims that arise in the ordinary course of business. The outcome of legal proceedings and claims brought against us is subject to significant uncertainty. If one or more legal matters were resolved against us in a reporting period for amounts in excess of management's expectations, our consolidated financial statements for that reporting period could be materially adversely affected.

On June 12, 2012, a lawsuit was commenced against Made, one of our planned acquisition targets, its founders Mike Bindra and Laura De Palma, and Sala Corporation, by Henri Pferdmenges and NRW, Inc. in the Circuit Court of the Eleventh Judicial Circuit in and for Miami Dade County, Florida alleging claims of (i) breach of joint venture agreement, (ii) breach of fiduciary duty and (iii) declaratory action regarding rights in the 2011, 2012 and future Electric Zoo Festivals and certain rights to intellectual property associated with the Electric Zoo Festival. The complaint was amended on September 17, 2012 to add additional claims alleging (i) unjust enrichment, (ii) promissory estoppel, (iii) contract implied in fact and (iv) fraud in the inducement with respect to the ownership of the Electric Zoo Festival. The case was removed to the United States District Court for the Southern District of Florida on July 20, 2012, and venue was transferred to the United States District Court for the Southern District of New York on November 26, 2012. Pursuant to the Second Amended Complaint filed on January 23, 2013, the plaintiffs are seeking up to approximately $2.0 million per claim, ownership of certain intellectual property and lost profits. On February 5, 2013, the defendants filed a Motion to Dismiss Plaintiffs' Second Amended Complaint, which is currently pending before the court.

PROPERTIES

We occupy approximately 11,917 square feet of office space at our headquarters in New York, New York under a lease that expires in February 2015. We occupy approximately 2,400 square feet of storage space in Hollywood, Florida under a lease that expires in August 2014. We occupy approximately 3,858 square feet under a lease for office space in Miami Beach, Florida. The term of the lease is 24 months. We also currently occupy approximately 1,404 square feet under a lease for office space in Miami Beach, Florida. The lease is set to expire on January 31, 2016. We occupy approximately 14,929 square feet of office space in Denver, Colorado under a lease that expires on May 31, 2015. We occupy approximately 3,444 square feet of office space in Los Angeles, California under a lease that expires January 31, 2014. We also occupy office space in Bettembourg, Luxembourg under a lease that has an indefinite term and can be terminated by either party with two months'

105

Table of Contents

Business

written notice. We also occupy approximately 350 square meters of office space in Berlin, Germany under a lease that has an indefinite term and can be terminated by either party with twelve months' notice; provided, however, that the earliest termination date is August 31, 2014.

Upon the consummation of our planned acquisitions, we will occupy an office building in Mülheim-Kärlich, Germany under that expires on December 31, 2015. The lease may be extended for a period of five years. We will also occupy approximately 1,450 square feet of office space in Mülheim-Kärlich, Germany under a lease that has an indefinite term and can be terminated by either party with three months' written notice after the end of a month. We will also occupy approximately 3,000 square feet of storage space in Mülheim-Kärlich, Germany under a lease that has an indefinite term and can be terminated by either party with six months' written notice after the end of a month. We will also occupy approximately 3,700 square feet of storage space in Mülheim-Kärlich, Germany under a lease that has an indefinite term and can be terminate by either party with six months' written notice after the end of a month. We will also occupy office space in Windsor, Australia under a lease set to expire June 8, 2016. The lease may be renewed for two six-year periods.

EMPLOYEES

As of June 15, 2013, we had approximately 145 full-time employees.

Our staffing needs vary significantly throughout the year. Therefore, we also employ part-time and/or seasonal employees, primarily for our live EMC events held between May and September. We are not a party to any collective bargaining agreements and have not experienced any strikes or work stoppages. We believe that we enjoy good relations with our employees. From time to time, we utilize the services of independent contractors to perform various services.

Upon the consummation of our planned acquisitions, we will have approximately an additional 168 full-time employees.

106

Table of Contents

Management

Our executive officers and directors and their respective ages and positions as of the date of this prospectus, are as follows:

Name	Age	Position


Robert F.X. Sillerman	65	Chief Executive Officer and Chairman of the Board of Directors
D. Geoff Armstrong	55	Director
Dr. Andrew N. Bazos	50	Director
Jared Cohen	31	Director
Michael Meyer	48	Director
John Miller	68	Director
Joseph F. Rascoff	67	Director and Chief Operating Officer
Edward Simon	67	Director
Mitchell Slater	52	Vice Chairman of the Board of Directors
Sheldon Finkel	68	Vice Chairman
Richard Rosenstein	48	Chief Financial Officer and Executive Vice President, Corporate Strategy and Development
Timothy J. Crowhurst	37	President
Chris Stephenson	47	Chief Marketing Officer
Howard Tytel	66	General Counsel
Robert Damon	58	Chief Accounting Officer and Senior Vice President

Robert F.X. Sillerman has been the Chairman of our board of directors and Chief Executive Officer since our inception. He has served as Executive Chairman of the Board of Directors of Viggle Inc. (formerly, Function(x) Inc.), a media company, since February 2012 and as its Chief Executive Officer since June 2012. He has, since January 2008, served as director and, from January 2008 to January 2013, served as Chairman and Chief Executive Officer of Circle Entertainment Inc., a company developing location-based entertainment venues. Mr. Sillerman also served as the Chief Executive Officer and Chairman of CKX, Inc., a company that owns, develops, manages and commercially uses entertainment content, from February 2005 until May 2010. From August 2000 to February 2005, Mr. Sillerman was Chairman of FXM, Inc., a private investment firm. Mr. Sillerman is the founder and has served as managing member of FXM Asset Management, LLC, the managing member of MJX Asset Management, a company principally engaged in the management of collateralized loan obligation funds, from November 2003 through April 2010. Prior to that, Mr. Sillerman served as the Executive Chairman, a Member of the Office of the Chairman and a director of SFX Entertainment Inc., a company that owned and operated live entertainment venues, from its formation in December 1997 through its sale to Clear Channel in August 2000. We believe that Mr. Sillerman is qualified to serve as a member of our board of directors because of his extensive background as an executive of companies in the entertainment and music industries.

D. Geoff Armstrong has served on our board of directors since December 2012. Mr. Armstrong is currently Chief Executive Officer of 310 Partners, a private investment firm. Mr. Armstrong has been a director, since November 2003, of Nexstar Broadcasting Group, Inc., a television broadcasting company, and, since June 2001, a director of Radio One, Inc., a radio broadcasting company, both publicly held companies. From March 1999 through September 2000, Mr. Armstrong was the Chief Financial Officer of AMFM, Inc., a radio broadcasting company, publicly traded on the New York Stock Exchange until it was purchased by Clear Channel Communications in September 2000. Mr Armstrong was also Chief Operating Officer and a director of Capstar Broadcasting Corporation, which merged with AMFM, Inc. in 1999. Additionally, he was a founder of SFX Broadcasting, which

107

Table of Contents

Management

went public in 1993, and he subsequently served as Chief Financial Officer, Chief Operating Officer, and director until the company was sold in 1998. We believe that Mr. Armstrong is qualified to serve as a member of our board of directors because of his many years of senior management experience at various public and private companies in the media and entertainment industries, including as a chief financial officer and chief operating officer, and his ability to provide insight into a number of areas including governance, executive compensation and corporate finance.

Andrew N. Bazos, M.D. has served on our board of directors since November 2012. Dr. Bazos is an orthopedic surgeon specializing in sports medicine, arthroscopy, knee and shoulder surgery. Dr. Bazos earned a degree with honors in biochemistry from Harvard University and graduated from Yale University School of Medicine. Following a general surgery internship at Columbia-Presbyterian Medical Center in New York City, Dr. Bazos completed his residency training at Columbia-Presbyterian's New York Orthopedic Hospital. Since that time, he has co-authored numerous clinical research projects and international presentations. Dr. Bazos completed a fellowship in Sports Medicine and Arthroscopy at NYU-Hospital for Joint Diseases in New York City in 1993. After being awarded the position of medical director and house physician for Yankee Stadium in 1989, Dr. Bazos founded Sports & Entertainment Physicians, PC, which focuses on comprehensive medical coverage for large-capacity venues in the greater New York City area. In addition to his ongoing role at Yankee Stadium providing venue coverage, Dr. Bazos and his company have served in a similar capacity at Madison Square Garden since 1990 and the US Open Tennis Championships since 2011. Dr. Bazos has also served as Tournament Physician at the Big East Basketball Championships since 2006. He is board-certified by The American Board of Orthopedic Surgery. Dr. Bazos is a partner at Western Connecticut Orthopedic Specialists, PC and since 1993 serves as an Associate Clinical Professor of Orthopedic Surgery in the Sports Medicine Department at NYU-Hospital for Joint Diseases in New York City, where he maintains operating privileges and keeps office hours. We believe that Dr. Bazos is qualified to serve as a member of our board of directors because of his expertise in medicine and event safety.

Jared Cohen has served on our board of directors since April 2013. Since October 2010, he has been the founder and Director of Google Ideas, a "think/do tank" that seeks to enable new technology-driven initiatives and understand how technology can assist in confronting global challenges. Mr. Cohen has been an Adjunct Senior Fellow at the Council on Foreign Relations since September 2010 and currently serves as a member of the National Counterterrorism Center's (NCTC) Director's Advisory Board. He previously served as a member of the Secretary of State's Policy Planning Staff and as an advisor to both Condoleezza Rice and Hillary Clinton from September 2006 to September 2010. Mr. Cohen is the coauthor of the New York Times' Bestseller The New Digital Age: Reshaping the Future of People, Nations, and Business. In 2013, Mr. Cohen was named one of TIME's 100 most influential people in the world. Vanity Fair named him as a member of the "Next Establishment," The Washington Post and Harvard's Kennedy School of Government named him one of six "Top American Leaders," and Foreign Policy listed him as one of the "Top 100 Global Thinkers." We believe that Mr. Cohen is qualified to serve as a member of our board of directors because of his expertise in digital media and technology.

Michael Meyer has served on our board of directors since May 2013. He is a Partner and Head of Sales and Trading at The Seaport Group, a position he has held since 2009. The Seaport Group provides investment banking, research and analysis, and institutional sales and trading services. From 2008 to 2009, Mr. Meyer was employed as Director at UBS O'Conner, a hedge fund located in New York City. Prior to that, he served as Head of Investment Grade Trading and Sales for Bank of America from 2002 to 2007. From 1998 through 2002, Mr. Meyer was the Head of Investment Grade Bond Trading at Union Bank of Switzerland. He was also Managing Director of Credit Trading at

108

Table of Contents

Management

Merrill Lynch from 1992 through 1998 and Vice-President of Credit Trading at Credit Suisse from 1988 through 1992. Mr. Meyer has served as a director for Circle Entertainment, Inc., a company developing location-based entertainment venues which is controlled by Mr. Sillerman, since 2008. We believe that Mr. Meyer is qualified to serve as a member of our board of directors because of his expertise in financial planning and capital markets.

John Miller has served on our board of directors since October 2012. Since June 2004, Mr. Miller has been the Chief Investment Officer of W.P. Carey & Co. LLC, a net lease real estate company. Mr. Miller is also a founder and Non-Managing Member of StarVest Partners, L.P., a $150 million venture capital investment fund formed in 1998. Since February 2011, he has been a director of Viggle Inc., a publicly traded media company. Mr. Miller was also a director of Circle Entertainment Inc. from January 2009 to August 2012. From February 2005 through January 2009, when he resigned, Mr. Miller served as a director of CKX, Inc., a company that owns, develops, manages and commercially uses entertainment content. From 1995 to 1998, Mr. Miller was President of Rothschild Ventures Inc., the private investment unit of Rothschild North America, a subsidiary of the worldwide Rothschild Group. He was also President and CEO of Equitable Capital Management Corporation, an investment advisory subsidiary of The Equitable, where he worked for 24 years beginning in 1969. We believe that Mr. Miller is qualified to serve as a member of our board of directors because of his expertise in finance and venture capital.

Joseph F. Rascoff has served on our board of directors since October 2012 and was named our Chief Operating Officer in June 2013. Mr. Rascoff is a business manager for musical artists. As a co-founder of The RZO Companies, an organization involved in the music industry as a tour producer and business manager, he has represented artists in recording contract negotiations, music publishing administration, licensing, royalty compliance and touring since 1978. Clients of The RZO Companies include The Rolling Stones, U2, David Bowie and Sting. Since February, 2011, he has been a director and Chairman of the Audit Committee of Viggle Inc., a publicly traded media company. Since 2005, Mr. Rascoff has been a director of Van Wagner Communications, LLC, a privately held advertising and media company. From 1974 to 1978, Mr. Rascoff was an audit partner in Hurdman and Cranstoun, a predecessor accounting firm of KPMG LLP. Mr. Rascoff served as a Trustee of The University of Pennsylvania from 1992 to 1996, is on the Board of Overseers of the University of Pennsylvania Libraries, and President of the Board of Trustees of The Bishop's School, La Jolla, California, from 2005 to 2011. Mr. Rascoff is a graduate of The Wharton School, University of Pennsylvania. We believe that Mr. Rascoff is qualified to serve as a member of our board of directors because of his expertise in finance and accounting and his substantial familiarity with the entertainment industry.

Edward Simon has served on our board of directors since October 2012. Since 1998, Mr. Simon has been president of PS Broadway Holdings, Inc., an entertainment management company providing artist services in concert production, music publishing, contract negotiations and business management. We believe that Mr. Simon is qualified to serve as a member of our board of directors because of his expertise in music, entertainment and related industries.

Mitchell Slater has been the Vice Chairman of our board of directors since October 2012. Mr. Slater is a long-time associate of Mr. Sillerman having served as Chief Operating Officer of CKX, Inc. from 2005 to 2010; as Executive Vice President of FXM Investment Corporation from 2000 to 2005; and as Executive Vice President of SFX Entertainment, Inc. from 1998 to 2000. From 2002 until 2011, Mr. Slater was founder and a principal of De Novo Legal, a legal solutions company that focused on document review, temporary legal staffing and electronic discovery. Mr. Slater is a former Board member and current Observer to the Board of Trustees of Muhlenberg College, a member of the Board of Trustees of The Garden School, a private college prepatory school in Jackson Heights, New

109

Table of Contents

Management

York, and former President and current member of the Board of Directors of Lifebeat, a non-profit music organization that fosters HIV/AIDS prevention. Mr. Slater came to know Mr. Sillerman when he sold his concert promotions company Delsener/Slater Enterprises to SFX Broadcasting in 1996. We believe that Mr. Slater is qualified to serve as a member of our board of directors because of his expertise in finance and his experience as an executive at several entertainment companies.

Sheldon Finkel has been our Vice Chairman since June 2013 and previously served as our President from October 2012 to May 2013. He was Chairman and Chief Executive Officer of Sagebrush Gold Ltd. and its wholly owned subsidiary, Empire Sports & Entertainment Holdings Co., an entertainment company, from September 2010 until September 2011. Mr. Finkel is most known as an American boxing and music manager and promoter, having managed and promoted boxing fighters from 1980 until 2010. Mr. Finkel was selected by the Boxing Writers Association of America as manager of the year in 1990 and 1993. In June 2010, he was inducted into the Boxing Hall of Fame. From 2006 to 2010, Mr. Finkel was the President of Shelly Finkel Management Inc., a business specializing in the management of professional fighters, including world-class boxers such as Mike Tyson and Manny Pacquiao. In addition from 2006 to 2010, Mr. Finkel handled a number of business ventures and negotiated opportunities for boxing heavyweight fighters Vitali and Wladmir Klitschko. Prior to his career in boxing, he was a music manager, producing the Watkins Glen Summer Jam concert in 1973, that featured the Grateful Dead, Allman Brothers and The Band.

Richard Rosenstein has been our Executive Vice President of Corporate Strategy & Development since October 2012. He was named our Chief Financial Officer in February 2013. Prior to joining the Company, Mr. Rosenstein was Vice President at Baron Capital, Inc., a money management firm from 2007 to 2012, and before that, was Partner at Keel Capital Management LLC, a hedge fund from 2004 to 2007. Prior to 2004, Mr. Rosenstein was a Managing Director at The Goldman Sachs Group, Inc., where he covered media companies in equity research, co-headed Communacopia Research and served on the stock selection committee.

Timothy J. Crowhurst has been our President since June 2013. Prior to joining SFX, Mr. Crowhurst founded White Oak, an investment management and corporate advisory firm focused on internet, media and entertainment. Prior to White Oak, Mr. Crowhurst was with Goldman, Sachs & Co. from 1999 through 2012, where, most recently, he served as a Managing Director in the Technology, Media and Telecom Group within the Investment Banking Division. Mr. Crowhurst is a Term Member of the Council on Foreign Relations, and a board member of HealthRight International, a charitable organization focused on health and human rights. Mr. Crowhurst holds an A.B. degree in economics from the University of Chicago.

Chris Stephenson has been our Chief Marketing Officer since November 2012. Mr. Stephenson was most recently President and Chief Operating Officer of Viggle Inc., a publicly traded media company from May 2011 to November 2012. Beginning in September 2009 to May 2011, Mr. Stephenson was Chief Marketing Officer at Interscope Records, part of Universal Music Group. Mr. Stephenson was General Manager of Global Marketing for Microsoft, Inc. from March 2006 to September 2009 and was also the Senior Vice President of Marketing at House of Blues Entertainment, LLC, a live entertainment venue management company, from 1996 to 2001, where he focused on brand development and online content. Mr. Stephenson's experience also includes his role as Senior Vice President of Marketing for MTV Networks Inc. where he managed multiple award-winning international advertising campaigns, developed multiple sponsor-driven programs, including the European Music Awards, and was a digital pioneer in the 1990s.

Howard J. Tytel has been our General Counsel since February 2012. He is also currently Counsel in the Corporate and Securities group of Reed Smith LLP. Mr. Tytel served as the Senior Executive Vice

110

Table of Contents

Management

President, Director of Legal and Governmental Affairs and director of CKX, Inc. from February 2005 to February 2012, the Executive Vice President and Director of Legal and Governmental Affairs of FXM, Inc. from August 2000 to February 2005 and the Executive Vice President, General Counsel, Secretary and director of SFX Entertainment Inc. from December 1997 through August 2000.

Robert Damon has been our Chief Accounting Officer since February 2013. Mr. Damon was the Vice President and Corporate Controller of Katz Media Group, Inc., a leading media representation firm for radio, television and digital media clients from 1995 until 2000 when Mr. Damon served as Senior Vice President and Chief Financial Officer until 2012. Mr. Damon was also Corporate Controller at Liberty Fabrics, Inc. from 1991 to 1995 and Senior Manager of Ernst & Young from 1983 to 1991.

BOARD COMPOSITION AND ELECTION OF DIRECTORS

Our board of directors consists of nine directors, with each director being elected to serve until the next annual meeting of stockholders and until their respective successors have been duly elected and qualified. All elections for the board of directors will be decided by a plurality of the votes cast by the stockholders entitled to vote on such matter.

DIRECTOR INDEPENDENCE

Our board of directors has determined that each of our non-employee directors, Edward Simon, John Miller, D. Geoffrey Armstrong, Dr. Andrew Bazos, Jared Cohen and Michael Meyer, satisfy the criteria for independence under NASDAQ listing rules for independence of directors and of committee members. In addition, each of the members of our audit committee is "independent" as such term is defined in Rule 10A-3(b)(1) under the Exchange Act, which is different from the test under NASDAQ listing rules for independence of board and committee members. We currently have a fully independent compensation committee, corporate governance and nominating committee, and audit committee.

BOARD STRUCTURE

Our governance structure combines the roles of Chairman and Chief Executive Officer. Mr. Sillerman has served as both our Chairman and Chief Executive Officer since our formation. The board of directors continues to believe there are important advantages to Mr. Sillerman serving in both roles at this time. Mr. Sillerman is the director most familiar with our business and industry and is best situated to propose the board of directors' agendas and lead board discussions on important matters. Mr. Sillerman provides a strong link between management and the board of directors, which promotes clear communication and enhances strategic planning and implementation of corporate strategies. Another advantage is the clarity of leadership provided by one person representing the Company to employees, stockholders and other stakeholders. The board of directors has named Mr. Miller as its lead independent director.

Our independent directors expect to hold executive sessions at which only independent directors are present in connection with regularly scheduled board meetings, but no less than twice a year.

Our board of directors monitors our exposure to a variety of risks through our audit committee. Our audit committee charter gives the audit committee responsibilities and duties that include discussing with management, the internal audit department and the independent auditors our major financial risk exposures and the steps management has taken to monitor and control such exposures, including our risk assessment and risk management policies.

Even though we are a "controlled company" under NASDAQ listing rules, we do not intend to use any of the exemptions from the NASDAQ corporate governance rules available to a controlled

111

Table of Contents

Management

company, including those relating to board independence and the requirement to have a compensation committee and a nominating committee.

BOARD COMMITTEES

Our board of directors has established an audit committee, a compensation committee, and a corporate governance and nominating committee. Each of the committees reports to the board of directors as they deem appropriate, and as the board of directors may request. The composition, duties and responsibilities of these committees are set forth below. In the future, our board of directors may establish other committees, as it deems appropriate, to assist it with its responsibilities. In addition to the committees described below, we have a medical services committee, chaired by Dr. Bazos, and a digital committee, chaired by Jared Cohen, of the board of directors.

Audit Committee

The audit committee is responsible for, among other matters, assisting the board of directors in fulfilling the board of directors' oversight responsibility relating to: the quality and integrity of our financial statements; the financial reporting process; the systems of internal accounting and financial controls; the performance of our internal audit function; the independent auditors' qualifications, independence, performance and compensation; and our compliance with ethics policies and legal and regulatory requirements.

Our audit committee consists of Messrs. Armstrong, Meyer and Miller, and Mr. Armstrong serves as the chairperson. Our board of directors has determined that Mr. Armstrong, Mr. Meyer and Mr. Miller each qualify as an "audit committee financial expert," as such term is defined in Item 407(d) of Regulation S-K.

Compensation Committee

The compensation committee is responsible for, among other matters, reviewing key employee compensation goals, policies, plans and programs; reviewing and approving the compensation of our chief executive officer and other executive officers; reviewing and approving employment agreements and other similar arrangements between us and our executive officers; and administering our stock plans and other incentive compensation plans.

Our compensation committee consists of Messrs. Simon, Meyer and Miller, and Mr. Miller serves as the chairperson.

Corporate Governance and Nominating Committee

Our corporate governance and nominating committee is responsible for, among other matters, identifying individuals qualified to become members of our board of directors, consistent with criteria approved by our board of directors; overseeing the organization of our board of directors to discharge the board of directors' duties and responsibilities properly and efficiently; identifying best practices and recommending corporate governance principles; reviewing and approving any transaction between us and any related person (as defined in Item 404 of Regulation S-K); reviewing and approving the compensation of our non-employee directors; and developing and recommending to our board of directors a set of corporate governance guidelines and principles applicable to us.

Our corporate governance and nominating committee consists of Messrs. Simon, Meyer and Miller, and Mr. Simon serves as the chairperson.

112

Table of Contents

Management

CODE OF BUSINESS CONDUCT AND ETHICS

We have adopted a code of business conduct and ethics that applies to all of our employees, officers, and directors, including those officers responsible for financial reporting. These standards are designed to deter wrongdoing and to promote honest and ethical conduct. The code of business conduct and ethics and the written charters for the audit committee, compensation committee and corporate governance and nominating committee will be available on our website. The information that appears on our website is not part of, and is not incorporated into, this prospectus.

None of our directors or executive officers, nor any associate of such individual, is involved in a legal proceeding adverse to us or any of our subsidiaries or our joint ventures.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the members of our compensation committee is or has at any time during the past year been an officer or employee of ours. None of our executive officers currently serves or in the past year has served as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors or compensation committee.

113

Table of Contents

Executive compensation

SUMMARY COMPENSATION TABLE

The following table sets forth information concerning cash and non-cash compensation paid to our named executive officers for 2012.

Name and position	Year	Salary ($)	Bonus ($)	Stock awards ($)	Option awards ($)(1)						Total


Robert F.X. Sillerman	2012	—	—	—	$	15,146,254	(2)	—	—	—	$	15,146,254
Chief Executive Officer
Mitchell Slater	2012	—	—	—	$	3,714,778	(2)	—	—	—	$	3,714,778
Vice Chairman
Sheldon Finkel	2012	$300,000	—	—	$	7,429,557		—	—	—	$	7,729,557
Vice Chairman(3)

(1): The amounts in this column were calculated based on the grant date fair value of stock options or warrants computed using the Black-Scholes model, in accordance with FASB ASC Topic 718. For additional information regarding the assumptions used in determining fair value using the Black Scholes pricing model, see Note 1, "Summary of Critical Accounting Policies—Stock Based Compensation," to our audited consolidated financial statements included below.
(2): Our financial statements recognize all of the awards to Mr. Sillerman and all of the awards to Mr. Slater in 2013 rather than 2012. See "—Equity incentives—Formation grants." A portion of the reported securities for Mr. Sillerman were warrants to purchase common stock that were subsequently exchanged on April 23, 2013 for options with substantially the same terms or shares of restricted common stock as discussed below under the caption "Other awards."
(3): Mr. Finkel served as our President from October 2012 through May 2013 when he agreed to serve as our Vice Chairman.

OVERVIEW OF COMPENSATION PROGRAM

The compensation of each of our executive officers is based on individual terms that have been approved by our board of directors. In the future, our compensation committee will review and approve the compensation of our executive officers. We are a relatively young company and only recently began making payments to our executive officers pursuant to their employment agreements or arrangements, as more fully described below under "Employment Arrangements." Consequently, the consideration of our compensation programs to date has been limited.

We expect to more fully develop our compensation plans going forward by using a combination of data regarding historical pay, publicly available compensation data for public companies that are engaged in our industry, in related industries, or that possess size or other characteristics which are similar to ours, and data which may be obtained by a compensation consultant for us on public and private companies. We also expect to consider other factors, including but not limited to:

•: the individual's background, training, education and experience;
•: the individual's role with us and the compensation paid to individuals in similar roles in the companies we consider to have characteristics similar to ours;
•: the market demand for specific expertise possessed by the individual;

114

Table of Contents

Executive compensation

•: the goals and expectations for the individual's position and his or her success in achieving these goals; and
•: a comparison of the individual's pay to that of other individuals within the company with similar title, role, experience and capabilities.

We do not have a definitive compensation program in place. We expect that a key element of our philosophy on senior executive compensation will be to ensure that all elements of our compensation program work together to attract, motivate and retain the executive, managerial and professional talent needed to achieve our corporate strategy, goals and objectives. We are committed to the principles inherent in paying for performance, and we expect that we will structure the compensation program to deliver rewards for exemplary performance.

COMPONENTS OF COMPENSATION FOR EXECUTIVE OFFICERS

The key elements of executive compensation are base salary (other than with respect to Mr. Sillerman and Mr. Slater) and long-term incentive awards. In considering appropriate levels of long-term incentive compensation, we take into account the extent to which existing incentives, including each executive's existing stock ownership in us and the existence or lack of any vesting provisions or restrictions on resale with respect thereto, provide a sufficient degree of economic incentive to continue our success.

BASE SALARY

The compensation committee will annually review the base salaries of the Chief Executive Officer and other executive officers of our company. As described further below, Mr. Sillerman and Mr. Slater will receive an annual base salary of one dollar per annum. The arrangement with Mr. Sillerman and Mr. Slater to request no material salary is based on our belief that, beginning with their involvement in the formation of the company and an interest in maximizing our stockholder value, their compensation should be tied to generating stockholder returns through growth in value of our common stock. The salaries of our other executive officers have been set to reflect the nature and responsibility of each of their respective positions and to retain a management group with a proven track record.

ANNUAL INCENTIVES

While we believe that annual incentive compensation motivates executives to achieve exemplary results, no formal annual incentive compensation plan for our executive officers has been adopted to date. In large part, this decision reflects the view, jointly held by management and the members of the compensation committee, that during the formative phase in our development, we should approach compensation cautiously.

EMPLOYMENT ARRANGEMENTS

We believe that entering into employment agreements with our most senior executives will help ensure that our core group of managers will be available to us and our stockholders on a long-term basis. At this time, we have agreed to compensation arrangements with our named executive officers and such arrangements have been memorialized in employment agreements, as discussed below.

We entered into an employment agreement with each of (i) Mr. Sillerman, dated as of October 18, 2012 and executed January 1, 2013, for his service as Executive Chairman of our board of directors and Chief Executive Officer, (ii) Mr. Slater, dated January 1, 2013, for his service as Vice Chairman of our board of directors and Member of the Office of the Chairman and (iii) Mr. Finkel, dated

115

Table of Contents

Executive compensation

November 8, 2012, for his service as our President although Mr. Finkel agreed to serve as our Vice Chairman effective June 2013. The term of the employment agreement for Mr. Sillerman is through November 17, 2017, and the term of the employment agreement for Mr. Slater is through December 31, 2017, and the term of employment agreement for Mr. Finkel is through December 31, 2016. Under the terms of his employment agreement with us, Mr. Sillerman has also agreed, as is necessary and practically feasible, to provide to us financial support until we have completed our initial public offering.

Pursuant to their employment agreements, Messrs. Sillerman and Slater are each entitled to receive an annual base salary of one dollar, and Mr. Finkel is entitled to receive an annual base salary of $300,000. Messrs. Sillerman, Slater and Finkel are each also eligible to receive an annual bonus in the discretion of our compensation committee. Pursuant to their employment agreements, Messrs. Sillerman, Slater and Finkel received an initial grant of options with respect to 2,500,000, 1,000,000 and 2,000,000 shares of our common stock, respectively, at a strike price of $2.00 per share, (i) 20% of which options vested on January 1, 2013 in the cases of Messrs. Sillerman and Slater, and December 31, 2012, in the case of Mr. Finkel, and (ii) 20% which vest on December 31 of each of 2013, 2014, 2015 and 2016. Messrs. Sillerman's, Slater's and Finkel's employment agreements each provide that the executive is also entitled to qualify for additional equity or option grants each year. Under their employment agreements, Messrs. Sillerman, Slater and Finkel are entitled to participate in benefits offered by us for similarly situated employees, six weeks of vacation time per calendar year in the case of Mr. Sillerman, and three weeks of vacation time per calendar year in the cases of Messrs. Slater and Finkel. Messrs. Sillerman's, Slater's and Finkel's employment agreements contain restrictive covenants with respect to non-competition, non-solicitation of customers and employees and non-disparagement (each of which remains in effect during the term of employment and for one year thereafter), and a restrictive covenant with respect to non-disclosure of confidential information (which remains in effect during the term of employment and at all times thereafter).

Pursuant to our employment agreement with Mr. Sillerman, he is required to devote his time, attention, energy, knowledge, best professional efforts and skills to the duties assigned to him by us, but he is permitted to pursue other professional endeavors and investments that do not violate the terms of his employment agreement, including non-competition covenants. Mr. Sillerman is expressly permitted to engage in certain endeavors and investments which are listed in his employment agreement, and we believe that none of these endeavors or investments currently compete with us. Any other professional endeavors to be performed by Mr. Sillerman are subject to prior approval of our board of directors. Under our employment agreements with our other named executive officers, each of Mr. Slater and Mr. Finkel and Mr. Crowhurst, our President, and Mr. Rascoff, our Chief Operating Officer, are also permitted to engage in certain endeavors that are listed in their agreements and other endeavors or pre-approved by our board of directors that do not compete with us. We believe that none of the endeavors currently pursued by any of our officers compete with us.

In addition to the employment agreements with our named executive officers, we have also entered into employment agreements with our other executive officers, as discussed below.

We entered into an employment agreement, dated as of October 2, 2012, with Richard Rosenstein, for his service as our Executive Vice President, Head of Corporate Strategy and Development. The initial term of the employment agreement with Mr. Rosenstein is through October 2, 2017. Pursuant to his employment agreement, Mr. Rosenstein is entitled to receive a base salary of $300,000 and a discretionary bonus to be determined by the compensation committee, subject to a minimum annual bonus target of $150,000. Under his employment agreement, Mr. Rosenstein received a fully vested option to purchase 150,000 shares of our common stock at a strike price of $4.00 per share. He is also entitled to a minimum grant of 100,000 stock options during each subsequent year of his

116

Table of Contents

Executive compensation

employment, such options to be issued at fair market value and to vest at the end of the year of each grant. Upon his promotion to Chief Financial Officer, Mr. Rosenstein received an additional option grant on February 22, 2013 to purchase 150,000 shares at a strike price of $5.00 per share, 20% of which options vested immediately and 20% of which vest on December 31 of each of 2013, 2014, 2015 and 2016.

We entered into an employment agreement, dated as of June 1, 2013, with Timothy J. Crowhurst for his service as the President of the Company. The term of the employment agreement with Mr. Crowhurst is through June 1, 2018. Pursuant to his employment agreement, Mr. Crowhurst is entitled to receive a base salary of $300,000 and an annual bonus at the discretion of our compensation committee. Pursuant to his employment agreement, Mr. Crowhurst will receive an option grant to purchase 1,000,000 shares of our common shares at a strike price of $10.00 per share, 20% of which options vested upon the execution of the employment agreement and 20% which vest on December 31 of each of 2013, 2014, 2015 and 2016.

We entered into an employment agreement, dated as of June 3, 2013, with Joseph F. Rascoff for his service as Chief Operating Officer of the Company. The term of the employment agreement with Mr. Rascoff is through June 1, 2016. Pursuant to his employment agreement, Mr. Rascoff is entitled to receive a base salary of $300,000 and an annual bonus at the discretion of our compensation committee, subject to a minimum annual bonus of $210,000. Such bonus may be paid to Mr. Rascoff or to a third party at his discretion. Pursuant to his employment agreement, Mr. Rascoff will receive an option grant to purchase 1,400,000 shares of our common shares at a strike price of $10.00 per share, one-third of which options vested upon the execution of the employment agreement and one-third of which vest on June 1 of each of 2014 and 2015. As a condition to his employment, we agreed to accelerate the vesting of options to purchase 93,750 shares of our common stock previously issued to Mr. Rascoff on December 18, 2012. Mr. Rascoff is also entitled to a housing, meal, and travel allowance of $20,000.00 per month.

We entered into an employment agreement, dated as of November 13, 2012, with Chris Stephenson for his service as the Chief Marketing Officer of the Company. The term of the employment agreement with Mr. Stephenson is through November 1, 2017. Pursuant to his employment agreement, Mr. Stephenson is entitled to receive a base salary of $300,000 and an annual bonus at the discretion of our compensation committee. Mr. Stephenson received an initial option grant to purchase 400,000 shares of our common stock at a strike price of $2.00 per share, 25% of which options vest on December 31 of each of 2013, 2014, 2015 and 2016. He is also entitled to a minimum grant of 100,000 stock options during each subsequent year of his employment, such options to be issued at fair market value and to vest at the end of the year of each grant.

We entered into an employment agreement, dated as of June 5, 2013, with Robert Damon for his service as the Chief Accounting Officer and Senior Vice President of the Company. The term of the employment agreement with Mr. Damon is through February 22, 2016. Pursuant to his employment agreement, Mr. Damon is entitled to receive a base salary of $275,000 and a minimum annual bonus target of $85,000 at the discretion of the Company. In connection with his employment, Mr. Damon received an initial grant of options to purchase 125,000 shares of our common stock at a strike price of $5.00 per share, 20% of which options vested upon the execution of Mr. Damon's employment agreement and 20% of which vest on February 22 of each of 2014, 2015, 2016 and 2017.

EQUITY INCENTIVES

Because of the direct relationship between the value of an option and the market price of our common stock, we believe that granting stock options is an effective method of motivating our executive officers and other key employees to manage our company in a manner that is consistent with our interests and

117

Table of Contents

Executive compensation

those of our stockholders. We will grant option awards to our executive officers and key employees based upon prior performance, the importance of retaining their services and the potential for their performance to help us attain our long-term goals. However, we do not expect to rely on a formula for the granting of awards to individual executives or employees. Option awards generally will reflect our board's assessment of the influence an employee's position has on stockholder value. The number of options awarded from year to year, on a going forward basis, by our compensation committee, may vary up or down from prior year awards based on the level of an individual executive officer's contribution to us in a particular year, determined in part on the recommendation of the Chief Executive Officer. Factors to be considered by the compensation committee will include past grants to the individual, total compensation level (relative to other executives and relative to market data), contributions to our success during the last completed fiscal year, potential for contributions in the future, and as a component of competitive total compensation based on market data.

Formation grants

During our formation in 2012, our then sole director granted options to certain of our officers and employees, including Messrs. Sillerman, Slater and Finkel, to retain top talent and drive long-term shareholder value creation. Mr. Sillerman was granted options to purchase 2,500,000 shares with an exercise price of $2.00 per share, vesting in five equal installments of 500,000 shares each, commencing on the date of grant and then on January 1 of each year starting January 1, 2014. Mr. Slater was granted options to purchase 1,000,000 shares with an exercise price of $2.00 per share, vesting in five equal installments of 200,000 shares each, commencing on the date of grant and then on January 1 of each year starting January 1, 2013. Mr. Finkel was granted options to purchase 2,000,000 shares with an exercise price of $2.00 per share, vesting in five equal installments of 400,000 shares each, commencing on the date of grant and then on December 31 of each year starting December 31, 2013. These option grants were subsequently reviewed by our compensation committee.

These options, among others, were granted at prices ranging from $2.00 to $4.00 per share, which in the view of management and subsequently our compensation committee, represented the fair market value of our common stock at the time of grant. The options were granted for a term not exceeding ten years and generally vest over various periods up to five years. While some of these grants were documented at a later date in 2012, some were not fully documented until 2013. As a result of the concerns with respect to contemporaneous documentation of the our option grants, we recorded compensation expense with respect to option grants at the time it was believed that the documentation of such grants met all key criteria under ASC 718 and could be evidenced (referred to as the measurement date). In some cases this was 2013, and accordingly, our financial statements for 2012 contain no expense related to those stock option awards. The fair value of common stock on the measurement date has been used solely to record compensation expenses in our consolidated financial statements.

Other awards

In addition, in 2012 and 2013, Mr. Sillerman was granted options and 1.1 million shares of restricted stock in recognition of our performance under his leadership, his individual performance achievements, including with respect to our acquisitions, providing structuring advice, and supporting our capital raising activities, and to encourage his retention with us, including through our transition to a public company.

118

Table of Contents

Executive compensation

The below chart provides the date of grant of each non-formation option granted to Mr. Sillerman, the number of the shares that may be purchased under each option, and the exercise price per share of each option.

Date of Grant		Exercise Price Per Share


December 31, 2012	700,000	$	5.00
December 31, 2012	700,000	$	7.50
December 31, 2012	700,000	$	10.00
February 11, 2013	500,000	$	5.00
February 11, 2013	750,000	$	7.50
February 11, 2013	1,000,000	$	10.00
March 12, 2013	5,000,000	$	5.00

The option grants described in the above chart were originally issued as warrants representing the same number of underlying shares at the same exercise price per share. The December 2012 warrant grants were issued to Mr. Sillerman in connection with the issuance to him of a $7.0 million promissory note and as consideration for entering into a back-stop agreement pursuant to which he agreed to purchase the entire amount of the notes offered but not subscribed for by certain of our other stockholders. Mr. Sillerman also received a warrant to purchase 100,000 shares at a strike price of $0.01 per share on December 31, 2012 for providing the aforementioned services and this warrant was subsequently exchanged for 100,000 shares of restricted common stock on April 23, 2013. The February 2013 warrant grants were issued to Mr. Sillerman as consideration for his agreement to guaranty our obligations under our future credit facility. The March 2013 warrant grant was issued to Mr. Sillerman as consideration for providing the aforementioned guaranty. On April 23, 2013, an independent committee of our board of directors agreed that the previous issuances of warrants should be exchanged for and reclassified as compensatory options to be issued under the 2013 Supplemental Equity Compensation Plan because Mr. Sillerman was providing, pursuant to his employment agreement with us, financing support to us when the warrants were first issued.

Each of the option grants and the restricted stock grants have service-based vesting components and vest on the third anniversary of each grant or upon a change in control, subject to Mr. Sillerman's continued employment with us through such date. The options and restricted stock are also subject to accelerated vesting under certain conditions pursuant to the terms of Mr. Sillerman's employment agreement, as more fully discussed below under the caption "Potential Payments Upon Terminations of Employment or Following a Change in Control."

The option and restricted stock grants were made pursuant to our 2013 Supplemental Equity Compensation Plan. The terms of this plan are substantially similar to our 2013 Equity Compensation Plan, as more fully discussed below under the caption "Equity Incentive Plan," however, other than those shares issued to Mr. Sillerman, we consider this plan to be terminated and do not intend to make additional issuances under the plan.

Equity incentive plan

Our board of directors has adopted, and our stockholders have approved, the 2013 Equity Compensation Plan, or the 2013 Plan. The 2013 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, to our employees and any parent and subsidiary corporations' employees, and for the grant of nonstatutory stock options, restricted stock, and restricted stock units to our employees, directors and consultants and our parent and subsidiary corporations' employees and consultants.

119

Table of Contents

Executive compensation

Authorized Shares. A total of 11,250,000 shares of our common stock have been reserved for issuance pursuant to the 2013 Plan, of which 9,633,000 shares are currently subject to issued and outstanding awards. Our board of directors is considering increasing the number of shares reserved for issuance under the 2013 Plan to an amount equal to 15% to 20% of the shares to be outstanding following the closing of our initial public offering and our planned acquisitions.

Plan Administration. Our compensation committee administers the 2013 Plan. Subject to the provisions of the 2013 Plan, our compensation committee has the power to determine the terms of the awards, including the exercise price, the number of shares subject to each such award, the exercisability of the awards and the form of consideration, if any, payable upon exercise.

Stock Options. The exercise price of options granted under the 2013 Plan must at least be equal to the fair market value of our common stock on the date of grant. The term of an incentive stock option may not exceed ten years, except that with respect to any employee who owns more than 10% of the voting power of all classes of our outstanding stock, the term must not exceed five years and the exercise price must equal to at least 110% of the fair market value of our common stock on the grant date. Subject to the provisions of the 2013 Plan, the compensation committee determines the term of all other options. After the termination of service of an employee, director or consultant, he or she may exercise his or her option for 90 days. Generally, if termination is due to death or disability, the option will remain exercisable for 12 months. However, in no event may an option be exercised later than the expiration of its term.

Restricted Stock. Restricted stock may be granted under the 2013 Plan. Restricted stock awards are grants of shares of our common stock that vest in accordance with terms and conditions established by the compensation committee. The compensation committee will determine the number of shares of restricted stock granted to any employee, director, or consultant. The compensation committee may impose whatever conditions to vesting it determines to be appropriate (for example, the compensation committee may set restrictions based on the achievement of specific performance goals or continued service to us); provided, however, that the compensation committee, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed. Shares of restricted stock that do not vest are subject to our right of repurchase or forfeiture.

Restricted Stock Units. Restricted stock units may be granted under the 2013 Plan. Restricted stock units are bookkeeping entries representing an amount equal to the fair market value of one share of our common stock. The compensation committee determines the terms and conditions of restricted stock units, including the vesting criteria (which may include accomplishing specified performance criteria or continued service to us) and the form and timing of payment. Notwithstanding the foregoing, the compensation committee, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed.

Non-Transferability of Awards. Unless the compensation committee provides otherwise, the 2013 Plan generally does not allow for the transfer of awards and only the recipient of an award may exercise an award during his or her lifetime.

Certain Adjustments. In the event of certain changes in our capitalization, to prevent diminution or enlargement of the benefits or potential benefits available under the 2013 Plan, the compensation committee will adjust the number and class of shares that may be delivered under the 2013 Plan and/or the number, class and price of shares covered by each outstanding award, and the numerical share limits set forth in the 2013 Plan.

Change of Control. The 2013 Plan provides that in the event of a change of control, as defined under the 2013 Plan, each outstanding award will fully vest, unless otherwise determined by the compensation committee; provided that upon a change of control where we are not the surviving

120

Table of Contents

Executive compensation

corporation (or survives only as a subsidiary of another corporation), unless the compensation committee determines otherwise, all outstanding options that are not exercised shall be assumed by, or replaced with comparable options by, the surviving corporation (or a parent or subsidiary of the surviving corporation).

Amendment; Termination. Our compensation committee has the authority to amend, suspend or terminate the 2013 Plan provided such action does not impair the existing rights of any participant. The 2013 Plan automatically terminates in 2023, unless we terminate it sooner.

OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2012

The following table includes certain information with respect to all equity awards that remain outstanding as of December 31, 2012 for our named executive officers.

	Option / Warrant Awards

Name	Number of Securities Underlying Unexercised Options (#) Exercisable			Number of Securities Underlying Unexercised Options (#) Unexercisable			Option Exercise Price ($)(6)		Option Expiration Date

Robert F.X. Sillerman		500,000	(1)		2,000,000	(1)		2.00	3/1/2022
		700,000	(2)		—			5.00	12/31/2019
		700,000	(2)		—			7.50	12/31/2019
		700,000	(2)		—			10.00	12/31/2019
		100,000	(3)		—			0.01	12/31/2019
Mitchell Slater		400,000	(4)		600,000	(4)		2.00	3/1/2022
Sheldon Finkel		400,000	(5)		1,600,000	(5)		2.00	3/1/2022

(1): Of these options granted on March 1, 2012, 500,000 vested immediately and the remaining 2,000,000 will vest in four equal installments on January 1 of each year starting January 1, 2014, subject to the grantee remaining employed with us through such dates. Our financial statements do not show these options as being outstanding on December 31, 2012 because they recognize these options as having been awarded in 2013 rather than in 2012. See "—Equity incentives—Formation grants."
(2): This warrant was subsequently exchanged for an option with substantially the same terms on April 23, 2013 as discussed above under the caption "Other awards."
(3): This warrant was subsequently exchanged for 100,000 shares of restricted common stock on April 23, 2013 as discussed above under the caption "Other awards."
(4): Of these options granted on March 1, 2012, 200,000 vested immediately, 200,000 vested on January 1, 2013 and the remaining 600,000 will vest in three equal installments on January 1 of each year starting January 1, 2014, subject to the grantee remaining employed with us through such dates. Our financial statements do not show these options as being outstanding on December 31, 2012 because they recognize these options as having been awarded in 2013 rather than 2012. See "—Equity incentives—Formation grants."
(5): Of these options granted on March 1, 2012, 400,000 vested immediately and the remaining 1,600,000 will vest in four equal installments on December 31 of each year starting December 31, 2013, subject to the grantee remaining employed with us through such dates.
(6): The exercise price was determined by our board of directors or our compensation committee.

121

Table of Contents

Executive compensation

POTENTIAL PAYMENTS UPON TERMINATIONS OF EMPLOYMENT OR FOLLOWING A CHANGE IN CONTROL

The employment agreement with Mr. Sillerman provides that, upon a termination of Mr. Sillerman's employment with us (i) by us without "cause," (ii) by Mr. Sillerman due to "constructive termination without cause," (iii) in the event of a "change of control" of the Company or (iv) resulting from the death or disability of Mr. Sillerman, we shall make a payment to Mr. Sillerman (or his estate, as applicable) subject to his execution of a release of claims, in the amount of $5.0 million, plus a payment equal to a pro-rated annual bonus based on Mr. Sillerman's prior year's bonus. In addition, upon such a termination, or upon our election not to renew Mr. Sillerman's employment at the end of his term, all previously issued but unvested stock options and restricted stock issued to Mr. Sillerman shall accelerate. Under the employment agreement with Mr. Sillerman, the Company must also pay costs subject to his execution of a release of claims, associated with Mr. Sillerman's health and dental benefits for a period of 12 months following his termination without cause, due to constructive termination without cause, a change of control, or death.

The employment agreement with Mr. Slater provides that, upon a termination of Mr. Slater's employment with us (i) by us without "cause," (ii) by Mr. Slater due to "constructive termination without cause," (iii) in the event of a "change of control" of the Company or (iv) resulting from the death or disability of Mr. Slater, we shall make a payment to Mr. Slater (or his estate, as applicable), subject to his execution of a release of claims, in the amount of $2,000,000, plus a payment equal to a pro-rated annual bonus based on Mr. Slater's prior year's bonus. In addition, upon such a termination, or upon our election not to renew Mr. Slater's employment at the end of his term, all previously issued but unvested stock options and restricted stock issued to Mr. Slater shall accelerate. Under the employment agreement with Mr. Slater, we must also pay costs, subject to his execution of a release of claims, associated with Mr. Slater's health and dental benefits for a period of two months following his termination without cause, due to constructive termination without cause, a change of control or death.

The employment agreement with Mr. Finkel provides that, upon a termination of Mr. Finkel's employment with us (i) by us without "cause," (ii) by Mr. Finkel due to "constructive termination without cause" or (iii) resulting from the death or disability of Mr. Finkel, we shall make a severance payment to Mr. Finkel (or his estate, as applicable), subject to his execution of a release of claims, in the amount equal to six months current base salary, plus a payment equal to a pro-rated annual bonus based on Mr. Finkel's prior year's bonus. In addition, upon such a termination, or upon our election not to renew Mr. Finkel's employment at the end of his term, all previously issued but unvested stock options and restricted stock issued to Mr. Finkel shall accelerate. Under the employment agreement with Mr. Finkel, we must also pay costs, subject to his execution of a release of claims, associated with Mr. Finkel's health and dental benefits for a period of two months following his termination without cause, due to constructive termination without cause or death.

The employment agreement with Mr. Rosenstein provides that, upon a termination of Mr. Rosenstein employment with us (i) by us without "cause," (ii) in the event of a "change of control" of the Company or (iii) resulting from the death or disability of Mr. Rosenstein, we shall make a severance payment to Mr. Rosenstein (or his estate, as applicable), subject to his execution of a release of claims, in the amount equal to six months current base salary. In addition, upon such a termination, or upon our election not to renew Mr. Rosenstein's employment at the end of his term, all previously issued but unvested stock options issued to Mr. Rosenstein shall accelerate. Under the employment agreement with Mr. Rosenstein, we must also pay costs, subject to his execution of a release of claims, associated with Mr. Rosenstein's health and dental benefits for a period of two months following his termination without cause, due to constructive termination without cause, or death.

122

Table of Contents

Executive compensation

The employment agreement with Mr. Crowhurst provides that, upon a termination of Mr. Crowhurst's employment with us (i) by us without "cause," (ii) by Mr. Crowhurst due to "constructive termination without cause" or (iii) resulting from the death or disability of Mr. Crowhurst, we shall make a severance payment to Mr. Crowhurst (or his estate, as applicable), subject to his execution of a release of claims, in the amount equal to twelve months current base salary, plus a payment equal to a pro-rated annual bonus based on Mr. Crowhurst's prior year's bonus. In addition, upon such a termination, or upon our election not to renew Mr. Crowhurst's employment at the end of his term, all previously issued but unvested stock options and restricted stock issued to Mr. Crowhurst shall accelerate. Under the employment agreement with Mr. Crowhurst, we must also pay costs, subject to his execution of a release of claims, associated with Mr. Crowhurst's health and dental benefits for a period of two months following his termination without cause, due to constructive termination without cause or death.

The employment agreement with Mr. Rascoff provides that, upon a termination of Mr. Rascoff's employment with us (i) by us without "cause," (ii) by Mr. Rascoff due to "constructive termination without cause" or (iii) resulting from the death or disability of Mr. Rascoff, we shall make a severance payment to Mr. Rascoff (or his estate, as applicable), subject to his execution of a release of claims, in the amount equal to twelve months current base salary, plus a payment equal to a pro-rated annual bonus based on Mr. Rascoff's prior year's bonus, and we are is obligated to continue to pay the $20,000 per month expense allowance provided in his employment agreement for one year after termination of employment. In addition, upon such a termination, or upon our election not to renew Mr. Rascoff's employment at the end of his term, all previously issued but unvested stock options and restricted stock issued to Mr. Rascoff shall accelerate. Under the employment agreement with Mr. Rascoff, we must also pay costs, subject to his execution of a release of claims, associated with Mr. Rascoff's health and dental benefits for a period of two months following his termination without cause, due to constructive termination without cause or death.

The employment agreement with Mr. Stephenson provides that, upon a termination of Mr. Stephenson's employment with us (i) by us without "cause," (ii) by Mr. Stephenson due to "constructive termination without cause" or (iii) resulting from the death or disability of Mr. Stephenson, we shall make a severance payment to Mr. Stephenson (or his estate, as applicable), subject to his execution of a release of claims, in the amount equal to three months current base salary, plus an additional month of salary for every full year Mr. Stephenson was employed by us, in addition to a payment equal to a pro-rated annual bonus based on Mr. Stephenson's prior year's bonus. In addition, upon such a termination, or upon our election not to renew Mr. Stephenson's employment at the end of his term, all previously issued but unvested stock options issued to Mr. Stephenson shall accelerate. Under the employment agreement with Mr. Stephenson, we must also pay costs, subject to his execution of a release of claims, associated with Mr. Stephenson's health and dental benefits for a period of two months following his termination without cause, due to constructive termination without cause, or death.

The employment agreement with Mr. Damon provides that, upon a termination of Mr. Damon's employment with us (i) by us without "cause" or (ii) by Mr. Damon for "good reason," prior to the end of his first full year of employment with us, we shall make a severance payment to Mr. Damon in an amount equal to the greater of (y) the difference between twelve months of his base salary less the actual compensation received by Mr. Damon, or (z) six months base salary. Upon a termination of Mr. Damon's employment with us (i) by us without "cause" or (ii) by Mr. Damon for "good reason," after he has completed one full year of employment with us, we shall make a payment to Mr. Damon in the amount equal to six months base salary. In addition, upon a termination of Mr. Damon's employment upon or after a "change of control" of the Company, we shall make a payment to Mr. Damon in the amount equal to twelve months of his base salary.

123

Table of Contents

Executive compensation

DIRECTOR COMPENSATION—YEAR ENDED DECEMBER 31, 2012

Name	Fees earned or paid in cash ($)(1)		Stock awards(2)		Option awards ($)(2)		Total ($)


Edward Simon	$	22,250		—	$	369,932	$	392,182
Joseph F. Rascoff	$	23,750		—	$	369,932	$	393,682
John Miller	$	22,250		—	$	369,932	$	392,182
Dr. Andrew N. Bazos	$	9,375	$	9,375	$	369,932	$	388,682
D. Geoffrey Armstrong	$	7,250		—	$	369,932	$	377,182

(1): Represents the amounts of all fees earned or paid in cash for services as a director in 2012. Our director compensation program is described in more detail below.
(2): Represents the grant date fair value determined in accordance with FASB ASC Topic 718 for share awards and option awards granted to our non-employee directors.

Our non-employee directors held the following outstanding share awards and option awards as of December 31, 2012:

Name


Edward Simon	—	125,000
Joseph F. Rascoff	—	125,000
John Miller	—	125,000
Dr. Andrew N. Bazos	1,875	125,000
D. Geoffrey Armstrong	—	125,000

Effective as of December 18, 2012, our board of directors approved a compensation program pursuant to which we provide the following compensation to our non-employee directors:

•: quarterly payments of $18,750, half of which may be taken in the form of our common stock;
•: $1,000 for attendance at committee meetings;
•: quarterly fees of $2,500 for chairmanship of each of the compensation committee and the governance and nominating committee and $5,000 for chairmanship of the audit committee; and
•: initial grants of stock options to purchase 125,000 shares of common stock, having an exercise price of $4.00 per share. The options vest as follows: 31,250 options at the time of grant and in three equal installments of 31,250 options on the next three anniversaries of the initial grant date. In April 2013, our board revised the director compensation program so that Mr. Cohen and Mr. Meyer would receive options to purchase 175,000 shares of common stock, having an exercise price of $10.00 per share. These options vest as follows: 43,750 options at the time of grant and in three equal installments of 43,750 options on the next three anniversaries of the initial grant date.

We reimburse each non-employee director for out-of-pocket expenses incurred in connection with attending our board and committee meetings.

124

Table of Contents

Certain relationships and related party transactions

AGREEMENTS WITH INDIVIDUALS AND ENTITIES AFFILIATED WITH DIRECTORS AND EXECUTIVE OFFICERS

In February 2012, SFX EDM Holdings Corporation issued and sold an aggregate of 36,000,000 shares of its common stock at par value to our founder, Chief Executive Officer and chairman, Robert F.X. Sillerman, and funds controlled by him. SFX subsequently acquired SFX EDM Holdings Corporation when the stockholders of SFX EDM Holdings Corporation exchanged all of their shares for a like amount of shares of our common stock under share exchange agreements between and among SFX, SFX EDM Holdings Corporation and the stockholders of SFX EDM Holdings Corporation.

Pursuant to nominee agreements, multiple record holders of our common stock, including certain members of our management and funds controlled by Mr. Sillerman, assigned all of their title and interest in an aggregate of 19,124,000 shares to Mr. Sillerman, as their nominee.

On October 29, 2012, we issued and sold 2,500,000 shares of our common stock at a price per share of $4.00 to Mr. Sillerman for an aggregate purchase price of $10.0 million. We used the proceeds to pay the initial acquisition costs in our joint venture arrangement with ID&T. At the time of the issuance of these shares, our board of directors agreed that Mr. Sillerman may sell these shares to unaffiliated third persons during our capital raising process. Mr. Sillerman subsequently transferred these shares to unaffiliated third-parties.

During 2012, we had a shared services arrangement with Circle Entertainment Inc., or Circle, a company substantially owned and controlled by Mr. Sillerman, pursuant to which we paid Circle for shared office space and office support services, as well as the use of certain of Circle's legal and secretarial employees. For the year ended December 31, 2012, we incurred costs under this arrangement of $0.2 million and paid $0.05 million. This arrangement was memorialized in a written agreement on January 4, 2013. During the period ended March 31, 2013, we incurred no additional costs and paid Circle a total of $0.2 million. Mr. Meyer also currently serves on the board of directors of Circle, as does Mr. Sillerman.

During 2012, we had a shared services arrangement with Viggle Inc., or Viggle, a company substantially owned and controlled by Mr. Sillerman, pursuant to which we paid Viggle for the costs of certain tax, accounting and financial processing services incurred on our behalf. For the year ended December 31, 2012, we incurred costs under this arrangement of $0.012 million and paid $0.007 million. This arrangement was memorialized in a written agreement on January 4, 2013. During the period ended March 31, 2013, we incurred costs of $0.1 million and paid Viggle $0.02 million. Messrs. Meyer and Miller currently serve on the board of directors of Viggle, as does Mr. Sillerman.

Pursuant to subscription agreements with three separate investors entered into in June 2012 with respect to an aggregate of 5,750,000 shares, Mr. Sillerman granted certain tag-along rights to the three investors that would permit them to participate in any transfer to an unaffiliated third-party by Mr. Sillerman and/or his affiliates of their shares. These tag-along rights will expire immediately prior to the pricing of our initial public offering.

In the early stages of our development, MJX, LLC, a company owned 100% by Mr. Sillerman, funded the travel and entertainment expenses incurred by our consultants and employees who were assisting in meeting with potential acquisition targets. As of December 31, 2012, we owed MJX, LLC

125

Table of Contents

Certain relationships and related party transactions

$0.5 million. During the period ended March 31, 2013, we paid MJX, LLC $0.6 million and have no balance with MJX, LLC as of May 31, 2013.

On December 31, 2012, we issued a promissory note to Mr. Sillerman in the principal amount of $7.0 million (the "$7.0 million Promissory Note"). The $7.0 million Promissory Note had an interest rate of 9% per annum and a maturity date of March 31, 2013. Under the terms of the $7.0 million Promissory Note, we were required to repay the outstanding principal and interest by (i) one-third of the amounts raised in our equity offerings and (ii) 100% of the amounts raised in debt financings over $15.0 million after December 31, 2012. As of April 3, 2013, the entire promissory note had been repaid.

On March 15, 2013, Mr. Sillerman entered into the Sillerman Guarantee with Barclays Bank PLC, as collateral agent, for the benefit of the other lender parties, in which he personally guaranteed all our obligations under the First Lien Term Loan Facility. On June 5, 2013 the First Lien Term Loan Facility was amended to increase the facility amount by $15.0 million, to a total of $64.5 million. Mr. Sillerman entered into an amendment to the Sillerman Guarantee to reaffirm his guarantee thereunder in connection with the amendment.

Our General Counsel, Howard Tytel, serves as a legal consultant and is not an employee of the Company. Mr. Tytel is paid $43,500 per month under an oral agreement that is subject to change at any time. Mr. Tytel is also Counsel in the law firm Reed Smith LLP, which has acted as legal counsel to us since our inception. In March 2012, we granted to Mr. Tytel options to purchase 650,000 shares with an exercise price of $2.00 per share.

On November 1, 2012, we entered into a master services agreement with Sports & Entertainment Physicians, PC, or S & E Physicians, for the provision of advice and consultation regarding various medical issues and services designed to further our goal of hosting safe festivals and events. Andrew N. Bazos, the principal and founder of S & E Physicians, is also a director of the Company and serves as Chairman of our Medical Procedure & Safety Committee. Pursuant to the terms of the master services agreement, we have agreed to pay S & E Physicians on terms to be determined provided the charges must not exceed the amounts charged by S & E Physicians to its most favored clients. The services we may request include advice on health, safety and medical training and staffing; consultation on contracts related to medical services; creation of plans, policies and programs to improve our provision of medical services and ensure compliance with applicable laws, regulations, and rules; work with state and local regulatory authorities; and other tasks intended to advance our objective of hosting safe festivals and events. The term of the agreement is from November 1, 2012, the effective date, until November 1, 2013, unless earlier terminated. Either party may terminate the agreement at any time with or without cause by providing 60 days' written notice to the other party. The agreement also provides that we must pay any incremental cost in S & E Physicians' medical malpractice insurance caused solely by execution of the agreement directly to S & E Physicians' insurance company.

On December 6, 2012, we closed a financing with White Oak Securities LLC in which we issued 300,000 shares of common stock at a price per share of $5.00 for an aggregate purchase price of $1.5 million. Such purchase price was paid in the form of a $1.5 million principal amount promissory note having a maturity date of December 6, 2015. White Oak Securities LLC is controlled by its managing member, Timothy J. Crowhurst, who was subsequently hired as our President in June 2013. The promissory note was secured by the 300,000 shares issued to White Oak Securities LLC, and Mr. Crowhurst personally guaranteed the repayment of $375,000 of the promissory note. In connection with his hiring as our President, Mr. Crowhurst surrendered the 300,000 shares, we cancelled the promissory note, and Mr. Crowhurst was released from the personal guaranty.

126

Table of Contents

Certain relationships and related party transactions

We currently have an investment banking relationship with Tangent Capital Partners LLC ("Tangent"). Our President, Timothy J. Crowhurst, is a registered representative of Tangent. Under the current arrangement with Tangent, Tangent shall be paid up to $1.5 million in cash upon the closing of certain financings, including our initial public offering, plus fees for other services to be mutually agreed to between Tangent and us. As of June 23, 2013, Tangent had been paid or accrued $1.0 million in fees under its agreement. We are in advanced discussions with Tangent to amend the terms of their compensation to provide that after giving effect to the payment of the fees paid and payable as of June 23, 2013, Tangent will receive $1.4 million in cash upon the closing of our initial public offering and will relinquish its right to any additional fees other than the $1.4 million.

Other than compensation agreements and other arrangements which are described under "Executive compensation" and the transactions described above, since January 1, 2012, there has not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a party in which the amount involved exceeded or will exceed $120,000 and in which any related person had or will have a direct or indirect material interest.

INDEMNIFICATION

Our certificate of incorporation provides that we must indemnify our directors and officers to the fullest extent permitted by Delaware law and must advance expenses, including attorneys' fees, to our directors and officers in connection with legal proceedings, subject to very limited exceptions. In addition, we have entered into indemnification agreements with our directors and officers and some of our executives have certain indemnification rights arising under their employment agreements with us.

127

Table of Contents

Material United States tax considerations for non-United States holders of common stock

The following is a general discussion of material U.S. federal income and estate tax considerations relating to the acquisition, ownership and disposition of our common stock purchased pursuant to this offering that may be relevant to non-U.S. holders (as defined below) who hold shares of our common stock as capital assets.

This discussion does not address the U.S. state and local, U.S. federal gift, or non-U.S. tax considerations relating to the acquisition, ownership and disposition of our common stock.

As used in this discussion, the term "non-U.S. holder" means a beneficial owner of our common stock (other than a partnership) that is not, for U.S. federal income tax purposes, any of the following:

•: an individual citizen or resident of the United States;
•: a corporation or other entity taxable as a corporation created or organized in or under the laws of the United States or of any state or political subdivision thereof or therein, including the District of Columbia;
•: an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
•: a trust, if (a) a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions of the trust or (b) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

An individual may, subject to certain exceptions, be deemed to be a U.S. resident for a calendar year by reason of being present in the United States for at least 31 days in such calendar year and for an aggregate of at least 183 days during a three-year period ending with such current calendar year (counting for such purposes all of the days present in such current calendar year, one-third of the days present in the immediately preceding calendar year, and one-sixth of the days present in the second preceding calendar year). U.S. residents are generally taxed for U.S. federal income tax purposes in the same manner as U.S. citizens.

If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our common stock, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our common stock, we suggest that you consult your own tax advisor as to the particular U.S. federal income and estate tax consequences applicable to you.

This discussion is based on currently existing provisions of the Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed Treasury Regulations promulgated thereunder, and administrative and judicial interpretations thereof, all as in effect or proposed on the date hereof and all of which are subject to change, possibly with retroactive effect, or different interpretations. We have not sought, and will not seek, any ruling from the Internal Revenue Service (the "IRS") or any opinion of counsel with respect to the tax consequences discussed herein, and there can be no assurance that the IRS will not take a position contrary to the tax consequences discussed below or that any position taken by the IRS would not be sustained.

This discussion is for general information only and does not address all of the tax considerations that may be relevant to specific non-U.S. holders in light of their particular circumstances or to non-U.S. holders subject to special treatment under U.S. federal tax laws (such as certain financial institutions, partnerships or other pass-through entities, hybrid entities, insurance companies, tax-exempt entities,

128

Table of Contents

Material United States tax considerations for non-United States holders of common stock

retirement plans, brokers or dealers in securities, U.S. expatriates, persons who hold our common stock as part of a straddle, hedge, conversion transaction or other risk-reduction or integrated investment, controlled foreign corporations, passive foreign investment companies, and persons who hold or receive our common stock as compensation).

Prospective purchasers are urged to consult their own tax advisors as to the particular tax considerations applicable to them relating to the acquisition, ownership and disposition of our common stock, including the applicability of U.S. federal, state or local tax laws or non-U.S. tax laws, any changes in applicable tax laws and any pending or proposed legislation or regulations.

DIVIDENDS

A distribution will constitute a dividend for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits as determined under the Code. Any distribution not constituting a dividend will be treated first as a return of capital reducing your tax basis in your shares of common stock and, to the extent it exceeds your tax basis, as gain realized on the sale or other disposition of our common stock subject to the rules discussed under "Sale, Exchange or Other Disposition."

We or a withholding agent will have to withhold U.S. federal withholding tax from the gross amount of any dividends paid to a non-U.S. holder at a rate of 30%, unless (a) an applicable income tax treaty reduces or eliminates such tax, and a non-U.S. holder claiming the benefit of such treaty provides to us or such agent proper IRS documentation, or (b) the dividends are effectively connected with a non-U.S. holder's conduct of a trade or business in the United States and the non-U.S. holder provides to us or such agent proper IRS documentation. In the latter case, such non-U.S. holder generally will be subject to U.S. federal income tax, net of certain deductions, at the same graduated individual and corporate rates applicable to U.S. persons.

Additionally, a non-U.S. holder that is a corporation could be subject to a branch profits tax on effectively connected dividend income at a rate of 30% (or at a reduced rate under an applicable income tax treaty). Dividends that are effectively connected with your conduct of a trade or business but that under an applicable income tax treaty are not attributable to a U.S. permanent establishment maintained by you may be exempt from U.S. withholding tax under such treaty, provided you comply with certification and disclosure requirements necessary to obtain treaty benefits.

In addition, where dividends are paid to a non-U.S. holder that is a partnership or other pass-through entity, persons holding an interest in the entity may need to provide certification claiming an exemption or reduction in withholding under an applicable income tax treaty.

Non-U.S. holders that do not timely provide us or our agent with the required certification, but that are eligible for a reduced rate of U.S. federal withholding tax pursuant to an income tax treaty, may obtain a refund of any excess amount withheld by timely filing an appropriate claim for refund with the IRS.

SALE, EXCHANGE OR OTHER DISPOSITION

Generally, a non-U.S. holder will not be subject to U.S. federal income tax on gain realized upon the sale, exchange or other disposition of our common stock unless:

•: such non-U.S. holder is a nonresident alien individual present in the United States for 183 days or more in the taxable year of the sale, exchange or other disposition and certain other conditions are met;

129

Table of Contents

Material United States tax considerations for non-United States holders of common stock

•: the gain is effectively connected with such non-U.S. holder's conduct of a trade or business in the United States (and, under certain income tax treaties, is attributable to a U.S. permanent establishment of such non-U.S. holder); or
•: we are or have been a "United States real property holding corporation" for U.S. federal income tax purposes at any time within the shorter of the 5-year period preceding the disposition or the non-U.S. holder's holding period for our common stock unless our common stock is regularly traded on an established securities market and the non-U.S. holder holds no more than 5% of our outstanding common stock, directly or indirectly, during the relevant period. Generally, a U.S. corporation is treated as a United States real property holding corporation if the fair market value of its U.S. real property interests equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business.

We believe that we have not been and are not currently a United States real property holding corporation, and we do not expect to become a United States real property holding corporation. However, no assurances can be made in this regard. Furthermore, no assurances can be provided that our stock will be considered to be regularly traded on an established securities market for purposes of Section 897 of the Code.

If the first exception applies, the non-U.S. holder generally will be subject to U.S. federal income tax at a rate of 30% (or at a reduced rate under an applicable income tax treaty) on the amount by which capital gains allocable to U.S. sources (including gains from the sale, exchange or other disposition of our common stock) exceed capital losses allocable to U.S. sources. If the second or third exception applies, the non-U.S. holder generally will be subject to U.S. federal income tax with respect to such gain in the same manner as a U.S. citizen or U.S. corporation, as applicable, unless otherwise provided in an applicable income tax treaty, and a non-U.S. holder that is a corporation could also be subject to a branch profits tax on such gain at a rate of 30% (or at a reduced rate under an applicable income tax treaty).

If the gain from the sale or disposition of your shares is effectively connected with your conduct of a trade or business in the United States but under an applicable income tax treaty is not attributable to a permanent establishment you maintain in the United States, your gain may be exempt from U.S. tax under the treaty. In addition, if we are determined to be a United States real property holding corporation and the 5% exception does not apply, then a purchaser may be required to withhold 10% of the proceeds payable to a non-U.S. holder from a sale or other taxable disposition of our common stock.

INFORMATION REPORTING AND BACKUP WITHHOLDING TAX

We must report annually to the IRS the amount of dividends or other distributions we pay to you on your shares of common stock and the amount of tax we withhold on these distributions regardless of whether withholding is required. The IRS may make copies of the information returns reporting those distributions and amounts withheld available to the tax authorities in the country in which you reside pursuant to the provisions of an applicable income tax treaty or exchange of information treaty. Backup withholding tax may also apply to payments made to a non-U.S. holder on or with respect to our common stock, unless the non-U.S. holder certifies as to its status as a non-U.S. holder under penalties of perjury or otherwise establishes an exemption, and certain other conditions are satisfied.

Information reporting and backup withholding generally are not required with respect to the amount of any proceeds from the sale of your shares of common stock outside the United States through a foreign office of a foreign broker that does not have certain specified connections to the United States. However, if you sell your shares of common stock through a U.S. broker or the U.S. office of a foreign

130

Table of Contents

Material United States tax considerations for non-United States holders of common stock

broker, the broker will be required to report the amount of proceeds paid to you to the IRS and also perform backup withholding on that amount unless you provide appropriate certification to the broker of your status as a non-U.S. holder or you otherwise establish an exemption. Information reporting will also apply if you sell your shares of common stock through a foreign broker deriving more than a specified percentage of its income from U.S. sources or having certain other connections to the United States, unless such broker has documenting evidence in its records that you are a non-U.S. holder and certain other conditions are met or you otherwise establish an exemption.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder will be allowed as a refund or a credit against such non-U.S. holder's U.S. federal income tax liability, if any, provided that the required information is furnished to the IRS. Non-U.S. holders should consult their own tax advisors regarding the filing of a U.S. tax return for claiming a refund of such backup withholding.

FEDERAL ESTATE TAX

Common stock owned or treated as owned by an individual who is not a citizen or resident (as defined for U.S. federal estate tax purposes) of the United States at the time of his or her death generally will be included in the individual's gross estate for U.S. federal estate tax purposes and therefore may be subject to U.S. federal estate tax unless an applicable estate tax treaty provides otherwise.

LEGISLATION AFFECTING TAXATION OF COMMON STOCK HELD BY OR THROUGH FOREIGN ENTITIES

Under legislation enacted in 2010, a 30% U.S. federal withholding tax will be imposed on dividends on stock of U.S. corporations, and on the gross proceeds from the disposition of such stock, paid to a "foreign financial institution" (as specially defined for this purpose), unless such institution enters into an agreement with the U.S. Treasury to collect and provide to the U.S. Treasury substantial information regarding its U.S. account holders and certain account holders that are foreign entities with U.S. owners or complies with local laws that implement an intergovernmental agreement relating to this new legislation between its country and the United States. A 30% U.S. federal withholding tax will also apply to dividends paid on stock of U.S. corporations and on the gross proceeds from the disposition of such stock paid to a non-financial foreign entity unless such entity provides the withholding agent with a certification that it does not have any substantial U.S. owners or a certification identifying the direct and indirect substantial U.S. owners of the entity. The withholding taxes described above will apply to dividend payments made after December 31, 2013 and payments of gross proceeds made after December 31, 2016. Under certain circumstances, a non-U.S. holder may be eligible for refunds or credits of such withholding taxes. Non-U.S. holders are urged to consult with their own tax advisors regarding the possible application of these rules to their investment in our common stock.

NEW TAX ON INVESTMENT INCOME

Recent legislation would require individuals, estates and trusts to pay a 3.8% tax on, among other things, dividends on and capital gains from the sale or other disposition of our common stock, but exempts from such tax non-resident alien individuals. Newly published proposed regulations, upon which, by their terms, taxpayers may rely until final regulations are promulgated, exempt from the tax non-U.S. trusts and estates all of whose beneficiaries are non-U.S. persons. Such proposed regulations reserve on the treatment of non-U.S. trusts and estates with U.S. beneficiaries. Prospective investors

131

Table of Contents

Material United States tax considerations for non-United States holders of common stock

should consult their tax advisors regarding the tax consequences of the new legislation and the proposed regulations on the ownership and disposition of our common stock.

The foregoing discussion is only a summary of certain U.S. federal income and estate tax consequences of the acquisition, ownership and disposition of our common stock by non-U.S. holders. You are urged to consult your own tax advisor with respect to the particular tax consequences to you of ownership and disposition of our common stock, including the effect of any U.S. federal, state or local tax laws or non-U.S. tax laws and any applicable income or estate tax treaty.

132

Table of Contents

Principal stockholders

We had 63,592,902 shares of common stock outstanding as of June 24, 2013, which were owned by approximately 25 record holders.

The following table sets forth information with respect to the beneficial ownership of our common stock as of the date of this prospectus, and as adjusted to reflect the shares of our common stock offered hereby, by:

•: each person known to own beneficially more than 5% of the capital stock;
•: each of our directors;
•: each of our named executive officers; and
•: all of our directors and executive officers as a group.

The amounts and percentages of shares beneficially owned are reported on the basis of SEC regulations governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a "beneficial" owner of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing that holder's ownership percentage, but not any other person's percentage. Under these rules, more than one person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.



	Number and percent of common stock beneficially owned prior to the offering
Name of beneficial owners	Number		Percent

5% Stockholders:
Robert F.X. Sillerman(1)		37,600,000		57.0%
Entertainment Events Funding LLC(2)		4,000,000		6.1%
ID&T Holding B.V.(3)		4,500,000		6.8%
Officers and Directors:
Robert F.X. Sillerman(1)		37,600,000		57.0%
Mitchell Slater(4)		2,400,000		3.6%
Edward Simon(5)		31,250		*
Joseph F. Rascoff(6)		125,000		*
John Miller(7)		139,250		*
Dr. Andrew N. Bazos(8)		33,125		*
D. Geoffrey Armstrong(9)		391,250		*
Jared Cohen(10)		43,750		*
Michael Meyer(10)		43,750		*
Shelly Finkel(11)		1,400,000		2.1%
ALL DIRECTORS AND EXECUTIVE OFFICERS (15 Persons)		41,269,375		62.6%

*: Less than 1% of our outstanding common stock.

133

Table of Contents

Principal stockholders

(1): Includes 19,124,000 shares that Mr. Sillerman holds on behalf of multiple record holders of our common stock pursuant to nominee agreements. Also includes: (i) 16,876,000 shares held personally by Mr. Sillerman, (ii) 1,100,000 shares of unvested restricted stock over which Mr. Sillerman has voting power and (iii) exercisable options to purchase 500,000 shares.
(2): The address of Entertainment Events Funding LLC is c/o Och-Ziff Capital Investments LLC, 9 West 57th Street, New York, NY 10019. Daniel S. Och, as Chief Executive Officer of Och-Ziff Capital Management Group LLC, (a) the sole shareholder of Och-Ziff Holding Corporation, the General Partner of OZ Management LP, the Investment Manager of OZ Master Fund, Ltd., and (b) the sole member of Och-Ziff Holding LLC, the General Partner of OZ Advisors II, LP, the General Partner of OZ Global Special Investments Master Fund, L.P., which are the members of Entertainment Events Funding LLC, may be deemed to have voting and/or investment control of the shares held by Entertainment Events Funding LLC.
(3): The address of ID&T Holding B.V. is De Entree 300, 1101 EE Amsterdam. Includes: (i) 4,000,000 shares, and (ii) exercisable warrants to purchase 500,000 shares.
(4): Includes: (i) exercisable options to purchase 400,000 shares and (ii) 2,000,000 shares subject to nominee agreement naming Mr. Sillerman as nominee with respect to such shares.
(5): Includes exercisable options to purchase 31,250 shares.
(6): Includes exercisable options to purchase 125,000 shares.
(7): Includes: (i) exercisable options to purchase 31,250 shares and (ii) 1,875 shares.
(8): Includes: (i) exercisable options to purchase 31,250 shares and (ii) 108,000 shares subject to nominee agreement naming Mr. Sillerman as nominee with respect to such shares.
(9): Includes: (i) exercisable options to purchase 31,250 shares and (ii) 360,000 shares subject to nominee agreement naming Mr. Sillerman as nominee with respect to such shares.
(10): Includes exercisable options to purchase 43,750 shares.
(11): Includes: (i) exercisable options to purchase 400,000 shares and (ii) 1,000,000 shares subject to nominee agreement naming Mr. Sillerman as nominee with respect to such shares.

We also intend to file with the U.S. Securities and Exchange Commission a registration statement on Form S-1 (the ``resale registration statement") relating to the offering and sale from time to time of up to shares of our common stock by certain of our existing stockholders named as selling stockholders therein. The offer and sale of these shares are not included in the registration statement of which this prospectus is a part, and none of those shares will be included in this offering. In the event that any of the selling stockholders sell shares of our common stock under the resale registration statement, we will not receive any proceeds from those sales. Each of the selling stockholders have signed lock-up agreements with our underwriters that prohibit them, subject to certain exceptions, from selling their shares during the period ending 180 days after the date of this prospectus, and many of them have signed separate lock-up agreements with us. We intend for the resale registration statement to be declared effective by the SEC following the effectiveness of this prospectus and after we have closed one or more of our planned acquisitions.

134

Table of Contents

Description of capital stock

GENERAL

Immediately following this offering we will have shares of our common stock issued and outstanding. Our certificate of incorporation provides that our authorized capital stock will consist of an aggregate number of 300,000,000 shares of common stock, par value $0.001 per share, and 100,000,000 shares of preferred stock, par value $0.001 per share.

COMMON STOCK

Voting

The holders of our common stock are entitled to one vote for each outstanding share of common stock owned by that stockholder on every matter properly submitted to the stockholders for their vote.

Dividend rights

Holders of our common stock are entitled to receive ratably such dividends and other distributions of cash or any other right or property as may be declared by our board of directors out of our assets or funds legally available for such dividends or distributions.

Liquidation rights

In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, holders of our common stock would be entitled to share ratably in our assets that are legally available for distribution to stockholders after payment of liabilities.

PREFERRED STOCK

Under the terms of our certificate of incorporation, our board of directors is authorized to issue shares of preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges, and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of our outstanding voting stock. There are currently no shares of preferred stock outstanding, and we have no present plans to issue any shares of preferred stock.

AUTHORIZED BUT UNISSUED CAPITAL STOCK

Delaware law does not require stockholder approval for any issuance of authorized shares. However, the listing requirements of the NASDAQ Stock Market, which would apply so long as the shares of common stock remain listed on the NASDAQ Global Select Market, require stockholder approval of certain issuances equal to or exceeding 20% of the then-outstanding voting power or the then-outstanding number of shares of common stock. These additional shares may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions.

135

Table of Contents

Description of capital stock

One of the effects of the existence of unissued and unreserved common stock or preferred stock may be to enable our board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of our company by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares at prices higher than prevailing market prices.

OPTIONS

As of June 24, 2013, there were outstanding options to purchase 18,383,000 shares of our common stock subject to our equity compensation plans with a weighted average price of $4.62 per share. In addition, we intend to grant options to purchase approximately 635,000 shares of our common stock at the initial public offering price immediately prior to the closing of this offering.

WARRANTS

As of June 24, 2013, there were outstanding warrants to purchase 500,000 shares of our common stock with a weighted average price of $2.50 per share.

REGISTRATION RIGHTS

We have entered into various agreements with certain holders of our common stock granting them the right, subject to certain limitations, to include the resale of their shares in certain registration statements we file with the Securities and Exchange Commission ("SEC"). We have also agreed with certain of these parties to file a registration statement for our initial public offering within certain time periods. These stockholders include both investors who purchased shares of our common stock in private placements as well as sellers of businesses that we have acquired who received shares of our common stock as consideration in the acquisition.

We anticipate granting certain registration rights to the sellers in our planned acquisitions, consistent with the registration rights we granted to the previous owners of the companies we have acquired.

Registration of these shares under the Securities Act would result in the shares becoming eligible for sale under the Securities Act immediately upon the effectiveness of such registration. Any sales of securities by holders of these shares could adversely affect the trading prices, if any, of our common stock.

DDP, LIC and MMG Acquisitions

Pursuant to certain registration rights agreements entered into by us with the sellers of DDP, LIC and MMG holders of up to 2,461,027 shares of our common stock will have the right to participate in future registrations of securities. If we propose to file a registration statement under the Securities Act relating to an offering for our own account (other than the initial registration statement for an offering for our own account or a registration statement for an offering to our officers or employees pursuant to an employee benefit plan or in connection with the acquisition of a business) or the account of others, such stockholders will have the right to request that we include their shares of common stock in any such registration statement, subject to specified limitations. In connection with the registration rights, we may limit, including entirely, the number of these investors' shares if the managing underwriters for the relevant public offering determine that the inclusion of those shares would be detrimental to the marketing of the offering. In such case, the shares to be included in the registration shall be reduced pro rata based on the number of shares of common stock each stockholder has requested to include and the aggregate number of shares the stockholders have received. These

136

Table of Contents

Description of capital stock

piggyback registration rights terminate upon the earliest to occur of (1) December 31, 2014, (2) such time as all of the registrable securities have been disposed of pursuant to and in accordance with the registration statement or Rule 144 of the Securities Act or (3) such time as all the registrable securities of a particular holder may be resold pursuant to Rule 144 without volume limitations.

ID&T JV and ID&T Option

Pursuant to our joint venture with ID&T, we agreed to use commercially reasonable efforts to register for resale with the SEC ID&T's 2,000,000 shares and shares issuable upon exercise of the warrants issued in connection with the joint venture and to pursue our initial public offering. Under the ID&T Option, we agreed to use commercially reasonable efforts to register for resale with the SEC the 2,000,000 shares of our common stock that were issued to ID&T upon entry into the ID&T Option and to pursue our initial public offering.

Beatport

Pursuant to the merger agreement with Beatport, we agreed to (i) use commercially reasonable efforts to include the shares of our common stock issued to the sellers of Beatport in our initial public offering (or a concurrent resale registration) and (ii) include such shares in our initial public offering (or a concurrent resale registration) on a pro rata basis with the shares of our common stock that were issued by us as consideration in our previously closed acquisitions. Additionally, following the lock-up period of this initial public offering, we agreed to use commercially reasonable efforts to register with the SEC the resale of the shares of our common stock issued to the sellers of Beatport except for shares that are then eligible for resale under Rule 144.

Insight Venture Partners

Pursuant to the subscription agreement we entered into on April 1, 2013 with Insight Venture Partners V, L.P., Insight Venture Partners V (Employee Co-Investors), L.P., and Insight Venture Partners (Cayman) V, L.P. we have agreed to (i) use commercially reasonable efforts to include the 1,000,000 shares of our common stock issued to them in our initial public offering (or a concurrent resale registration) and (ii) include such shares in our initial public offering (or a concurrent resale registration) on a pro rata basis with the shares of our common stock that were issued by us as consideration in our previously closed acquisitions. We also agreed to use commercially reasonable efforts to register with the SEC, following the lock-up period of this initial public offering, the resale of the shares of our common stock issued to the three investors, except for shares that are eligible for resale under Rule 144 following our initial public offering.

LOCK-UP AGREEMENTS

In connection with our acquisitions of certain businesses, we entered into lock-up agreements with some of our stockholders. The lock-up agreements provide that the stockholders may not, subject to certain exemptions, offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock. Lock-up agreements with respect to 1,786,467 shares of our common stock expire on August 15, 2013, and lock-up agreements with respect to 1,674,560 shares expire on December 31, 2013.

Pursuant to our joint venture with ID&T, ID&T may not transfer prior to March 15, 2014, the 2,000,000 shares of our common stock or warrants to purchase our shares (or the shares underlying the warrants) that were each issued in connection with the joint venture.

137

Table of Contents

Description of capital stock

In addition, under the ID&T Option, ID&T may not transfer the 2,000,000 shares of our common stock issued to them upon entry into the ID&T Option until after March 20, 2014.

Upon the closing of certain of our planned acquisitions, we will be required to issue shares of common stock to the selling parties. The sellers who are to receive the shares have agreed to sign the form of lockup agreement provided by our underwriters (or a substantially similar lockup agreement) prior to or on the closing of these acquisitions.

REPURCHASE RIGHTS

We have granted certain repurchase rights to the holders of our stock. The terms of these repurchase rights, including information with respect their expiration, are set forth in the table below.

Holder(s) of Repurchase Right	Number of Shares	Price	Relevant Date and Trigger Events

Baron Small Cap Fund	2,500,000	$4.00/share	We have agreed to repurchase these shares upon Baron's election if the SEC has not declared effective a registration statement covering the resale of the shares of our common stock held by this investor by January 15, 2013. This investor has not exercised its repurchase right. If we become required to repurchase these shares, we must do so over a ten-month period on a pro rata basis.
Entertainment Events Funding LLC	4,000,000	$2.50/share	We have agreed to repurchase these shares if the SEC has not declared effective a registration statement covering the resale of the shares of our common stock held by this investor by January 15, 2013. This investor has not exercised its repurchase right. If we are required to repurchase these shares, we must do so over a ten-month period on a pro rata basis. These repurchase rights are based on the "most favored nation" rights we granted Entertainment Events Funding LLC under its subscription agreement, which require that (until immediately prior to our initial public offering), we provide to them the same right or benefit we provide to a third-party purchasing or receiving our common stock.
Disco Productions	1,000,000	$5.00/share	We have agreed to repurchase these shares if we do not have a registration statement declared effective or our shares are not registered pursuant to Section 12 of the Exchange Act by June 30, 2014.
ID&T	All shares and warrants held by ID&T issued to them in connection with the ID&T JV (this could include up to 2.0 million shares; warrants to purchase 500,000 shares; and, for a period of 5 years beginning the year ended December 31, 2013, 100,000 warrants to purchase shares of our common stock if the ID&T JV has achieved an EBITDA of $7.0 million or more in the prior fiscal year)	$10.0 million	We have agreed to repurchase these securities if we do not complete our initial public offering by May 26, 2014.

138

Table of Contents

Description of capital stock

Holder(s) of Repurchase Right	Number of Shares	Price	Relevant Date and Trigger Events

ID&T	2,000,000	$10.00/share	We have agreed to repurchase these shares if do not complete our initial public offering by March 20, 2014.
Former equity holders of Beatport	5,000,000	$5.00/share	On or after March 15, 2014, the former equity holders of Beatport will have the right to require us to repurchase from them the shares of our common stock issued as consideration in the merger. This right will not apply to any shares that have been registered in our initial public offering at an initial offering price of at least $5.00 per share or in a subsequent resale registration or are subsequently eligible for resale under Rule 144 following such initial public offering.
Insight Venture Partners V, L.P. Insight Venture Partners V (Employee Co-Investors), L.P. Insight Venture Partners (Cayman) V, L.P.	Up to 1,000,000	$10.00/share	On or after March 15, 2014, these parties can require us to repurchase shares of our common stock that we have not registered in our initial public offering or registered in a resale registration following such initial public offering, or that are not eligible for resale under Rule 144 following such initial public offering. If prior to the date that these shares are registered for resale or become subsequently eligible for resale under Rule 144 following our initial public offering, we enter into an agreement for the acquisition by any third party of beneficial ownership of more than 50% of the voting power in our voting shares (including by merger or consolidation) or the sale of all of our assets to a third-party in one or a series of related transactions, then this repurchase right will automatically accelerate and become exercisable. If we do not pay these investors the repurchase price of $10.00 per share within ten business days following receipt of notice from the investors of their exercise of this repurchase right, then the repurchase price will increase at a rate of 10% per annum (compounded quarterly) until the date of payment.
Totem	Number of shares to be equal to the quotient of AUD$15.0 million (or $13.8 million) divided by our initial public offering share price	Initial public offering share price	Upon closing of our acquisition of Totem, we are obligated to issue Totem the number of shares equal to the quotient obtained by dividing AUS$15,000,000 by our initial public offering share price. We granted Totem the right, during the 30 calendar day period beginning on the second anniversary of the closing date, to require us to repurchase at our initial public offering price per share all of the shares of our common stock that we issued to Totem as consideration under the asset contribution agreement.

PRE-EMPTIVE AND OTHER RIGHTS

Under the subscription agreement with Entertainment Events Funding LLC, we granted such investor pre-emptive rights to purchase its pro rata portion of any new securities (other than certain excluded

139

Table of Contents

Description of capital stock

securities) that we may from time to time propose to issue or sell to any party. The investor has five business days to close on the purchase of its pro rata portion of any new securities (other than excluded securities) following notice of the offering. These preemptive rights expire at the time the SEC declares effective a registration statement on Form S-1 that covers a primary offering by us or a secondary offering for the accounts of others. In addition, due to the "most favored nation" rights we have granted to Entertainment Events Funding LLC under its subscription agreement, we may be required to offer it similar rights that we may grant or have granted to others. The "most favored nation" right also expires at the time of our initial public offering.

Under a letter agreement with Baron Small Cap Fund, dated October 28, 2012, we agreed, that if the public offering price of (a) our first primary offering of shares or (b) the investor's resale secondary offering of its shares of our stock, is for less than $4.00 per share, we would issue additional shares to the investor so that it would own an aggregate number of shares as if it purchased its shares at the public offering price instead of its $4.00 per share purchase price. We also agreed to issue additional shares to the investor on substantially the same terms as provided in the previous sentence, if we sell shares at an issuance price of less than $4.00 per share at any time prior to the date the SEC declares effective a resale registration statement covering the investor's shares, and we use the proceeds of such stock sale to redeem $10 million of shares that were purchased by Robert F.X. Sillerman.

Pursuant to the subscription agreement with Insight Venture Partners V, L.P., Insight Venture Partners V (Employee Co-Investors), L.P., and Insight Venture Partners (Cayman) V, L.P., dated April 1, 2013, we agreed that if the public offering price of the common stock in our initial public offering is less than $10.00 per share, we would issue additional shares to each of these investors so that each would own an aggregate number of shares as if it purchased its shares at our initial public offering price instead of the $10.00 per share purchase price.

PROVISIONS OF OUR CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE LAW THAT MAY HAVE AN ANTI-TAKEOVER EFFECT

Certificate of incorporation and bylaws

Certain provisions in our certificate of incorporation and bylaws summarized below may be deemed to have an anti-takeover effect and may delay, deter or prevent a tender offer or takeover attempt that a stockholder might consider to be in our best interests, including attempts that might result in a premium being paid over the market price for the shares held by stockholders.

Calling of special meetings of stockholders; advanced notice provision

Our certificate of incorporation and bylaws provide that a special meeting of stockholders may be called only by the Chairman, the President, the Chief Executive Officer, our board of directors, or at the request in writing of the holders of not less than 30% of all of the outstanding shares of the corporation entitled to vote. Stockholders are not otherwise permitted to call, or to require that the board of directors call, a special meeting of stockholders.

Board size; filling of vacancies

Our certificate of incorporation and bylaws provides that the number of directors on our board of directors will be fixed exclusively by our board of directors. Newly created directorships resulting from any increase in our authorized number of directors will be filled solely by a majority vote of our remaining directors in office. Any vacancies in our board of directors, however occurring, will be filled solely by a majority vote of our remaining directors in office.

140

Table of Contents

Description of capital stock

Pursuant to the Delaware General Corporation Law, any action required to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of our stock entitled to vote thereon were present and voted, unless the company's amended and restated certificate of incorporation provides otherwise. Our amended and restated certificate of incorporation provides any action required or permitted to be taken by our stockholders may not be effected by consent in writing by such stockholders unless such action is recommended by all directors then in office.

No cumulative voting

The Delaware General Corporation Law provides that stockholders are denied the right to cumulate votes in the election of directors unless the certificate of incorporation provides otherwise. Our certificate of incorporation does not permit cumulative voting.

Amendment of the bylaws

Our certificate of incorporation and bylaws provide that the board of directors may adopt, amend, or repeal our bylaws. Our certificate of incorporation also permits our stockholders to adopt, amend, or repeal the bylaws upon the vote of the holders of a majority of the voting power of the common stock entitled to vote generally in an election of the directors.

Limits on ability of stockholders to elect directors

Our certificate of incorporation and bylaws contain provisions indemnifying our directors and officers to the fullest extent permitted by law. We have entered into indemnification agreements with each of our directors which may, in some cases, be broader than the specific indemnification provisions contained under Delaware law. Our certificate of incorporation provides that the number of directors constituting the whole board of directors may only be fixed by the board of directors. In addition, our certificate of incorporation and bylaws provide that, subject to the rights of holders of any one or more series of preferred stock then outstanding, vacancies and newly created directorships resulting from any increase in the authorized number of directors or from any other cause (other than vacancies which the holders of any class or classes of stock or series of stock are entitled by the certificate of incorporation to fill) shall, unless otherwise required by resolution of the board of directors, be filled by, and only by, the board of directors pursuant to a resolution adopted by a majority of the directors then in office, even if less than a quorum, or by the sole remaining director.

Limits on ability of stockholders to remove directors

Our bylaws provides that any director may be removed, with or without cause, by the stockholders only with the affirmative vote of the holders of not less than a majority of the voting power of all outstanding shares of stock entitled to vote generally in the election of directors.

Limitations on liability and indemnification of officers and directors

The Delaware General Corporation Law authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors' fiduciary duties. Our certificate of incorporation includes a provision that eliminates the

141

Table of Contents

Description of capital stock

personal liability of directors for monetary damages for breaches of fiduciary duty as a director, except for liability:

•: for any breach of a director's duty of loyalty to us or our stockholders;
•: for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
•: under Section 174 of the Delaware General Corporation Law; or
•: for any transaction from which a director derived an improper personal benefit.

Our certificate of incorporation and bylaws provide for the indemnification by us of any person serving as a director, officer, employee or other agent to the fullest extent permissible under the Delaware General Corporation Law. In addition, we have purchased a directors' and officers' insurance policy covering our officers and directors for liabilities that they may incur as a result of any action, or failure to act, in their capacity as officers and directors. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors and officers.

The limitation of liability and indemnification provisions in our certificate of incorporation and bylaws may discourage a stockholder from bringing a lawsuit against our directors for breach of their fiduciary duties. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might benefit us and our stockholders.

The foregoing provisions of our certificate of incorporation and bylaws could discourage potential acquisition proposals and could delay or prevent a change in control. These provisions are intended to enhance the likelihood of continuity and stability in the composition of the board of directors and in the policies formulated by the board of directors and to discourage certain types of transactions that may involve an actual or threatened change of control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our common stock that could result from actual or rumored takeover attempts. Such provisions also may have the effect of preventing changes in our management.

DELAWARE TAKEOVER STATUTE

We are not subject to Section 203 of the Delaware General Corporation Law, which, subject to certain exceptions, prohibits a Delaware corporation from engaging in any "business combination" (as defined below) with any "interested stockholder" (as defined below) for a period of three years following the date that such stockholder became an interested stockholder, unless: (1) prior to such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (2) on consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned (x) by persons who are directors and also officers and (y) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or (3) on or subsequent to such date, the business combination is approved by the board of directors and authorized at an annual or

142

Table of Contents

Description of capital stock

special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66²/3% of the outstanding voting stock that is not owned by the interested stockholder.

Section 203 of the Delaware General Corporation Law defines "business combination" to include: (1) any merger or consolidation involving the corporation and the interested stockholder; (2) any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; (3) subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; (4) any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or (5) the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. In general, Section 203 defines an "interested stockholder" as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by such entity or person.

TRANSFER AGENT AND REGISTRAR

Upon the completion of our initial public offering, the transfer agent and registrar for our common stock will be Continental Stock Transfer & Trust Company. The transfer agent's address is 17 Battery Place, New York, New York, 10004.

LISTING

We have applied to have our common stock approved for listing on The Nasdaq Global Market under the symbol "SFXE."

143

Table of Contents

Shares eligible for future sale

Prior to this offering, there has been no market for our common stock, and a liquid trading market for our common stock may not develop or be sustained after this offering. Future sales of substantial amounts of common stock, including shares issued upon exercise of outstanding options or in the public market after this offering, or the anticipation of those sales, could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through sales of our equity securities.

Upon the closing of this offering, we will have outstanding shares of common stock, after giving effect to the issuance of shares of common stock in this offering and assuming no exercise of the underwriters' option to purchase additional shares.

In addition to the shares being sold in this offering, we intend to file with the Securities and Exchange Commission ("SEC") a registration statement on Form S-1 (the "resale registration statement") relating to the offering and sale from time to time of up to shares of our common stock by certain of our existing stockholders named as selling stockholders therein. The offer and sale of, those shares are not included in the registration statement of which this prospectus is a part, and none of those shares will be included in this offering. Each of the selling stockholders have signed lock-up agreements with our underwriters that subject them to the 180-day lock-up described below, and many of them have signed separate lock-up agreements with us. We intend for the resale registration statement to be declared effective by the SEC following the effectiveness of this prospectus and after we have closed one or more of our planned acquisitions.

Of the shares to be outstanding immediately after the closing of this offering, the shares to be sold in this offering and any shares sold by the selling stockholders under the resale registration statement will be freely tradable without restriction under the Securities Act unless purchased by our "affiliates," as that term is defined in Rule 144 under the Securities Act. The remaining shares of common stock are "restricted securities" under Rule 144. Substantially all of these restricted securities will be subject to the 180-day lock-up described below.

After the 180-day lock-up period, these restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration under Rule 144 or 701 under the Securities Act, which exemptions are summarized below.

LOCK-UP AGREEMENTS

We, all of our directors and executive officers and holders of substantially all of our currently outstanding capital stock and participants in the directed share program described below have agreed that, subject to certain exceptions, without the prior written consent of UBS Securities LLC, Barclays Capital Inc. and Jefferies LLC, we and they will not, during the period ending 180 days after the date of this prospectus, subject to exceptions specified in the lock-up agreements, offer, sell, contract to sell or otherwise dispose of, directly or indirectly, or hedge our common stock or securities convertible into or exchangeable for or exercisable for our common stock, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable for our common stock. Further, we and each such person have agreed that, during this period, they will not make any demand for, or exercise any right with respect to, the registration of our common stock or warrants or other rights to purchase the common stock.

144

Table of Contents

Shares eligible for future sale

As described under "Underwriting—Directed Share Program," any participants in the Directed Share Program shall be subject to a 180-day lock up with respect to any shares sold to them pursuant to that program. This lock up will have similar restrictions as described above.

Additionally, in our acquisitions of certain target companies, we entered into lock-up agreements with some of our stockholders. The lock-up agreements with respect to 1,786,467 shares of our common stock provide that the stockholder parties may not, subject to certain exemptions, offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock prior to August 15, 2013. The lock-up agreements with respect to an additional 1,674,560 shares of our common stock hold the stockholder parties to similar lock-up restrictions, but those lock-up agreements terminate on December 31, 2013.

In addition, under the ID&T Option, ID&T may not transfer the 2,000,000 shares of our common stock issued to them upon entry into the ID&T Option until after March 20, 2014.

RULE 144

In general, under Rule 144, beginning 90 days after the date of this prospectus, a person who has beneficially owned shares of our common stock for at least six months, including the holding period of any prior owner that is not one of our affiliates, would be entitled to sell those shares under Rule 144. For sellers who are our affiliates, sales within any three-month period a number of shares may not exceed the greater of:

•: 1% of the number of shares of our common stock then outstanding, which will equal approximately shares immediately after this offering, and
•: the average weekly trading volume in our common stock on The Nasdaq Global Select Market during the four calendar weeks preceding the date of filing of a Notice of Proposed Sale of Securities Pursuant to Rule 144 with respect to the sale.

Sales by affiliates under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us. Upon expiration of the 180-day lock-up period described below and this six-month holding period shares of our common stock will be eligible for sale under Rule 144 by our affiliates, subject to the above restrictions.

A person may sell shares of common stock acquired from us without regard to manner of sale, the availability of public information about us or volume limitations, if:

•: the person is not our affiliate and has not been our affiliate at any time during the three months preceding the sale; and
•: the person has beneficially owned the shares proposed to be sold for at least six months, including the holding period of any prior owner other than our affiliates.

Upon the expiration of the 180-day lock-up period described below, and this six-month holding period approximately shares of common stock will be eligible for sale by non-affiliates under Rule 144.

145

Table of Contents

Shares eligible for future sale

We cannot estimate the number of shares of common stock that our existing stockholders will elect to sell under Rule 144.

RULE 701 AND FORM S-8

In general, under Rule 701 of the Securities Act, any of our employees, consultants or advisors who purchased shares from us in connection with a qualified compensatory stock plan or other written agreement is eligible to resell those shares 90 days after the effective date of this offering in reliance on Rule 144, but without compliance with the various restrictions, including the holding period, contained in Rule 144. Subject to the 180-day lock-up period described below, approximately shares of our common stock will be eligible for sale in accordance with Rule 701.

In addition, following this offering, we intend to file a registration statement on Form S-8 under the Securities Act to register all of the shares of common stock subject to outstanding options under our 2013 Equity Compensation Plan. Shares of our common stock issued under the Form S-8 registration statement will be available for sale in the public market, subject to the Rule 144 provisions applicable to affiliates, and subject to any vesting restrictions and lock-up agreements applicable to these shares.

REGISTRATION RIGHTS

Upon the closing of this offering, the holders of shares of our common stock will be entitled to rights with respect to the registration of the sale of these shares under the Securities Act. Registration of the sale of these shares under the Securities Act would result in these shares becoming fully tradable without restriction under the Securities Act immediately upon the effectiveness of the registration, except for shares purchased by affiliates. See "Description of Capital Stock—Registration Rights" for additional information.

146

Table of Contents

Underwriting

UBS Securities LLC, Barclays Capital Inc. and Jefferies LLC (collectively, the "Representatives") are acting as joint book-running managers of the offering and are acting as representatives of the underwriters named below. Subject to the terms and conditions stated in the underwriting agreement dated the date of this prospectus, each underwriter named below has severally agreed to purchase, and we have agreed to sell to that underwriter, the number of shares set forth opposite the underwriter's name.

Underwriter		Number of shares


UBS Securities LLC
Barclays Capital Inc.
Jefferies LLC

Total

The underwriting agreement provides that the obligations of the underwriters to purchase the shares included in this offering are subject to approval of legal matters by counsel and to other conditions. The underwriters are obligated to purchase all the shares (other than those covered by the underwriters' option to purchase additional shares as described below) if they purchase any of the shares.

Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount from the initial public offering price not to exceed $ per share. If all the shares are not sold at the initial offering price, the underwriters may change the offering price and the other selling terms. The representatives have advised us that the underwriters do not intend to make sales to discretionary accounts.

If the underwriters sell more shares than the total number set forth in the table above, we have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to additional shares at the public offering price less the underwriting discount. The underwriters may exercise the option solely for the purpose of covering over-allotments, if any, in connection with this offering. To the extent the option is exercised, each underwriter must purchase a number of additional shares approximately proportionate to that underwriter's initial purchase commitment. Any shares issued or sold under the option will be issued and sold on the same terms and conditions as the other shares that are the subject of this offering.

We, our officers and directors, our stockholders and our option and warrant holders have agreed that, for a period of 180 days from the date of this prospectus, we and they will not, without the prior written consent of the Representatives, dispose of or hedge any shares or any securities convertible into or exchangeable for our common stock. The Representatives in their sole discretion may release any of the securities subject to these lock-up agreements at any time, which, in the case of officers and directors, shall be with notice.

As described below under "—Directed Share Program," any participants in the Directed Share Program shall be subject to a 180-day lock up with respect to any shares sold to them pursuant to that program. This lock up will have similar restrictions as the lock-up agreement described above.

Prior to this offering, there has been no public market for our shares. Consequently, the initial public offering price for the shares was determined by negotiations between us and the representatives.

147

Table of Contents

Underwriting

Among the factors considered in determining the initial public offering price were our results of operations, our current financial condition, our future prospects, our markets, the economic conditions in and future prospects for the industry in which we compete, our management, and currently prevailing general conditions in the equity securities markets, including current market valuations of publicly traded companies considered comparable to our company. We cannot assure you, however, that the price at which the shares will sell in the public market after this offering will not be lower than the initial public offering price or that an active trading market in our shares will develop and continue after this offering.

We have applied to have our shares listed on the NASDAQ Global Market under the symbol "SFXE."

The following table shows the underwriting discounts and commissions that we are to pay to the underwriters in connection with this offering. These amounts are shown assuming both no exercise and full exercise of the underwriters' over-allotment option.

	Paid by SFX Entertainment, Inc.

	No exercise	Full exercise

Per share	$	$
Total	$	$

We estimate that our portion of the total expenses of this offering will be $ million, which includes an amount not to exceed $ that we have agreed to reimburse the underwriters for certain expenses incurred by them in connection with this offering.

Directed Share Program

At our request, the underwriters have reserved for sale at the initial public offering price up to shares offered hereby for certain other persons associated with us. The number of shares available for sale to the general public will be reduced to the extent such persons purchase such reserved shares. Any reserved shares not so purchased will be offered by the underwriters to the general public on the same basis as the other shares offered hereby. Any participants in this program shall be prohibited from selling, pledging or assigning any shares sold to them pursuant to this program for a period of 180 days after the date of this prospectus. See "—Lock-Up Agreements."

In connection with the offering, the underwriters may purchase and sell shares in the open market. Purchases and sales in the open market may include short sales, purchases to cover short positions, which may include purchases pursuant to the over-allotment option, and stabilizing purchases.

•

Short sales involve secondary market sales by the underwriters of a greater number of shares than they are required to purchase in the offering.

o: "Covered" short sales are sales of shares in an amount up to the number of shares represented by the underwriters' over-allotment option.
o: "Naked" short sales are sales of shares in an amount in excess of the number of shares represented by the underwriters' over-allotment option.

•

Covering transactions involve purchases of shares either pursuant to the underwriters' over-allotment option or in the open market after the distribution has been completed in order to cover short positions.

148

Table of Contents

Underwriting

o: To close a naked short position, the underwriters must purchase shares in the open market after the distribution has been completed. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.
o: To close a covered short position, the underwriters must purchase shares in the open market after the distribution has been completed or must exercise the over-allotment option. In determining the source of shares to close the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option.

•: Stabilizing transactions involve bids to purchase shares so long as the stabilizing bids do not exceed a specified maximum.

Pursuant to the underwriting agreement we have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make because of any of those liabilities.

Purchases to cover short positions and stabilizing purchases, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of the shares. They may also cause the price of the shares to be higher than the price that would otherwise exist in the open market in the absence of these transactions. The underwriters may conduct these transactions on the NASDAQ Global Market in the over-the-counter market or otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time.

The underwriters are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. The underwriters and their respective affiliates may, from time to time, engage in transactions with and perform services for us in the ordinary course of their business for which they may receive customary fees and reimbursement of expenses. In the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve our securities and instruments. In particular, Barclays Bank Plc, is the administrative agent, UBS Securities LLC is the syndication agent and Jefferies Group LLC is the documentation agent under our First Lien Term Loan Facility. The First Lien Term Loan Facility was negotiated on an arm's length basis and contained or contains customary terms pursuant to which those parties received or receive customary fees and reimbursement for out-of-pocket costs.

NOTICE TO PROSPECTIVE INVESTORS IN THE EUROPEAN ECONOMIC AREA

In relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a relevant member state), with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state (the relevant implementation date), an offer of shares described in this prospectus may not be made to the public in that relevant member state other than:

•: to any legal entity which is a qualified investor as defined in the Prospectus Directive;

149

Table of Contents

Underwriting

•: to fewer than 100 or, if the relevant member state has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by us for any such offer; or
•: in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of shares shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive.

For purposes of this provision, the expression an "offer of securities to the public" in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe for the shares, as the expression may be varied in that member state by any measure implementing the Prospectus Directive in that member state, and the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the relevant member state) and includes any relevant implementing measure in the relevant member state. The expression 2010 PD Amending Directive means Directive 2010/73/EU.

The sellers of the shares have not authorized and do not authorize the making of any offer of shares through any financial intermediary on their behalf, other than offers made by the underwriters with a view to the final placement of the shares as contemplated in this prospectus. Accordingly, no purchaser of the shares, other than the underwriters, is authorized to make any further offer of the shares on behalf of the sellers or the underwriters.

NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED KINGDOM

This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (each such person being referred to as a "relevant person"). This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents.

NOTICE TO PROSPECTIVE INVESTORS IN HONG KONG

The shares may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong) and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning

150

Table of Contents

Underwriting

of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

NOTICE TO PROSPECTIVE INVESTORS IN JAPAN

The shares offered in this prospectus have not been registered under the Securities and Exchange Law of Japan. The shares have not been offered or sold and will not be offered or sold, directly or indirectly, in Japan or to or for the account of any resident of Japan, except (i) pursuant to an exemption from the registration requirements of the Securities and Exchange Law and (ii) in compliance with any other applicable requirements of Japanese law.

NOTICE TO PROSPECTIVE INVESTORS IN SINGAPORE

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.

Where the shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

•: a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
•: a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except:
•: to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA;
•: where no consideration is or will be given for the transfer; or
•: where the transfer is by operation of law.

NOTICE TO PROSPECTIVE INVESTORS IN SWITZERLAND

This prospectus does not constitute an issue prospectus pursuant to Article 652a or Article 1156 of the Swiss Code of Obligations ("CO") and the shares will not be listed on the SIX Swiss Exchange.

151

Table of Contents

Underwriting

Therefore, this prospectus may not comply with the disclosure standards of the CO and/or the listing rules (including any prospectus schemes) of the SIX Swiss Exchange. Accordingly, the shares may not be offered to the public in or from Switzerland, but only to a selected and limited circle of investors, which do not subscribe to the shares with a view to distribution.

NOTICE TO PROSPECTIVE INVESTORS IN AUSTRALIA

No prospectus or other disclosure document (as defined in the Corporations Act 2001 (Cth) of Australia ("Corporations Act")) in relation to the common stock has been or will be lodged with the Australian Securities & Investments Commission ("ASIC"). This document has not been lodged with ASIC and is only directed to certain categories of exempt persons. Accordingly, if you receive this document in Australia:

•

you confirm and warrant that you are either:

o: a "sophisticated investor" under section 708(8)(a) or (b) of the Corporations Act;
o: a "sophisticated investor" under section 708(8)(c) or (d) of the Corporations Act and that you have provided an accountant's certificate to us which complies with the requirements of section 708(8)(c)(i) or (ii) of the Corporations Act and related regulations before the offer has been made;
o: a person associated with the company under section 708(12) of the Corporations Act; or
o: a "professional investor" within the meaning of section 708(11)(a) or (b) of the Corporations Act, and to the extent that you are unable to confirm or warrant that you are an exempt sophisticated investor, associated person or professional investor under the Corporations Act any offer made to you under this document is void and incapable of acceptance; and

•

you warrant and agree that you will not offer any of the common stock for resale in Australia within 12 months of that common stock being issued unless any such resale offer is exempt from the requirement to issue a disclosure document under section 708 of the Corporations Act.

152

Table of Contents

Experts

SFX Entertainment, Inc.

The consolidated financial statements of SFX Entertainment, Inc. and subsidiaries as of December 31, 2012 and December 31, 2011, for the period from July 7, 2011 (inception) to December 31, 2011 and for the year ended December 31, 2012, appearing in this prospectus and the registration statement have been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report appearing elsewhere herein, and are included in reliance upon such report given on authority of such firm as experts in accounting and auditing.

Beatport

The consolidated financial statements of BEATPORT, LLC at December 31, 2012 and 2011, and for the years then ended, appearing in this Prospectus and Registration Statement have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

ID&T

The consolidated financial statements of ID&T Holding B.V. and subsidiaries at December 31, 2012 and 2011, and for the years then ended, appearing in this Prospectus and Registration Statement have been audited by Ernst & Young Accountants LLP, independent auditors, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

i-Motion

The combined financial statements of I-Motion GmbH Events & Communication and I-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One at December 31, 2012 and 2011, and for the years then ended, appearing in this Prospectus and Registration Statement have been audited by Ernst & Young GmbH, independent auditors, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

Totem

The combined financial statements of Totem Onelove Group and Totem Industries Pty Ltd at December 31, 2012 and 2011, and for the years then ended, appearing in this Prospectus and Registration Statement have been audited by Ernst & Young, independent auditors, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

Made

The combined financial statements of Made Event, LLC and EZ Festivals, LLC at December 31, 2012 and 2011, and for the years then ended, appearing in this Prospectus and Registration Statement have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

Life In Color

The combined financial statements of Life in Color (Limited Liability Companies) as of July 31, 2012 and for the period then ended and as of December 31, 2011 and 2010 and for each of the two years

153

Table of Contents

Experts

in the period ended December 31, 2011, included in this prospectus have been so included in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, appearing elsewhere herein and in the Registration Statement, given on the authority of said firm as experts in auditing and accounting.

Nightlife

The consolidated financial statements of Nightlife Holdings, LLC and subsidiaries as of December 31, 2012, 2011 and 2010 and for the period ended December 31, 2012, and for each of the two years in the period ended December 31, 2011, included in this prospectus have been so included in reliance on the report of BDO USA, LLP, a certified public accounting firm, appearing elsewhere herein and in the Registration Statement, given on the authority of said firm as experts in auditing and accounting.

DDP

The financial statements of Disco Productions, Inc. as of December 31, 2011 and 2010 and for each of the two years in the period ended December 31, 2011, included in this prospectus have been so included in reliance on the report of BDO USA, LLP, a certified public accounting firm, appearing elsewhere herein and in the Registration Statement, given on the authority of said firm as experts in auditing and accounting.

Legal matters

The validity of the common stock we are offering will be passed upon by Reed Smith LLP, New York, New York for the company. The underwriters have been represented by White & Case LLP, New York, New York.

Where you can find more information

This prospectus, which constitutes part of the registration statement, does not include all of the information contained in the registration statement and the exhibits, schedules and amendments to the registration statement. For further information with respect to us and our common stock, we refer you to the registration statement and to the exhibits and schedules to the registration statement. Statements contained in this prospectus about the contents of any contract or any other document are not necessarily complete, and, in each instance, we refer you to the copy of the contract or other documents filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference.

You may read and copy the registration statement of which this prospectus is a part at the Securities and Exchange Commission's public reference room, which is located at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You can request copies of the registration statement by writing to the Securities and Exchange Commission and paying a fee for the copying cost. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for more information about the operation of the Securities and Exchange Commission's public reference room. In addition, the Securities and Exchange Commission maintains an Internet website, which is located at http://www.sec.gov, that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Securities and Exchange Commission. You may access the registration statement of which this prospectus is a part at the Securities and Exchange Commission's Internet website. Upon closing of this offering, we will be subject to the information reporting requirements of the Exchange Act, and we will file reports, proxy statements and other information with the Securities and Exchange Commission. You may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission.

154

Table of Contents

Index to consolidated financial statements


Financial Statements—Life in Color and Affiliates (fka Dayglow and Affiliates) (Predecessor)			F-5
Report of Independent Registered Accounting Firm			F-6
Combined Balance Sheets—July 31, 2012, December 31, 2011 and 2010			F-7
Combined Statements of Operations and Members' Equity (Deficit)—For the seven month period ended July 31, 2012 and for the years ended December 31, 2011 and 2010			F-8
Combined Statements of Cash Flows—For the seven month period ended July 31, 2012 and for the years ended December 31, 2011 and 2010			F-9
Notes to Combined Financial Statements			F-10
Financial Statements—SFX Entertainment, Inc. (Successor) (Restated)			F-15
Report of Independent Registered Accounting Firm			F-16
Consolidated Balance Sheets (Restated)—December 31, 2012 and 2011			F-17
Consolidated Statements of Operations—For the year ended December 31, 2012 and for the period from July 7, 2011 (Inception) through December 31, 2011			F-18
Consolidated Statements of Stockholders' Equity/(Deficit) (Restated)—For the period from July 7, 2011 (Inception) through December 31, 2012			F-19
Consolidated Statements of Cash Flows—For the year ended December 31, 2012 and for the period from July 7, 2011 through December 31, 2011			F-20
Notes to Consolidated Financial Statements			F-21
Financial Statements—SFX Entertainment, Inc. (Successor)			F-47
Consolidated Balance Sheets (Unaudited) as of March 31, 2013 and December 31, 2012 (Restated)			F-48
Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 2013 and 2012			F-49
Consolidated Statements of Stockholders' Equity (Unaudited) for the three months ended March 31, 2013			F-50
Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2013 and 2012			F-51
Notes to Consolidated Financial Statements			F-53
Financial Statements of Acquired Companies
Disco Productions, Inc.—Annual statements			F-73
Independent Auditors' Report			F-74
Balance Sheets—December 31, 2011 and 2010			F-75
Statements of Income and Accumulated Deficit—For the years ended December 31, 2011 and 2010			F-76
Statements of Cash Flows—For the years ended December 31, 2011 and 2010			F-77
Notes to Financial Statements			F-78
Disco Productions, Inc.—Interim statements			F-83
Balance Sheets—June 19, 2012 (unaudited) and December 31, 2011 (audited)			F-84
Statements of Operations and Accumulated Deficit—For the period ended June 19, 2012 and the six months ended June 30, 2011			F-85
Statement of Cash Flows—For the period ended June 19, 2012 and for the six months ended June 30, 2011			F-86
Notes to Unaudited Financial Statements			F-87

F-1

Table of Contents

Index to consolidated financial statements


Nightlife Holdings, LLC—Annual statements			F-94
Independent Auditor's Report			F-95
Balance Sheets—December 31, 2012, 2011 and 2010			F-97
Statements of Income and Members' Equity—For the period ended December 31, 2012 and for the years ended December 31, 2011 and 2010			F-98
Statements of Cash Flows—For the period ended December 31, 2012 and years ended December 31, 2011 and 2010			F-99
Notes to Consolidated Financial Statements			F-100
BEATPORT, LLC—Annual Statements			F-104
Report of Independent Auditors			F-105
Balance Sheets—December 31, 2012 and 2011			F-106
Consolidated Statements of Operations—For the years ended December 31, 2012 and 2011			F-107
Consolidated Statements of Members' Equity (Deficit)—For the years ended December 31, 2012 and 2011			F-108
Consolidated Statements of Cash Flows—For the years ended December 31, 2012 and 2011			F-109
Notes to Consolidated Financial Statements			F-110
Financial Statements of Planned Acquisitions
ID&T HOLDING B.V.—Annual Statements			F-120
Report of Independent Auditors			F-121
Consolidated Balance Sheets—December 31, 2012 and 2011			F-122
Consolidated Statements of Operations			F-123
Consolidated Statements of Comprehensive Income—For the years ended December 31, 2012 and December 31, 2011			F-124
Consolidated Statements of Stockholders' Equity/(Deficit)—For the years ended December 31, 2012 and 2011			F-125
Consolidated Statements of Cash Flows—For the years ended December 31, 2012 and 2011			F-126
Notes to Consolidated Financial Statements			F-127
ID&T HOLDING B.V.—Interim Statements			F-144
Consolidated Balance Sheets—(unaudited) March 31, 2013 and December 31, 2012			F-145
Consolidated Statements of Operations (unaudited)			F-146
Consolidated Statements of Comprehensive Income—For the three months ended March 31, 2013 and 2012 (unaudited)			F-147
Consolidated Statements of Shareholders' Equity/(Deficit)—(unaudited) as of March 31, 2013 and December 31, 2012			F-148
Consolidated Statements of Cash Flows—For the three months ended March 31, 2013 and 2012 (unaudited)			F-149
Notes to Consolidated Financial Statements			F-150
i-Motion GmbH—Annual Statements			F-167
Report of Independent Auditors			F-168
Combined Balance Sheets—December 31, 2012 and 2011			F-169
Combined Statements of Comprehensive Income—For the years ended December 31, 2012 and December 31, 2011			F-170
Combined Statements of Changes in Equity—For the years ended December 31, 2012 and 2011			F-171
Combined Cash Flow Statements—For the years ended December 31, 2012 and 2011			F-172
Notes to Consolidated Financial Statements			F-173

F-2

Table of Contents

Index to consolidated financial statements


i-Motion GmbH—Interim Statements			F-190
Combined Balance Sheets—(unaudited) March 31, 2013 and December 31, 2012			F-192
Combined Statements of Changes in Equity—For the three months ended March 31, 2013 and December 31, 2012 (unaudited)			F-193
Combined Statements of Comprehensive Income—For the three months ended March 31, 2013 and March 31, 2012 (unaudited)			F-194
Combined Cash Flow Statements—For the three months ended March 31, 2013 and March 31, 2012 (unaudited)			F-195
Notes to Consolidated Financial Statements			F-196
Totem Onelove Group and Totem Industries Pty Ltd—Annual Statements			F-213
Report of Independent Auditors			F-215
Combined Balance Sheets—December 31, 2012 and 2011			F-216
Combined Statements of Comprehensive Income—For the years ended December 31, 2012 and December 31, 2011			F-217
Combined Statements of Owners' Equity/(Deficit)—For the years ended December 31, 2012 and 2011			F-218
Combined Statements of Cash Flows—For the years ended December 31, 2012 and 2011			F-219
Notes to Consolidated Financial Statements			F-220
Made Event—Annual and Interim Statements			F-231
Report of Independent Auditors			F-233
Combined Balance Sheets—As of March 31, 2013 and March 31 2012 (unaudited) and December 31, 2012 and 2011			F-234
Combined Statements of Operations and Member's Equity—For the three months ended March 31, 2013 and March 31, 2012 (unaudited) and for the years ended December 31, 2012 and December 31, 2011			F-235
Combined Statements of Cash Flows—For the three months ended March 31, 2013 and March 31, 2012 (unaudited) and for the years ended December 31, 2012 and December 31, 2011			F-236
Notes to Consolidated Financial Statements			F-237

F-3

Table of Contents

Life In Color and Affiliates
fka Dayglow and Affiliates
(Limited Liability Companies)

Combined Financial Statements

Period Ended July 31, 2012 and Year
Ended December 31, 2011 and 2010

Table of Contents

Life In Color and Affiliates (Limited Liability Companies)

Contents


Independent Registered Accountants' Report		F-6
Combined Financial Statements:
Balance Sheets as of July 31, 2012; December 31, 2012 and 2011		F-7
Statements of Operations and Members' Equity (Deficit) for the Period Ended July 31, 2012 and for the Years Ended December 31, 2011 and 2010		F-8
Statements of Cash Flows for the Period Ended July 31, 2012 and for the Years Ended December 31, 2011 and 2010		F-9
Notes to Combined Financial Statements		F-10 - F-13

F-5

Table of Contents

Report of independent registered accounting firm

To the Members
Life In Color and Affiliates
Miami, Florida

We have audited the accompanying combined balance sheets of Life In Color and Affiliates (fka Dayglow and Affiliates) (limited liability companies) (the "Company") as of July 31, 2012; December 31, 2011 and 2010 and the related combined statements of operations and members' equity (deficit), and cash flows for the period ended July 31, 2012 and the years ended December 31, 2011 and 2010. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of Life In Color and Affiliates (limited liability companies) at July 31, 2012, December 31, 2011 and 2010 and the results of its operation and its cash flows for the period ended July 31, 2012 and the years ended December 31, 2011 and 2010, in conformity with accounting principles generally accepted in the United States.

New York, NY
April 22, 2013

F-6

Table of Contents

Life In Color and Affiliates (Limited Liability Companies)

Combined balance sheets

	July 31, 2012			December 31, 2011			December 31, 2010


Assets
Current:
Cash	$	182,444		$	44,414		$	15,010
Accounts receivable		199,574			157,563			—
Prepaid event expenses		388,984			253,570			—
Other current assets		61,355			95,763			2,570

Total Current Assets		832,357			551,310			17,580
Property and Equipment, Net (Note 3)		723,817			559,315			2,523
Other Assets		58,806			—			—

	$	1,614,980		$	1,110,625		$	20,103

Liabilities and Members' Equity (Deficit)
Current Liabilities:
Accounts payable	$	139,206		$	83,397		$	3,238
Accrued expenses		538,460			316,013			—
Deferred revenue		666,630			662,797			—
Ticketfly advance		163,366			—			—
Note payable (Note 4)		159,716			83,333			—

Total Current Liabilities		1,667,378			1,145,540			3,238
Note Payable (Note 4)		—			16,667			—
Loans Payable—Members (Note 2)		440,000			565,000			—

Total Liabilities		2,107,378			1,727,207			3,238
Commitments (Note 5)
Members' Equity (Deficit) (Note 6)		(492,398	)		(616,582	)		16,865

	$	1,614,980		$	1,110,625		$	20,103

See accompanying notes to combined financial statements.

F-7

Table of Contents

Life In Color and Affiliates (Limited Liability Companies)

Combined statements of operations and members' equity (deficit)

	Seven Month Period Ended July 31, 2012			Year ended December 31, 2011			Year Ended December 31, 2010


Revenues	$	10,985,968		$	9,606,232		$	1,131,488
Operating Expenses:
Direct operating expenses		8,219,045			8,572,487			833,416
Selling, general and admin expenses		2,323,365			1,142,495			250,884
Depreciation and amortization		94,679			41,214			1,261

Operating Income (Loss)		348,879			(149,964	)		45,927
Other Income (Expenses)		13,060			(8,483	)		25,281

Net Income (Loss)		361,939			(158,447	)		71,208
Members' Deficit, Beginning of Period		(616,852	)		16,865			1,499
Contributions from Members		—			30,000			—
Distributions to Members		(237,755	)		(505,000	)		(55,842	)

Members' Deficit, End of Period	$	(492,398	)	$	(616,582	)	$	16,865

See accompanying notes to combined financial statements.

F-8

Table of Contents

Life In Color and Affiliates (Limited Liability Companies)

Combined statements of cash flows

	Seven Month Period ended July 31, 2012			Year Ended December 31, 2011			Year Ended December 31, 2010


Cash Flows From Operating Activities:
Net income (loss)	$	361,939		$	(158,447	)	$	71,208
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		94,679			41,214			1,261
Increase (decrease) from changes in operating assets and liabilities:
Accounts receivable		(42,011	)		(157,563	)		—
Prepaid event expenses		(135,414	)		(253,570	)		—
Accounts payable		55,809			83,397			—
Accrued expenses		222,447			312,776			3,238
Deferred revenue		3,833			662,797			—
Ticketfly advance		163,366			—			—
Other assets		(24,398	)		(93,195	)		(1,172	)

Net Cash Provided By Operating Activities		700,249			437,409			74,535

Cash Flows From Investing Activities:
Purchases of property and equipment		(259,181	)		(598,005	)		(3,784	)

Cash Flows From Financing Activities:
Net borrowings on notes payable		59,716			100,000			—
Proceeds from (payment to) members on loans payable		(125,000	)		565,000			(2,419	)
Contributions from members		—			30,000			—
Distributions to members		(237,755	)		(505,000	)		(55,842	)

Net Cash Provided By (Used In) Financing Activities		(303,039	)		190,000			(58,261	)

Net Increase in Cash		138,030			29,404			12,490
Cash, Beginning of Period		44,414			15,010			2,520

Cash, End of Period	$	182,444		$	44,414		$	15,010

Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	25,139		$	18,000		$	1,500

See accompanying notes to combined financial statements.

F-9

Table of Contents

Life In Color and Affiliates (Limited Liability Companies)

Notes to combined financial statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of business

Life In Color and Affiliates (fka Dayglow and Affiliates) (limited liability companies) were incorporated in the State of Florida as promoters and operators of EMC-themed concerts with live entertainment. Since Life In Color and Affiliates are limited liability companies, their members are generally not liable for the debts, obligations or liabilities of the respective companies as defined below.

Basis of accounting

The accompanying combined financial statements have been prepared on the accrual basis of accounting whereby revenue is recognized when earned and expenses are recognized when incurred.

Principles of combination

The accompanying combined financial statements include the accounts of Dayglow & Affiliates, LLC (now operating as SFX-LIC Operating LLC) ("LIC"), Committee Entertainment LLC ("CE") and Advance Concert Productions LLC ("ACP") (collectively referred to as the "Company"). The Company has been combined by virtue of common ownership and management. In addition, substantially all of ACP's revenue is earned through equipment rentals to LIC, which has been eliminated in combination along with all other significant intercompany accounts and transactions.

Concentrations of credit risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade receivables. Exposure to losses on trade account receivables is minimal as the promoters whom the Company partners with for ticket sales and collection of event revenues typically remit proceeds to the Company in a timely manner. The Company maintains balances at financial institutions, which at times exceed the federally insured limit. The Company has not historically experienced losses on these accounts.

Accounts receivable

Accounts receivable are customer obligations due under normal trade terms. The Company partners with promoters on certain events to take responsibility for the collection of event revenues and payment of event expenses. The Company believes no allowance for doubtful accounts as of July 31, 2012 is necessary.

Prepaid event expenses

The Company routinely incurs event expenses in advance of the event date, which are recorded as prepaid event expenses. The amounts are expensed when the event takes place.

Property and equipment, and depreciation and amortization

Property and equipment are stated at cost. Depreciation and amortization expense is computed over the estimated useful lives of the assets by the straight-line method for financial reporting purposes. Expenditures for maintenance and repairs are expensed as incurred and additions, renewals and betterments that materially extend the life of an asset are generally capitalized.

F-10

Table of Contents

Life In Color and Affiliates (Limited Liability Companies)

Notes to combined financial statements (Continued)

Revenue recognition

Revenue from ticket sales from events and concerts is recognized when the performance occurs. Ticket sales collected in advance of an event date are recorded as deferred revenue.

The Company evaluates the criteria outlined in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Subtopic 605-45, "Revenue Recognition—Principal Agent Considerations," in determining whether it is appropriate to record the gross amount of revenues and related costs or the net revenues. Under this accounting guidance, if the Company is the primary obligor to perform the services being sold, has general inventory risk as it pertains to recruiting and compensating the talent, has the ability to control the ticket pricing, has discretion in selecting the talent, is involved in the production of the event, generally bears the majority of the credit or collection risk, or has several but not all of these indicators, revenue is recorded gross. If the Company does not have several of these indicators, it records revenues or losses on a net basis.

According to the guidance, for the majority of the Company's events, the Company has several of the above indicators and therefore it recognizes revenue gross as a principal. Additionally, the Company charges for and collects ticketing and credit card processing surcharges and records the amounts in revenue on a gross basis. Actual expenses paid to the ticket service provider and credit card merchant processors are reflected in expenses.

Direct operating expenses

Direct operating expenses include artist performance fees and travel expenses, venue fees, show-specific marketing and advertising expenses, show-related production expenses, ticket processing fees and other costs related to producing the events. These costs are primarily variable in nature.

Selling, general and administrative expenses

Selling, general and administrative expenses include salaries and wages related to full-time employees, credit card fees and other expenses.

Income taxes

The Company is comprised of limited liability companies and the shareholders are required to report their respective shares of the Company's income in their individual tax returns. Accordingly, no federal corporation income tax provision has been made in the accompanying combined financial statements. The combined financial statements include a provision for various state income taxes, which amounts are immaterial. Deferred income taxes are not material to the Company's financial position or results of operations.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Fair value of financial instruments

F-11

Table of Contents

Life In Color and Affiliates (Limited Liability Companies)

Notes to combined financial statements (Continued)

prioritizes the inputs used in measuring fair value. The three levels of fair value hierarchy are described below:

The three levels of the fair value hierarchy under ASC 820 are described as follows:

Level 1 inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

Level 2 inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The carrying amounts of the Company's financial instruments including cash, receivables and payables are carried at cost, which approximates fair value due to the immediate and short maturity of these assets and liabilities. The Company's debt relates to related party loans and third party notes payable at market interest rates, which approximate fair value.

2. RELATED PARTY TRANSACTIONS

In December 2011, the Company executed unsecured loan agreements of $565,000 with members, $440,000 of which were outstanding as at July 31, 2012. The loans have a 5-year maturity term and bear interest at 5%. The Company is to make interest only payments on a semi-annual basis and a balloon payment at maturity.

There was $16,342 and $0 in interest expense in the seven month period ended July 31, 2012 and the year ended December 31, 2011 respectively.

3. PROPERTY AND EQUIPMENT, NET

Property and equipment consists of the following:

	July 31, 2012			December 31, 2011			December 31, 2010			Estimated Useful Lives


Computer equipment	$	20,799		$	16,725		$	3,381		3 years
Furniture and fixtures		17,182			15,017			403		3 years
Production equipment		822,990			570,048			—		5 years

		860,971			601,790			3,784
Less: Accumulated depreciation and amortization		(137,154	)		(42,475	)		(1,261	)

Net property and equipment	$	723,817		$	559,315		$	2,523

4. NOTE PAYABLE

The Company executed a $100,000 and $150,000 unsecured promissory note agreement with Treehouse International, LLC on August 2, 2011 and January 31, 2012, respectively. Total amount outstanding on these notes as of July 31, 2012 were $58,393 and $101,323, respectively. The first note

F-12

Table of Contents

Life In Color and Affiliates (Limited Liability Companies)

Notes to combined financial statements (Continued)

has an 18-month term and bears interest at 15%, with an interest free period for the first six months while the second note has a 13-month term and bears interest at 8%. The Company is required to make monthly amortization payments of $9,583 and $13,048 respectively beginning March 2012.

There are no covenants to these notes and the notes are personally guaranteed by three of the members. In August 2012, the entire balance outstanding was repaid. There was $10,563 and $0 in interest expense in the seven month period ended July 31, 2012 and the year ended December 31, 2011, respectively.

5. COMMITMENTS

Lease commitment

The Company leases its office and warehouse facilities under noncancellable operating lease agreements, which expire on July 31, 2012 and August 31, 2014, respectively. The Company did not renew the July 31 lease and paid a monthly rent of $5,889 in August and September 2012 and moved into a temporary executive office space with a month-to-month rent of $6,906. Future minimum rental commitments are as follows:

Year ending December 31,


2012	$	8,704
2013		21,222
2014		14,428

	$	44,354

Rent expense was $53,123, $42,574 and $5,080 for the seven month period ended July 31, 2012 and the years ended December 31, 2011 and 2010, respectively.

6. MEMBERS' EQUITY (DEFICIT)

LIC has four members, of which three members each owns 29% and the fourth member owns 13%. CE has four members, of which two members each owns 30% while the third and fourth members own 25% and 15%, respectively. ACP has six members, of which three members each owns 22% while the fourth, fifth and sixth members own 15%, 11.5% and 7.5%, respectively. Total members' equity (deficit) by entity is as follows:

	July 31, 2012			December 31, 2011			December 31, 2010


Life In Color LLC	$	(461,802	)	$	(490,186	)	$	16,470
Committee Entertainment LLC		(673,877	)		(443,822	)		395
ACP LLC		643,281			317,426			—

	$	(492,398	)	$	(616,582	)	$	16,865

7. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through August 1, 2012, the date the Company was acquired. There have been no material subsequent events after July 31, 2012 for which disclosure is required, except as noted below.

On August 1, 2012, the members sold all ownership interest in and assets of the Company for a total consideration of $11,950,000, paid as $7,917,667 in cash and $4,032,333 by shares of the purchaser's common stock. The combined financial statements do not reflect this transaction.

F-13

Table of Contents

Consolidated Financial Statements

SFX Entertainment, Inc.

As of and for the year ended December 31, 2012 and
the period from July 7 (Inception), to December 31, 2011

Table of Contents

SFX Entertainment, Inc.

Consolidated Financial Statements
As of and for the year ended December 31, 2012 and
the period from July 7, to December 31, 2011

Contents


Financial Statements
Report of Independent Registered Public Accounting Firm		F-16
Consolidated Balance Sheets (Restated)		F-17
Consolidated Statements of Operations		F-18
Consolidated Statements of Changes in Stockholders' Equity/(Deficit) (Restated)		F-19
Consolidated Statements of Cash Flows		F-20
Notes to Consolidated Financial Statements		F-21

F-15

Table of Contents

SFX Entertainment, Inc.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of SFX Entertainment, Inc.

We have audited the accompanying consolidated balance sheets of SFX Entertainment, Inc. (the "Company") as of December 31, 2012 and 2011, and the related consolidated statements of operations, stockholders' equity/(deficit) and cash flows for the year ended December 31, 2012 and the period from July 7, 2011 (inception) through December 31, 2011. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of SFX Entertainment, Inc. at December 31, 2012 and 2011, and the consolidated results of its operations and its cash flows for the year ended December 31, 2012 and the period from July 7, 2011 (inception) through December 31, 2011, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 20, the December 31, 2012 consolidated balance sheet and consolidated statement of stockholders' deficit have been restated to classify the Company's common stock with repurchase rights and the non-controlling interest as temporary equity rather than stockholders' equity as previously reported.

/s/ Ernst & Young LLP

New York, New York
April 24, 2013
except for Note 20, as to which the date is
June 24, 2013

F-16

Table of Contents

SFX Entertainment, Inc.

Consolidated balance sheets
(in thousands except share data)

	December 31,

	2012			2011

	Restated
Assets:
Cash and cash equivalents	$	3,675		$	—
Accounts receivable		1,998			—
Due from promoters—net of allowance of $997 and $0, as of December 31, 2012 and 2011, respectively		1,597			—
Prepaid expenses		181			—
Other current assets		223			—

Total current assets		7,674			—

Property, plant and equipment		1,311			—
Accumulated depreciation		(75	)		—

Property, plant and equipment, net		1,236			—
Goodwill		21,571			—
Intangible assets, net		23,571			—
Other assets		12,680			—

Total assets	$	66,732		$	—

Liabilities:
Accounts payable and accrued expenses	$	7,932		$	96
Notes payable, current		8,491			—
Due to related parties		4,525			5
Other current liabilities		4,731			—

Total current liabilities		25,679			101
Deferred tax liabilities		67
Other long term liabilities		2,313			—

Total liabilities		28,059			101

Commitments and contingencies		—			—
Redeemable common stock, $.001 par value, 7,800,000 and 0 shares outstanding at December 31, 2012 and 2011, respectively (net of $1,500 subscription receivable in 2012)		25,000			0
Redeemable non-controlling interest		4,794			0
Stockholders' equity / (deficit):
Common stock, $0.001 par value, 300,000,000 authorized, 40,461,027 and 0 shares issued and outstanding at December 31, 2012 and 2011, respectively		40			—
Preferred stock, $0.001 par value, 100,000,000 authorized, 0 shares issued and outstanding at December 31, 2012 and 2011		—			—
Additional paid-in capital		25,200			—
Due from stockholder for stock subscriptions		(36	)		—
Accumulated other comprehensive loss		(16,325	)		(101	)

Total stockholders' equity/(deficit)		8,879			(101	)

Total liabilities and stockholders' equity / (deficit)	$	66,732		$	—

See accompanying notes to the consolidated financial statements

F-17

Table of Contents

SFX Entertainment, Inc.

Consolidated Statements of operations
(in thousands except share data)

	Year Ended December 31, 2012			Period from July 7, 2011 to December 31, 2011


Revenue	$	24,815		$	—
Direct costs:
Musical talent		7,971			—
Production costs		15,048			—

Gross profit		1,796			—
Operating expenses:
Selling, general and administrative expenses		17,026			101
Depreciation		75			—
Amortization		916			—

Operating loss		(16,221	)		(101	)
Interest expense		(34	)		—
Other income		98			—

Net loss before taxes		(16,157	)		(101	)
Provision for income taxes		(67	)		—

Net loss	$	(16,224	)	$	(101	)

Loss per share—basic and diluted	$	(0.44	)		N/A
Weighted average shares outstanding—basic and diluted		37,186			N/A

See accompanying notes to the consolidated financial statements

F-18

Table of Contents

SFX Entertainment, Inc.

Consolidated statements of stockholders' equity/(deficit) (Restated)
(in thousands)

	Common Stock				Additional Paid-in- Capital		Stock Subscription Receivable

	Common Stock									Accumulated Deficit
	Shares		Amount							Accumulated Deficit

Balances at July 7, 2011		—		—		—		—			—		—
Net loss		—		—		—		—		$	(101	)	(101	)

Balance at December 31, 2011		—	$	—	$	—	$	—		$	(101	)	(101	)

Net loss		—		—		—		—		$	(16,224	)	(16,224	)
Common Stock issued		40,461	$	40	$	19,801		—			—		19,841
Non cash stock compensation expense		—		—		2,209		—			—		2,209
Issuance of warrants		—		—		3,190		—			—		3,190
Stock subscription receivable		—		—		—		(36	)		—		(36	)

Balance at December 31, 2012		40,461	$	40	$	25,200	$	(36	)	$	(16,325	)	8,879

See accompanying notes to the consolidated financial statements

F-19

Table of Contents

SFX Entertainment, Inc.

Consolidated statements of cash flows
(in thousands)

	Year ended December 31, 2012			Period from July 7, 2011 through December 31, 2011


Cash flow from operating activities:
Net loss	$	(16,224	)	$	(101	)
Reconciling items:					—
Depreciation		75			—
Amortization		916			—
Bad debt expense		1,003			—
Stock compensation expense		2,209			—
Provision for deferred income taxes		67			—
Changes in operating assets and liabilities, net of acquisitions:					—
Accounts receivable		(1,290	)		—
Due from promoters		(755	)		—
Prepaid expenses		176			—
Other current assets		155			—
Other assets		(161	)		—
Accounts payable & accrued expenses		6,534			96
Due to related parties		(151	)		5
Other current liabilities		836			—

Net cash used by operating activities		(6,610	)		—

Cash flow from investing activities:
Purchases of property, plant and equipment		(584	)		—
Investment in Joint Venture		(12,500	)		—
Acquisition of businesses, net of cash acquired		(16,131	)		—

Net cash (used) by investing activities		(29,215	)		—

Cash flow from financing activities:
Proceeds from common stock transactions (Including redeemable stock)		32,500			—
Proceeds from notes payable		7,000			—

Net cash provided by financing activities		39,500			—

Net increase in cash		3,675			—

Cash, end of year	$	3,675		$	—

Supplemental scheduled of non-cash investing activities:
Shares issued in connection with purchase of LIC	$	3,932		$	—
Shares issued in connection with purchase of Disco		5,000			—
Shares issued in connection with purchase of Nightlife Holdings, Inc.		3,372			—

	$	12,304		$	—

Supplemental cash flow information:
Interest paid	$	43		$	—
Income taxes paid	$	—		$	—

See accompanying notes to the consolidated financial statements

F-20

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements
(in thousands except share data)

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of business

SFX Entertainment, Inc. ("SFX" or "the Company"), a Delaware corporation, was formed on June 5, 2012, under the name SFX Holding Corporation. On February 13, 2013, the name was changed to SFX Entertainment, Inc. The operations of SFX began on July 7, 2011, under an entity now named SFX EDM Holdings Corporation (a wholly owned subsidiary of SFX). SFX was formed with the intent of acquiring and operating companies within the live music industry, specifically those engaged in the promotion and production of live music events and festivals in the United States and abroad. Through the Company's recent acquisitions, it is actively engaged in the production and promotion of live electronic music culture (EMC) festivals and events, production of music tours, merchandising and related services. In addition, it also manages large, event-driven nightclubs that serve as venues for key electronic music talent.

As of December 31, 2012, SFX successfully completed the acquisition of certain assets and liabilities of three companies:

•: Disco Productions, Inc. (now operating as SFX-Disco Operating LLC ("Disco")) on June 19, 2012;
•: Dayglow and Affiliates, LLC (now operating as SFX-LIC Operating LLC, LLC ("LIC")), on July 31, 2012;
•: Nightlife Holdings, LLC, MMG Nightlife, LLC, US Nightlife Management, LLC, Punta Cana Venue, LLC, Dave Grutman, Inc., SEBU Corp., Brian Gordon, David Grutman and World on a String, LLC (now operating collectively as SFX-Nightlife Operating LLC LLC ("MMG" or "Miami Marketing Group")) on December 31, 2012;

The audited consolidated financial statements of SFX include the activities for the three acquired companies from the dates of their respective acquisition by SFX.

Basis of presentation and principles of consolidation

The accompanying consolidated financial statements of SFX have been prepared applying accounting principles generally accepted in the United States of America ("US GAAP") and include the accounts of the Company and its majority owned and controlled subsidiaries. Intercompany accounts among the consolidated businesses have been eliminated in consolidation. Equity associated with non-controlling interests is stated separately as a component of total stockholders' equity.

Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include allowance for doubtful accounts, purchase accounting allocations, recoverability and useful lives of property, plant and equipment, identifiable intangible assets, and goodwill and the valuation allowance of deferred tax assets, contingencies and equity compensation. Actual results could differ materially from those estimates.

F-21

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

Revenue recognition

Revenue from festivals and events are recognized when the performance occurs. Ticket sales collected in advance of an event are recorded as deferred revenue.

The Company evaluates the criteria outlined in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Subtopic 605-45, "Revenue Recognition—Principal Agent Considerations," in determining whether it is appropriate to record the gross amount of revenue and related costs or the net revenue. Under this accounting guidance, if the Company is the primary obligor to perform the services being sold, has general inventory risk as it pertains to recruiting and compensating the talent, has the ability to control the ticket pricing, has discretion in selecting the talent, is involved in the production of the event, generally bears the majority of the credit or collection risk, or has several but not all of these indicators, revenue is recorded gross. If the Company does not have several of these indicators, it records revenue or losses on a net basis.

Direct costs

Direct costs include artist performance fees and travel expenses, venue fees, show-specific marketing and advertising expenses, show-related production expenses, and other costs related to producing the events. These costs are primarily variable in nature.

Selling, general and administrative expenses

Selling, general and administrative expenses include salaries and wages related to employees, credit card fees, legal fees, professional fees, rent and other expenses.

Income taxes

The Company accounts for income taxes in accordance with the liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. Management must make assumptions, judgments, and estimates to determine the current provision for income taxes and also the deferred tax assets and liabilities as well as any valuation allowance to be recorded against deferred tax assets.

The Company's assumptions, judgments, and estimates relative to the current provision for income taxes take into account current tax laws, its interpretation of current tax laws, and possible outcomes of current and future audits conducted by domestic tax authorities. The Company has established reserves for income taxes to address potential exposures involving tax positions that could be challenged by tax authorities. Although the Company believes its assumptions, judgments, and estimates are reasonable, changes in tax laws or the Company's interpretation of tax laws, and the resolution of potential tax audits could significantly impact the amounts provided for income taxes in the financial statements.

The Company's assumptions, judgments, and estimates relative to the value of a deferred tax asset take into account predictions of the amount and category of future taxable income, such as income from operations or capital gains income. Actual operating results and the underlying amount and category of income in future years could render its current assumptions, judgments, and estimates of recoverable net deferred taxes inaccurate. Any of the assumptions, judgments and estimates mentioned above could

F-22

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

cause the Company actual income tax obligations to differ from its estimates, thus materially impacting its financial position and results of operations.

Cash and cash equivalents

Accounts receivable and allowance for doubtful accounts

Accounts receivable are primarily amounts due from ticketing agencies in conjunction with events. The Company records a provision for doubtful accounts based on historical experience and a detailed assessment of the collectability of our accounts receivable. To assist with the estimate, management considers certain factors such as historical experience, industry data, credit quality, age of accounts receivable balances, and current economic conditions that may affect a customer's ability to pay. In cases where the Company becomes aware of circumstances that may impair a specific customer's ability to meet its financial obligations, the Company records a specific allowance against amounts due from the customer and thereby reduces the net recognized receivable to the amount reasonably believed to be collectible. There is significant judgment involved in estimating the allowance for doubtful accounts.

Due from promoters, due to promoters and allowance for doubtful accounts

In the period preceding an event, both we and our promoters incur various costs. These costs are tracked in a shared database which can be accessed by both parties at any time. As we incur our costs, we record an asset in prepaid expenses. After the event, we and our promoters agree upon a settlement for that individual event and that settlement culminates the earnings process. Based on the settlement, we record one amount Due From or Due To Promoters for that event. Generally, this settlement results in the promoters owing amounts to us.

Amounts due from promoters are the net receivables due for events. Management assesses the collectability of the receivables and writes off balances when it determines that they are no longer collectible. The Company recorded an allowance for settlement revisions and doubtful accounts of $997 and $0 as of December 31, 2012 and December 31, 2011, respectively. On a periodic basis, management evaluates the balances due from promoters and determines whether to provide an allowance or if any balances should be written down and charged to expense as bad debt. The evaluation is based on a past history of collections, current credit conditions, the length of time the balance is past due, and a past history of write-downs. Amounts due to promoters for events of $165 are included in accounts payable.

Prepaid event expenses

The Company routinely incurs event expenses in advance of the event date. These expenses are recorded as prepaids and are expensed when the event occurs.

F-23

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

Property, plant and equipment, and depreciation and amortization

Property, plant, and equipment are stated at cost net of accumulated depreciation. Depreciation expense is computed over the estimated useful lives of the assets using the straight-line method. Expenditures for maintenance and repairs are expensed as incurred. Additions, renewals and improvements that materially extend the life of the asset are capitalized and depreciated over five years or the extended life of the asset, whichever is shorter.

Business combinations

The Company accounts for business combinations under the acquisition method of accounting. Identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree are recognized and measured as of the acquisition date at fair value. Shares issued in connection with acquisitions are valued at the most recent private sale per share value. Additionally, contingent consideration is recorded at fair value on the acquisition date and classified as a liability. Goodwill is recognized to the extent by which the aggregate of the acquisition-date fair value of the consideration transferred and any noncontrolling interests in the acquiree exceeds the recognized basis of the identifiable assets acquired, net of assumed liabilities. Determining the fair value of assets acquired, liabilities assumed and noncontrolling interests requires management's judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates and asset lives among other items. Acquisition related costs, including advisory, legal, accounting, valuation and other costs are expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in the consolidated financial statements from the date of acquisition.

Due to the Company's rapid expansion plan, letters of intent, Asset Contribution Agreements ("ACA"), or similar documents are signed regularly for businesses the Company has an interest in acquiring. While the language in each of these varies, management evaluates if there is effectively a constructive acquisition as of the date signed based on the control considerations within Accountings Statement Codification 805—Business Combinations ("ASC 805"). To date, the Company has accounted for all acquisitions as of the date that the Company has transferred valuable consideration is transferred and control of the entities in question has been obtained.

Goodwill and intangible assets

Goodwill represents the excess of the aggregate purchase price paid over the fair value of the net tangible assets acquired. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company has determined that it operates as one reporting unit and has selected October 31 as the date to perform the annual impairment test. The first step of the impairment test involves comparing the fair value of the reporting unit to its net book value, including goodwill. If the net book value exceeds its fair value, then the Company would perform the second step of the goodwill impairment test to determine the amount of the impairment loss. When performing the valuation of its goodwill, the Company makes assumptions regarding estimated future cash flows to determine the fair value of our business. If the estimates or related assumptions change in the future, the Company may be required to record impairment loss related to its goodwill. The Company has not recognized any goodwill impairments since its inception.

F-24

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

The Company accounts for intangible assets and goodwill in accordance with Accounting Statement Codification 350—Intangibles and Goodwill—Other (ASC 350). Intangibles are valued at their fair market value and are amortized taking into account the character of the acquired intangible asset and the expected period of benefit. The Company evaluates intangible assets for impairment, at a minimum, on an annual basis and whenever events or changes in circumstances indicate the carrying value may not be recoverable from its estimated future cash flows. The Company will determine the recoverability of its intangible assets by comparing the net book value to the related projected undiscounted cash flows from these assets, considering a number of factors, including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss. The Company has not recorded an impairment loss on its goodwill or intangible assets.

Impairment of long-lived assets

The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured first by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, an impairment loss would be recognized. When measuring the recoverability of these assets, the Company will make assumptions regarding its estimated future cash flows it expects to be generated by the assets. If the Company's estimates or related assumptions change in the future, the Company may be required to impair these assets. The Company has not recognized any impairment of long-lived assets to date.

Advertising expense

The Company expenses advertising costs when incurred. These costs are recorded on the income statement as selling, general, and administrative expenses. Advertising expenses for the year ended December 31, 2012 was $393. There were no advertising expenses incurred in 2011.

Artist fee tax withholding

Artist fee tax withholdings are amounts owed to federal taxing authorities for income tax withholdings required on payments made to foreign artists for services. These withholdings are withheld from the artist, accrued, and paid to the federal taxing authority. At December 31, 2012 and 2011 $1,971 and $0 are in other current liabilities on the balance sheet.

Fair value of financial instruments

The Company values its assets and liabilities using the methods of fair value as described in ASC 820, Fair Value Measurements and Disclosures. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The three levels of fair value hierarchy are described below:

The three levels of the fair value hierarchy under ASC 820 are described as follows:

Level 1 inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

F-25

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company's financial instruments consist principally of cash, receivables due from promoters, accounts payable, notes payable, other liabilities and warrants issued with respect to the Company's common stock. Cash and receivables due from promoters are financial assets with carrying values that approximate fair value. Accounts payable and other liabilities are financial liabilities with carrying values that approximate fair value. Notes payable and related warrants are recorded based on their relative fair value at date of issuance. The Company believes that the recorded values of all of its financial instruments approximate fair market value because of the nature and duration of the respective financial instruments.

Stock-based compensation

The Company follows the fair value recognition provisions in ASC 718, "Stock Compensation." Stock-based compensation expense recognized during the year includes compensation expense for all share-based payments based on the grant date fair value estimated in accordance with the provisions in the FASB guidance for stock compensation. The grant date is the date at which an employer and an employee reach a mutual understanding of the key terms and conditions of a share-based payment award, awards have been approved as needed, unless such approval is deemed to be a formality or perfunctory and documented contemporaneous documentation exists.

The fair value for options in SFX common stock is estimated on the date of grant using the Black-Scholes option-pricing model. The fair value of the options is amortized to expense on a straight-line basis over the options' vesting period. Expected volatilities were based on similar companies' implied volatilities of traded options and historical volatilities since the Company's common stock has not been publicly traded, in addition, the Company has not paid a dividend on its common stock. The Company uses the simplified method for estimating the expected life within the valuation model which is the period of time that options granted are expected to be outstanding. The risk free rate for periods within the expected life of the option is based on the United States Treasury Note rate.

2. RECENT ACCOUNTING PRONOUNCEMENTS

Jumpstart Our Business Startups Act

On April 5, 2012, the Jumpstart Our Business Startups Act (the "JOBS Act") was enacted, which provided special accommodations for companies defined as emerging growth companies. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. The Company's

F-26

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

Presentation of comprehensive income

In June 2011, the FASB issued new accounting rules that require an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. The new accounting rules eliminate the option to present components of other comprehensive income as part of the statement of equity. The adoption of the new accounting rules in the first quarter of 2012 did not have a material effect on the Company's financial condition, results of operations or cash flows.

In December 2011, the FASB issued new accounting rules which deferred certain provisions of the rules issued in June 2011 that required entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented.

In February 2013, the FASB issued a final rule related to the reporting of amounts reclassified out of accumulated other comprehensive income that requires entities to report, either on their income statement or in a footnote to their financial statements, the effects on earnings from items that are reclassified out of other comprehensive income. The new accounting rules will be effective for the Company in the first quarter of 2013. The Company does not expect the adoption of the new accounting rules to have a material effect on the Company's financial condition, results of operations or cash flows.

Goodwill impairment testing

In September 2011, the FASB issued new accounting rules related to testing goodwill for impairment. The new accounting rules permit an entity to first assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, it is necessary to perform the two-step goodwill impairment test prescribed under current accounting rules. Otherwise, the two-step goodwill impairment test is not required. The adoption of the new accounting rules in 2012 did not have a material effect on the Company's financial condition, results of operations or cash flows.

Disclosures about offsetting assets and liabilities

In December 2011, the FASB issued new accounting rules related to new disclosure requirements regarding the nature of an entity's rights of offset and related arrangements associated with its financial instruments and derivative instruments. The new rules are effective for the Company in the first quarter of 2014 with retrospective application required. The Company does not expect the adoption of the new accounting rules to have a material effect on Company's financial condition, results of operations or cash flows.

3. CONCENTRATION OF CREDIT RISK

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, accounts receivables and balances due from promoters. Exposure to losses on

F-27

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

account receivables is minimal as the promoters with whom the Company partners for ticket sales and collection of event revenues typically remit proceeds to the Company in a timely manner. The Company maintains balances at financial institutions, which at times exceed the federally insured limit. On a periodic basis, management evaluates its due from promoter balances and determines whether to provide an allowance or if any balances should be written down and charged to expense as bad debt. The evaluation is based on a past history of collections, current credit conditions, the length of time the balance is past due, and a past history of write-downs.

The credit risk in amounts due from promoters is generally not diversified due to the limited number of promoters that the Company works with. The following table represents a breakdown of concentrations at December 31, 2012 and December 31, 2011:

Percentage of Due from Promoters at:			December 31, 2011


Promoter A	15.7	%	N/A
Promoter B	14.3	%	N/A
Promoter C	9.5	%	N/A

N/A—not applicable

Accounts receivable includes an amount due from one client, which represents 30.4% of the balance.

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

(in thousands)	December 31, 2012			December 31, 2011		Estimated Useful Lives


Computer equipment	$	96		$	—	3 years
Furniture, fixtures and other equipment		35			—	5 years
Production equipment		1,180			—	5-7 years

Property, plant and equipment	$	1,311		$	—
Less: accumulated depreciation		( 75	)		—

Property, plant and equipment, net	$	1,236		$	—

Depreciation expense for the years ended December 31, 2012 and 2011 was $75 and $0, respectively.

5. NOTES PAYABLE

Secured promissory note—Nightlife Holdings, LLC

On December 31, 2012, the Company issued a secured promissory note in the principal amount of $8,491 as part of the acquisition of certain assets and liabilities of MMG. Such amount is included as Notes payable, current on the balance sheet. On March 15, 2013 a payment of $3,000 was made to Nightlife Holding, LLC and the promissory note was amended and restated to provide that the remaining amount of $5,491 plus interest will be payable on May 15, 2013. This note as amended

F-28

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

and restated bears interest at the rate of 0.22% per annum. For further information on the acquisition of Nightlife Holdings, LLC by SFX see Note 8—Business Combinations.

6. OTHER CURRENT LIABILITIES—EVENTBRITE

Through the Company's acquisition of Disco Productions, Inc. ("Disco") the Company became the assignee of an agreement with Eventbrite, Inc. ("Eventbrite"), a ticket sales agency. The agreement provides that Eventbrite will provide certain ticketing services for events managed by SFX-Disco Operating LLC unless the specific venue has a prior ticket agency relationship that would prevent Eventbrite from acting as the ticket agent. In connection with the acquisition of Disco, the Company assumed a liability of $700 to Eventbrite which will be repaid principally from a portion of future ticket sales. At December 31, 2012, the balance due to Eventbrite with respect to this liability was $612, which is expected to be repaid within twelve months. The Company is responsible for the payment of any amounts not recouped by Eventbrite through ticket sales and ultimately has the right to recover such shortfalls, if any, from the former owner of Disco.

7. CONTINGENCIES

Legal matters

During the normal course of business, the Company is occasionally involved with various claims and litigation. Reserves are established in connection with such matters when a loss is probable and the amount of such loss can be reasonably estimated. At December 31, 2012 and 2011, no material reserves were recorded. No reserves are established for losses which are only reasonably possible. The determination of probability and the estimation of the actual amount of any such loss is inherently unpredictable, and it is therefore possible that the eventual outcome of such claims and litigation could exceed the estimated reserves, if any. Based upon the Company's experience, current information and applicable law, it does not believe it is reasonably possible that any proceedings or possible related claims will have a material effect on its financial statements.

Legal expenses are expenses related to the organization and legal formation of SFX Entertainment, Inc. and SFX EDM Holdings Corporation, a limited liability corporation and 100% owned subsidiary of SFX Entertainment, Inc., as well as expenses for acquisition related costs. For the years ended December 31, 2012 and 2011 the Company incurred legal expenses of $4,374 and $96, respectively.

8. BUSINESS COMBINATIONS

On July 31, 2012, SFX acquired certain assets and liabilities of Dayglow and Affiliates, LLC (now operating as LIC) for $12,063 in cash and equity. The purchase price was comprised of $8,131 in cash and $3,932 in common stock. LIC are promoters and operators of EMC-themed concerts with live entertainment.

Under the terms of the asset purchase agreement, if LIC's 2012 earnings before interest, taxes, depreciation and amortization (EBITDA) exceeds $2,300, the former shareholders will receive five times the difference between actual 2012 EBITDA and $2,300. The maximum earn-out payment is $3,500. Two thirds of this contingent consideration, if any, will be paid in cash and the remaining one third in common stock of the Company at $5.00 per share. Considering the results of the business up

F-29

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

to the date of acquisition, we did not allocate any value to the earn-out payment at the time of acquisition. Based on the results of LIC, no earn-out payment was achieved for 2012.

For the period August 1, 2012 through December 31, 2012, LIC contributed revenue of $10,147 and pre-tax loss of $452. On June 19, 2012, SFX acquired certain assets and liabilities of Disco for $9,000 in cash and equity. The purchase price was comprised of $4,000 in cash and $5,000 in common stock. Disco partners with regional promoters to produce dance music events across the USA and internationally that feature electronic music artists playing at nightclub, arena and festival venues.

The asset purchase agreement includes a provision that the net liabilities assumed by the Company will not exceed $1,500. To the extent that the settlement of assumed liability payments, net of receivable collections, exceeds $1,500, the purchase price paid to the former shareholder will be adjusted in cash or the cancellation of common shares issued. The final settlement of these amounts will occur no later than one year from the date of acquisition. Any adjustments to the purchase price will impact goodwill, accounts receivable and accrued expenses.

For the period from June 20, 2012 through December 31, 2012, Disco contributed revenue of $14,668 and pre-tax loss of ($1,490).

On December 31, 2012, SFX acquired certain assets and liabilities representing 80% of the operations of MMG for $16,864 in cash and equity. The purchase price was comprised of $5,000 in cash and a $8,491 promissory note plus $3,373 in common stock. MMG is engaged in the business of nightlife operations and management. Contingent consideration of $2,313 has also been recorded as part of the initial purchase price and is included in other long term liabilities on the balance sheet. In connection with the acquisition of MMG the Company recorded an amount representing the non-controlling interest of MMG of $4,794. The non-controlling interest in MMG was determined based on the fair value of MMG less the amounts paid by the Company for the 80% controlling interest.

In addition, the Company has a call option and the holders of the non-controlling interest in MMG have a put option, which are exercisable anytime during the period January 1, 2015 through June 30, 2015. The call and put options provide for the Company to acquire the remaining non-controlling interest at a price based on a multiple of 20% of MMG's 2014 EBITDA times six. Because the put option could require the Company to redeem the non-controlling interests, the Company has restated its financial statements to show the redeemable non-controlling interest in MMG as temporary equity.

F-30

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

The Company has made a preliminary allocation of the purchase price to the assets acquired and liabilities assumed as of the purchase date for its acquisitions. The Company expects to finalize its analysis of the purchase price allocation within the first year of the acquisitions, and therefore adjustments to goodwill and identifiable assets may occur. The allocation of the aggregate purchase price, based on our valuation of the assets and liabilities, is as follows:

(in thousands)	Disco Productions, Inc.			Life In Color			MMG Nightlife, LLC			Total


Consideration
Cash	$	4,000		$	8,131		$	5,000		$	17,131
Notes Payable		—			—			8,491			8,491
Contingent Consideration		—			—			2,313			2,313
Common Stock		5,000			3,932			3,373			12,305

Fair value of total consideration transferred	$	9,000		$	12,063		$	19,177		$	40,240

Recognized amounts of identifiable assets acquired and liabilities assumed
Due from promoters	$	1,838		$	—		$	—		$	1,838
Accounts receivable		—			—			714			714
Prepaid event expenses & other current assets		3			355			—			358
Other receivables		204						203			407
Property, plant and equipment		1			724			2			727
Identifiable intangible assets		4,633			5,420			14,425			24,478
Financial liabilities		(3,895	)		(375	)		(789	)		(5,059	)
Noncontrolling interest in subsidiary		—			—			(4,794	)		(4,794	)
Goodwill		6,216			5,939			9,416			21,571

Fair value of total consideration transferred	$	9,000		$	12,063		$	19,177		$	40,240

The Company issued 786,467 shares of its common stock at $5.00 per share to the former shareholders of LIC, 1,000,000 shares of its common stock at $5.00 per share to the former owner of Disco Productions, Inc., 674,560 shares of its common stock at $5.00 per share to the former owner of Nightlife Holdings, LLC. For purposes of calculating the value of the common stock, the Company evaluates and estimates its common stock at each grant date. There is no public market for the Company's common stock and, as such, we evaluate the best evidence to estimate the common stock's fair value. The common stock was valued using the market approach. The market approach bases the valuation measurement on what other similar enterprises or comparable transactions indicate the value to be. Based upon the most recently negotiated third-party transactions in the Company's common stock preceding the acquisitions, the Company has valued the price of the common stock issued in conjunction with these transactions at $5.00 per share. The Company considers these transactions preceding the acquisition the best evidence of fair value for the common stock. In the absence of an active market trading its securities, management will continue to monitor transactions in the Company's common stock to ascertain its value under the market approach.

The overall weighted average life of the identified intangible assets acquired is 5.3 years. These identified intangible assets will be amortized on a straight-line basis over their useful lives.

F-31

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

On December 31, 2012, the Company signed an ACA with two entities. For one of these entities, the Sellers were required to deliver certain rights to the Company in order for the transaction to be consummated. It was determined that the Sellers had not and could not deliver the required rights and the transaction was rescinded. For the second entity, certain conditions were required to be met prior to valuable consideration to be transferred to the Sellers. It was determined that the Sellers could not or would not deliver the required materials and thus this transaction was also rescinded. Both rescissions occurred in April 2013 as agreed by both the Company and the Sellers, in each case. The Company did not control either entity as of December 31, 2012 or any date thereafter.

Supplemental pro forma information

The following table represents unaudited consolidated pro forma financial information as if the closing of the Company's acquisitions had occurred on January 1, 2012 for purposes of the financial information presented for the year ended December 31, 2012; and as if the closing of the Company's acquisitions had occurred on January 1, 2011 for purposes of the financial information presented for the year ended December 31, 2011.

(in thousands)	2012			2011


Revenue	$	51,040		$	35,515
Net loss attributable to SFX	$	(19,124	)	$	(3,996	)
Net loss attributable to SFX per common—Basic	$	(0.49	)		N/A

The unaudited consolidated pro forma financial information has been adjusted to give effect to the pro forma events that are (1) directly attributable to the acquisitions, (2) factually supportable, and (3) expected to have a continuing impact on the combined results of SFX and its acquired entities.

The unaudited pro forma results have been adjusted with respect to certain aspects of our acquisitions to reflect:

•: the consummation of the acquisitions;
•: the elimination of related party transactions; and
•: changes in assets and liabilities to record their acquisition date fair value and changes in certain expenses resulting therefrom.

The unaudited consolidated pro forma results do not reflect future events that either have occurred or may occur after the acquisitions, including, but not limited to, the anticipated realization of ongoing savings from operating synergies in subsequent periods.

F-32

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

9. INTANGIBLE ASSETS

Intangible assets consist of the following:

(in thousands)	Intangible, Gross		Accumulated Depreciation			Intangible, Net			Estimated Useful Lives


Customer lists (Fan database)	$	2,300	$	(364	)	$	1,936	2.5	3 years
Trademarks		6,470		(437	)		6,033	6.5	7 years
Management agreements		13,600		—			13,600	5.0	5 years
Non-compete agreements		2,094		(112	)		1,982	4.7	5 years
Website		19		(2	)		17	2.5	3 years
Intellectual property		4		(1	)		3	2.6	3 years

Intangible assets, gross	$	24,487	$	(916	)	$	23,571

Amortization expense for the years ended December 31, 2012 and 2011 was $916 and $0, respectively.

The aggregate amortization expense for each of the next five years is:

(in thousands)


2013	$	4,837
2014	$	4,837
2015	$	4,470
2016	$	4,063
2017	$	3,951

10. LEASE COMMITMENTS

The Company leases its office and warehouse facilities under non-cancellable operating lease agreements. The office leases for the Company's corporate office and MMG expire in March 2015 and February 2016, respectively. The warehouse facility lease expires in September 2014. The Company's corporate office includes a rent holiday of three months.

Future minimum rental commitments are as follows:




2013	$	803
2014	$	908
2015	$	220
2016	$	10

Rent expense for the year ended December 31, 2012 and 2011 was $202 and $0, respectively.

F-33

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

11. INCOME TAXES

The provision for income taxes for the year ended December 31, 2012 consists of current and deferred taxes based on income as follows:

	2012		2011


Income tax expense:
Current
Federal	$	—	$	—
State		—		—

Total current	$	—	$	—

Deferred
Federal	$	58	$	—
State		9		—

Total deferred	$	67	$	—

Total income tax expense	$	67	$	—

Significant components of the Company's net deferred tax assets at December 31, 2012 are as follows:

	2012			2011


Components of deferred tax assets and liabilities:
Deferred tax assets—current
Allowance for doubtful accounts	$	983		$	—
Less:
Valuation allowance—Federal		(720	)		—
Valuation allowance—State		(254	)		—

Total deferred tax assets—current		9			—

Deferred tax assets—non-current:
Equity-based compensation	$	1,152		$	—
Capitalized deal costs and organizational costs		3,883			—
Net operating loss		1,818			—
Depreciable, amortizable and other property		245			—
Other		391			46

Total gross deferred assets—non-current	$	7,489		$	46
Less:
Valuation allowance—Federal	$	(5,012	)	$	(35	)
Valuation allowance—State		(2,411	)		(11	)

Total deferred tax assets	$	75		$	—

Deferred tax liabilities
Depreciable, amortizable and other property	$	(142	)	$	—

Total deferred tax liabilities	$	(142	)	$	—

Total deferred tax liabilities, net	$	(67	)	$	—

F-34

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

At December 31, 2012, the Company had a Federal Net Operating Loss carryforward of $3,486 which may be available to offset future taxable income. The Federal Net Operating Loss carryforward will begin to expire in 2032.

The Company files income tax returns in the US federal jurisdiction and various state and local jurisdictions. Based on the Company's analysis, we conclude that no uncertain tax positions exist as of December 31, 2012. As of December 31, 2012, there are no interest or accrued penalties related to any uncertain tax positions recorded within the consolidated financial statements.

For the year ended December 31, 2012, the Company's effective tax rate differs from the federal statutory rate principally due to net operating losses and other temporary differences for which no benefit was recorded. The difference between the zero rate in 2011 versus the (0.42)% rate in 2012 relates primarily to the tax amortization of goodwill in 2012 for tax purposes.

A reconciliation of the effective income tax rate is as follows:

SFX Effective Tax Rate


Pretax book Income	34.00	%	34.00	%
Permanent Differences	(0.09	)%	0.00	%
State Deferred	16.49	%	0.00	%
Valuation Allowance	(51.98	)%	(34.00	)%
Other	1.16	%	0.00	%

Total Tax Provision	(0.42	)%	0.00	%

12. RELATED PARTIES

The Company's chief executive officer and chairman, Robert F.X. Sillerman, beneficially owns shares, in the aggregate, representing approximately 74.6% of our outstanding capital stock as of December 31, 2012. As a result, he controls all matters submitted to our stockholders for approval, as well as our management and affairs.

Promissory Note—Robert F.X. Sillerman

On December 31, 2012, the Company issued in a financing transaction a promissory note to Robert F.X. Sillerman in the principal amount of $7,000, together with warrants to purchase up to an aggregate amount of 2,100,000 shares of the Company's common stock. In connection with this transaction, Mr. Sillerman entered into a back-stop agreement pursuant to which he agreed to purchase the entire amount of the notes offered but not subscribed for. As consideration for the funding of the back-stop, Mr. Sillerman received 100,000 warrants at an exercise price of $.01 per share. In connection with the issuance of the note, Mr. Sillerman also was issued 700,000 warrants to purchase stock at $5.00 per share; 700,000 warrants to purchase stock $7.50 per share; and 700,000 warrants to purchase stock at $10.00 per share. See Note 15—Common Stock Warrants for further discussion on warrants issued in connection with this promissory note.

Under the terms of the $7,000 Promissory Note, the Company is required to repay the outstanding principal and interest by (i) one-third of the amounts raised in completed equity offerings and (ii) 100% of the amounts raised in debt financings over $15,000. As of April 3, 2013, the entire principal amount was repaid.

F-35

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

In accordance with the guidance under ASC 815, the fair value of both the note and the warrants was determined and the proceeds of the note were allocated between the note and the warrants based on the pro rata individual values to the aggregate combined value of the note and the warrants. As a result $3,190 was recorded as additional paid in capital with respect to the allocated value of the warrants and $3,810 was allocated to the note payable, which is included in due to related parties on the balance sheet as of December 31, 2012. The difference between the face value of the note and the recorded value represents a discount associated with the issuance of the note and will be amortized as interest expense during the first quarter of 2013.

Viggle, Inc.

The Company has a shared service agreement with Viggle, Inc., a company whose Chief Executive Officer and primary shareholder is Robert F.X. Sillerman. The shared services agreement is for taxation, finance and administrative services to the Company. Costs incurred through December 31, 2012 totaled $12.

Circle Entertainment, Inc.

The Company has a shared service agreement with Circle Entertainment Inc., a company partially owned by Robert F.X. Sillerman. The shared services agreement covers expenses for office space, legal services, IT services and office supplies for SFX. Costs incurred through December 31, 2012 by the Company under the terms of the agreement totaled $181.

Donnie Estopinal

The Company is indebted to the former owner of Disco, Donnie Estopinal, in the amount of $18 for certain reimbursable business related expenses.

Life in Color

The former owners of LIC are indebted to the Company in the amount of $3 for certain purchase price adjustments.

MJX, LLC

Prior to receiving funding from our equity partners, MJX, LLC, a company owned 100% by Robert F.X. Sillerman, funded the travel and entertainment expenses incurred by our consultants and employees who were assisting in meeting with potential acquisition targets. The amount owed to MJX, LLC, at December 31, 2012 is $507.

13. STOCK-BASED COMPENSATION

The Company adopted the SFX Entertainment, Inc. 2013 Equity Compensation Plan ("Equity Plan"). The Equity Plan authorizes the Company to grant incentive stock options, nonqualified stock options, restricted stock units and stock awards. Prior to the formation and adoption of the Equity Plan, the Company granted options to purchase its common stock to employees, directors and consultants of the Company and its affiliates at prices ranging from $2.00 to $4.00 per share, which in the view of management and after it was formed by the Company's compensation committee, represented the fair market value of the Company's common stock at the time of grant. The options were granted for a

F-36

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

term not exceeding ten years and the nonvested options are generally forfeited in the event the employee or director terminates his or her employment or relationship with the Company or one of its affiliates. Any options that have vested at the time of termination are forfeited to the extent they are not exercised within the applicable post-employment exercise period provided in their option agreements. The options generally vest in various periods up to five years. In some cases, contemporaneous documentation of these grants could not be located. While some of these grants were documented at a later date in 2012, some were not fully documented until 2013. As a result of the issues with respect to contemporaneous documentation of the Company's option grants, the Company recorded compensation expense with respect to option grants at the time it was believed that the documentation of such grants met all key criteria under ASC 718 and could be evidenced (referred to as the measurement date). In some cases this was 2013 and accordingly, 2012 contains no expense related to those stock option awards. Options issued in 2012 but not fully documented until 2013 amounted to 5,220,500 options at exercise prices ranging from $2 to $4 per share. The approximate fair value of such options was $2.81 to $3.87 and the compensation expense (measured from the date such option grants were originally made) recognized in 2013 with respect to these options was $4,389.

In 2013, the Company granted an additional, 9,912,500 options (net of 225,000 of forfeitures) at exercise prices ranging from $5 to $10 per share, including 9,350,000 option issued pursuant to the 2013 Supplemental Equity Compensation Plan. The fair value of common stock on the measurement date has been used solely to record compensation expenses in our consolidated financial statements. The fair value of our equity awards were based on a valuation prepared by a third party and was based on contemporaneous information using the Black Scholes formula. The options were granted for a term not exceeding ten years and the nonvested options are generally forfeited in the event the employee or director terminates his or her employment or relationship with the Company or one of its affiliates. Any options that have vested at the time of termination are forfeited to the extent they are not exercised within the applicable post-employment exercise period provided in their option agreements. The options generally vest in various periods up to five years.

The Company records stock-based compensation expense as part of selling, general and administrative expenses. The Company recorded $2,209 and $0 in stock-based compensation expense for the year ended December 31, 2012 and 2011, respectively.

Stock Options

The following assumptions were used to calculate the fair value of the Company's options on the date of grant:

	2012	2011


Risk-free interest rate	0.77%–1.40%	N/A
Dividend yield	—	N/A
Volatility factors	60%	N/A
Weighted average expected life (in years)	5–7.6	N/A

N/A—not applicable

F-37

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

The following table presents a summary of the Company's stock options outstanding at, and stock option activity during, the years ended December 31, 2012 and 2011 ("Price" reflects the weighted average exercise price per share):

	2012				2011

(in thousands)	Options		Price		Options		Price

Outstanding January 1		—	$	—		—	$	—
Granted		3,250		2.45		—		—
Exercised		—		—		—		—
Forfeited or expired		—		—		—		—

Outstanding at December 31		3,250	$	2.45		—	$	—

Through December 31, 2012, no tax benefit from the exercise of stock options has been recognized. Any future excess tax benefits derived from the exercise of stock options will be recorded prospectively and reported as cash flows from financing activities in accordance with FASB guidance for stock compensation.

There were 8,000,000 shares available for future grants under the stock incentive plan at December 31, 2012. Upon share option exercise, the Company issues new shares to fulfill these grants. Vesting dates on the stock options range from October 2012 to December 2016 and expiration dates range from October 2022 to December 2022 at exercise prices and average contractual lives as follows:

	Options Outstanding								Options Exercisable

Range of Exercise Prices	Outstanding as of 12/31/12 (in thousands)		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Exercisable as of 12/31/12 (in thousands)		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Weighted Average Fair Value per Option Granted

$2.00–$4.00		3,250		9.82	$	2.45		556		9.82	$	2.56	$	3.55

The total intrinsic value of options outstanding as of December 31, 2012 and 2011 was $8,288 and $0, respectively. As of December 31, 2012, there was $9,330 of total unrecognized compensation cost related to stock options granted during the period. This cost is expected to be recognized over a weighted average remaining period of 3.8 years.

14. CAPITAL STOCK

The Company has issued and outstanding 48,261,027 shares of its $.001 par value Common Stock, of which 7,800,000 is classified as temporary equity. During 2012, the Company issued common stock in private placement transactions with investors. As of December 31, 2012, the Company issued 9,800,000 in several private placement transactions for an aggregate purchase price of $34,000.

On June 6, 2012, we closed three private placement financings with investors in which we (1) issued 4,000,000 shares of common stock at a price per share of $2.50 for an aggregate purchase price of $10,000, (2) issued 1,250,000 share of common stock at a price per share of $4.00 for an aggregate

F-38

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

purchase price of $5,000, and (3) issued 500,000 shares of common stock at a price per share of $5.00 for an aggregate purchase price of $2,500.

On October 29, 2012, we closed a private placement financing with an existing stockholder in which we issued 1,250,000 shares of common stock at a price per share of $4.00 for an aggregate purchase price of $5,000.

On October 29, 2012, we closed a private placement financing with an existing stockholder in which we issued 200,000 shares of common stock at a price per share of $4.00 for an aggregate purchase price of $800.

On October 29, 2012, we closed a financing with our founder Robert F.X. Sillerman in which we issued 2,300,000 shares of common stock at a price per share of $4.00 for an aggregate purchase price of $9,200.

On December 6, 2012, we closed a private placement financing with an investor in which we issued 300,000 shares of common stock at a price per share of $5.00 for an aggregate purchase price of $1,500. Such purchase price was paid in the form of a $1,500 principal amount promissory note having a maturity date of December 6, 2015. The promissory note is secured by the 300,000 shares and the principal of the investor has personally guaranteed the repayment of $375 of the promissory note.

Under certain circumstances, specifically if the Company does not successfully undertake an initial public offering of its stock, some investors with respect to their private placements may elect to have the Company redeem their stock at the initial purchase price paid. As of the date of this report, none of the investors have elected to exercise their redemption rights.

At December 31, 2012, the Company had subscriptions receivable related to the issuance of common stock in the amount of $36. Such amount is shown in stockholder's equity as a reduction of additional paid in capital. Subsequent to year end, as more fully described in note 19, the Company issued 5,000,000 shares in three separate private placement transactions for a total purchase price of $30,000.

15. COMMON STOCK WARRANTS

For the year ended December 31, 2012, as disclosed in Note 12 above, the Company granted 2,200,000 warrants to its chief executive officer and chairman, Robert F.X. Sillerman, all of which are still outstanding. The Company has accounted for these warrants as equity instruments and as such, are classified in stockholders' equity. The Company has estimated the fair value of these warrants as $3,190 at December 31, 2012 using the Black-Scholes option pricing model.

Warrants issued	Strike Price


100,000	$	.01
700,000	$	5.00
700,000	$	7.50
700,000	$	10.00

F-39

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

The following assumptions were used to calculate the fair value of the Company's warrants on the date of grant:

			2011


Risk-free interest rate	1.18	%	N/A
Dividend yield	—		N/A
Volatility factors	60	%	N/A
Weighted average expected life (in years)	7		N/A

N/A—not applicable

As there is no publicly traded market for the Company's common stock, the expected volatility of historical closing stock prices of comparable companies over the expected term of the warrants. The risk free interest for the periods within the contractual life of the warrants is based on the 7 year U.S. Treasury bond rate as of December 31, 2012. The expected term of warrants granted is based upon management's estimate for the period of time for which warrants are expected to be outstanding.

16. LOSS PER COMMON SHARE

Basic loss per common share is computed as net comprehensive loss divided by the weighted-average number of common shares outstanding for the period.

Diluted loss per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. However, since the Company had a net loss for the year ended December 31, 2012, diluted loss per common share is the same as basic loss per common share, as any potentially dilutive securities would reduce the loss per share. There were 556,250 options and 100,000 warrants that were excluded from the diluted shares outstanding per share calculation at December 31, 2012.

17. OTHER INFORMATION

Investment in ID&T North America

On October 30, 2012, the Company entered into an agreement with ID&T Holding BV ("ID&T") to form a joint venture, subject to certain closing conditions, which will have an exclusive license to use and promote all ID&T brands in North America. The joint venture began operations on January 1, 2013. At the time of the agreement, the Company paid ID&T $12,500. On March 15, 2013, the Company and ID&T executed a definitive joint venture agreement and in connection therewith made a $7,500 non-recourse loan to ID&T, which is to be repaid from ID&T's interest in distributions from the joint venture. In addition, we issued to ID&T $10,000 with our common stock and warrants to purchase 500,000 shares of our common stock at an exercise price of $2.50. Our acquisition of 51% of the ID&T Joint Venture was accounted for in 2013 on a consolidated basis. Goodwill and intangible assets will be recognized based on a valuation performed by a third party and the non-controlling interest measured on a full fair value basis. The warrant issued with respect to this acquisition was valued based on the Black Scholes formula and the fair value was determined to be

F-40

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

$1,820. The $7,500 non-recourse loan will remain as an advance until the option to purchase ID&T is executed and closed. See Note 19—Subsequent Events.

	For the Year ended December 31,

(in thousands)	2012		2011

The following details the components of "Other Assets":
Investment in ID&T Joint Venture	$	12,500	$	—
Other assets		180		—

Total Other Assets	$	12,680	$	—

The following details the components of "Accounts Payable and Accrued Expenses":
Accounts payable	$	2,337	$	—
Accrued legal fees		2,828		96
Accrued accounting and professional fees		2,105		—
Other		662		—

Total accounts payable and accrued expenses	$	7,932	$	96

The following details the components of "Other Current Liabilities":
Foreign artist withholding liability	$	1,971	$	—
Acquisition related liabilities		1,398		—
Eventbrite liability (see Note 6)		612		—
Other		750		—

Total other current liabilities	$	4,731		—

18. SEGMENT REPORTING

The Company has one reportable segment. Operating segments are business units that have separate financial information and are separately reviewed by the Company's chief decision maker. The Company's chief decision maker is the Chief Executive Officer. The Company is engaged in the promotion and production of live music events and festivals in the United States. The Company and its subsidiaries currently operate in a single reportable segment: the promotion and production of live music events and festivals in the United States. The chief operating decision maker allocates resources and assesses performance of the business and other activities at the reporting segment level. The revenue from this segment is predominantly from ticket sales (93.1%), with the remainder attributable to sponsorship (1.2%), licensing (2.4%) and other ancillary revenue (3.3%) from our live music events and festivals.

19. SUBSEQUENT EVENTS

F-41

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

The Company has considered subsequent events through April 24, 2012, the date which the financial statements were available to be issued, in preparing the financial statements and notes thereto, and has determined that there are no subsequent events that require disclosure, except as follows:

On January 8, 2013, the Company closed a private placement transaction with an investor in which it issued 2,000,000 shares of common stock at a price per share of $5.00 for an aggregate purchase price of $10,000.

On February 22, 2013, the Company closed a private placement transaction with an investor in which it issued 2,000,000 shares of common stock at a price per share of $5.00 for an aggregate purchase price of $10,000. In addition to the private placement, SFX signed a preferred provider agreement with this investor whereby this investor will be SFX's preferred marketing services provider.

On March 15, 2013, the Company acquired BEATPORT, LLC and subsidiary ("Beatport") in a merger transaction totaling $58,400 consisting of $33,400 in cash and $25,000 in company stock valued at $5.00 per share. Beatport is currently engaged in the sale and marketing of electronic music downloads through its websites in the United States and Germany.

On March 15, 2013, the Company's subsidiary SFX Intermediate Holdco II LLC entered into a credit agreement with Barclays Bank PLC and other lenders, which provided for a $49,500 senior secured first lien term loan facility ("Term Loan"). The proceeds of the Term Loan were used to fund acquisitions and related costs as well as the expenses associated with the term loan. Under the terms of the credit agreement the Company has certain restrictions on the payment of dividends and the use of funds for Company expenditures outside of the borrower and its subsidiaries.

In connection with the Term Loan the, Company's Chairman, Mr. Robert F.X. Sillerman, entered into a guarantee agreement with the Lender in which he has personally guaranteed obligations under the Term Loan. As consideration for personally guaranteeing the obligations under the Term Loan, the Board of Directors granted Mr. Sillerman the following: (i) warrants to purchase 5,500,000 shares of our common stock at $5.00 per share, (ii) warrants to purchase 750,000 shares of our common stock at $7.50 per share, (iii) warrants to purchase 1,000,000 shares of our common stock at $10.00 per share, and (iv) 1,000,000 shares of our common stock. In April 2013, these warrants and common stock were exchanged for (i) 5,500,000 stock options at a strike price of $5.00 per share, (ii) 750,000 stock options and a strike price of $7.50 per share, (iii) 1,000,000 stock options at a strike price of $10.00 per share and (iv) 1,000,000 shares of restricted stock. The stock options and restricted stock were issued pursuant to the 2013 Supplemental Equity Compensation Plan and provide for three year cliff vesting.

On April 23, 2013 the Company exchanged 9,350,000 of warrants issued in connection with the promissory note described in Note 12 and the guarantee of the term loan, discussed above, by Mr. Sillerman for stock options at substantially identical terms. The replacement equity awards all provide for three year cliff vesting based on the date of the original issuance date of the warrants and shares of common stock. In addition, 100,000 warrants with an exercise price of $.01 per share and 1,000,000 shares of common stock issued to Mr. Sillerman were exchanged for 1,100,000 shares of restricted stock with three year cliff vesting. All of these options and restricted stocks were awarded under the Company's 2013 Supplemental Equity Compensation Plan.

On March 20, 2013 in exchange for a payment of $2,500 and 2,000,000 shares of common stock the Company entered into an option agreement with ID&T ("ID&T option") whereby it obtained the right to purchase a 75% interest in ID&T. Upon the exercise of the option, the Company will be

F-42

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

obligated to pay $40,000 in cash and relinquish our right to the repayment of the $7,500 advance with respect to the ID&T Joint Venture. In connection with the ID&T option, ID&T is to provide to the Company audited financial statements substantially compliant with SEC rules. Once provided, the Company is required to make a payment to ID&T of $10,000 within 90 days and if the Company does not exercise the ID&T option, ID&T may retain the $7,500 non-recourse loan as a breakup fee.

The $2,500 cash payment and the 2,000,000 shares paid for the option, which were valued at $7.19 each, will be accounted for as an investment until the option is exercised and closed. The share value was determined based on an arms length negotiation between the parties. Once and if the transaction closes, the company will account for the acquisition of ID&T on a consolidated basis, including recognition of the non-controlling interest on a full fair value basis. At the time of the closing of the ID&T acquisition, the Company will revise value of the ID&T Joint Venture to reflect the increase in its ownership interest from 51% to 75%.

At December 31, 2012, the Company issued a secured promissory note in the principal amount of $8,491 as part of the acquisition of certain assets and liabilities of MMG. Such amount is included as Notes payable, current on the balance sheet. On March 15, 2013 a payment of $3,000 was made to Nightlife Holding, LLC and the promissory note was amended and restated to provide that the remaining amount of $5,491 plus interest will be payable on May 15, 2013. This note as amended and restated bears interest at the rate of 0.22% per annum. On May 15, 2013 the note was fully paid off.

On April 2, 2013, the Company closed a private placement transaction with an investor in which 1,000,000 shares of common stock were issued at a price per share $10.00 for an aggregate purchase price of $10,000.

The Company has entered into a term sheet for the acquisition of i-Motion GmbH Events & Communication ("i-Motion"). The term sheet provides for a cash payment of $8,000 and $4,000 in shares of the Company stock in exchange for 60% of i-Motion. In addition, upon closing, the Company would be obligated to purchase the remaining 40% of i-motion at 5.5 times 40% of the average EBITDA for 2013 and 2014.

On May 15, 2013, The Company entered into an asset contribution agreement with Totem Onelove Group Pty Ltd and Totem Industries Pty Ltd (together "Totem") and their respective affiliates, pursuant to which Totem agreed to sell to us substantially all of the assets Totem uses in connection with its business. The purchase price consists of a cash payment of AUS$60 million and AUS$15 million in shares of our common stock valued at our initial public offering per share price. Under the terms of the agreement we paid an initial deposit of AUS$5 million. The agreement further provides for certain purchase price adjustments based on Totem's EBITDA for its fiscal year ended June 30, 2013.

On April 23, 2013, The Company signed term sheets relating to the acquisition of Made Event, LLC and EZ Festivals, LLC (together "Made") which together are the owners and producers of the Electric Zoo Festival. The Company will acquire 100% of the membership interests of the two Made Event companies in two increments. Initially The Company will acquire 70% interest in both companies for (i) $20 million in cash (ii) $5 million in Company common stock valued at the lesser of $12.75 per share or the per share value of our initial public offering, and (iii) promissory notes in the aggregate amount of $10 million which mature in March 2014. At a second closing on or before March 18, 2018 the Company will acquire the remaining 30% of the interests for a payment equal to the greater

F-43

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

of $10 million or a multiple of 2017 EBITDA. Until the second closing, the sellers are entitled to receive certain payments with respect to a percentage of net income of Made.

On June 5, 2013, the First Lien Term Loan Facility was amended (the "Amendment") to increase the facility amount by $15 million, to a total of $64.5 million. The Guarantors reaffirmed their guarantees of the First Lien Term Loan Facility in the Amendment, and Mr. Sillerman entered into an amendment to the Sillerman Guarantee to reaffirm his guarantee thereunder in connection with the Amendment. The Company received $14,700 in cash for the Term loan, net of $300 in original issue discount.

On June 23, 2013, we entered into a letter agreement with Made in which we paid a $2.5 million advance and the parties agreed to extend the closing date to August 21, 2013.

20. RESTATEMENT

The Company restated its previously issued consolidated financial statements as of and for the year ended December 31, 2012, to correct the classification for certain shares of common stock and non-controlling interest. The Company determined that 7,800,000 shares of common stock were issued in 2012 with redemption features, which should have been classified as temporary equity in accordance with the provisions of ASC 480-10-S99 for public companies. This includes 300,000 shares of common stock with a related subscription receivable of $1,500. Additionally, in connection with the 80% acquisition of MMG on December 31, 2012, the Asset Purchase Agreement contains certain rights which allows the Company to call the remaining interest it does not own, as well as providing that the minority interest holder may put their interest to the Company at a multiple of 20% of MMG's 2014 EBITDA times six. Similarly, the Company has determined that the non-controlling interest should have been classified as redeemable non-controlling interest and included as part of temporary equity, as required for public companies. Refer to Note 8 and Note 14.

The table below sets forth the effects of the restatement on the Company's balance sheet at December 31, 2012 (in thousands except share data). These adjustments also affected the amounts reflected as 2012 activity in the consolidated statement of stockholders' deficit for the year ended December 31, 2012. The correction of these errors had no effect on the consolidated statements of comprehensive loss, loss per share or the consolidated statements of cash flows.

F-44

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except share data)

Consolidated Balance Sheet as of December 31, 2012:

	December 31, 2012 (As reported)			Adjustments			December 31, 2012 (Restated)


Redeemable common stock, $.001 par value, 0 and 7,800,000 shares at December 31, 2012 as reported and as restated, respectively (net of $1,500 subscription receivable in 2012)		—		$	25,000		$	25,000
Redeemable non-controlling interest		—			4,794			4,794
Stockholders' equity/(deficit):
Common stock, $0.001 par value, 300,000,000 authorized, 40,461,027 shares issued and outstanding at December 31, 2012	$	48		$	(8	)	$	40
Preferred stock		—			—			—
Additional paid-in capital		51,692			(26,492	)		25,200
Due from stockholders for stock subscriptions		(1,536	)		1,500			(36	)
Accumulated other comprehensive loss		(16,325	)		—			(16,325	)

Total SFX stockholders' equity		33,879			(25,000	)		8,879
Non-controlling interest in subsidiaries		4,794			(4,794	)		—

Total Stockholders' equity/(deficit)	$	38,673		$	(29,794	)	$	8,879

Consolidated Statement of Stockholders' equity/(deficit) as of December 31, 2012:

	December 31, 2012 (As reported)			Adjustments			December 31, 2012 (As restated)


Common stock, $0.001 par value, 300,000,000 authorized, 40,461,027 shares as restated (48,261,027 as reported) issued and outstanding at December 31, 2012	$	48		$	(8	)	$	40
Additional paid-in capital		51,692			(26,492	)		25,200
Due from stockholder for stock subscriptions		(1,536	)		1,500			(36	)

Total SFX stockholders' equity		33,879			(25,000	)		8,879
Non-controlling interest in subsidiaries		4,794			(4,794	)		—

Total Stockholders' equity/(deficit)	$	38,673		$	(29,794	)	$	8,879

Disclosures included elsewhere in the notes to the consolidated financial statements have been adjusted as appropriate to reflect the effect of the adjustments noted above.

F-45

Table of Contents

Consolidated Financial Statements

SFX Entertainment, Inc.

As of March 31, 2013 and December 31, 2012
And for the three months ended March 31, 2013 and 2012

Table of Contents

SFX Entertainment, Inc.

Consolidated Financial Statements
As of March 31, 2013 and December 31, 2012
and for the three months ended March 31, 2013 and 2012

Contents


Financial Statements
Consolidated Balance Sheets (Unaudited) as of March 31, 2013 and December 31, 2012 (Restated)		F-48
Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 2013 and 2012		F-49
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) for the three months ended March 31, 2013		F-50
Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2013 and 2012		F-51–F-52
Notes to Consolidated Financial Statements		F-53

F-47

Table of Contents

SFX Entertainment, Inc.

Consolidated balance sheets
(in thousands except share data)

	March 31, 2013			December 31, 2012


	(Unaudited)			(Restated)
Assets:
Cash and cash equivalents	$	21,859		$	3,675
Accounts receivable		1,586			1,998
Due from related parties		2,085
Due from promoters—net of allowance of $997 and $997, as of March 31, 2013 and December 31, 2012, respectively		1,856			1,597
Prepaid expenses		3,454			181
Other current assets		618			223

Total current assets		31,458			7,674

Property, plant and equipment, net		3,349			1,236
Goodwill		50,072			21,571
Intangible assets, net		104,043			23,571
Other assets		52,039			12,680

Total assets	$	240,961			66,732

Liabilities:
Accounts payable and accrued expenses	$	13,202		$	7,932
Notes payable, current		5,513			8,491
Label and royalty Payables		12,861
Deferred Revenue		3,028			324
Due to related parties		2,366			4,525
Other current liabilities		2,620			4,407

Total current liabilities		39,590			25,679

Deferred tax liabilities		545			67
Credit Facility		48,526
Other long term liabilities		8,596			2,313

Total liabilities		97,257			28,059

Commitments and contingencies
Redeemable Common Stock, $.001 par value, 16,800,000 and 7,800,000 shares outstanding at March 31, 2013 and December 31, 2012, respectively		74,380			25,000
Redeemable non-controlling interest		4,835			4,794
Stockholders' equity:
Common stock, $0.001 par value, 300,000,000 authorized, 45,462,902 and 40,461,027 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively		45			40
Preferred stock, $0.001 par value, 100,000,000 authorized, 0 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively
Additional paid-in capital		77,464			25,200
Due from stockholders for stock subscriptions		(36	)		(36	)
Accumulated deficit		(35,431	)		(16,325	)

Total SFX stockholders' equity		42,042			8,879
Non-controlling interest in subsidiary		22,447			—

Total stockholders' equity		64,489			8,879

Total liabilities and stockholders' equity	$	240,961		$	66,732

See accompanying notes to the consolidated financial statements

F-48

Table of Contents

SFX Entertainment, Inc.

Consolidated statements of operations
(in thousands except share data)
Unaudited

	Three months ended

	March 31, 2013			March 31, 2012

Revenue	$	10,153		$	—
Direct costs:
Cost of sale		4,421
Other costs		3,180

Gross profit		2,552
Operating expenses:
Selling, general and administrative expenses		14,246			1,366
Depreciation		118
Amortization		2,747

Operating loss		(14,559	)		(1,366	)
Interest expense		(3,911	)
Other expense		(942	)

Net loss before taxes		(19,412	)		(1,366	)
Provision for income taxes		(572	)

Net loss		(19,984	)		(1,366	)
Less: Net loss attributable to non-controlling interest		878

Net loss attributable to SFX	$	(19,106	)	$	(1,366	)

Loss per share—basic & diluted	$	(0.36	)		N/A
Weighted average shares outstanding—basic & diluted		52,929			N/A

See accompanying notes to the consolidated financial statements

F-49

Table of Contents

SFX Entertainment, Inc.

Consolidated statements of stockholders' equity
(in thousands)
Unaudited

	Common Stock				Additional Paid-in- Capital		Stock Subscription Receivable						Total SFX Stockholders' Equity			Non- controlling Interest			Total Stockholders' Equity

	Common Stock									Accumulated Deficit
	Shares		Amount							Accumulated Deficit

Balance at December 31, 2012		40,461	$	40	$	25,200	$	(36	)	$	(16,325	)	$	8,879		$	—		$	8,879

Total comprehensive income/ (loss)										$	(19,106	)	$	(19,106	)		(919	)	$	(20,025	)
Acquisition Non-controlling interest in subsidiary														—		$	23,366			23,366
Common Stock issued		5,002	$	5	$	25,004								25,009			—			25,009
Non-cash stock compensation expense						5,010								5,010						5,010
Issuance of warrants						22,250								22,250						22,250

Balance at March 31, 2013		45,463	$	45	$	77,464	$	(36	)	$	(35,431	)	$	42,042		$	22,447		$	64,489

See accompanying notes to the consolidated financial statements

F-50

Table of Contents

SFX Entertainment, Inc.

Consolidated statements of cash flows
(in thousands)
Unaudited

	Three months ended

	March 31, 2013			March 31, 2012

Cash flow from operating activities:
Net loss	$	(19,984	)	$	(1,366	)
Reconciling items:					—
Depreciation		118			—
Amortization		2,747			—
Stock compensation expense		5,010			—
Non-cash interest expense		3,668
Provision for deferred income taxes		478			—
Changes in operating assets and liabilities, net of acquisitions:					—
Accounts receivable		548			—
Due from related parties		(2 ,085	)
Due from promoters		(189	)		—
Prepaid expenses		(2,781	)		—
Other current assets		(172	)		—
Accounts payable & accrued expenses		1,695			1,002
Label and royalty payables		884
Deferred revenue		2,704
Due to related parties		1,263			364
Other current liabilities		(1,018	)		—
Other liabilities		403

Net cash used by operating activities		(6,711	)		—

Cash flow from investing activities:
Purchases of property and equipment		(490	)		—
Purchase of software and other intangible assets		(51	)
Advance with respect to ID&T N.A.		(7,500	)		—
Purchase of ID&T Worldwide option		(2,500	)
Payment of Nightlife Holdings, LLC note		(3,000	)
Acquisition of businesses, net of cash acquired		(21,913	)		—

Net cash (used) by investing activities		(35,454	)		—

Cash flow from financing activities:
Proceeds from common stock transactions		20,000			—
Payment of related party note		(6,611	)
Net proceeds from term loan facility		46,960			—

Net cash provided by financing activities		60,349			—

Net increase in cash		18,184			—
Cash, beginning of year		3,675

Cash, end of year	$	21,859		$	—

F-51

Table of Contents

SFX Entertainment, Inc.

Consolidated statements of cash flows (continued)
(in thousands)
Unaudited

	Period ended March 31, 2013		Period ended March 31, 2012


Supplemental schedule of non-cash investing activities:
Shares issued in connection with purchase of BEATPORT, LLC	$	25,000	$	—
Shares issued in connection with purchase of controlling interest in ID&T North America		10,000
Shares issued to Mr. Sillerman		5,000
Shares issued in connection with purchase of ID&T Worldwide Option		14,380		—
Warrant issued in connection with Investment in ID&T N.A. and related party guarantee of term loan		22,250		—

	$	76,630	$	—

See accompanying notes to the consolidated financial statements

F-52

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements
(in thousands except per share data)
(Unaudited)

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of business

SFX Entertainment, Inc. ("SFX" or the "Company"), a Delaware corporation, was formed on June 5, 2012, under the name SFX Holding Corporation. On February 13, 2013, the name was changed to SFX Entertainment, Inc. The operations of SFX began on July 7, 2011, under an entity now named SFX EDM Holdings Corporation (a wholly owned subsidiary of SFX). SFX was formed with the intent of acquiring and operating companies within the live music industry, specifically those engaged in the promotion and production of live music events and festivals in the United States and abroad. Through the Company's recent acquisitions, it is actively engaged in the production and promotion of live electronic music culture (EMC) festivals and events, production of music tours, merchandising and related services. In addition, it also manages large, event-driven nightclubs that serve as venues for key electronic music talent.

For the three months ended March 31, 2013, SFX successfully completed the acquisition of certain assets and liabilities of two companies:

•: The operations of ID&T in North America ("ID&T N.A.") with a 51% controlling interest on January 1, 2013; and
•: Beatport (now operating as BEATPORT, LLC) on March 15, 2013.

The consolidated financial statements of SFX include the activities for the two acquired companies from the dates of their respective acquisition by SFX. (See Note 10).

Basis of presentation and principles of consolidation

The unaudited interim Consolidated Financial Statements are presented in accordance with accounting principles generally accepted in the United States of America ("US GAAP") for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with US GAAP have been condensed or omitted. Accordingly, these unaudited interim Consolidated Financial Statements and accompanying footnotes should be read in conjunction with the Company's Annual Consolidated Financial Statements for the year ended December 31, 2012, included elsewhere in this prospectus. In the opinion of management, all adjustments, consisting of normal recurring nature considered necessary for a fair presentation, have been included in the Condensed Consolidated Financial Statements.

Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include allowance for doubtful accounts, purchase accounting allocations, recoverability and useful lives of property, plant and equipment and identifiable intangible assets, and goodwill and the valuation allowance of deferred tax assets, contingencies and equity compensation. Actual results could differ materially from those estimates.

F-53

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

Direct costs

Cash and cash equivalents

The Company considers cash deposits in all highly liquid investments with a maturity of three months or less to be cash equivalents. The Company's cash deposits are held at multiple high credit quality financial institutions. The Company's cash deposits at the institutions often exceed the federally insured limit. At March 31, 2013 the Company had $13,821 reserved for the use of SFX Intermediate Holdco II LLC for capital and general operating purposes (See Note 8—Long-Term Debt).

Marketing and public relations expense

The Company expenses marketing and public relations costs when incurred. These costs are recorded on the income statement as selling, general, and administrative expenses. Marketing and public relations expenses for the three months ended March 31, 2013 and March 31, 2012 was $197 and $0, respectively.

Artist fee tax withholding

Artist fee tax withholdings are amounts owed to federal taxing authorities for income tax withholdings required on payments made to foreign artists for services. These withholdings are withheld from the artist, accrued, and paid to the federal taxing authority. At March 31, 2013 and December 31, 2012 $86 and $1,971 are in other current liabilities on the balance sheet.

2. CONCENTRATION OF CREDIT RISK

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, accounts receivables and balances due from promoters. Exposure to losses on account receivables is minimal as the promoters with whom the Company partners for ticket sales and collection of event revenues typically remit proceeds to the Company in a timely manner. The Company maintains balances at financial institutions, which at times exceed the federally insured limit. On a periodic basis, management evaluates balances due from promoters and determines whether to provide an allowance or if any balances should be written down and charged to expense as bad debt. The evaluation is based on a past history of collections, current credit conditions, the length of time the balance is past due, and a past history of write-downs.

F-54

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

Percentage of Due from Promoters at:


Promoter A	15.2	%	15.7	%
Promoter B	12.6	%	14.3	%
Promoter C	9.5	%	9.5	%

Percentage of Accounts Receivable at:			December 31, 2012


Counterparty A	35.0	%	N/A
Counterparty B	31.7	%	30.4%
Counterparty C	21.2	%	N/A

3. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

(in thousands)	March 31, 2013			December 31, 2012			Estimated Useful Lives


Computer equipment	$	1,423		$	96		3 years
Furniture, fixtures and other equipment		154			35		5 years
Production equipment		1,526			1,180		5-7 years
Leasehold Improvements		396			—		1-3 years
Construction in process		43			—

Property, plant and equipment		3,542			1,311
Less: accumulated depreciation		(193	)		(75	)

Property, plant and equipment, net	$	3,349		$	1,236

Depreciation expense for the three months ended March 31, 2013 and 2012 was $118 and $0, respectively.

F-55

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

4. INTANGIBLE ASSETS

The following table presents the gross carrying amount and accumulated amortization for each major class of intangible assets as of March 31, 2013:

(in thousands)	Intangible, Gross		Accumulated Amortization			Intangible, Net		Estimated Useful Lives


Customer lists (Fan database)	$	2,300	$	(556	)	$	1,744	3 years
Supplier and Label relationships		17,900		(50	)		17,850	15 years
Trade Domain names		19,400		(115	)		19,285	7 years
Trademarks and names		42,235		(1,945	)		40,290	7 years
Management agreements		13,600		(680	)		12,920	5 years
Non-compete agreements		3,394		(227	)		3,167	5 years
Website		29		(4	)		25	3 years
Software		699		(17	)		682	5 years
Technology		8,141		(68	)		8,073	5 years
Intellectual property		8		(1	)		7	3 years

Intangible assets, gross	$	107,706	$	(3,663	)	$	104,043

Amortization expense for the three months ended March 31, 2013 and 2012 was $2,747 and $0, respectively.

The aggregate amortization expense for each of the remaining periods is as follows:

(in thousands)


Remainder of 2013	$	11,947
2014	$	15,944
2015	$	15,577
2016	$	15,165
2017	$	15,053
2018	$	10,421
Thereafter	$	19,936

5. GOODWILL

The following table presents the changes in the carrying amount of goodwill for the three months ended March 31, 2013:

(in thousands)


Balance as of December 31, 2012	$	21,571
Acquisitions:
Beatport		17,348
Controlling interest in ID&T N.A.		11,921
Disco purchase price adjustment		(768	)

Balance as of March 31, 2013	$	50,072

F-56

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

During the three months ended March 31, 2013, the Company adjusted the purchase price related to the Disco acquisition based on the terms set out in the purchase agreement by $768, resulting in a decrease to goodwill by the same amount.

6. NOTES PAYABLE

Secured promissory note—Nightlife Holdings, LLC

On December 31, 2012, the Company issued a secured promissory note in the principal amount of $8,491 as part of the acquisition of certain assets and liabilities of MMG. Such amount is included as Notes payable, current on the balance sheet. On March 15, 2013, a payment of $3,000 was made to Nightlife Holding, LLC and the promissory note was amended and restated to provide that the remaining amount of $5,491 plus interest will be payable on May 15, 2013. This note as amended and restated bears interest at the rate of 0.22% per annum. At March 31, 2013 the balance related to this note was $5,513. On May 15, 2013, the promissory note was fully paid off.

7. OTHER CURRENT LIABILITIES—EVENTBRITE, INC.

In connection with the acquisition of Disco, the Company assumed a liability of $700 to Eventbrite, Inc. ("Eventbrite") which will be repaid principally from a portion of future ticket sales. At March 31, 2013, the balance due to Eventbrite with respect to this liability was $544. The Company is responsible for the payment of any amounts not recouped by Eventbrite through ticket sales, and ultimately has the right to recover such shortfalls if any from the former owner of Disco.

8. LONG-TERM DEBT

Long-term debt consists of our senior secured first lien term loan ("Term Loan") at March 31, 2013:

(in thousands)


Term Loan	$	49,500
Less:
Original Issue Discount		(974	)

Balance as of March 31, 2013	$	48,526

F-57

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

•: 75.0% of the annual excess cash flow of SFX Intermediate Holdco I LLC and its subsidiaries for the year-ended December 31, 2013;

F-58

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

•: 100% of the net proceeds from certain asset sales, casualty events, and debt issuances, by Holdings and its subsidiaries; and
•: 30.0% of the outstanding borrowings within 60 days of the date Mr. Sillerman either announces he will not serve as our chairman, president, chief executive officer, or equivalent officer, ceases serving as our chairman, president, chief executive officer, or equivalent officer, or is incapable of serving as our chairman, president, chief executive officer, or equivalent officer.

The First Lien Term Loan Facility includes customary affirmative covenants, subject to certain materiality thresholds and exceptions, including covenants to deliver certain information and notices; preservation of existence; compliance with laws; payment of obligations; maintenance of properties; maintenance of insurance; keeping of books and records; limitations on use of proceeds under the First Lien Term Loan Facility; and requirements to join future subsidiaries of Holdings as guarantors and secured parties. The First Lien Term Loan Facility includes customary restrictive covenants, subject to certain materiality thresholds and exceptions, including covenants limiting the Borrower and the loan parties' ability to

•: incur certain types of indebtedness and liens;
•: merge with, make an investment in or acquire property or assets of another company;
•: make capital expenditures;
•: pay dividends;
•: repurchase shares of our outstanding stock;
•: a negative pledge;
•: modifying certain documents;
•: make loans;
•: dispose of assets;
•: prepay the principal on other indebtedness;
•: liquidate, wind up or dissolve; or
•: enter into certain transactions with affiliates.

The First Lien Term Loan Facility does not include any financial covenants.

F-59

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

(iii) at any time after our initial public offering (so long as we raise net proceeds of at least $100 million) and for any reason whatsoever, Mr. Sillerman and certain affiliates cease to own, directly or indirectly, at least 30% of our outstanding voting equity or any "person" or "group" other than Mr. Sillerman and certain affiliates and senior management beneficially own a greater percentage of our voting equity than beneficially owned by Mr. Sillerman and certain affiliates and senior management; or (iv) the majority of the seats (other than vacant seats) on our board of directors cease to be occupied by persons who either were members of our board of directors on March 15, 2013 or were nominated for election by a majority of our board of directors who were directors at the time of the closing of the First Lien Term Loan Facility or whose election or nomination for election was previously approved by a majority of such directors.

9. COMMON STOCK AND COMMON STOCK WARRANTS

For the three months ended March 31, 2013, in connection with and consideration for the guarantee of the term loan made by Mr. Sillerman to the lenders, the Board of Directors granted warrants to purchase 5,500,000 shares at $5.00 per share, warrants to purchase 750,000 shares at $7.50 per share, warrants to purchase 1,000,000 shares at $10.00 per share and 1,000,000 shares of the Company's common stock to the Company's chief executive officer and chairman, Mr. Sillerman. The Company has estimated the fair value of these warrants and common stock at $25,430 and accounted for them as deferred financing fees related to our term loan.

As part of the ID&T N.A. acquisition, the Company issued warrants to purchase 500,000 shares of our common stock at $2.50 per share to ID&T. The Company has estimated the fair value of these warrants issued to ID&T at $1,820. All of these warrants were valued using the Black-Scholes option pricing model.

The following assumptions were used to calculate the fair value of the Company's warrants on the date of grant:




Risk-free interest rate	1.35-1.40	%
Dividend yield	—
Volatility factors	60	%
Weighted average expected life (in years)	7

As there is no publicly traded market for the Company's common stock, the expected volatility of historical closing stock prices is based on comparable companies over the expected term of the warrants. The risk free interest for the periods within the contractual life of the warrants is based on the 7 year U.S. Treasury bond rate. The expected term of warrants is based on the maximum term of the warrants issued. In April 2013, these warrants and common stock were forgiven by Mr. Sillerman in exchange for options and restricted stock issued under the Company's Supplemental Equity Compensation Plan with similar terms. See Note 20.

F-60

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

10. BUSINESS COMBINATIONS

During the three months ended March 31, 2013 the Company completed two acquisitions which further enhanced its presence in the EMC space, as follows:

Acquired Entity		Purchase Price


(in thousands)
Beatport	March 15, 2013	$	58,550
Controlling interest in ID&T N.A.	January 1, 2013	$	24,320

On March 15, 2013, the Company acquired 100% of BEATPORT, LLC stock for $58,550 in cash and equity. The purchase price was comprised of $33,550 in cash and $25,000 in common stock (5 million shares of Common Stock valued at $5 per share). Beatport is primarily engaged in the business of selling EMC related digital music. Goodwill is expected to be deductible for tax purposes and is attributable to expected synergies and assembled workforce. Transaction related expense of $526 was expensed as incurred and is included within selling, general and administrative expenses in the consolidated statements of operations for the three months ended March 31, 2013. Beatport is consolidated into the Company's results from the date of acquisition

On January 1, 2013, the Company acquired 51% of ID&T N.A., which has the exclusive licensing rights to use all of ID&T's brands in North America. The purchase price was $24,320, comprised of $12,500 in cash, $10,000 in common stock (2 million shares of Common Stock valued at $5 per share), and $1,820 in warrants to buy 500,000 shares of common stock at $2.50 per share. Goodwill is not expected to be deductible for tax purposes and is attributable to expected synergies between the joint venture and our businesses. Transaction related expense of $159 was incurred in connection with this acquisition. ID&T N.A. is consolidated into the Company's results from the date of acquisition.

In connection with the acquisition of ID&T N.A. the Company recorded an amount representing the non-controlling interest of ID&T N.A. of $23,366 which represents 49% interest in ID&T N.A. The acquisition-date fair value of the non-controlling interest in ID&T N.A. was measured using an income approach. The equity shares of ID&T N.A. are not traded and as such could not be determined based on active market prices. The fair value was determined by calculating the fair value of ID&T as a whole and subtracting the consideration the Company paid for the 51% controlling interest. In determining the fair value of ID&T N.A., the acquisition-date fair value contemplated synergies that are expected to be created through the acquisition and determined that the synergies created from the acquisition will benefit ID&T N.A. as a whole, including the non-controlling interest, resulting in our ownership and the non-controlling interest having proportionate economic interest to the respective ownership interests.

F-61

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

identifiable assets may occur. The allocation of the aggregate purchase price, based on our initial valuation of the assets and liabilities are as follows:

Consideration	Beatport		ID&T N.A.		Total


(in thousands)
Cash	$	33,550	$	12,500	$	46,050
Warrants		—		1,820		1,820
Common Stock		25,000		10,000		35,000

Fair value of total consideration transferred	$	58,550	$	24,320	$	82,870

Recognized amounts of identifiable assets acquired and liabilities assumed	Beatport			ID&T N.A.			Total


(in thousands)
Cash	$	11,637			—		$	11,637
Accounts receivable		137			—			137
Prepaid expenses & other current assets		993			—			993
Other receivables		222			—			222
Property, plant and equipment		2,444			—			2,444
Identifiable intangible assets		46,700			35,765			82,465
Financial liabilities		(20,931	)		—			(20,931	)
Non-controlling interest		—			(23,366	)		(23,366	)
Goodwill		17,348			11,921			29,269

Fair value of total consideration transferred	$	58,550		$	24,320		$	82,870

The overall weighted average life of the identified intangible assets acquired is 8.5 years. These identified intangible assets will be amortized on a straight line basis over their useful lives. For the three months ended March 31, 2013, Net revenues and Net loss included in the Company's Consolidated Statements of Comprehensive Loss were $2,307 and $(235), respectively, related to Beatport. For the three months ended March 31, 2013, Net revenues and Net loss included in the Company's Consolidated Statements of Comprehensive Loss was $0 and $(1,875), respectively, related to the ID&T N.A.

Supplemental pro forma information

The following table represents unaudited consolidated pro forma financial information as if the closing of the Company's acquisition of Beatport and the ID&T N.A. had occurred on January 1, 2012. For comparability purposes, the acquisitions that occurred during the year ended December 31, 2012 have been presented in the pro forma financial information as if they had occurred on January 1, 2012.

Fiscal 2012 Acquisitions included in the unaudited consolidated pro forma financial information:

•: Acquisition of LIC on July 31, 2012;
•: Acquisition of Disco on June 19, 2012; and
•: Acquisition of an 80% interest in MMG on December 31, 2012.

F-62

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

	March 31,

(in thousands)	2013			2012

Revenue	$	20,539		$	21,074
Net loss attributable to SFX	$	(19,728	)	$	(4,858	)
Net loss attributable to SFX per common—Basic	$	(0.37	)		N/A

The unaudited pro forma results have been adjusted with respect to certain aspects of our acquisitions to reflect:

•: the consummation of the acquisitions;
•: the elimination of related party transactions; and
•: changes in assets and liabilities to record their acquisition date fair value and changes in certain expenses resulting therefrom.

The unaudited consolidated pro forma results do not reflect future events that either have occurred or may occur after the acquisitions, including but not limited to, the anticipated realization of ongoing savings from operating synergies in subsequent periods.

11. RELATED PARTIES

The Company's chief executive officer and chairman, Mr. Sillerman, beneficially owns shares, in the aggregate, representing approximately 59.4% of our outstanding capital stock as of March 31, 2013. As a result, he controls all matters submitted to our stockholders for approval, as well as the Company's management and affairs.

F-63

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements
(in thousands except per share data)
(Unaudited)

Promissory note—Mr. Sillerman

On December 31, 2012, the Company issued in a financing transaction a promissory note to Mr. Sillerman in the principal amount of $7,000, together with warrants to purchase up to an aggregate amount of 2,100,000 shares of the Company's common stock. In connection with this transaction, Mr. Sillerman entered into a back-stop agreement pursuant to which he agreed to fund the entire amount of the notes offered but not subscribed for by third parties approached to fund the notes. As consideration for the back-stop agreement, Mr. Sillerman received 100,000 warrants at an exercise price of $.01 per share. In connection with the funding of the note, Mr. Sillerman was issued 700,000 warrants to purchase stock at $5.00 per share; 700,000 warrants to purchase stock $7.50 per share; and 700,000 warrants to purchase stock at $10.00 per share.

Under the terms of the $7,000 Promissory Note, the Company was required to repay the outstanding principal and interest by (i) one-third of the amounts raised in completed equity offerings and (ii) 100% of the amounts raised in debt financings over $15,000.

In accordance with the guidance under ASC 815, the fair value of both the note and the warrants was determined and the proceeds of the note were allocated between the note and the warrants based on the pro rata individual values to the aggregate combined value of the note and the warrants. As a result $3,190 was recorded as additional paid in capital with respect to the allocated value of the warrants and $3,810 was allocated to the note payable. The difference between the face value of the note and the recorded value represents a discount associated with the issuance of the note and was amortized as interest expense during the first quarter of 2013. As of March 31, 2013, $389 was included in due to related parties. As of April 3, 2013, the entire principal amount was repaid.

Viggle, Inc.

The Company has a shared service agreement with Viggle, Inc. ("Viggle"), a company whose Chief Executive Officer and primary shareholder is Mr. Sillerman. The shared services agreement is for taxation, finance and administrative services to the Company. During the three months ended March 31, 2013, the Company made a payment of $22 to Viggle for expenses incurred in January 2013. Costs incurred for the three months ended March 31, 2013 and 2012 totaled $101 and $43, respectively. As of March 31, 2013 the Company has a payable of $91 recorded as due to related party.

Circle Entertainment, Inc.

The Company has a shared service agreement with Circle Entertainment Inc. ("Circle Entertainment"), a company partially owned by Mr. Sillerman. The shared services agreement covers expenses for office space, legal services, IT services and office supplies for SFX. During the three months ended March 31, 2013 the Company made a payment of $176 to Circle Entertainment for the outstanding payable at December 31, 2012 of $181. At March 31, 2013 a payable of $5 was recorded as due to related party. The Company incurred no expenses for services provided by Circle Entertainment for the three months ended March 31, 2013 and 2012.

F-64

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

Donnie Estopinal

The Company is indebted to the former owner of Disco, Donnie Estopinal, in the amount of $18 as of March 31, 2013 and December 31, 2012, respectively, for certain reimbursable business related expenses.

Life in Color

The former owners of LIC are indebted to the Company in the amount of $34 at March 31, 2013 for certain purchase price adjustments.

MJX, LLC

Prior to receiving funding from its equity partners, MJX, LLC, a company owned 100% by Mr. Sillerman, funded the travel and entertainment expenses incurred by the Company's consultants and employees who were assisting in meeting with potential acquisition targets. Costs incurred for the three months ended March 31, 2013 and 2012 by the Company under the terms of the agreement totaled $66 and $322, respectively. The amount owed to MJX, LLC, at March 31, 2013 is $573.

ID&T

At March 31, 2013 ID&T N.A. had a payable of $1,290 to ID&T (which currently holds a 49% interest in ID&T N.A. for business development costs, event costs, employee allowances and other office related expenses which ID&T paid on behalf of ID&T N.A. In addition, ID&T N.A. had a receivable from ID&T for sponsorship revenue collected on their behalf by ID&T of $2,051, which is recorded as a Due from related party as of March 31, 2013.

12. STOCK-BASED COMPENSATION

The Company adopted the SFX Entertainment, Inc. 2013 Equity Compensation Plan ("Equity Plan") on February 25, 2013. The Equity Plan authorizes the Company to grant incentive stock options, nonqualified stock options, restricted stock units and stock awards. Prior to the formation and adoption of the Equity Plan, the Company granted options to purchase its common stock to employees, directors and consultants of the Company and its affiliates at prices ranging from $2.00 to $5.00 per share, which in the view of management and, after it was formed, by the Company's compensation committee, represented the fair market value of the Company's common stock at the time of issuance. The options were granted for a term not exceeding ten years and the nonvested options are generally forfeited in the event the employee or director terminates his or her employment or relationship with the Company or one of its affiliates. Any options that have vested at the time of termination are forfeited to the extent they are not exercised within the 90 day applicable post-employment exercise period, unless otherwise provided in their option agreements. The options generally vest in various periods up to five years. In some cases, contemporaneous documentation of these grants could not be located. While some of these grants were documented during 2012, some were not fully documented until 2013. As a result of the issues with respect to contemporaneous documentation of the Company's option grants, the Company recorded compensation expense with respect to option grants at the time it was believed that the documentation of such grants met all key criteria under ASC 718 and could be evidenced (referred to as the measurement date). In some cases this was 2013 and accordingly, 2012 contains no expense related to those stock option awards.

F-65

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

Options issued in 2012 but not fully documented until 2013 amounted to 5,220,500 options at exercise prices ranging from $2 to $4 per share. The approximate fair value of such options was $2.81 to $3.87 and the compensation expense (measured from the date such option grants were originally made) recognized in 2013 with respect to these options was $4,389. The fair value of common stock on the measurement date has been used solely to record compensation expenses in our consolidated financial statements.

The Company records stock-based compensation expense as part of selling, general and administrative expenses. The Company recorded $5,010 and $0 in stock-based compensation expense for the three months ended March 31, 2013 and 2012, respectively.

Stock options

The following assumptions were used to calculate the fair value of the Company's options on the date of grant:

	March 31, 2013	December 31, 2012


Risk-free interest rate	0.84%-1.47%	0.77%-1.40%
Dividend yield	—	—
Volatility factors	60%	60%
Weighted average expected life (in years)	5-7.5	5-7.6

N/A—not applicable

The following table presents a summary of the Company's stock options outstanding at, and stock option activity during, the three months ended March 31, 2013 ("Price" reflects the weighted average exercise price per share):

	March 31, 2013

(in thousands)	Options			Price

Outstanding at beginning of period		3,250		$	2.45
Granted		5,503			2.47
Exercised		—			—
Forfeited or expired		(225	)		3.00

Outstanding at end of period		8,528		$	2.45

Through March 31, 2013, no tax benefit from the exercise of stock options has been recognized. Any future excess tax benefits derived from the exercise of stock options will be recorded prospectively and reported as cash flows from financing activities.

There were 2,722,000 shares available for future grants under the stock incentive plan at March 31, 2013. Upon share option exercise, the Company issues new shares to fulfill these grants. Vesting dates

F-66

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

on the stock options range from October 2012 to December 2016 and expiration dates range from October 2022 to December 2022 at exercise prices and average contractual lives as follows:

Options Outstanding						Options Exercisable

Exercise Price		Outstanding as of 03/31/13		Weighted Average Remaining Contractual Life (in years)		Exercisable as of 03/31/13 (in thousands)		Weighted Average Remaining Contractual Life (in years)		Fair Value of Options Granted

$	2.00		6,750,000		9.8		1,300,000		9.8	$	3.71
$	3.00		17,500		9.9		8,750		9.9	$	3.27
$	4.00		1,478,000		9.9		309,250		9.9	$	2.95
$	5.00		282,500		9.9		58,750		9.9	$	2.75

			8,528,000		9.8		1,676,750		9.8	$	3.53

The total intrinsic value of options outstanding as of March 31, 2013 and 2012 was $40,439 and $0, respectively. As of March 31, 2013 and December 31, 2012, there was $23,065 and $9,330, respectively, of total unrecognized compensation cost related to stock options granted during the period. This cost is expected to be recognized over a weighted average remaining period of 3.7 years.

13. CAPITAL STOCK

The Company has issued and outstanding 62,262,902 shares of its $.001 par value common stock of which 16,800,000 shares are classified as temporary equity at March 31, 2013. During the three months ended March 31, 2013 the company issued 14,001,875 shares of common stock, 9,000,000 of which are included in temporary equity as a result of repurchase rights granted by the Company to the counterparties. Subsequent to March 31, 2013, as more fully described in Note 20—Subsequent Events, the Company issued 1,000,000 shares of common stock for $10,000 in a private placement transaction.

Under certain circumstances, specifically if the Company does not successfully undertake an initial public offering of its stock, some investors with respect to their private placements may elect to have the Company redeem their stock at the initial purchase price paid. These shares are recorded as temporary equity until the redemption rights associated with them are no longer applicable. As of the date of this report, none of the investors have elected to exercise their redemption rights.

14. LOSS PER SHARE OF COMMON STOCK

Basic loss per share of common stock is computed as net comprehensive loss divided by the weighted-average number of shares of common stock outstanding for the period.

Diluted loss per share of common stock reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. However, since the Company had a net loss for the three months ended March 31, 2013, diluted loss per share of common stock is the same as basic loss per share of common stock, as any potentially dilutive

F-67

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

securities would reduce the loss per share. There were 8,528,000 options and 6,800,000 warrants that were excluded from the diluted shares outstanding calculation at March 31, 2013.

In addition, the Company has redeemable non-controlling interest as well as common shares outstanding with redemption rights. Both of these securities' redemption values are below their respective fair values and therefore there was no reduction of net loss attributable to SFX in the calculation of basic loss per common share.

15. COMMITMENTS AND CONTINGENCIES

Legal matters

During the normal course of business, the Company is occasionally involved with various claims and litigation. Reserves are established in connection with such matters when a loss is probable and the amount of such loss can be reasonably estimated. At March 31, 2013 and, December 31, 2012, no material reserves were recorded. No reserves are established for losses which are only reasonably possible. The determination of probability and the estimation of the actual amount of any such loss is inherently unpredictable, and it is therefore possible that the eventual outcome of such claims and litigation could exceed the estimated reserves, if any. Based upon the Company's experience, current information and applicable law, it does not believe it is reasonably possible that any proceedings or possible related claims will have a material effect on its financial statements.

Legal expenses are expenses related to the organization and legal formation of SFX Entertainment, Inc. and SFX EDM Holdings Corporation, a limited liability corporation and 100% owned subsidiary of SFX Entertainment, Inc., as well as expenses for acquisition related costs. For the three months ended March 31, 2013, the Company incurred legal expenses of $2,153 which does not includes $436 that was capitalized as deferred financing costs. For the three months ended March 31, 2012, the Company incurred $633 of legal expenses.

Acquisition agreement

Pursuant to the terms of the MMG acquisition, on December 31, 2012, the Company may be required to purchase the remaining 20% non-controlling interest in MMG. The terms of the agreement allow for the non-controlling interest holder to put their 20% interest in MMG to the Company beginning on January 1, 2015 and continuing through June 30, 2015. The purchase price of the 20% interest is based on six times the 2014 EBITDA of MMG, which is to be paid 80% in cash and 20% in shares of common stock of the Company at the then-current price.

In addition, the Company is required to make additional payments to the sellers of MMG for the Company's acquisition of an 80% ownership interest in MMG on December 31, 2012. These additional payments are contingent on the EBITDA results of MMG for 2014 (the "contingent payment"). This contingent payment is also to be paid 80% in cash and 20% in shares of common stock of the Company at the then current price. The fair value of this contingent payment at March 31, 2013 was $2,500.

F-68

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

Lease commitments

The Company leases its office and warehouse facilities under non-cancellable operating lease agreements.

Future minimum rent commitments as follows:


Remainder of 2013	$	1,113
2014	$	1,435
2015	$	370
2016	$	10

16. FAIR VALUE

The Company has certain contingent consideration obligations related to the acquisition of MMG which is measured at fair value using Level 3 inputs as defined by the FASB as, Unobservable inputs that reflect assumptions about what market participants would use in pricing the asset or liability. These inputs would be based on the best information available, including the Company's own data. The amount due to the seller is based on the achievement of agreed-upon financial performance metrics, EBITDA, by MMG. The Company recorded the liability at the time of acquisition of MMG, December 31, 2012, at fair value, and at each subsequent reporting date, the Company remeasures the fair value of the contingent consideration, recognizing the changes in the fair value of contingent consideration in the results of the Company's earnings. Fair value was determined based on the income approach using discounted cash flows.

The change in fair value of contingent consideration of $187 was recognized in other income/(expense) in the statement of operations for the three months ended March 31, 2013.




Liabilities:
Contingent consideration	2,500	2,313

Due to their short maturity, the carrying amounts of accounts receivable, accounts payable and accrued expenses approximate their fair values at March 31, 2013 and December 31, 2012. There were no non-recurring fair value measurements reported for the three months ended March 31, 2013 and 2012.

17. OTHER INFORMATION

Transactions with ID&T

On October 26, 2012, the Company entered into an agreement with ID&T to acquire a controlling interest in ID&T N.A., subject to certain closing conditions. ID&T N.A. began operations on January 1, 2013. At the time of the agreement, the Company paid ID&T $12,500. On March 15, 2013, the Company made a $7,500 non-recourse loan to ID&T, which is to be repaid from ID&T's non-controlling interest in distributions from ID&T N.A. In addition, the Company issued to ID&T

F-69

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

$14,380 in common stock and $2,500 in cash for the option to purchase 75% of ID&T worldwide ("ID&T Option").

	As of

The following details the components of "Other Assets":	March 31, 2013		December 31, 2012

(in thousands)
Deferred financing costs related to Mr. Sillerman's loan guarantee	$	25,021	$	—
Loan to ID&T		7,500		—
Prepayment for ID&T N.A.		—		12,500
Investment in ID&T Option		16,880		—
Deferred debt costs		1,955		—
Other		683		180

Total Other Assets	$	52,039	$	12,680

The following details the components of "Accounts Payable and Accrued Expenses":
Accounts payable	$	9,696	$	2,337
Accrued legal fees		1,428		2,828
Accrued accounting and professional fees		351		2,105
Other		1,727		662

Total accounts payable and accrued expenses	$	13,202	$	7,932

The following details the components of "Other Current Liabilities":
Foreign artist withholding liability	$	86	$	1,971
Acquisition related liabilities				1,398
Eventbrite, Inc. liability (see Note 7)		544		612
Other		1,990		426

Total other current liabilities	$	2,620	$	4,407

18. SEGMENT REPORTING

The Company has one reportable segment. Operating segments are business units that have separate financial information and are separately reviewed by the Company's chief decision maker. The Company's chief decision maker is the Chief Executive Officer. The Company is engaged in the promotion and production of live music events and festivals in the United States. The Company and its subsidiaries currently operate in a single reportable segment: the promotion and production of live music events and festivals in the United States. The chief operating decision maker allocates resources and assesses performance of the business and other activities at the reporting segment level. The revenue from this segment for the three months ended March 31, 2013 is predominantly from live events 77.3% and digital music sales 22.7%.

19. PROVISION FOR INCOME TAXES

The income tax provision for continuing operations for the three months ended March 31, 2013 was $572. The income tax provision for quarter primarily related to foreign and separate filing state

F-70

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

income taxes and the amortization of tax basis in acquired goodwill, which was allocated to the year-to-date pretax book loss under the interim provision calculation of ASC 740-270.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that either some portion or the entire deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, tax-planning strategies, and available carry-back capacity in making this assessment. Based on this evidence, we have recorded a full valuation allowance on its deferred tax assets.

The Company's estimated annual effective tax rate was impacted by preliminary purchase accounting related to the Company's acquisition of BEATPORT, which was primarily treated as an asset sale for US tax purposes. As the Company's purchase accounting is not final, it anticipates a true-up of its tax basis in acquired goodwill in the three and six months ending June 30, 2013.

As of March 31, 2013, the Company did not record any tax liabilities to uncertain income tax positions, and concluded that all of its tax positions are either highly certain or are not material to the Company's financial statements. The Company is currently not under audit in any jurisdiction in which the Company conducts business.

20. SUBSEQUENT EVENTS

The Company has considered subsequent events through June 24, 2013, the date that the financial statements were available to be issued, in preparing the financial statements and notes thereto.

On April 23, 2013, the Company exchanged 9,350,000 of warrants issued in connection with the promissory note and the guarantee of the term loan by Mr. Sillerman for stock options at substantially identical terms. The replacement equity awards all provide for three year cliff vesting based on the date of the original issuance date of the warrants and shares of common stock. In addition, 100,000 warrants with an exercise price of $.01 per share and 1,000,000 shares of common stock issued to Mr. Sillerman were exchanged for 1,100,000 shares of restricted stock with three year cliff vesting. All of these options and restricted stocks were awarded under the Company's 2013 Supplemental Equity Compensation Plan.

At March 31, 2013, the Company had a secured promissory note for $5,513 in connection with the acquisition of certain assets and liabilities of MMG. This note bore an interest at the rate of 0.22% per annum. On May 15, 2013 the note was fully paid off.

On December 31, 2012, the Company signed an asset contribution agreement with two entities. For one of these entities, the seller was required to deliver certain rights to the Company in order for the transaction to be consummated. It was determined that the seller had not and could not deliver the required rights and the transaction was rescinded. For the second entity, certain conditions were required to be met prior to valuable consideration to be transferred to the seller. It was determined that the seller could not or would not deliver the required materials and thus this transaction was also

F-71

Table of Contents

SFX Entertainment, Inc.

Notes to consolidated financial statements (Continued)
(in thousands except per share data)
(Unaudited)

rescinded. Both recessions occurred in April 2013 as agreed by both the Company and the sellers, in each case. The Company did not control either entity as of March 31, 2013 or any date thereafter.

The Company has entered into a term sheet for the acquisition of I-Motion GmbH Events & Communication ("i-Motion"). The term sheet provides for a cash payment of $8,000 and $4,000 in shares of the Company stock in exchange for 60% of i-Motion. In addition, upon closing, the Company would be obligated to purchase the remaining 40% of i-Motion at 5.5 times 40% of the average EBITDA for 2013 and 2014.

On May 15, 2013, the Company entered into an asset contribution agreement with Totem Onelove Group Pty Ltd. and Totem Industries Pty Ltd. (together, "Totem") and their respective affiliates, pursuant to which Totem agreed to sell to us substantially all of the assets Totem uses in connection with its business. The purchase price consists of a cash payment of AUD$60 million and AUD$15 million in shares of our common stock valued at our initial public offering per share price. Under the terms of the agreement we paid an initial deposit of AUD$5 million. The agreement further provides for certain purchase price adjustments based on Totem's EBITDA for its fiscal year ended June 30, 2013.

On April 23, 2013, The Company signed term sheets relating to the acquisition of Made Event, LLC and EZ Festivals, LLC (together, "Made") which together are the owners and producers of the Electric Zoo Festival. The Company will acquire 100% of the membership interests of the two Made companies in two increments. Initially The Company will acquire 70% interest in both companies for (i) $20 million in cash (ii) $5 million in Company common stock valued at the lesser of $12.75 per share or the per share value of our initial public offering, and (iii) promissory notes in the aggregate amount of $10 million which mature in March 2014. At a second closing on or before March 18, 2018, the Company will acquire the remaining 30% of the interests for a payment equal to the greater of $10 million or a multiple of 2017 EBITDA. Until the second closing, the sellers are entitled to receive certain payments with respect to a percentage of net income of Made.

On June 23, 2013, we entered into a letter agreement with Made in which we paid a $2.5 million advance and the parties agreed to extend the closing date to August 21, 2013.

F-72

Table of Contents

Disco Productions, Inc.

Contents


Independent Auditors' Report			F-74
Financial Statements
Balance Sheets as of December 31, 2011 and 2010			F-75
Statements of Income and Accumulated Deficit for the Years Ended December 31, 2011 and 2010			F-76
Statements of Cash Flows for the Years Ended December 31, 2011 and 2010			F-77
Notes to Financial Statements			F-78 - F-82

F-73

Table of Contents

Independent auditors' report

To the Stockholder
Disco Productions, Inc.
Metairie, Louisiana

We have audited the accompanying balance sheets of Disco Productions, Inc. (the "Company") as of December 31, 2011 and 2010 and the related statements of income and accumulated deficit, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Disco Productions, Inc. as of December 31, 2011 and 2010 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

June 30, 2012

F-74

Table of Contents

Disco Productions, Inc.

Balance sheets

December 31,	2011			2010


Assets
Current assets
Cash	$	5,601		$	887
Due from promoters, less allowance for doubtful accounts of $137,000 and $0 as of December 31, 2011 and 2010, respectively		640,515			175,720
Prepaid expenses and other		22,663			4,000

Total current assets		668,779			180,607
Property and equipment, net (Note 2)		1,805			2,602

Total assets	$	670,584		$	183,209

Liabilities and Stockholder's Deficit
Current liabilities
Checks written against future deposits	$	74,308		$	32,628
Accounts payable		614,597			615,661
Due to promoters		380,065			92,158
Artist fee tax withholdings		677,013			76,582
Deferred revenues		215,645			13,398
Other accrued expenses		6,907			3,082
Notes payable (Note 3)		530,766			219,700

Total current liabilities		2,499,301			1,053,209

Contingencies (Note 4)
Stockholder's deficit
Common stock, no par value, stated value $1,000 per share, 1 share authorized, issued and outstanding		1,000			1,000
Accumulated deficit		(1,829,717	)		(871,000	)

Total stockholder's deficit		(1,828,717	)		(870,000	)

Total liabilities and stockholder's deficit	$	670,584		$	183,209

See accompanying summary of significant accounting policies and notes to financial statements.

F-75

Table of Contents

Disco Productions, Inc.

Statements of income and accumulated deficit

Years ended December 31,	2011			2010


Revenues	$	22,736,938		$	9,634,622
Operating expenses
Direct operating expenses		22,430,447			9,589,586
Selling, general and administrative expenses		777,525			275,255

Operating loss		(471,034	)		(230,219	)
Interest expense		315,416			145,169

Income before provision for taxes		(786,450	)		(375,388	)
Provision for taxes		—			—

Net loss		(786,450	)		(375,388	)
Accumulated deficit, beginning of year		(871,000	)		(491,064	)
Stockholder contributions (Note 5)		71,058			240,627
Stockholder distributions (Note 5)		(243,325	)		(245,175	)

Accumulated deficit, end of year	$	(1,829,717	)	$	(871,000	)

See accompanying summary of significant accounting policies and notes to financial statements.

F-76

Table of Contents

Disco Productions, Inc.

Statements of cash flows

Increase (Decrease) in Cash (Note 6) Years ended December 31,	2011			2010


Cash flows from operating activities
Net loss	$	(786,450	)	$	(375,388	)
Adjustments to reconcile net loss to net cash used in operating activities:
Bad debt expense		156,066			20,647
Depreciation		797			913
Increase (decrease) from changes in:
Due from and due to promoters		(332,954	)		(137,616	)
Prepaid expenses		(18,663	)		41,858
Accounts payable and other liabilities		603,192			381,973
Deferred revenues		202,247			13,398

Net cash used in operating activities		(175,765	)		(54,215	)

Cash flows from investing activities		—			—
Cash flows from financing activities
Checks written against future deposits		41,680			(46,886	)
Net borrowings on line of credit		300			(259	)
Borrowings on notes payable		1,600,000			575,000
Repayments on notes payable		(1,289,234	)		(475,000	)
Stockholder contributions		71,058			240,627
Stockholder distributions		(243,325	)		(245,175	)

Net cash provided by financing activities		180,479			48,307

Net increase (decrease) in cash		4,714			(5,908	)
Cash, beginning of year		887			6,795

Cash, end of year	$	5,601		$	887

See accompanying summary of significant accounting policies and notes to financial statements.

F-77

Table of Contents

Disco Productions, Inc.

Notes to financial statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of accounting

The accompanying financial statements have been prepared on the accrual basis of accounting whereby revenue is recognized when earned and expenses are recognized when incurred.

Business

The Company was incorporated in the State of Louisiana on September 22, 2000. The Company partners with regional promoters to produce dance music events across the USA and internationally that feature electronic music artists playing at club, arena and festival settings.

Revenue recognition

Revenue from the promotion and production of an event is recognized after the performance occurs. Ticket sales collected in advance of an event occurring are recorded as deferred revenues until the event occurs.

We evaluate the criteria outlined in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Subtopic 605-45, Revenue Recognition—Principal Agent Considerations, in determining whether it is appropriate to record the gross amount of revenues and related costs or the net revenues. Under this accounting guidance, if we are the primary obligor to perform the services being sold, have general inventory risk as it pertains to recruiting and compensating the talent, have the ability to control the ticket pricing, have discretion in selecting the talent, are involved in the production of the event, generally bear the majority of the credit or collection risk, or have several but not all of these indicators, revenue is recorded gross. If we do not have several of these indicators, we record revenues or losses on a net basis.

According to the guidance for the majority of our events, we have several of the above indicators and therefore we recognize revenue gross as a principal. Additionally, we charge for and collect ticketing and credit card processing surcharges and record the amounts in revenue on a gross basis. Actual expenses paid to the ticket service provider and credit card merchant processors are reflected in expenses.

Direct operating expenses

Direct operating expenses include artist performance fees and travel expenses, venue fees, show- specific marketing and advertising expenses, show-related production expenses, ticket processing fees and other costs related to producing the events. These costs are primarily variable in nature.

Selling, general and administrative expenses

Selling, general and administrative expenses include salaries and wages related to full-time employees, credit card fees and other expenses.

Provision for taxes

The Company has elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. Under those provisions, the Company does not pay federal corporate income taxes on its taxable income unless the stockholders revoke the S Corporation election. Instead, the stockholders are

F-78

Table of Contents

Disco Productions, Inc.

Notes to financial statements (Continued)

liable for individual federal income taxes. Accordingly, no provision for corporate income taxes has been recognized.

Due from and due to promoters

Amounts due from and to promoters are the net receivables or payables due from or to promoters for events that have occurred during the year. Management assesses the collectability of the receivables and writes off balances when it determines that they are no longer collectible. During the years ended December 31, 2011 and 2010, management wrote off $19,066 and $20,647, respectively, related to balances that were deemed to be uncollectible as the promoter went out of business. At December 31, 2011, management also established an allowance for doubtful accounts of $137,000 related to one of its promoters with which it is involved in a dispute (see Note 8).

Property and equipment, and depreciation and amortization

Property and equipment are stated at cost. Depreciation and amortization expense is computed over the estimated useful lives of the assets by the straight-line method for financial reporting purposes and by accelerated methods for income tax purposes. Expenditures for maintenance and repairs are expensed as incurred while additions, renewals and betterments that materially extend the life of the asset are capitalized.

Artist fee tax withholdings

Artist fee tax withholdings are amounts owed to federal taxing authorities for income tax withholdings required on payments made to foreign artists for services.

Accounting estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Fair value of financial instruments

The Company's financial instruments consist principally of cash, receivables due from promoters, accounts payable and other liabilities, and debt. Cash and receivables due from promoters are financial assets with carrying values that approximate fair value. Accounts payable and other liabilities are financial liabilities with carrying values that approximate fair value. The carrying amounts of debt approximate the fair value of the financial instruments, as the interest rates are variable and approximate the interest rates presently available to the Company. The Company believes all of the financial instruments' recorded values approximate fair market value because of their nature and respective durations.

F-79

Table of Contents

Disco Productions, Inc.

Notes to financial statements (Continued)

Concentrations

Financial instruments which potentially subject the Company to credit risks consist primarily of excess cash over insured limits by the Federal Deposit Insurance Corporation and concentration of trade receivables and payables. At times throughout the year cash balances may be in excess of the Federal Deposit Insurance Corporation.

Concentration of credit risk in amounts due from and to promoters is generally not diversified due to the limited number of promoters that the Company works with. The following tables represent a breakdown of concentrations at December 31, 2011 and 2010:

Percentage of Due from Promoters at December 31,


Promoter A	21	%	27	%
Promoter B	24	%	*
Promoter C	*		39	%
Promoter D	*		11	%

*: did not represent more than 10% of total amounts due from promoters

Percentage of Due to Promoters at December 31,


Promoter E	25	%	*
Promoter F	40	%	*
Promoter G	*		29	%
Promoter H	*		23	%
Promoter I	*		21	%
Promoter J	*		16	%

*: did not represent more than 10% of total amounts due to promoters

2. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

December 31,	2011			2010			Estimated Useful Lives


Equipment and furniture	$	6,731		$	6,731		5 years

		6,731			6,731
Less: accumulated depreciation and amortization		(4,926	)		(4,129	)

Net property and equipment	$	1,805		$	2,602

Depreciation and amortization expense for the years ended December 31, 2011 and 2010 was $797 and $913, respectively.

F-80

Table of Contents

Disco Productions, Inc.

Notes to financial statements (Continued)

3. NOTES PAYABLE

The Company maintains a line of credit from a bank and also borrows from three unrelated lenders on a short-term basis.

Line of credit

The Company maintains a line of credit with one bank, which provides credit facilities up to a maximum amount of $20,000. Borrowings under the credit agreement bear interest at 8.25% and are payable monthly. The line of credit agreement does not have a maturity date, and is collateralized by the Company's general assets and personally guaranteed by the stockholder's family member. The Company has an outstanding balance of $20,000 and $19,700 as of December 31, 2011 and 2010, respectively, and for the years then ended, the Company incurred interest expense of $1,356 and $1,567, respectively.

Notes payable

For one lender, the Company incurred multiple borrowings during the years ended December 31, 2011 and 2010 of between $75,000 and $100,000 individually. Repayment on each of the borrowings is typically required within two to six months. The effective interest rates on the individual borrowings range from 18% to 47%. The Company has an outstanding balance due to this lender of $200,000 at both December 31, 2011 and 2010 and has accrued interest of $13,602 and $16,711, respectively. For the years ended December 31, 2011 and 2010, the Company incurred interest expense of $200,551 and $143,602, respectively.

For another lender, the borrowings range between $50,000 and $200,000 for the year ended December 31, 2011. The effective interest rates on the individual borrowings range from 28% to 30%. The Company makes daily repayments through an automatic 20% deduction from its daily ticket sales and allocates a portion of the daily payments to principal and to interest. The borrowing is collateralized by future ticket sales and is personally guaranteed by the stockholder. At December 31, 2011 and 2010, the Company has an outstanding balance of $50,000 and $0, respectively, due to this lender. For the year ended December 31, 2011, the Company incurred interest expense of $97,795.

For another lender, the Company borrowed $300,000 for the year ended December 31, 2011 with an effective interest rate of 29%. The borrowing is collateralized by future ticket sales and is personally guaranteed by the stockholder. At December 31, 2011, the Company has an outstanding balance of $260,766 and due to this lender and for the year then ended, the Company incurred interest expense of $15,714.

4. CONTINGENCIES

Legal matters

The Company is party to legal actions arising in the normal course of business. In the opinion of management, resolution of such matters will not have a material adverse effect on the financial position and operating results of the Company.

Subsequent to December 31, 2011, the Company became involved in a dispute with one of its promoters who claimed the sole rights to intellectual property that was developed, as the Company asserts, in conjunction with the Company. As of the date the financial statements were available to be issued, the dispute had not been resolved, nor did the Company enter into any litigation.

F-81

Table of Contents

Disco Productions, Inc.

Notes to financial statements (Continued)

5. STOCKHOLDER CONTRIBUTIONS AND DISTRIBUTIONS

During the years ended December 31, 2011 and 2010, the stockholder contributed $71,058 and $240,627, respectively, to the Company and took cash distributions of $243,325 and $245,175, respectively.

6. SUPPLEMENTAL CASH FLOW DISCLOSURES

Cash paid

During the years ended December 31, 2011 and 2010, the Company paid interest of $318,525 and $128,458, respectively. During the years ended December 31, 2011 and 2010, the Company did not pay taxes.

7. LIQUIDITY

During the year ended December 31, 2011, the Company generated a net loss of $786,450, increasing the accumulated deficit to $1,829,717. Subsequent to year end, the stockholder negotiated for the sale of certain assets of the Company. As a result, management believes that it has the necessary financing to meet its working capital needs and to meet its obligations.

8. SUBSEQUENT EVENTS

The Company has considered subsequent events through June 30, 2012, the date the financial statements were available to be issued, in preparing the financial statements and notes thereto, and has determined that there are no subsequent events that require disclosure under Financial Accounting Standards Board Accounting Standards Codification 855, Subsequent Events, except as noted below.

In April 2012, the Company entered into a five-year agreement with a ticket service provider, which requires the Company to use the ticket service provider exclusively for all future events, with certain exceptions. In consideration for this agreement, the Company will receive an advance of $1,400,000, of which $700,000 is to be repaid through future ticket fees. The Company has also guaranteed a minimum volume of tickets and ticket sales, and a bonus if the volume of ticket sales exceeds a certain target.

In June 2012, the stockholder sold certain assets of the Company for a total consideration of $4,000,000 and 1,000,000 shares of the purchaser's common stock.

F-82

Table of Contents

Disco Productions, Inc.

Combined interim financial statements
Contents


Interim Financial Statements
Balance Sheets as of June 19, 2012 (unaudited) and December 31, 2011 (audited)		F-84
Statements of Operations and Accumulated Deficit (Unaudited)—For the period ended June 19, 2012 (Unaudited) and the six months ended June 30, 2011		F-85
Unaudited Statement of Cash Flows for the period ended June 19, 2012 and for the six months ended June 30, 2011		F-86
Notes to Unaudited Interim Financial Statements		F-87 - F-92

F-83

Table of Contents

Disco Productions, Inc.

Balance sheets
June 19, 2012 and December 31, 2011

	June 19, 2012 unaudited			December 31, 2011


Assets
Current assets:
Cash	$	1,904		$	5,601
Due from promoters, less allowance for doubtful accounts of $137,000 as of June 19, 2012 and December 31, 2011		2,106,255			640,515
Other receivable		203,774			—
Prepaid expenses and other current assets		2,971			22,663

Total current assets		2,314,904			668,779
Property and equipment:
Property and equipment, net		15,232			1,805

Total assets	$	2,330,136		$	670,584

Liabilities and Stockholder's Deficit
Current liabilities:
Checks written against future deposits	$	182,470		$	74,308
Accounts payable		2,221,162			614,597
Due to promoters		267,931			380,065
Artist fee tax withholdings		805,730			677,013
Deferred revenue		208,141			215,645
Accrued expenses		4,274			6,907
Notes payable		391,013			530,766

Total current liabilities		4,080,721			2,499,301
Long-term liabilities:
Other long-term liability		1,374,301			—

Total liabilities		5,455,022			2,499,301
Contingencies (Note 4)
Stockholder's deficit:
Common stock, no par value, stated value $1,000 per share, 1 share authorized, issued and outstanding		1,000			1,000
Accumulated deficit		(3,125,886	)		(1,829,717	)

Total stockholder's deficit		(3,124,886	)		(1,828,717	)

Total liabilities and stockholder's deficit	$	2,330,136		$	670,584

See accompanying notes to the financial statements.

F-84

Table of Contents

Disco Productions, Inc.

Unaudited statements of operations and accumulated
deficit for the period ended June 19, 2012 and
six months ended June 30, 2011

	Period ended June 19, 2012			Six months ended June 30, 2011


Revenue	$	12,888,008		$	12,065,356
Operating expenses:
Direct operating expenses		12,616,208			11,802,894
Selling, general and administrative expenses		1,045,609			214,914

Total operating expenses		13,661,817			12,017,808

Operating loss		(773,809	)		47,548
Other income (expense):
Amortization of nonrecoupable payment (see Note 4)		25,699			—
Interest expense		(373,218	)		(92,002	)

Total other income (expense)		(347,519	)		(92,002	)
Loss before income taxes		(1,121,328	)		(44,454	)
Provision for income taxes		—			—

Net loss		(1,121,328	)		(44,454	)
Accumulated deficit, beginning of period		(1,829,717	)		(871,000	)
Stockholder contributions		53,804			48,191
Stockholder distributions		(228,645	)		(136,547	)

Accumulated deficit, end of period	$	(3,125,886	)	$	(1,003,810	)

See accompanying notes to the financial statements.

F-85

Table of Contents

Disco Productions, Inc.

Unaudited statements of cash flows
for the period ended June 19, 2012 and
six months ended June 30, 2011

	Period ended June 19, 2012			Six months ended June 30, 2011


Cash flows from operating activities:
Net loss	$	(1,121,328	)	$	(44,454	)
Adjustments to reconcile net loss to net cash (used) provided by operating activities:
Amortization of nonrecoupable payment		(25,699	)		—
Depreciation		773			398
Changes in operating assets and liabilities:
Due from and due to promoters		(1,577,874	)		(606,329	)
Other receivable		(203,774	)		—
Prepaid expenses		19,692			4,000
Accounts payable and other liabilities		1,732,649			793,881
Deferred revenue		(7,504	)		7,796
Other long-term liability		700,000			—

Net cash (used) provided by operating activities		(483,065	)		155,292
Cash flows from investing activities:
Purchase of property and equipment		(14,200	)		—

Net cash used by investing activities		(14,200	)		—
Cash flows from financing activities:
Checks written against future deposits		108,162			(32,628	)
Net borrowings on line of credit		—			300
Borrowings on notes payable		850,000			600,000
Repayments on notes payable		(989,753	)		(499,952	)
Proceeds from ticketing services agreement		700,000			—
Stockholder contributions		53,804			48,191
Stockholder distributions		(228,645	)		(136,547	)

Net cash provided (used) by financing activities		493,568			(20,636	)

Net (decrease) increase in cash		(3,697	)		134,656
Cash at beginning of period		5,601			887

Cash at end of period	$	1,904		$	135,543

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	389,929		$	108,713

See accompanying notes to the financial statements

F-86

Table of Contents

Disco Productions, Inc.

Notes to unaudited financial statements
for the period ended June 19, 2012 and
six months ended June 30, 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of Disco Productions, Inc. (the Company) is presented to assist in understanding the Company's financial statements.

Nature of the company and basis of presentation

The Company was incorporated in the State of Louisiana on September 22, 2000. The Company partners with regional promoters to produce dance music events across the USA, and internationally, that feature electronic music artists playing at club, arena and festival settings. On June 19, 2012, SFX-Disco Operating LLC, a company wholly owned by SFX Holding Corporation, purchased the assets and assumed the liabilities of the Company. As such, these financial statements include the period from January 1, 2012 through June 19, 2012.

Basis of accounting

The accompanying interim statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). These statements reflect all normal recurring adjustments that, in the opinion of management, are necessary for fair presentation of the information contained herein. These interim financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report for the year ended December 31, 2011. The Company adheres to the same accounting policies in preparing interim financial statements.

Revenue recognition

We evaluate the criteria outlined in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Subtopic 605-45, Revenue Recognition—Principal Agent Considerations, in determining whether it is appropriate to record the gross amount of revenues and related costs or the net revenues. Under this accounting guidance, if we are the primary obligor to perform the services being sold, have general inventory risk as it pertains to recruiting and compensating the talent, have the ability to control the ticket pricing, have discretion in selecting the talent, are involved in the production of the event, generally bear the majority of the credit or collection risk, or have several but not all of these indicators, revenue is recorded gross. If we do not have several of these indicators, we record revenues or losses on a net basis.

According to the guidance, for the majority of our events, we have several of the above indicators and therefore we recognize gross revenue as a principal. Additionally, we charge for, and collect, ticketing and credit card processing surcharges and record the amounts in revenue on a gross basis. Actual expenses paid to the ticket service provider, and credit card merchant processors, are reflected in expenses.

F-87

Table of Contents

Disco Productions, Inc.

Notes to unaudited financial statements (Continued)
for the period ended June 19, 2012 and
six months ended June 30, 2011

Direct operating expenses

Selling, general and administrative expenses

Selling, general and administrative expenses include salaries and wages related to full-time employees, credit card fees and other expenses.

Provision for taxes

Due from and due to promoters

Amounts due from and to promoters are the net receivables or payables due from or to promoters for events that have occurred during the year. Management assesses the collectability of the receivables and writes off balances when it determines that they are no longer collectible. During the period ended June 19, 2012, there were no balances written off by the Company. At both June 19, 2012 and December 31, 2011, there is an allowance for doubtful accounts of $137,000, related to one of its promoters with which it is involved in a dispute (see Note 5).

Property and equipment, and depreciation and amortization

Property and equipment are stated at cost. Depreciation and amortization expense is computed over the estimated useful lives of the assets by the straight-line method for financial reporting purposes and by accelerated methods for income tax purposes. Expenditures for maintenance and repairs are expensed as incurred while additions, renewals and betterments that materially extend the life of the asset are capitalized. The useful life of property and equipment for purposes of computing depreciation is 5 years.

Artist fee tax withholdings

Artist fee tax withholdings are amounts owed to federal taxing authorities for income tax withholdings required on payments made to foreign artists for services.

Accounting estimates

F-88

Table of Contents

Disco Productions, Inc.

Notes to unaudited financial statements (Continued)
for the period ended June 19, 2012 and
six months ended June 30, 2011

2. PROPERTY AND EQUIPMENT

Property and equipment consists of the following at:

	June 19, 2012			December 31, 2011


Equipment and furniture	$	6,731		$	6,731
Website		14,200			—

		20,931			6,731
Less: Accumulated depreciation		(5,699	)		(4,926	)

	$	15,232		$	1,805

F-89

Table of Contents

Disco Productions, Inc.

Notes to unaudited financial statements (Continued)
for the period ended June 19, 2012 and
six months ended June 30, 2011

Depreciation expense for the period ended June 19, 2012 and six months ended June 30, 2011 was $773 and $398, respectively.

3. NOTES PAYABLE

The Company maintains a line of credit with a bank and also borrows from three unrelated lenders on a short-term basis.

	Balance as of

	June 19, 2012		December 31, 2011

Line of credit
The Company maintains a line of credit with one bank, which provides a credit facility up to a maximum amount of $20,000. Borrowings under the credit agreement bear interest at 8.25% and are payable monthly. The line of credit agreement does not have a maturity date, and is collateralized by the Company's general assets and the personal guarantee of the stockholder's family member.	$	20,000	$	20,000
For one lender, the Company incurred multiple borrowings for both the period ended June 19, 2012 and six months ended June 30, 2011 of $100,000. Repayment on each of the borrowings is typically required within two to six months. The effective interest rates on the individual borrowings range from 15% to 18%.	$	230,000	$	200,000
For another lender, the borrowings range between $25,000 and $200,000 for the period ended June 19, 2012. There were no borrowings for the six months ended June 30, 2011. The effective interest rates on the individual borrowings range from 26% to 42%. The Company makes daily repayments through an automatic 20% deduction from its daily ticket sales and allocates a portion of the daily payments to principal and to interest. The borrowing is collateralized by future ticket sales and the personal guarantee of the stockholder.		141,013		50,000
For another lender, the Company borrowed $300,000 in the second half of the year ended December 31, 2011 with an effective interest rate of 29%. The Company makes daily repayments through an automatic 20% deduction from its daily ticket sales and allocates a portion of the daily payments to principal and to interest. The borrowing is collateralized by future ticket sales and the personal guarantee of the stockholder.		—		260,766

	$	391,013	$	530,766

F-90

Table of Contents

Disco Productions, Inc.

Notes to unaudited financial statements (Continued)
for the period ended June 19, 2012 and
six months ended June 30, 2011

4. LONG-TERM LIABILITIES

During the period ended June 19, 2012, the Company entered into a ticketing services agreement with Eventbrite, Inc. (EBI) and appointed EBI as the Company's exclusive ticketing agent. In accordance with the agreement, the Company received the following compensation:

Recoupable advance

The Company received an advance of $700,000. This advance will be repaid to EBI through ticket sale royalties of at least $2 per ticket, on all ticket sales, until fully recouped by EBI. Ticketing services under this agreement began in July 2012. As such, no payments were received by EBI during the period ended June 19, 2012.

Nonrecoupable payment

The Company received $700,000 in consideration for entering into the ticketing services agreement. The Company is amortizing this nonrecoupable payment over the five year term of the agreement. The Company recognized $25,699 of other income, in connection with this agreement, during the period ended June 19, 2012.

5. CONTINGENCIES

Legal matters

During the period ended June 19, 2012, the Company became involved in a dispute with one of its promoters who claimed the sole rights to intellectual property that was developed, as the Company asserts, in conjunction with the Company. As of the date the financial statements were available to be issued, the dispute had not been resolved, nor did the Company enter into any litigation.

6. CONCENTRATIONS

Financial instruments which potentially subject the Company to credit risks consist primarily of excess cash over insured limits by the Federal Deposit Insurance Corporation and concentration of trade receivables and payables. At times throughout the year, cash balances may be in excess of the Federal Deposit Insurance Corporation.

F-91

Table of Contents

Disco Productions, Inc.

Notes to unaudited financial statements (Continued)
for the period ended June 19, 2012 and
six months ended June 30, 2011

Concentration of credit risk in amounts due from and to promoters is generally not diversified due to the Company's limited number of promoters. The following tables represent a breakdown of concentrations at June 19, 2012:




Percentage of Due from Promoters
Promoter A	51	%	21	%
Promoter B	11	%	24	%
Promoter C	*	%	*	%

Percentage of Due to Promoters
Promoter D	39	%	*	%
Promoter E	38	%	25	%
Promoter F	17	%	40	%
Promoter G	*	%	*	%

*: did not represent more than 10% of total amounts due from or due to promoters

7. OTHER RECEIVABLE

Beginning February 2012, one of the Company's lenders began withholding an additional 10% of the Company's daily ticket sales but did not apply the funds against the Company's note payable balance with the lender. At June 19, 2012, the Company recorded the total amount withheld of $203,774 as a receivable. As of June 19, 2012, the Company's note payable balance to this lender was $0 and accordingly, subsequent to period end, the Company has received the entire receivable balance of $203,774.

8. SUBSEQUENT EVENTS

The Company has considered subsequent events through January 7, 2013, the date the interim financial statements were available to be issued, in preparing the financial statements and notes thereto, and has determined that there are no subsequent events that require disclosure under FASB ASC 855, Subsequent Events.

F-92

Table of Contents

Nightlife Holdings, LLC

Financial Statements

Period Ended December 31, 2012 and Years
Ended December 31, 2011 and 2010

Table of Contents

Nightlife Holdings, LLC

Contents


Independent Auditor's Report			F-95
Consolidated Financial Statements:
Balance Sheets as of December 31, 2012, 2011 and 2010			F-97
Statements of Income and Members' Equity for the Period Ended December 31, 2012 and the Years Ended December 31, 2011 and 2010			F-98
Statements of Cash Flows for the Period Ended December 31, 2012 and the Years Ended December 31, 2011 and 2010			F-99
Notes to Consolidated Financial Statements			F-100 - F-102

F-94

Table of Contents

Independent auditor's report

To the Members
Nightlife Holdings, LLC
Miami, Florida

We have audited the accompanying consolidated balance sheets of Nightlife Holdings, LLC (formerly known as MMG Nightlife, LLC) and subsidiaries (the "Company") as of December 31, 2012, 2011 and 2010, and the related consolidated statements of income and members' equity and cash flows for the period ended December 31, 2012 and the years ended December 31, 2011 and 2010, and the related notes to the consolidated financial statements. These consolidated financial statements are the responsibility of the Company's management.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

F-95

Table of Contents

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Nightlife Holdings, LLC and subsidiaries at December 31, 2012, 2011 and 2010, and the results of their operations and their cash flows for the period ended December 31, 2012 and the years ended December 31, 2011 and 2010 in conformity with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As described in Note 10, effective December 31, 2012, the members sold 80% of their ownership interests in and assets of Nightlife Holdings, LLC to SFX Entertainment, Inc. The consolidated financial statements and accompanying notes do not reflect this transaction. Our opinion is not modified with respect to this matter.

New York, NY
April 12, 2013

F-96

Table of Contents

Nightlife Holdings, LLC

Balance sheets

December 31,	2012		2011		2010


Assets
Current:
Cash	$	112,531	$	7,237	$	—
Accounts receivable (Note 3)		713,946		137,515		272,329
Other assets		175,000		37,688		—

Total Current Assets		1,001,477		182,440		272,329
Property and Equipment, Net		1,687		1,687		1,687
Loan Receivable From Related Party (Note 2)		28,000		28,000		—

	$	1,031,164	$	212,127	$	274,016

Liabilities and Members' Equity
Current Liabilities:
Accounts payable and other	$	284,813	$	14,883	$	96,656
Accrued expenses		109,000		—		25,183

Total Current Liabilities		393,813		14,883		121,839
Commitments (Note 4)
Members' Equity		637,351		197,244		152,177

	$	1,031,164	$	212,127	$	274,016

See accompanying notes to consolidated financial statements.

F-97

Table of Contents

Nightlife Holdings, LLC

Statements of income and members' equity

	Period Ended December 31, 2012			Year Ended December 31, 2011			Year Ended December 31, 2010


Revenues (Note 3):
Management fee	$	2,799,585		$	3,420,576		$	1,510,640
Incentive fee		888,329			90,110			195,035
Professional service income		900,407			1,069,557			779,438

Total Revenues		4,588,321			4,580,242			2,485,113

Operating Expenses:
Professional service expense		846,912			1,175,202			883,891
Selling, general and administrative		1,163,594			943,435			1,036,918
Ticket sales expense		—			1,047			—

Total Operating Expenses		2,010,506			2,119,684			1,920,809

Operating Income		2,577,815			2,460,558			564,304
Other Income		20,500			61,607			62,889

Net Income		2,598,315			2,522,165			627,193
Members' Equity, Beginning of Year		197,244			152,177			785,478
Contributions from Members		2,372,098			—			—
Distributions to Members		(4,530,306	)		(2,477,098	)		(1,260,494	)

Members' Equity, End of Year	$	637,351		$	197,244		$	152,177

See accompanying notes to consolidated financial statements.

F-98

Table of Contents

Nightlife Holdings, LLC

Statements of cash flows

Year ended December 31,	2012			2011			2010


Cash Flows From Operating Activities:
Net income	$	2,598,315		$	2,522,165		$	627,193
Adjustments to reconcile net income to net cash provided by operating activities:
(Increase) decrease in:
Accounts receivable		(576,431	)		134,813			(54,702	)
Other assets		(137,312	)		(37,688	)		—
Increase (decrease) in:
Accrued expenses		269,930			(25,183	)		25,183
Accounts payable		109,000			(81,772	)		96,183

Net Cash Provided By Operating Activities		2,263,502			2,512,335			693,857

Cash Flows From Investing Activities:
Purchases of property and equipment		—			—			(1,687	)
Decrease in loans receivable—members		—			—			44,964
Decrease in due from related party		—			—			461,806
Increase in loan receivable		—			(28,000	)		—

Net Cash Provided By (Used In) Investing Activities		—			(28,000	)		505,083

Cash Flows From Financing Activities:
Contributions from members		2,372,098			—			—
Distributions to members		(4,530,306	)		(2,477,098	)		(1,260,494	)

Net Increase (Decrease) in Cash		105,294			7,237			(61,554	)
Cash, Beginning of Year		7,237			—			61,554

Cash, End of Year	$	112,531		$	7,237		$	—

See accompanying notes to consolidated financial statements.

F-99

Table of Contents

Nightlife Holdings, LLC

Notes to consolidated financial statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of business

Nightlife Holdings, LLC (the "Company"), formed in March 2012 as a new holding Company is engaged in marketing and nightclub operations activities, primarily in Florida, USA. Its wholly owned subsidiaries, MMG Nightlife LLC, Punta Cana Venue, LLC and US Nightlife Management, LLC manage the operations of two nightclub venues in South Florida (USA) on behalf of Fontainebleau Hotel ("club owner"), one nightclub in Punta Cana (the Caribbean) on behalf of Palace Resorts ("club owner") that commenced operations in January 2012 but terminated the agreement in July 2012 and a new venue in South Florida (USA) on behalf of Amnesia International, LLC ("club owner") that commenced operations in December 2012 under the terms of the respective executed management agreements.

Principles of consolidation

The accompanying consolidated financial statements include the account of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

Concentrations of credit risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash.

The Company maintains balances at financial institutions, which at times exceed the federally insured limit. The Company has not historically experienced losses on these accounts.

Accounts receivable

Accounts receivable are customer obligations due under normal trade terms. The Company manages three venues and derives its revenues from the two club owners of these clubs. The Company performs continuing evaluations of its customers' financial condition and based on the information available to it as well as historical collections trends, the Company believes no allowance for doubtful accounts as of December 31, 2012, 2011 and 2010 is necessary.

Revenue recognition

The Company earns management fee revenue from operating nightclubs which is recognized as services are provided per the terms of its management agreements. Incentive fee income is based on the nightclubs' profitability. The Company recognizes incentive fee income when the fee is fixed and determinable. In 2012, the Company ceased managing a nightclub. The club owner was contractually obligated to pay a $175,000 termination fee. The fee was recorded as management fee revenue in 2012. The professional service income primarily consists of reimbursable expenses for professional services provided by the Company, acting in a principal capacity on behalf of the club owner, and is recorded on a gross basis as the services are provided.

F-100

Table of Contents

Nightlife Holdings, LLC

Notes to consolidated financial statements (Continued)

obligor to perform the services being sold, has general inventory risk as it pertains to recruiting and compensating the talent, has the ability to control the ticket pricing, has discretion in selecting the talent, is involved in the production of the event, generally bears the majority of the credit or collection risk, or has several but not all of these indicators, revenue is recorded gross. If the Company does not have several of these indicators, it records revenues or losses on a net basis. According to the guidance, for its professional service fee income, the Company has determined that most of the above indicators exist and therefore, it recognizes reimbursement revenue gross as a principal. Professional service fee expenses are reflected in operating expenses.

Income taxes

The Company is a limited liability Company and the members are required to report their respective shares of the Company's income in their individual tax returns. Accordingly, no income tax provision has been made in the accompanying financial statements.

Use of estimates

Fair value of financial instruments

The three levels of the fair value hierarchy under ASC 820 are described as follows:

Level 1 inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

2. RELATED PARTY TRANSACTIONS

The Company has a loan receivable with related party of $28,000 as of December 31, 2012 and 2011. The loan is noninterest-bearing, unsecured and with no stated repayment terms.

F-101

Table of Contents

Nightlife Holdings, LLC

Notes to consolidated financial statements (Continued)

3. MAJOR CUSTOMERS

One customer accounted for approximately 85%, 100% and 100% of trade receivables and approximately 97%, 100% and 100% of revenues in 2012, 2011 and 2010 respectively.

4. COMMITMENTS

The Company leases its office facilities under a five-year non-cancellable operating lease. The lease was renewed on February 1, 2012 and expires on January 31, 2016. The Company follows the straight-line rent method of recognizing lease rental expense. Annual future minimum rental commitments are as follows:

Year ending December 31,


2013	$	81,845
2014		85,937
2015		90,234
2016		7,549

	$	265,566

Rent expense for the period ended December 31, 2012 and years ended December 31, 2011 and 2010 was $78,258, $55,899 and $36,970 respectively.

5. SUBSEQUENT EVENTS

The Company has considered subsequent events through April 12, 2013, the date the financial statements were available to be issued, in preparing the financial statements and notes thereto, and has determined that there are no subsequent events that require disclose ASC 855, "Subsequent Events", except for the following:

On December 31, 2012, the members sold 80% of their ownership interests in and assets of Nightlife Holdings, LLC to SFX Entertainment, Inc. ("SFXE") for a total consideration of $13,491,200 paid in cash and 674,560 shares of SFXE's common stock. The consolidated financial statements and accompanying notes above do not reflect this transaction.

F-102

Table of Contents

Consolidated Financial Statements

BEATPORT, LLC and Subsidiaries

(A Limited Liability Company)

Years Ended December 31, 2012 and 2011
With Report of Independent Auditors

Table of Contents

BEATPORT, LLC and Subsidiaries (A Limited Liability Company)

Consolidated Financial Statements

Years ended December 31, 2012 and 2011

Contents


Report of Independent Auditors		F-105
Consolidated Financial Statements
Consolidated Balance Sheets		F-106
Consolidated Statements of Operations		F-107
Consolidated Statements of Members' Equity (Deficit)		F-108
Consolidated Statements of Cash Flows		F-109
Notes to Consolidated Financial Statements		F-110

F-104

Table of Contents

Report of independent auditors

The Board of Managers and Members
BEATPORT, LLC

We have audited the accompanying consolidated financial statements of BEATPORT, LLC and Subsidiaries, which comprise the consolidated balance sheets as of December 31, 2012 and 2011, and the related consolidated statements of operations, members' equity (deficit) and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the consolidated financial statements that are free of material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of BEATPORT, LLC and Subsidiaries at December 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

February 11, 2013
Denver, Colorado

F-105

Table of Contents

BEATPORT, LLC and Subsidiaries (A Limited Liability Company)

Consolidated balance sheets

	December 31

	2012			2011

Assets
Current assets:
Cash and cash equivalents	$	13,292,765		$	10,994,269
Restricted cash		206,062			410,006
Accounts receivable		174,366			155,325
Taxes receivable, net		5,253			20,941
Prepaid expenses		378,182			387,572
Other current assets		159,841			298,324

Total current assets		14,216,469			12,266,437
Property and equipment, net		1,988,378			2,459,003
Software and intangible assets, net		1,722,035			1,214,981
Goodwill		368,808			368,808
Merchant deposits		431,197			370,746
Other assets		74,891			85,849

Total assets	$	18,801,778		$	16,765,824

Liabilities and members' equity (deficit)
Current liabilities:
Accounts payable	$	267,081		$	554,869
Taxes due		1,860,197			1,240,269
Deferred tax liability		31,500			53,625
Record label payable		9,510,001			7,690,511
Mechanical royalties payable		3,569,250			3,298,680
Other accrued liabilities		1,153,616			1,082,288

Total current liabilities		16,391,645			13,920,242
Other liabilities		58,342			93,105
Long-term record label and mechanical royalties payable		5,505,774			4,371,109

Total long-term liabilities		5,564,116			4,464,214
Commitments and contingencies (Note 7)
Members' equity (deficit):
Membership Interests		(2,918,539	)		(1,937,599	)
Preferred Membership Interests		(235,444	)		318,967

Total members' equity (deficit)		(3,153,983	)		(1,618,632	)

Total liabilities and members' equity (deficit)	$	18,801,778		$	16,765,824

See accompanying notes.

F-106

Table of Contents

BEATPORT, LLC and Subsidiaries (A Limited Liability Company)

Consolidated statements of operations

	Year Ended December 31

	2012			2011

Net revenue	$	48,460,649		$	44,457,542
Cost of sales		33,393,337			31,548,419

Gross profit		15,067,312			12,909,123
Selling, general, and administrative expenses		16,400,565			14,189,034

Operating loss		(1,333,253	)		(1,279,911	)
Other income (expense):
Interest income		36,673			38,973
Foreign exchange loss		(78,536	)		(11,531	)

Total other income (expense)		(41,863	)		27,442

Loss before income tax expense		(1,375,116	)		(1,252,469	)
Foreign income tax expense		160,235			101,255

Net loss	$	(1,535,351	)	$	(1,353,724	)

See accompanying notes.

F-107

Table of Contents

BEATPORT, LLC and Subsidiaries (A Limited Liability Company)

Consolidated statements of members' equity (deficit)

	Common Interests			Preferred Interests			Total


Balance at December 31, 2010	$	(1,937,599	)	$	1,672,691		$	(264,908	)
Net loss		—			(1,353,724	)		(1,353,724	)

Balance at December 31, 2011		(1,937,599	)		318,967			(1,618,632	)
Net loss		(980,940	)		(554,411	)		(1,535,351	)

Balance at December 31, 2012	$	(2,918,539	)	$	(235,444	)	$	(3,153,983	)

See accompanying notes.

F-108

Table of Contents

BEATPORT, LLC and Subsidiaries (A Limited Liability Company)

Consolidated statements of cash flows

	Year Ended December 31

	2012			2011

Operating activities
Net loss	$	(1,535,351	)	$	(1,353,724	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		1,759,709			1,545,648
Gain on sale of fixed assets		—			(17,390	)
Net changes in operating assets and liabilities:
Accounts receivable		(19,041	)		52,130
Taxes receivable		15,688			(20,941	)
Prepaid expenses		9,390			(153,345	)
Other current assets		138,483			49,645
Merchant deposits and other assets		(49,493	)		(151,578	)
Accounts payable		(287,788	)		346,960
Taxes due		619,928			(185,696	)
Deferred tax benefit		(22,125	)		(30,375	)
Record label payables		1,767,832			1,062,664
Mechanical royalties payable		1,456,893			1,802,469
Changes to restricted cash		—			(15,000	)
Other current accrued liabilities		71,328			(604,624	)
Other liabilities, long-term		(34,763	)		(24,344	)

Net cash provided by operating activities		3,890,690			2,302,499
Investing activities
Purchases of property and equipment		(806,353	)		(1,600,809	)
Purchases of software and other intangible assets		(989,785	)		(742,282	)
Changes to restricted cash		203,944			(203,944	)
Proceeds from sale of fixed assets		—			35,060

Net cash used in investing activities		(1,592,194	)		(2,511,975	)

Net increase (decrease) in cash and cash equivalents		2,298,496			(209,476	)
Cash and cash equivalents, beginning of year		10,994,269			11,203,745

Cash and cash equivalents, end of year	$	13,292,765		$	10,994,269

Supplemental cash flow information
Cash paid for interest	$	—		$	—
Cash paid for income taxes	$	37,851		$	23,896

See accompanying notes.

F-109

Table of Contents

BEATPORT, LLC and Subsidiaries (A Limited Liability Company)

Notes to consolidated financial statements
December 31, 2012

1. ORGANIZATION AND BUSINESS

BEATPORT, LLC (the Company) commenced operations in 2003 and is incorporated in the state of Colorado as a limited liability company. The Company is engaged in the sale and marketing of electronic music file downloads through its websites and facilities in the United States and Berlin, Germany. During 2012, the Company's largest markets were the European Union (EU) and the United States, representing approximately 45.9% and 22.3% of net revenue, respectively.

Basis of presentation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated.

Financial condition

For the year ended December 31, 2012, the Company incurred a net loss of $1,535,351, with cash provided by operating activities of $3,890,690. Management expects reductions in operating losses in the long term as business and operating activities are completed to generate increased revenues and reduce expenses based on the Company's business plan. The positive operating cash flow generated by the Company primarily relates to the accumulation of monies withheld from record label payables in order to satisfy mechanical royalty obligations. This accumulation has provided positive cash flows each of the past five years and management anticipates this trend will continue as the ultimate settlement of these obligations happens at a slow pace. The Company believes its cash and cash equivalents will be adequate to meet its cash needs for the foreseeable future, or at least one year from December 31, 2012. An inability to generate sufficient revenues, quickening of the ultimate settlement of mechanical royalty obligations, or the inability to decrease expenses could have a material adverse impact on the Company's ability to meet its intended business objectives.

Reclassifications

Certain 2011 financial statement line items have been reclassified to conform to the current year's presentation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and cash equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. The Company's cash equivalents are comprised of readily accessible money market mutual fund investments and certificates of deposit.

For the years ended December 31, 2012 and 2011, the Company had deposits in banks in excess of the Federal Deposit Insurance Corporation limits of $7,513,937 and $6,788,795, respectively.

Restricted cash

For the years ended December 31, 2012 and 2011, the Company had restricted cash balances of $206,062 and $410,006, respectively. As of December 31, 2012 and 2011, these amounts represent collateral for the Company's purchasing cards and an unused letter of credit for payment of Swiss Value Added Tax, as well as amounts held in escrow.

F-110

Table of Contents

BEATPORT, LLC and Subsidiaries (A Limited Liability Company)

Notes to consolidated financial statements (Continued)
December 31, 2012

Accounts receivable

Accounts receivable are a result of the time delay between customer payments through their credit card accounts on the Company's website and final settlement from the Company's external payment processors. The clearing period between payment and settlement is normally one to five days, with international transactions generally taking the longest period of time.

Property and equipment

Property and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the respective estimated useful lives. Maintenance and repairs are expensed as incurred. Improvements that extend the useful lives of the assets or provide improved efficiency are capitalized.

Estimated useful lives by asset class are generally as follows:

Asset Classification		Estimated Useful Lives


Furniture and fixtures			7 years
Computer equipment			3 years

Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful lives.

Goodwill, software, and intangibles

The Company incurs significant costs associated with internal-use software, which consists principally of the Company's website. The Company charges to expense as incurred the costs of research, including predevelopment efforts related to determining technological or product alternatives, and costs incurred for training and maintenance. Internal-use software and website development costs, which include direct costs such as labor and contractors, are capitalized when it is probable that the project will be completed and the software or website will be used as intended. Costs incurred for upgrades and enhancements to the Company's internal-use software or website are capitalized when it is probable that such efforts will result in additional functionality. Capitalized software and website costs are amortized to expense over the estimated useful life of the software or website, generally three years, except for purchased software, which is depreciated over five years.

As part of the acquisition of Sounds to Sample Ltd. in October 2010, a portion of the purchase price was allocated to two intangible assets: trademarks and supplier relationships, which are amortized over four years. Additionally, a portion of the purchase price was allocated to goodwill.

Merchant deposits

Merchant deposits are amounts held by the Company's external payment processors as security for any voided or charged back transaction amounts greater than deposits on any given day. If necessary, amounts will be deducted from these deposits and replenished through normal sales activity.

F-111

Table of Contents

BEATPORT, LLC and Subsidiaries (A Limited Liability Company)

Notes to consolidated financial statements (Continued)
December 31, 2012

Revenue recognition

The Company recognizes revenue from music file sales made via the internet. Revenue is recognized when persuasive evidence of an arrangement exists, products or services have been delivered to and accepted by the customer, collectibility is reasonably assured, and the Company's fee is fixed or determinable. The Company's music files are considered delivered to and accepted by the customer upon the customer's remittance by a credit card through the Company's website. The Company records reductions to revenue for voided transactions based on the Company's historical experience.

Cost of sales

Cost of sales includes the cost of royalties to record labels, mechanical royalties to collecting societies and labels, and direct costs of order fulfillment, including transaction and foreign exchange conversion fees from external payment processors.

The Company withholds a portion of royalty payments to record labels to satisfy mechanical royalty obligations. These withholdings have been accrued and are reflected in the accompanying consolidated balance sheets in mechanical royalties payable and record label payable. The amounts withheld are subject to estimation, and any excess amount withheld will be remitted back to the record labels upon reconciliation with the various mechanical royalty societies to whom the Company remits mechanical royalty payments.

Advertising

The cost of advertising is expensed in selling, general, and administrative expenses as incurred. For the years ended December 31, 2012 and 2011, the Company incurred advertising expense of $1,446,395 and $1,261,065, respectively. As of December 31, 2012 and 2011, the Company had $38,328 and $42,500, respectively, of deferred advertising costs recorded as prepaid expenses.

Foreign currency transactions

The U.S. dollar is the functional currency for all of the Company's operations. Revenues and expenses are translated at average exchange rates prevailing during the period. Foreign currency denominated monetary assets and liabilities are remeasured based on exchange rates at the end of the period and are recognized in operations. Non-monetary assets and liabilities are remeasured at historical rates in effect when the asset was recognized or the liability was incurred. The Company recognized a net foreign exchange loss in the accompanying consolidated statements of operations of $(78,536) and $(11,531) for the years ended December 31, 2012 and 2011, respectively.

Taxes

The Company is a limited liability company and, as such, is considered a pass-through entity for U.S. income tax purposes and generally does not pay U.S. federal or state income taxes. The taxable income or loss of the Company, which may vary substantially from income or loss on a financial reporting basis, is included in the U.S. federal and state tax returns of the members.

Income taxes on the results of operations of the Company's wholly owned subsidiary, Beatport S.a.r.l., have been included as current foreign income tax expense in the accompanying consolidated statements of operations.

F-112

Table of Contents

BEATPORT, LLC and Subsidiaries (A Limited Liability Company)

Notes to consolidated financial statements (Continued)
December 31, 2012

Management has estimated and recorded amounts due for other taxes it believes the Company is subject to, primarily Value Added Tax (VAT) in the EU. Management believes that the amounts recorded for such non-income tax liabilities are adequate; however, actual amounts may differ from recorded amounts. Net revenue and cost of sales on the accompanying consolidated statements of operations included VAT of $3,310,841 and $3,285,518 for the years ended December 31, 2012 and 2011, respectively.

Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the book and tax bases of the Company's assets and liabilities. The Company has a net deferred tax liability of $31,500 and $53,625 at December 31, 2012 and 2011, respectively.

Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates.

Subsequent events

The Company evaluated subsequent events through February 11, 2013, the date these consolidated financial statements were available to be issued.

3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	December 31

	2012			2011

Furniture and fixtures	$	290,093		$	283,197
Computer equipment		4,961,200			4,200,763
Leasehold improvements		786,435			747,415

		6,037,728			5,231,375
Less accumulated depreciation		(4,049,350	)		(2,772,372	)

	$	1,988,378		$	2,459,003

Depreciation expense was $1,276,978 and $954,023 for the years ended December 31, 2012 and 2011, respectively.

The Company performs an annual review of all long-lived assets to determine if indicators of impairment are present. No impairment was identified as a result of the Company's 2012 or 2011 analyses.

F-113

Table of Contents

BEATPORT, LLC and Subsidiaries (A Limited Liability Company)

Notes to consolidated financial statements (Continued)
December 31, 2012

4. GOODWILL, SOFTWARE, AND OTHER INTANGIBLE ASSETS

The Company does not amortize goodwill. Rather, such assets are required to be tested for impairment whenever events or changes in circumstances indicate that the assets may be impaired. The Company performs its goodwill impairment tests as of December 31 each year and no goodwill impairment charges were recognized during the years ended December 31, 2012 or 2011.

Amortizable software and other intangible assets consisted of the following:

	December 31, 2012

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value

Computer software	$	3,127,900	$	2,367,885	$	760,015
Intellectual property		7,500		2,858		4,642
Supplier relationships		238,000		133,875		104,125
Trademark		62,000		34,874		27,126
Software in progress		826,127		—		826,127

Total	$	4,261,527	$	2,539,492	$	1,722,035

	December 31, 2011

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value

Computer software	$	2,449,418	$	1,961,225	$	488,193
Intellectual property		7,500		1,786		5,714
Supplier relationships		238,000		74,375		163,625
Trademark		62,000		19,375		42,625
Software in progress		514,824		—		514,824

Total	$	3,271,742	$	2,056,761	$	1,214,981

Amortization expense was $482,731 and $591,625 for the years ended December 31, 2012 and 2011, respectively. The estimated amortization expense for the next five years is as follows:

Year ended December 31:


2013	$	452,477
2014		343,446
2015		92,751
2016		3,015
2017		729

	$	892,418

Total capitalized costs related to internal-use software, consisting primarily of internal labor and contract labor, were $797,807 and $328,530 during the years ended December 31, 2012 and 2011, respectively.

F-114

Table of Contents

BEATPORT, LLC and Subsidiaries (A Limited Liability Company)

Notes to consolidated financial statements (Continued)
December 31, 2012

5. MEMBERS' EQUITY

Members' equity consists of two classes of Membership Interests: Membership Interests (including Non-voting Member) and Preferred Membership Interests (of the Investor Member). The Members' Interest was governed by the Fourth Amended and Restated Operating Agreement of BEATPORT, LLC (the Former Agreement) from April 19, 2007 through November 30, 2009. The Members' Interest is governed by the Fifth Amended and Restated Operating Agreement of BEATPORT, LLC (the Agreement) from December 1, 2009. Except under certain specific circumstances, no Member or Non-voting Member has the right to resign, retire, or otherwise withdraw as a member without consent of all other members.

Membership interests

Membership Interests may be sold to a third party only after the selling Member offers to sell its interests to the other Members and Investor Members. Members vote ratably as per their Membership Interest in relation to the total Membership Interests and Investor Membership Interests.

Non-voting member

Non-voting Members shall not be entitled to transfer or dispose of their Membership Interest except to the Company. Such transfer or disposition of a Non-voting Member's Interest to the Company shall require a majority vote, which must include the Investor Member. In the event that a Non-voting Member is terminated from employment with the Company or leaves employment with the Company subject to provisions of the Agreement, the Company shall have the right to repurchase the Non-voting Member's Interest.

Preferred membership interests

Preferred Membership Interests are held only by the Investor Member. On April 20, 2007, the Company finalized an agreement issuing Preferred Membership Interests to Insight Venture Partners V, L.P., Insight Beatport Cayman Blocker, Inc., and Insight Venture Partners, L.P. (Employee Co-Investors) (collectively, Insight or the Investor Member), and received proceeds of $12,000,000.

The Preferred Membership Interests issued to Insight give the Investor Member a 19.356% interest in the Company and veto rights to certain corporate actions and provide Insight with a priority in receiving a return of its initial capital investment.

Insight has the right to transfer any or all of its Preferred Membership Interests. Insight must first offer the Company the right to purchase the Preferred Membership Interests at the same price and upon the same terms as any proposed sale to a third party. If the Company refuses, the transfer can occur as long as the transferee is not deemed to be a competitor of the Company and the transferee agrees to be bound by the Agreement.

At any time after January 1, 2017, Insight has the right to require the Company to redeem all or part of the Preferred Membership Interests for the initial price paid.

Allocation of net loss, net income, and cash distributions

Prior to the Former Agreement, net income and loss were allocated to members based on relative membership interest percentages (as defined in previous operating agreements). The Former Agreement

F-115

Table of Contents

BEATPORT, LLC and Subsidiaries (A Limited Liability Company)

Notes to consolidated financial statements (Continued)
December 31, 2012

and Agreement require the Company to allocate net income or loss to members according to defined formulas. For the time period after the Former Agreement, the net loss is first allocated to the Members so as to cause the Capital Account balances of the Members (in excess of the Preferred Members Contributions) to be equal to zero, second, to the Members holding Preferred (Investor) Membership Interests until their Capital Accounts are reduced to zero, and thereafter to the Members in accordance with the Membership Interests. Net income shall be allocated among the Members first, to the Members to the extent of any net losses allocated to the Members in accordance with provisions of the Agreement in inverse order to the allocations made thereunder. Second, net income shall be allocated to any Member to the extent that the aggregate of all distributions made to such Member pursuant to provisions of the Agreement for the current period and for all prior periods exceeds all income previously allocated to such Member pursuant to provisions of the Agreement, for all prior periods, in proportion to such excess amounts. Third, net income shall be allocated to the Members (including Members holding Preferred Membership Interests) in accordance with their Membership Interests until the Members holding Preferred Membership Interests have been allocated an aggregate amount of net income equal to three times their Contributions. Thereafter, net income shall be allocated to the Members other than the Members holding Preferred Membership Interests.

Voluntary distributions are only allowed if the assets of the Company are greater than the liabilities of the Company and if other restrictions related to the recovery of the Investor Members' initial capital contribution have been triggered. Further, distributions must be approved by a majority vote of Members and Investor Members. The resulting distribution would first be allocated to fully repay any loans made to the Company by any Member and then to all Members (including Members holding Preferred Membership Interests), in accordance with their Membership Interest.

Distributions as a result of a change in control, liquidation, or dissolution of the Company would first be allocated to fully repay any loans made to the Company by any Member. The Investor Member would then obtain a priority payout to recoup their initial capital contribution. The next distribution would be made to members in accordance with their Membership Interests until such time as the Investor Member has received distributions equal to three times their capital contribution. Any remaining distribution would be allocated to the Members other than Members holding Preferred Membership Interests, in accordance with their membership interests.

Equity-based compensation

Phantom membership interests

During 2008 and 2009, the Company issued a 0.75% and 1.1%, respectively, Phantom Membership Interest to executives subject to the appreciation of the value of the Company. The Phantom Membership Interest vests after five years of continuous employment, but may vest earlier upon death, termination without cause, or a change in control of the Company in accordance with the terms of the underlying agreements. The expense related to the Phantom Membership Interest is recognized straight-line over the vesting period, as long as the value of the Company is increasing. The Phantom Interest, once earned and vested, is payable in cash. The estimated value of the Company at December 31, 2012 and 2011, was below the required appreciation threshold, and thus, no expense was recognized for the years ended December 31, 2012 and 2011.

F-116

Table of Contents

BEATPORT, LLC and Subsidiaries (A Limited Liability Company)

Notes to consolidated financial statements (Continued)
December 31, 2012

6. EMPLOYEE BENEFIT PLAN

The Company has a defined contribution 401(k) plan under which eligible employees may defer up to 100% of compensation subject to IRS maximum contribution amounts. The Company matches up to 3% of salary on eligible funds contributed to the plan. The Company's contributions vest over five years. The expense incurred by the Company for the matching of 401(k) contributions was $100,131 and $57,728 for the years ended December 31, 2012 and 2011, respectively, which is included in selling, general, and administrative expenses in the accompanying consolidated statements of operations.

7. COMMITMENTS AND CONTINGENCIES

Operating leases

The Company leases administrative offices and certain equipment under noncancelable operating lease agreements. Rent expense under these leases for the years ended December 31, 2012 and 2011, totaled $493,915 and $347,103, respectively. The following is a schedule of future minimum lease payments:

Year ended December 31:


2013	$	395,504
2014		296,411
2015		106,875

	$	798,790

There are no noncancelable operating lease commitments beyond 2015. The Company has the option to renew its lease for its Denver, Colorado facility, for up to two additional five-year terms.

Commitments

The Company has entered into contracts with vendors primarily for internet connectivity services, which have committed the Company to minimum future payments. The following is a schedule of future minimum payments:

Year ended December 31:


2013	$	634,459
2014		361,044
2015		97,200

	$	1,092,703

Litigation, claims, and assessments

In December 2010, a lawsuit was filed against the Company, a Denver, Colorado nightclub, the nightclub's owner, and a talent agency. The nightclub's owner is a Member of the Company. The plaintiff owns several nightclubs in the Denver market and alleges that Beatport, the local nightclub, the nightclub's owner, and the talent agency engaged in monopolistic practices, denying the plaintiff's nightclubs access to performances by popular DJs. The Company attended mediation proceedings in June 2012 with no settlement reached. Oral arguments and discovery occurred in 2012, with the

F-117

Table of Contents

BEATPORT, LLC and Subsidiaries (A Limited Liability Company)

Notes to consolidated financial statements (Continued)
December 31, 2012

actual trial scheduled for June 2013. The Company is unable to predict an outcome or a possible loss or range of loss, if any, which could be associated with the resolution of the civil claims brought against the Company.

The Company is subject to various other claims and business disputes in the ordinary course of business, none of which are considered to be material to the financial position or operations of the Company.

Mechanical royalties payable

Prior to July 1, 2008, based on agreements with individual record labels related to its sales of digital music, the Company had consistently remitted monies for mechanical royalties to such record labels with the understanding that these amounts would be remitted to applicable mechanical royalty collection societies. However, the Company is in discussions with multiple collection societies that are requesting payment directly from the Company. As a result, the Company has recorded $746,550 and $746,550 within mechanical royalties payable as of December 31, 2012 and 2011, respectively, for these claims. Management believes the amounts recorded for such mechanical royalties payable are adequate; however, actual amounts paid could ultimately differ from recorded amounts.

8. RELATED-PARTY TRANSACTIONS

The Company shared a facility with a Member in Berlin, Germany. The Member billed the Company for rent and other services and the expense related to this arrangement for the years ended December 31, 2012 and 2011, was $0 and $115,664, respectively.

The Company utilized the janitorial services of a Member's immediate family member. The expense related to these services for the years ended December 31, 2012 and 2011, was $0 and $31,660, respectively.

9. EVENTS (UNAUDITED) SUBSEQUENT TO DATE OF INDEPENDENT AUDITOR'S REPORT

On March 15, 2013, the Company was acquired by SFX Entertainment, Inc. (SFX). In connection with the acquisition, SFX settled the lawsuit described in Note 7 for approximately $1.5 million. The effects of purchase accounting related to the acquisition and settling the lawsuit have not been reflected in the consolidated financial statements as of December 31, 2012.

F-118

Table of Contents

ID&T HOLDING B.V.

US GAAP Consolidated Financial Statements

Years Ended December 31, 2012 and 2011
With Report of Independent Auditors

Table of Contents

ID&T HOLDING B.V.

US GAAP Consolidated Financial Statements
Years Ended December 31, 2012 and 2011

Table of Contents

		Page

Report of Independent Auditors		F-121
Consolidated Balance Sheets		F-122
Consolidated Statements of Operations		F-123
Consolidated Statements of Comprehensive Income		F-124
Consolidated Statements of Changes in Stockholders' Equity		F-125
Consolidated Statements of Cash Flows		F-126
Notes to Consolidated Financial Statements		F-127

F-120

Table of Contents

Report of Independent Auditors

To: The Shareholders of ID&T Holding B.V.

We have audited the accompanying consolidated financial statements of ID&T Holding B.V. and subsidiaries ("the Company") which comprise the consolidated balance sheets as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income, statements of changes in shareholder's equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a reasonable basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and subsidiaries as of December 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young Accountants LLP
Amsterdam, The Netherlands
June 24, 2013

F-121

Table of Contents

ID&T Holding B.V.

Consolidated balance sheets
(In thousands)

	As of December 31

	2012			2011

ASSETS
Current assets:
Cash and cash equivalents		EUR9,454			EUR5,313
Trade accounts receivable		1,004			656
Accounts receivable from affiliated companies		352			459
Inventories		140			355
Advance to shareholders		4,000			—
Revenues yet to be invoiced		1,790			1,621
Other current assets		2,646			1,552

Total current assets		19,386			9,956
Property and equipment		1,655			1,777
Other assets:
Intangible assets		306			277
Investments in non-consolidated affiliates		2,022			1,296
Deferred tax assets		140			326
Other long-term assets		874			886

Total other assets		4,997			4,562

Total assets		EUR24,383			EUR14,518

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable		EUR3,387			EUR2,323
Income taxes payable		217			350
Due to affiliated company		109			325
Accrued expenses		3,928			2,186
Prepayment from SFX		9,285			—
Deferred revenues		1,148			2,035
Other current liabilities		583			726

Total current liabilities		18,657			7,945
Stockholders' equity:
Common stock (29,283 shares outstanding at €1 par value)		29			29
Additional paid-in capital		6,772			6,772
Retained deficit		(1,674	)		(763	)
Accumulated other comprehensive income		535			438

Total stockholders' equity		5,662			6,476
Non-controlling interest		64			97

Total stockholders' equity		5,726			6,573
Total liabilities and stockholders' equity		EUR 24,383			EUR 14,518

See notes to consolidated financial statements

F-122

Table of Contents

ID&T Holding B.V.

Consolidated statements of operations
(In thousands)

	Year ended December 31

	2012			2011

Revenue	EUR	52,425		EUR	45,104
Cost of revenue (exclusive of depreciation and amortization)		(37,441	)		(29,603	)

Gross profit		14,984			15,501
Operating expenses:
Sales and marketing		8,118			6,593
General and administrative		6,599			5,848
Depreciation and amortization		1,192			1,372

Total operating expenses		15,909			13,813
Net operating (loss) income		(925	)		1,688
Other income (expense):
Interest expense		—			(47	)
Interest income		158			200
Share in earnings of non-consolidated affiliates		1,523			1,873
Gain on sales of non-consolidated affiliates		70			492
Other income (expense)		395			(39	)

Total other income		2,146			2,479

Earnings before income taxes		1,221			4,167
Income tax expense		(76	)		(594	)

Net income		1,145			3,573
Net income attributable to non-controlling interests		(57	)		(86	)

Net income attrbutable to common stockholders of ID&T Holding B.V.	EUR	1,088		EUR	3,487

See notes to consolidated financial statements

F-123

Table of Contents

ID&T Holding B.V.

Consolidated statements of comprehensive income
(In thousands)

	Year Ended December 31,

	2012			2011
Net income	EUR	1,145		EUR	3,573
Other comprehensive income, net of tax:
Currency translation differences		97			70

Total comprehensive income, net of tax		1,242			3,643
Comprehensive income attributable to noncontrolling interest		(57	)		(86	)

Comprehensive income attributable to common stockholders	EUR	1,185		EUR	3,557

See notes to consolidated financial statements

F-124

Table of Contents

ID&T Holding B.V.

Consolidated statements of stockholders' equity
(In thousands)




Balance as of January 1, 2011 EUR	29	6,667	(1,707	)	368	178		5,535
Issue of additional shares		105						105
Non-controlling interests			(43	)		43		—
Cash dividends			(2,500	)		(210	)	(2,710	)
Net income			3,487			86		3,573
Other comprehensive income					70			70

Balance as of December 31, 2011	29	6,772	(763	)	438	97		6,573

Non-controlling interests			1			(14	)	(13	)
Cash dividends			(2,000	)		(76	)	(2,076	)
Net income			1,088			57		1,145
Other comprehensive loss					97			97

Balance as of December 31, 2012 EUR	29	6,772	(1,674	)	535	64		5,726

See notes to consolidated financial statements

F-125

Table of Contents

ID&T Holding B.V.

Consolidated statements of cash flows
(In thousands)

	Year ended December 31

	2012			2011

OPERATING ACTIVITIES:
Net income	EUR	1,145		EUR	3,573
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		1,192			1,372
Provision for uncollectible accounts, net		67			(45	)
Share in earnings of non-consolidated affiliates		(1,593	)		(2,365	)
Deferred income taxes		186			(13	)
Other		49			(59	)
Changes in assets and liabilities:
Inventories		67			98
Trade accounts receivable		(403	)		674
Accounts receivable from affiliated companies		107			(105	)
Other current assets		(1,263	)		(7	)
Trade accounts payable, accrued expenses and other current liabilities		1,352			(2,149	)
Income taxes payable		(133	)		(919	)
Due to affiliated companies		(216	)		(127	)

Net cash provided by (used in) operating activities		557			(72	)
INVESTING ACTIVITIES
Proceeds from sale of non-consolidated affiliates		63			517
Investments made in non-consolidated affiliates		—			(17	)
Prepayments from SFX		9,707			—
Prepayment from SFX currency translation differences		(422	)		—
Goodwill on acquisitions		(30	)		—
Increase in loans to shareholders/employees/ non-consolidated affiliates		(126	)		(113	)
Proceeds from sale of property and equipment		61			—
Purchase of property and equipment		(1,178	)		(1,677	)

Net cash provided by (used in) investing activities		8,075			(1,290	)
FINANCING ACTIVITIES
Proceeds from share issuance		—			105
Loans granted		(3,821	)		211
Dividends distributed		(2,000	)		(2,500	)
Dividends received		1,343			1,205

Net cash (used in) financing activities		(4,478	)		(979	)

Effect of exchange rate changes on cash and cash equivalents		(13	)		26

Net increase/(decrease) in cash and cash equivalents		4,141			(2,315	)
Cash and cash equivalents, beginning of period	EUR	5,313		EUR	7,628

Cash and cash equivalents, end of period	EUR	9,454		EUR	5,313

See notes to consolidated financial statements

F-126

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements

(1) THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of business

Background

ID&T Holding B.V. (the "Company") operates in what is commonly referred to as the Electronic Music Culture ("EMC") industry and primarily develops and realises dance experience events both in the Netherlands and abroad. These events take place both indoors and outdoors.

SFX Entertainment, Inc. acquistion

On October 26, 2012, the Company entered into an agreement with SFX Entertainment, Inc ("SFX") to form a joint venture (the "ID&T Joint Venture"), which will have an exclusive license to use and promote all ID&T brands in North America. At the time of the agreement, SFX paid the Company $12.5 million. This amount, which is equivalent to EUR 9.3 million, has been disclosed separately as prepayment under current liabilities.

On March 15, 2013, the Company and SFX executed a definitive joint venture agreement and in connection therewith SFX made a $7.5 million non-recourse loan to the Company, which is to be repaid from the Company's interest in distributions from the ID&T Joint Venture. In addition, SFX issued to the Company $10 million common stock and warrants to purchase 500,000 shares of SFX's common stock at an exercise price of $2.50.

On March 20, 2013, in exchange for a payment of $2.5 million and 2 million shares of common stock, the Company entered into an option agreement with SFX (the "ID&T Option") whereby SFX obtained the right to purchase a 75% interest in the Company. Upon the exercise of the ID&T Option, SFX will be obligated to pay $40 million in cash and relinquish SFX's right to the repayment of the $7.5 million advance with respect to the ID&T Joint Venture. In connection with the ID&T Option, the Company is to provide to SFX audited financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and the applicable rules and regulations of the US Securities and Exchange Commission. Once these financial statements are provided, if SFX does not exercise the ID&T option, the Company may retain the $7.5 million non-recourse loan as a breakup fee.

(b) Basis of presentation and principles of consolidation

The accompanying consoliated financial statements have been prepared in accordance with GAAP. The accompanying consoliated financial statements differ from the financial statements issued for statutory purposes because they reflect certain adjustments, not recorded in the statutory accounting books, that are appropriate to present the financial position, results of operations and cash flows. The Company's consolidated financial statements include all accounts of the Company, its majority owned and controlled subsidiaries and variable interest entities for which the Company is the primary beneficiary. All intercompany accounts and transactions were eliminated in the consolidation.

The Company consolidates entities in which the Company owns more than 50% of the voting common stock and controls operations as well as variable interest entities for which the Company is the primary beneficiary. Investments in non-consolidated affiliates in which the Company owns more than 20% of the voting common stock or otherwise exercises significant influence over operating and financial policies, but does not control the non-consolidated affiliate. Intercompany accounts among

F-127

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements (Continued)

the consolidated businesses have been eliminated in consolidation. Net income (loss) attributable to non-controlling interests is reflected in the statements of operations.

All cash flow activity reflected in the consolidated statements of cash flows for the Company is presented net of any non-cash transactions. Therefore, such amounts may differ from other amounts in the Company's financial statements that are not just related to cash flow amounts. For example, the purchases of property and equipment reflected in the consolidated statements of cash flows reflect the amount of cash paid during the year for these purchases and does not include the impact of the changes in accrued liabilities related to capital expenditures during the year.

The list of consolidated subsidiaries is as follows:

	Relative % ownership

Name	2012		2011

ID&T International Holding B.V., Amsterdam, the Netherlands*		100		100
ID&T Trademark B.V., Amsterdam, the Netherlands*		100		100
Sensation Germany B.V., Amsterdam, the Netherlands*		100		100
Sensation International B.V., Amsterdam, the Netherlands*		100		100
Mysteryland Denmark B.V., Amsterdam, the Netherlands*		100		100
Sensation North America B.V., Amsterdam, the Netherlands*		100		100
Sensation UK B.V., Amsterdam, the Netherlands*		100		100
Sensation Brazil B.V., Amsterdam, the Netherlands*		100		100
ID&T Australia PTY, Sydney, Australia		100		100
Sensation Australia PTY, Sydney, Australia		100		100
ID&T Management B.V., Amsterdam, the Netherlands*		100		100
Sensation Management B.V., Amsterdam, the Netherlands*		100		100
ID&T B.V., Amsterdam, the Netherlands*		100		100
Welcome to the Future B.V., Amsterdam, the Netherlands*		100		100
Thunderdome B.V., Amsterdam, the Netherlands*		100		100
ID&T Travel B.V., Amsterdam, the Netherlands*		100		100
Dance Tunes Holding B.V., Amsterdam, the Netherlands*		100		100
ID&T Participations B.V., Amsterdam, the Netherlands*		100		100
ID&T Events B.V., Amsterdam, the Netherlands*		100		100
ID&T Sensation B.V., Amsterdam, the Netherlands*		100		100
ID&T Mysteryland B.V., Amsterdam, the Netherlands*		100		100
ID&T Trance Energy B.V., Amsterdam, the Netherlands*		100		100
Mysteryland International B.V., Amsterdam, the Netherlands*		100		100
ID&T Club B.V., Amsterdam, the Netherlands*		100		100
Core Production B.V., Amsterdam, the Netherlands*		100		100
Q-Dance B.V., Amsterdam, the Netherlands*		100		100
Q-International B.V., Amsterdam, the Netherlands*		100		100
Q-Outdoor Events B.V., Amsterdam, the Netherlands*		100		100
Q-Dance Management B.V., Amsterdam, the Netherlands*		100		100
Q-Small Events B.V., Amsterdam, the Netherlands*		100		100
Q-Big Events B.V., Amsterdam, the Netherlands*		100		100
Q-Dance Partners B.V., Amsterdam, the Netherlands*		100		100
Q-Dance Licenties B.V., Amsterdam, the Netherlands*		100		100
ID&Q Licenties B.V., Amsterdam, the Netherlands*		100		100

F-128

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements (Continued)

	Relative % ownership

Name	2012		2011

ID&T Enterprise B.V., Amsterdam, the Netherlands*		100		100
ID&T eCommerce B.V., Amsterdam, the Netherlands*		100		100
Support Group B.V., Amsterdam, the Netherlands*		100		100
Agent Audio B.V., Amsterdam, the Netherlands*		100		100
ID&T USA LLC, Delaware, USA		100		100
ID&T Invest B.V.*		100		—
Q-Dance Australia PTY, Sydney, Australia		51		51
IDQK Group PTY, Melbourne, Australia		98		98
Platinum Agency B.V., Amsterdam, the Netherlands		70.3		65.4

(c) Seasonality

Due to the seasonal nature of the outdoor and indoor shows, which are primarily held during May through September, the Company experiences higher revenue for the Dance Experience Events during the second and third quarters. Generally, the Company experiences higher revenues in this segment during the second and third quarters as the period from May through September tends to be a popular time for dance events. The Company's seasonality also results in higher balances in cash and cash equivalents, accounts receivable, prepaid expenses, accrued expenses and deferred revenue at different times in the year.

(d) Use of estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footenotes thereto. Actual results may differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets; allowances for doubtful accounts; the valuation of investments, deferred tax assets, fixed assets and inventory.

(e) Fair value of financial instruments

The Company's financial instruments, including cash and cash equivalents, trade accounts receivable, trade accounts payable, accrued expenses and other liabilities, are carried at cost, which approximates their fair value because of the short-term nature of these financial instruments. Cash and cash equivalents are considered "Level 1" instruments within the Financial Accounting Standards Board ("FASB") fair value hierarchy under ASC 820, Fair Value Measurements.

(f) Cash and cash equivalents

Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less. The Company's cash and cash equivalents consist primarily of domestic and foreign bank accounts. To reduce its credit risk, the Company monitors the credit standing of the financial institutions that hold the Company's cash and cash equivalents. These balances are stated at cost, which approximates fair value.

F-129

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements (Continued)

(g) Trade accounts receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the Consolidated Statements of Cash Flows. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions our customers' financial condition, the amount of receivables in dispute and the current receivables aging and current payment patterns. The Company does not have any off-balance-sheet credit exposure related to its customers.

(h) Inventories

Inventories are stated at the lower of cost or market value. Cost is determined using the average cost method.

(i) Other current assets

The majority of the Company's prepaid expenses relate to event expenses including show advances and deposits and other costs directly related to future dance events. For advances that are expected to be recouped over a period of more than 12 months, the long-term portion of the advance is classified as other long-term assets. These prepaid costs are charged to operations upon completion of the related events.

(j) Other long-term assets

Loans to shareholders, employees and non-consolidated affiliates are presented at their nominal value, less a provision for bad debts where necessary.

(k) Investments in non-consolidated affiliates

In general, non-consolidated investments in which the Company owns more than 20% of the common stock or otherwise exercises significant influence over the affiliate are accounted for under the equity method. The Company reviews the value of equity method investments and records impairment charges in the statement of operations for any decline in value that is determined to be other than temporary.

(l) Property and equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. The useful lives of property and equipment is 5 years.

(m) Business combinations

The Company accounts for its business combinations under the acquisition method. Identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree are recognized and measured as of the acquisition date at fair value. Additionally, any contingent consideration is recorded at fair value on the acquisition date and classified as a liability. Goodwill is recognized to the extent the aggregate amount of the acquisition date fair value of the consideration transferred and any

F-130

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements (Continued)

non-controlling interests in the acquiree exceeds the recognized bases of the identifiable assets acquired, net of assumed liabilities.

Determining the fair value of assets acquired, liabilities assumed and non-controlling interests requires management's judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates and asset lives among other items.

(n) Goodwill

Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

The Company performs its annual impairment review of goodwill at December 31, and when a triggering event occurs between annual impairment tests. No impairment loss was recorded in 2012 or 2011.

(o) Income taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to income taxes in interest expense and penalties in general and administrative expenses.

The available tax losses are determined and accounted for based on the nominal applicable tax rates, taking into account the probability and timing with which those losses are deemed to be available for offset against future taxable profits. Both the probability and the timing element are expressed in the discount rate used.

Deferred tax assets also include a component related to a fiscal amortisation charge regarding trademark rights capitalized exclusively for fiscal purposes, which can be realized in the future. The remaining amortisation period at the end of 2012 is 4 years.

(p) Impairment of long-lived assets

Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require that a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including

F-131

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements (Continued)

discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

In 2012 and 2011 no circumstances that indicate that the carrying amount of an asset may not be recoverable were identified.

(q) Revenue recognition

Revenue from the promotion and production of an event is recognized upon commencement of the event. Cash collected in advance of the event is recorded as deferred revenue until the event occurs. Revenue from the Company's ticketing operations consists of ticket sales for events and ticketing fees. Revenue from ticket sales for events is recognized upon commencement of the event. Ticketing fees are charged at the time a ticket for an event is sold. Revenue collected from partners (sponsorships) and other revenue, which is not related to any single event, is classified as deferred revenue and generally amortized over the operating season or the term of the contract. Food and beverage revenue is recognized when the tokens that serve as tender at events are sold. Merchandise revenue is recognized when the merchandise is sold and delivered. Revenue from the production of licensed events is recognized on the date of the event.

Revenue from artist fees consists of booking fees and artist fees and is recognized at the date of the performance of the artist.

(r) Gross versus net revenue recognition

The Company reports revenue on a gross or net basis based on management's assessment of whether the Company acts as a principal or agent in the transaction. To the extent the Company acts as the principal, revenue is reported on a gross basis. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company has the substantial risks and rewards of ownership under the terms of an arrangement.

(s) Foreign currency

The Company uses the Euro as its reporting currency. The Euro is also the functional currency of most of the group Companies, however most of the foreign subsidiaries use applicable local currency as their functional currency. Results of operations for foreign subsidiaries and foreign equity investees are translated into the reporting currency using the average exchange rates during the year. The assets and liabilities of those subsidiaries and investees are translated into the reporting currency using the exchange rates at the balance sheet date. The related translation adjustments are recorded in a separate component of stockholders' equity in accumulated other comprehensive income.

(t) Cost of revenue

Cost of revenue includes technical production, cost of food and beverages, artist fees, crowd services, costs of venues, event related marketing and overhead, cost of merchandise and neighbouring rights. Cost of revenue excludes depreciation and amortization. These costs are primarily variable in nature.

(u) Sales and marketing expense

Sales and marketing expenses consist primarily of hotel and travelling expenses, cost of sponsorship and corporate social responsibility expenses.

F-132

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements (Continued)

(v) General and administrative expenses

General and administrative expenses include rent, information technology expenses, costs of vehicles, legal expenses and consulting fees along with other costs.

(w) Depreciation

The Company's depreciation expense is presented as a separate line item in the statements of operations. There is no depreciation expense included in cost of revenue or sales and marketing, general and administrative expenses.

(x) Pension and other postretirement benefits

The pension scheme for employees is a defined contribution scheme, which is administered by a life insurance company. The Company's only obligation is to pay the insurance company the contributions agreed upon. The contributions for the financial year are taken directly to profit or loss. Contributions payable and receivable are presented as current liabilities and current assets, respectively. The contributions are EUR 259,000 and EUR 227,000 for the years ending December 31, 2012 and 2011 respectively.

(y) Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.

(z) Concentration of credit risk

Revenue from ticket sales, which is the Company's main source of income, as well as revenue from food and beverage, is collected at the time of the sale. This significantly limits the Company's exposure to credit risk.

In addition, the company has implemented procedures to check the creditworthiness of third parties and local promoters. Furthermore, the Company applies credit control and reminder procedures. There are no significant concentrations of credit risk within the group.

(aa) Recently issued accounting standards

On January 1, 2012, the Company adopted the amended accounting guidance issued by the FASB concerning the presentation of comprehensive income. The new guidance requires comprehensive income to be reported in either a single statement or in two consecutive statements reporting net income and other comprehensive income. The Company selected to present two consecutive statements. This amended guidance did not change the items that constitute net income or other comprehensive income, the timing of when other comprehensive income is reclassified to net income, or the earnings per share computation. In February 2013, the FASB issued new accounting guidance, which adds new disclosure requirements for items reclassified out of accumulated other comprehensive income. The new guidance requires that companies present either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts reclassified based on its source and is effective for public companies in interim and annual reporting periods beginning after

F-133

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements (Continued)

December 13, 2012. The Company will adopt this guidance on January 1, 2013 and the adoption of this standard will not have a material effect on its financial position or results of operations.

In 2012, the FASB issued ASU 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment. This update amended the procedures for testing the impairment of indefinite-lived intangible assets by permitting an entity to first assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible assets are impaired. An entity's assessment of the totality of events and circumstances and their impact on the entity's indefinite-lived intangible assets will then be used as a basis for determining whether it is necessary to perform the quantitative impairment test as described in ASC 350-30, Intangibles—Goodwill and Other—General Intangibles Other than Goodwill. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company does not expect this amendment to have a material effect on its financial position or results of operations.

In 2011, the FASB issued issued ASU 2011-04, which is an update to the provisions of the Fair Value Measurement topic of the FASB Codification. This amendment provides a consistent definition of fair value and ensures that the fair value measurement and disclosure requirements are similar between US GAAP and International Financial Reporting Standards (IFRS). This topic changes certain fair value measurement principles and enhances the disclosure requirements, particularly for Level 3 fair value measurements. These provisions are effective for reporting periods beginning on or after December 15, 2011, applied prospectively. The amendment did not have a material effect on the Company's financial position or results of operations.

(2) RELATED PARTY TRANSACTIONS

Transactions with related parties concern various loans granted to non-consolidated affiliates and employees/shareholders, managements fees charged to subsidiaries of EUR 225,000 (2011: EUR 225,000), management fees agreed with the board of EUR 1,028,000 (2011: EUR 1,278,000) and various accounts payable or receivable. Also, certain related parties are engaged in performing Sensation shows, resulting in license fees of EUR 575,000 (2011: EUR 773,000). Related party transactions are executed at arm's length.

The other long-term assets relate to loans to non-consolidated affiliates for EUR 575,000 (2011: EUR 394,000), employees EUR 58,000 (2011: EUR 85,000) and shareholders/employees EUR 240,000 (2011: EUR 407,000). The interest rate on those loans during 2012 was 2.5% and 4.6% in 2011. Under the shareholders agreement, the shareholders of ID&T Holding B.V. are required to apply 50% of the dividends paid-out to them to repay the outstanding loan balances. The shares held by the shareholders secure the loans to these shareholders. The other loan arrangements have not been collateralized.

In addition to the balance of loans to shareholders/employees outstanding on December 31, 2012 of EUR 240,000, on December 17, 2012 an advance payment was made to the shareholders of the Company of EUR 4 million which is disclosed on the consolidated balance sheet seperately in current assets.

F-134

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements (Continued)

(3) ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Accounts receivable consist of the following

	As of December 31

	2012			2011

	EUR	1,000		EUR	1,000
Trade debtors		1,386			984
Allowance for doubtful accounts		(382	)		(328	)

	EUR	1,004		EUR	656

The movement in allowance for doubtful accounts is the following

	As of December 31

	2012			2011

	EUR	1,000		EUR	1,000
Balance, beginning of year		(328	)		(373	)
Charged to expense		(98	)		(18	)
Write-offs and adjustments		44			63

Balance, end of year	EUR	(382	)	EUR	(328	)

(4) INVENTORIES

Inventories consist of the following

	As of December 31

	2012		2011

	EUR	1,000	EUR	1,000
Merchandise		22		165
Prepaid production costs for DVD's and other		118		190

	EUR	140	EUR	355

The production costs for DVD's compromises cost for registration and prepaid production cost for DVD's which are to be released in the succeeding year.

F-135

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements (Continued)

(5) OTHER CURRENT ASSETS

Other current assets consists of the following

	As of December 31

	2012		2011

		EUR 1,000		EUR 1,000
VAT		1,124		170
Prepayments and accrued expenses		919		513
Guarantee deposits		499		406
Prepaid neighbouring rights		—		381
Outstanding credit notes		57		56
Pension contributions		46		9
Other		1		17

		EUR 2,646		EUR 1,552

(6) PROPERTY AND EQUIPMENT

Property and equipment consists of the following

	As of December 31

	2012			2011

		EUR 1,000			EUR 1,000
Leasehold improvements		683			602
IT Enterprise Platform		480			480
Fixtures, fittings and IT facilities		6,439			5,485

Total		7,602			6,567
Less: accumulated depreciation and amortization		(5,947	)		(4,790	)

Property and equipment, net		EUR 1,655			EUR 1,777

Depreciation and amortization expenses are approximately EUR 1,192,000 and EUR 1,372,000 for the years ended December 31, 2012 and 2011, respectively.

In 2010, the Company developed an IT Enterprise Platform. The related costs aredepreciated over three years.

Aggregate amortization expense for intangible assets subject to amortization was EUR 367,000 for the years ended December 31, 2012 and 2011, respectively.

The Company has recorded an asset retirement obligation for the costs associated with returning a warehouse to the condition it had prior to the lease in the amount of of EUR 15,000 (2011: EUR 20,000). In 2012 depreciation expense in relation to the asset retirement obligation was EUR 5,000.

(7) GOODWILL

In 2008, the Company recorded goodwill in connection with the acquisition by Platinum Agency B.V. On November 27, 2012, additional goodwill was recorded in conection with the acquisition of an additional 4.9% interest in Platinum Agency B.V.

F-136

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements (Continued)

The Company performed its annual goodwill impairment test as of December 31, 2012. The Company did not identify any material reporting unit at risk of failing step one of the goodwill impairment test. The fair value of all reporting units is substantially in excess of their carrying value. The value of goodwill as of December 31, 2012 is EUR 306,000 (2011: EUR 277,000).

(8) EQUITY METHOD INVESTMENTS

Oliver Weiter BV

In 2011, as a result of an arrangement with an artist operating under the name "Oliver Weiter", Oliver Weiter BV was established as a subsidiary with the intention of supporting the artist's career development. In 2012, 50% of the shares of this subsidiary were sold to the artist. The assets and liabilities of the subsidiary are insignificant. The shares were sold at a net asset value of EUR 3,185.

BackBone BV

In 2011, BackBone BV was established as a subsidiary to facilitate the operational support of event productions. Initially, the Company held 80% of the shares of BackBone BV. In 2012, 40% of the shares were sold to management of the company for EUR 60,000, resulting in a EUR 52,800 gain recognized in income.

2011

In 2011, the Company sold two participating interests, Outland Vastgoed B.V. and Indian Summer Festival B.V., which resulted in a combined gain of EUR 492,000.

The non-consolidated participating interests as at December 31, 2012 are the following:

	Relative % ownership

	2012			2011

ID&T BVBA, Antwerp, Belgium		50			50
Q-Licenties v.o.f., Landsmeer, the Netherlands		50			50
B2S Holding B.V., Rotterdam, the Netherlands		50			50
B2S Real Estate B.V., Rotterdam, the Netherlands		50			50
ID&T Brasil Eventos LTDA		50			50
Toffler B.V., Rotterdam, the Netherlands		25			25
Dominator B.V., Zaandam, the Netherlands		50			50
DZIV B.V.(formerly Outland Exploitatie BV),Rotterdam,the Netherlands		33	¹/3		33	¹/3
Go Fast Sports Europe B.V.		8.35			8.35
Maximus Security B.V.		—			38
Eventions Riggings B.V.		20			20
Olivier Weiter B.V., Breda, the Netherlands		50			100
Vantage Point B.V.		30			30
Toren Overhoeks B.V.		33	¹/3		—
Toren Overhoeks C.V.		45			—
N8lab B.V.		40			—
Kinetic Art Winches B.V.		36			—
Backbone B.V., Amsterdam, the Netherlands		40			80

F-137

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements (Continued)

The changes in investments in non-consolidated affiliates were as follows:




	EUR 1,000		EUR 1,000
Balance, beginning of year	1,296		610
Share in earnings of non-consolidated affiliates	1,523		1,873
Acquired/divested/added	546		18
Dividend distribution	(1,343	)	(1,205	)

Balance, end of year	2,022		1,296

The summarized financial information in the tables below discloses the consolidated financial information of the equity method investees ID&T BVBA and B2S Holding BV on a stand-alone basis. The tables below include the respective years and periods through which the Company recorded its proportionate share of each of their results of operations under Share in earnings of non-consolidated affiliates in these financial statement.

ID&T BVBA




	EUR 1,000		EUR 1,000
Current assets	5,084		2,704
Non-current assets	372		298
Current liabilities	(3,408	)	(2,352	)
Non-current liabilities	—		—
Net sales	24,061		18,608
Gross margin	3,128		2,734
Net income	1,598		1,563

B2S Holding BV




	EUR 1,000		EUR 1,000
Current assets	3,428		2,929
Non-current assets	971		345
Current liabilities	(2,570	)	(1,735	)
Non-current liabilities	—		—
Net sales	11,340		10,470
Gross margin	4,005		3,478
Net income	1,790		1,828

F-138

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements (Continued)

(9) NON-CONTROLLING INTERESTS

The consolidated financial statements contain the following non-controlling interest:

	Relative % ownership

	2012		2011

Platinum Agency B.V., Amsterdam, the Netherlands		70.3		65.4

Redeemable non-controlling interests are measured at fair value, both at the date of acquisition and subsequently at each reporting period. The redeemable non-controlling interests are reported on the Consolidated Balance Sheets in "non-controlling interests".

A reconciliation of redeemable noncontrolling interests for the years ended December 31, 2012 and 2011 is as follows:

	2012			2011


	EUR	1,000		EUR	1,000
Balance beginning of period		97			178
Dividends		(76	)		(210	)
Net income attributable to non-controlling interests		57			86
(Sale)/Purchase of subsidiary shares at fair value		(14	)		43

Balance end of period	EUR	64		EUR	97

(10) INCOME TAXES

The income tax expense:

	Year ended December 31,

	2012			2011

	EUR	1,000		EUR	1,000
Realisation of deferred tax asset		160			—
Corporate income tax for the financial year		(236	)		(594	)

Total	EUR	(76	)	EUR	(594	)

F-139

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements (Continued)

The Company has deferred tax assets of EUR 140,000 (2011: EUR 326,000) as follows:

	Year ended December 31,

	2012		2011

	EUR	1,000	EUR	1,000
Tax loss carry forward of ID&T International Holding B.V.		—		138
Temporary difference related to amortization of brands		109		142
Temporary difference related to depreciation of IT Enterprise Platform		31		46

Total	EUR	140	EUR	326

There is no valuation allowance in relation to the deferred tax assets. The tax loss carryforwards in relation to brands and IT Enterprise Platform are to expire in 2016 and 2014, respectively. There were no tax penalties imposed in either 2012 or 2011.

The group has approximately EUR 3.2 million available tax loss carryforwards in the Netherlands. At year-end 2012, those losses are valued at EUR nil (2011: EUR 110,000), taking into account both the degree and the timing of the expected offset against eligible future taxable profits. Furthermore, the company has several pre-fiscal unity tax losses attached to a number of subsidiaries. These total tax losses amount to approximately EUR 1.4 million which are valued at nil and mainly relate to Dance Tunes B.V., the activities of which were sold in 2011.

The group also has approximately EUR 2.4 million tax losses in Australia. One of the Australian subsidiaries realized a profit of EUR 437,000 for 2012 which eliminated all of its loss carry forwards. For the other Australian subsidiaries there is currently no realistic prospect of recovery of these losses. The losses are therefore valued at nil.

The effective income tax rate of the Company is different from the amount computed using the expected Netherlands income tax rate of 25% as a result of the following:

	Year ended December 31,

	2012			2011

	EUR	1,000		EUR	1,000
Income tax expense at federal statutory rate		306			1,042
Increase (reduction) in income taxes resulting from:
Share in earnings of non-consolidated affiliates		(399	)		(591	)
Adjustment of deferred tax assets		121			—
Withholding taxes in Brazil		(136	)		9
Non-deductable expenses		52			13
Tax loss carryforward incurred in other jurisdictions		128			92
Other, net		4			29

	EUR	76		EUR	594

The Company's Netherlands income tax returns are subject to examination by the taxing authorities as prescribed by applicable statute. The statute of limitations remains open for the Company's Netherlands returns from 2008 and forward. No income tax waivers have been executed that would extend the period subject to examination beyond the period prescribed by statute.

F-140

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements (Continued)

(11) COMMITMENTS AND CONTINGENCIES

The Company leases vehicles, office space, certain equipment and some of its event venues for rent expense of EUR 6,274,000 (2011: EUR 6,789,000). Some of the lease agreements contain renewal options and annual rental escalation clauses (generally tied to the consumer price index), as well as provisions for the payment of utilities and maintenance by the Company.

As of December 31, 2012, the Company's future minimum rental commitments under non-cancelable operating lease agreements with terms in excess of one year consist of the following:

		2012


			EUR 1,000
2013			2,018
2014			1,652
2015			708
2016			455
2017			405
Thereafter			1,036

Total			EUR 6,274

Lease obligations

At year-end 2012, ID&T Holding B.V. and its subsidiaries had obligations totalling EUR 668,000 (2011: EUR 599,000) in connection with vehicle leases. Those with terms of one year or less amount to EUR 277,000 (2011: EUR 259,000) and those with terms between one and five years total EUR 391,000 (2011: EUR 340,000).

Rental of buildings and guarantees

The Company has entered into rental obligations representing an amount of approximately EUR 620,000 per annum (2011: EUR 590,000). The rental obligation covers a period 1 to 5 years. Under the rental agreements entered into, third parties have issued rental guarantees for the Company's benefit, representing a total of EUR nil (2011: EUR 16,000).

On August 30, 2012, the parties Groet Beheer B.V. and MCH Holding B.V. en Lingotto B.V. joined together in a development consortium and submitted the project plan Twenty4Amsterdam to the City of Amsterdam and won the tender. The project plan entails the purchase and refurbishment of Toren Overhoeks with the intention to redevelop and exploit the refurbished building. On November 8, 2012, the parties signed the contract with the city of Amsterdam, the so called 'Bouwenvelopovereenkomst'. Funding for the refurbishment will be sourced externally by the CV, both through debt as well as equity.

The Company has signed letters of intent to rent office space in the refurbished building for a term of 10 years.

Rental obligations for event venues

Current rental obligations of ID&T Holding B.V. and its subsidiaries for event venues in total EUR 4,300,000 at year-end 2012 (2011: EUR 4,433,000). Those with terms of one year or less in total

F-141

Table of Contents

ID&T Holding B.V.

Notes to US GAAP consolidated financial statements (Continued)

EUR 1,119,000 (2011: EUR 718,000), those with terms between one and five years in total EUR 2,146,000 (2011: EUR 2,275,000) and in excess of 5 years EUR 1,035,000 (2011: EUR 1,440,000).

Fiscal unit

The Company forms part of the fiscal unity for corporate income tax purposes (together with the entities marked with an asterisk (*) in the list on pages 10 and 11. As such, the Company is jointly and severally liable for the tax liabilities of the fiscal unity as a whole.

(12) SUBSEQUENT EVENTS

On March 15, 2013, the Company and SFX executed a definitive joint venture agreement and in connection therewith, SFX made a $7.5 million non-recourse loan to the Company, which is to be repaid from the Company's interest in distributions from the ID&T Joint Venture. In addition, SFX issued to the Company $10 million common stock and warrants to purchase 500,000 shares of SFX's common stock at an exercise price of $2.50.

On March 20, 2013, in exchange for a payment of $2.5 million and 2 million shares of common stock the Company entered into the ID&T Option whereby SFX obtained the right to purchase a 75% interest in ID&T Holding B.V. Upon the exercise of the option SFX will be obligated to pay $40 million in cash and relinquish SFX's right to the repayment of the $7.5 million advance with respect to the ID&T Joint Venture. In connection with the ID&T option, the Company is to provide to SFX audited financial statements substantially compliant with US GAAP and the applicable rules of the Securities and Exchange Commission. Once provided, if SFX does not exercise the ID&T option, the Company may retain the $7.5 million non-recourse loan as a breakup fee.

On May 17, 2013, the Company completed the acquisition of 100% of the shares of DTW Holding B.V. for a nominal amount. DTW Holding B.V. owns 50% of the shares of Q-Licenties VOF. Going forward the Company owns 100% of the shares of Q-Licenties VOF.

On April 16, 2013, the Company has signed a Memorandum of Understanding with the shareholders of Club Amstelstraat B.V. to further negotiate the purchase of a 50% interest in this company which in turn holds an interest in several clubs and outdoor festivals in the Amsterdam area. The definitive acquisition price will be based on the historic economic performance of the companies and the outcome of the due diligence procedures.

F-142

Table of Contents

ID&T HOLDING B.V.

Consolidated Interim Financial Statements

As of March 31, 2013 and December 31, 2012
And for Three Months Ended March 31, 2013 and 2012

Table of Contents

ID&T Holding B.V.

Consolidated Interim Financial Statements
Three Months Ended March 31, 2013 and 2012

Table of Contents

		Page

Consolidated Balance Sheets (Unaudited) as of March 31, 2013 and December 31, 2012		F-145
Consolidated Statements of Operations for the three months ended March 31, 2013 and 2012 (unaudited)		F-146
Consolidated Statements of Comprehensive Income for the three months ended March 31, 2013 and 2012 (unaudited)		F-147
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) as of March 31, 2013 and December 31, 2012		F-148
Consolidated Statements of Cash Flows for the three months ended March 31, 2013 and 2012 (unaudited)		F-149
Notes to Consolidated Interim Financial Statements		F-150-F-165

F-144

Table of Contents

ID&T Holding B.V.

Consolidated balance sheets
(In thousands)

	March 31, 2013


	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		EUR 14,663	EUR 9,454
Equity instruments held on behalf of shareholders of the Company		15,619
Equity instruments held on behalf of the Company		17,251
Trade accounts receivable		1,647	1,004
Accounts receivable from affiliated companies		1,520	352
Inventories		151	140
Income taxes receivable		857	—
Advance to shareholders		6,000	4,000
Revenues yet to be invoiced		1,431	1,790
Other current assets		4,624	2,646

Total current assets		63,763	19,386
Property and equipment		1,946	1,655
Other assets:
Intangible assets		306	306
Investments in non-consolidated affiliates		2,044	2,022
Deferred tax assets		130	140
Other long-term assets		804	874

Total other assets		5,230	4,997

Total assets		EUR68,993	EUR24,383

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable		EUR2,138	EUR3,387
Income taxes payable		—	217
Due to affiliated companies		1,221	109
Accrued expenses		2,927	3,928
Prepayment from SFX on behalf of the shareholders of the Company		17,571
Prepayments from SFX		5,857	9,285
Deferred revenues		8,609	1,148
Other current liabilities		712	583

Total current liabilities		39,035	18,657
Stockholders' equity:
Common stock (29,283 shares outstanding at EUR 1 par value)		29	29
Additional paid-in capital		6,772	6,772
Retained surplus (deficit)		22,467	(1,674	)
Accumulated other comprehensive income		625	535

Total parent shareholders' equity		29,893	5,662
Non-controlling interest		65	64

Total shareholders' equity including non-controlling interest		29,958	5,726

Total liabilities and shareholders' equity		EUR 68,993	EUR 24,383

See notes to consolidated financial statements

F-145

Table of Contents

ID&T Holding B.V.

Consolidated statements of operations
(In thousands)

	Three months ended March 31,

	2013			2012

	(unaudited)			(unaudited)
Revenue	EUR	2,448		EUR	2,770
Cost of revenue (exclusive of depreciation and amortization)		(1,888	)		(2,160	)

Gross profit		560			610
Operating expenses:
Sales and marketing		1,936			1,755
General and administrative		1,411			1,346
Depreciation and amortization		146			130

Total operating expenses		3,493			3,231
Net operating loss		(2,933	)		(2,621	)
Other income (expense):
Interest expense		(7	)		—
Interest income		13			23
Gain on sale of 51% interest in ID&T North America to SFX		26,433			—
Share in earnings (loss) of non-consolidated affiliates		(23	)		20
Other expense		(26	)		(48	)

Total other income		26,390			(5	)

Income (loss) before income taxes		23,457			(2,626	)
Income tax benefit (expense)		685			497

Net income (loss)		24,142			(2,129	)
Net income (loss) attributable to non-controlling interests		(1	)		(5	)

Net income attributable to controlling interest	EUR	24,141		EUR	(2,135	)

See notes to consolidated financial statements

F-146

Table of Contents

ID&T Holding B.V.

Consolidated statements of comprehensive income
(In thousands)

	Three months ended March 31,

	2013			2012
	(unaudited)			(unaudited)
Net income (loss)	EUR	24,142		EUR	(2,129	)
Other comprehensive income, net of tax:
Currency translation adjustments		90			(15	)

Total comprehensive income (loss), net of tax		24,232			(2,144	)
Comprehensive income (loss) attributable to non-controlling interest		(1	)		(5	)

Comprehensive income attributable to controlling interest	EUR	24,231		EUR	(2,149	)

See notes to consolidated financial statements

F-147

Table of Contents

ID&T Holding B.V.

Consolidated statements of shareholders' equity
(In thousands)




Balance as of January 1, 2012
EUR	29	6,772	(763	)	438	97		6,573
Non-controlling interests			1			(14	)	(13	)
Cash dividends			(2,000	)		(76	)	(2,076	)
Net income			1,088			57		1,145
Other comprehensive income					97			97

Balance as of December 31, 2012
EUR	29	6,772	(1,674	)	535	64		5,726

Non-controlling interests								—
Cash dividends								—
Net income			24,141			1		24,142
Other comprehensive income					90			90

Balance as of March 31, 2013
EUR (unaudited)	29	6,772	22,467		625	65		29,958

See notes to consolidated financial statements

F-148

Table of Contents

ID&T Holding B.V.

Consolidated statements of cash flows
(In thousands)

	Three months ended March 31,

	2013 (unaudited)			2012 (unaudited)

OPERATING ACTIVITIES:
Net income	EUR	24,141		EUR	(2,129	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		146			130
Provision for uncollectible accounts, net		32			(10	)
Gain on sale to SFX		(26,433	)
Currency translation difference on gain on sale to SFX		(196	)
Share in earnings of non-consolidated affiliates		23			(19	)
Deferred income taxes		10			10
Other		(60	)		(45	)
Changes in assets and liabilities:
Inventories		(160	)		150
Trade accounts receivable		(675	)		(55	)
Accounts receivable from affiliated companies		(1,154	)		456
Other current assets		(1,617	)		2,031
Trade accounts payable, accrued expenses and other current liabilities		5,513			2,882
Prepayment from SFX on behalf of shareholders of the Company		1,952			—
Prepayment from SFX		5,857			—
Income taxes payable/receivable		(1,074	)		(423	)
Due to affiliated company		284			(589	)

Net cash provided by (used in) operating activities		7,416			2,389
INVESTING ACTIVITIES:
Proceeds from sale of non-consolidated affiliates		—			17
Investments made in non-consolidated affiliates		—			—
Increase (decrease) in loans to shareholders/employees/non-consolidated affiliates		6			(166	)
Goodwill on acquisitions		—			—
Proceeds from sale of property and equipment		—			—
Purchase of property and equipment		(437	)		(701	)

Net cash provided by (used in) investing activities		(431	)		(850	)
FINANCING ACTIVITIES:
Proceeds from share issuance		—			—
Prepayment to shareholders		(2,000	)
Loans repaid		191			(4	)
Dividends distributed		—			—
Dividends received		—			—

Net cash provided by (used in) financing activities		(1,809	)		(4	)
Effect of exchange rate changes on cash and cash equivalents		33			24

Net decrease in cash and cash equivalents:		5,209			1,559
Cash and cash equivalents beginning of period	EUR	9,454		EUR	5,313

Cash and cash equivalents end of period	EUR	14,663		EUR	6,872

See notes to consolidated financial statements

F-149

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements
March 31, 2013
(unaudited)

(1) THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of business

Background

ID&T Holding B.V. (the "Company") operates in the Electronic Music Culture ("EMC") industry and primarily develops and realizes dance experience events both in the Netherlands and abroad. These events take place both indoors and outdoors.

SFX Entertainment, Inc. acquistion

On October 26, 2012, the Company entered into an agreement with SFX Entertainment, Inc ("SFX") to sell 51% of ID&T/SFX North America LLC (the "ID&T Joint Venture"), which will have an exclusive license to use and promote all the Company's brands in North America. At the time of the agreement, SFX paid the Company $12.5 million, which is equivalent to EUR 9.3 million. This amount has been disclosed separately as a prepayment under current liabilities in 2012.

On March 15, 2013, the Company and SFX executed the definitive joint venture agreement, and in connection therewith, SFX made a $7.5 million non-recourse loan to the Company (the "Advance"), which is to be repaid from the Company's interest in distributions from the ID&T Joint Venture. In addition, SFX issued to the Company $10 million in shares of SFX's common stock and warrants to purchase an additional 500,000 shares of SFX's common stock at an exercise price of $2.50 per share. SFX, on the three-year anniversary of the closing date has the right to purchase all SFX shares held at the time by the Company or its shareholders at $35.00 per share. Additionally, on the five-year anniversary of the closing date, SFX has the right to purchase all SFX shares held at the time by the Company or its shareholders at $50.00 per share. Effectively two written call options on an undefined number of SFX shares.

On March 20, 2013, in exchange for a payment of $2.5 million and 2 million shares of SFX's common stock, the shareholders of the Company entered into an option agreement with SFX (the "ID&T Option") whereby SFX obtained the right to purchase a 75% interest in the Company. Upon the exercise of the ID&T Option, SFX will be obligated to pay USD 40 million in cash to the sellers and relinquish its right to the repayment of the Advance by withholding it from future profit distributions.

(b) Basis of presentation and principles of consolidation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles ("US GAAP"). The Company's consolidated financial statements include all accounts of the Company, its majority owned and controlled subsidiaries and variable interest entities for which the Company is the primary beneficiary. All intercompany accounts and transactions have been eliminated in the consolidation. The accompanying interim consoliated financial statements do not include all the information and footnotes required by US GAAP for annual financial statements. In the opinion of management, interim consolidated financial statements have been prepared on the same basis as the prior year audited financial statements and all adjustments considered necessary for a fair presentation have been included in the financial statements. All such adjustments are of a normal recurring nature. The result for the interim period is not necessarily indicative of the results to be expected for any future period or for the fiscal year ending December 31, 2013.

F-150

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements (Continued)
March 31, 2013
(unaudited)

The Company consolidates entities in which the Company owns more than 50% of the voting common stock and controls operations and also variable interest entities for which the Company is the primary beneficiary. Investments in non-consolidated affiliates in which the Company owns more than 20% of the voting common stock or otherwise exercises significant influence over operating and financial policies but not control of the non-consolidated affiliate are accounted for using the equity method of accounting. Intercompany accounts among the consolidated businesses have been eliminated in consolidation. Net income (loss) attributable to non-controlling interests is reflected in the statements of operations.

All cash flow activity reflected in the consolidated statements of cash flows for the Company is presented net of any non-cash transactions. Therefore, such amounts may differ from other amounts in the Company's financial statements that are not solely related to cash flow amounts. For example, the purchases of property and equipment reflected in the consolidated statements of cash flows reflect the amount of cash paid during the year for these purchases and does not include the impact of the changes in accrued liabilities related to capital expenditures during the year.

The list of the Company's consolidated subsidiaries is as follows:

	Relative % ownership

Name	As of March 31, 2013		As of December 31, 2012

ID&T International Holding B.V., Amsterdam, the Netherlands*		100		100
ID&T Trademark B.V., Amsterdam, the Netherlands*		100		100
Sensation Germany B.V., Amsterdam, the Netherlands*		100		100
Sensation International B.V., Amsterdam, the Netherlands*		100		100
Mysteryland Denmark B.V., Amsterdam, the Netherlands*		100		100
Sensation North America B.V., Amsterdam, the Netherlands*		100		100
Sensation UK B.V., Amsterdam, the Netherlands*		100		100
Sensation Brazil B.V., Amsterdam, the Netherlands*		100		100
ID&T Australia PTY, Sydney, Australia		100		100
Sensation Australia PTY, Sydney, Australia		100		100
ID&T Management B.V., Amsterdam, the Netherlands*		100		100
Sensation Management B.V., Amsterdam, the Netherlands*		100		100
ID&T B.V., Amsterdam, the Netherlands*		100		100
Welcome to the Future B.V., Amsterdam, the Netherlands*		100		100
Thunderdome B.V., Amsterdam, the Netherlands*		100		100
ID&T Travel B.V., Amsterdam, the Netherlands*		100		100
Dance Tunes Holding B.V., Amsterdam, the Netherlands*		100		100
ID&T Participations B.V., Amsterdam, the Netherlands*		100		100
ID&T Events B.V., Amsterdam, the Netherlands*		100		100
ID&T Sensation B.V., Amsterdam, the Netherlands*		100		100
ID&T Mysteryland B.V., Amsterdam, the Netherlands*		100		100
ID&T Trance Energy B.V., Amsterdam, the Netherlands*		100		100
Mysteryland International B.V., Amsterdam, the Netherlands*		100		100
ID&T Club B.V., Amsterdam, the Netherlands*		100		100

F-151

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements (Continued)
March 31, 2013
(unaudited)

	Relative % ownership

Name	As of March 31, 2013		As of December 31, 2012

Core Production B.V., Amsterdam, the Netherlands*		100		100
Q-Dance B.V., Amsterdam, the Netherlands*		100		100
Q-International B.V., Amsterdam, the Netherlands*		100		100
Q-Outdoor Events B.V., Amsterdam, the Netherlands*		100		100
Q-Dance Management B.V., Amsterdam, the Netherlands*		100		100
Q-Small Events B.V., Amsterdam, the Netherlands*		100		100
Q-Big Events B.V., Amsterdam, the Netherlands*		100		100
Q-Dance Partners B.V., Amsterdam, the Netherlands*		100		100
Q-Dance Licenties B.V., Amsterdam, the Netherlands*		100		100
ID&Q Licenties B.V., Amsterdam, the Netherlands*		100		100
ID&T Enterprise B.V., Amsterdam, the Netherlands*		100		100
ID&T eCommerce B.V., Amsterdam, the Netherlands*		100		100
Support Group B.V., Amsterdam, the Netherlands*		100		100
Agent Audio B.V., Amsterdam, the Netherlands*		100		100
ID&T USA LLC, Delaware, USA		100		100
ID&T Invest B.V.*		100		100
Q-Dance Australia PTY, Sydney, Australia		51		51
IDQK Group PTY, Melbourne, Australia		98		98
Platinum Agency B.V., Amsterdam, the Netherlands		70.3		70.3

(c) Seasonality

Due to the seasonal nature of the outdoor and indoor shows, which are primarily held during May through September, the Company experiences higher revenue for the Dance Experience Events held during the second and third quarters. Generally, the Company experiences higher revenues in this segment during the second and third quarters as the period from May through September tends to be a popular time for dance events. The Company's seasonality also results in higher balances in cash and cash equivalents, trade accounts receivable, prepaid expenses, accrued expenses and deferred revenue for the Company at different times in the year.

(d) Use of estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results may differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, allowances for doubtful accounts and the valuation of investments, deferred tax assets, fixed assets and inventory.

(e) Fair value of financial instruments

F-152

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements (Continued)
March 31, 2013
(unaudited)

equivalents are considered "Level 1" instruments within the Financial Accounting Standards Board ("FASB") fair value hierarchy under ASC 820, Fair Value Measurements.

(f) Cash and cash equivalents

(g) Trade accounts receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the Consolidated Statements of Cash Flows. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and our customers' financial condition, the amount of receivables in dispute and the current receivables aging and current payment patterns. The Company does not have any off-balance-sheet credit exposure related to its customers.

(h) Inventories

Inventories are stated at the lower of cost or market value. Cost is determined using the average cost method.

(i) Equity instruments

Shares and related derivative financial instruments pertaining to the equity instruments of a related party, which is not part of the ID&T group, are accounted for under this heading. These instruments are accounted for at fair value. Changes in the fair value of these instruments subsequent to the initial recognition are accounted for in income.

The fair value of the equity instruments is determined based on an enhanced binomial option model tailored for valuation options and warrants with possible early exercise triggers.

Equity instruments are considered "Level 3" instruments within the FASB fair value hierarchy under ASC 820, Fair Value Measurements. See Notes 3 and 9 for information on fair value for equity instruments.

(j) Other current assets

F-153

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements (Continued)
March 31, 2013
(unaudited)

(k) Other long-term assets

Loans to shareholders, employees and non-consolidated affiliates are presented at their nominal value, less a provision for bad debts where necessary.

(l) Investments in non-consolidated affiliates

(m) Property and equipment

(n) Business combinations

The Company accounts for its business combinations under the acquisition method of accounting. Identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree are recognized and measured as of the acquisition date at fair value. Additionally, any contingent consideration is recorded at fair value on the acquisition date and classified as a liability. Goodwill is recognized to the extent the aggregate amount of the acquisition date fair value of the consideration transferred and any non-controlling interests in the acquiree exceeds the recognized bases of the identifiable assets acquired, net of assumed liabilities.

(o) Goodwill

Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

The Company performs its annual impairment review of goodwill on December 31, and when a triggering event occurs between annual impairment tests. No impairment loss was recorded in the three months ended March 31, 2013 or 2012.

(p) Income taxes

F-154

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements (Continued)
March 31, 2013
(unaudited)

change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to income taxes in interest expense and penalties in general and administrative expenses.

(q) Impairment of long-lived assets

In 2013 and 2012, no circumstances that indicate that the carrying amount of an asset may not be recoverable were identified.

(r) Revenue recognition

Revenue from artist fees consists of booking fees and artist fees and is recognized at the date of the performance of the artist.

F-155

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements (Continued)
March 31, 2013

(s) Gross versus net revenue recognition

(t) Foreign currency

The Company uses the Euro as its reporting currency. The Euro is also the functional currency of most of the group Companies, however most of the foreign subsidiaries use their respective local currencies as their functional currency. Results of operations for foreign subsidiaries and foreign equity investees are translated into the reporting currency using the average exchange rates during the year. The assets and liabilities of those subsidiaries and investees are translated into the reporting currency using the exchange rates at the balance sheet date. The related translation adjustments are recorded in a separate component of shareholders' equity in accumulated other comprehensive income.

(u) Cost of revenue

(v) Sales and marketing expense

Sales and marketing expenses consist primarily of hotel and travelling expenses, cost of sponsorship and corporate social responsibility expenses.

(w) General and administrative expenses

General and administrative expenses include rent, information technology expenses, costs of vehicles, legal expenses and consulting fees, along with other costs.

(x) Depreciation

(y) Pension and other postretirement benefits

The pension scheme for employees is a defined contribution scheme, which is administered by a life insurance company. The Company's only obligation is to pay the insurance company the contributions agreed upon. The contributions for the financial year are taken directly to profit or loss. Contributions payable and receivable are presented as current liabilities and current assets, respectively. The contributions were EUR 71,000 and EUR 66,000 for the three months ended March 31, 2013 and 2012, respectively.

F-156

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements (Continued)
March 31, 2013

(z) Commitments and contingencies

(aa) Concentration of credit risk

In addition, the Company has implemented procedures to check the creditworthiness of third parties and local promoters. Furthermore, the Company applies credit control and reminder procedures. There are no significant concentrations of credit risk within the group.

(bb) Recently issued accounting standards

In February 2013, the FASB issued new accounting guidance which adds new disclosure requirements for items reclassified out of accumulated other comprehensive income. The new guidance requires that companies present, either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts reclassified based on their source and are effective for public companies in interim and annual reporting periods beginning after December 13, 2012. The Company has adopted this guidance as per January 1, 2013 even though it presently is not a public company. The adoption of this standard will not have a material effect on its financial position or results of operations.

In 2012, the FASB issued ASU 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment. This update amended the procedures for testing the impairment of indefinite-lived intangible assets by permitting an entity to first assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible assets are impaired. An entity's assessment of the totality of events and circumstances and their impact on the entity's indefinite-lived intangible assets will then be used as a basis for determining whether it is necessary to perform the quantitative impairment test as described in ASC 350-30, Intangibles—Goodwill and Other—General Intangibles Other than Goodwill. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company has concluded that this amendment does not have a material effect on its financial position or results of operations.

F-157

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements (Continued)
March 31, 2013

(2) RELATED PARTY TRANSACTIONS

Transactions with related parties include various loans granted to non-consolidated affiliates and employees/shareholders, management fees paid to the board of directors of EUR 189,000 (2012: EUR 137,000) and various accounts payable or receivable to related parties. Related party transactions are executed at arm's length.

The other long-term assets relate to loans to non-consolidated affiliates for EUR 569,000 (2012: EUR 575,000), to employees for EUR 19,000 (2011: EUR 85,000) and to shareholders/employees for EUR 216,000 (2012: EUR 240,000). The interest rate on those loans during 2013 was 3.0% respectively 4.6% (2012: 2.85% respectively 4.6%). Under the shareholders agreement, the shareholders of the Company are required to apply 50% of the dividends paid-out to them to repay the outstanding loan balances. The shares held by the shareholders secure the loans to these shareholders. The other loan arrangements have not been collateralized.

In addition to the balance of loans to employees and shareholders/employees outstanding on March 31, 2013 of EUR 235,000, the Company made advance payments to the shareholders of the Company of EUR 6.0 million as of March 31, 2013. These advance payments are included in current assets under the caption "Advance to shareholders." The balance of the advance payments to the shareholders at December 31, 2012 was EUR 4 million. On Feburary 20, 2013, an additional advance payment of EUR 2.0 million was made.

(3) EQUITY INSTRUMENTS

	As of March 31, 2013 (in thousands)			As of December 31, 2012 (in thousands)


SFX common stock held on behalf of the shareholders of the Company	EUR	15,619		EUR	—

Equity instruments held on behalf of the shareholders of the Company:		15,619
SFX common stock		15,619			—
Warrants		3,024			—
EBITDA warrants		112			—
Short calls		(1,504	)		—

Equity instruments held on behalf of the Company		17,251			—

	EUR	32,870			—

The aforementioned equity instruments are valued using pricing models as no market data is available. Pricing models take into account the contract terms as well as multiple inputs where applicable, such as interest rate yield curves and option volatility. The fair value of the SFX common stock is based on recent transaction data. The fair value of the equity instruments other than the SFX common stock is determined based on an enhanced binomial option model tailored for valuation options and warrants with possible early exercise triggers. Refer to note 9 for further information on the fair value hierarchy.

F-158

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements (Continued)
March 31, 2013

(4) ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Accounts receivable consist of the following

	As of March 31, 2013 (in thousands)			As of December 31, 2012 (in thousands)


Trade debtors	EUR	2,007		EUR	1,386
Allowance for doubtful accounts		(360	)		(382	)

Reserve balance end of period	EUR	1,647		EUR	1,004

The movement in allowance for doubtful accounts is the following

	As of March 31, 2013 (in thousands)			As of December 31, 2012 (in thousands)


Balance, balance beginning of period	EUR	(382	)	EUR	(328	)
Charged to expense					(98	)
Write-offs and adjustments		22			44

Reserve balance end of period	EUR	(360	)	EUR	(382	)

(5) INVENTORIES

	As of March 31, 2013 (in thousands)		As of December 31, 2012 (in thousands)


Merchandise	EUR	22	EUR	22
Prepaid production costs of DVD's and other		129		118

	EUR	151	EUR	140

The production cost of DVD's consists of cost for registration and prepaid production cost for DVD's that are to be released in the succeeding reporting period.

(6) PROPERTY AND EQUIPMENT

	March 31, 2013 (in thousands)			December 31, 2012 (in thousands)


Leasehold improvements	EUR	744		EUR	683
IT Enterprise Platform		480			480
Fixtures, fittings and IT facilities		6,791			6,439

Total		8,015			7,602
Less: accumulated depreciation and amortization		(6,069	)		(5,947	)

Property and equipment, net	EUR	1,946		EUR	1,655

F-159

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements (Continued)
March 31, 2013

Depreciation and amortization expenses are approximately EUR 104,000 and EUR 130,000 for the three months ended March 31, 2013 and 2012, respectively.

In 2010, the Company developed an IT Enterprise Platform. The related costs are amortized over three years. Aggregate amortization expense for intangible assets subject to amortization was EUR 19,000 for the three months ended March 31, 2013 and 2012, respectively.

The Company has recorded an asset retirement obligation for the costs associated with returning a warehouse to its condition prior to the lease in the amount of EUR 13,750 (2012: EUR 15,000). In 2013, depreciation expenses in relation to the asset retirement obligation was EUR 1,250.

(7) GOODWILL

In 2008, the Company recorded goodwill in connection with the acquisition of Platinum Agency B.V. On November 27, 2012, additional goodwill was recorded in conection with the acquisition of an additional 4.9% interest in Platinum Agency B.V.

The Company performed its annual goodwill impairment test as of December 31, 2012. The Company did not identify any material reporting unit at risk of failing step one of the goodwill impairment test. The fair value of all reporting units is substantially in excess of their carrying value. As of March 31, 2013, no impairment indicators were noted that would trigger an impairment test. The value of the goodwill as of March 31, 2013 is EUR 306,000 (2012: EUR 306,000).

(8) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company does not engage in hedging activities and does not enter into derivative instruments for cash flow hedging or speculative purposes.

(9) FAIR VALUE MEASUREMENTS AND THE FAIR VALUE OPTION

Fair value of financial instruments

Financial assets carried at fair value as of March 31, 2013 are classified in the table below in the categories described below:

	As of March 31, 2013				As of December 31, 2012

	Level		Fair value		Level		Fair value

Financial assets:
Cash and cash equivalents		1		14,663		1		9,454
Equity instruments		3		32,870		—		—

There are three levels of inputs to measure fair value. The definition of each input is described below:


Level 1:		Quoted prices in active markets for identical assets and liabilities that are accessible by the Company at the measurement date for identical assets and liabilities.
Level 2:		Inputs are observable, other than quoted prices included in Level 1, either directly or indirectly. Such prices may be based upon quoted prices for or comparable securities in active markets or inputs not quoted on active markets, but are observable or corroborated by market data.

F-160

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements (Continued)
March 31, 2013


Level 3:		Unobservable inputs are used when little or no market data is available. These items do not have two-way markets and are measured using management's best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

The Company's equity instruments are valued using pricing models. Pricing models take into account the contract terms as well as multiple inputs where applicable, such as interest rate yield curves, option volatility and currency rates. Equity instruments are considered "Level 3" fair value measurements. The Company's derivative instruments are typically long-term in nature.

As of March 31, 2013 and December 31, 2012, the carrying value of the Company's cash and cash equivalents approximated their fair value and consisted primarily of bank deposits. Other financial assets and liabilities, including accounts receivable, accrued expenses are carried at cost, which also approximates their fair value because of the short-term nature of these items.

In the normal course of business, the Company is exposed to the impact of foreign currency fluctuations. The Company limits these risks by following established risk management policies and procedures.

(10) EQUITY METHOD INVESTMENTS

In October 2012, the Company entered into an agreement with SFX effectively selling 51% of the shares of a newly formed company in the United States. The remaining 49% of the shares are accounted for at net asset value under non-consolidated participating interests.

The non-consolidated participating interests as at March 31, 2013 are the following:

	Relative % ownership

	As of March 31, 2013		As of December 31, 2012

ID&T BVBA		50		50
Q-Licenties v.o.f.		50		50
B2S Holding B.V.		50		50
B2S Real Estate B.V.		50		50
ID&T Brasil Eventos LTDA		50		50
Toffler B.V.		25		25
Dominator B.V.		50		50
DZIV B.V.(formerly Outland Exploitatie BV)		33.33		33.33
Go Fast Sports Europe B.V.		8.35		8.35
Maximus Security B.V.		—		—
Eventions Riggings B.V.		20		20
Olivier Weiter B.V.		50		50
Vantage Point B.V.		30		30
Toren Overhoeks B.V.		33.33		33.33
Toren Overhoeks C.V.		45		45
N8lab B.V.		40		40
Kinetic Art Winches B.V.		36		36
Backbone B.V.		40		40

F-161

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements (Continued)
March 31, 2013

The changes in investments in non-consolidated affiliates were as follows:




Balance, beginning of period	EUR 2,022	EUR 1,296
Share in earnings of non-consolidated affiliates	22	1,523
Acquired/divested/added	—	546
Dividend distribution	—	(1,343	)

Balance, end of period	EUR 2,044	EUR 2,022

(11) NON-CONTROLLING INTERESTS

The consolidated financial statements contain the following non-controlling interest:

	Relative % ownership

	March 31, 2013		December 31, 2012

Platinum Agency B.V., Amsterdam, the Netherlands		70.3		70.3

A reconciliation of redeemable noncontrolling interests for the three months ended March 31, 2013 and the year ended December 31, 2012 is as follows:

	March 31, 2013 (in thousands)		December 31, 2012 (in thousands)


Balance beginning of period	EUR	64	EUR	97
Dividends		—		(76	)
Net income attributable to noncontrolling interests		1		57
(Sale)/Purchase of subsidiary shares at fair value		—		(14	)

Balance end of period	EUR	65	EUR	64

(12) INCOME TAXES

The income tax expense (benefit) for the three months ended March 31, 2013 is as follows:

	March 31, 2013 (in thousands)		March 31, 2012 (in thousands)


Realisation of deferred tax asset,	EUR	—	EUR	—
Corporate income tax for the period		685		497

Total	EUR	685	EUR	497

F-162

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements (Continued)
March 31, 2013

The Company has deferred tax assets of EUR 130,000 (2012: EUR 140,000) which can be specified as follows:




Temporary difference amortization brands	EUR 101	EUR 109
Temporary difference amortization IT Enterprise Platform	29	31

Total	130	140

The effective income tax rate of the Company is different from the amount computed using the expected Netherlands income tax rate of 25% as a result of the following:

	Three months ended March 31,

	2013 (in thousands)			2012 (in thousands)

Income tax expense at federal statutory rate		EUR 5,904			EUR (657	)
Increase (reduction) in income taxes resulting from:
Share in earnings of non-consolidated affiliates which are tax-exemped		(6,602	)		(5	)
Adjustment of deferred tax assets
Withholding taxes in Brazil					122
Non-deductable expenses		(12	)		3
Tax loss carryforward incurred in other jurisdictions		44			36
Other, net		(19	)		4

		(685	)		(497	)

(13) COMMITMENTS AND CONTINGENCIES

The Company leases vehicles, office space, certain equipment and some of its event venues for rent expenses of EUR 5,982,000 (2012: EUR 6,274,000). Some of the lease agreements contain renewal options and annual rental escalation clauses (generally tied to the consumer price index), as well as provisions for the payment of utilities and maintenance by the Company.

F-163

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements (Continued)
March 31, 2013

As of March 31, 2013, the Company's future minimum rental commitments under non-cancelable operating lease agreements with terms in excess of one year consist of the following:




2013	EUR 2,007	EUR 2,018
2014	1,461	1,652
2015	641	708
2016	433	455
2017	405	405
Thereafter	1,035	1,036

Total	EUR 5,982	EUR 6,274

Lease obligations

At March 31, 2013, the Company and its subsidiaries had obligations totalling EUR 596,000 (2012: EUR 668,000) in connection with vehicle leases. Those with terms of one year or less amount to EUR 266,000 (2012: EUR 277,000) and those with terms between one and five years total EUR 330,000 (2011: EUR 391,000).

Rental of buildings and guarantees

The Company has entered into rental obligations representing an amount of approximately EUR 620,000 per annum (2012: EUR 620,000). The rental obligation covers a period of one to five years. Under the rental agreements entered into, third parties have issued rental guarantees for the Company's benefit representing a total of EUR nil (2012: EUR nil).

The Company has signed letters of intent to rent office space in the refurbished building for a term of 10 years.

Rental obligations for event venues

Current rental obligations of the Company and its subsidiaries for event venues total EUR 4,300,000 as of March 31, 2013 (2012: EUR 4,300,000). Those with terms of one year or less total EUR 1,119,000 (2012: EUR 1,119,000), those with terms between one and five years total EUR 2,081,000 (2012: EUR 2,145,000) and those with terms in excess of 5 years EUR 1,036,000 (2012: EUR 1,036,000).

Fiscal unit

F-164

Table of Contents

ID&T Holding B.V.

Notes to consolidated financial statements (Continued)
March 31, 2013

(14) SUBSEQUENT EVENTS

On April 16, 2013, the Company has signed a Memorandum of Understanding with the shareholders of Club Amstelstraat B.V. to further negotiate the purchase of a 50% interest in this company, which in turn holds an interest in several clubs and outdoor festivals in the Amsterdam area. The definitive acquisition price will be based on the historic economic performance of the companies and the outcome of the due diligence procedures.

F-165

Table of Contents

i-Motion GmbH Events & Communication
and
i-Motion Veranstaltungs-GmbH
Konzeption u. Ausführung Nature One,
Both situated in 56218 Mülheim-Kärlich

Combined Financial Statements
as of and for the years ended December 31, 2012 and 2011

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One,
Both situated in 56218 Mülheim-Kärlich

Combined Financial Statements
As of and for the years ended December 31, 2012 and 2011

Contents


Financial Statements
Report of Independent Auditors		F-168
Combined Balance Sheets as of December 31, 2012 and 2011		F-169
Combined Statement of Comprehensive Income for the years ended December 31, 2012 and 2011		F-170
Combined Statements of Changes in Equity for the years ended December 31, 2012 and 2011		F-171
Combined Cash Flow Statements for the years ended December 31, 2012 and 2011		F-172
Notes to Consolidated Financial Statements		F-173-F-189

F-167

Table of Contents

Report of Independent Auditors

The Management and Shareholders of I-Motion GmbH Events & Communication
and i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

We have audited the accompanying combined financial statements of I-Motion GmbH Events & Communication and i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One (jointly: the Company), which comprise the combined balance sheets as of December 31, 2012 and 2011, and the related combined statements of comprehensive income, changes in shareholders' equity and cash flows for the years then ended, and the related notes to the combined financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these combined financial statements in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these combined financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion the combined financial statements referred to above present fairly, in all material respects, the combined financial position of i-Motion GmbH Events & Communication and i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One at December 31, 2012 and 2011, and the combined results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.


/s/ Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft
Eschborn, Germany June 21, 2013

F-168

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Combined balance sheets
As of December 31, 2012 and 2011

		2012


		(in thousands of EUROs)
Assets
Current assets
Cash	5		1,216	869
Trade and other receivables net of allowances of 0 and 0 as of December 31, 2012 and 2011 respectively			271	159
Receivables from related parties	12		77	3
Prepaid expenses			12	67
Other current assets	6		542	951
Inventory	7		284	274

			2,403	2,322

Non-current assets
Property, plant and equipment, net of accumulated depreciation	8		297	208
Intangible assets, net of accumulated amortization	9		20	29
Other assets	6		101	110
Deferred taxes	4.6		0	5

			417	351

Total assets			2,819	2,674

Equity and Liabilities
Current liabilities
Income taxes payable	4.6		26	13
Provisions	11		130	86
Accrued liabilities	10		103	152
Trade and other liabilities	10		754	288
Liabilities to related parties	12		77	49
Deferred revenues			103	0

			1,191	588

Non current liabilities
Deferred taxes	4.6		1	0

			1	0

Total Liabilities			1,192	588

Equity
Issued capital			50	50
Retained earnings			1,577	2,036

Total equity			1,627	2,086

Total equity and liabilities			2,819	2,674

The accompying notes are an integral part of these combined financial statements

F-169

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Combined statement of comprehensive income
For the years ended December 31, 2012 and 2011

		2012


		(in thousands of EUROs)
Revenue in connection with events	4.1		10,911	10,073
Merchandise revenue	4.1		513	500

Total Revenue			11,424	10,573

Costs in connection with events	4.2		6,697	6,378
Cost of merchandise	4.2		168	126
Other operating income	4.3		118	80
Personnel expenses	4.4		1,448	1,300
Depreciation and amortization			93	82
Other operating expenses	4.5		1,260	1,150

Operating profit			1,875	1,617

Interest expense			2	5
Interest income			21	58

Income before income taxes			1,894	1,671

Income taxes	4.6		598	486
Deferred income taxes	4.6		6	(5	)

Net income			1,290	1,191

Comprehensive income			1,290	1,191

The accompying notes are an integral part of these combined financial statements

F-170

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Combined statements of changes in equity
For the years ended December 31, 2012 and 2011

	Issued capital


	(in thousands of EUROs)
As of January 1, 2011		50	1,905		1,955
Net income		0	1,191		1,191
Dividends		0	(1,060	)	(1,060	)

As of December 31, 2011		50	2,036		2,086

As of January 1, 2012		50	2,036		2,086
Net income		0	1,290		1,290
Dividends		0	(1,749	)	(1,749	)

As of December 31, 2012		50	1,577		1,627

The accompying notes are an integral part of these combined financial statements

F-171

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Combined cash flow statements
For the years ended December 31, 2012 and 2011

		2012


		(in thousands of EUROs)
Operating activities
Net income			1,290		1,191
*Adjustments to reconcile net income to cash flows from operating activities*
Depreciation	8		83		72
Amortisation	9		10		10
Gain on disposal of property, plant and equipment	4.3, 8		(23	)	(10	)
Changes in deferred taxes	4.6		6		(6	)
Changes in provisions and accrued liabilities	10, 11		21		(236	)
*Working capital adjustments*
Increase in trade and other receivables and prepayments			(113	)	(139	)
Increase/decrease in inventories			(10	)	46
Increase/decrease in trade and other payables and deferred revenues			595		(450	)

Net cash flow from operating activities			1,859		478

Investing activities
Proceeds from sale of property, plant and equipment	8		139		152
Purchase of property plant and equipment	8		(288	)	(145	)
Purchase of intangible assets	9		(1	)	(9	)
Repayment of loans to shareholder	12		377		0
Loans granted to shareholder	12		0		(738	)
Repayment of other loans granted			10		1,389

Net cash flow used in investing activities			237		649

Dividends paid to shareholders			(1,749	)	(1,060	)

Net cash flow from financing activities			(1,749	)	(1,060	)

Net increase in cash			347		67
Cash at January 1	5		869		802

Cash at December 31	5		1,216		869

The accompying notes are an integral part of these combined financial statements

F-172

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements

1. DESCRIPTION OF BUSINESS

i-Motion GmbH Events & Communication was incorporated in 1999 (registered in the trade register of Koblenz under HRB 6269) and i-Motion Veranstaltungs-GmbH Konzeption und Ausführung Nature One was incorporated in 2008 (registered in the trade register of Koblenz under HRB 21100). They are leading event-management and entertainment companies whose business primarily includes the organization of electronic music events.

i-Motion GmbH Events & Communication and i-Motion Veranstaltungs-GmbH Konzeption und Ausführung Nature One (collectively, "i-Motion" or the "Company") are related parties and are under common ownership (see Note 12—Transactions with related parties). The financial statements are presented on a combined basis.

The following activities are carried out by i-Motion: concept, marketing, ticketing, booking talent, sponsoring, beverage, merchandising, on-site-production, staff, crowd-management and artist-management. The Company organizes its activities as follows:

• Live entertainment (organization and promotion of music events)

Organizing music events is the key activity of the Company. i-Motion has managed to obtain a prominent role on the calendar of yearly events for the community of electric music culture both nationally and internationally.

The events are the following:

– NATURE ONE

NATURE ONE is Germany's largest open-air festivals for electronic music. The festival is held over four days and three nights, includes more than 300 DJs and live acts from all over the world and occupies four main floors and 19 club floors on a former missile base of the US Army. A camping site opens from Thursday to Monday and hosts a large majority of visitors. Since 1995, the event has taken place on the first weekend of August with an average of 50,000 tickets sold.

– Ruhr-in-Love

Ruhr-in-Love is another annually organized live event, which is held in Oberhausen, Germany with approximately 44,000 spectators attending the event. Since 2002, Ruhr-in-Love has been "the family-gathering of the electronic music scene." The concept includes: daytime open-air on a Saturday at "OlgaPark" in the middle of the city of Oberhausen, 38 different open air floors, hosted by various participants in the electronic music culture including: clubs, promoters, record labels, booking agencies, radio stations and magazines.

– MAYDAY

This event is regarded as the first major party for electronic music in Europe. It started in 1991 and was initially held in Berlin. The first MAYDAY event was organised by i-Motion in 2007 with a record number of tickets sold in 2009 (25,000 visitors). It is the biggest electronic music indoor event in Germany with more than 50 artists on five different floors. It is held once a year on April 30 in the "Westfalenhallen Dortmund."

F-173

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

Since 2000 MAYDAY events have been organized in different countries, including Poland, Belarus and Russia.

– SYNDICATE "Ambassadors in Harder Styles"

SYNDICATE, begun in 2007, is one of the larger festivals for the harder styles of electronic music with 16,000-18,000 regular visitors. It takes place the first weekend of October in "Westfalenhallen Dortmund." SYNDICATE is jointly organized by i-Motion and Art of Dance (Netherlands).

– WinterWorld

WinterWorld has become the first major electronic music culture event in Germany at the beginning of each year. WinterWorld's 10^th anniversary in 2013 sold-out with 12,000 visitors. The event offers three different floors and different styles of electronic music. The event takes place in "Rhein-Main-Hallen Wiesbaden" near Frankfurt.

– Toxicator

Toxicator started in 2009. It is the first event by i-Motion for hardcore, hard-style and hard techno music in the southwest of Germany. It attracted approximately 7,000 people (for the December 2012 event).

– Electric City

Starting in 2001, Electric City is a local event held in different clubs in the City of Koblenz and is regularly attended by approximately 6,500 visitors.

– Sunshine live

Sunshine live was initiated in 2012 for the 15^th anniversary of the radio station "sunshine live," which solely plays electronic music.

– International

In 2012, there were four international events: MAYDAY Poland, MAYDAY Belarus, Soundtropolis Poland and Silesia-in-Love Poland. The events in Poland are organized with a partner and the event in Belarus is based on a contractual (licence) agreement.

• Public relations, advertisement, design

Further to the organization of the Company's own events, the Company also renders such services to third parties for a fee.

Under the label "abstract," i-Motion offers a booking agency for artists in the electronic music culture.

• Merchandising of products and gastronomy services

During the events, the Company sells clothing, accessories and beverages.

F-174

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

Basis of preparation

Combined statements

The combined financial statements include the financial statements of i-Motion GmbH Events & Communications and i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One as of December 31, 2012 and 2011 and for the years then ended. Intercompany accounts and transactions have been eliminated in combination.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Significant estimates by management include the review of the owned investment and real estate funds for potential impairment, the measurement of the merchandise inventories based on the lower of cost or market principle, the recognition of allowances for trade accounts receivable, the recognition and measurement of uncertain tax positions and the evaluation of risks from litigation. Actual results may differ from those estimates.

For the investment and real estate funds, the carrying value is compared as of each year-end with an estimated market value. The estimated market value is based on Level 2 inputs as the investments are closed and not publicly traded.

Merchandise inventories are measured at their weighted average costs. At a period-end, the Company evaluates the lower of cost or market by comparing the historical purchase costs with the expected sales prices minus potential distribution costs to conclude on a necessary inventory reserve.

The Company's assumptions, judgments, and estimates relative to the current provision for income taxes take into account current tax laws, its interpretation of current tax laws and possible outcomes of current and future audits conducted by domestic tax authorities. The Company has established reserves for income taxes to address potential exposures involving tax positions that could be challenged by tax authorities. Although the Company believes its assumptions, judgments, and estimates are reasonable, changes in tax laws or the Company's interpretation of tax laws, and the resolution of potential tax audits could significantly impact the amounts provided for income taxes in the financial statements.

For the measurement of the contingent risks from pending litigation, management reviews all available evidence supported by external lawyers to conclude on the best estimate to measure a potential provision for such litigation. Supporting documents include the year-end lawyer letters and estimates, current settlement negotiations with the plaintiff and comparable rulings in other cases. Actual results may differ from these estimates.

2. SUMMARY OF ACCOUNTING POLICIES

The following section discloses and discusses each of the Company's critical accounting policies, including information and analysis of estimates and assumptions involved in their application and other significant accounting policies.

F-175

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

Recognition of revenues and cost

Live entertainment

The company recognizes revenue from live entertainment events when the performance occurs. Cash received in advance of the event is recognized as deferred revenue.

The Company sells tickets in cooperation with sales agencies. Tickets are either sold via online shops, ticket hotlines or at box offices.

Further to the tickets sales, i-Motion recognizes revenue from the sale of beverages, camping, shuttle buses and parking fees etc. In addition, the Company charges rental fees for event space to third parties who mainly offer food and non-food products to the visitors. Revenues are recognized at the time of delivery of the product or service.

The Company evaluates the criteria outlined in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Subtopic 605-45, "Revenue Recognition—Principal Agent Considerations," in determining whether it is appropriate to record the gross amount of revenue and related costs or the net revenue. Under this accounting guidance, if the Company is the primary obligor to perform the services being sold, has general inventory risk as it pertains to recruiting and compensating the talent, has the ability to control the ticket pricing, has discretion in selecting the talent, is responsible for the production of the event, generally bears the majority of the credit or collection risk or has several but not all of these indicators, then its revenue is recorded on a gross basis. If the Company does not have several of these indicators, it records revenue or losses on a net basis.

Costs in connection with events include fees for artists, rental expenses for buildings and technical equipment, marketing and communication expenses as well as external personnel cost. Any direct costs (with the exception of marketing expenses) incurred prior to the event are deferred and then expensed when the event takes place.

Certain events are organized jointly with other operators and there are agreements in place to share the respective results from the event with such operators. In such cases, the Company records its revenues and costs on a gross basis and the agreed allocation of the net profit is settled between the partners in accordance with the contract timeline. The net settlement is recorded as an adjustment to costs in connection with events. When the net profit settlement has not occurred for a past event prior to year-end, the Company makes an accrual based on an estimate of the expected settlement.

Sponsoring revenues

The Company has entered sponsoring agreements with different beverage and tobacco companies. According to these sponsoring agreements, the respective partner has the exclusive right to promote its brand during the event and in the marketing material advertising the event. Additionally the Company exclusively sells the partners' products during the event. These sponsoring agreements are each agreed for specific i-Motion events and accordingly the Company records the fees received from the sponsor when the event takes place.

Public relations, advertisement, design

In its advertisement and product placement activities, the Company enters into barter transactions with several partners, which are principally radio stations, exchanging rights to place advertisements on

F-176

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

each others' websites, flyers and radio broadcasting. In these transactions, the Company has historically not paid cash or its equivalent for any of the exchanged services and therefore is unable to establish a fair value of the services it receives. As a result, no revenues from the services provided to the radio stations and no corresponding advertising expense is recorded in relation to such barter transactions. In 2012, the overall volume of the advertising activities covered by such barter agreements was approximately 112 hours in radiospots, approximately 16 hours in television hours and additional advertising in print media.

Advertisement costs (unrelated to the partners with barter transactions) paid in cash are expensed as incurred and are included in the costs in connection with events.

Merchandising of products and gastronomy services

Merchandising products (t-shirts, jackets, hoodies and accessories) and beverages are sold during events and are generally non-refundable.

In addition, but to a lesser extent, merchandising products are sold online.

Revenues and the related cost of the merchandise and gastronomy services are recognized when products and services are delivered. In connection with CD-sales, the Company has signed an arrangement with the supplier "Kontor." In accordance with this agreement the Company receives a fixed license fee for every CD sold and downloaded from the partner. The Company records the license revenues in the respective period the CD and download sales were realized.

Income taxes

The Company accounts for income taxes in accordance with the liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. Management makes assumptions, judgments, and estimates to determine the current provision for income taxes and also the deferred tax assets and liabilities as well as any valuation allowance to be recorded against deferred tax assets. Interests and penalties on income tax assessments are expensed as incurred in the respective period as interest expense.

The Company's assumptions, judgments and estimates relative to the current provision for income taxes take into account current tax laws, the Company's interpretation of current tax laws and possible outcomes of current and future audits conducted by domestic tax authorities. The Company has established reserves for income taxes to address potential exposures involving tax positions that could be challenged by tax authorities. Although the Company believes its assumptions, judgments and estimates are reasonable, changes in tax laws, the Company's interpretation of tax laws or the resolution of potential tax audits could significantly impact the amounts provided for income taxes in the financial statements.

The Company's assumptions, judgments and estimates relative to the value of a deferred tax asset take into account predictions of the amount and category of future taxable income, such as income from operations or capital gains income. Actual operating results and the underlying amount and category of income in future years could render its current assumptions, judgments and estimates of recoverable net deferred taxes inaccurate. Any of the assumptions, judgments and estimates mentioned above could cause the Company's actual income tax obligations to differ from its estimates, thus could materially impact its financial position and results of operations.

F-177

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

Cash

Cash consists of cash in bank accounts and cash on hand.

Trade and other receivables and allowance for doubtful accounts

Trade receivables are primarily amounts due from ticketing agencies in conjunction with events, sponsor partners and due from profit sharing revenues with foreign partners. The Company records a provision for doubtful accounts based on a detailed assessment of the collectability of the accounts receivable. To assist with the estimate, management considers certain factors such as historical experience, industry data, credit quality, age of accounts receivable balances and current economic conditions that may affect a customer's ability to pay. In cases where the Company becomes aware of circumstances that may impair a specific customer's ability to meet its financial obligations, the Company records a specific allowance against amounts due from the customer and thereby reduces the net recognized receivable to the amount reasonably believed to be collectible. There is significant judgment involved in estimating the allowance for doubtful accounts. The Company calculates an allowance for doubtful accounts in order to build a reserve for potentially uncollectible receivables. The allowance for doubtful accounts is estimated based on our analysis of trends in overall receivables aging, specific identification of certain receivables that are at risk of not being paid, past collection experience and current economic trends. In times of domestic or global economic turmoil, the Company's estimates and judgments with respect to the collectability of its receivables are subject to greater uncertainty than in more stable periods.

Prepaid expenses

The Company routinely incurs event expenses in advance of the event date. These expenses are recorded as prepaid and are expensed when the event occurs. Additionally insurance premiums are recorded as prepaid expenses and deferred to the period of service.

Inventory

Carrying amounts of merchandise, materials and supplies inventories are determined on an individual cost basis using a weighted average cost and are recorded at the lower of cost or market value.

Receivables from and liabilities to related parties

Receivables from and liabilities to related parties include services provided to or from other companies owned by the majority shareholder of the Company. The balances are recorded at their nominal amount.

Fair value of financial instruments

Level 1 inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

F-178

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company's financial instruments consist principally of cash, trade and other receivables, investments in funds, trade payables, receivables and liabilities with related parties and with the majority shareholder. Cash and receivables are financial assets with carrying values that approximate fair value. Trade payable and other liabilities are financial liabilities with carrying values that approximate fair value. Receivables and payables to related parties are recorded based on their carrying values which approximates their fair value. The Company believes that for these financial instruments, the recorded values approximate fair market value because of the nature and duration of the respective financial instruments.

The Company's investment in funds are measured at cost, less any other than temporary impairments as the investments do not meet the scope of ASC 320 because the instruments are not readily tradable. Other than temporary impairment is determined based on the comparison of the cost to the fair value and the duration of that impairment, including factors as to whether the fair value could reasonably be expected to recover and the length of time that the fair value has been below cost. The estimate of the fair value of the investment and the determination of whether such impairment is other than temporary requires significant judgement.

Property, plant and equipment net of accumulated depreciation

Property, plant and equipment are stated at cost, net of accumulated depreciation. Additions to property, plant and equipment generally include acquisition cost. Expenditures for maintenance and repairs are expensed as incurred.

Depreciation expense is recorded on a straight-line basis over estimated useful lives in the range from 3 to 13 years. Upon the occurrence of certain triggering events or circumstances, the Company evaluates the depreciation periods of property, plant and equipment to determine whether a revision to its estimates of useful lives is warranted.

Intangible assets net of accumulated amortization

Intangible assets include software with estimated useful lives of 3 to 5 years and stated at amortized cost. Amortization is recorded on a straight-line basis over the estimated useful lives. Upon the occurrence of certain triggering events or circumstances, the Company evaluates the amortization periods of intangible assets to determine whether a revision to its estimates of useful lives is warranted.

Impairment of long-lived assets

F-179

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, an impairment loss would be recognized. When measuring the recoverability of these assets, the Company will make assumptions regarding its estimated future cash flows it expects to be generated by the assets. If the Company's estimates or related assumptions change in the future, the Company may be required to impair these assets. The Company has not recognized impairment of long-lived assets in 2012 or in 2011.

Provisions and accrued liabilities

Provisions and accrued liabilities are recognized when the Company has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the combined income statement net of any reimbursement.

3. RECENT ACCOUNTING PRONOUNCEMENTS

Presentation of comprehensive income

In June 2011, the FASB issued new accounting rules that require an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The new accounting rules eliminate the option to present components of other comprehensive income as part of the statement of equity. The adoption of the new accounting rules in the first quarter of 2012 did not have a material effect on the Company's financial condition, results of operations or cash flows as it does not have any components of other comprehensive income.

Disclosures about offsetting assets and liabilities

In December 2011, the FASB issued new accounting rules related to new disclosure requirements regarding the nature of an entity's rights of offset and related arrangements associated with its financial instruments and derivative instruments. The new rules are effective for the Company in the first quarter of 2014 with retrospective application required. The Company does not expect the adoption of the new accounting rules to have a material effect on the Company's financial condition, results of operations or cash flows.

F-180

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

4. NOTES TO THE STATEMENTS OF COMPREHENSIVE INCOME

4.1. Revenue

Total revenues in 2012 and 2011 are as follows:

Revenues

(€ in thousands)


Revenues from key events	10,268	9,561
Merchandise sales	513	500
Others	643	512

	11,424	10,573

4.2. Costs in connection with events and merchandise costs

Related to the revenues the Company has incurred external costs for celebrating the events and merchandise costs splitting as reflected in the table below. Costs in connection with events do not include payroll expenses for personnel to organize and execute the events (see below in personnel expenses) or other operating expenses related to these events (see below in other operating expenses). Costs in connection with events includes only external direct costs specifically related to the respective event (e.g. rent expenses for the event location and equipment, marketing and communication expenses, artist expenses, technical equipment, third party event personnel).

Costs in connection with events and merchandise costs

(€ in thousands)


Costs in connection with key events	6,197	6,026
Merchandise sales	168	126
Others	500	352

	6,865	6,504

4.3. OTHER OPERATING INCOME

Other operating income is as follows:

Other operating income

(€ in thousands)


Income from private usage of company cars	43	32
Artist commissions	36	17
Gains on disposal of fixed assets	23	10
Insurance reimbursements	7	16
Other	9	5

	118	80

F-181

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

4.4 Personnel expenses

Personnel expenses

(€ in thousands)


Wages and salaries	1,294	1,159
Social security and other benefits	154	141

	1,448	1,300

As part of social security, the Company contributed €47 thousand (2011: €37 thousand) to the statutory pension scheme.

4.5. Other operating expenses

Other operating expenses

(€ in thousands)


Licence fees	456	365
Consulting fees	155	85
Office rent and other costs	131	100
Distribution expenses	79	82
Administration fees to related parties	76	76
Car expenses	36	36
Repair and maintenance	33	64
Bank charges	33	31
Others	261	311

	1,260	1,150

The licence fees relate to the brand names licensed from Rufener Brand Management AG. The license fee is calculated based on percentage of the revenues from the different events of the Company.

4.6. Income taxes

The income taxes consist of the following:

Tax expense

(€ in thousands)


Income Tax	598	486
Deferred income Tax	6	(5	)

	604	481

The deferred income tax principally results from differences between the accounting and income tax base of certain assets and liabilities.

F-182

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

("expected income tax") of 28.25% percent including the Solidarity Surcharge ("Solidaritätszuschlag"), as of December 31, 2012 and 2011.

The reconciliation of the tax expense calculated based on the expected statutory tax rate of 28.25% to the actual tax expense recorded in the income statement is as follows:

Tax reconciliation

(€ in thousands)


Net income before income tax	1,894	1,671
Expected income tax	535	472
Tax expenses for prior periods	40	0
Non tax deductible items	29	9

	604	481

The deferred tax assets and liabilities relate to different depreciation of fixed assets and different measurement of one accrual. Deferred tax asset and liability impacts are netted as follows:

Netting of deferred tax assets and liabilities

(€ in thousands)


Deferred tax asset	5		6
Deferred tax liability	6		1

Net deferred tax asset (+)/Liability (-)	(1	)	5

General tax status of the companies

Both companies included in these combined financial statements are individually subject to Corporate Income Tax and Trade Tax. The following tables shall disclose the results of past tax assessments, tax field audits and potential tax risks per company.

• i-Motion Veranstaltungs-GmbH: Konzeption und Ausführungen Nature One

Tax filing status

The tax returns for 2011 have been finalized and filed with the tax authorities and have been assessed in line with the tax returns with assessment notices as of October 17, 2012.

The tax assessments for the fiscal year 2011 lead to the following tax refunds:

Tax filing status

(€ in thousands)


Corporate income tax			5
Solidarity surcharge			0
Trade tax			4

F-183

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

Current tax positions

i-Motion has not yet prepared the tax returns for the fiscal year 2012.

• i-Motion GmbH Events & Communication

Tax filing status

The tax returns for the fiscal year 2011 have been filed in time to the tax authorities and have been assessed in line with the tax returns.

The tax assessments for the fiscal year 2011 lead to the following tax refunds:

Tax assessments

(€ in thousands)


Corporate income tax			35
Solidarity surcharge			2
Trade tax			21

Results from tax field audits

The last tax field audit for the tax years 2006 until 2008 resulted in minor adjustments to the taxable income, none of which are expected to impact future tax audits.

5. CASH/CASH FLOW DISCLOSURES

Cash consists of bank accounts and cash on hand.

In 2012, the Company paid interest of €2 thousand in cash (2011: €4 thousand) and income taxes of €551 thousand in cash (2011: €698 thousand).

6. OTHER ASSETS

Other assets

(€ in thousands)


Loan due from shareholder	414	792
Shares in Investment Funds	100	100
Income tax receivable	52	80
VAT receivable	72	77
Other	5	12

Total	643	1,061
Thereof:
Short term	542	951
Long term	101	110

For the loan due from shareholder please refer to Note 12—Transactions with related parties.

F-184

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

The investment in funds relate to real estate and ships. The investments are not actively traded thus are accounted for at cost, less any other-than-temporary impairment. Prior to 2011, the Company recorded €600 thousand in other-than-temporary impairment losses on the original cost of €700 based on other-than-temporary impairment for the shares in investment funds. No other-than-temporary impairments were recorded in 2012 or 2011.

7. INVENTORY

Inventory primarily includes merchandise (clothing, accessories and CDs), materials and supplies as well as alcoholic and non-alcoholic beverages.

Inventories

(€ in thousands)


Raw materials and supplies	35	39
Merchandise	249	235

	284	274

8. PROPERTY, PLANT AND EQUIPMENT NET OF ACCUMULATED DEPRECIATION

Property, plant and equipment consist of the following:

Property, plant and equipment

(in € thousands)


Gross amount:
As of January 1, 2011	332		193		0		525
Additions	95		36		14		145
Disposals	(185	)	(11	)	—		(196	)

As of December 31, 2011	242		218		14		474
Additions	263		26		—		289
Disposals	(242	)	(4	)	—		(246	)
Reclassifications	14				(14	)	0

As of December 31, 2012	277		240		0		517
Depreciation:
As of January 1, 2011	116		131		0		247
Depreciation charge for the year	40		33		0		73
Disposals	(44	)	(10	)	0		(54	)

As of December 31, 2011	112		154		0		266
Depreciation for the year	50		33		0		83
Disposals	(125	)	(4	)	0		(129	)

As of December 31, 2012	37		183		0		220
Carrying value:
As of December 31, 2011	130		64		14		208
As of December 31, 2012	240		57		0		297

Cars are depreciated over a useful life of 6 years whereas the other administration equipment is depreciated over a useful life of 3 to 13 years.

F-185

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

9. INTANGIBLE ASSETS, NET OF ACCUMULATED AMORTIZATION

The intangible assets consist of the following:

Intangible assets

(in € thousands)


Gross amount:
As of January 1, 2011	58
Additions	9
Disposals	(9	)

As of December 31, 2011	58
Additions	1
Disposals	0

As of December 31, 2012	59
Amortization
As of January 1, 2011	28
Amortization charge for the year	10
Disposals	(9	)

As of December 31, 2011	29
Amortization for the year	10
Disposals	0

As of December 31, 2012	39
Carrying value:
As of December 31, 2011	29
As of December 31, 2012	20

10. TRADE LIABILITIES, OTHER LIABILITIES AND ACCRUED LIABILITIES

Trade and other liabilities

(€ in thousands)


Trade liabilities	618	160
Payroll and foreign taxes	54	52
Others	82	76

Total	754	288

Accrued liabilities

(€ in thousands)


Bonus general manager	36	86
Vacation accrual	17	25
Outstanding invoices	37	22
Others	13	19

Total	103	152

F-186

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

11. PROVISIONS

Provisions

	Year ended December 31,

(€ in thousands)	2012		2011

Litigation		45		45
Uncertain tax issues		34		14
Others		51		27

Total		130		86

12. TRANSACTIONS WITH RELATED PARTIES

The combined entities are engaged in transactions in the ordinary course of business with other related, but "non-combined", companies.

Group structure

The combined entities are part of a group structured as follows:

i-Motion GmbH Events & Communication is 95% owned and i-Motion Veranstaltungs GmbH Konzeption u. Ausführung Nature One is wholly owned by i-Motion Besitz- und Verwaltungsgesellschaft mbH & Co. KG, which is 100% owned by Nikolaus Schär. The remaining 5% share of i-Motion GmbH Events & Communication is held by Oliver Vordemvenne. Nikolaus Schär and Oliver Vordemvenne are engaged in another partnership, i-Motion Communication GbR ("i-Motion GbR"), in which Mr. Schär holds 69% of the interests and Mr. Vordemvenne 30%. All of the above described entities are referred to as the "Group".

The Group is directly and indirectly controlled by Mr. Schär. In addition to being the sole or majority shareholder of all group companies, he is the legal representative of i-Motion and solely entitled to represent the Company. Mr. Oliver Vordemvenne is an authorized officer for i-Motion.

The group structure gives evidence to the business relationship between the group companies and their shareholders. In this context i-Motion is legally bound to deal at "arm's length" in all contractual matters between group companies and other related parties.

Receivables and liabilities resulting from this context are embedded into loan contracts with an interest rate calculated at arm's length and an appropriate securitization.

Summary of transactions between related parties

i-Motion is engaged with intra-group companies and other related parties regarding the following business transactions:

Remuneration of management and close family members

Mr. Schär receives a monthly salary from the Company. The authorized officer Mr. Vordemvenne does not receive a salary directly from the Company, but i-Motion GbR is billing the Company for services provided.

Mr. Schär's fixed remuneration was €294 thousand in 2012 and 2011 plus a variable bonus of €98 thousand. Additionally Mr. Schär receives other benefits (e.g., usage of company cars) resulting in

F-187

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

an additional taxable salary of €99 thousand (2011: €50 thousand). Also the wife of Mr. Schär was engaged by the Company in 2012 and 2011 and received a salary of €37 thousand and €34 thousand, respectively.

Shareholder loan with the general manager

In 1999, the Company signed a facility agreement (shareholder loan agreement) with Mr. Schär. According to this loan agreement the Company is offering the loan to Mr. Schär for an interest rate of 2% above the basis interest rate of the European Central Bank. As of December 31, 2012, the loan receivable due from Mr. Schär is €414 thousand (2011: €792 thousand). Interest on the outstanding balance was calculated at 2.125% per annum for 2012. Interest income on the shareholder loan for the years ended December 31, 2012 and 2011 was €15 and €5 thousand, respectively.

The shareholder loan receivable is recorded in other current financial assets, because the loan agreement can be terminated by both parties at any time.

Rent contracts

The Company rents its office space in Mülheim-Kärlich from i-Motion Besitz- und Verwaltungsgesellschaft mbH & Co. KG ("i-Motion KG"). This Group company is a partnership owned to 100% by Nikolaus Schär and has leased the office space for the same term from an external party. i-Motion KG has agreed in a sub lease agreement with the Company until the end of 2015 for a monthly rent including surcharges of €3,710. Total rent expenses recorded in other operating expenses of the Company for the office space amounts to €45 thousand in 2012 and 2011.

Other services from i-Motion KG

In addition to the rental agreement, i-Motion KG provides administrative services (including bookkeeping) to the Company, for which the Company paid an amount of €76 thousand in 2012 and in 2011.

Services from i-Motion GbR

i-Motion GbR is primarily providing support services to the Company (covering also the services of Mr. Vordemvenne) and very limited services to Group external parties. In 2012, the Company paid total €336 thousand (2011: €294 thousand) to i-Motion GbR for services. These services include charges for support of the events, preparation of technical drawings and other administration services.

Guarantees

The Company has a financing relationship with the Sparkasse Koblenz. For any obligations to the Sparkasse Koblenz Mr. Nikolaus Schär has offered a personal guarantee in the maximum amount of €50 thousand. Additionally he has assigned the rights from proceed from his term life insurance at the Cosmos Direkt Versicherung for the financial obligations of the Company at Sparkasse Koblenz. At the years ended 2012 and 2011, the Company had no obligations outstanding to Sparkasse Koblenz.

13. COMMITMENTS AND CONTINGENCIES, GUARANTEES

Commitments

The Company has commitments for rental of office space, warehouses and event locations. i-Motion's rent expenses amounted to €69 thousand in 2012 (€71 thousand in 2011) excluding event locations (which are recorded in the cost of sales for the respective event).

F-188

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

The rent contract for the office space with i-Motion Besitz- und Verwaltungsgesellschaft mbH & Co. KG has a contractual termination date set at December 31, 2015 with automatic extension for one further year if not terminated with a notification period of 6 months before contract end (latest termination date: June 30, 2015). As described in the section "transactions with related parties", i-Motion Besitz- und Verwaltungsgesellschaft mbH & Co. KG is the main-lessee of the office space and has a one-time 5-year option to extend the contract with the lessor until December 31, 2020.

The Company has no contractual obligations to remove instalments or to renovate the offices spaces and has consequently not accrued for such cost.

Future minimum rentals payable under non-cancellable operating leases for office space and event locations as at December 31 are as follows:




Within one year	174	95
After one year but not more than five years	222	239
More than five years	0	0

	396	334

Contingencies

Legal matters

In 2012, the Company had several legal actions filed against it in connection with alleged violations of trademark-rights, ticketing agreements and other service agreements.

The legal advisors for general contractual matters of the company give notice about two actions filed against i-Motion in 2012. For one of the cases the Company accrued €45 thousand which is 50 percent of the maximum exposure.

14. SUBSEQUENT EVENTS

Subsequent events include all relevant events through June 21, 2013, as the date the combined financial statements were issued.

The Company has a signed term sheet to enter into a transaction with SFX Entertainment, Inc. ("SFX") in which the principals of i-Motion have agreed to sell the Company to SFX. Concurrent with this transaction, it is anticipated that a entity that holds the intellectual property licensed by the Company, will also be purchased by SFX. A portion of the consideration paid to i-Motion will be allocated to the purchase of this entity. Alternatively, the intellectual property might be transferred to the Company before closing the transaction.

Because the ultimate shareholder of the Company, Mr. Schär, is considering the sale of the shares in the both entities combined in these financial statements, all employees engaged in i-Motion GbR and i-Motion KG were transferred with effective date January 1, 2013 to the Company. As a consequence, both partnerships remained as a legal shell with no operating business. Therefore, as of January 1, 2013, the relationships with these related parties only consist of renting of the office space in Mülheim-Kärlich.

Due to shareholder resolutions from February 19, 2013 and May 13, 2013, the Company has paid dividends in the total amount of €1,000 thousand to its shareholders.

F-189

Table of Contents

i-Motion GmbH Events & Communication
and
i-Motion Veranstaltungs-GmbH
Konzeption u. Ausführung Nature One,
Both situated in 56218 Mülheim-Kärlich

Unaudited Interim Combined financial statements
as of March 31, 2013 and for the three months ended March 31, 2013 and for 2012

Table of Contents

i-Motion GmbH Events & Communication
and i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One,
Both situated in 56218 Mülheim-Kärlich

Combined Financial Statements
As of and the three months ended March 31, 2013
and 2012

Contents


Financial Statements
Combined Balance Sheets (Unaudited) as of March 31, 2013 and December 31, 2012		F-192
Combined Statements of Changes in Equity for the three months ended March 31, 2013 and 2012 (unaudited)		F-193
Combined Statement of Comprehensive Income for the three months ended March 31, 2013 and 2012 (unaudited)		F-194
Combined Cash Flow Statements for the three months ended March 31, 2013 and 2012 (unaudited)		F-195
Notes to Consolidated Financial Statements		F-196

F-191

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Combined balance sheets
As of March 31, 2013 (unaudited) and December 31, 2012

			Combined

	Notes Reference		March 31, 2013		December 31, 2012

	(in thousands of Euros)

ASSETS
Current assets
Cash		5		419		1,216
Trade and other receivables
net of allowances of 0 and 0 as of March 31, 2013 and 2012 respectively				326		271
Receivables from related parties		12		64		77
Prepaid expenses				302		12
Other current assets		6		363		542
Inventory		7		275		284

				1,749		2,403

Non-current assets
Property, plant and equipment, net of accumulated depreciation		8		282		297
Intangible assets, net of accumulated amortization		9		17		20
Other assets		6		99		101
Deferred taxes		4.6		65		0

				463		417

Total assets				2,211		2,819

EQUITY AND LIABILITIES
Current liabilities
Income taxes payable		4.6		67		26
Provisions		11		130		130
Accrued liabilities		10		213		103
Trade and other liabilities		10		249		754
Liabilities to related parties		12		1		77
Deferred revenues				594		103

				1,254		1,191

Non current liabilities
Deferred taxes		4.6		0		1

				0		1

Total Liabilities				1,254		1,192

Equity
Issued capital				50		50
Retained earnings				907		1,577

Total equity				957		1,627

Total equity and liabilities				2,211		2,819

The accompying notes are an integral part of these combined financial statements

F-192

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Combined statements of changes in equity
For the quarters ended March 31, 2013 and 2012 (unaudited)

	Issued capital


	(in thousands of Euros)
As of January 1, 2012		50	2,036		2,086
Net loss		0	(260	)	(260	)
Dividends		0	0		0

As of March 31, 2012		50	1,776		1,826

As of January 1, 2013		50	1,577		1,627
Net loss		0	(170	)	(170	)
Dividends		0	(500	)	(500	)

As of March 31, 2013		50	907		957

The accompying notes are an integral part of these combined financial statements

F-193

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Combined statement of comprehensive income
For the quarters ended March 31, 2013 and 2012 (unaudited)

	Notes reference


	(in thousands of Euros)
Revenue in connection with events		4.1	602		388
Merchandise revenue		4.1	19		15

Total Revenue			621		403

Costs in connection with events		4.2	375		364
Cost of merchandise		4.2	11		8
Other operating income		4.3	45		39
Personnel expenses		4.4	358		260
Depreciation and amortization			24		19
Other operating expenses		4.5	134		160

Operating profit			(236	)	(369	)

Interest expense			0		0
Interest income			0		7

Loss before income taxes			(236	)	(362	)

Income taxes		4.6	0		0
Deferred income taxes		4.6	(66	)	(102	)

Net loss			(170	)	(260	)

Comprehensive loss			(170	)	(260	)

The accompying notes are an integral part of these combined financial statements

F-194

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Combined cash flow statements
For the quarters ended March 31, 2013 and 2012 (unaudited)

	Notes reference


	(in thousands of Euros)
Operating activities
Net loss			(170	)	(260	)
*Adjustments to reconcile net income to cash flows from operating activities*
Depreciation		8	21		16
Amortisation		9	3		3
Gain on Disposal of property, plant and equipment		4.3, 8	0		0
Changes in deferred taxes		4.6	(66	)	(102	)
Changes in provisions and accrued liabilities		10,11	110		165
*Working Capital adjustments*
Increase in trade and other receivables and prepayments			(350	)	(235	)
Decrease/Increase in Inventories			9		(16	)
Decrease/Increase in trade and other payables and deferred revenues			(48	)	170

Net cash flow from operating activities			(491	)	(259	)

Investing activities
Proceeds from sale of property, plant and equipment		8	0		0
Purchase of property plant and equipment		8	(6	)	(4	)
Purchase of intangible assets		9	0		0
Repayment of loans by shareholder		12	200		0
Loans granted to shareholder		12	0		(470	)
Loans granted to third parties			0		(21	)

Net Cash flow used in investing activities			194		(495	)

Dividends paid to shareholders			(500	)	0

Net Cash Flow from financing activities			(500	)	0

Net increase in cash			(797	)	(754	)
Cash at January 1		5	1,216		869

Cash at March 31		5	419		115

The accompying notes are an integral part of these combined financial statements

F-195

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements

1. DESCRIPTION OF BUSINESS

i-Motion GmbH Events & Communication was incorporated in 1999 (registered in the trade register of Koblenz under HRB 6269) and i-Motion Veranstaltungs-GmbH Konzeption und Ausführung Nature One was incorporated in 2008 (registered in the trade register of Koblenz under HRB 21100) are leading event-management and entertainment companies whose business primarily includes the organization of electronic music events.

i-Motion GmbH Events & Communication and i-Motion Veranstaltungs-GmbH Konzeption und Ausführung Nature One (collectively, "i-Motion" or the "Company") are related parties and are under common ownership (see note 12, Transactions with related parties). The quarterly financial statements are presented on a combined basis.

The results of operations for an interim period may not be indicative of another interim period or for the entire year. The business of the Company has a seasonal character due to the timing of the different events. In the first quarter of every year the company is hosting only one event, whereas the main events (Nature One, Mayday and Ruhr in Love) are performed in the second and third quarters of the year. These notes to interim combined financial statements should be read in conjunction with the Company's combined financial statements for the year ended December 31, 2012.

Basis of preparation

Quarterly combined statements

The quarterly combined financial statements include the quarterly financial statements of i-Motion GmbH Events & Communications and i-Motion Veranstaltungs-GmbH as of March 31, 2013 and for the three months ended March 31, 2013 and 2012. Intercompany accounts and transactions have been eliminated in combination.

Use of estimates

The preparation of quarterly financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the quarterly financial statements and footnotes thereto. Significant estimates by management include the review of the owned investment and real estate funds for potential impairment, the measurement of the merchandise inventories based on the lower of cost or market principle, the recognition of allowances for trade accounts receivable, the recognition and measurement of uncertain tax positions and the evaluation of risks from litigation. Actual results may differ from those estimates.

For the investment and real estate funds the carrying value is compared as of each year end with an estimated market value. The estimated market value is based on Level 2 inputs as the investments are closed and not publicly traded.

Merchandise inventories are measured at their weighted average costs. At a period end, the Company evaluates the lower of cost or market by comparing the historical purchase costs with the expected sales prices minus potential distribution costs to conclude on a necessary inventory reserve.

F-196

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

For the measurement of the contingent risks from pending litigation, management reviews all available evidence supported by external lawyers to conclude on the best estimate to measure a potential provision for such litigations. Supporting documents are the lawyer letters and estimates, current settlement negotiations with the plaintiff, comparable rulings in other cases, etc. Actual results may differ from these estimates.

2. SUMMARY OF ACCOUNTING POLICIES

Recognition of revenues and cost

Live entertainment

The company recognizes revenue from live entertainment events when the performance occurs. Cash received in advance of the event is recognized as deferred revenue.

The Company sells tickets in cooperation with sales-agencies. Tickets are either sold via online-shops, ticket hotlines or at box-offices.

Further to the tickets sales, i-Motion recognizes revenue from the sale of beverages, camping-, bus-shuttle and parking fees etc. In addition, the Company charges rental fees for event space to third parties who mainly offer food and non-food products to the visitors. Revenues are recognized at the time of delivery of the product or service.

The Company evaluates the criteria outlined in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Subtopic 605-45, "Revenue Recognition—Principal Agent Considerations," in determining whether it is appropriate to record the gross amount of revenue and related costs or the net revenue. Under this accounting guidance, if the Company is the primary obligor to perform the services being sold, has general inventory risk as it pertains to recruiting and compensating the talent, has the ability to control the ticket pricing, has discretion in selecting the talent, is responsible for the production of the event, generally bears the majority of the credit or collection risk, or has several but not all of these indicators, revenue is recorded gross. If the Company does not have several of these indicators, it records revenue or losses on a net basis.

Costs in connection with events include fees for artists, rental expenses for buildings and technical equipment, marketing and communication expenses as well as external personnel cost. Any direct costs (with exception of marketing expenses) incurred prior to the event are deferred and then expensed when the event takes place.

F-197

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

Certain events are organized jointly with other operators and there are agreements in place to share the respective results from the event with the partner. In such cases, the Company record its revenues and costs on a gross basis and the agreed allocation of the net profit is settled between the partners in accordance with the contract timeline. The net settlement is recorded as an adjustment to costs in connection with events. When the net profit settlement has not occurred for a past event prior to quarter end, the Company makes an accrual based on an estimation of the expected settlement.

Sponsoring revenues

The Company has agreed with different beverage and tobacco companies in sponsoring agreements. According to these sponsoring agreements, the respective partner has the exclusive right to promote its brand during the event and in the marketing material advertising the event. Additionally the Company exclusively sells the partners' products during the event. These sponsoring agreements are each agreed for specific events of i-Motion and accordingly the Company records the fees received from the sponsor when the respective event takes place.

Public relations, advertisement, design

In its advertisement and product placement activities, the Company enters into barter transactions with several partners, principally, radio stations, exchanging rights to place advertisement on each other`s websites, flyers and radio broadcasting. In these transactions, the Company has historically not paid cash or its equivalent for any of the exchanged services and therefore is unable to establish a fair value of the services it receives. As a result, no revenues from the services provided to the radio stations and no corresponding advertising expense is recorded related to such barter transactions.

Advertisement costs (unrelated to the partners with barter transactions) paid in cash are expensed as incurred and are included in the costs in connection with events.

Merchandising of products and gastronomy services

Merchandising products (T-shirts, jackets, hoodies and accessories) and beverages are sold during events and are generally non-refundable.

In addition, but to a lesser extent, Merchandising products are sold online.

Revenues and the related cost of the merchandise and gastronomy services are recognized when products and services are delivered. In connection with CD-sales, the Company has signed an arrangement with the supplier "Kontor". In accordance with this agreement the Company receives a fixed license fee for every sold CD and download from the partner. The Company records the license revenues in the respective period the CD and download sales were realized.

Income taxes

The Company accounts for income taxes in accordance with the liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. Management makes assumptions, judgments, and estimates to determine the current provision for income taxes and also the deferred tax assets and liabilities as well as any valuation allowance to be recorded against deferred tax assets. Interests and penalties on income tax assessments are expensed as incurred in the respective period as interest expense.

F-198

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

The provision for income taxes on an interim basis is based upon the estimated annual effective tax rates for the year applied to the current period income or loss before tax plus the tax effect of any significant unusual items, discrete events or changes in tax law.

Cash

Cash consist of cash in bank accounts and cash on hand.

Trade and other receivables and allowance for doubtful accounts

Trade receivables are primarily amounts due from ticketing agencies in conjunction with events, sponsor partners and due from profit sharing revenues with foreign partners. The Company records a provision for doubtful accounts based on a detailed assessment of the collectability of the accounts receivable. To assist with the estimate, management considers certain factors such as historical experience, industry data, credit quality, age of accounts receivable balances, and current economic conditions that may affect a customer's ability to pay. In cases where the Company becomes aware of circumstances that may impair a specific customer's ability to meet its financial obligations, the Company records a specific allowance against amounts due from the customer and thereby reduces the net recognized receivable to the amount reasonably believed to be collectible. There is significant judgment involved in estimating the allowance for doubtful accounts. The Company calculates an allowance for doubtful accounts in order to build a reserve for potentially uncollectible receivables. The allowance for doubtful accounts is estimated based on our analysis of trends in overall receivables aging, specific identification of certain receivables that are at risk of not being paid, past collection experience and current economic trends. In times of domestic or global economic turmoil, the Company's estimates and judgments with respect to the collectability of its receivables are subject to greater uncertainty than in more stable periods.

Prepaid expenses

F-199

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

Inventory

Carrying amounts of merchandise, materials and supplies inventories are determined on an individual cost basis using a weighted average cost and are recorded at the lower of cost or market.

Receivables from and liabilities to related parties

Receivable from and liabilities to related parties include services provided to or from other companies owned by the majority shareholder of the Company. The balances are recorded at their nominal amount.

Fair value of financial instruments

Level 1 inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company's financial instruments consist principally of cash, trade and other receivables, investments in funds, trade payables, receivables and liabilities with related parties and with the majority shareholder. Cash and receivables are financial assets with carrying values that approximate fair value. Trade payable and other liabilities are financial liabilities with carrying values that approximate fair value. Receivables and payables to related parties are recorded based on their carrying values which approximates their fair value. The Company believes that for these financial instruments the recorded values approximate fair market value because of the nature and duration of the respective financial instruments.

The Company's investment in funds are measured at cost, less any other-than-temporary impairments as the investments do not meet the scope of ASC 320 because the instruments are not readably tradable. Other-than-temporary impairment is determined based on the comparison of the cost to the fair value and the duration of that impairment, including factors as to whether the fair value could reasonably be expected to recover and the length of time that the fair value has been below cost. The estimate of the fair value of the investment and the determination of whether such impairment is other than temporary requires significant judgement.

F-200

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

Property, plant and equipment net of accumulated depreciation

Intangible assets net of accumulated amortization

Impairment of long-lived assets

Provisions and accrued liabilities

3. RECENT ACCOUNTING PRONOUNCEMENTS

Presentation of comprehensive income

F-201

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

the first quarter of 2012 did not have a material effect on the Company's financial condition, results of operations or cash flows as it does not have any components of other comprehensive income.

Disclosures about offsetting assets and liabilities

4. NOTES TO THE STATEMENTS OF COMPREHENSIVE INCOME

4.1. Revenue

Total revenues in the first quarter of 2013 and 2012 split as follows:

Revenues

	January 1 - March 31,

(€ in thousands)	2013		2012

Revenues from key events		563		369
Merchandise sales		19		15
Others		39		19
		621		403

4.2. Costs in connection with events and merchandise costs

Costs in connection with events and merchandise costs

(€ in thousands)


Costs in connection with key events	371	339
Merchandise sales	11	8
Others	4	25
	386	372

F-202

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

4.3. Other operating income

Other operating income is as follows:

Other operating income

	January 1 - March 31,

(€ in thousands)	2013		2012

Income from private usage of company cars		15		8
Artist Commissions		27		12
Insurance reimbursements		2		1
Other		1		18
		45		39

4.4 Personnel expenses

Personnel expenses

	January 1 - March 31,

(€ in thousands)	2013		2012

Wages and Salaries		324		233
Social Security and other benefits		34		27
		358		260

The increase of the personnel expenses compared to the prior years is due to the employees transferred from i-Motion GbR and i-Motion KG into the Company with effective date January 1, 2013 (for further details see note 12 "Transactions with related parties").

4.5. Other operating expenses

Other operating expenses

	January 1 - March 31,

(€ in thousands)	2013		2012

Consulting fees		29		33
Office rent and other costs		23		22
Distribution expenses		15		12
Licence fees		9		7
Car expenses		7		13
Repair and maintenance		6		7
Bank charges		5		4
Administration fees to related parties		0		19
Others		40		62
		134		160

The licence fees relate to the brand names licensed from Rufener Brand Management AG. The license fee is calculated based on percentage of the revenues from the different events of the Company and in the first quarter of both years only the license fee for the event "Winterworld" is included.

The administration fees to related parties include fees for the services from i-Motion GbR, for further details refer to Note 12 "Transactions with related parties."

F-203

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

4.6. Income taxes

The income taxes consist of the following:

Tax expense

	January 1 - March 31,

(€ in thousands)	2013			2012

Income Tax		0			0
Deferred income Tax		(66	)		(102	)
		(66	)		(102	)

The deferred income tax principally results from differences between the accounting and income tax base of certain assets and liabilities. Additionally the Company recognized a deferred tax asset on the tax loss carry forward as of March 31, 2013 in the amount of €66 thousand. There was no loss carry forward as of December 31, 2012. This loss for the three months ended March 31, 2013 and 2012 is due to the seasonality of the business of the Company.

i-Motion is a company with corporate seat and place of management in Germany and therefore subject to the German Corporate Income Tax Act ("Körperschaftsteuergesetz") and Trade Tax Act ("Gewerbesteuergesetz"). Corporate Income Tax and Trade Tax equate to a combined tax rate ("expected income tax") of 28.25% percent including the Solidarity Surcharge ("Solidaritätszuschlag"), as of March 31, 2013 and 2012.

The reconciliation of the tax expense calculated for the both quarters based on the expected statutory tax rate of 28.25% to the actual tax expense recorded in the income statement is as follows:

Tax reconciliation

	January 1 - March 31,

(€ in thousands)	2013			2012

Net income before income tax		(236	)		(362	)
Expected income tax		(66	)		(102	)
Recorded tax income		(66	)		(102	)

The deferred tax assets and liabilities relate to the tax deductible loss realized as of March 31, 2013 as well as different depreciation of fixed assets and different measurement of one accrual as of March 31, 2013 and December 31, 2012. Deferred tax asset and liability impacts are netted as follows:

Netting of deferred tax assets and liabilities

(€ in thousands)


Deferred tax asset	71	5
Deferred tax liability	6	6
Net deferred tax asset (+)/Liability (-)	65	(1	)

F-204

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

General tax status of the companies

• i-Motion Veranstaltungs-GmbH: Konzeption und Ausführungen Nature One

Tax filing status

The tax returns 2011 have been finalized and filed with the tax authorities and have been assessed in line with the tax returns with assessment notices as of October 17, 2012.

Current tax positions

i-Motion has not yet prepared the tax returns for the fiscal year 2012.

• i-Motion GmbH Events & Communication

Tax filing status

The tax returns for the fiscal year 2011 have been filed in time to the tax authorities and have been assessed in line with the tax returns.

Results from tax field audits

The last tax field audit for the tax years 2006 until 2008 resulted in minor adjustments to the taxable income, none of which are expected to impact future tax audits.

5. CASH/CASH FLOW DISCLOSURES

Cash consist of bank accounts and cash on hand.

The Company paid no interest in the three months ended March 31, 2013 and 2012 and paid income taxes of €112 thousand and €126 thousand respectively.

6. OTHER ASSETS

Other assets

(€ in thousands)


Loan due from shareholder	214	414
Income tax receivable	144	52
Shares in Investment Funds	99	100
VAT receivable	0	72
Other	5	5

Total	462	643
Thereof:
Short term	363	542
Long term	99	101

F-205

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

For the loan due from shareholder please refer to Note 12, Transactions with related parties.

7. INVENTORY

Inventory primarily includes merchandise (clothing, accessories and CDs), materials and supplies as well as alcoholic and non-alcoholic beverages.

Inventories

(€ in thousands)


Raw materials and supplies	25	35
Merchandise	250	249
	275	284

F-206

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

8. PROPERTY, PLANT AND EQUIPMENT NET OF ACCUMULATED DEPRECIATION

Property, plant and equipment consist of the following:

Property, plant and equipment

(in € thousands)


Gross amount:
As of January 1, 2012	242	218		14	474
Additions	0	3		0	3
Disposals	0	(1	)	0	(1	)
Reclassifications	0	0		0	0
As of March 31, 2012	242	220		14	476
As of January 1, 2013	277	240		0	516
Additions	0	6		0	6
Disposals	0	(1	)	0	(1	)
Reclassifications	0	0		0	0
As of March 31, 2013	277	245		0	521
Depreciation
As of January 1, 2012	112	153		0	266
Depreciation for the year	8	8		0	16
Disposals	0	(1	)	0	(1	)
As of March 31, 2012	120	160		0	281
As of January 1, 2013	37	183		0	219
Depreciation for the year	13	8		0	21
Disposals	0	(1	)	0	(1	)
As of March 31, 2013	50	190		0	239
Carrying value:
As of January 1, 2012	130	65		14	208
As of March 31, 2012	122	60		14	195
As of January 1, 2013	240	57		0	297
As of March 31, 2013	227	55		0	282

Cars are depreciated over a useful life of 6 years whereas the other administration equipment is depreciated over a useful life of 3 to 13 years.

F-207

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

9. INTANGIBLE ASSETS, NET OF ACCUMULATED AMORTIZATION

The intangible assets consist of the following:

Intangible assets

(in € thousands)		Software


Gross amount:
As of January 1, 2012			58
Additions			0
Disposals			0
As of March 31, 2012			58
As of January 1, 2013			59
Additions			0
Disposals			0
As of March 31, 2013			59
Amortization
As of January 1, 2012			29
Amortization for the year			3
Disposals			0
As of March 31, 2012			32
As of January 1, 2013			39
Amortization for the year			3
Disposals			0
As of March 31, 2013			42
Carrying value:
As of January 1, 2012			29
As of March 31, 2012			26
As of January 1, 2013			20
As of March 31, 2013			17

10. TRADE LIABILITIES, OTHER LIABILITIES AND ACCRUED LIABILITIES

Trade and other liabilities

(€ in thousands)


Trade liabilities	205	618
Payroll and foreign taxes	26	54
VAT liability	8	0
Others	10	82

Total	249	754

F-208

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

Accrued liabilities

(€ in thousands)


Bonus and outstanding salaries general manager	92	36
Vacation accrual	40	17
Outstanding invoices	68	37
Others	13	13

Total	213	103

11. PROVISIONS

Provisions

(€ in thousands)


Litigation	45	45
Uncertain tax issues	34	34
Others	51	51

Total	130	130

12. TRANSACTIONS WITH RELATED PARTIES

The combined entities are engaged in transactions in the ordinary course of business with other related, but non-combined, companies.

Group structure

The combined entities are part of a group structured as follows:

i-Motion GmbH Events & Communication is 95% owned and i-Motion Veranstaltungs-GmbH is wholly owned by i-Motion Besitz- und Verwaltungsgesellschaft mbH & Co. KG, which is 100% owned by Nikolaus Schär. The remaining 5% share of i-Motion GmbH Events & Communication is held by Oliver Vordemvenne. Nikolaus Schär and Oliver Vordemvenne are engaged in another partnership, i-Motion Communication GbR ("i-Motion GbR"), in which Mr. Schär holds 69% of the interests and Mr. Vordemvenne 30%; this partnership transferred all employees to I-Motion GmbH with effective date January 1, 2013, and was then dissolved in the first quarter 2013. All of the above described entities are referred to as the "Group."

The Group is directly and indirectly controlled by Mr. Schär. In addition to being the sole or majority shareholder of all group companies, he is the legal representative of i-Motion and solely entitled to represent the Company. Mr Oliver Vordemvenne is an authorized officer for i-Motion.

Receivables and liabilities resulting from this context are embedded into loan contracts with an interest rate calculated at arm's length and an appropriate securitization.

F-209

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

Summary of transactions between related parties

i-Motion is engaged with intra-group companies and other related parties regarding the following business transactions:

Remuneration of management and close family members

Mr. Schär's fixed remuneration for the three months ended March 31, 2013 and 2012 was €74 thousand plus a variable bonus of €25 thousand. Additionally Mr. Schär receives other benefits (e.g., usage of company cars). Also the wife of Mr. Schär was engaged by the Company in 2012 and received a salary of €9 thousand for the three months ended March 31, 2012; Mrs. Schär is not any longer employee of the company effective January 1, 2013.

Shareholder loan with the general manager

In 1999, the Company signed a facility agreement (shareholder loan agreement) with Mr. Schär. According to this loan agreement the Company is offering the loan to Mr. Schär for an interest rate of 2% above the basis interest rate of the European Central Bank. As of March 31, 2013, the loan receivable due from Mr. Schär was €214 thousand (March 31, 2012: €1,268 thousand). Interest on the outstanding balance was calculated at 2.125% per annum for 2012 and for the first quarter 2013. Interest income on the shareholder loan in the three months ended March 31, 2013 and 2012 was €0 thousand and €7 thousand, respectively.

The shareholder loan receivable is recorded in other current financial assets, because the loan agreement can be terminated by both parties at any time.

Rent contracts

Other services from I Motion KG

In addition to the rental agreement, i-Motion KG has provided administrative services (including bookkeeping) to the Company, for which the Company paid an amount of €19 thousand in the first quarter 2012. In the first quarter 2013 i-Motion KG did not charge the Company, because the respective administrative employee is employed by the Company effective January 1, 2013.

F-210

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

Services from i-Motion GbR

Through December 31, 2012, I-Motion GbR has primarily provided support services to the Company (covering also the services of Mr. Vordemvenne) and very limited services to Group external parties. In the three months ended March 31, 2012 the revenues of I-Motion GbR with the Company amount to €30 thousand. These services included charges for support of the events, preparation of technical drawings and other administration services. Effective January 1, 2013 all employees of I-Motion GbR were transferred to the Company and therefore during the three months ended March 31, 2013 and until its dissolution I-Motion GbR provided no services to the Company.

Guarantees

The Company has a financing relationship with the Sparkasse Koblenz. For any obligations to the Sparkasse Koblenz Mr. Nikolaus Schär has offered a personal guarantee in the maximum amount of €50 thousand. Additionally he has assigned the rights from proceeds from his term life insurance at the Cosmos Direkt Versicherung for the financial obligations of the Company at Sparkasse Koblenz. As of March 31, 2013 and December 31, 2012 the Company had no obligations outstanding to Sparkasse Koblenz.

13. COMMITMENTS AND CONTINGENCIES, GUARANTEES

Commitments

The Company has commitments for rental of office space and warehouses and event locations. i-Motion's rent expenses amounted to €17 thousand in the first quarter 2013 and 2012 excluding event locations (which are recorded in the cost of sales for the respective event).

The rent contract for the office space with i-Motion Besitz- und Verwaltungsgesellschaft mbH & Co. KG has a contractual termination date set at December 31, 2015 with automatic extension for one further year if not terminated with a notification period of 6 months before contract end (latest termination date: June 30, 2015). As described in the section "transactions with related parties", i-Motion Besitz- und Verwaltungsgesellschaft mbH & Co. KG is the main-lessee of the office space and has a one-time 5-year-option to extend the contract with the lessor until December 31, 2020.

The Company has no contractual obligations to remove instalments or to renovate the offices spaces and has consequently not accrued for such cost.

Future minimum rentals payable under non-cancellable operating leases for office space and event locations as at March 31 are as follows:

		March 31, 2013


Within one year			174
After one year but not more than five years			173
More than five years			0

			347

F-211

Table of Contents

i-Motion GmbH Events & Communication and
i-Motion Veranstaltungs-GmbH Konzeption u. Ausführung Nature One

Notes to combined financial statements (Continued)

Contingencies

Legal matters

The Company had several legal actions filed against it in connection with alleged violations of trademark-rights, ticketing agreements and other service agreements.

The legal advisors for general contractual matters of the company give notice about two actions filed against i-Motion. For one of the cases the Company accrued €45 thousand at the end of March 31, 2013 and 2012 which is 50 percent of the maximum exposure.

14. SUBSEQUENT EVENTS

Subsequent events include all relevant events through June 21, 2013, as the date the combined financial statements were issued.

The Company has signed a term sheet to enter into a transaction with SFX Entertainment, Inc. ("SFX") in which the principals of i-Motion have agreed to sell the Company to SFX. Concurrent with this transaction, it is anticipated that the entity that holds the intellectual property licensed by the Company, will also be purchased by SFX. A portion of the consideration paid to i-Motion will be allocated to the purchase of this entity. Alternatively, the intellectual property held by this entity might be transferred to the Company before closing of the transaction.

Due to the shareholder resolution from May 13, 2013, the Company has paid a dividend in the total amount of €500 thousand to its shareholders.

F-212

Table of Contents

Combined Financial Statements and Report of Independent
Certified Public Accountants

Totem Onelove Group and Totem Industries Pty Ltd.

December 31, 2012 and 2011

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Index


Report of Independent Accountants		F-215
Balance Sheet		F-216
Statement of Comprehensive Income		F-217
Statement of Owners' Equity		F-218
Statement of Cash Flows		F-219
Notes to Financial Statements		F-220

F-214

Table of Contents

Report of Independent Auditors

To the Partners and Members,
Totem Onelove Group and Totem Industries Pty Limited

We have audited the accompanying combined financial statements of Totem Onelove Group and Totem Industries Pty Limited, which comprise the combined balance sheets as of December 31, 2012 and 2011, and the related combined statements of comprehensive income, owners equity and cash flows for the years then ended, and the related notes to the combined financial statements.

Management's Responsibility for the Financial Statements

Auditor's Responsibility

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the combined financial position of Totem Onelove Group and Totem Industries Pty Limited at December 31, 2012 and 2011, and the combined results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.


/s/ Ernst & Young
Melbourne, Australia June 24, 2013

F-215

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Combined balance sheet

	December 31,

	2012			2011

	AUD
ASSETS
CURRENT ASSETS
Cash and cash equivalents		8,298,920			2,698,776
Accounts receivable, net		1,363,556			2,483,520
Accounts receivable, net, related parties		251,454			175,925
Inventories		16,387			17,000
Accrued revenue		110,805			240,025
Prepaid expenses and other current assets		375,303			779,234
Deferred income taxes		84,531			7,078

Total current assets		10,500,956			6,401,558
PROPERTY, PLANT AND EQUIPMENT
Leasehold improvements		126,958			124,605
Equipment		288,428			144,181

		415,386			268,786
Less accumulated depreciation and amortization		(132,184	)		(60,964	)

		283,202			207,822
INTANGIBLE ASSETS
Intangible assets		23,120			18,316
Less accumulated depreciation and amortization		(4,143	)		(1,832	)

		18,977			16,484

Deferred income taxes, non current		70,814			—

Total assets		10,873,949			6,625,864

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable		4,429,751			5,011,091
Accounts payable—related parties		—			474
Artist fee tax withholding		819,142			227,771
Other accounts payable and accrued expenses		893,223			1,005,502
Accrued vacation		61,340			39,142
Deferred income		312,453			18,282
Current tax payable		—			13,395
Deferred tax liability		155,345			7,078

Total current liabilities		6,671,254			6,322,735
NONCURRENT LIABILITIES
Accrued vacation, long-term		34,661			23,062

Total noncurrent liabilities		34,661			23,062
OWNERS' EQUITY
Owners' current account		4,228,122			353,549
Common stock, issued, 1000 shares		1,000			1,000
Retained earnings		(61,088	)		(74,482	)

Total owners' equity		4,168,034			280,067

Total liabilities and owners' equity		10,873,949			6,625,864

The accompanying notes are an integral part of these financial statements.

F-216

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Combined statement of comprehensive income

	Year ended December 31,

	2012			2011

	AUD
Revenue		40,850,837			35,126,966
Operating expenses:
Direct costs		28,989,782			27,391,452
General and administrative expenses		1,986,504			1,633,936
Business sale expenses		89,563			15,086
Collaboration agreement payout		3,612,500			—
Depreciation and amortization		73,533			46,344

Operating income before taxes		6,098,955			6,040,148
Other income/(expense)
Interest expense		(33,521	)		(33,020	)
Interest income		9,167			10,363
Other		—			7,083
Benefit for income tax		13,394			46,311

Net income		6,087,995			6,070,885
Other comprehensive income		—			—

Total comprehensive income		6,087,995			6,070,885

The accompanying notes are an integral part of these financial statements.

F-217

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Combined statement of owners' equity

	Common Stock


	AUD
Balance at December 31, 2010		1,000	1,339,403		(120,793	)	1,219,610
Net income		—	—		6,070,885		6,070,885
Profit allocation to owners		—	6,024,574		(6,024,574	)	—
Contribution from owners		—	1,189,572		—		1,189,572
Distributions to owners		—	(8,200,000	)	—		(8,200,000	)

Balance at December 31, 2011		1,000	353,549		(74,482	)	280,067
Net income		—	—		6,087,995		6,087,995
Profit allocation to owners		—	6,074,601		(6,074,601	)	—
Contribution from owners		—	4,000,000		—		4,000,000
Distributions to owners		—	(6,200,028	)	—		(6,200,028	)

Balance at December 31, 2012		1,000	4,228,122		(61,088	)	4,168,034

The accompanying notes are an integral part of these financial statements.

F-218

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Combined statement of cash flows

	Year ended December 31,

	2012			2011

	AUD
Cash Flows from Operating Activities:
Net income		6,087,995			6,070,885
Adjustments to reconcile net income to net cash (used)/ provided by operating activities:
Depreciation and amortization		73,533			46,344
Changes in operating assets and liabilities:
Receivables—trade		1,119,964			(1,285,501	)
Receivables—related parties		(75,529	)		(175,925	)
Inventories		613			(17,000	)
Accrued revenue		129,220			1,177,242
Prepaid expenses and other current assets		403,931			(669,348	)
Deferred income tax assets, current		(77,453	)		(2,137	)
Deferred income tax assets, non current		(70,814	)		—
Accounts payable—trade		(581,340	)		2,162,095
Accounts payable—related parties		(474	)		(1,443,601	)
Artist fee tax withholding		591,371			229,332
Other accounts payable and accrued expenses		(112,279	)		(2,490,497	)
Accrued vacation, short term		22,198			19,772
Deferred income		294,171			(27,004	)
Current tax payable		(13,395	)		(46,310	)
Deferred income tax liabilities		148,267			2,137
Accrued vacation, long-term		11,599			8,346

Net cash provided by operating activities		7,951,578			3,558,830
Cash Flows from Investing Activities:
Capital expenditures		(146,602	)		(67,805	)
Purchase of trademarks		(4,804	)		(18,315	)

Net cash used in investing activities		(151,406	)		(86,120	)
Cash Flows from Financing Activities:
Proceeds from owners		4,000,000			1,189,572
Payments to owners		(6,200,028	)		(8,200,000	)

Net cash used in financing activities		(2,200,028	)		(7,010,428	)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS		5,600,144			(3,537,718	)
Cash and cash equivalents:
Beginning of year		2,698,776			6,236,494

End of year		8,298,920			2,698,776

Included in operating cashflows are:
Income taxes paid		—			—
Interest paid		1,050			1,750

The accompanying notes are an integral part of these financial statements.

F-219

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Combined notes to the financial statements
December 31, 2012 and 2011

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Totem Industries Pty Ltd. (TI) and Totem Onelove Group (TOG) have developed into one of Australia's leading innovators in the dance music scene organizing festivals, events or concerts. Based in Melbourne but with offices and partnerships with key promoters/businesses throughout Australia, it's dedicated to a range of industry related opportunities. This includes a focus on: sponsorship, event production, touring and travel services.

TOG is a partnership under Australia law. Totem Industries Pty Ltd. is a limited liability company.

Basis of accounting

The accompanying combined financial statements have been prepared on an accrual basis of accounting, whereby revenue is recognized when earned and expenses are recognized when incurred.

Functional and presentation currency

The combined financial statements are presented in Australian dollars which is TI's and TOG's functional and presentation currency. The functional currency of each entity is measured using the currency of the primary economic environment in which that entity operates.

Principals of combination

Totem Industries Pty Ltd. (the "Company ") and Totem Onelove Group (collectively, the "Group") share two common partners/directors of a total of five partners. As the operations of the two entities are intertwined, management has elected to present the financial statements on a combined basis. Common transactions and year end balances between the two entities are eliminated upon combination.

Cash and cash equivalents

The Group considers cash, time deposits and all other highly liquid investments with an original maturity of three months or less to be cash equivalents. All amounts are held with reputable Australian banks.

Accounts receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest. The Group performs ongoing credit evaluations of its customers and establishes appropriate allowances for doubtful accounts based on the factors surrounding the credit risk of their customers, historical trends with respect to write-offs and other information.

The Group does not have any off balance sheet exposure related to its customers.

Inventories

All inventories are valued on the average cost method. Inventory consists of retail merchandise.

F-220

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Combined notes to the financial statements (Continued)
December 31, 2012 and 2011

Inventories are stated at the lower of cost or net realizable value. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

Accrued Revenue

The Group recognizes revenue once the event is held. Accrued revenue represents ticket sales or income receivable in relation to held events which have not been billed to customers.

Prepaid expenses

The Group's prepaid expenses relate to event expenses, including artist advances and other costs directly related to future concert events. These prepaid costs are charged to operations upon completion of the related events.

Plant and equipment

Leasehold improvement and equipment are carried at cost. Depreciation and amortization are computed on the straight-line method over the estimated useful lives or lease term of the respective assets. On sale or retirement, the asset cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in income. Expenditures for improvements and additions are charged to leasehold improvement and equipment while expenditures for replacements and maintenance and repairs are expensed as incurred.

Depreciation is computed using the straight-line method based on the following ranges of estimated useful lives;

•: equipment: 2 to 7 years
•: leasehold improvement; period of lease

Depreciation expense for the year is AUD $71,221 and AUD $44,512 for 2012 and 2011, respectively.

The Group tests for impairment whenever events or changes in circumstances indicate that the carrying amount of property, plant and equipment may not be recoverable. The Group determines the need for an impairment charge by comparing undiscounted cash flows associated with the continued use and ultimate disposition of the related assets to the carrying values of the assets.

Intangibles

Intangibles relate to registered trademarks which are amortized over 10 years.

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

F-221

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Combined notes to the financial statements (Continued)
December 31, 2012 and 2011

Amortizable intangible assets at December 31, 2012 and 2011 consist of the following:

		December 31, 2012

	Life	Gross		Accumulated amortization		Net

		AUD
Trademarks	10 years		23,120		4,143		18,977

		December 31, 2011

	Life	Gross		Accumulated amortization		Net

		AUD
Trademarks	10 years		18,316		1,832		16,484

The weighted average period prior to the next trademark renewal is 8.5 years. The entity is expected to renew the trademarks at the end of the initial term and the cash flows from the trademarks are expected to continue. In instances where the trademark's lives are extended, the cost of renewal is capitalized.

Amortization expense totalled AUD $2,312 and AUD $1,832 for 2012 and 2011, respectively. Based on the current amount of intangible assets subject to amortization, the estimated amortization for each of the five succeeding years is as follows:

		AUD


2013			2,312
2014			2,312
2015			2,312
2016			2,312
2017			2,312

Accounts payable and accruals

An accrual is recorded for expenses incurred. Where a supplier invoice has not been received, the expense is estimated based on the supplier quote or other reliable estimate.

Artist fee tax withholding

The artist fee tax withholdings are amounts owed to federal taxation authorities for income tax withholdings required on payments made to foreign artists for services.

Employee provisions

A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured reliably. Liabilities recognized in respect of short-term employee benefits, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Liabilities recognized in respect of long term employee benefits are measured as the present

F-222

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Combined notes to the financial statements (Continued)
December 31, 2012 and 2011

value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date.

Revenue

Ticket sales are recognized as revenue once the festival or event has occurred. Revenues collected in advance of any event is recorded as deferred revenue until the event occurs.

Similarly, sponsorship income and selling rights income is recognized when the sponsored festival or event occurs.

The Group earns income relating to the sale of beverages either directly or indirectly. The Group may staff the bar and recognize income earned once the beverages are sold at the festival/event or earn a percentage of profits from the bar run by the venue. In both instances, the income is recognized once the beverages are sold.

The Group received non-monetary revenue in the form of product from sponsors. The gross amount recognized is $44,000 in each of 2012 and 2011 respectively. These products have been recognized at fair value.

Gross vs. Net Revenue recognition

The Group reports revenue on a gross or net basis based on management's assessment of whether the Group acts as a principal or agent in the transaction, in accordance with the criteria outlined in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) subtopic 605-45 'Revenue Recognition—Principal Agent Considerations'. To the extent that the Group acts as a principal, revenue is reported on a gross basis. The determination of whether the Group acts as a principal or agent in a transaction is based on an evaluation of whether the Group has substantial risks or rewards of ownership under the terms of the agreement.

On occasion, the Group incurs costs on behalf of sponsors or related parties. In such instances, the Group charges the cost of this setup back to the sponsors. As the Group do not have control over these costs and act as an agent, on-charging these costs is not recognized as income but is recognized as an offset to the expense.

The on-charged amounts are recognized when the event has occurred and the quantum of the recharges can be reliably determined by reference to a supplier invoice.

Collaboration agreements

The Group collaborated with parties in Brisbane, Perth and Adelaide to run the Creamfield festivals in 2011 and 2012 and the Stereosonic festivals in 2011 in each of these cities. Collaborative partners were primarily responsible for organizing local suppliers in these cities and they participated in a share of the net profit or loss of each of the festivals as outlined in the respective joint venture agreements.

All revenue and expenses relating to the festivals are recognized on a gross basis when the Group acts as a principal. It has been determined that the Group predominantly acts as principal as noted above.

Receivables and payables, at year end, under collaboration agreements have been offset as the amounts are determinable and the Group has the right and intent to set off.

F-223

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Combined notes to the financial statements (Continued)
December 31, 2012 and 2011

The collaboration agreements were terminated in June 2012 and a one off termination payment was made to the partners. From June 2012, the partners do not participate in the profit share.

Direct operating expenses

The following variable costs relate directly to running a festival or event.

•: Entertainment expenses primarily relate to artist fees and artist related costs.
•: Event expenses primarily relate to venue hire, equipment hire, security, salary and wages paid to seasonal employees at the festivals or events and share of profits on festivals under collaboration agreements.
•: Production expenses relate to costs incurred in staging the events, e.g., lighting, sound, shipping and handling etc.
•: Sponsorship expenses relate to commissions and fees paid to agents whom procure the sponsorship income.
•: Ticketing expenses relate to fees or commissions paid to agents.
•: Bar costs relate to instances where the Group manages the bar at festivals and include seasonal employee costs and beverage costs.
•: Advertising costs which directly relate to promoting specific festivals or events to sell tickets. Advertising costs are expensed when incurred.

Business sale expenses

These are costs related to potential business combinations, such as legal and accounting charges.

Collaboration agreement termination payouts

These costs relate to terminating existing collaboration agreements in relation to the Stereosonic festival in certain states. The Group does not have further commitments under the collaboration agreements from June 2012.

General and administrative expenses

Costs relating to the running of the Group, e.g. employment expenses, rent and other office overhead, are recognized as incurred. There are no advertising costs included in this expense.

Depreciation and amortization

Depreciation and amortization is presented as a separate line in the Statement of Comprehensive Income. There is no depreciation or amortization included in direct operating expenses or general and administrative expenses.

Income Taxes

TOG is a partnership for tax purposes and under Australian tax legislation, it is not a tax payer in its own right and as such does not record income tax expense nor incur any income tax liabilities. The

F-224

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Combined notes to the financial statements (Continued)
December 31, 2012 and 2011

partners of TOG are required to report their respective shares of the partnerships income in their individual tax returns.

Income tax expense for TI is calculated on a legal entity basis, based on reported income before income taxes. The Company utilizes the asset and liability method of accounting for income taxes. Under this method deferred tax assets and liabilities are recognized to reflect the future tax consequences attributable to temporary differences between financial reporting bases of existing assets and liabilities and their respective tax bases. Deferred tax assets are reduced by a valuation allowance, when, in the opinion of management, it is more likely than not that all or some of the net deferred tax assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period in which the change is enacted.

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

Deferred tax balances that are expected to reverse within the year are classified as current.

Transactional taxes

The Group account for taxes that are externally imposed on revenue and expenses on a net basis, as a reduction of revenue and expenses.

Interest in relation to underpaid transaction taxes is recorded as interest expense in the Statement of Comprehensive Income. Interest expense for underpaid transactions was AUD$32,471 and AUD$31,270 for 2012 and 2011, respectively. Interest and penalties in relation to underpaid transaction taxes are accrued in Other accounts payable and accrued expenses in the Balance Sheet. The amount of interest and penalties was $90,875 and $58,404 at December 31, 2012 and 2011 respectively.

Operating leases

The Group has an operating lease which relates to the lease of its current premises. The lease expenses are recognized on a straight line basis over the period of the lease.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

F-225

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Combined notes to the financial statements (Continued)
December 31, 2012 and 2011

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair values because of the short maturities of those instruments.

Comprehensive Income

The Group displays all items required to be recognized under accounting standards as components of comprehensive income in a financial statement with the same prominence as other financial statements. Comprehensive income consists of net income and foreign currency translation adjustments, and is presented in the Statements of Comprehensive Income.

NOTE 2 LEASES

The Group leases office space under an operating lease. The lease has the option of extension of two further terms of six years each.

The future scheduled rental payments required under operating leases that have remaining non-cancelable lease terms exceeding one year at December 31, 2012 are as follows:

		AUD


2013			115,839
2014			115,863
2015			117,319
2016			58,207

Total			407,228

Rent expense for operating leases was AUD$111,384 and AUD$107,100 for 2012 and 2011, respectively.

Part of the property was sublet during December 31, 2011 and yielded income of AUD$7,083.

NOTE 3 RETIREMENT BENEFITS

The Group contributes 10% of the employee's salary to an employee nominated pension fund. The total contributed for the period is AUD $109,430 and AUD $56,407 and for 2012 and 2011, respectively.

The Group has no further obligations or commitments beyond remitting these withheld amounts to nominated pension funds each quarter.

F-226

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Combined notes to the financial statements (Continued)
December 31, 2012 and 2011

NOTE 4 RELATED PARTIES

Transactions involving equity owners and their related entities

The following table sets forth expenses incurred and revenue earned from related entities:

	Year ended December 31,

	2012		2011

	AUD
Revenue billed by the Group for resources utilized		32,600		—
Staff costs billed to the Group		6,030		8,756
Management fee billed to the Group		110,471		254,569

The above transactions are conducted at cost.

The total amounts outstanding from related entities, included within accounts receivable and accounts payable are:

	December 31,

	2012		2011

	AUD
Receivables		251,454		175,925
Payables		—		474

The above amounts are due on standard trading terms, i.e. within 30 days of invoice.

Two of the Directors have provided a personal guarantee for the liabilities of Totem Industries Pty Ltd up to AUD $340,000 in relation to its banking arrangement. There are no outstanding bank loans or overdraft facilities as at December 31, 2012 or 2011.

NOTE 5 INCOME TAXES

The Company has been operating under Australian tax law that has a corporate rate of 30% for all periods presented.

F-227

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Combined notes to the financial statements (Continued)
December 31, 2012 and 2011

The provision for taxes on income (i.e. income tax expense) for the years ended December 31, 2012 and 2011 is comprised of the following:

	Year ended December 31,

	2012			2011

	AUD
Federal
Current expense/(benefit)		(140,638	)		13,395
Prior year overprovision		(13,395	)		(59,705	)
Deferred expense/(benefit)		142,388			(12,510	)

		(11,645	)		(58,820	)
Valuation Allowance		(1,749	)		12,509

Tax expense (benefit)		(13,394	)		(46,311	)

Comprising:
US		—			—
Foreign		—			—

Reconciliation of income tax expense attributable to continuing operations and income tax expense resulting from applying the statutory tax rate to pre-tax income from continuing operations:

	Year ended December 31,

	2012			2011

	AUD
Accounting profit before income taxes—combined financial statements		6,074,601			6,024,574
Less: accounting profit of non taxable partnership TOG		(6,074,601	)		(6,024,574	)
Accounting profit/(loss) before income tax—TI		—			—
Tax at the applicable rates(1)		—			—
Prior year true up of tax returns		(13,394	)		(59,705	)
Permanent differences		1,749			885

Net income tax expense/(benefit)		(11,645	)		(58,820	)

Valuation Allowance		(1,749	)		12,509

Tax expense / (benefit)		(13,394	)		(46,311	)

(1): The statutory tax rate is based on the Australian rate of 30%.

The Company's deferred income tax balance and the difference between income tax computed at the Australian statutory income rate and income tax expense is primarily the result of tax losses carried forward and the valuation allowance raised.

No jurisdiction tax rate adjustment is calculated to account for the difference between the Australian and US federal statutory tax rates as the Company is not expected to be a US domestic company until after the initial public offering.

F-228

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Combined notes to the financial statements (Continued)
December 31, 2012 and 2011

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amount used for income tax purposes. Significant components of the Company's deferred tax items are as follows:

Temporary differences and tax losses which gave rise to deferred tax assets and liabilities were as follows:

	December 31,

	2012			2011

	AUD			AUD
Current deferred tax assets
Accrued expenses deductible when paid		58,636			72,911
Deferred revenue		25,895			5,485

Total current deferred tax assets		84,531			78,396
Non current deferred tax assets
Accrued vacation		642			897
Carried forward tax losses		140,638			—

Total non current deferred tax assets		141,280			897

Gross deferred tax assets		225,811			79,293
Valuation allowance		(70,466	)		(72,215	)

Total deferred tax asset		155,345			7,078

Work in Progress		(150,969	)		(2,195	)
Prepaid expenses and other current assets		(4,376	)		(4,883	)

Total deferred tax liability		(155,345	)		(7,078	)

The carry forward tax losses do not expire and can be utilized against future taxable income.

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Group also considers the scheduled reversal of deferred tax liabilities, projected future taxable income or losses, and tax planning strategies in making this assessment. Based upon the Group's history, the Company does not believe realization of these tax assets is more likely than not. As such, full valuation allowances for the deferred tax assets were established.

NOTE 6 CONTINGENCIES

There are no contingencies that management are aware of at balance date.

F-229

Table of Contents

Totem Onelove Group and Totem Industries Pty Ltd.

Combined notes to the financial statements (Continued)
December 31, 2012 and 2011

NOTE 7 SUBSEQUENT EVENTS

The Directors evaluated the December 31, 2012 financial statements for subsequent events through June 24, 2013, the date the financial statements were available to be issued. Subsequent to year end, the Directors/Partners have agreed in principal to sell 100% of the ownership of the Group to SFX Entertainment, Inc. The agreement is subject to a number of conditions precedent and is expected to be completed in 2013 financial year. The Directors/Partners will continue to remain and operate the business in Australia.

F-230

Table of Contents

Made Event, LLC &
EZ Festivals, LLC

Combined Financial Statements

As of and for the Years Ended December 31, 2012 and 2011
and as of and for the Three Months Ended
March 31, 2013 and 2012 (Unaudited)

Table of Contents

Made Event, LLC & EZ Festivals, LLC

Combined Financial Statements

Contents


Combined Financial Statements
Report of Independent Auditors		F-233
Combined Balance Sheets		F-234
Combined Statements of Operations and Members' Equity		F-235
Combined Statements of Cash Flows		F-236
Notes to Combined Financial Statements		F-237

F-232

Table of Contents

Made Event, LLC & EZ Festivals, LLC

Report of Independent Auditors

Board of Managers and Members
Made Event, LLC, and
EZ Festivals, LLC

We have audited the accompanying combined financial statements of Made Event, LLC and EZ Festivals, LLC, which comprise the combined balance sheets as of December 31, 2012 and December 31, 2011, and the related combined statements of operations and members' equity, and cash flows for the years then ended, and the related notes to the financial statements.

Management's responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in conformity with US generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free of material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of Made Event, LLC and EZ Festivals, LLC at December 31, 2012 and December 31, 2011, and the combined results of its operations and its cash flows for the years then ended in conformity with US generally accepted accounting principles.


		/s/ Ernst & Young LLP
June 24, 2013 New York, New York

F-233

Table of Contents

Made Event, LLC & EZ Festivals, LLC

Combined balance sheets

	March 31,				December 31,

	2013		2012		2012		2011

	(Unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	517,456	$	1,425,501	$	815,665	$	1,228,384
Accounts receivable		1,451,093		206,087		211,774		212,191
Prepaid expenses and other current assets		292,100		234,602		100,080		115,610
Insurance proceeds receivable		—		606,408		—		606,408

Total Current Assets		2,260,649		2,472,598		1,127,519		2,162,593
Property and Equipment, net		66,457		—		66,457		—

Total Assets	$	2,327,106	$	2,472,598	$	1,193,976	$	2,162,593

Liabilities and Members' Equity
Current Liabilities:
Accounts payable and accrued expenses	$	1,149,660	$	143,129	$	358,604	$	168,435
Deferred revenue		1,055,232		1,353,409		693,126		909,581
Income taxes payable		6,000		16,000		6,000		28,839

Total Current Liabilities		2,210,892		1,512,538		1,057,730		1,106,855

Commitments and Contingencies
Members' Equity		116,214		960,060		136,246		1,055,738

Total Liabilities and Members' Equity	$	2,327,106	$	2,472,598	$	1,193,976	$	2,162,593

See notes to combined financial statements.

F-234

Table of Contents

Made Event, LLC & EZ Festivals, LLC

Combined statements of operations and members' equity

	Three Months Ended March 31,						Years Ended December 31,

	2013			2012			2012			2011

	(Unaudited)
Revenue	$	1,529,654		$	—		$	18,055,835		$	11,517,543

Operating Expenses:
Direct operating expenses		1,308,427			—			14,093,949			9,288,195
Selling, general and administrative expenses		101,929			69,099			656,511			492,644

Total Operating Expenses		1,410,356			69,099			14,750,460			9,780,839

Operating Income/(Loss)		119,298			(69,099	)		3,305,375			1,736,704

Other Income/(Expense):
Transaction and litigation costs		128,799			(5,975	)		(450,256	)		—
Interest income		64			209			710			1,481

Total Other Income/(Expense), net		128,735			(5,766	)		(449,546	)		1,481

(Loss)/Income before Provision for
Income Taxes		(9,437	)		(74,865	)		2,855,829			1,738,185
Provision for Income Taxes		25			85			145,085			90,818

Net (Loss)/Income		(9,462	)		(74,950	)		2,710,744			1,647,367
Members' Equity, beginning of period		136,246			1,055,738			1,055,738			772,427
Members' Distributions		(10,570	)		(20,728	)		(3,630,236	)		(1,364,056	)

Members' Equity, end of period	$	116,214		$	960,060		$	136,246		$	1,055,738

See notes to combined financial statements.

F-235

Table of Contents

Made Event, LLC & EZ Festivals, LLC

Combined statements of cash flows

	Three Months Ended March 31,						Years Ended December 31,

	2013			2012			2012			2011

	(Unaudited)
Cash Flows from Operating Activities:
Net income/(loss)	$	(9,462	)	$	(74,950	)	$	2,710,744		$	1,647,367
Adjustments to reconcile net income/(loss) to net cash (used in)/provided by operating activities:
Depreciation and amortization		—			—			66,457			—
Gain on insurance claim		—			—			—			(606,408	)
Changes in operating assets and liabilities:
Accounts receivable		(1,239,319	)		6,104			417			(208,791	)
Prepaid expenses and other current assets		(192,020	)		(118,992	)		15,530			(110,307	)
Insurance proceeds receivable		—			—			606,408			—
Accounts payable and accrued expenses		791,056			(25,306	)		190,169			105,655
Deferred revenue		362,106			443,828			(216,455	)		909,581
Income taxes payable		—			(12,839	)		(22,839	)		28,839

Net Cash (Used in)/Provided by Operating Activities		(287,639	)		217,845			3,350,431			1,765,936

Cash Flows from Investing Activities:
Purchase of equipment		—			—			(132,914	)		—

Net Cash Used in Investing Activities		—			—			(132,914	)		—

Cash Flows from Financing Activities:
Distributions to members		(10,570	)		(20,728	)		(3,630,236	)		(1,364,056	)

Net Cash Used in Financing Activities		(10,570	)		(20,728	)		(3,630,236	)		(1,364,056	)

Net (Decrease)/Increase in Cash and Cash Equivalents		(298,209	)		197,117			(412,719	)		401,880
Cash and Cash Equivalents, beginning of period		815,665			1,228,384			1,228,384			826,504

Cash and Cash Equivalents, end of period	$	517,456		$	1,425,501		$	815,665		$	1,228,384

Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes	$	25		$	12,924		$	167,924		$	61,979

See notes to combined financial statements.

F-236

Table of Contents

Made Event, LLC & EZ Festivals, LLC

Notes to Combined Financial Statements
Three Months Ended March 31, 2013 and 2012 (unaudited)
and Years Ended December 31, 2012 and 2011

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of business—Made Event, LLC and EZ Festivals, LLC (collectively referred to as the "Company") operate in the business of concert promotion and production of music events. Typically, to initiate live music events, the Company contracts with artists to perform at arranged events. The Company does not own any event venues and rents space as needed for its shows.

Seasonality—Due to the Company's largest event occurring primarily in September, the Company experiences higher revenue during the third quarter of each year. The Company's seasonality also results in higher balances in cash and cash equivalents, prepaid expenses, and deferred revenue at different times in the year.

Basis of presentation—The combined financial statements include the accounts of Made Event LLC and EZ Festivals, LLC. Made Event LLC is owned and operated by a single member/manager, who is the spouse of the sole member and manager of EZ Festivals, LLC. These entities may be deemed to be affiliated by virtue of the marital relationship between these two members/managers. All significant intercompany balances and transactions have been eliminated in combination.

Cash and cash equivalents—The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Accounts receivable and allowance for doubtful accounts—The Company evaluates the collectability of accounts receivable based on a combination of factors. Generally, the Company records specific reserves to reduce the amounts recorded to what is believed will be collected when a customer's account ages beyond typical collection patterns, or the Company becomes aware of a customer's inability to meet its financial obligations. The Company has determined that no allowance for doubtful accounts is necessary as of March 31, 2013 and 2012, and December 31, 2012 and 2011.

Revenue recognition—Revenue from the promotion and production of an event is recognized after the performance occurs upon settlement of the event. Revenue collected in advance of the event is recorded as deferred revenue until the event occurs. The Company also receives a percentage of proceeds from sales of merchandise and concessions at its events, which are recorded as revenue after the event occurs.

Direct operating expenses—Direct operating expenses include artist fees, show related marketing and advertising expenses, rent expense for event venues, and salaries and wages related to seasonal employees at the Company's events along with other costs. These costs are primarily variable in nature.

Selling, general and administrative expenses—Selling, general and administrative expenses include insurance costs, professional fees and consulting along with other costs.

Transaction and litigation costs represent legal and professional fees related to the potential sale of the company (Note 5) and litigation defense costs (Note 4).

F-237

Table of Contents

Made Event, LLC & EZ Festivals, LLC

Notes to Combined Financial Statements (Continued)
Three Months Ended March 31, 2013 and 2012 (unaudited)
and Years Ended December 31, 2012 and 2011

Prepaid expenses—The majority of the Company's prepaid expenses relate to event expenses including deposits and other costs directly related to future concert events. These prepaid costs are charged to operations upon completion of the related events.

Property and equipment—Property and equipment are stated at cost, less accumulated depreciation. Property and equipment, which is comprised of staging, is depreciated based on usage in conjunction with the related event over its estimated useful life of 2 years.

Income taxes—Made Event, LLC and EZ Festivals, LLC are taxed as limited liability companies. As a result, the income or loss of each entity is passed through directly to the individual members. The City of New York, however, levies an unincorporated business tax and business tax on Small Business Corporations on the income of the Company, which is shown as a provision for income taxes.

Presentation of sales tax—The Company earns revenue in localities that impose sales tax on the Company's sales. The Company's accounting policy is to exclude from revenue and cost of sale the taxes collected and remitted to the localities.

Use of estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Advertising costs—The Company records advertising expense as it is incurred. These expenses are recorded on the combined statements of operations as direct operating expenses. The Company incurred advertising expenses of approximately $33,000 and $10,000 for the three-month periods ended March 31, 2013 and 2012, respectively, and approximately $102,000 and $122,000 for the years ended December 31, 2012 and 2011, respectively.

Concentrations of credit risk:

Cash balances—The Company places its cash investments with high credit quality financial institutions. At times, the Company's cash deposits with any one financial institution may exceed amount insured by the Federal Deposit Insurance Corporation ("FDIC").

Customers—The Company has a diverse group of customers, and generally does not require collateral.

F-238

Table of Contents

Made Event, LLC & EZ Festivals, LLC

Notes to Combined Financial Statements (Continued)
Three Months Ended March 31, 2013 and 2012 (unaudited)
and Years Ended December 31, 2012 and 2011

2. PROPERTY AND EQUIPMENT

Property and equipment consists of the following at March 31, 2013 and 2012 and at December 31, 2012 and 2011:

March 31,	Estimated Useful Lives	2013			2012


		(Unaudited)
Property and Equipment	2 years	$	132,914		$	—
Less: Accumulated Depreciation and Amortization			(66,457	)		—

Property and Equipment, net		$	66,457		$	—

December 31,	Estimated Useful Lives	2012			2011


Property and Equipment	2 years	$	132,914		$	—
Less: Accumulated Depreciation and Amortization			(66,457	)		—

Property and Equipment, net		$	66,457		$	—

Depreciation expense for the year ended December 31, 2012 was approximately $66,000. There was no depreciation expense for the three months ended March 31, 2013 and 2012 and the year ended December 31, 2011.

3. INSURANCE CLAIM

In August 2011, Hurricane Irene interrupted the initial setup of the Company's largest music festival, the Electric Zoo, causing substantial additional costs to prepare for the storm and set up the event in time for the festival after the storm had passed. In connection with the storm, the Company received approximately $606,000 of insurance proceeds in Fiscal Year 2012 for damages and additional costs incurred, which was recorded as a reduction of direct costs for the year ended December 31, 2011. These insurance proceeds are reflected as a receivable by the Company as of March 31, 2012 and December 31, 2011.

4. CONTINGENCIES

Litigation—Mike Bindra, Laura De Palma, Made Event, LLC, and EZ Festivals, LLC (collectively the "Defendants") are defendants in an action whereby the Plaintiffs are claiming a breach of an alleged joint venture agreement by the Defendants relating to the Electric Zoo Festival and (a) allege, inter alia, that Plaintiffs have a perpetual ownership interest in the Electric Zoo Festival and the profits generated in connection therewith; and (b) seek certain other declaratory, compensatory, monetary and other relief in connection with such allegations. The action is entitled Henri Pferdmenges v. Bindra et al., and is currently pending in the United States District Court, Southern District of New York, Civil Action No. 12-cv-08555. This action is currently in the discovery phase, and the Defendants believe that the claims for a perpetual ownership interest in the Electric Zoo Festival and the profits generated therewith are completely without merit and intend to vigorously defend themselves against all claims asserted against them.

F-239

Table of Contents

Made Event, LLC & EZ Festivals, LLC

Notes to Combined Financial Statements (Continued)
Three Months Ended March 31, 2013 and 2012 (unaudited)
and Years Ended December 31, 2012 and 2011

In the normal course of business, the Company is a party to claims and/or litigation. In management's opinion, settlement of these actions will not have a material adverse effect on the Company's combined financial position, liquidity, or results of operations.

5. SUBSEQUENT EVENTS

The Company has considered subsequent events through June 24, 2013, the date the combined financial statements were available to be issued, in preparing the combined financial statements and notes thereto.

On June 23, 2013, we entered into a letter agreement with SFX Entertainment, Inc. to be acquired. As part of the agreement, we received a $2.5 million nonrefundable advance and the parties agreed to extend the closing date to August 21, 2013.

F-240

Table of Contents

Shares

Common Stock

SFX ENTERTAINMENT, INC.

PROSPECTUS


UBS Investment Bank		Barclays		Jefferies

, 2013

Until , 2013 (25 days after commencement of this offering), all dealers that buy, sell or trade shares of our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

Table of Contents

Part II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other expenses of issuance and distribution

The following table provides information regarding the various actual and anticipated expenses payable by us in connection with the issuance and distribution of the securities being registered hereby. All amounts shown are estimates except the Securities and Exchange Commission registration fee.

Item	Amount


SEC registration fee	$	23,870
Legal fees and expenses
Listing fee
FINRA filing fee	$	26,750
Accounting fees and expenses
Printing and engraving expenses
Transfer agent and registrar fees and expenses
Blue Sky fees and expenses
Miscellaneous fees and expenses
Total

Item 14. Indemnification of directors and officers

Section 102 of the General Corporation Law of the State of Delaware permits a corporation to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit.

Section 145 of the General Corporation Law of the State of Delaware provides that a corporation has the power to indemnify a director, officer, employee, or agent of the corporation, or a person serving at the request of the corporation for another corporation, partnership, joint venture, trust or other enterprise in related capacities against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with an action, suit or proceeding to which he was or is a party or is threatened to be made a party to any threatened, ending or completed action, suit or proceeding by reason of such position, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

The Company's Certificate of Incorporation and By-Laws provide that it will indemnify and hold harmless, to the fullest extent permitted by Section 145 of the Delaware General Corporation Law, as amended from time to time, each person that such section grants us the power to indemnify.

II-1

Table of Contents

Part II

The Company's Certificate of Incorporation and By-Laws provide that, to the fullest extent permitted by applicable law, none of our directors will be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director. Any repeal or modification of this provision will be prospective only and will not adversely affect any limitation, right or protection of a director of our company existing at the time of such repeal or modification.

We have entered into indemnification agreements with our directors and officers. These indemnification agreements may require us, among other things, to indemnify our directors and officers for some expenses, including attorneys' fees, judgments, fines and settlement amounts incurred by a director or officer in any action or proceeding arising out of his or her service as one of our directors or officers, or any of our subsidiaries or any other company or enterprise to which the person provides services at our request.

We maintain a general liability insurance policy that covers certain liabilities of directors and officers of our corporation arising out of claims based on acts or omissions in their capacities as directors or officers.

Item 15. Recent sales of unregistered securities

In June 2012, we issued 1,000,000 shares of common stock in a private placement to the seller of Disco Productions, Inc. In July 2012, we issued 786,467 shares of common stock in a private placement to the sellers of Dayglow LLC and its affiliates. In December 2012, we issued 674,560 shares of common stock in a private placement to the seller of Nightlife Holdings, LLC, MMG Nightlife, LLC, US Nightlife Management, LLC, Puhta Cana Venue, LLC, David Grutman, Inc., SEBU Corp., Brian Gordan, David Grutman and World on a String, LLC.

On October 29, 2012, we closed a financing with our founder Robert F.X. Sillerman in which we issued 2,500,000 shares of common stock at a price per share of $4.00 for an aggregate purchase price of $10.0 million.

On December 6, 2012, we closed a private placement financing with an investor in which we issued 300,000 shares of common stock at a price per share of $5.00 for an aggregate purchase price of $1.5 million. Such purchase price was paid in the form of a $1.5 million principal amount promissory note. These shares were subsequently surrendered to us and cancelled, and the note was cancelled.

During the year ended December 31, 2012, we granted to our directors, officers and employees (i) options to purchase 8,445,500 shares of our common stock and (ii) warrants to purchase 2.2 million shares of our common stock, each with per share exercise prices ranging from $2.00 to $10.00, and 1,875 shares of our common stock to a director.

On January 8, 2013, we closed a private placement financing with an investor in which we issued 2,000,000 shares of common stock at a price per share of $5.00 for an aggregate purchase price of $10.0 million.

On February 22, 2013, we closed a private placement financing with an investor in which we issued 2,000,000 shares of common stock at a price per share of $5.00 for $10.0 million in net proceeds.

In the March 2013 Beatport acquisition, we issued in a private placement 5,000,000 shares of our common stock.

In March 2013, under our joint venture with ID&T, we issued to ID&T 2,000,000 shares of our common stock and warrants to purchase 500,000 shares of our common stock. In March 2013, we

II-2

Table of Contents

Part II

issued to ID&T 2,000,000 shares of our common stock in connection with our entry into the ID&T Option.

During 2013, we granted to our directors, officers, and employees (i) options to purchase 8,037,5000 shares of our common stock and (ii) warrants to purchase 7,250,000 shares of our common stock, each with per share exercise prices ranging from $5.00 to $10.00 and 1,700,000 shares of our common stock to two employees.

On April 1, 2013, we closed a private placement financing with three related investors in which we issued 1,000,000 shares of our common stock at a price per share of $10.00 for an aggregate purchase price of $10.0 million.

In February 2012, SFX EDM Holdings Corporation issued and sold an aggregate of 36,000,000 shares of its common stock as founder shares at par to its founders, including Robert F.X. Sillerman and affiliated funds controlled by him. During June 2012, SFX EDM Holdings Corporation closed three private placement financings with three separate investors as follows: 4,000,000 shares of common stock at a price per share of $2.50 for an aggregate purchase price of $10.0 million; 1,250,000 shares of common stock at a price per share of $4.00 for an aggregate purchase price of $5.0 million; and 500,000 shares of our common stock at a price per share of $5.00 for an aggregate purchase price of $2.5 million.

We subsequently acquired SFX EDM Holdings Corporation when its stockholders entered into share exchange agreements exchanging all of their shares of SFX EDM Holdings Corporation for a like number of newly issued shares of our common stock.

Unless otherwise stated, the sales of the above securities were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(2) of the Securities Act (or Regulation D promulgated thereunder), or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or pursuant to benefit plans and contracts relating to compensation as provided under Rule 701.

Item 16. Exhibits and financial statement schedules


	1.1		Form of Underwriting Agreement*
	3.1		Certificate of Incorporation of the Registrant
	3.2		Amended and Restated Bylaws of the Registrant
	3.3		Certificate of Amendment to the Certificate of Incorporation of the Registrant
	4.1		Specimen Common Stock Certificate*
	4.2		Registration Rights Agreement, dated July 31, 2012, by and among the Registrant, Sebastian Solano, Paul Campbell, Patryk Tracz and Lukasz Tracz#
	4.3		Registration Rights Agreement, dated July 31, 2012, by and among the Registrant, Eric Fuller and Collyns Stenzel#
	4.4		Registration Rights Agreement, dated December 31, 2012, between the Registrant and Nightlife Holdings LLC
	4.5		Registration Rights Agreement, dated June 19, 2012, between the Registrant and Disco Productions, Inc.
	5.1		Opinion of Reed Smith LLP*
	10.1		SFX Entertainment, Inc. 2013 Equity Compensation Plan, and forms of agreements thereunder
	10.2		Employment Agreement, dated November 8, 2012, between the Registrant and Sheldon Finkel
	10.3		Employment Agreement, dated October 18, 2012, between the Registrant and Robert F.X. Sillerman#

II-3

Table of Contents

Part II


	10.4		Employment Agreement, dated January 1, 2013, between the Registrant and Mitchell Slater
	10.5		Employment Agreement, dated October 2, 2012, by and between the Registrant and Richard Rosenstein
	10.6		Subscription Agreement, dated June 5, 2012, between SFX EDM Holdings Corporation and The Gordon & Dana Crawford Trust, UTD 8/23/77#
	10.7		Subscription Agreement, dated June 6, 2012, between SFX EDM Holdings Corporation and Entertainment Events Funding LLC
	10.8		Subscription Agreement, dated June 6, 2012, between SFX EDM Holdings Corporation and Baron Small Cap Fund
	10.9		Subscription Agreement, dated January 8, 2013, between the Registrant and Adage Capital Management, L.P.
	10.10		Put Option Letter Agreement, dated October 28, 2012 between the Registrant and Baron Small Cap Fund
	10.11		Asset Contribution Agreement, dated June 19, 2012, by and among the the Registrant, SFX-Disco Operating LLC, SFX EDM Holdings Corporation, Disco Productions, Inc. and James Donald Estopinal**
	10.12		Asset Contribution Agreement, dated July 31, 2012, by and among the Registrant, SFX-LIC Operating LLC, Dayglow LLC, Committee Entertainment, LLC and additional parties named therein**
	10.13		Asset Contribution Agreement, dated November 21, 2012, by and among the Registrant, SFX-Nightlife Operating LLC, Nightlife Holdings LLC, MMG Nightlife LLC and additional parties named therein**
	10.14		Guarantee and Collateral Agreement, dated March 15, 2013, by and among SFX Intermediate Holdco I LLC, SFX Intermediate Holdco II LLC, PITA I LLC, SFX-LIC Operating LLC, SFX-Nightlife Operating LLC, SFX-IDT N.A. Holding LLC and Barclays Bank PLC#
	10.15		Amendment to the Asset Contribution Agreement, dated December 31, 2012, by and among the Registrant, Nightlife Holdings LLC, MMG Nightlife LLC and additional parties named therein**
	10.16		Amended & Restated Promissory Note, dated March 15, 2013, issued by the Registrant to Nightlife Holdings LLC
	10.17		Promissory Note, dated December 31, 2012, issued by the Registrant to Robert F.X. Sillerman
	10.18		Asset Contribution Agreement, dated July 31, 2012, by and among the Registrant, SFX-LIC Operating LLC, Advanced Concert Productions and additional parties named therein**
	10.19		Backstop Commitment Agreement, dated December 28, 2012, by and between the Registrant and Robert F.X. Sillerman
	10.20		Form of Indemnification Agreement for officers and directors of the Registrant
	10.21		Binding Term Sheet, dated October 26, 2012, by and between the Registrant and ID&T Holding B.V.
	10.22		Amendment to JV Agreement, dated March 14, 2013, by and among the Registrant, SFX-IDT N.A. Holding LLC, ID&T/SFX North America LLC, ID&T/SFX Q-Dance LLC, ID&T/SFX Sensation LLC, ID&T/SFX Mysteryland LLC, ID&T/SFX TomorrowWorld LLC and ID&T Holding B.V.
	10.23		Shared Services Agreement, dated January 4, 2013, by and between the Registrant and Viggle Inc.
	10.24		Shared Services Agreement, dated January 4, 2013, by and between the Registrant and Circle Entertainment Inc.
	10.25		Credit Agreement, dated March 15, 2013, by and among SFX Intermediate Holdco II LLC, SFX Intermediate Holdco I LLC, Barclays Bank PLC, UBS Securities LLC and Jefferies Group LLC#

II-4

Table of Contents

Part II


	10.26		Guarantee Agreement, dated March 15, 2013, by and between Robert F.X. Sillerman and Barclays Bank PLC#
	10.27		Option Agreement, dated March 20, 2013, by and between the Registrant and ID&T Holding B.V.#
	10.28		Subscription Agreement, dated April 1, 2013, by and between the Registrant, and Insight Venture Partners V, L.P., Insight Venture Partners V (Employee Co-Investors), L.P., and Insight Venture Partners (Cayman) V, L.P.
	10.29		Subscription Agreement, dated December 6, 2012, by and between the Registrant and White Oak Securities LLC#
	10.30		Subscription Agreement, dated February 22, 2013, by and between the Registrant and WPP Luxembourg Gamma Three SARL#
	10.31		Agreement and Plan of Merger, dated February 25, 2013, by and among the Registrant, PITA II LLC, Beatport, LLC, BP Representative, LLC and additional parties named therein**
	10.32		Warrant to Purchase Common Stock, dated March 15, 2013, issued by the Registrant to ID&T Holding B.V.
	10.33		Termination of Subscription Agreement, dated October 28, 2012, between the Registrant and Baron Small Cap Fund
	10.34		Amendment to Subscription Agreement, dated August 15, 2012, between the Registrant and Entertainment Events Funds LLC
	10.35		SFX Entertainment, Inc. 2013 Supplemental Equity Compensation Plan, and forms of agreement thereunder
	10.36		Letter Amendment to Asset Contribution Agreement; Termination of Pledge and Security Agreement; Amended and Restated Promissory Note, dated March 15, 2013, from the Registrant to Nightlife Holdings LLC
	10.37		Employment Agreement, dated November 13, 2012, by and between the Registrant and Chris Stephenson
	10.38		Term Sheet, dated October 10, 2012, between Registrant and i-Motion Besitz- und Verwaltungsgesellschaft mbH & Co KG
	10.39		Amendment No. 1 and Consent to Credit Agreement, dated May 22, 2013, by and among SFX Intermediate Holdco II LLC, SFX Intermediate Holdco I LLC, Barclays Bank PLC, UBS Loan Finance LLC, Jeffries Group LLC and additional parties therein
	10.40		Amendment No. 2 to Credit Agreement, dated June 5, 2013, by and among SFX Intermediate Holdco II LLC, SFX Intermediate Holdco I LLC, Barclays Bank PLC, UBS Loan Finance LLC, Jeffries Group LLC, and additional parties named therein
	10.41		EBITDA Warrant Certificate, dated March 15, 2013, between ID&T Holding B.V. and the Registrant
	10.42		Call Option Certificate, dated March 15, 2013, between ID&T Holding B.V. and the Registrant
	10.43		Employment Agreement, dated June 5, 2013, by and between the Registrant and Robert Damon
	10.44		Asset Contribution Agreement, dated May 15, 2013, by and among the Registrant, SFX-Totem Operating Pty Ltd., Totem Onelove Group Pty Ltd., and additional parties named therein**
	10.45		Term Sheet, dated April 23, 2013, between the Registrant and Made Event LLC
	10.46		Term Sheet, dated April 23, 2013, between the Registrant and EZ Festivals, LLC
	10.47		Employment Agreement, dated June 1, 2013, between the Registrant and Timothy Crowhurst
	10.48		Employment Agreement, dated June 3, 2013, between the Registrant and Joseph F. Rascoff*
	10.49		Letter Agreement, dated December 31, 2012, between the Registrant and Tangent Capital Partners LLC

II-5

Table of Contents

Part II


	10.50		Master Services Agreement, dated November 1, 2012, between the Registrant and Sports and Entertainment Physcians, PC
	10.51		Amendment No. 1 to Guarantee Agreement, dated June 5, 2013, between Robert F.X. Sillerman and Barclays Bank PLC
	10.52		Side Letter Agreement, dated June 23, 2013, by and among The Registrant, Made Event, LLC, and EZ Festival, LLC
	21.1		List of subsidiaries of the Registrant
	23.1		Consent of Ernst & Young LLP
	23.2		Consent of Ernst & Young LLP
	23.3		Consent of Ernst & Young LLP
	23.4		Consent of Ernst & Young Accountants LLP
	23.5		Consent of Ernst & Young GmbH
	23.6		Consent of Ernst & Young
	23.7		Consent of BDO USA, LLP
	23.8		Consent of BDO USA, LLP
	23.9		Consent of BDO USA, LLP
	23.10		Consent of Reed Smith LLP (included in Exhibit 5.1)*
	24.1		Power of Attorney (included on the signature page to this Registration Statement)

*: To be filed by Amendment.
**: The Registrant agrees to furnish supplementally a copy of any omitted schedules upon request to the SEC in accordance with Item 601(b)(2) of Regulation S-K.
#: Confidential Treatment Requested. Confidential portions of this document have been redacted pursuant to a request for confidential treatment and such portions have been submitted separately to the SEC.

Item 17. Undertakings

The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, or the Act, may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:

(1): For purposes of determining any liability under the Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the

II-6

Table of Contents

Part II

Securities Act of 1933, as amended, shall be deemed to be part of this registration statement as of the time it was declared effective.

(2): For the purpose of determining any liability under the Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-7

Table of Contents

Signatures

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, New York, on June 24, 2013.


		SFX ENTERTAINMENT, INC.
		By:		/s/ ROBERT F.X. SILLERMAN Robert F.X. Sillerman Chief Executive Officer and Director

POWER OF ATTORNEY

We, the undersigned officers and directors of SFX Entertainment, Inc., hereby severally constitute and appoint Robert F.X. Sillerman and Mitchell Slater, our true and lawful attorney-in-fact and agents, with full power of substitution and resubstitution for him and in his name, place and stead, and in any and all capacities, to sign for us and in our names in the capacities indicated below any and all amendments (including post-effective amendments) to this registration statement (or any other registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended), and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.


/s/ ROBERT F.X. SILLERMAN Robert F.X. Sillerman	Chairman and Chief Executive Officer (Principal Executive Officer)	June 24, 2013
/s/ RICHARD ROSENSTEIN Richard Rosenstein	Chief Financial Officer (Principal Financial Officer)	June 24, 2013
/s/ ROBERT DAMON Robert Damon	Chief Accounting Officer (Principal Accounting Officer)	June 24, 2013
/s/ MITCHELL SLATER Mitchell Slater	Director	June 24, 2013

II-8

Table of Contents

Signatures


/s/ JOHN D. MILLER John D. Miller	Director	June 24, 2013
/s/ EDWARD SIMON Edward Simon	Director	June 24, 2013
/s/ JOSEPH F. RASCOFF Joseph F. Rascoff	Director	June 24, 2013
/s/ DR. ANDREW N. BAZOS Dr. Andrew N. Bazos	Director	June 24, 2013
/s/ D. GEOFF ARMSTRONG D. Geoff Armstrong	Director	June 24, 2013
/s/ JARED COHEN Jared Cohen	Director	June 24, 2013
/s/ MICHAEL MEYER Michael Meyer	Director	June 24, 2013

II-9

EX-3.1 2 a2215423zex-3_1.htm EX-3.1

Exhibit 3.1

Delaware

The First State

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF INCORPORATION OF “SFX HOLDING CORPORATION”, FILED IN THIS OFFICE ON THE FIFTH DAY OF JUNE, A.D. 2012, AT 3:07 O’CLOCK P.M.

A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS.

5164834 8100 120705338 You may verify this certificate online at corp.delaware.gov/authver.shtml


	/s/ Jeffrey W. Bullock
	Jeffrey W. Bullock, Secretary of State
	AUTHENTICATION: DATE:	9620602 06-05-12

State of Delaware
Secretary of State
Division of Corporations
Delivered 03:10 PM 06/05/2012
FILED 03:07 PM 06/05/2012
SRV 120705338 - 5164834 FILE

CERTIFICATE OF INCORPORATION

SFX HOLDING CORPORATION

ARTICLE I.

The name of this corporation is SFX Holding Corporation (the “Corporation”).

ARTICLE II.

The address of the registered office of the Corporation in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, State of Delaware, 19808. The name of its registered agent at such address is Corporation Service Company.

ARTICLE III.

The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law.

ARTICLE IV.

The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 400,000,000, of which 300,000,000 shares shall be Common Stock with a par value of $0.001 per share (the “Common Stock”) and 100,000,000 shares shall be Preferred Stock with a par value of $0.001 per share (the “Preferred Stock”).

A. Preferred Stock. Subject to Article VI, the Board of Directors (the “Board”) is expressly granted authority, by resolution or resolutions thereof, to provide out of the unissued shares of Preferred Stock, one or more series of Preferred Stock, and to fix for each such series the number of shares constituting such series, the voting rights, full or limited, and any designations, powers, preferences and any relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof as shall be applicable to the shares of each series and shall be stated and expressed in the resolution or resolutions adopted by the Board providing for the issue of such series (a “Preferred Stock Designation”) and as may be permitted by the DGCL. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, irrespective of Section 242(b)(2) of the DGCL, without a separate vote of the holders of the Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation.

B. Common Stock. Except as otherwise required by law or as otherwise provided in any Preferred Stock Designation, the holders of the Common Stock shall exclusively possess all voting power and each share of Common Stock shall have one vote.

ARTICLE V.

The Corporation is to have perpetual existence.

ARTICLE VI.

Except as otherwise provided in this Certificate of Incorporation, in furtherance and not in limitation of the powers conferred by statute, the Board of Directors of the Corporation is expressly authorized to make, adopt, alter, amend or repeal any of the Bylaws of the Corporation.

ARTICLE VII.

Elections of directors need not be by written ballot unless otherwise provided in the Bylaws of the Corporation.

ARTICLE VIII.

A. To the fullest extent permitted by the Delaware General Corporation Law as the same exists or as may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director. If the Delaware General Corporation Law is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.

B. The Corporation shall have the power to indemnify, to the extent permitted by the Delaware General Corporation Law, as it presently exists or may hereafter be amended from time to time, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including, without limit, service with respect to employee benefit plans, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any such Proceeding. The Corporation shall pay the expenses (including attorney’s fees) incurred by any person entitled to indemnification under this ARTICLE VIII in defending any Proceeding in advance of its final disposition; provided, to the extent required by law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by such person to repay all amounts advanced if it should be ultimately determined that such person is not entitled to be indemnified under this ARTICLE VIII.

C. Neither any amendment nor repeal of this Article VIII, nor the adoption of any provision of this Certificate of Incorporation inconsistent with this Article VIll, shall eliminate or reduce the effect of this Article VIII in respect of any matter occurring, or any action or proceeding accruing or arising or that, but for this Article VIII, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.

ARTICLE IX.

Meetings of stockholders of the Corporation may be held within or without the State of Delaware, as the Bylaws of the Corporation may provide. The books of the Corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors of the Corporation or in the Bylaws of the Corporation.

ARTICLE X.

Except as otherwise provided in this Certificate of Incorporation, the number of directors which shall constitute the whole Board of Directors of the Corporation shall be fixed from time to time by, or in the manner provided in, the Bylaws of the Corporation or in an amendment thereof duly adopted by the Board of Directors of the Corporation or by the stockholders of the Corporation.

ARTICLE XI.

The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation.

ARTICLE XII.

The Corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware.

ARTICLE XIII.

The name and mailing address of the sole incorporator is as follows:

Name		Mailing Address

Joseph C. Gangitano, Esq.		200 Park Avenue
		New York, NY 10166

[Remainder of Page Intentionally Left Blank.]

I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the Delaware General Corporation Law, do make this Certificate of Incorporation, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 5th day of June, 2012.

	/s/ Joseph C. Gangitano
	Joseph C. Gangitano, Incorporator

[Signature Page to Certificate of Incorporation of SFX Holding Corporation]

EX-3.2 3 a2215423zex-3_2.htm EX-3.2

Exhibit 3.2

AMENDED AND RESTATED BYLAWS OF

SFX ENTERTAINMENT, INC.

ARTICLE I
STOCKHOLDERS

1.1 Place of Meetings. All meetings of stockholders shall be held at such place within or without the State of Delaware as may be designated from time to time by the Board of Directors or the President or Chief Executive Officer.

1.2 Annual Meeting. The annual meeting of stockholders for the election of directors and for the transaction of such other business as may properly be brought before the meeting shall be held on a date to be fixed by the Board of Directors at the time and place to be fixed by the Board of Directors and stated in the notice of the meeting.

1.3 Special Meetings. Special meetings of stockholders may be called at any time by the Board of Directors, the Chairman of the Board or the President or Chief Executive Officer or the holders of record of not less than 30% of all shares entitled to cast votes at the meeting, for any purpose or purposes prescribed in the notice of the meeting and shall be held at such place, on such date and at such time as the Board may fix, and special meetings may not be called by any other person or persons. Business transacted at any special meeting of stockholders shall be confined to the purpose or purposes stated in the notice of meeting.

1.4 Notice of Meetings. Written notice of each meeting of stockholders, whether annual or special, shall be given not less than 10 nor more than 60 days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting, except as otherwise provided herein or as required by law (meaning here and hereafter, as required from time to time by the Delaware General Corporation Law or the Certificate of Incorporation). The notices of all meetings shall state the place, date and hour of the meeting. The notice of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the corporation.

1.5 Voting List. The officer who has charge of the stock ledger of the corporation shall prepare, at least 10 days before each meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time of the meeting, and may be inspected by any stockholder who is present. This list shall determine the

identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.

1.6 Quorum. Except as otherwise provided by law or these Bylaws, the holders of a majority of the shares of the capital stock of the corporation entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business. If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority of the shares of stock entitled to vote who are present, in person or by proxy, may adjourn the meeting to another place, date or time.

1.7 Adjournments. Any meeting of stockholders may be adjourned to any other time and to any other place at which a meeting of stockholders may be held under these Bylaws by the Chairman of the meeting or, in the absence of such person, by any officer entitled to preside at or to act as Secretary of such meeting, or by the holders of a majority of the shares of stock present or represented at the meeting and entitled to vote, although less than a quorum. When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place, date and time thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than 30 days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, written notice of the place, date, and time of the adjourned meeting shall be given in conformity herewith. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting.

1.8 Voting and Proxies. Each stockholder shall have one vote for each share of stock entitled to vote held of record by such stockholder and a proportionate vote for each fractional share so held, unless otherwise provided by law or in the Certificate of Incorporation. Each stockholder of record entitled to vote at a meeting of stockholders may vote in person or may authorize any other person or persons to vote or act for him by written proxy executed by the stockholder or his authorized agent or by a transmission permitted by law and delivered to the Secretary of the corporation. No stockholder may authorize more than one proxy for his shares. Any copy, facsimile transmission or other reliable reproduction of the writing or transmission created pursuant to this Section may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile transmission or other reproduction shall be a complete reproduction of the entire original writing or transmission.

1.9 Action at Meeting. When a quorum is present at any meeting, any election of directors shall be determined by a plurality of the votes cast by the stockholders entitled to vote at the election, and all other matters shall be determined by a majority of the votes cast affirmatively or negatively on the matter (or if there are two or more classes of stock entitled to vote as separate classes, then in the case of each such class, a majority of each such class present or represented and voting affirmatively or negatively on the matter) shall decide such matter, except when a different vote is required by express provision of law, the Certificate of Incorporation or these Bylaws.

All voting, including on the election of directors, but excepting where otherwise required by law, may be by a voice vote; provided, however, that upon demand therefor by a stockholder

entitled to vote or his or her proxy, a stock vote shall be taken. Every stock vote shall be taken by ballot, each of which shall state the name of the stockholder or proxy voting and such other information as may be required under the procedure established for the meeting. Every vote taken by ballot shall be counted by an inspector or inspectors appointed by the chairman of the meeting. The corporation may, and to the extent required by law, shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The corporation may designate one or more persons as an alternate inspector to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting may, and to the extent required by law, shall, appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath to faithfully execute the duties of inspector with strict impartiality and according to the best of his or her ability.

1.10 Stockholder Action Without Meeting. Any action which may be taken at any annual or special meeting of stockholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the actions so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes which would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. All such consents shall be filed with the Secretary of the corporation and shall be maintained in the corporate records. Prompt notice of the taking of a corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

1.11 Meetings by Remote Communication. If authorized by the Board of Directors, and subject to such guidelines and procedures as the Board may adopt, stockholders and proxy holders not physically present at a meeting of stockholders may, by means of remote communication, participate in the meeting and be deemed present in person and vote at the meeting, whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (i) the corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder, (ii) the corporation shall implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the corporation.

1.12 Nominations. (a) Nominations of any person for election to the Board of Directors at an annual meeting or at a special meeting (but only if the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling such special meeting) may be made at such meeting only (i) by or at the direction of the Board of Directors, including by any committee or persons appointed by the Board of Directors, or (ii) by a stockholder who (A) was a stockholder of record (and, with respect to any beneficial owner, if different, on whose behalf such nomination is proposed to be made, only if such beneficial owner was the beneficial owner of shares of the corporation) both at the time of giving the notice provided for in this Section 1.12 and at the time of the meeting, (B) is entitled to vote at the

meeting, and (C) has complied with this Section 1.12 as to such nomination. The foregoing clause (ii) shall be the exclusive means for a stockholder to make any nomination of a person or persons for election to the Board of Directors at an annual meeting or special meeting.

(b) Without qualification, for a stockholder to make any nomination of a person or persons for election to the Board of Directors at an annual meeting, the stockholder must (i) provide Timely Notice (as defined in Section 1.13 below) thereof in writing and in proper form to the secretary of the corporation and (ii) provide any updates or supplements to such notice at the times and in the forms required by this Section 1.12 . Without qualification, if the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling such special meeting, then for a stockholder to make any nomination of a person or persons for election to the Board of Directors at a special meeting, the stockholder must (i) provide timely notice thereof in writing and in proper form to the secretary of the corporation at the principal executive offices of the corporation, and (ii) provide any updates or supplements to such notice at the times and in the forms required by this Section 1.12. To be timely, a stockholder’s notice for nominations to be made at a special meeting must be delivered to, or mailed and received at, the principal executive offices of the corporation not earlier than the one hundred twentieth (120th) day prior to such a special meeting and not later than the ninetieth (90th) day prior to such special meeting or, if such special meeting is announced later than the ninetieth day prior to the date of such special meeting, the tenth (10th) day following the day on which public disclosure (as defined in Section 1.13) of the date of such special meeting was first made. In no event shall any adjournment of an annual meeting or special meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice as described above.

(i) As to each Nominating Person (as defined below), the Stockholder Information (as defined in Section 1.13(c)(i), except that for purposes of this Section 1.12 the term “Nominating Person” shall be substituted for the term “Proposing Person” in all places it appears in Section 1.13(c)(i));

(ii) As to each Nominating Person, any Disclosable Interests (as defined in Section 1.13(c)(ii), except that for purposes of this Section 1.12 the term “Nominating Person” shall be substituted for the term “Proposing Person” in all places it appears in Section 1.13(c)(ii) and the disclosure in clause (L) of Section 1.13(c)(ii) shall be made with respect to the election of directors at the meeting);

(iii) As to each person whom a Nominating Person proposes to nominate for election as a director, (A) all information with respect to such proposed nominee that would be required to be set forth in a stockholder’s notice pursuant to this Section 1.12 if such proposed nominee were a Nominating Person, (B) all information relating to such proposed nominee that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14(a) under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (as so amended and inclusive of such rules and regulations, the “Exchange Act”)

(including such proposed nominee’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (C) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among any Nominating Person, on the one hand, and each proposed nominee, his or her respective affiliates and associates and any other persons with whom such proposed nominee (or any of his or her respective affiliates and associates) is Acting in Concert (as defined in Section 1.13(c)), on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K if such Nominating Person were the “registrant” for purposes of such rule and the proposed nominee were a director or executive officer of such registrant, and (D) a completed and signed questionnaire, representation and agreement as provided in Section 1.12(f); and

(iv) The corporation may require any proposed nominee to furnish such other information (A) as may reasonably be required by the corporation to determine the eligibility of such proposed nominee to serve as an independent director of the corporation in accordance with the corporation’s practices or (B) that could be material to a reasonable stockholder’s understanding of the independence or lack of independence of such proposed nominee.

For purposes of this Section 1.12, the term “Nominating Person” shall mean (i) the stockholder providing the notice of the nomination proposed to be made at the meeting, (ii) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the nomination proposed to be made at the meeting is made, (iii) any affiliate or associate of such stockholder or beneficial owner, and (iv) any other person with whom such stockholder or such beneficial owner (or any of their respective affiliates or associates) is Acting in Concert (as defined in Section 1.13 below).

(d) A stockholder providing notice of any nomination proposed to be made at a meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 1.12 shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the secretary at the principal executive offices of the corporation not later than five (5) business days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and not later than eight (8) business days prior to the date for the meeting, if practicable (or, if not practicable, on the first practicable date prior to) any adjournment or postponement thereof (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof).

(e) Notwithstanding anything in these By-laws to the contrary, no person shall be eligible for election as a director of the corporation unless nominated in accordance with this Section 1.12 . The presiding officer at the meeting shall, if the facts warrant, determine that a nomination was not properly made in accordance with this Section 1.12 , and if he or she should so determine, he or she shall so declare such determination to the meeting and the defective nomination shall be disregarded.

(f) To be eligible to be a nominee for election as a director of the corporation, the proposed nominee must deliver (in accordance with the time periods prescribed for delivery of notice under this Section 1.12) to the secretary at the principal executive offices of the corporation a written questionnaire with respect to the background and qualification of such proposed nominee (which questionnaire shall be provided by the secretary upon written request) and a written representation and agreement (in form provided by the secretary upon written request) that such proposed nominee (i) is not and will not become a party to (A) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such proposed nominee, if elected as a director of the corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the corporation or (B) any Voting Commitment that could limit or interfere with such proposed nominee’s ability to comply, if elected as a director of the corporation, with such proposed nominee’s fiduciary duties under applicable law, (ii) is not, and will not become a party to, any agreement, arrangement or understanding with any person or entity other than the corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed to the corporation and (iii) in such proposed nominee’s individual capacity and on behalf of the stockholder (or the beneficial owner, if different) on whose behalf the nomination is made, would be in compliance, if elected as a director of the corporation, and will comply with applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the corporation.

(g) In addition to the requirements of this Section 1.12 with respect to any nomination proposed to be made at a meeting, each Nominating Person shall comply with all applicable requirements of the Exchange Act with respect to any such nominations.

1.13 Proposals. (a) At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (i) brought before the meeting by the corporation and specified in the notice of meeting given by or at the direction of the Board of Directors, (ii) brought before the meeting by or at the direction of the Board of Directors, or (iii) otherwise properly brought before the meeting by a stockholder who (A) was a stockholder of record (and, with respect to any beneficial owner, if different, on whose behalf such business is proposed, only if such beneficial owner was the beneficial owner of shares of the corporation) both at the time of giving the notice provided for in this Section 1.13 and at the time of the meeting, (B) is entitled to vote at the meeting, and (C) has complied with this Section 1.13 as to such business. Except for proposals properly made in accordance with Rule 14a-8 under the Exchange Act, and included in the notice of meeting given by or at the direction of the Board of Directors, the foregoing clause (iii) shall be the exclusive means for a stockholder to propose business to be brought before an annual meeting of the stockholders. Stockholders shall not be permitted to propose business to be brought before a special meeting of the stockholders, and the only matters that may be brought before a special meeting are the matters specified in the notice of meeting given by or at the direction of the person calling the meeting pursuant to Section 1.3. Stockholders seeking to nominate persons for election to the Board must comply with Section

1.12 and this Section 1.13 shall not be applicable to nominations except as expressly provided in Section 1.12.

(b) Without qualification, for business to be properly brought before an annual meeting by a stockholder, the stockholder must (i) provide Timely Notice (as defined below) thereof in writing and in proper form to the secretary of the corporation and (ii) provide any updates or supplements to such notice at the times and in the forms required by this Section 1.13. To be timely, a stockholder’s notice must be delivered to, or mailed and received at, the principal executive offices of the corporation not less than ninety (90) days nor more than one hundred twenty (120) days prior to the one-year anniversary of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the stockholder to be timely must be so delivered, or mailed and received, not later than the ninetieth (90th) day prior to such annual meeting or, if such annual meeting is announced later than the ninetieth day prior to the date of such annual meeting, the tenth (10th) day following the day on which public disclosure of the date of such annual meeting was first made (such notice within such time periods, “Timely Notice”). In no event shall any adjournment of an annual meeting or the announcement thereof commence a new time period for the giving of Timely Notice as described above.

(i) As to each Proposing Person (as defined below), (A) the name and address of such Proposing Person (including, if applicable, the name and address that appear on the corporation’s books and records); and (B) the class or series and number of shares of the corporation that are, directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by such Proposing Persons, except that such Proposing Person shall in all events be deemed to beneficially own any shares of any class or series of the corporation as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future (the disclosures to be made pursuant to the foregoing clauses (i) and (ii) are referred to as “Stockholder Information”);

(ii) As to each Proposing Person, (A) any derivative, swap or other transaction or series of transactions engaged in, directly or indirectly, by such Proposing Person, the purpose or effect of which is to give such Proposing Person economic risk similar to ownership of shares of any class or series of the corporation, including due to the fact that the value of such derivative, swap or other transactions are determined by reference to the price, value or volatility of any shares of any class or series of the corporation, or which derivative, swap or other transactions provide, directly or indirectly, the opportunity to profit from any increase in the price or value of shares of any class or series of the corporation (“Synthetic Equity Interests”), which Synthetic Equity Interests shall be disclosed without regard to whether (x) the derivative, swap or other transactions convey any voting rights in such shares to such Proposing Person, (y) the derivative, swap or other transactions are required to be, or are capable of being, settled through delivery of such shares or (z) such Proposing Person may have entered into other transactions that hedge or mitigate the economic effect of such derivative, swap or other transactions (B) any proxy (other than a revocable proxy or consent given in response to a solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by way of a solicitation statement filed on

Schedule 14A), agreement, arrangement, understanding or relationship pursuant to which such Proposing Person has or shares a right to vote any shares of any class or series of the corporation, (C) any agreement, arrangement, understanding or relationship, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in, directly or indirectly, by such Proposing Person, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of shares of any class or series of the corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such Proposing Person with respect to the shares of any class or series of the corporation, or which provides, directly or indirectly, the opportunity to profit from any decrease in the price or value of the shares of any class or series of the corporation (“Short Interests”), (D) any rights to dividends on the shares of any class or series of the corporation owned beneficially by such Proposing Person that are separated or separable from the underlying shares of the corporation, (E) any performance related fees (other than an asset based fee) that such Proposing Person is entitled to based on any increase or decrease in the price or value of shares of any class or series of the corporation, or any Synthetic Equity Interests or Short Interests, if any, (F)(x) if such Proposing Person is not a natural person, the identity of the natural person or persons associated with such Proposing Person responsible for the formulation of and decision to propose the business to be brought before the meeting (such person or persons, the “Responsible Person”), the manner in which such Responsible Person was selected, any fiduciary duties owed by such Responsible Person to the equity holders or other beneficiaries of such Proposing Person, the qualifications and background of such Responsible Person and any material interests or relationships of such Responsible Person that are not shared generally by any other record or beneficial holder of the shares of any class or series of the corporation and that reasonably could have influenced the decision of such Proposing Person to propose such business to be brought before the meeting, and (y) if such Proposing Person is a natural person, the qualifications and background of such natural person and any material interests or relationships of such natural person that are not shared generally by any other record or beneficial holder of the shares of any class or series of the corporation and that reasonably could have influenced the decision of such Proposing Person to propose such business to be brought before the meeting, (G) any significant equity interests or any Synthetic Equity Interests or Short Interests in any principal competitor of the corporation held by such Proposing Persons (H) any direct or indirect interest of such Proposing Person in any contract with the corporation, any affiliate of the corporation or any principal competitor of the corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement), (I) any pending or threatened litigation in which such Proposing Person is a party or material participant involving the corporation or any of its officers or directors, or any affiliate of the corporation, (J) any material transaction occurring during the prior twelve months between such Proposing Person, on the one hand, and the corporation, any affiliate of the corporation or any principal competitor of the corporation, on the other hand, (K) a summary of any material discussions regarding the business proposed to be brought before the meeting (x) between or among any of the Proposing Persons or (y) between or among any Proposing Person and any other record or beneficial holder of the shares of any class or series of the corporation (including their names), and (L) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such Proposing Person in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act (the disclosures to be made pursuant to

the foregoing clauses (A) through (L) are referred to as “Disclosable Interests”); provided, however, that Disclosable Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these By-laws on behalf of a beneficial owner; and

(iii) As to each item of business that the stockholder proposes to bring before the annual meeting, (A) a reasonably brief description of the business desired to be brought before the annual meeting, the reasons for conducting such business at the annual meeting and any material interest in such business of each Proposing Person, (B) the text of the proposal or business (including the text of any resolutions proposed for consideration), and (C) a reasonably detailed description of all agreements, arrangements and understandings (x) between or among any of the Proposing Persons or (y) between or among any Proposing Person and any other record or beneficial holder of the shares of any class or series of the corporation (including their names) in connection with the proposal of such business by such stockholder.

For purposes of this Section 1.13, the term “Proposing Person” shall mean (i) the stockholder providing the notice of business proposed to be brought before an annual meeting, (ii) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the business proposed to be brought before the annual meeting is made, (iii) any affiliate or associate (each within the meaning of Rule 12b-2 under the Exchange Act for purposes of these By-laws) of such stockholder or beneficial owner, and (iv) any other person with whom such stockholder or beneficial owner (or any of their respective affiliates or associates) is Acting in Concert (as defined below).

A person shall be deemed to be “Acting in Concert” with another person for purposes of these By-laws if such person knowingly acts (whether or not pursuant to an express agreement, arrangement or understanding) in concert with, or towards a common goal relating to the management, governance or control of the corporation in parallel with, such other person where (A) each person is conscious of the other person’s conduct or intent and this awareness is an element in their decision-making processes and (B) at least one additional factor suggests that such persons intend to act in concert or in parallel, which such additional factors may include, without limitation, exchanging information (whether publicly or privately), attending meetings, conducting discussions, or making or soliciting invitations to act in concert or in parallel; provided, that a person shall not be deemed to be Acting in Concert with any other person solely as a result of the solicitation or receipt of revocable proxies or consents from such other person in response to a solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by way of a proxy or consent solicitation statement filed on Schedule 14A. A person Acting in Concert with another person shall be deemed to be Acting in Concert with any third party who is also Acting in Concert with such other person.

(d) A stockholder providing notice of business proposed to be brought before an annual meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 1.13 shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be

delivered to, or mailed and received by, the secretary at the principal executive offices of the corporation not later than five (5) business days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and not later than eight (8) business days prior to the date for the meeting, if practicable (or, if not practicable, on the first practicable date prior to) any adjournment or postponement thereof (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof).

(e) Notwithstanding anything in these By-laws to the contrary, no business shall be conducted at an annual meeting except in accordance with this Section 1.13. The presiding officer of the meeting shall, if the facts warrant, determine that the business was not properly brought before the meeting in accordance with this Section 1.13, and if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

(f) This Section 1.13 is expressly intended to apply to any business proposed to be brought before an annual meeting of stockholders other than any proposal made pursuant to Rule 14a-8 under the Exchange Act. In addition to the requirements of this Section 1.13 with respect to any business proposed to be brought before an annual meeting, each Proposing Person shall comply with all applicable requirements of the Exchange Act with respect to any such business. Nothing in Section 1.12 or this Section 1.13 shall be deemed to affect any rights (a) of stockholders to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (b) of the holders of any series of preferred stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.

(g) For purposes of these By-laws, “public disclosure” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

Except as otherwise provided by law, the chairman of a stockholder meeting shall have the power and duty (a) to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Article I (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination or proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s nominee or proposal in compliance with law and these By-laws and (b) if any proposed nomination or business was not made or proposed in compliance with this Article I, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted. Notwithstanding the foregoing provisions of this Article I, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the corporation to present a nomination or business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the corporation.

stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the corporation.

ARTICLE II
BOARD OF DIRECTORS

2.1 General Powers. The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors, who may exercise all of the powers of the corporation except as otherwise provided by law or the Certificate of Incorporation. In the event of a vacancy in the Board of Directors, the remaining directors, except as otherwise provided by law, may exercise the powers of the full Board until the vacancy is filled.

2.2 Number and Term of Office. The number of directors shall initially be one (1) and, thereafter, shall be fixed from time to time exclusively by the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board for adoption). All directors shall hold office until the next annual meeting of stockholders and until their respective successors are elected, except in the case of the death, resignation or removal of any director.

2.3 Vacancies and Newly Created Directorships. Subject to the rights of the holders of any series of capital stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification or other cause (other than removal from office by a vote of the stockholders) may be filled by a majority vote of the directors then in office, though less than a quorum, or by the sole remaining director, and directors so chosen shall hold office for a term expiring at the next annual meeting of stockholders. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

2.4 Resignation. Any director may resign by delivering notice in writing or by electronic transmission to the President, Chief Executive Officer, Chairman of the Board or Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.

2.5 Removal. Subject to the rights of the holders of any series of capital stock then outstanding, any directors, or the entire Board of Directors, may be removed from office at any time, with or without cause, by the affirmative vote of the holders of a majority of the voting power of all of the outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class. Vacancies in the Board of Directors resulting from such removal may be filled by a majority of the directors then in office, though less than a quorum, by the sole remaining director, or by the stockholders at the next annual meeting or at a special meeting called in accordance with Section 1.3 above. Directors so chosen shall hold office until the next annual meeting of stockholders.

2.6 Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place, either within or without the State of Delaware, as shall be determined from time to time by the Board of Directors; provided that any director who is absent when such a determination is made shall be given notice of the determination. A regular meeting of the Board of Directors may be held without notice immediately after and at the same place as the annual meeting of stockholders.

2.7 Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, the Chief Executive Officer, the President or two or more directors and may be held at any time and place, within or without the State of Delaware.

2.8 Notice of Special Meetings. Notice of any special meeting of directors shall be given to each director by the Secretary or by the officer or one of the directors calling the meeting. Notice shall be duly given to each director by whom it is not waived by (i) giving notice to such director in person or by telephone, electronic transmission or voice message system at least 24 hours in advance of the meeting, (ii) sending a facsimile to his last known facsimile number, or delivering written notice by hand, to his last known business or home address at least 24 hours in advance of the meeting, or (iii) mailing written notice to his last known business or home address at least three days in advance of the meeting. A notice or waiver of notice of a meeting of the Board of Directors need not specify the purposes of the meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.

2.9 Participation in Meetings by Telephone Conference Calls or Other Methods of Communication. Directors or any members of any committee designated by the directors may participate in a meeting of the Board of Directors or such committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting.

2.10 Quorum. A majority of the total number of authorized directors shall constitute a quorum at any meeting of the Board of Directors. In the absence of a quorum at any such meeting, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present. Interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or at a meeting of a committee which authorizes a particular contract or transaction.

2.11 Action at Meeting. At any meeting of the Board of Directors at which a quorum is present, the vote of a majority of those present shall be sufficient to take any action, unless a different vote is specified by law, the Certificate of Incorporation or these Bylaws.

2.12 Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee of the Board of Directors may be taken without a meeting if all members of the Board or committee, as the case may be, consent to the action in writing or by electronic transmission, and the writings or electronic transmissions are filed with the minutes of proceedings of the Board or committee.

2.13 Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation, with such lawfully delegated powers and duties as it therefor confers, to serve at the pleasure of the Board. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members of the committee present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors and subject to the provisions of the Delaware General Corporation Law, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation. Each such committee shall keep minutes and make such reports as the Board of Directors may from time to time request. Except as the Board of Directors may otherwise determine, any committee may make rules for the conduct of its business, but unless otherwise provided by such rules, its business shall be conducted as nearly as possible in the same manner as is provided in these Bylaws for the Board of Directors.

2.14 Compensation of Directors. Directors may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings as the Board of Directors may from time to time determine. No such payment shall preclude any director from serving the corporation or any of its parent or subsidiary corporations in any other capacity and receiving compensation for such service.

2.15 Nomination of Director Candidates. Subject to the rights of holders of any class or series of capital stock then outstanding, nominations for the election of Directors may be made by the Board of Directors, a duly authorized committee thereof or the Chairman of the Board or by a stockholder in accordance with Article I.

ARTICLE III
OFFICERS

3.1 Enumeration. The officers of the corporation shall consist of a President and a Secretary and such other officers with such other titles as the Board of Directors shall determine, including, at the discretion of the Board of Directors, a Chairman of the Board, a Chief Executive Officer, a Treasurer, a Chief Financial Officer and one or more Vice Presidents and Assistant Secretaries. The Board of Directors may appoint such other officers as it may deem appropriate.

3.2 Election. Officers shall be elected annually by the Board of Directors at its first meeting following the annual meeting of stockholders. Officers may be appointed by the Board of Directors at any other meeting.

3.3 Qualification. No officer need be a stockholder. Any two or more offices may be held by the same person.

3.4 Tenure. Except as otherwise provided by law, by the Certificate of Incorporation or by these Bylaws, each officer shall hold office until his successor is elected and qualified, unless a different term is specified in the vote appointing him, or until his earlier death, resignation or removal.

3.5 Resignation and Removal. Any officer may resign by delivering his written resignation to the corporation at its principal office or to the President or Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event. Any officer elected by the Board of Directors may be removed at any time, with or without cause, by the Board of Directors.

3.6 Chairman of the Board. The Board of Directors may appoint a Chairman of the Board. If the Board of Directors appoints a Chairman of the Board, he shall perform such duties and possess such powers as are assigned to him by the Board of Directors. Unless otherwise provided by the Board of Directors, he shall preside at all meetings of the stockholders, and, if he is a director, at all meetings of the Board of Directors.

3.7 President. The President shall, subject to the direction of the Board of Directors, have responsibility for the general management and control of the business and affairs of the corporation and shall perform all duties and have all powers which are commonly incident to the office of President or which are delegated to him or her by the Board of Directors. Unless otherwise designated by the Board of Directors, the President shall be the Chief Executive Officer of the corporation. The President shall, in the absence of or because of the inability to act of the Chairman of the Board, perform all duties of the Chairman of the Board and preside at all meetings of the Board of Directors and of stockholders. The President shall perform such other duties and shall have such other powers as the Board of Directors may from time to time prescribe. He or she shall have power to sign stock certificates, contracts and other instruments of the corporation which are authorized and shall have general supervision and direction of all of the other officers, employees and agents of the corporation, other than the Chairman of the Board.

3.8 Vice Presidents. Any Vice President shall perform such duties and possess such powers as the Board of Directors or the President may from time to time prescribe. In the event of the absence, inability or refusal to act of the President, the Vice President (or if there shall be more than one, the Vice Presidents in the order determined by the Board of Directors) shall perform the duties of the President and when so performing shall have at the powers of and be subject to all the restrictions upon the President. The Board of Directors may assign to any Vice President the title of Executive Vice President, Senior Vice President or any other title selected by the Board of Directors.

3.9 Secretary and Assistant Secretaries. The Secretary shall perform such duties and shall have such powers as the Board of Directors or the President may from time to time prescribe. In addition, the Secretary shall perform such duties and have such powers as are incident to the office of the Secretary, including, without limitation, the duty and power to give notices of all meetings of stockholders and special meetings of the Board of Directors, to keep a record of the proceedings of all meetings of stockholders and the Board of Directors, to maintain

a stock ledger and prepare lists of stockholders and their addresses as required, to be custodian of corporate records and the corporate seal and to affix and attest to the same on documents.

Any Assistant Secretary shall perform such duties and possess such powers as the Board of Directors, the Chief Executive Officer, the President or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal to act of the Secretary, the Assistant Secretary (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Secretary.

In the absence of the Secretary or any Assistant Secretary at any meeting of stockholders or directors, the person presiding at the meeting shall designate a temporary secretary to keep a record of the meeting.

3.10 Treasurer. The Treasurer shall perform such duties and have such powers as are incident to the office of treasurer, including without limitation, the duty and power to keep and be responsible for all funds and securities of the corporation, to maintain the financial records of the corporation, to deposit funds of the corporation in depositories as authorized, to disburse such funds as authorized, to make proper accounts of such funds, and to render as required by the Board of Directors accounts of all such transactions and of the financial condition of the corporation.

3.11 Chief Financial Officer. The Chief Financial Officer shall perform such duties and shall have such powers as may from time to time be assigned to him by the Board of Directors, the Chief Executive Officer or the President. Unless otherwise designated by the Board of Directors, the Chief Financial Officer shall be the Treasurer of the corporation.

3.12 Salaries. Officers of the corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed or allowed from time to time by the Board of Directors.

3.13 Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof.

ARTICLE IV
CAPITAL STOCK

4.1 Issuance of Stock. Subject to the provisions of the Certificate of Incorporation, the whole or any part of any unissued balance of the authorized capital stock of the corporation or the whole or any part of any unissued balance of the authorized capital stock of the corporation held in its treasury may be issued, sold, transferred or otherwise disposed of by vote of the Board of Directors in such manner, for such consideration and on such terms as the Board of Directors may determine.

4.2 Certificates of Stock. The shares of the corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution that some or all of

any or all classes or series of capital stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Provided that the Board of Directors has not resolved that the shares of the corporation be uncertificated, every holder of stock of the corporation shall be entitled to have a certificate, in such form as may be prescribed by law and by the Board of Directors, certifying the number and class of shares owned by him in the corporation. Each such certificate shall be signed by, or in the name of the corporation by, the Chairman or Vice Chairman, if any, of the Board of Directors, or the President or a Vice President, and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the corporation. Any or all of the signatures on the certificate may be a facsimile.

Each certificate for shares of stock which are subject to any restriction on transfer pursuant to the Certificate of Incorporation, the Bylaws, applicable securities laws or any agreement among any number of shareholders or among such holders and the corporation shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restriction.

4.3 Transfers. Except as otherwise established by rules and regulations adopted by the Board of Directors, and subject to applicable law, shares of stock may be transferred on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or authenticity of signature as the corporation or its transfer agent may reasonably require. Except as may be otherwise required by law, the Certificate of Incorporation or the Bylaws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect to such stock, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the corporation in accordance with the requirements of these Bylaws.

4.4 Lost, Stolen or Destroyed Certificates. The corporation may issue a new certificate of stock in place of any previously issued certificate alleged to have been lost, stolen, or destroyed, upon such terms and conditions as the Board of Directors may prescribe, including the presentation of reasonable evidence of such loss, theft or destruction and the giving of such indemnity as the Board of Directors may require for the protection of the corporation or any transfer agent or registrar.

4.5 Record Date. The Board of Directors may fix in advance a record date for the determination of the stockholders entitled to notice of or to vote at any meeting of stockholders or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights in respect of any change, concession or exchange of stock, or for the purpose of any other lawful action. Such record date shall not precede the date on which the resolution fixing the record date is adopted and shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action to which such record date relates.

If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of

business on the day before the day on which notice is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is held. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed. The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to such purpose.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

ARTICLE V
GENERAL PROVISIONS

5.1 Fiscal Year. The fiscal year of the corporation shall be as fixed by the Board of Directors.

5.2 Waiver of Notice. Whenever any notice whatsoever is required to be given by law, by the Certificate of Incorporation or by these Bylaws, a waiver of such notice either in writing signed by the person entitled to such notice or such person’s duly authorized attorney, or by electronic transmission or any other method permitted under the Delaware General Corporation Law, whether before, at or after the time stated in such waiver, or the appearance of such person or persons at such meeting in person or by proxy, shall be deemed equivalent to such notice. Neither the business nor the purpose of any meeting need be specified in such a waiver. Attendance at any meeting shall constitute waiver of notice except attendance for the sole purpose of objecting to the timeliness of notice.

5.3 Actions with Respect to Securities of Other Corporations. Except as the Board of Directors may otherwise designate, the Chief Executive Officer or President or any officer of the corporation authorized by the Chief Executive Officer or President shall have the power to vote and otherwise act on behalf of the corporation, in person or proxy, and may waive notice of, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact to this corporation (with or without power of substitution) at any meeting of stockholders or shareholders (or with respect to any action of stockholders) of any other corporation or organization, the securities of which may be held by this corporation and otherwise to exercise any and all rights and powers which this corporation may possess by reason of this corporation’s ownership of securities in such other corporation or other organization.

5.4 Evidence of Authority. A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by the stockholders, directors, a committee or any officer or representative of the corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action.

5.5 Certificate of Incorporation. All references in these Bylaws to the Certificate of Incorporation shall be deemed to refer to the Certificate of Incorporation of the corporation, as amended and in effect from time to time.

5.6 Severability. Any determination that any provision of these Bylaws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these Bylaws.

5.7 Pronouns. All pronouns used in these Bylaws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.

5.8 Notices. Except as otherwise specifically provided herein or required by law, all notices required to be given to any stockholder, director, officer, employee or agent shall be in writing and may in every instance be effectively given by hand delivery to the recipient thereof, by depositing such notice in the mails, postage paid, or by sending such notice by commercial courier service, or by facsimile or other electronic transmission, provided that notice to stockholders by electronic transmission shall be given in the manner provided in Section 232 of the Delaware General Corporation Law. Any such notice shall be addressed to such stockholder, director, officer, employee or agent at his or her last known address as the same appears on the books of the corporation. The time when such notice shall be deemed to be given shall be the time such notice is received by such stockholder, director, officer, employee or agent, or by any person accepting such notice on behalf of such person, if delivered by hand, facsimile, other electronic transmission or commercial courier service, or the time such notice is dispatched, if delivered through the mails. Without limiting the manner by which notice otherwise may be given effectively, notice to any stockholder shall be deemed given: (1) if by facsimile, when directed to a number at which the stockholder has consented to receive notice; (2) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (2) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; (4) if by any other form of electronic transmission, when directed to the stockholder; and (5) if by mail, when deposited in the mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the corporation.

5.9 Reliance Upon Books, Reports and Records. Each director, each member of any committee designated by the Board of Directors, and each officer of the corporation shall, in the performance of his duties, be fully protected in relying in good faith upon the books of account or other records of the corporation, including reports made to the corporation by any of its officers, by an independent certified public accountant, or by an appraiser selected with reasonable care.

5.10 Time Periods. In applying any provision of these Bylaws which require that an act be done or not done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.

5.11 Facsimile Signatures. In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.

ARTICLE VI
AMENDMENTS

6.1 By the Board of Directors. Except as is otherwise set forth in these Bylaws, these Bylaws may be altered, amended or repealed or new Bylaws may be adopted by the affirmative vote of a majority of the directors present at any regular or special meeting of the Board of Directors at which a quorum is present.

6.2 By the Stockholders. Except as otherwise set forth in these Bylaws, these Bylaws may be altered, amended or repealed or new Bylaws may be adopted by the affirmative vote of the holders of at least a majority of the voting power of all of the shares of capital stock of the corporation issued and outstanding and entitled to vote generally in any election of directors, voting together as a single class. Such vote may be held at any annual meeting of stockholders, or at any special meeting of stockholders provided that notice of such alteration, amendment, repeal or adoption of new Bylaws shall have been stated in the notice of such special meeting.

ARTICLE VII
INDEMNIFICATION OF DIRECTORS AND OFFICERS

7.1 Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (“proceeding”), by reason of the fact that he or she or a person of whom he or she is the legal representative, is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director or officer of another corporation, or as a controlling person of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director or officer, or in any other capacity while serving as a director or officer, shall be indemnified and held harmless by the corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said Law permitted the corporation to provide prior to such amendment) against all expenses, liability and loss reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that except as provided in Section 7.2 of this Article VII, the corporation shall indemnify any such person seeking indemnity in connection with a proceeding (or part thereof) initiated by such person only if (a) such indemnification is expressly required to be

made by law, (b) the proceeding (or part thereof) was authorized by the Board of Directors of the corporation, (c) such indemnification is provided by the corporation, in its sole discretion, pursuant to the powers vested in the corporation under the Delaware General Corporation Law, or (d) the proceeding (or part thereof) is brought to establish or enforce a right to indemnification or advancement under an indemnity agreement or any other statute or law or otherwise as required under Section 145 of the Delaware General Corporation Law. The rights hereunder shall be contract rights and shall include the right to be paid expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that the payment of such expenses incurred by a director or officer of the corporation in his or her capacity as a director or officer (and not in any other capacity in which service was or is tendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of such proceeding, shall be made only upon delivery to the corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it should be determined ultimately by final judicial decision from which there is no further right to appeal that such director or officer is not entitled to be indemnified under this Section or otherwise.

7.2 Right of Claimant to Bring Suit. If a claim under Section 7.1 is not paid in full by the corporation within 60 days after a written claim has been received by the corporation, or 20 days in the case of a claim for advancement of expenses, the claimant may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim and, if such suit is not frivolous or brought in bad faith, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any, has been tendered to this corporation) that the claimant has not met the standards of conduct which make it permissible under the Delaware General Corporation Law for the corporation to indemnify the claimant for the amount claimed. Neither the failure of the corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct. In any suit brought by the corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the corporation shall be entitled to recover such expenses upon a final judicial decision from which there is no further right to appeal that the indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, shall be on the corporation.

7.3 Indemnification of Employees and Agents. The corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification, and to the advancement of related expenses, to any employee or agent of the corporation to the fullest

extent of the provisions of this Article with respect to the indemnification of and advancement of expenses to directors and officers of the corporation.

7.4 Non-Exclusivity of Rights. The rights conferred on any person in this Article VII shall not be exclusive of any other right which such persons may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise.

7.5 Indemnification Contracts. The Board of Directors is authorized to enter into a contract with any director, officer, employee or agent of the corporation, or any person serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including employee benefit plans, providing for indemnification rights equivalent to or, if the Board of Directors so determines, greater than, those provided for in this Article VII.

7.6 Insurance. The corporation may maintain insurance to the extent reasonably available, at its expense, to protect itself and any such director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law.

7.7 Effect of Amendment. Any amendment, repeal or modification of any provision of this Article VII shall not adversely affect any right or protection of an indemnitee or his successor existing at the time of such amendment, repeal or modification.

EX-3.3 4 a2215423zex-3_3.htm EX-3.3

Exhibit 3.3

CERTIFICATE OF AMENDMENT

THE CERTIFICATE OF INCORPORATION

SFX HOLDING CORPORATION

SFX Holding Corporation (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, hereby certifies as follows:

1. The name of the Corporation is SFX Holding Corporation.

2. The Certificate of Incorporation of the Corporation, as filed with the Secretary of State of the State of Delaware on June 5, 2012, is hereby amended by striking Article I in its entirety and replacing it with the following:

“The name of the corporation is SFX Entertainment, Inc. (the ‘Corporation’).”

3. The amendment of the Certificate of lncorporation herein certified have been duly adopted and written consent has been given in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, the Corporation has caused this amendment to be executed by its officer hereto duly authorized this February 13,2013.

	SFX HOLDING CORPORATION


	By:	/s/ Robert F.X. Sillerman
		Name: Robert F.X. Sillerman
		Title: Chief Executive Officer

EX-4.2 5 a2215423zex-4_2.htm EX-4.2

Exhibit 4.2

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of July 31, 2012, is made and entered into by and among SFX HOLDING CORPORATION, a Delaware corporation (“Parent”), and each of the stockholders of Parent set forth on Exhibit A (each such party, a “Holder” and collectively the “Holders”). Capitalized terms appearing but not defined herein have the meanings ascribed to such terms in the Asset Contribution Agreement, dated as of the date hereof, by and among Parent, SFX-LIC Operating LLC, Dayglow LLC, Committee Entertainment, LLC, and the individuals party thereto (the “Asset Contribution Agreement”).

RECITALS

WHEREAS, pursuant to the Asset Contribution Agreement, the Transferor Parties contributed to Acquiror all of the Transferred Assets in exchange for the consideration set forth in the Asset Contribution Agreement, which included shares of common stock, par value $0.001 per share, of Parent (“Registrable Securities”); and

WHEREAS, Parent desires to grant, and the Holders desire to receive, certain rights with respect to the registration of the Registrable Securities under the Securities Act of 1933, as amended (the “Securities Act”).

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and other good and valuable consideration, the parties hereto hereby agree as follows:

ARTICLE I
PIGGY BACK REGISTRATION RIGHTS

1.1 If, at any time after the date hereof and prior to December 31, 2014 when there is not an effective registration statement covering the Registrable Securities pursuant to this Agreement, Parent shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account (other than the initial registration statement relating to an offering for its own account) or the account of others under the Securities Act of any of its equity securities (other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans), Parent shall send to all of the Holders of Registrable Securities written notice of such determination and, if within twenty (20) days after receipt of such notice, or within such shorter period of time as may be specified by Parent in such written notice as may be necessary for Parent to comply with its obligations with respect to the timing of the filing of such registration statement, a Holder shall so request in writing (which request shall specify the Registrable Securities intended to be disposed of by such Holder), Parent will cause the registration under the Securities Act of all Registrable Securities which Parent has been so requested to register by such Holder, to the extent requisite to permit the disposition of the Registrable Securities so to be registered, provided that if at any time after giving written notice of its intention to register any securities and prior to the effective date of

Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission.

the registration statement filed in connection with such registration, Parent shall determine for any reason not to register or to delay registration of such securities, Parent may, at its election, give written notice of such determination to such Holder and, thereupon, (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration, and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities being registered pursuant to this Section 1.1 for the same period as the delay in registering such other securities. Parent shall include in such registration statement all or any part of such Registrable Securities that a Holder requests to be registered; provided, however, that Parent shall not be required to register any Registrable Securities pursuant to this Section 1.1 that are eligible for sale pursuant to Rule 144 of the Securities Act without volume limitations or restrictions. In the case of an underwritten public offering, if the managing underwriter(s) or underwriter(s) should reasonably object to the inclusion of the Registrable Securities in such registration statement, then if Parent after consultation with the managing underwriter should reasonably determine that the inclusion of such Registrable Securities would materially adversely affect the offering contemplated in such registration statement (including the price at which Parent proposes to sell the securities in such offering), and based on such determination recommends inclusion in such registration statement of fewer or none of the Registrable Securities of a Holder, then (x) the number of Registrable Securities of the Holders included in such registration statement shall be reduced, pro rata based on the number of Registrable Securities that each Holder has requested be included in such registration statement and the aggregate number of Registrable Securities that the Holders and the other holders that have received shares of Parent Common Stock in connection with the Plan (the “Other Holders”) have requested be included in such registration statement (such proportion is referred to herein as “Pro Rata”), if Parent after consultation with the underwriter(s) recommends the inclusion of fewer Registrable Securities, or (y) none of the Registrable Securities of the Holders shall be included in such registration statement, if Parent after consultation with the underwriter(s) recommends the inclusion of none of such Registrable Securities; provided, however, that if securities are being offered for the account of other persons or entities as well as Parent, such reduction shall not represent a greater fraction of the number of Registrable Securities intended to be offered by the Holders than the fraction of similar reductions imposed on such other persons or entities (other than Parent).

1.2 Notwithstanding anything to the contrary contained in this Agreement, in the event the staff of the Commission (the “Staff”) or the Commission seeks to characterize any offering pursuant to a registration pursuant to the provisions of this Article I as constituting an offering of securities by or on behalf of Parent, or in any other manner, such that the Staff or the Commission do not permit such registration statement to become effective and used for resales in a manner that does not constitute such an offering and that permits the continuous resale at the market by the Holders participating therein (or as otherwise may be acceptable to each Holder) without being named therein as an “underwriter,” then Parent shall reduce the number of shares to be included in such registration statement by all Holders and the Other Holders until such time as the Staff and the Commission shall so permit such registration statement to become effective as aforesaid. In making such reduction, Parent shall reduce the number of shares to be included by all Holders and the Other Holders on a Pro Rata basis unless the inclusion of shares by a particular Holder or Other Holder or a particular set of Holders or Other Holders are resulting in the Staff’s or the Commission’s “by or on behalf of Parent” offering position, in which event the shares held by such Holder or Other Holder or set of Holders or Other Holders shall be the only

shares subject to reduction (and if by a set of Holders or Other Holders on a Pro Rata basis by such Holders or Other Holders or on such other basis as would result in the exclusion of the least number of shares by all such Holders or Other Holders). In addition, in the event that the Staff or the Commission requires any Holder seeking to sell securities under a registration pursuant to the provisions of this Article I to be specifically identified as an “underwriter” in order to permit such registration statement to become effective, and such Holder does not consent to being so named as an underwriter in such registration statement, then, in each such case, Parent shall reduce the total number of Registrable Securities to be registered on behalf of such Holder, until such time as the Staff or the Commission does not require such identification or until such Holder accepts such identification and the manner thereof.

Parent shall use commercially reasonable efforts to keep effective any registration or qualification contemplated by this Agreement and shall, from time to time, amend or supplement each applicable registration statement, preliminary prospectus, final prospectus, application, document, and communication for such period of time as shall be required to permit the Holders to complete the offer and sale of the Registrable Securities covered thereby. Notwithstanding the preceding sentence, Parent shall in no event be required to keep any such registration or qualification in effect for a period in excess of six (6) months from the date on which the Holders together with the Other Holders are first free to sell such Registrable Securities; provided, however, that, if Parent is required to keep any such registration or qualification in effect with respect to securities other than the Registrable Securities beyond such period, Parent shall keep such registration or qualification in effect as it relates to the Registrable Securities for so long as such registration or qualification remains or is required to remain in effect in respect of such other securities.

1.4 In the event of a registration pursuant to the provisions of this Article I, Parent shall furnish to a Holder such reasonable number of copies of the registration statement and of each amendment and supplement thereto (in each case, including all exhibits), such reasonable number of copies of each prospectus contained in such registration statement and each supplement or amendment thereto (including each preliminary prospectus), all of which shall conform to the requirements of the Securities Act and the rules and regulations promulgated thereunder, and such other documents, as a Holder may reasonably request to facilitate the disposition of the Registrable Securities included in such registration.

1.5 In the event of a registration pursuant to the provision of this Article I, Parent, the Holders and the Other Holders shall enter into a cross-indemnity agreement and a contribution agreement, each in customary form, with each underwriter, if any, and, if requested, enter into an underwriting agreement containing conventional representations, warranties, allocation of

expenses, and customary closing conditions, with any underwriter who acquires any Registrable Securities.

1.6 Parent agrees that, until all the Registrable Securities have been sold under a registration statement or pursuant to Rule 144 promulgated under the Securities Act, it shall keep current in filing all reports, statements and other materials required to be filed with the Commission to permit holders of the Registrable Securities to sell such securities under Rule 144 promulgated under the Securities Act.

1.7 Parent may grant piggy back registration rights to other persons so long as such rights are pari passu or subordinate to the rights of the Holders and nothing herein contained shall prohibit Parent from granting to any person demand registration rights.

ARTICLE II
INDEMNIFICATION AND CONTRIBUTION

2.1 Indemnification by Parent. Parent shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, its directors, officers, agents and employees, each person or entity who controls such Holder (within the meaning of Section 15 of the Securities Act and Section 20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), and the directors, officers, agents and employees of such controlling persons or entities, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of any untrue or alleged untrue statement of a material fact contained in a registration statement covering the Registrable Securities, any prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding a Holder or such other Indemnified Party (as defined below) furnished in writing to Parent by such Holder expressly for use therein. Parent shall notify each Holder promptly of any action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened (a “Proceeding”) of which Parent is aware in connection with the transactions contemplated by this Agreement.

based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder or other Indemnifying Party to Parent specifically for inclusion in a registration statement applicable to the Registrable Securities or such prospectus.

2.3 Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any person or entity entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party promptly shall notify the person or entity from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party.

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; or (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel (which shall be reasonably acceptable to the Indemnifying Party) that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section 2.3) shall be paid to the Indemnified Party, as incurred, within thirty (30) business days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder).

2.4 Contribution. If a claim for indemnification under Section 2.1 or 2.2 is unavailable to an Indemnified Party because of a failure or refusal of a governmental authority to enforce such indemnification in accordance with its terms (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative benefits received by the Indemnifying Party on the one hand and the Indemnified Party on the other from the offering of the Registrable Securities. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault, as applicable, of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 2.3, any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 2.4 was available to such party in accordance with its terms.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 2.4 were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. No person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.

ARTICLE III
GENERAL

3.1 Amendments and Waivers. No amendment or waiver of any term or provision of this Agreement shall be effective unless in writing signed by Parent and the Holders of at least a majority of the Registrable Securities at the time in question (the “Majority Holders”). The waiver by Parent or the Majority Holders of a breach of any term or provision of this Agreement shall not be construed as a waiver of any subsequent breach.

3.2 Notices. Except as otherwise provided in this Agreement, notices and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date received by hand delivery, overnight delivery, facsimile transmission or registered mail, postage prepaid, addressed as follows:

3.2.1 if to Parent, to:

SFX Holding Corporation

650 Madison Avenue

New York, NY 10022

Attention: Mitch Nelson, Esq.

Facsimile No.: Fax: (212) 750-3034

and

3.2.2 if to a Holder, to the address set forth opposite the name of such Holder on Exhibit A.

Parent and each Holder, by written notice given in accordance with this Section 3.2, may change the address to which such notice or other communications are to be sent.

3.3 Parent Representations. Parent represents and warrants to each Holder that:

3.3.1 Parent has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby;

3.3.2 The execution and delivery of this Agreement by Parent and the consummation by Parent of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Parent;

3.3.3 This Agreement has been duly executed and delivered by Parent and (assuming the due authorization, execution and delivery hereof by each Holder) constitutes a valid and binding obligation of Parent, enforceable against Parent in accordance with its terms, except that such enforceability may be subject to (i) bankruptcy, insolvency, reorganization or other similar laws affecting or relating to enforcement of creditors’ rights generally and (ii) general equitable principles;

3.3.4 The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and compliance with the provisions hereof will not, result in any violation or default (with or without notice or lapse of time, or both) under, (i) any provision of the charter or organizational documents of Parent, (ii) any judgment, order, decree, statute, law, ordinance, rule or regulation by which Parent is bound or to which any of its properties or assets is subject, other than, in which any of its properties or assets is subject, other than, in the case of clause (ii), any such violation or default that would not reasonably be expected to have a material adverse effect on the financial condition or operations of Parent, taken as a whole, and would not impair the ability of Parent to perform its obligations under this Agreement; and

3.3.5 No filing or registration with, or authorization, consent or approval of, any governmental authority is required by or with respect to Parent in connection with the execution and delivery by Parent of this Agreement or the consummation by Parent of the transactions contemplated hereby, except as otherwise expressly provided herein.

3.4 Holder Representations. Each Holder represents and warrants, severally but not jointly, to Parent that:

3.4.1 Such Holder has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby;

3.4.2 This Agreement has been duly executed and delivered by such Holder and (assuming the due authorization, execution and delivery hereof by Parent) constitutes a valid and binding obligation of such Holder, enforceable against such Holder in accordance with its terms, except that such enforceability may be subject to (i) bankruptcy, insolvency, reorganization or other similar laws affecting or relating to enforcement of creditors’ rights generally and (ii) general equitable principles;

3.4.3 The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and compliance with the provisions hereof will not, result in any violation of or default (with or without notice or lapse of time, or both) under (i) any provision of the charter or organizational documents of such Holder, (ii) any judgment, order, decree, statute, law, ordinance, rule or regulation by which such Holder is bound or to which any of its properties or assets is subject, other than, in which any of its properties or assets is subject, other than, in the case of clause (ii), any such violation or default that would not reasonably be expected to have a material adverse effect on the financial condition or operations of such Holder, taken as a whole, and would not impair the ability of such Holder to perform its obligations under this Agreement;

3.4.4 No filing or registration with, or authorization, consent or approval of, any governmental authority is required by or with respect to such Holder in connection with the execution and delivery by such Holder of this Agreement or the consummation by such Holder of the transactions contemplated hereby, except as otherwise expressly provided herein.

3.5 This Agreement and the rights, duties and obligations of Parent hereunder may not be assigned or delegated by Parent in whole or in part. Prior to the date that is one year from the date that the Commission declares effective a registration pursuant to the provisions of Article I, no Holder may assign or delegate their rights, duties or obligations under this Agreement in whole or in part. Except as set forth in immediately preceding sentence, this Agreement and the rights, duties and obligations of the Holders of Registrable Securities hereunder may be assigned or delegated by such Holder of Registrable Securities in conjunction with and to the extent of any transfer of Registrable Securities by any such Holder. This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement. No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate Parent unless and until Parent shall have received (i) written notice of such assignment as provided in Section 3.2 and (ii) the written agreement of the assignee, in a form reasonably satisfactory to Parent, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this Section 3.5 shall be null and void.

3.6 Miscellaneous.

3.6.1 This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the respective successors and assigns of the parties hereto.

3.6.2 This Agreement constitutes the entire understanding between the parties with respect to the subject matter hereof and supersedes any and all previous agreements among them relating to the subject matter hereof, whether written, oral or implied.

3.6.3 This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of New York, without giving effect to the conflicts of law principles thereof.

3.6.4 The Section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation hereof.

3.6.5 This Agreement may be executed in one or more counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement.

3.6.6 Should any term or condition of this Agreement be determined by a court of competent jurisdiction to be unenforceable for any reason, including, without limitation, violation of statute or public policy, such provision shall, if possible, be reformed by the parties hereto, or if the parties cannot agree, by the appropriate court of competent jurisdiction to comply with applicable legal requirements in a matter that is as close in its intent and effect to the original provision as possible or, if such reformation cannot be accomplished shall be stricken without affecting the validity of any other term or condition of this Agreement.

3.6.7 Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

	COMPANY:

	SFX HOLDING CORPORATION

	By:	/s/ Robert F.X. Sillerman
		Name: Robert F.X. Sillerman
		Title: Chief Executive Officer

[Signature Page — Registration Rights Agreement]

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

	SEBASTIAN SOLANO
	an individual resident of Florida

	/s/ Sebastian Solano


	PAUL CAMPBELL
	an individual resident of Florida


	/s/ Paul Campbell


	PATRYK TRACZ
	an individual resident of Florida

	/s/ Patryk Tracz


	LUKASZ TRACZ
	an individual resident of Florida

	/s/ Lukasz Tracz

[Signature Page — Registration Rights Agreement]

EXHIBIT A

HOLDERS

Name		Address
Sebastian Solano		###
Paul Campbell		###
Patryk Tracz		###
Lukasz Tracz		###

Confidential material redacted and filed separately with the Commission.

EX-4.3 6 a2215423zex-4_3.htm EX-4.3

Exhibit 4.3

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of July 31, 2012, is made and entered into by and among SFX HOLDING CORPORATION, a Delaware corporation (“Parent”), and each of the stockholders of Parent set forth on Exhibit A (each such party, a “Holder” and collectively the “Holders”). Capitalized terms appearing but not defined herein have the meanings ascribed to such terms in the Asset Contribution Agreement, dated as of the date hereof, by and among Parent, SFX-LIC Operating LLC, Advanced Concert Productions LLC and the individuals party thereto (the “Asset Contribution Agreement”).

RECITALS

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and other good and valuable consideration, the parties hereto hereby agree as follows:

ARTICLE I
PIGGY BACK REGISTRATION RIGHTS

Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission.

expenses, and customary closing conditions, with any underwriter who acquires any Registrable Securities.

ARTICLE II
INDEMNIFICATION AND CONTRIBUTION

ARTICLE III
GENERAL

3.2.1 if to Parent, to:

SFX Holding Corporation

650 Madison Avenue

New York, NY 10022

Attention: Mitch Nelson, Esq.

Facsimile No.: Fax: (212) 750-3034

and

3.2.2 if to a Holder, to the address set forth opposite the name of such Holder on Exhibit A.

Parent and each Holder, by written notice given in accordance with this Section 3.2, may change the address to which such notice or other communications are to be sent.

3.3 Parent Representations. Parent represents and warrants to each Holder that:

3.3.1 Parent has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby;

3.4 Holder Representations. Each Holder represents and warrants, severally but not jointly, to Parent that:

3.4.1 Such Holder has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby;

3.6 Miscellaneous.

3.6.1 This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the respective successors and assigns of the parties hereto.

3.6.3 This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of New York, without giving effect to the conflicts of law principles thereof.

3.6.4 The Section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation hereof.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

	COMPANY:

	SFX HOLDING CORPORATION

	By:	/s/ Robert F.X. Sillerman
		Name: Robert F.X. Sillerman
		Title: Chief Executive Officer

[Signature Page — Registration Rights Agreement]

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

	ERIC FULLER
	an individual resident of Florida

	/s/ Eric Fuller


	COLLYNS STENZEL
	an individual resident of Florida


	/s/ Collyns Stenzel

[Signature Page — Registration Rights Agreement]

EXHIBIT A

HOLDERS

Name		Address
Eric Fuller		###
Collyns Stenzel		###

Confidential material redacted and filed separately with the Commission.

EX-4.4 7 a2215423zex-4_4.htm EX-4.4

Exhibit 4.4

EXECUTION VERSION

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of December 31, 2012, is made and entered into by and among SFX HOLDING CORPORATION, a Delaware corporation (“Parent”), and each of the stockholders of Parent set forth on Exhibit A (each such party, a “Holder” and collectively the “Holders”). Capitalized terms appearing but not defined herein have the meanings ascribed to such terms in the Asset Contribution Agreement, dated November 21, 2012, by and among Parent, SFX-Nightlife Operating LLC, Nightlife Holdings LLC and the other parties thereto (the “Asset Contribution Agreement”).

RECITALS

WHEREAS, pursuant to the Asset Contribution Agreement, the Transferor Parties contributed to Acquiror all of the the Transferred Assets in exchange for the consideration set forth in the Asset Contribution Agreement, which included shares of common stock, par value $0.001 per share, of Parent (“Registrable Securities”); and

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and other good and valuable consideration, the parties hereto hereby agree as follows:

ARTICLE I
PIGGY BACK REGISTRATION RIGHTS

1.1 If, at any time after the date hereof and prior to December 31, 2014 when there is not an effective registration statement covering the Registrable Securities pursuant to this Agreement or otherwise, Parent shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account (other than the initial registration statement relating to an offering solely for its own account) or the account of others under the Securities Act of any of its equity securities (other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans), Parent shall send to all of the Holders of Registrable Securities written notice of such determination and, if within twenty (20) days after receipt of such notice, or within such shorter period of time as may be specified by Parent in such written notice as may be necessary for Parent to comply with its obligations with respect to the timing of the filing of such registration statement, a Holder shall so request in writing (which request shall specify the Registrable Securities intended to be disposed of by such Holder), Parent will cause the registration under the Securities Act of all Registrable Securities which Parent has been so requested to register by such Holder, to the extent requisite to permit the disposition of the Registrable Securities so to be registered, provided that if at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, Parent shall determine for

any reason not to register or to delay registration of such securities, Parent may, at its election, give written notice of such determination to such Holder and, thereupon, (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration, and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities being registered pursuant to this Section 1.1 for the same period as the delay in registering such other securities. Parent shall include in such registration statement all or any part of such Registrable Securities that a Holder requests to be registered; provided, however, that Parent shall not be required to register any Registrable Securities pursuant to this Section 1.1 that are eligible for sale pursuant to Rule 144 of the Securities Act without volume limitations or restrictions. In the case of an underwritten public offering, if the managing underwriter(s) or underwriter(s) should reasonably object to the inclusion of the Registrable Securities in such registration statement, then if Parent after consultation with the managing underwriter should reasonably determine that the inclusion of such Registrable Securities would materially adversely affect the offering contemplated in such registration statement (including the price at which Parent proposes to sell the securities in such offering), and based on such determination recommends inclusion in such registration statement of fewer or none of the Registrable Securities of a Holder, then (x) the number of Registrable Securities of the Holders included in such registration statement shall be reduced, pro rata based on the number of Registrable Securities that each Holder has requested be included in such registration statement and the aggregate number of Registrable Securities that the Holders and the other holders that have received shares of Parent Common Stock in connection with the Plan (the “Other Holders”) have requested be included in such registration statement (such proportion is referred to herein as “Pro Rata”), if Parent after consultation with the underwriter(s) recommends the inclusion of fewer Registrable Securities, or (y) none of the Registrable Securities of the Holders or Other Holders shall be included in such registration statement, if Parent after consultation with the underwriter(s) recommends the inclusion of none of such Registrable Securities; provided, however, that if securities are being offered for the account of other persons or entities (the “Non Plan Other Holders”) as well as Parent, such reduction shall not represent a greater fraction of the number of Registrable Securities intended to be offered by the Holders and Other Holders than the fraction of similar reductions imposed on such Non Plan Other Holders or entities (other than Parent).

1.2 Notwithstanding anything to the contrary contained in this Agreement, in the event the staff of the Commission (the “Staff”) or the Commission seeks to characterize any offering pursuant to a registration pursuant to the provisions of this Article I as constituting an offering of securities by or on behalf of Parent, or in any other manner, such that the Staff or the Commission do not permit such registration statement to become effective and used for resales in a manner that does not constitute such an offering and that permits the continuous resale at the market by the Holders participating therein (or as otherwise may be acceptable to each Holder) without being named therein as an “underwriter,” then Parent shall reduce the number of shares to be included in such registration statement by all Holders, Other Holders and Non Plan Other Holders until such time as the Staff and the Commission shall so permit such registration statement to become effective as aforesaid. In making such reduction, Parent shall reduce the number of shares to be included by all Holders, Other Holders and Non Plan Other Holders on a Pro Rata basis unless the inclusion of shares by a particular Holder, Other Holder, Non Plan Other Holder or a particular set of Holders, Other Holders or Non Plan Other Holders are resulting in the Staff’s or the Commission’s “by or on behalf of Parent” offering position, in

which event the shares held by such Holder or Other Holder or set of Holders or Other Holders shall be the only shares subject to reduction (and if by a set of Holders or Other Holders on a Pro Rata basis by such Holders or Other Holders or on such other basis as would result in the exclusion of the least number of shares by all such Holders or Other Holders). In addition, in the event that the Staff or the Commission requires any Holder seeking to sell securities under a registration pursuant to the provisions of this Article I to be specifically identified as an “underwriter” in order to permit such registration statement to become effective, and such Holder does not consent to being so named as an underwriter in such registration statement, then, in each such case, Parent shall reduce the total number of Registrable Securities to be registered on behalf of such Holder, until such time as the Staff or the Commission does not require such identification or until such Holder accepts such identification and the manner thereof.

1.3 In the event of a registration pursuant to the provisions of this Article I, Parent shall use its best efforts to cause the Registrable Securities so registered to be registered or qualified for sale under the securities or blue sky laws of such jurisdictions as a majority-in-interest of the Holders together with the Other Holders may reasonably request; provided, however, that Parent shall not by reason of this Agreement be required to qualify to do business in any state in which it is not otherwise required to qualify to do business, to subject itself to taxation in any such jurisdiction or to file a general consent to service of process. Parent shall use commercially reasonable efforts to keep effective any registration or qualification contemplated by this Agreement and shall, from time to time, amend or supplement each applicable registration statement, preliminary prospectus, final prospectus, application, document, and communication for such period of time as shall be required to permit the Holders to complete the offer and sale of the Registrable Securities covered thereby.

1.7 Parent may grant piggy back registration rights to other persons (including both Other Holders and Non Plan Other Holders) so long as such rights are pari passu or subordinate to the rights of the Holders and nothing herein contained shall prohibit Parent from granting to any person demand registration rights.

ARTICLE II
INDEMNIFICATION AND CONTRIBUTION

2.2 Indemnification by Holders. Each Holder shall, severally but not jointly, indemnify and hold harmless Parent, its directors, officers, agents and employees, each person or entity who controls Parent (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents and employees of such controlling persons or entities, to the fullest extent permitted by applicable law, from and against all Losses (as determined by a court of competent jurisdiction in a final judgment not subject to appeal or review), as incurred, arising solely out of or based solely upon any untrue statement of a material fact contained in a registration statement applicable to the Registrable Securities, any prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder or other Indemnifying Party to Parent specifically for inclusion in a registration statement applicable to the Registrable Securities or such prospectus.

but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault, as applicable, of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 2.3, any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 2.4 was available to such party in accordance with its terms.

ARTICLE III
GENERAL

3.2.1 if to Parent, to:

SFX Holding Corporation

650 Madison Avenue

New York, NY 10022

Attention: Mitch Nelson, Esq.

Facsimile No.: Fax: (212) 750-3034

and

3.2.2 if to a Holder, to the address set forth opposite the name of such Holder on Exhibit A.

Parent and each Holder, by written notice given in accordance with this Section 3.2, may change the address to which such notice or other communications are to be sent.

3.3 Parent Representations. Parent represents and warrants to each Holder that:

3.3.1 Parent has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby;

3.4 Holder Representations. Each Holder represents and warrants, severally but not jointly, to Parent that:

3.4.1 Such Holder has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby;

other similar laws affecting or relating to enforcement of creditors’ rights generally and (ii) general equitable principles;

3.5 This Agreement and the rights, duties and obligations of Parent hereunder may not be assigned or delegated by Parent in whole or in part. Prior to the date that is one year from the date that the Commission declares effective a registration pursuant to the provisions of Article I, no Holder may assign or delegate their rights, duties or obligations under this Agreement in whole or in part other than to such Holder’s Affiliates. Except as set forth in immediately preceding sentence, this Agreement and the rights, duties and obligations of the Holders of Registrable Securities hereunder may be assigned or delegated by such Holder of Registrable Securities in conjunction with and to the extent of any transfer of Registrable Securities by any such Holder. This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement. No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate Parent unless and until Parent shall have received (i) written notice of such assignment as provided in Section 3.2 and (ii) the written agreement of the assignee, in a form reasonably satisfactory to Parent, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this Section 3.5 shall be null and void.

3.6 Miscellaneous.

3.6.1 This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the respective successors and assigns of the parties hereto.

3.6.3 This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of New York, without giving effect to the conflicts of law principles thereof.

3.6.4 The Section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation hereof.

3.6.8 This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

	PARENT:

	SFX HOLDING CORPORATION a Delaware corporation

	By:	/s/ Shelly Finkel
		Name: Shelly Finkel
		Title: President

[Signature Page — Registration Rights Agreement]

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

HOLDERS:


NIGHTLIFE HOLDINGS LLC,
a Florida limited liability company

By:	David Grutman, Inc., Member-Manager


By:	/s/ David Grutman
Name:		David Grutman
Title:		President


By:	Sebu Corp., Member-Manager


By:	/s/ Brian Gordon
Name:		Brian Gordon
Title:		President

EXHIBIT A

HOLDERS

Name		Address
Nightlife Holdings LLC		1000 Lincoln Road, Suite 200 Miami, FL 33139

EX-4.5 8 a2215423zex-4_5.htm EX-4.5

Exhibit 4.5

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of June 19, 2012, is made and entered into by and among SFX HOLDING CORPORATION, a Delaware corporation (“Parent”), and each of the stockholders of Parent set forth on Exhibit A (each such party, a “Holder” and collectively the “Holders”).

RECITALS

WHEREAS, on or about the date hereof, SFX Entertainment Inc. (“SFX”) entered into an exchange agreement with Parent, pursuant to which the stockholders of SFX will, on the terms and subject to the conditions set forth therein, contribute all outstanding shares of common stock, par value $0.01 per share, of SFX to Parent in exchange for shares (the “Exchange Shares”) of common stock, par value $0.001 per share, of Parent (“Parent Common Stock”);

WHEREAS, on or about the date hereof, Parent, certain wholly-owned limited liability company subsidiaries of Parent, and SFX entered into one or more contribution agreements (the “Contribution Agreements”) with one or more individuals or entities engaged in businesses that are synergistic with those of SFX and such individuals and entities (the “Other Parties”), pursuant to which a wholly-owned limited liability company subsidiary of Parent will, on the terms and subject to the conditions set forth therein, acquire certain assets and assume certain liabilities of the Other Parties in exchange for Parent issuing to the Holders shares of Parent Common Stock (collectively, the “Registrable Securities”) with a view to combining and expanding the overall business activities of Parent, SFX and the Other Parties in the field of live entertainment; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and other good and valuable consideration, the parties hereto hereby agree as follows:

ARTICLE I
PIGGY BACK REGISTRATION RIGHTS

1.1 If, at any time after the date hereof and prior to December 31, 2014 there is not an effective registration statement covering the Registrable Securities pursuant to this Agreement and Parent shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account (other than the initial registration statement relating to an offering for its own account) or the account of others under the Securities Act of any of its equity securities (other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans), Parent shall send to all of the Holders of Registrable Securities written notice of such determination and, if within twenty (20) days after receipt of such notice, or within such shorter period of time as may be specified by Parent in such written

notice as may be necessary for Parent to comply with its obligations with respect to the timing of the filing of such registration statement, a Holder shall so request in writing (which request shall specify the Registrable Securities intended to be disposed of by such Holder), Parent will cause the registration under the Securities Act of all Registrable Securities which Parent has been so requested to register by such Holder, to the extent requisite to permit the disposition of the Registrable Securities so to be registered, provided that if at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, Parent shall determine for any reason not to register or to delay registration of such securities, Parent may, at its election, give written notice of such determination to such Holder and, thereupon, (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration, and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities being registered pursuant to this Section 1.1 for the same period as the delay in registering such other securities. Parent shall include in such registration statement all or any part of such Registrable Securities that a Holder requests to be registered; provided, however, that Parent shall not be required to register any Registrable Securities pursuant to this Section 1.1 that are eligible for sale pursuant to Rule 144 of the Securities Act without volume limitations or restrictions. In the case of an underwritten public offering, if the managing underwriter(s) or underwriter(s) should reasonably object to the inclusion of the Registrable Securities in such registration statement, then if Parent after consultation with the managing underwriter should reasonably determine that the inclusion of such Registrable Securities would materially adversely affect the offering contemplated in such registration statement (including the price at which Parent proposes to sell the securities in such offering), and based on such determination recommends inclusion in such registration statement of fewer or none of the Registrable Securities of a Holder, then (x) the number of Registrable Securities of the Holders included in such registration statement shall be reduced, pro rata based on the number of Registrable Securities that each Holder has requested be included in such registration statement and the aggregate number of Registrable Securities that the Holders and have requested be included in such registration statement (such proportion is referred to herein as “Pro Rata”), if Parent after consultation with the underwriter(s) recommends the inclusion of fewer Registrable Securities, or (y) none of the Registrable Securities of the Holders shall be included in such registration statement, if Parent after consultation with the underwriter(s) recommends the inclusion of none of such Registrable Securities; provided, however, that if securities are being offered for the account of other persons or entities as well as Parent, such reduction shall not represent a greater fraction of the number of Registrable Securities intended to be offered by the Holders than the fraction of similar reductions imposed on such other persons or entities (other than Parent).

Commission shall so permit such registration statement to become effective as aforesaid. In making such reduction, Parent shall reduce the number of shares to be included by all Holders on a Pro Rata basis unless the inclusion of shares by a particular Holder or a particular set of Holders are resulting in the Staff’s or the Commission’s “by or on behalf of Parent” offering position, in which event the shares held by such Holder or set of Holders shall be the only shares subject to reduction (and if by a set of Holders on a Pro Rata basis by such Holders or on such other basis as would result in the exclusion of the least number of shares by all such Holders). In addition, in the event that the Staff or the Commission requires any Holder seeking to sell securities under a registration pursuant to the provisions of this Article I to be specifically identified as an “underwriter” in order to permit such registration statement to become effective, and such Holder does not consent to being so named as an underwriter in such registration statement, then, in each such case, Parent shall reduce the total number of Registrable Securities to be registered on behalf of such Holder, until such time as the Staff or the Commission does not require such identification or until such Holder accepts such identification and the manner thereof.

Parent shall use commercially reasonable efforts to keep effective any registration or qualification contemplated by this Agreement and shall, from time to time, amend or supplement each applicable registration statement, preliminary prospectus, final prospectus, application, document, and communication for such period of time as shall be required to permit the Holders to complete the offer and sale of the Registrable Securities covered thereby. Notwithstanding the preceding sentence, Parent shall in no event be required to keep any such registration or qualification in effect for a period in excess of six (6) months from the date on which the Holders are first free to sell such Registrable Securities under such registration statement (the “Effectiveness Period”); provided, however, that, if Parent is required to keep any such registration or qualification in effect with respect to securities other than the Registrable Securities beyond such period, Parent shall keep such registration or qualification in effect as it relates to the Registrable Securities for so long as such registration or qualification remains or is required to remain in effect in respect of such other securities.

1.5 In the event of a registration pursuant to the provision of this Article I, Parent and the Holders shall enter into a cross-indemnity agreement and a contribution agreement, each in customary form, with each underwriter, if any, and, if requested, enter into an underwriting agreement containing conventional representations, warranties, allocation of expenses, and customary closing conditions, with any underwriter who acquires any Registrable Securities.

1.6 Parent agrees that, until all the Registrable Securities have been sold under a registration statement or pursuant to Rule 144 promulgated under the Securities Act, it shall keep current in filing all reports, statements and other materials required to be filed with the Commission under Section 12 of the Securities Exchange Act of 1934 to permit holders of the Registrable Securities to sell such securities under Rule 144 promulgated under the Securities Act.

1.8 During the Effectiveness Period, Parent shall notify each Holder of Registrable Securities, the disposition of which requires delivery of a prospectus relating thereto under the Securities Act, of the happening of any event (as promptly as practicable after becoming aware of such event), which comes to the Parent’s attention, that will after the occurrence of such event cause the prospectus included in such Registration Statement, if not amended or supplemented, to contain an untrue statement of a material fact or an omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading and the Parent shall, at the request of such Holder, promptly thereafter prepare and furnish to such Holder a supplement or amendment to such prospectus (or prepare and file appropriate reports under the Exchange Act) so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.

1.9 Parent shall comply, and continue to comply during the Effectiveness Period, in all material respects with the Securities Act and the Exchange Act and with all applicable rules and regulations of the Commission with respect to the disposition of all securities covered by such Registration Statement.

1.10 Parent shall, as promptly as practicable after becoming aware of such event, notify each Holder of Registrable Securities being offered or sold pursuant to the Registration Statement of the issuance by the Commission of any stop order or other suspension of effectiveness of the Registration Statement.

1.11 Parent shall use commercially reasonable efforts to provide a transfer agent and registrar, which may be a single entity, for the shares of the Parents Common Stock at all times.

1.12 If requested by the Holders, Parent shall cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to the Registration Statement, which certificates shall be free, to the

extent permitted by applicable law, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request.

1.13 Parent shall take all other reasonable actions necessary to expedite and facilitate the disposition by the Holders of the Registrable Securities pursuant to the Registration Statement.

1.14 Parent shall pay all expenses in connection with any registration obligation provided herein, including, without limitation, all registration, filing, stock exchange fees, printing expenses, all fees and expenses of complying with applicable securities laws, and the fees and disbursements of counsel for the Parent and of its independent accountants; provided, that, in any registration, each party shall pay for its own underwriting discounts and commissions and transfer taxes.

ARTICLE II
INDEMNIFICATION AND CONTRIBUTION

or any form of prospectus, or in any amendment or supplement thereto, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by a Holder or other Indemnifying Party to Parent specifically for inclusion in a registration statement applicable to the Registrable Securities or such prospectus.

Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder).

ARTICLE III
GENERAL

3.2.1 if to Parent, to:

SFX Holding Corporation

650 Madison Avenue

New York, NY 10022

Attention: Mitch Nelson, Esq.

Facsimile No.: Fax: (212) 750-3034

and

3.2.2 if to a Holder, to the address set forth opposite the name of such Holder on Exhibit A.

Parent and each Holder, by written notice given in accordance with this Section 3.2, may change the address to which such notice or other communications are to be sent.

3.3 Parent Representations. Parent represents and warrants to each Holder that:

3.3.1 Parent has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby;

3.4 Holder Representations. Each Holder represents and warrants, severally but not jointly, to Parent that:

3.4.1 Such Holder has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby;

3.5 This Agreement and the rights, duties and obligations of Parent hereunder may not be assigned or delegated by Parent in whole or in part. Prior to the date that is one year from the date that the Commission declares effective a registration pursuant to the provisions of Article I, no Holder may assign or delegate their rights, duties or obligations under this Agreement in whole or in part, without the prior written consent of the Parent, which consent shall not be unreasonably withheld. Except as set forth in immediately preceding sentence, this Agreement and the rights, duties and obligations of the Holders of Registrable Securities hereunder may be assigned or delegated by such Holder of Registrable Securities in conjunction with and to the extent of any transfer of Registrable Securities by any such Holder. This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement. No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate Parent unless and until Parent shall have received (i) written notice of such assignment as provided in Section 3.2 and (ii) the written agreement of the assignee, in a form reasonably satisfactory to Parent, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this Section 3.5 shall be null and void.

3.6 Miscellaneous.

3.6.1 This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and the respective successors and assigns of the parties hereto.

3.6.3 This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of New York, without giving effect to the conflicts of law principles thereof.

3.6.4 The Section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation hereof.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

	COMPANY:

	SFX HOLDING CORPORATION

	By:	/s/ Robert F.X. Sillerman
		Name: Robert F.X. Sillerman
		Title: Chief Executive Officer

[Signature Page — Registration Rights Agreement]

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

	HOLDER:

	DISCO PRODUCTIONS, INC.

	By:	/s/ James D. Estopinal
		Name: James D. Estopinal
		Title: President

EXHIBIT A

HOLDERS

Name		Address

EX-10.1 9 a2215423zex-10_1.htm EX-10.1

Exhibit 10.1

SFX ENTERTAINMENT, INC.

2013 EQUITY COMPENSATION PLAN

The purpose of the SFX Entertainment, Inc. 2013 Equity Compensation Plan (the “Plan”) is to provide (i) designated employees of the SFX Entertainment, Inc. (the “Company”) and its parents and subsidiaries; (ii) certain consultants and advisors who perform services for the Company or its parents or subsidiaries; and (iii) non-employee members of the Board of Directors of the Company (the “Board”) with the opportunity to receive grants of incentive stock options, nonqualified stock options and stock awards. The Company believes that the Plan will encourage the participants to contribute materially to the growth of the Company, thereby benefitting the Company’s shareholders, and will align the economic interests of the participants with those of the shareholders.

1. Administration

(a) Committee. The Plan shall be administered and interpreted by the Board or by a committee consisting of members of the Board, which shall be appointed by the Board. After an initial public offering of the Company’s stock as described in Section 18(b) (a “Public Offering”), the Plan shall be administered by a committee of Board members, which may consist of “outside directors” as defined under section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and related Treasury regulations, and “non-employee directors” as defined under Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board, however, may ratify or approve any grants as it deems appropriate, and the Board shall approve and administer all grants made to non-employee directors. The committee may delegate authority to one or more subcommittees as it deems appropriate. To the extent that a committee or subcommittee administers the Plan, references in the Plan to the “Board” shall be deemed to refer to the committee or subcommittee.

(b) Board Authority. The Board shall have the sole authority to (i) determine the individuals to whom grants shall be made under the Plan; (ii) determine the type, size, and terms of the grants to be made to each such individual; (iii) determine the time when the grants will be made and the duration of any applicable exercise or restriction period, including the criteria for exercisability and the acceleration of exercisability; (iv) amend the terms of any previously issued grant; and (v) deal with any other matters arising under the Plan.

(c) Board Determinations. The Board shall have full power and authority to administer and interpret the Plan, to make factual determinations and to adopt or amend such rules, regulations, agreements, and instruments for implementing the Plan and for the conduct of its business as it deems necessary or advisable, in its sole discretion. The Board’s interpretations of the Plan and all determinations made by the Board pursuant to the powers vested in it hereunder shall be conclusive and binding on all persons having any interest in the Plan or in any awards granted hereunder. All powers of the Board shall be executed in its sole discretion, in the best interest of the Company, not as a fiduciary, and in keeping with the objectives of the Plan and need not be uniform as to similarly situated individuals.

2. Awards

Awards under the Plan may consist of grants of incentive stock options as described in Section 5 (“Incentive Stock Options”), nonqualified stock options as described in Section 5 (“Nonqualified Stock Options”) (Incentive Stock Options and Nonqualified Stock Options are collectively referred to as “Options”), as stock awards as described in Section 6 (“Stock Awards”), and restricted stock units as described in Section 6 (“RSUs”) (hereinafter collectively referred to as “Awards”). All Awards shall be subject to the terms and conditions set forth herein and to such other terms and conditions consistent with the Plan as the Board deems appropriate and as are specified in writing by the Board to the individual in a grant instrument or an amendment to the grant instrument (the “Award Agreement”). The Board shall approve the form and provisions of each Award Agreement. Awards under a particular Section of the Plan need not be uniform as among the grantees.

3. Shares Subject to the Plan

(a) Shares Authorized. Subject to adjustment as described below, the aggregate number of shares of common stock of the Company (“Company Stock”) that may be issued or transferred under the Plan is 11,250,000 and the maximum aggregate number of shares that may be issued under the Plan under Incentive Stock Options is 11,250,000. After a Public Offering, the maximum aggregate number of shares of Company Stock that shall be subject to Awards made under the Plan to any individual during any calendar year shall be 3,750,000 shares, subject to adjustment as described below. The shares may be authorized but unissued shares of Company Stock or reacquired shares of Company Stock, including shares purchased by the Company on the open market for purposes of the Plan. If and to the extent Options granted under the Plan terminate, expire, or are canceled, forfeited, exchanged, or surrendered without having been exercised or if any Stock Awards or RSUs (including restricted stock received upon the exercise of Options) are forfeited, the shares subject to such Awards shall be available again for purposes of the Plan.

(b) Adjustments. If there is any change in the number or kind of shares of Company Stock outstanding (i) by reason of a stock dividend, spinoff, recapitalization, stock split, or combination or exchange of shares; (ii) by reason of a merger, reorganization, or consolidation; (iii) by reason of a reclassification or change in par value; or (iv) by reason of any other extraordinary or unusual event affecting the outstanding Company Stock as a class without the Company’s receipt of consideration, or if the value of outstanding shares of Company Stock is substantially reduced as a result of a spinoff or the Company’s payment of an extraordinary dividend or distribution, the maximum number of shares of Company Stock available for Awards, the maximum number of shares of Company Stock that any individual participating in the Plan may be granted in any year, the number of shares covered by outstanding Awards, the kind of shares issued under the Plan, and the price per share of such Awards shall be adjusted by the Board to reflect any increase or decrease in the number of, or change in the kind or value of, issued shares of Company Stock to preclude the enlargement or dilution of rights and benefits under such Awards; provided, however, that any fractional shares resulting from such adjustment shall be eliminated. Any adjustments determined by the Board shall be final, binding, and conclusive.

4. Eligibility for Participation

(a) Eligible Persons. All employees of the Company and its parents or subsidiaries (“Employees”), including Employees who are officers or members of the Board, and members of the Board who are not Employees (“Non-Employee Directors”) shall be eligible to participate in the Plan. Consultants and advisors who perform services for the Company or any of its parents or subsidiaries (“Key Advisors”) shall be eligible to participate in the Plan if the Key Advisors render bona fide services to the Company or its parents or subsidiaries, the services are not in connection with the offer and sale of securities in a capital-raising transaction, and the Key Advisors do not directly or indirectly promote or maintain a market for the Company’s securities.

(b) Selection of Grantees. The Board shall select the Employees, Non-Employee Directors, and Key Advisors to receive Awards and shall determine the number of shares of Company Stock subject to a particular Award in such manner as the Board determines. Employees, Key Advisors, and Non-Employee Directors who receive Awards under the Plan shall hereinafter be referred to as “Grantees.”

5. Granting of Options

The Company may grant Options to purchase shares of Company Stock to Employees, Non-Employee Directors, and Key Advisors. The following provisions are applicable to Options.

(a) Number of Shares. The Board shall determine the number of shares of Company Stock that shall be subject to each Award of Options.

(b) Type of Option and Price.

(i) The Board may grant Incentive Stock Options that are intended to qualify as “incentive stock options” within the meaning of section 422 of the Code or Nonqualified Stock Options that do not qualify as Incentive Stock Options. Incentive Stock Options may be granted only to employees of the Company or its parents or subsidiaries, as defined in section 424 of the Code.

(ii) The purchase price (the “Exercise Price”) of Company Stock subject to an Option shall be determined by the Board and may be equal to or greater than the Fair Market Value (as defined below) of a share of Company Stock on the date the Option is granted. An Incentive Stock Option may not be granted to an Employee who, at the time of grant, owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or any parent or subsidiary of the Company, unless the Exercise Price per share is not less than 110% of the Fair Market Value of Company Stock on the date of grant.

(iii) If the Company Stock is publicly traded, the Fair Market Value per share shall be determined as follows: (x) if the principal trading market for the Company Stock is a national securities exchange or the Nasdaq National Market, the last reported sale price thereof on the relevant date or (if there were no trades on that date) the latest preceding date upon which a sale was reported, or (y) if the Company Stock is not principally traded on such exchange or

market, the mean between the last reported “bid” and “asked” prices of Company Stock on the relevant date, as reported on Nasdaq or, if not so reported, as reported by the National Daily Quotation Bureau, Inc. or as reported in a customary financial reporting service, as applicable and as the Board determines.

(iv) If the Company Stock is not publicly traded or, if publicly traded, is not subject to reported transactions or “bid” or “asked” quotations as set forth above, the Fair Market Value per share shall be as determined by the Board. The Board shall determine the Fair Market Value based upon the application of a reasonable valuation method that considers all material information available to the Board. The Board may engage outside advisors, valuation experts and counsel to assist the Board in making a determination of Fair Market Value for purpose of the Plan.

(c) Option Term. The Board shall determine the term of each Option. The term of any Option shall not exceed ten years from the date of grant. An Incentive Stock Option that is granted to an Employee who, at the time of grant, owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company, or any parent or subsidiary of the Company, however, may not have a term that exceeds five years from the date of grant.

(d) Exercisability of Options. Options shall become exercisable in accordance with such terms and conditions, consistent with the Plan, as may be determined by the Board and specified in the Award Agreement. The Board may accelerate the exercisability of any or all outstanding Options at any time for any reason. The Board may provide in an Award Agreement that the Grantee may elect to exercise part or all of an Option before it otherwise has become exercisable. Any shares so purchased shall be restricted shares and shall be subject to a repurchase right in favor of the Company during a specified restriction period, with the repurchase price equal to the lesser of (A) the Exercise Price or (B) the Fair Market Value of such shares at the time of repurchase, and (C) any other restrictions determined by the Company.

(e) Termination of Employment, Disability, or Death.

(i) Except as provided below, an Option may only be exercised while the Grantee is employed by, or providing service to, the Employer (as defined below) as an Employee, Key Advisor, or member of the Board. In the event that a Grantee ceases to be employed by, or provide service to, the Employer for any reason other than Disability, death, or termination for Cause, any Option which is otherwise exercisable by the Grantee shall terminate unless exercised within 90 days after the date on which the Grantee ceases to be employed by, or provide service to, the Employer (or within such other period of time as may be specified by the Board), but in any event no later than the date of expiration of the Option term. Except as otherwise provided by the Board or in the Award Agreement, any of the Grantee’s Options that are not otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide service to, the Employer shall terminate as of such date.

to, the Employer. In addition, notwithstanding any other provisions of this Section 5, if the Board determines that the Grantee has engaged in conduct that constitutes Cause at any time while the Grantee is employed by, or providing service to, the Employer or after the Grantee’s termination of employment or service, any Option held by the Grantee shall immediately terminate, and the Grantee shall automatically forfeit all shares underlying any exercised portion of an Option for which the Company has not yet delivered the share certificates, upon refund by the Company of the Exercise Price paid by the Grantee for such shares. Upon any exercise of an Option, the Company may withhold delivery of share certificates pending resolution of an inquiry that could lead to a finding resulting in a forfeiture.

(iii) In the event the Grantee ceases to be employed by, or provide service to, the Employer because the Grantee is Disabled, any Option which is otherwise exercisable by the Grantee shall terminate unless exercised within one year after the date on which the Grantee ceases to be employed by, or provide service to, the Employer (or within such other period of time as may be specified by the Board), but in any event no later than the date of expiration of the Option term. Except as otherwise provided by the Board, any of the Grantee’s Options which are not otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide service to, the Employer shall terminate as of such date.

(iv) If the Grantee dies while employed by, or providing service to, the Employer or within 90 days after the date on which the Grantee ceases to be employed or provide service on account of a termination specified in Section 5(f)(i) above (or within such other period of time as may be specified by the Board), any Option that is otherwise exercisable by the Grantee shall terminate unless exercised within one year after the date on which the Grantee ceases to be employed by, or provide service to, the Employer (or within such other period of time as may be specified by the Board), but in any event no later than the date of expiration of the Option term. Except as otherwise provided by the Board, any of the Grantee’s Options that are not otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide service to, the Employer shall terminate as of such date.

(v) For purposes of this Plan:

(A) The term “Employer” shall mean the Company and its parent and subsidiary corporations or other entities, as determined by the Board.

(B) “Employed by, or provide service to, the Employer” shall mean employment or service as an Employee, Key Advisor, or member of the Board (so that, for purposes of exercising Options and satisfying conditions with respect to Stock Awards or RSUs, a Grantee shall not be considered to have terminated employment or service until the Grantee ceases to be an Employee, Key Advisor, or member of the Board), unless the Board determines otherwise.

(C) “Disability” shall mean a Grantee’s becoming disabled within the meaning of section 22(e)(3) of the Code, within the meaning of the Employer’s long-term disability plan applicable to the Grantee, or as otherwise determined by the Board.

(D) “Cause” shall mean, except to the extent specified otherwise by the Board or as defined in any other agreement between the Grantee and the Company, a finding by the Board that the Grantee has (i) been convicted of a felony or crime involving moral turpitude; (ii) disclosed trade secrets or confidential information of the Employer to persons not entitled to receive such information; (iii) breached any written noncompetition or nonsolicitation agreement between the Grantee and the Employer; or (iv) engaged in willful and continued negligence in the performance of the duties assigned to the Grantee by the Employer, after the Grantee has received notice of and failed to cure such negligence.

(f) Exercise of Options. A Grantee may exercise an Option that has become vested and exercisable, in whole or in part, by delivering a notice of exercise to the Company. The Grantee shall pay the Exercise Price for an Option by the Board (i) in cash; (ii) by delivering shares of Company Stock owned by the Grantee (including Company Stock acquired in connection with the exercise of an Option, subject to such restrictions as the Board deems appropriate) and having a Fair Market Value on the date of exercise equal to the Exercise Price or by attestation (on a form prescribed by the Board) to ownership of shares of Company Stock having a Fair Market Value on the date of exercise equal to the Exercise Price; (iii) after a Public Offering, payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board; or (iv) by such other method as the Board may approve. In addition, the Grantee may elect to settle the Option on a “net basis” by taking delivery of the number of Company Stock equal to Fair Market Value of the shares subject to any Option less the exercise price, any tax (or other governmental obligation) or other administration fees due. Shares of Company Stock used to exercise an Option shall have been held by the Grantee for the requisite period of time to avoid adverse accounting consequences to the Company with respect to the Option. The Grantee shall pay the Exercise Price and the amount of any withholding tax due (pursuant to Section 7) as specified by the Board.

(g) Limits on Incentive Stock Options. Each Incentive Stock Option shall provide that, if the aggregate Fair Market Value of the stock on the date of the grant with respect to which Incentive Stock Options are exercisable for the first time by a Grantee during any calendar year, under the Plan or any other stock option plan of the Company or a parent or subsidiary, exceeds $100,000, then the Option, as to the excess, shall be treated as a Nonqualified Stock Option. An Incentive Stock Option shall not be granted to any person who is not an Employee of the Company or a parent or subsidiary (within the meaning of section 424(f) of the Code) of the Company.

6. Stock Awards and RSUs

The Company may issue or transfer shares of Company Stock to an Employee, Non-Employee Director, or Key Advisor under a Stock Award or RSU, upon such terms as the Board deems appropriate. The following provisions are applicable to Stock Awards and RSUs:

(a) General Requirements. Shares of Company Stock issued or transferred pursuant to Stock Awards may be issued or transferred for consideration or for no consideration, and subject to restrictions or no restrictions, as determined by the Board. The Board shall determine the number of shares of Company Stock subject to a Stock Award and the number of RSUs to be granted to a Grantee, the duration of the period during which, and the conditions, if any,

under which, the Stock Award and RSUs may vest or may be forfeited to the Company and the other terms and conditions of such Awards. The Board may require different periods of service or different performance goals and objectives with respect to different Participants holding different Stock Awards or RSUs or to separate, designated portions of shares constituting Stock Awards.

(b) Transfer Restrictions and Legend on Stock Certificate. Stock Awards and RSUs may not be sold, assigned, transferred, pledged or otherwise encumbered except as provided in the Plan or as may be provided in the applicable Award Agreement; provided, however, that the Board may determine that Stock Awards and RSUs may be transferred by the Grantee. Each certificate for Stock Awards shall contain a legend giving appropriate notice of the restrictions in the Award. The Grantee shall be entitled to have the legend removed from the stock certificate covering the shares subject to restrictions when all restrictions on such shares have lapsed. The Board may determine that the Company shall not issue certificates for Stock Awards until all restrictions on such shares have lapsed, or that the Company shall retain possession of certificates for Stock Awards until all restrictions on such shares have lapsed. Upon the lapse of the restrictions applicable to a Stock Award, the Company or other custodian, as applicable, shall deliver such certificates to the Grantee or the Grantee’s legal representative.

(c) Payment/Lapse of Restrictions. Each RSU shall be granted with respect to one share of Company Stock or shall have a value equal to the Fair Market Value of one share of Company Stock. RSUs shall be paid in cash, shares of Company Stock, other securities, other Awards or other property, as determined in the sole discretion of the Board, upon the lapse of restrictions applicable thereto, or otherwise in accordance with the applicable Award Agreement. The amount payable as a result of the vesting of an RSU shall be distributed as soon as practicable following the vesting date and in no event later than the fifteenth date of the third calendar month of the year following the vesting date of the RSU (or as otherwise permitted under Section 409A of the Code).

(d) Termination of Employment or Service. Except as otherwise set forth in the Award Agreement, if the Grantee ceases to be employed by, or provide service to, the Employer (as defined in Section 5(e)), any Stock Award or RSUs held by the Grantee that are subject to the transfer restrictions set forth in Section 6(b) above at such time shall be forfeited. The Board may, however, provide for complete or partial exceptions to this requirement as it deems appropriate.

(e) No Right to Vote and to Receive Dividends. Prior to the lapse of the transfer restrictions set forth in Section 6(b) above, the Grantee shall not have the right to vote shares subject to Stock Awards or to receive any dividends or other distributions paid on such shares, subject to any restrictions deemed appropriate by the Board.

7. Withholding of Taxes

(a) Required Withholding. All Awards under the Plan shall be subject to applicable federal (including FICA), state, and local tax withholding requirements. The Employer may require that the Grantee or other person receiving or exercising Awards pay to the Employer the amount of any federal, state, or local taxes that the Employer is required to withhold with

respect to such Awards, or the Employer may deduct from other wages paid by the Employer the amount of any withholding taxes due with respect to such Awards.

(b) Election to Withhold Shares. If the Board so permits, a Grantee may elect to satisfy the Employer’s income tax withholding obligation with respect to an Award by having shares withheld up to an amount that does not exceed the Grantee’s minimum applicable withholding tax rate for federal (including FICA), state, and local tax liabilities. The election must be in a form and manner prescribed by the Board and may be subject to the prior approval of the Board.

8. Transferability of Awards

(a) Nontransferability of Awards. Except as provided below, only the Grantee may exercise rights under an Award during the Grantee’s lifetime. A Grantee may not transfer those rights except (i) by will or by the laws of descent and distribution or (ii) with respect to Awards other than Incentive Stock Options, if permitted in any specific case by the Board, pursuant to a domestic relations order or otherwise as permitted by the Board. When a Grantee dies, the personal representative or other person entitled to succeed to the rights of the Grantee may exercise such rights. Any such successor must furnish proof satisfactory to the Company of his or her right to receive the Award under the Grantee’s will or under the applicable laws of descent and distribution.

(b) Transfer of Nonqualified Stock Options. Notwithstanding the foregoing, the Board may provide, in an Award Agreement, that a Grantee may transfer Nonqualified Stock Options to family members, or one or more trusts or other entities for the benefit of or owned by family members, consistent with applicable securities laws, according to such terms as the Board may determine; provided that the Grantee receives no consideration for the transfer of an Option and the transferred Option shall continue to be subject to the same terms and conditions as were applicable to the Option immediately before the transfer.

9. Right of First Refusal; Repurchase Right

(a) Offer. Prior to a Public Offering, if at any time an individual desires to sell, encumber, or otherwise dispose of shares of Company Stock that were distributed to him or her under the Plan and that are transferable, the individual may do so only pursuant to a bona fide written offer, and the individual shall first offer the shares to the Company by giving the Company written notice disclosing: (i) the name of the proposed transferee of the Company Stock; (ii) the certificate number and number of shares of Company Stock proposed to be transferred or encumbered; (iii) the proposed price; (iv) all other terms of the proposed transfer; and (v) a written copy of the proposed offer. Within 60 days after receipt of such notice, the Company shall have the option to purchase all or part of such Company Stock at the price and on the terms described in the written notice; provided that the Company may pay such price in installments over a period not to exceed four years, at the discretion of the Board.

subsection (a) at the price and on the terms of the transfer set forth in the written notice to the Company, provided such transfer is effected within 15 days after the expiration of the option period. If the transfer is not effected within such period, the Company must again be given an option to purchase, as provided above.

(c) Assignment of Rights. The Board, in its sole discretion, may waive the Company’s right of first refusal and repurchase right under this Section 9. If the Company’s right of first refusal or repurchase right is so waived, the Board may, in its sole discretion, assign such right to the remaining shareholders of the Company in the same proportion that each shareholder’s stock ownership bears to the stock ownership of all the shareholders of the Company, as determined by the Board. To the extent that a shareholder has been given such right and does not purchase his or her allotment, the other shareholders shall have the right to purchase such allotment on the same basis.

(d) Purchase by the Company. Prior to a Public Offering, if a Grantee ceases to be employed by, or provide service to, the Employer, the Company shall have the right to purchase, within 60 days of the date that Grantee ceases to be employed by, or provide services to, the Employer, all or part of any Company Stock distributed to Grantee under the Plan at the Fair Market Value (as defined in Section 5(b)) on the date that Grantee ceases to be employed by, or provide services to, the Employer (or at such other price as may be established in the Award Agreement); provided, however, that such repurchase shall be made in accordance with applicable accounting rules to avoid adverse accounting treatment.

(e) Public Offering. On and after a Public Offering, the Company shall have no further right to purchase shares of Company Stock under this Section 9.

(f) Shareholder’s Agreement. Notwithstanding the provisions of this Section 9, if the Board requires that a Grantee execute a shareholder’s agreement with respect to any Company Stock distributed pursuant to the Plan, which contains a right of first refusal or repurchase right, the provisions of this Section 9 shall not apply to such Company Stock.

10. Change of Control of the Company

As used herein, a “Change of Control” shall be deemed to have occurred if:

(a) Any “person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act) (other than persons who are shareholders on the effective date of the Plan) becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the voting power of the then outstanding securities of the Company; provided that a Change of Control shall not be deemed to occur as a result of a change of ownership resulting from the death of a shareholder, and a Change of Control shall not be deemed to occur as a result of a transaction in which the Company becomes a subsidiary of another corporation and in which the shareholders of the Company, immediately prior to the transaction, will beneficially own, immediately after the transaction, shares entitling such shareholders to more than 50% of all votes to which all shareholders of the parent corporation would be entitled in the election of directors (without consideration of the rights of any class of stock to elect directors by a separate class vote); or

(b) The consummation of (i) a merger or consolidation of the Company with another corporation where the shareholders of the Company, immediately prior to the merger or consolidation, will not beneficially own, immediately after the merger or consolidation, shares entitling such shareholders to more than 50% of all votes to which all shareholders of the surviving corporation would be entitled in the election of directors (without consideration of the rights of any class of stock to elect directors by a separate class vote); (ii) a sale or other disposition of all or substantially all of the assets of the Company; or (iii) a liquidation or dissolution of the Company.

11. Consequences of a Change of Control

(a) Notice and Acceleration. Upon a Change of Control, unless the Board determines otherwise, (i) the Company shall provide each Grantee with outstanding Awards written notice of such Change of Control; (ii) all outstanding Options shall automatically accelerate and become fully vested and exercisable; (iii) all outstanding Stock Awards shall become vested and deliverable in accordance with Section 6(b); and (iv) all outstanding RSUs shall become vested and deliverable in accordance with Section 6(c).

(b) Assumption of Awards. Upon a Change of Control where the Company is not the surviving corporation (or survives only as a subsidiary of another corporation), unless the Board determines otherwise, all outstanding Options that are not exercised shall be assumed by, or replaced with comparable options by, the surviving corporation (or a parent or subsidiary of the surviving corporation).

(c) Other Alternatives. Notwithstanding the foregoing, in the event of a Change of Control, the Board may take one or both of the following actions: the Board may (i) require that Grantees surrender their outstanding Options in exchange for a payment by the Company, in cash or Company Stock as determined by the Board, in an amount equal to the amount by which the then Fair Market Value of the shares of Company Stock subject to the Grantee’s unexercised Options exceeds the Exercise Price of the Options; or (ii) after giving Grantees an opportunity to exercise their outstanding Options, terminate any or all unexercised Options at such time as the Board deems appropriate. Such surrender or termination shall take place as of the date of the Change of Control or such other date as the Board may specify.

12. Requirements for Issuance or Transfer of Shares

(a) Shareholder’s Agreement. The Board may require that a Grantee execute a shareholder’s agreement, with such terms as the Board deems appropriate, with respect to any Company Stock issued or distributed pursuant to the Plan.

reflect any such restrictions. Certificates representing shares of Company Stock issued or transferred under the Plan shall be subject to such stop-transfer orders and other restrictions as may be required by applicable laws, regulations, and interpretations, including any requirement that a legend be placed thereon.

(c) Lock-Up Period. If so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any underwritten offering of securities of the Company under the Securities Act of 1933, as amended (the “Securities Act”), a Grantee (including any successor or assigns) shall not sell or otherwise transfer any shares or other securities of the Company during the 30-day period preceding and the 180-day period following the effective date of a registration statement of the Company filed under the Securities Act for such underwriting (or such shorter period as may be requested by the Managing Underwriter and agreed to by the Company) (the “Market Standoff Period”). The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period.

13. Amendment and Termination of the Plan

(a) Amendment. The Board may amend or terminate the Plan at any time; provided, however, that the Board shall not amend the Plan without shareholder approval if such approval is required in order to comply with the Code or other applicable laws or, after an Initial Public Offering, to comply with applicable stock exchange requirements.

(b) Termination of Plan. The Plan shall terminate on the day immediately preceding the tenth anniversary of its effective date, unless the Plan is terminated earlier by the Board or is extended by the Board with the approval of the shareholders.

(c) Termination and Amendment of Outstanding Awards. A termination or amendment of the Plan that occurs after an Award is made shall not materially impair the rights of a Grantee unless the Grantee consents or unless the Board acts under Section 19(b). The termination of the Plan shall not impair the power and authority of the Board with respect to an outstanding Award. Whether or not the Plan has terminated, an outstanding Award may be terminated or amended under Section 19(b) or may be amended by agreement of the Company and the Grantee consistent with the Plan.

(d) Governing Document. The Plan shall be the controlling document. No other statements, representations, explanatory materials or examples, oral or written, may amend the Plan in any manner. The Plan shall be binding upon and enforceable against the Company and its successors and assigns.

14. Funding of the Plan

The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Awards under the Plan. In no event shall interest be paid or accrued on any Award, including unpaid installments of Awards.

15. Rights of Participants

Nothing in the Plan shall entitle any Employee, Key Advisor, Non-Employee Director, or other person to any claim or right to be granted an Award under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any individual any rights to be retained by or in the employ of the Employer or any other employment rights. No Fractional Shares

16. No Fractional Shares

No fractional shares of Company Stock shall be issued or delivered pursuant to the Plan or any Award. The Board shall determine whether cash, other awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

17. Headings

Section headings are for reference only. In the event of a conflict between a title and the content of a Section, the content of the Section shall control.

18. Effective Date of the Plan

(a) Effective Date. The Plan shall be effective on February 25, 2013.

(b) Public Offering. The provisions of the Plan that refer to a Public Offering, or that refer to, or are applicable to persons subject to, section 16 of the Exchange Act or section 162(m) of the Code, shall be effective, if at all, upon the initial registration of the Company Stock under section 12(g) of the Exchange Act, and shall remain effective thereafter for so long as such stock is so registered.

19. Miscellaneous

(a) Awards in Connection with Corporate Transactions and Otherwise. Nothing contained in the Plan shall be construed to (i) limit the right of the Board to make Awards under the Plan in connection with the acquisition, by purchase, lease, merger, consolidation, or otherwise, of the business or assets of any corporation, firm or association, including Awards to employees thereof who become Employees, or for other proper corporate purposes; or (ii) limit the right of the Company to grant stock options or make other awards outside of the Plan. Without limiting the foregoing, the Board may make an Award to an employee of another corporation who becomes an Employee by reason of a corporate merger, consolidation, acquisition of stock or property, reorganization, or liquidation involving the Company, the Parent, or any of their subsidiaries in substitution for a stock option, stock award or other type of applicable equity grants made by such corporation. The terms and conditions of the substitute grants may vary from the terms and conditions required by the Plan and from those of the substituted stock incentives. The Board shall prescribe the provisions of the substitute grants.

(b) Compliance with Law. The Plan, exercise of Options, restrictions of Stock Awards and obligations of the Company to issue or transfer shares of Company Stock under

Awards shall be subject to all applicable laws and to approvals by any governmental or regulatory agency as may be required. With respect to persons subject to section 16 of the Exchange Act, after a Public Offering, it is the intent of the Company that the Plan and all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its successors under the Exchange Act. In addition, it is the intent of the Company that the Plan and applicable Awards under the Plan comply with the applicable provisions of sections 162(m), 409A and 422 of the Code. To the extent that any legal requirement of section 16 of the Exchange Act or sections 162(m), 409A or 422 of the Code as set forth in the Plan ceases to be required under section 16 of the Exchange Act or sections 162(m), 409A or 422 of the Code, that Plan provision shall cease to apply. The Board may revoke any Award if it is contrary to law or modify an Award to bring it into compliance with any valid and mandatory government regulation. The Board may also adopt rules regarding the withholding of taxes on payments to Grantees. The Board may, in its sole discretion, agree to limit its authority under this Section.

(c) Employees Subject to Taxation Outside the United States. With respect to Grantees who are subject to taxation in countries other than the United States, the Board may make Awards on such terms and conditions as the Board deems appropriate to comply with the laws of the applicable countries, and the Board may create such procedures, addenda, and subplans and make such modifications as may be necessary or advisable to comply with such laws.

(d) Governing Law. The validity, construction, interpretation, and effect of the Plan and Award Agreements issued under the Plan shall be governed and construed by and determined in accordance with the laws of the State of Delaware, without giving effect to the conflict of laws provisions thereof.

SFX ENTERTAINMENT, INC.

2013 EQUITY COMPENSATION PLAN

NONQUALIFIED STOCK OPTION

SFX Entertainment, Inc.(the “Company”) has granted you a Nonqualified Stock Option (the “Option”) under the 2013 Equity Compensation Plan (the “Plan”). The terms of the grant are set forth in the Nonqualified Stock Option Award Agreement provided to you (the “Agreement”). The following provides a summary of the key terms of the grant; however, you should read the entire Agreement, along with the terms of the Plan, to fully understand the grant.

SUMMARY OF NONQUALIFIED STOCK OPTION AWARD

Grantee:

Date of Grant:

Vesting Schedule:

Exercise Price Per Share:

Total Number of Options Granted:

Term/Expiration Date:

SFX ENTERTAINMENT, INC.

2013 EQUITY COMPENSATION PLAN

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

This NONQUALIFIED STOCK OPTION AWARD AGREEMENT (the “Agreement”), dated as of [ ] (the “Date of Grant”), is delivered by SFX Entertainment, Inc. (the “Company”) to (the “Grantee”).

RECITALS

A. The SFX Entertainment, Inc. 2013 Equity Compensation Plan (the “Plan”) provides for the grant of options to purchase shares of common stock of the Company. The Company has decided to make a stock option award as an inducement for the Grantee to promote the best interests of the Company and its stockholders. A copy of the Plan is attached.

B. The Plan is administered and interpreted by the Compensation Committee of the Board of Directors of the Company (the “Board”) (or a subcommittee thereof), or such other committee of the Board (including, without limitation, the full Board) to which the Board has delegated power to act under or pursuant to the provisions of the Plan (the “Committee”). The Committee may delegate authority to one or more subcommittees as it deems appropriate. If a subcommittee is appointed, all references in this Agreement to the “Committee” shall be deemed to refer to the committee.

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby, agree as follows:

1. Grant of Option. Subject to the terms and conditions set forth in this Agreement and in the Plan, the Company hereby grants to the Grantee a Nonqualified Stock Option (the “Option”) to purchase shares of common stock of the Company (“Shares”) at an exercise price of $[ ] per Share.

The Option shall become vested and exercisable according to Paragraph 2 below.

2. Vesting. The Option shall become vested and exercisable, according to the following vesting schedule, if the Grantee continues to be employed by, or provide service to, the Employer (as defined in the Plan) from the Date of Grant until the applicable vesting date:

Vesting Date		% of Option Vested

The vesting of the Option shall be cumulative, but shall not exceed 100% of the shares subject to the Option granted above. If the foregoing schedule would produce fractional shares, the portion of the Option that vests shall be rounded down to the nearest whole share.

3. Term of Option.

(a) The Option shall have a term of 10 years from the Date of Grant and shall terminate at the expiration of that period, unless it is terminated at an earlier date pursuant to the provisions of this Agreement or the Plan.

(b) Unless a later termination date is provided for in a Company-sponsored plan, policy or arrangement, or any agreement to which the Company is a party, the Option shall automatically terminate upon the happening of the first of the following events:

(i) The expiration of the ninety (90) day period after the Grantee ceases to be employed by, or provide service to, the Company, if the termination is for any reason other than Disability (as defined in the Plan), death or Cause (as defined in the Plan).

(ii) The expiration of the one (1) year period after the Grantee ceases to be employed by, or provide service to, the Company on account of the Grantee’s Disability.

(iii) The expiration of the one (1) year period after the Grantee ceases to be employed by, or provide service to, the Company, if the Grantee dies (x) while employed by, or providing service to, the Company or (y) within ninety (90) days after the Grantee ceases to be so employed or provide such services on account of a termination described in subparagraph (i) above.

(iv) The date on which the Grantee ceases to be employed by, or provide service to, the Company on account of a termination by the Company for Cause. In addition, notwithstanding the prior provisions of this Paragraph 3, if the Company determines that the Grantee has engaged in conduct that constitutes Cause at any time while the Grantee is employed by, or providing service to, the Company or after the Grantee’s termination of employment or service, the Option shall terminate as of the date on which such Cause first occurred.

Notwithstanding the foregoing, in no event may the Option be exercised after the date that is immediately before the tenth anniversary of the Date of Grant. Any portion of the Option that is vested or exercisable at the time the Grantee ceases to be employed by, or provide service to, the Company shall immediately terminate.

4. Exercise Procedures

(a) Subject to the provisions of Paragraphs 2 and 3 above, the Grantee may exercise part or all of the vested or exercisable Option by giving the Company written notice of intent to exercise in the manner provided in this Agreement, specifying the number of Shares as to which the Option is to be exercised. At such time as the Committee shall determine, the Grantee shall pay the exercise price (i) in cash, (ii) by payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board, or (iii) by such other method as the

Company may approve. The Company may impose from time to time such limitations as it deems appropriate on the use of Shares of the Company to exercise the Option.

(b) The obligation of the Company to deliver Shares upon exercise of the Option shall be subject to all applicable laws, rules, and regulations and such approvals by governmental agencies as may be deemed appropriate by the Company, including such actions as Company counsel shall deem necessary or appropriate to comply with relevant securities laws and regulations. The Company may require that the Grantee (or other person exercising the Option after the Grantee’s death) represent that the Grantee is purchasing Shares for the Grantee’s own account and not with a view to or for sale in connection with any distribution of the Shares, or such other representation as the Company deems appropriate.

(c) All obligations of the Company under this Agreement shall be subject to the rights of the Company as set forth in the Plan to withhold amounts required to be withheld for any taxes, if applicable. Subject to Committee approval, the Grantee may elect to satisfy any tax withholding obligation of the Company with respect to the Option by having Shares withheld up to an amount that does not exceed the minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities.

5. Change of Control. The provisions of the Plan applicable to a Change of Control (as described in Sections 10 and 11 of the Plan) shall apply to the Option.

6. Right of First Refusal; Repurchase Right; Shareholder’s Agreement. As a condition of receiving this Option, the Grantee hereby agrees that all Shares issued under the Plan shall be subject to a right of first refusal and repurchase right as described in the Plan, and the Committee may require that the Grantee (or other person exercising the Option) execute a shareholder’s agreement, in such form as the Committee determines, with respect to all Shares issued upon the exercise of the Option before the initial public offering of the Company’s Common Stock (as described in the Plan).

7. Restrictions on Exercise. Except as the Company may otherwise permit pursuant to the Plan, only the Grantee may exercise the Option during the Grantee’s lifetime and, after the Grantee’s death, the Option shall be exercisable (subject to the limitations specified in the Plan) solely by the legal representatives of the Grantee, or by the person who acquires the right to exercise the Option by will or by the laws of descent and distribution, to the extent that the Option is vested or exercisable pursuant to this Agreement.

8. Adjustments. The provisions of the Plan applicable to Adjustments (as described in Section 3 of the Plan) shall apply to the Option.

9. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan. The grant and exercise of the Option are subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (i) rights and obligations with respect to withholding taxes, (ii) the registration, qualification or listing of the Shares, (iii) changes in capitalization of the Company and (iv) other requirements

of applicable law. The Committee shall have the authority to interpret and construe the Option pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.

10. No Employment or Other Rights. The grant of the Option shall not confer upon the Grantee any right to be retained by or in the employ or service of the Company and shall not interfere in any way with the right of the Company to terminate the Grantee’s employment or service at any time. The right of the Company to terminate at will the Grantee’s employment or service at any time for any reason is specifically reserved.

11. No Shareholder Rights. Neither the Grantee, nor any person entitled to exercise the Grantee’s rights in the event of the Grantee’s death, shall have any of the rights and privileges of a shareholder with respect to the Shares subject to the Option, until certificates for Shares have been issued upon the exercise of the Option.

12. Assignment and Transfers. Except as the Committee may otherwise permit pursuant to the Plan, the rights and interests of the Grantee under this Agreement may not be sold, assigned, encumbered or otherwise transferred except, in the event of the death of the Grantee, by will or by the laws of descent and distribution. In the event of any attempt by the Grantee to alienate, assign, pledge, hypothecate, or otherwise dispose of the Option or any right hereunder, except as provided for in this Agreement, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may terminate the Option by notice to the Grantee, and the Option and all rights hereunder shall thereupon become null and void. The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries, and affiliates. This Agreement may be assigned by the Company without the Grantee’s consent.

13. Applicable Law. The validity, construction, interpretation and effect of this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflicts of laws provisions thereof.

14. Notice. Any notice to the Company provided for in this Agreement shall be addressed to the Company in care of the Committee, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll of the Company, or to such other address as the Grantee may designate to the Company in writing. Any notice shall be delivered by hand, sent by telecopy or enclosed in a properly sealed envelope addressed as stated above, deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service.

IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute this Agreement, and the Grantee has executed this Agreement, effective as of the Date of Grant.

	SFX Entertainment, Inc.

	By:

	Name:

	Title:


I hereby accept the Option described in this Agreement, and I agree to be bound by the terms of the Plan, the applicable stockholder’s agreement or investor’s rights agreement or other similar agreement and this Agreement. I hereby further agree that all the decisions and determinations of the Committee shall be final and binding.

	Grantee:


	Date:

SFX ENTERTAINMENT, INC.

2013 EQUITY COMPENSATION PLAN

RESTRICTED STOCK AWARD AGREEMENT

SFX Entertainment, Inc. (the “Company”) has determined to grant to you a restricted stock award of common stock (“Stock Award”) of the Company under the SFX Entertainment, Inc. 2013 Equity Compensation Plan (the “Plan”). The terms of the grant are set forth in the attached Restricted Stock Award Agreement (the “Agreement”). The following provides a summary of the key terms of the Agreement; however, you should read the entire Agreement along with the terms of the Plan, to fully understand the Agreement.

SUMMARY OF RESTRICTED STOCK AWARD AGREEMENT

Grantee:

Date of Grant:

Vesting Schedule:

Total Number of Restricted Shares Granted:

RESTRICTED STOCK AWARD AGREEMENT

This RESTRICTED STOCK AWARD AGREEMENT (the “Agreement”), dated as of [ ] (the “Date of Grant”) is delivered by SFX Entertainment, Inc. (the “Company”), to [ ] (the “Grantee”).

The Company has determined to provide the Grantee a restricted stock award under the SFX Entertainment, Inc. 2013 Equity Compensation Plan (the “Plan”) and in accordance with the terms and conditions set forth in this Agreement. Capitalized terms that are used but not defined herein shall have the respective meanings accorded to such terms in the Plan.

The Company and Grantee, intending to be legally bound hereby, agree as follows:

1. Grant of Restricted Stock Award.

The Company grants to Grantee [ ] shares of common stock of the Company, subject to the restrictions set forth below and in the Plan (the “Stock Award”). The Stock Award may not be transferred by the Grantee or subjected to any security interest until the shares have become vested pursuant to this Agreement and the Plan.

2. Vesting and Nonassignability of Stock Award.

The shares shall become vested, according to the following vesting schedule, if the Grantee continues to be employed by, or provide service to, the Employer (as defined in the Plan) from the Date of Grant until the applicable vesting date:

Applicable Vesting Date		% of Vested Shares

[ ]		[ ]

[ ]		[ ]

The vesting of the shares shall be cumulative, but shall not exceed 100% of the shares. If the foregoing schedule would produce fractional shares, the portion of the shares that vests shall be rounded down to the nearest whole share.

The Grantee will be entitled to exercise voting rights with respect to the unvested shares held under this Agreement.

3. Issuance of Certificates.

(a) Stock certificates representing the Stock Award may be issued by the Company and held in escrow by the Company until the Stock Award vests, or the Company may hold non-certificated shares until the Stock Award vests.

(b) When the Grantee obtains a vested right to shares from the Stock Award, a certificate representing the vested shares shall be issued to the Grantee, free of the restrictions under Section 2 of this Agreement.

(c) The obligation of the Company to deliver shares upon the vesting of the Stock Award shall be subject to all applicable laws, rules, and regulations and such approvals by governmental agencies as may be deemed appropriately to comply with relevant securities laws and regulations.

4. Right of First Refusal; Repurchase Right; Shareholder’s Agreement.

If at any time the Grantee desires to sell, encumber or otherwise dispose of a Stock Award that was distributed to him or her under the Plan prior to the consummation of an initial public offering the Company’s securities, the Grantee shall provide the Company with a right of first refusal and repurchase right in accordance with the terms of the Plan. The Board may require that the Grantee execute a shareholder’s agreement with respect to the Shares issued under the Plan.

5. Notices.

Any notice to be given to Company under the terms of this Agreement shall be addressed to the Company, at the attention of the Board, at its principal place of business, and any notice to be given to Grantee may be sent to Grantee’s address as it appears in the payroll records of the Company, or at such other addresses as either party may designate in writing to the other.

6. Change in Control.

The provisions of the Plan applicable to a Change of Control shall apply to the Stock Award, and, in the event of a Change of Control, the Board may take such actions as it deems appropriate pursuant to the Plan.

7. Withholding.

The Grantee shall be required to pay to the Company, or make other arrangements satisfactory to the Company to provide for the payment of, any federal, state, local or other taxes that the Employer is required to withhold with respect to the grant or vesting of the Stock Award. Subject to Board approval, the Grantee may elect to satisfy any tax withholding obligation of the Employer with respect to the Stock Award by having shares withheld up to an amount that does not exceed the minimum applicable withholding tax rate for federal (including FICA), state, local and other tax liabilities.

8. Other Restrictions on Sale or Transfer of Shares.

(a) The Grantee is acquiring the shares underlying this grant solely for investment purposes, with no present intention of distributing or reselling any of the shares or any interest therein. The Grantee acknowledges that the shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”).

(b) The Grantee is aware of the applicable limitations under the Securities Act and under the Plan relating to a subsequent sale, transfer, pledge or other assignment or encumbrance of the shares. The Grantee further acknowledges that the shares must be held indefinitely unless they are subsequently registered under the Securities Act and applicable state securities laws or an exemption from such registration is available.

(c) The Grantee will not sell, transfer, pledge, donate, assign, mortgage, hypothecate or otherwise encumber the shares underlying this grant unless (i) the shares are registered under the Securities Act or (ii) the Company is given an opinion of counsel reasonably acceptable to the Company that such registration is not required under the Securities Act.

(d) The Grantee realizes that there is no public market for the shares underlying this grant, that no market may ever develop for them, and that they have not been approved or disapproved by the Securities and Exchange Commission or any governmental agency.

9. Miscellaneous.

(a) No Right to Employment. The grant of the Stock Award shall not be construed as giving the Grantee the right to be retained by or in the employ of the Employer or any other employment right.

(b) Stock Award Subject to Plan. By entering into this Agreement the Grantee agrees and acknowledges that the Grantee has received and read a copy of the Plan. The Stock Award is subject to the Plan. The terms and provisions of the Plan, as they may be amended from time to time, are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

(c) Board Authority. By entering into this Agreement the Grantee agrees and acknowledges that all decisions and determinations of the Board shall be final and binding on the Grantee, his or her beneficiaries and any other person having or claiming and interest in the Stock Award.

(d) Severability. If any provision of this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify this Agreement or the Stock Award under any applicable law, such provision shall be construed or deemed amended to conform to applicable law (or if such provision cannot be so construed or deemed amended without materially altering the purpose or intent of this Agreement and the grant of the Stock Award hereunder, such provision shall be stricken as to such jurisdiction and the remainder of this Agreement and the award shall remain in full force and effect).

(d) Notices. Any notice to be given to Company under the terms of this Agreement shall be addressed to the Company, at the attention of the Board, at its principal place of

business, and any notice to be given to Grantee may be sent to Grantee’s address as it appears in the payroll records of the Company, or at such other addresses as either party may designate in writing to the other.

(e) Governing Law. The validity, construction, interpretation and effect of this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflict of laws provisions thereof

(f) Interpretation. The Grantee accepts the Stock Award subject to all the terms and provisions of this Agreement and the terms and conditions of the Plan.

(g) Headings. Headings are given to the paragraphs and subparagraphs of this Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Agreement or any provision thereof.

(h) Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. Facsimile or other electronic transmission of any signed original document or retransmission of any signed facsimile or other electronic transmission will be deemed the same as delivery of an original.

(i) Complete Agreement. Except as otherwise provided for herein, this Agreement and those agreements and documents expressly referred to herein embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. The terms of this Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Grantee.

[Signature Page Follows]

IN WITNESS WHEREOF, the Company and Grantee have executed this Agreement as of the grant date shown above.

	SFX Entertainment, Inc.


	By:
		Name:
		Title:


	GRANTEE:


	[ ]

(Signature Page to Restricted Stock Award Agreement)

EX-10.2 10 a2215423zex-10_2.htm EX-10.2

Exhibit 10.2

SFX HOLDING CORPORATION

650 Madison Avenue

15th Floor

New York, NY 10022

November 8, 2012

Dear Shelly,

1070 Park Avenue

Apt. 2-C

New York, NY 10128

We are delighted to confirm to you that we are offering you the position of President of SFX Holding Corporation (the “Company”), subject to the terms and conditions set forth herein:

Assuming you accept our offer, you will become an employee of the Company commencing with the start date stated in Section 1 hereof. The terms and conditions of your employment with the Company are set forth in this letter agreement (this “Agreement”).

1. Start Date and Term.

(a) Your start date (“Start Date”) will be January 1, 2012.

(b) The term of your employment shall continue for a period of five (5) years from your start date (the “Term”).

2. Duties. You will be required to perform your duties at the Company’s headquarters in New York City (or wherever else located hereafter) and be expected to travel from time to time. You will report to the Chief Executive Officer of the Company or such person as he or she shall designate from time to time. You shall devote your full time, attention, energy, knowledge, best professional efforts and skills to the duties assigned to you; provided, however, that with the prior written consent of the Board of Directors of the Company (the “Board”), you may pursue professional endeavors within your areas of expertise and experience to the extent that any such endeavors do not otherwise violate the terms of this Agreement, including, without limitation, any non-competition or non-solicitation provisions contained herein or therein, or otherwise interfere with or impinge upon the performance of your duties as set forth in this Agreement. The Board may, at any time and in its sole discretion, revoke such written consent, in which event you shall immediately cease engaging in any and all such professional endeavors as described in the preceding sentence. This will acknowledge that, notwithstanding any other terms of this agreement, you will be entitled to continue your professional endeavors in the field of professional boxing management and promotion.

To the extent that the Board requires you to serve in capacities other than as President, but still relating to the responsibilities attendant to such position, you shall accept such responsibilities. Whether you serve in one capacity or several capacities, the

compensation to which you will be entitled for doing so is set forth in Section 3 of this Agreement.

3. Compensation.

(a) Base Salary. In consideration for the performance of your services hereunder, you will be paid a base salary at the annual rate of $300,000.00 (“Base Salary”), payable in accordance with the Company’s normal payroll practices and subject to applicable tax and payroll withholdings and deductions. Currently, the Company’s payroll is payable on the [fifteenth and the last day] of each month. As an exempt employee, you will not be eligible for overtime pay.

(b) Discretionary Bonuses. During the Term, you will also be eligible to participate in any annual incentive compensation plan, program and/or arrangements as established by the Board, its Compensation Committee, or by the Chairman of the Board or the Chief Executive Officer of the Company, from time to time. During the Term, for each calendar year, you may have a target bonus opportunity under such plan, program and/or arrangement in an amount to be established by the Board, its Compensation Committee, or by the Chairman of the Board or the Chief Executive Officer of the Company, whichever applicable, for such calendar year, which, in each case, will be based on the satisfaction of performance criteria to be established by the Board, its Compensation Committee, or by the Chairman of the Board or the Chief Executive Officer of the Company, whichever applicable, within the first three (3) months of each calendar year during the Term. Payment of any bonuses to you will be made by the Company on March 31 of the calendar year immediately following the calendar year in which such bonus was earned and will be payable, in the Company’s discretion, in either cash, stock or both. Unless expressly and specifically agreed to in writing, no bonus compensation will be deemed earned, paid or awarded unless you are in the continuous employment of the Company through the last day of the calendar year in which such bonus corresponds; however, any earned or accrued bonuses will be payable upon the date of early termination or expiration of this Agreement.

(c) Equity Grants: Subject to approval by the Company’s Compensation Committee, which is anticipated to occur no later than ninety (90) days after the Start Date, you shall receive an grant of options to purchase 2,000,000 common shares at $2.00 per share, 400,000 of which shall vest on December 31, 2012 and 400,000 of which shall vest on December 31 of each year during the remaining term of this Agreement.

(d) Additional Grants: You shall also be entitled to qualify for additional equity or option grants each year.

4. Benefits. Subject to the eligibility requirements and other terms and conditions of the respective plan documents, you will be entitled to participate in benefits offered by the Company for similarly situated employees of the Company, as may be in effect or modified from time to time. Furthermore, you are currently entitled to three (3) weeks of paid vacation time per calendar year (such vacation days to be prorated based on the date you commence employment with the Company) in accordance with, and subject to, the Company’s vacation policy, as it may change from time to time, with the timing of any such vacation to be agreed upon. You will be entitled to reimbursement of travel and other business expenses in accordance with the Company’s guidelines commensurate with your level of compensation and responsibility.

5. Severance.

(a) In the event your employment with the Company is completely terminated either (i) on account of your death or Disability (as defined in Section 5(e) below), (ii) by the Company without Cause (as defined in Section 5(c) below) or (iii) by you due to Constructive Termination without Cause (as defined in Section 5(d) below):

(1) You shall receive the Termination Payments (as defined in Section 5(b) below);

(2) You shall also be paid a lump sum by the Company, which shall be paid as soon as practicable but not later than sixty (60) days following such termination date, equal to six (6) months of your Base Salary (the “Post Termination Salary Payment”);

(3) You shall also be paid a pro-rated annual bonus, in a lump sum by the Company, which shall be paid as soon as practicable but not later than sixty (60) days following such termination date, in an amount equal to the prior year’s bonus, if any, pro-rated; and

(4) Any stock options and/or restricted stock previously granted under Sections 3(c) and 3(d) of this Agreement shall vest as follows:

(A) If termination is by the Company without Cause or by you for Constructive Termination without Cause or due to your Death or Disability, or the Company elects not to renew your employment at the end of the Term, in the case of such a termination, all unvested stock options and/or restricted stock granted to you that are scheduled to vest during or at the end of the Term shall vest as of the date of termination; or

(B) If termination is due to Cause or by you not as a result of Constructive Termination without Cause, then you shall only be permitted to retain those stock options and/or restricted shares which have vested as of the date of termination.

(b) In the event you voluntarily terminate your employment for any reason other than Constructive Termination without Cause or your employment is terminated by the Company for Cause (as defined in Section 5(c) below), you shall be paid, as soon as practicable but no later than sixty (60) days following such termination, (i) all earned but unpaid Base Salary through the date of termination; (ii) any previously awarded and unpaid bonus; and (iii) all unpaid reimbursable expenses incurred by you through the date of termination (the “Termination Payments”). In either such event, you shall have no further obligation or liability to the Company in connection with the performance of this agreement (except the continuing obligations specified in Sections 7, 8 and 10 of this Agreement).

(i) falsified or omitted information as required by Section 11 of this Agreement

(ii) committed an act which, as set forth in any employment handbook promulgated by the Company and as in effect from time to time, may lead to termination of employment, subject to a thirty (30) day cure period following the Company’s written notice of such act to the extent such act is curable;

(iii) engaged in any intentional act of fraud against the Company;

(iv) engaged in willful malfeasance or gross negligence in the performance of this Agreement or in your capacity as an employee of the Company;

(v) refused to perform the duties required or requested consistent with your obligations under this Agreement and under law;

(vi) been convicted of a felony or entering a plea of nolo contendre to a felony charge;

(vii) materially breached this Agreement, subject to a fifteen (15) day cure period following the Company’s written notice of such breach to the extent such breach is curable;

(viii) engaged in any act which could reasonably be expected to (i) bring the Company into public disrepute, (ii) injure the Company’s customer or vendor relations or business prospects or (iii) cause a decline in the price of any publicly traded securities of the Company; or

(ix) engaged in an act which leads to a finding by the Securities and Exchange Commission, which, in the opinion of independent counsel selected by the Company, could reasonably be expected to impair or impede the Company’s ability to register, list, or otherwise offer its stock to the public, or to maintain itself as a publicly-traded company in good standing with the Securities and Exchange Commission.

(d) For purposes of this Agreement, “Constructive Termination without Cause” means the termination of your employment at your initiative after, without your prior written consent, one or more of the following events:

(i) any material diminution in your authority, duties or responsibilities as President;

(ii) a material breach by the Company of this Agreement;

(iii) a material reduction in the Base Salary (unless such reduction is part of an overall and nondiscriminatory reduction by the Company to the base salaries of all similarly situated employees of the Company and such reduction is proportional in amount to the reductions suffered by all of such other employees), or the uncured failure by the Company to fulfill its obligations under this Agreement within thirty (30) days after written notice thereof from you to the Company; or

(iv) relocating your principal place of work outside of the Tri-State New York Metropolitan area.

For purposes of this Agreement, Constructive Termination without Cause shall not be deemed to exist unless the termination of your employment for Constructive Termination without Cause occurs within ninety (90) days following the initial existence of one of the conditions specified in clauses (i) through (iv) above, you provide the Company with written notice of the existence of such condition within sixty (60) days after the initial existence of the condition, and the Company fails to remedy the condition within thirty (30) days after its receipt of such notice.

(e) For the purposes of this Agreement, “Disability” shall mean your inability, or failure, to perform the essential functions of your position, with or without reasonable

accommodation, for any period of six (6) consecutive months or more, by reason of any medically determinable physical or mental impairment.

(f) The Company will provide the following post-termination health and dental benefits under the circumstances outlined below:

(i) The Company agrees that in the event of the your death during the Term, the Company will pay to your estate the following, which shall be distributed in accordance with your will or testamentary plan, as directed by any court having jurisdiction over such estate, or as directed by any duly appointed administrator or executor of your estate, the full costs relating to the continuation of any group health and dental plan provided through the company in which you participated at the time of your death, and through which coverage was provided to any of your dependent(s) at the date of your death, for a period of two (2) months following your death, without regard to the availability or expiration of any continuation option or feature provided by the plan(s), or as otherwise provided to a lesser extent by applicable law at the time of your death.

(ii) In the event the Company terminates your employment without Cause (other than due to Disability or death), or there is a Constructive Termination without Cause, a continuation of the health and dental benefits provided to you and your covered dependents under the Company’s health and dental plans as in effect from time to time (except that if providing any such benefit under the terms of a plan would cause an adverse tax effect, the Company may provide you with equivalent cash payments outside of the plan at the same time the benefits would otherwise have been taxable to you) for a period of two (2) months following such termination, with no additional cost or charge payable by you.

(g) Notwithstanding the foregoing, if at the time of your Separation from Service (as defined in Treasury Regulation 1.409A-1(h)) you are a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i), any amount or benefits that constitutes “nonqualified deferred compensation” within the meaning of Code Section 409A that becomes payable to you on account of your Separation from Service will not be paid until after the earlier of (i) first business day of the seventh month following your Separation from Service, or (ii) the date of your death (the “409A Suspension Period”). Within fourteen (14) calendar days after the end of the 409A Suspension Period, you shall be paid a cash lump sum payment equal to any payments (including interest on any such payments), and benefits that the Company would otherwise have been required to provide under this Section 5 but for the imposition of the 409A Suspension Period delayed because of the preceding sentence. Thereafter, you shall receive any remaining payments and benefits due under this agreement in accordance with the terms of this Section (as if there had not been any Suspension Period beforehand).

(h) The Company may provide (in its sole discretion) that you may continue to participate in any benefits delayed, provided that you shall bear the full cost of such benefits during such delay period. Upon the date such benefits would otherwise commence pursuant to this Section 5 hereof, the Company shall reimburse you the Company’s share of the cost of such benefits, to the extent that such costs otherwise would have been paid by the Company or to the extent that such benefits otherwise would have been provided by the Company at no cost to you, in each case had such benefits commenced immediately upon the termination of your employment. Any remaining benefits shall be reimbursed or provided by the Company in accordance with the schedule and procedures specified herein.

(i) General Release. Notwithstanding any other provision of this Agreement, no benefits or amounts shall be payable under this Section 5 unless you execute and deliver a general release of claims in a form and manner reasonably satisfactory to the Company and to you including, but not limited to, a release of any and all claims arising out of this Agreement and your employment relationship with the Company, and such release has become irrevocable pursuant to its terms or applicable law (it being understood, however, that in no event will such release expand any of the post-termination restrictions and covenants referred to in Section 9). A form of the Company release is attached hereto as Schedule A. You shall forfeit all rights to such payments and benefits unless such release is signed and delivered (and no longer subject to revocation, if applicable) within sixty (60) days (or such longer period which is provided by law for review and revocation) following the date your employment with the Company is terminate.

6. Compliance with Policies and Procedures. You agree to be bound by and to comply fully with all of the Company’s policies and procedures for employees.

7. Confidentiality.

(a) You acknowledge that, as a result of your employment with the Company, you will be in possession of trade secrets and confidential and proprietary information (the “Confidential Information”) of the Company. You agree to keep secret all Confidential Information and not to disclose Confidential Information to anyone outside of the Company (other than to the Company’s advisors, agents, consultants, financing sources and other representatives), except in connection with the performance of your duties under this Agreement, provided that: (i) you shall have no such obligation to the extent Confidential Information is or becomes publicly known, other than as a result of your breach of your obligations hereunder; and (ii) you may disclose such information if required by law, including pursuant to a court or similar order, but you agree to use reasonable efforts to provide the Company with prompt written notice of such court or similar order so that the Company may seek an appropriate protective order. You agree to deliver promptly to the Company at the termination of your employment, or at any other time the Company may so request, all memoranda, notes, records, reports, and other documents (including electronically stored information) relating to the Company’s business which you obtained while employed by, or otherwise serving or acting on behalf of, the Company and which you may then possess or have under your control. You acknowledge that the disclosure of Confidential Information would have a material adverse effect on the operations and development of the business of the Company. Therefore, you agree that in the event of your failure to comply with the provisions of this Section 7(a) the Company shall be entitled to the entry of an injunction or other equitable relief against you without posting a bond, proof of damages or proof of an inadequate remedy at law and you shall not object to such injunction or equitable relief for any reason. This remedy shall be in addition to any other remedies available to the Company.

(b) You agree not to disclose the terms of this Agreement to anyone except your immediate family and your tax advisors or legal counsel, prospective employers (but with disclosure limited to terms relating to your post-employment restrictions under this letter), pursuant to a court or similar order, or in connection with any proceeding to enforce your rights under this letter or any other agreement between you and the Company, except as otherwise required by applicable law.

alone or in conjunction with others (collectively, and without limitation, the “Company Work Product”), whether created at home or at the office and whether or not created during normal business hours, shall (a) be the sole and exclusive property of the Company and you shall not have any right, title or interest therein and (b) constitute “works made for hire” under all applicable copyright, trademark, and similar or related statutes, regulations, or decisional law. In furtherance of the foregoing, you hereby assign to the Company all of your rights, title, and interest, whether choate or inchoate or whole or partial, in any Company Work Product created, developed, or discovered by you in connection with your employment. You further agree to cooperate fully and promptly with, and otherwise facilitate, any efforts by the Company to vest in the Company all rights, title and interest in and to the Company Work Product and to register, preserve, and protect the Company Work Product from use by others, or from dilution or diminution. You agree to execute and deliver any and all documents, agreements and instruments reasonably intended to evidence only the rights of the Company in the Company Work Product as provided in this Section 8. You hereby irrevocably name the Company as your attorney-in-fact, and irrevocably grant to the Company a limited power of attorney to execute and deliver any and all documents, agreements and instruments in your name as may be reasonably required to give effect to this Section 8; provided, that this power of attorney shall be exercised only with respect to any document, agreement or instrument that you fail to execute and deliver after five days written request by the Company. The rights granted to the Company in this Section 8 shall continue in effect after the termination or expiration of your employment Term to the extent necessary for the Company’s full enjoyment of such rights.

9. Section 409A.

(a) It is the intention of both the Company and you that the benefits and rights to which you could be entitled pursuant to this Agreement comply with Code Section 409A and the Treasury Regulations and other guidance promulgated or issued thereunder (“Section 409A”), to the extent that the requirements of Section 409A are applicable thereto, and the provisions of this Agreement shall be construed in a manner consistent with that intention. If you or the Company believes, at any time, that any such benefit or right that is subject to Section 409A does not so comply, each of us shall promptly advise the other and shall negotiate reasonably and in good faith to amend the terms of such benefits and rights such that they comply with Section 409A (with the most limited possible economic effect on you and on the Company).

(b) If and to the extent required to comply with Section 409A, no payment or benefit required to be paid under this Agreement on account of termination of your employment shall be made unless and until you incur a “separation from service” within the meaning of Section 409A.

(c) Neither the Company nor you, individually or in combination, may accelerate any payment or benefit that is subject to Section 409A, except in compliance with Section 409A and the provisions of this Agreement, and no amount that is subject to Section 409A shall be paid prior to the earliest date on which it may be paid without violating Section 409A.

(d) For purposes of applying the provisions of Section 409A to this Agreement, each separately identified amount to which you are entitled under this Agreement shall be treated as a separate payment. In addition, to the extent permissible under Section 409A, any series of installment payments under this Agreement shall be treated as a right to a series of separate payments. Whenever a payment under this Agreement specifies a payment

period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company.

(e) Any reimbursements by the Company to you of any eligible expenses under this Agreement that are not excludable from your income for Federal income tax purposes (the “Taxable Reimbursements”) shall be made by no later than the earlier of the date on which they would be paid under the Company’s normal policies and the last day of the calendar year following the year in which the expense was incurred. The amount of any Taxable Reimbursements during any calendar year shall not affect the expenses eligible for reimbursement in any other calendar year. The right to Taxable Reimbursement shall not be subject to liquidation or exchange for another benefit.

10. Restrictive Covenants.

(a) During the Term and for a period of one (1) year after termination of your employment hereunder you shall not, directly or indirectly, (i) solicit, induce or cause any individual or entity with whom the Company had a business relationship to reduce or terminate such Person’s business relationship with the Company or any of its affiliates or its successors or assigns; and you shall not, directly or indirectly, approach any such individual or entity for any such purpose, or authorize or assist in the taking of any of such actions for any such purpose or authorize or assist in the taking of any such actions by any individual or entity, (ii) engage in any Restricted Activity, (iii) acquire, or own in any manner, any interest in any entity that engages in any Restricted Activity, or that engages in any business, activity or enterprise that competes with any aspect of any of Restricted Activity, or (iv) be interested in (whether as an owner, director, officer, partner, member, manager, joint venturer, lender, shareholder, vendor, consultant, employee, advisor, agent, independent contractor or otherwise), or otherwise participate in the management or operation of, any entity that engages in any Restricted Activity or in any business, activity or enterprise that competes with any Restricted Activity; provided, however, that this Section 10(a) shall not apply to the ownership of less than five percent (5%) of the outstanding stock of any Person who has a class of securities that is publicly traded.

(b) During the Term and for a period of one (1) year after termination of your employment hereunder you shall not, directly or indirectly (i) hire or offer employment to or seek to hire any employee of the Company or any successor or affiliate thereof, unless the Company first terminates the employment of such employee or gives its written consent to such employment or offer of employment, (ii) induce, solicit, persuade or encourage (or in any manner attempt to induce, solicit, persuade or encourage), or cause or authorize any other individual or entity to induce, solicit, persuade or encourage, any such employee or any other such employee of the Company or any successor or affiliate thereof, to leave the employ of his or her employer, (iii) induce, solicit, persuade or encourage (or in any manner attempt to induce, solicit, persuade or encourage), or cause or authorize any other individual or entity to induce, solicit, persuade or encourage, any individual or entity to cease, diminish or not commence doing business with the Company or any successor or affiliate thereof or (iv) disparage the Company or any successor or affiliate thereof or the business in which the Company is engaged to any individual or entity.

conducted from time to time, or (ii) any business in which the Company and/or any of its affiliates are engaged or likely to engage as of the date hereof or as of the date of termination of your employment hereunder.

11. Background Information. As more fully described on the following pages, the Company may conduct a background check, which may include a “consumer report” and/or an “investigative consumer report” prepared by the Company or by a third party, in all cases commensurate with background checks conducted for similarly situated employees of the Company. These reports may be obtained at any time after receipt of your authorization and, if you are hired, throughout your employment. Falsification or omission of any information previously provided to the Company or provided to the Company on the attached release may disqualify you for employment or result in your immediate dismissal, if hired. Your rights relating to this background check are more fully set forth on the attached release.

12. Representations. You represent, warrant and covenant to the Company that you are free to execute this Agreement and provide the services contemplated hereunder and the engagement hereunder does not conflict with or violate, and will not be restricted by any pre-existing business relationship or agreement to which you are a party or are otherwise bound. Without limiting the foregoing, you further represent, warrant and covenant to the Company that you are under no contractual commitments, including without limitation, any confidentiality, proprietary rights, non-solicitation, non-competition agreement or similar type of restrictive covenant agreement, inconsistent with your obligations to the Company and that you will not at any time during the course of your employment by the Company or any of its affiliates violate and/or breach, subject to any applicable cure periods, any obligation or contractual/common law commitment that you may have to a third party or prior employer.

13. Superseding of Prior Understandings or Agreements; No Employment or Compensation Guarantees or Other Modifications Except as Provided Herein. You acknowledge that you have not relied on any oral or written representations or understandings not explicitly contained herein in executing this Agreement. This Agreement supersedes any and all oral or written understandings or agreements regarding your employment with the Company or any of its affiliates. No employee or representative of the Company, other than in a writing signed by a duly authorized officer of the Company, may enter into any agreement or understanding (a) guaranteeing you employment with the Company for any specific duration, (b) providing you with a guaranteed level of compensation with the Company, whether incentive compensation, severance pay or otherwise, or (c) otherwise modifying the terms of this Agreement.

14. Miscellaneous.

(a) This offer is subject to the satisfactory completion of the Company’s standard drug, background and reference screening used for similarly situated employees of the Company, authorization of your right to work in the United States, and the absence of any non-competition agreement or other restrictions that would prohibit or interfere with your working for the Company

(b) If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect under the law, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired. This Agreement contains section headings for reference only. The headings in no way affect the meaning or interpretation of this Agreement.

(c) You acknowledge that you have consulted counsel of your choosing with regard to the provisions of this Agreement. You and the Company acknowledge that each has participated fully and equally in the negotiation and drafting of this Agreement and both have assumed the risk of any misrepresentation or mistaken understanding or belief relied upon by entering into this Agreement.

(d) This Agreement and the Company’s rights and obligations hereunder are assignable and delegable, in whole or in part, by the Company to any affiliate of the Company upon written notice to you, whereupon such affiliate shall succeed to the rights and assume the obligations of the Company hereunder to the full extent of such assignment and/or delegation; provided, however, that no assignment shall relieve the Company of any of its obligations hereunder.

(e) This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving reference to the principles of conflicts of laws or where the parties are located at the time a dispute arises. Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in New York City before a single arbitrator. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. Judgment on the Award may be entered in any court having jurisdiction. This clause shall not preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction. The arbitrator shall award to the prevailing party, if any, the costs and attorneys’ fees reasonably incurred by the prevailing party in connection with the arbitration. Notwithstanding the foregoing, any action or proceeding initiated by the Company seeking any form of injunctive relief for a breach by you of any of Sections 7, 8 or 10 of this Agreement, including, without limitation, specific performance, shall be brought against you in the courts of the State of New York or, if the Company has or can acquire jurisdiction, in the United States District Court for the Southern District of New York (collectively, the “Courts”), and each party consents to the jurisdiction of the Courts in any such action or proceeding, and each party waives any objection to venue laid therein.

Signatures on following page

We look forward to you joining the Company. If the terms of this Agreement are acceptable to you and you are ready, willing and able to abide by all the conditions enumerated herein, please sign and date this Agreement below.

	Sincerely,


	/s/ Robert F.X. Sillerman
	Name: Robert F.X. Sillerman
	Title: Chairman

*Acknowledged and Agreed to:*


/s/ Sheldon Finkel
Name:	Sheldon Finkel
Date:	January 11, 2013

SCHEDULE A

FORM OF RELEASE

FORM OF RELEASE

GENERAL RELEASE OF CLAIMS

1. (“Employee”), for himself and his family, heirs, executors, administrators, legal representatives and their respective successors and assigns, in exchange for the consideration received pursuant to Section 5 of the employment letter agreement to which this release is attached as Exhibit A (the “Agreement”), does hereby release and forever discharge SFX Holding Corporation (the “Company”), its subsidiaries, affiliated companies, successors and assigns, and its current or former directors, officers, employees, shareholders or agents in such capacities (collectively with the Company, the “Released Parties”) from any and all actions, causes of action, suits, controversies, claims and demands whatsoever, for or by reason of any matter, cause or thing whatsoever, whether known or unknown including, but not limited to, all claims under any applicable laws arising under or in connection with Employee’s employment or termination thereof, whether for tort, breach of express or implied employment contract, wrongful discharge, intentional infliction of emotional distress, or defamation or injuries incurred on the job or incurred as a result of loss of employment. Employee acknowledges that the Company encouraged him to consult with an attorney of his choosing, and through this General Release of Claims encourages him to consult with his attorney with respect to possible claims under the Age Discrimination in Employment Act (“ADEA”) and that he understands that the ADEA is a Federal statute that, among other things, prohibits discrimination on the basis of age in employment and employee benefits and benefit plans. Without limiting the generality of the release provided above, Employee expressly waives any and all claims under ADEA that he may have as of the date hereof. Employee further understands that by signing this General Release of Claims he is in fact waiving, releasing and forever giving up any claim under the ADEA as well as all other laws within the scope of this paragraph 1 that may have existed on or prior to the date hereof. Notwithstanding anything in this paragraph 1 to the contrary, this General Release of Claims shall not apply to (i) any rights to receive any payments or benefits pursuant to Section 5 of the Agreement, (ii) any rights or claims that may arise as a result of events occurring after the date this General Release of Claims is executed, (iii) any indemnification rights Employee may have as a former officer or director of the Company or its subsidiaries or affiliated companies, (iv) any claims for benefits under any directors’ and officers’ liability policy maintained by the Company or its subsidiaries or affiliated companies in accordance with the terms of such policy, and (v) any rights as a holder of equity securities of the Company.

2. Employee represents that he has not filed against the Released Parties any complaints, charges, or lawsuits arising out of his employment, or any other matter arising on or prior to the date of this General Release of Claims, and covenants and agrees that he will never individually or with any person file, or commence the filing of, any charges, lawsuits, complaints or proceedings with any governmental agency, or against the Released Parties with respect to any of the matters released by Employee pursuant to paragraph 1 hereof (a “Proceeding”); provided, however, Employee shall not have relinquished his right to commence a Proceeding to challenge whether Employee knowingly and voluntarily waived his rights under ADEA.

3. Employee hereby acknowledges that the Company has informed him that he has up to twenty-one (21) days to sign this General Release of Claims and he may knowingly and voluntarily waive that twenty-one (21) day period by signing this General Release of Claims earlier. Employee also understands that he shall have seven (7) days following the date on which he signs this General Release of Claims within which to revoke it by providing a written notice of his revocation to the Company.

4. Employee acknowledges that this General Release of Claims will be governed by and construed and enforced in accordance with the internal laws of the State of New York applicable to contracts made and to be performed entirely within such State.

5. Employee acknowledges that he has read this General Release of Claims, that he has been advised that he should consult with an attorney before he executes this general release of claims, and that he understands all of its terms and executes it voluntarily and with full knowledge of its significance and the consequences thereof.

6. This General Release of Claims shall take effect on the eighth day following Employee’s execution of this General Release of Claims unless Employee’s written revocation is delivered to the Company within seven (7) days after such execution.



			, 20

EX-10.3 11 a2215423zex-10_3.htm EX-10.3

Exhibit 10.3

SFX ENTERTAINMENT INC.

430 Park Avenue

6th Floor

New York, NY 10022

October 18, 2012

Mr. Robert F.X. Sillerman

###

Dear Bob,

We are delighted to confirm to you that we are offering you the position of Executive Chairman of the Board of Directors and Chief Executive Officer of SFX Entertainment Inc. (the “Company”), subject to the terms and conditions set forth herein. Assuming you accept our offer, you will become an employee of the Company commencing with the start date stated in Section 1 hereof. The terms and conditions of your employment with the Company are set forth in this letter agreement (this “Agreement”).

1. Start Date and Term.

(a) Your start date (“Start Date”) will be as of October 18, 2012.

(b) The term of your employment shall continue for a period of five (5) years from your start date (the “Term”).

2. Duties. You shall have executive duties, functions, authority and responsibilities commensurate with the offices that you hold with the Company in a company that is public, subject, in accordance with applicable law, to the supervision and direction of the Board. Your service as a member of the Board and the Executive Chairman of the Board shall be subject to the removal and the reelection provisions of the Company’s Certificate of Incorporation and By-Laws applicable to all members of the Board as in effect during the Term.

(a) In addition to the foregoing, your duties shall specifically include: (a) directing the Company to get financing; (b) participating and deciding on the selection of financial institutions; (c) structuring alternative financial transactions; (d) negotiating the terms of financing, and, as is necessary and practically feasible, providing financial support for financing until the Company is public. While these duties are part of the services to be provided under this Agreement, they may be compensated through bonus payments or other compensation under subparagraphs 3(b), 3(c), and/or 3(d) of this Agreement.

(b) You shall devote your time, attention, energy, knowledge, best professional efforts and skills to the duties assigned to you; provided, however, that you may pursue professional endeavors within your areas of expertise and experience to the extent that any such endeavors do not otherwise violate the terms of this Agreement, including, without limitation, any non-competition or non-solicitation provisions contained herein, or otherwise interfere with or impinge upon the performance of your duties as set forth in this Agreement. You agree that these professional endeavors shall be subject to the review and approval of the

Confidential Treatment Requested. Confidential portions of this document have been redacted and have be separately filed with the Commission.

Confidential material redacted and filed separately with the Commission.

Board (based on the criteria of competitiveness and time commitment), so long as the Board’s discretion is not applied unreasonably.

(i) You may continue or commence service as a director and officer (or in a similar capacity) on the governing body of other business entities whose business is not competitive with that of the Company or any of its subsidiaries;

(ii) You may devote a portion of our business time to personal investments and outside business commitments, provided, however that (1) such activities do not conflict with the business of the Company; (2) such activities do not interfere, directly or indirectly, with your performance of the obligations under this agreement; and (3) such activities do not result in a breach by the Company of any non-competition or any other similar type of agreement to which the Company may be a party.

(d) No provision of this Agreement shall be construed to prohibit your (i) acquisition, ownership, or trading, including without limitation your indirect ownership, of less than five percent (5%) of the issued and outstanding stock (or comparable bonds, options, derivatives, or negotiable instruments) of a business entity having securities publicly traded anywhere in the world, provided, however, that the ownership limitations of this clause shall not apply to (1) your ownership of any such securities through an open-end mutual fund; (2) your ownership of any such securities in Viggle Inc. and/or Circle Entertainment (or any respective successor thereto through acquisition, merger or otherwise); or (3) your ownership of securities that precede the effective date of this Agreement if, but only if, the issuer of the securities is not a competitor of the Company; or (b) passive ownership of stock, partnership interests, or comparable ownership interests or securities in any for-profit private business entity that is not directly competitive with the business of the Company of any of its subsidiaries. The Company additionally agrees that nothing in this Agreement shall operate to prohibit your acceptance of a testamentary gift, bequest, or its equivalent, nor your retention of any such gift, bequest or its equivalent following its delivery, so long as you retain the interest(s) solely for investment purposes.

(e) Notwithstanding anything contained in this Agreement, the Company acknowledges and agrees that you shall be entitled to continue to participate in the investments and activities set forth in Schedule A attached hereto. In connection therewith, you agree to provide, when requested by the Company, a reasonable estimate of the allocation of your time spent in furtherance of your activities specified in Schedule A to allow for an accurate accounting of costs attributable thereto.

(f) You may be required to perform your duties at the Company’s headquarters in New York City (or wherever else located hereafter) and be expected to travel from time to time. In addition, you may perform your services from Long Island, New York, provided, that there is no additional cost to the Company beyond those that would otherwise be reimbursed pursuant to Section 4 hereof.

(g) This will acknowledge that you currently serve as Executive Chairman of the Board and Chief Executive Officer of Viggle Inc., a company of which you are a principal and will continue to serve in such capacity as long as you deem it appropriate, and devote such time and function in such capacity as you deem necessary to perform the services required.

3. Compensation.

(a) Base Salary. In consideration for the performance of your services hereunder, you will be paid a base salary at the annual rate of $1.00 (“Base Salary”), payable on January 1 of each year of the Term, in accordance with the Company’s normal payroll practices and subject to applicable tax and payroll withholdings and deductions. As an exempt employee, you will not be eligible for overtime pay.

(b) Discretionary Bonuses. During the Term, you will also be eligible to participate in any annual incentive compensation plan, program and/or arrangements as established by the Board or its Compensation Committee, from time to time. During the Term, for each calendar year, you may have a target bonus opportunity under such plan, program and/or arrangement in an amount to be established by the Board or its Compensation Committee, whichever applicable, for such calendar year, which, in each case, will be based on the satisfaction of performance criteria to be established by the Board or its Compensation Committee, as applicable, each calendar year during the Term. Payment of any bonuses to you will be made by the Company not later than March 31 of the calendar year immediately following the calendar year in which such bonus was earned and will be payable, in the Company’s discretion, in either cash, stock or both. Unless expressly and specifically agreed to in writing, no bonus compensation will be deemed earned, paid or awarded unless you are in the continuous employment of the Company through the last day of the calendar year in which such bonus corresponds; however, any earned or accrued bonuses will be payable upon the date of early termination or expiration of this Agreement.

(i) These awards are part of our Company-wide stock option plan. Company-wide consideration of additional options (including any annual option grants) will be done annually and you will be considered for additional awards as part of that process. All additional awards, and the terms and conditions thereof, are made at the sole discretion of the Company and its Compensation Committee.

(ii) Twenty Percent (20%) of the grant will vest and become exercisable upon signing this Agreement, and 20% annually in arrears on December 31, 2013, December 31, 2014, December 31, 2015 and December 31, 2016.

(d) Additional Grants: You shall also be entitled to qualify for additional equity or option grants each year.

4. Benefits.

(a) Subject to the eligibility requirements and other terms and conditions of the respective plan documents and the specific provision of this Agreement, you may be entitled to participate in benefits offered by the Company for similarly situated employees of the Company, as may be in effect or modified from time to time. You shall be entitled to six (6) weeks of vacation time per calendar year (such vacation days to be prorated based on the date you commence employment with the Company) in accordance with, and subject to, the Company’s vacation policy, as it may change from time to time, with the timing of any such vacation to be agreed upon. You additionally shall be entitled to remain away from work for as

many or as few days as required by you due to your bona fide illness, subject to the provisions of Section 5 of this Agreement. You will be entitled to reimbursement of travel and other business expenses in accordance with the Company’s guidelines commensurate with your level of responsibility, provided that notwithstanding the foregoing, you shall be entitled to (a) charter a private flight when you travel; (b) to hotel accommodations while outside New York on business at a full-service hotel offering a hotel suite with sufficient space, furnishings, and technological facilities and appointments for your comfortable and productive work in the room; and (c) private car service when required to travel in connection with the Company’s business, attend business meetings, or work or attend functions outside of normal business hours or on weekends or holidays. The Company shall provide you with a full-time car and driver. In addition, the Company shall provide you with full-time protection services upon your request. You acknowledge that the Company may, but is not obligated to, retain a consultant to recommend a Company-wide security plan and that the protection services to be provided to you hereunder would be provided subject to the terms and conditions of such plan, as so adopted and in effect from time to time during the Term.

(b) Perquisites: To the extent that there are fringe benefits, perquisites, or other amounts that the Executive may use during the year, the Employer may be required to report the foregoing as compensation and issue a Form W-2 to the Executive.

5. Severance.

(a) In the event your employment with the Company is completely terminated either (i) on account of your death or Disability (as defined in Section 5(f) below), (ii) by the Company without Cause (as defined in Section 5(c) below), or (iii) by you due to Constructive Termination without Cause (as defined in Section 5(d) below), or (iv) in the event of a Change of Control (as defined in Section 5(e) below):

(1) You shall receive the Termination Payments (as defined in Section 5(b) below);

(2) You shall also be paid a lump sum of Five Million Dollars ($5,000,000.00) by the Company, which shall be paid as soon as practicable but not later than sixty (60) days following such termination date (the “Post Termination Salary Payment”);

(4) Any stock options granted shall vest as follows:

(A) If termination is by the Company without Cause or by you for Constructive Termination without Cause or due to your Death or Disability, or the Company elects not to renew your employment at the end of the Term, or if there is a Change of Control (as hereinafter defined) (1) in the case of such a termination, all unvested stock options and/or restricted stock granted to you shall vest and (2) in the case of an election by the Company not to renew your employment, all unvested stock options and/or restricted stock granted to you shall vest; or

(b) In the event you voluntarily terminate your employment for any reason or your employment is terminated by the Company for Cause (as defined in Section 5(c) below), you shall be paid, as soon as practicable but no later than sixty (60) days following such termination, (i) all earned but unpaid Base Salary through the date of termination; (ii) any previously awarded and unpaid bonus; and (iii) all unpaid reimbursable expenses incurred by you through the date of termination (the “Termination Payments”). Your voluntary termination of employment shall be effective upon reasonable advance written notice to the Company. In the event your employment is terminated for Cause, you shall have no further obligation or liability to the Company in connection with the performance of this agreement (except the continuing obligations specified in Sections 7, 8 and 10 of this Agreement).

(i) falsified or omitted information as required by Section 11 of this Agreement

(ii) committed an act which, as set forth in any employment handbook promulgated by the Company and as in effect from time to time, may lead to termination of employment, subject to a five (5) day cure period following the Company’s written notice of such act to the extent such act is curable;

(iii) engaged in any intentional act of fraud against the Company;

(iv) engaged in willful malfeasance or gross negligence in the performance of this Agreement or in your capacity as an employee of the Company;

(v) refused to perform the duties required or requested consistent with your obligations under this Agreement and under law;

(vi) been convicted of a felony or entering a plea of nolo contendre to a felony charge;

(vii) materially breached this Agreement, subject to a five (5) day cure period following the Company’s written notice of such breach to the extent such breach is curable;

For purposes of this Section 5(c), no act, or failure to act, by you shall be “willful” unless committed without a reasonable belief that the act or omission was in the best interest of the Company.

(i) requiring you to report to any person other than directly and exclusively to the Board; any material diminution in the your authority, duties or responsibilities;

(ii) any material diminution in your authority, duties or responsibilities as Executive Vice President;

(iii) a material breach by the Company of this Agreement;

(iv) a material reduction in the Base Salary (unless such reduction is part of an overall and nondiscriminatory reduction by the Company to the base salaries of all similarly situated employees of the Company and such reduction is proportional in amount to the reductions suffered by all of such other employees), or the uncured failure by the Company to fulfill its obligations under this Agreement within thirty (30) days after written notice thereof from you to the Company; or

(v) relocating your principal place of work outside of the Tri-State New York Metropolitan area.

(e) “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i) any “person” (as such term is used in Section 13(d) and Section 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (an “Exchange Act Person”) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than thirty-five percent (35%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction, provided that, notwithstanding the foregoing, a Change in Control shall not be deemed to occur (1) if the Principal or a Related Party of his (a “Principal Controlled Entity”) beneficially own more than such thirty-five percent (35%) at any time; or (2) solely because the level of ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided further that if a Change in Control would occur (but for the operation of this proviso) as a result of the acquisition of voting securities by the Company, and after such share acquisition, any such Subject Person (so long as not a Principal Controlled Entity) becomes the owner of any additional voting securities that,

assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities owned by such Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur;

(ii) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company if, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not own, directly or indirectly, either (1) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar transaction or (2) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving entity in such merger, consolidation or similar transaction;

(iii) implementation of any plan for the liquidation or dissolution of the Company;

(iv) there is consummated a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries to an entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportion as their ownership of the Company immediately prior to such sale, lease, license or other disposition; or

(v) during any period of 12 consecutive months, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof unless the election, or the nomination for election by stockholders, of each new director was approved by a vote of at least a majority of the directors then still in office who were directors at the beginning of the period.

(vi) For purposes of this Section 5, “Principal” means Robert F.X. Sillerman; and “Related Party” means, with respect to the principal, (i) any spouse or immediate family member of the Principal, (ii) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or persons beneficially holding a fifty-one percent (51%) or more controlling interest of which consist of the Principal and/or such other persons referred to in the immediately preceding clause (i); or (iii) the trustees of any trust referred to in the immediately preceding clause (ii).

(f) For the purposes of this Agreement, “Disability” shall mean your inability, or failure, to perform the essential functions of your position, with or without reasonable accommodation, for any period of six (6) consecutive months or more, by reason of any medically determinable physical or mental impairment. If during the Term and after the date upon which you became Disabled, you shall no longer be Disabled, the Company, by action of the Board, shall have the right (exercisable within sixty (60) days after notice from you of such recovery), but not the obligation, to restore you to employment, full compensation, and your full level of duties, functions, authority and responsibilities hereunder.

(g) The Company will provide the following post-termination health and dental benefits under the circumstances outlined below:

(i) The Company agrees that in the event of the your death during the Term, the Company will pay to your estate the following, which shall be distributed in

accordance with your will or testamentary plan, as directed by any court having jurisdiction over such estate, or as directed by any duly appointed administrator or executor of your estate, the full costs relating to the continuation of any group health and dental plan provided through the company in which you participated at the time of your death, and through which coverage was provided to any of your dependent(s) at the date of your death, for a period of twelve (12) months following your death, without regard to the availability or expiration of any continuation option or feature provided by the plan(s), or as otherwise provided to a lesser extent by applicable law at the time of your death.

(ii) In the event the Company terminates your employment without Cause (other than due to Disability or death), or there is a Constructive Termination without Cause, or in the event of a Change of Control, a continuation of the health and dental benefits provided to you and your covered dependents under the Company’s health and dental plans as in effect from time to time (except that if providing any such benefit under the terms of a plan would cause an adverse tax effect, the Company may provide you with equivalent cash payments outside of the plan at the same time the benefits would otherwise have been taxable to you) for a period of twelve (12) months following such termination, with no additional cost or charge payable by you.

(h) Notwithstanding the foregoing, if at the time of your Separation from Service (as defined in Treasury Regulation 1.409A-1(h)) you are a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i), any amount or benefits that constitutes “nonqualified deferred compensation” within the meaning of Code Section 409A that becomes payable to you on account of your Separation from Service will not be paid until after the earlier of (i) first business day of the seventh month following your Separation from Service, or (ii) the date of your death (the “409A Suspension Period”). Within fourteen (14) calendar days after the end of the 409A Suspension Period, you shall be paid a cash lump sum payment equal to any payments (including interest on any such payments), and benefits that the Company would otherwise have been required to provide under this Section 5 but for the imposition of the 409A Suspension Period delayed because of the preceding sentence. Thereafter, you shall receive any remaining payments and benefits due under this agreement in accordance with the terms of this Section (as if there had not been any Suspension Period beforehand).

(i) The Company may provide (in its sole discretion) that you may continue to participate in any benefits delayed, provided that you shall bear the full cost of such benefits during such delay period. Upon the date such benefits would otherwise commence pursuant to this Section 5 hereof, the Company shall reimburse you the Company’s share of the cost of such benefits, to the extent that such costs otherwise would have been paid by the Company or to the extent that such benefits otherwise would have been provided by the Company at no cost to you, in each case had such benefits commenced immediately upon the termination of your employment. Any remaining benefits shall be reimbursed or provided by the Company in accordance with the schedule and procedures specified herein.

(j) General Release. Notwithstanding any other provision of this Agreement, no benefits or amounts shall be payable under this Section 5 unless you execute and deliver a general release of claims in a form and manner reasonably satisfactory to the Company and to you including, but not limited to, a release of any and all claims arising out of this Agreement and your employment relationship with the Company, and such release has become irrevocable pursuant to its terms or applicable law (it being understood, however, that in no event will such release expand any of the post-termination restrictions and covenants referred to in Section 9). A form of the Company release is attached hereto as Schedule A. You shall forfeit all rights to

such payments and benefits unless such release is signed and delivered (and no longer subject to revocation, if applicable) within sixty (60) days (or such longer period which is provided by law for review and revocation) following the date your employment with the Company is terminated.

(k) No Mitigation or Offset. At any termination of your employment, you shall have no obligation to seek other employment. Except as otherwise provided herein, there shall be no offset against amounts due to you under this Agreement on account of any remuneration attributable to any later employment, consultancy, partnership, or other remunerative activity connected with you. However, the Company may offset (at any time before the date that is two and one-half months after the end of the calendar year in which your employment terminates) any amounts owed by you to the Company or any of its subsidiaries or affiliates against amounts due to you under this agreement. Notwithstanding any other provisions of this agreement or any other agreement to which the Company and you are parties to the contrary, in no event shall any payment under this agreement that constitutes “deferred compensation” for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A.

6. Compliance with Policies and Procedures. You agree to be bound by and to comply fully with all of the Company’s policies and procedures for employees.

7. Confidentiality.

(a) You acknowledge that, as a result of your employment with the Company, you will be in possession of trade secrets and confidential and proprietary information (the “Confidential Information”) of the Company. You agree to keep secret all Confidential Information and not to disclose Confidential Information to anyone outside of the Company (other than to the Company’s advisors, agents, consultants, financing sources and other representatives), except in connection with the performance of your duties under this Agreement, provided that: (i) you shall have no such obligation to the extent Confidential Information is or becomes publicly known, other than as a result of your breach of your obligations hereunder; and (ii) you may disclose such information if required by law, including pursuant to a court or similar order, but you agree to use reasonable efforts to provide the Company with prompt written notice of such court or similar order so that the Company may seek an appropriate protective order; provided, further, however, that if, absent the entry of a protective order or the receipt of a waiver under this agreement, you are, in the opinion of the Company’s counsel, legally compelled to disclose such Confidential Information under pain of liability for contempt or other censure or penalty (civil or criminal), you may disclose such information to the persons and to the extent required without liability under this Agreement. In such event, you shall give the Company written notice of such disclosure, in reasonable detail, as soon as possible, but in any event not later than concurrently with making such disclosure, and you shall exercise reasonable commercial efforts to obtain reliable assurances that confidential treatment will be accorded any such Confidential Information so disclosed. You agree to deliver promptly to the Company at the termination of your employment, or at any other time the Company may so request, all memoranda, notes, records, reports, and other documents (including electronically stored information) relating to the Company’s business which you obtained while employed by, or otherwise serving or acting on behalf of, the Company and which you may then possess or have under your control. You acknowledge that the disclosure of Confidential Information would have a material adverse effect on the operations and development of the business of the Company. Therefore, you agree that in the event of your failure to comply with the provisions of this Section 7(a) the Company shall be

entitled to the entry of an injunction or other equitable relief against you without posting a bond, proof of damages or proof of an inadequate remedy at law and you shall not object to such injunction or equitable relief for any reason. This remedy shall be in addition to any other remedies available to the Company.

(c) Your duties may require that you enter into confidentiality agreements, nondisclosure agreements, or comparable agreements with third parties, and a third party may require the your entry into such an agreement(s) personally and on behalf of the Company. In any such event, you agree to engage in reasonable efforts to perform any such agreement.

(d) During the Term, the Company may adopt or implement additional Confidential Information policies, procedures, or requirements in connection with the Company’s business, and any such policies, procedures, or requirements will supplement this Section 7, without additional consideration from the Company to you, except to the extent, if any, that they conflict with this agreement, in which event this agreement shall control and govern.

8. Company Work Product. You acknowledge and agree that all of the ideas, concepts, inventions and work product rendered or provided by you in connection with your employment hereunder which directly or indirectly relate to the Company’s business, whether alone or in conjunction with others (collectively, and without limitation, the “Company Work Product”), whether created at home or at the office and whether or not created during normal business hours, shall (a) be the sole and exclusive property of the Company and you shall not have any right, title or interest therein and (b) constitute “works made for hire” under all applicable copyright, trademark, and similar or related statutes, regulations, or decisional law. In furtherance of the foregoing, you hereby assign to the Company all of your rights, title, and interest, whether choate or inchoate or whole or partial, in any Company Work Product created, developed, or discovered by you in connection with your employment. You further agree to cooperate fully and promptly with, and otherwise facilitate, any efforts by the Company to vest in the Company all rights, title and interest in and to the Company Work Product and to register, preserve, and protect the Company Work Product from use by others, or from dilution or diminution. You agree to execute and deliver any and all documents, agreements and instruments to evidence the rights of the Company in the Company Work Product as provided in this Section 8. You hereby irrevocably name the Company as your attorney-in-fact, and irrevocably grant to the Company a limited power of attorney to execute and deliver any and all documents, agreements and instruments in your name as may be reasonably required to give effect to this Section 8; provided, that this power of attorney shall be exercised only with respect to any document, agreement or instrument that you fail to execute and deliver after five days written request by the Company. The rights granted to the Company in this Section 8 shall continue in effect after the termination or expiration of your employment Term to the extent necessary for the Company’s full enjoyment of such rights.

9. Section 409A.

(a) It is the intention of both the Company and you that the benefits and rights to which you could be entitled pursuant to this Agreement comply with Code Section 409A

and the Treasury Regulations and other guidance promulgated or issued thereunder (“Section 409A”), to the extent that the requirements of Section 409A are applicable thereto, and the provisions of this Agreement shall be construed in a manner consistent with that intention. If you or the Company believes, at any time, that any such benefit or right that is subject to Section 409A does not so comply, each of us shall promptly advise the other and shall negotiate reasonably and in good faith to amend the terms of such benefits and rights such that they comply with Section 409A (with the most limited possible economic effect on you and on the Company).

10. Restrictive Covenants.

(a) During the Term and for a period of one (1) year after termination of your employment hereunder for Cause, you shall not, directly or indirectly, solicit, induce or cause any individual or entity with whom the Company had a business relationship to reduce or terminate such Person’s business relationship with the Company or any of its affiliates or its successors or assigns; and you shall not, directly or indirectly, approach any such individual or entity for any such purpose, or authorize or assist in the taking of any of such actions for any such purpose or authorize or assist in the taking of any such actions by any individual or entity.

manner attempt to induce, solicit, persuade or encourage), or cause or authorize any other individual or entity to induce, solicit, persuade or encourage, any such employee or any other such employee of the Company or any successor or affiliate thereof, to leave the employ of his or her employer, or (iii) engage, directly or indirectly, through a sole proprietorship, or as an employee officer, consultant, director, manager, managing member, stockholder, limited partner, general partner, trustee or member of any corporation, general partnership, limited partnership, trust, limited liability company or any other entity in a Restricted Activity (as defined below). Nothing in this Section 10 shall prohibit you from continuing to fulfill your obligations as an officer, director or partner or companies or entities identified in Section 2 or from engaging in the activities listed on Schedule A to this Agreement.

(c) For purposes of this Section 10, the term “Restricted Activity” means any activity that is, or would reasonably be deemed to be, competitive with (i) any aspect of the business in which the Company is engaged (1) as operated prior to the date of this Agreement or (2) as contemplated by the Company to be operated in the future as of the date of this Agreement, in each case, anywhere in the world where the Company’s business may be conducted from time to time, or (ii) any business in which the Company and/or any of its affiliates are engaged or likely to engage as of the date hereof or as of the date of termination of your employment hereunder.

(d) You agree during and after your employment with the Company to not make, either directly or indirectly, or cause to be made, either directly or indirectly, by any other person or entity, any statement or comment, whether oral, written or otherwise, or to take any other action which disparages or criticizes the Company, including any of its past, present or future directors and officers, employees, businesses, business practices, products or services, or which disrupts or impairs or could disrupt or impair the Company, including its businesses.

13. Superseding of Prior Understandings or Agreements; No Employment or Compensation Guarantees or Other Modifications Except as Provided Herein. You

acknowledge that you have not relied on any oral or written representations or understandings not explicitly contained herein in executing this Agreement. This Agreement supersedes any and all oral or written understandings or agreements regarding your employment with the Company or any of its affiliates. No employee or representative of the Company, other than in a writing signed by a duly authorized officer of the Company, may enter into any agreement or understanding (a) guaranteeing you employment with the Company for any specific duration, (b) providing you with a guaranteed level of compensation with the Company, whether incentive compensation, severance pay or otherwise, or (c) otherwise modifying the terms of this Agreement.

14. Indemnification. The Company shall indemnify you against all losses, claims, expenses, or other liabilities of any nature arising by reason of the fact that you: (a) are or were a director, officer, employee, or agent of the Company or any of its subsidiaries or affiliates; or (b) while a director, officer, employee or agent of the Company or any of its subsidiaries or affiliates, are or were serving at the request of the Company as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another corporation, partnership, joint venture, trust, employee benefit plan or other entity, in each case to the fullest extent permitted under the Delaware General Corporation Law, as the same exists or may hereafter be amended. Without limiting the generality of the foregoing, you shall be entitled in connection with your employment and in connection with your services as an officer and director of the Company to the benefit of the provisions relating to indemnification and advancement of defense costs and expenses contained in the bylaws and certificate of incorporation of the Company, as the same in the future may be amended (not including any amendments or additions that limit or narrow, but including any that add to or broaden, the protection afforded to you), to the fullest extent permitted by applicable law. The Company shall advance to you all costs of investigation or defense incurred by you in connection with any pending or threatened claim for which you may be entitled to indemnification hereunder, provided that you shall agree to return to the Company any such reimbursed amounts, without interest, if it is determined in a final, non-appealable judgment by a Court of competent jurisdiction that you are not entitled to indemnification by the Company for losses incurred in connection with such claim. The indemnification obligations of the Company shall survive from the effective date of this agreement and continue until three (3) months after the expiration of any applicable statute of limitations with respect to any claim made against you for which you are or may be entitled to indemnification (the “Survival Period “), and shall survive after the Survival Period with respect to any indemnification claim as to which the Company has received notice on or prior to the end of the Survival Period. During the Term of this Agreement and during the Survival Period, the Company will maintain for your benefit, on an “occurrence” basis, a directors and officers errors and omissions insurance policy, or a similar insurance policy(ies), providing coverage from a financially reputable carrier. Anything in this agreement to the contrary notwithstanding, this Section 14 shall survive the termination of this agreement for any reason, and no release which may be entered into in connection with the termination of your employment will be deemed to release the Company from its obligations under this Section 14.

15. Miscellaneous.

(f) Notices. All notices, requests, consents and other communications, required or permitted to be given hereunder, shall be in writing and shall be deemed to have been duly given if delivered personally or by facsimile transmission or mailed first class, postage prepaid, by registered or certified mail, as follows (or to such other or additional address as either party shall designate by notice in writing to the other in accordance herewith):

If to the Company:

SFX Entertainment Inc.

430 Park Avenue, 6th Floor

New York, New York 10022

Facsimile: (646)349-5988

Attention: Board of Directors

If to you:

Facsimile:

Copies of all communications given hereunder to the Employer shall also be delivered or sent, in like fashion, to: Mitchell J. Nelson, Esq., 430 Park Avenue, 6th Floor, New York, New York 10022; telephone: (646) 561-6386; facsimile: (646) 561-6700.

All such notices, requests and other communications shall (a) if delivered personally to the address as provided in this Section, be deemed given upon delivery, (b) if delivered by facsimile transmission to the facsimile number as provided in this Section, be deemed given upon receipt of electronic confirmation of delivery, and (c) if delivered by mail in the manner described above to the address as provided in this Section, be deemed given upon receipt (in each case regardless of whether such notice, request or other communication is received by any other person to whom a copy of such notice is to be delivered pursuant to this Section).

Signatures on following page

		Sincerely,

		SFX Entertainment Inc.

		By:	/s/ Shelley Finkel
		Name:	Shelley Finkel
		Title:	President


*Acknowledged and Agreed to:*


	/s/ Robert F.X. Sillerman

Name:	Robert F.X. Sillerman

Date:	1/1/2013

SCHEDULE A

Permitted Investments and Activities

Service as an officer and/or director of Circle Entertainment Inc. and investment activities therein.

Service as an officer and/or director of Viggle Inc. and investment activities therein.

Any and all theatrical or feature film production work or projects with Mel Brooks.

Partnership interests in certain minor league and major league baseball, basketball, hockey and football teams and arenas (built or to be built).

Passive investments through private equity funds and other investments pursuant to which the principal beneficially owns less than 5% of the outstanding shares of a company and has no voting control.

Service as a principal of MJX Asset Management, LLC.

Service as a principal of Flag Leisure Group, LLC and/or Flag Luxury Properties, LLC.

Service as an officer and director of Atlas Real Estate Funds, Inc.

Investment activities currently underway through MJX Real Estate Ventures, LLC or affiliates.

Participation in Temenos Anguilla and Pelican ventures in Anguilla, British West Indies.

Participation in various real estate investments in conjunction with Paul Kanavos.

SCHEDULE B

FORM OF RELEASE

GENERAL RELEASE OF CLAIMS

1. Robert F.X. Sillerman (“Employee”), for himself and his family, heirs, executors, administrators, legal representatives and their respective successors and assigns, in exchange for the consideration received pursuant to Section 5 of the employment letter agreement to which this release is attached as Exhibit A (the “Agreement”), does hereby release and forever discharge SFX Entertainment, Inc. (the “Company”), its subsidiaries, affiliated companies, successors and assigns, and its current or former directors, officers, employees, shareholders or agents in such capacities (collectively with the Company, the “Released Parties”) from any and all actions, causes of action, suits, controversies, claims and demands whatsoever, for or by reason of any matter, cause or thing whatsoever, whether known or unknown including, but not limited to, all claims under any applicable laws arising under or in connection with Employee’s employment or termination thereof, whether for tort, breach of express or implied employment contract, wrongful discharge, intentional infliction of emotional distress, or defamation or injuries incurred on the job or incurred as a result of loss of employment. Employee acknowledges that the Company encouraged him to consult with an attorney of his choosing, and through this General Release of Claims encourages him to consult with his attorney with respect to possible claims under the Age Discrimination in Employment Act (“ADEA”) and that he understands that the ADEA is a Federal statute that, among other things, prohibits discrimination on the basis of age in employment and employee benefits and benefit plans. Without limiting the generality of the release provided above, Employee expressly waives any and all claims under ADEA that he may have as of the date hereof. Employee further understands that by signing this General Release of Claims he is in fact waiving, releasing and forever giving up any claim under the ADEA as well as all other laws within the scope of this paragraph 1 that may have existed on or prior to the date hereof. Notwithstanding anything in this paragraph 1 to the contrary, this General Release of Claims shall not apply to (i) any rights to receive any payments or benefits pursuant to Section 5 of the Agreement, (ii) any rights or claims that may arise as a result of events occurring after the date this General Release of Claims is executed, (iii) any indemnification rights Employee may have as a former officer or director of the Company or its subsidiaries or affiliated companies, (iv) any claims for benefits under any directors’ and officers’ liability policy maintained by the Company or its subsidiaries or affiliated companies in accordance with the terms of such policy, and (v) any rights as a holder of equity securities of the Company.


	Robert F.X. Sillerman


	Date

EX-10.4 12 a2215423zex-10_4.htm EX-10.4

Exhibit 10.4

SFX ENTERTAINMENT, INC.

430 Park Avenue

6th Floor

New York, NY 10022

As of January 1, 2013

Dear Mitchell,

We are delighted to confirm to you that we are offering you the position of Vice Chairman and Member of the Office of the Chairman of SFX Entertainment, Inc. (the “Company”), subject to the terms and conditions set forth herein. Assuming you accept our offer, you will become an employee of the Company commencing with the start date stated in Section 1 hereof. The terms and conditions of your employment with the Company are set forth in this letter agreement (this “Agreement”).

1. Start Date and Term.

(a) Your start date (“Start Date”) will be January 1, 2013.

(b) The term of your employment shall continue for a period of five (5) years from your start date (the “Term”).

(c) Duties. You will be required to perform your duties at the Company’s headquarters in New York City (or wherever else located hereafter) and be expected to travel from time to time. You will report to the Chairman of the Company or such person as he or she shall designate from time to time. You shall devote your time, attention, energy, knowledge, best professional efforts and skills to the duties assigned to you; provided, however, that you may pursue professional endeavors within your areas of expertise and experience to the extent that any such endeavors do not otherwise violate the terms of this Agreement, including, without limitation, any non-competition or non-solicitation provisions contained herein or therein, or otherwise interfere with or impinge upon the performance of your duties as set forth in this Agreement. The Board may, at any time and in its sole discretion, require that you shall immediately cease engaging in any and all such professional endeavors as described in the preceding sentence if it reasonably determines you are violating your Agreement. Notwithstanding anything contained in this Agreement, the Company acknowledges and agrees that you shall be entitled to continue to participate in the investments and activities set forth in Schedule A attached hereto. In connection therewith, you agree to provide, when requested by the Company, a reasonable estimate of the allocation of your time spent in furtherance of such activities.

2. To the extent that the Board requires you to serve in capacities other than as Vice Chairman and Member of the Office of the Chairman, but still relating to the responsibilities attendant to such position, you shall accept such responsibilities. Whether you serve in one capacity or several capacities, the compensation to which you will be entitled for doing so is set forth in Section 3 of this Agreement.

3. Compensation.

(a) Base Salary. In consideration for the performance of your services hereunder, you will be paid a base salary at the annual rate of $1.00 (“Base Salary”), payable in accordance with the Company’s normal payroll practices and subject to applicable tax and payroll withholdings and deductions. Currently, the Company’s payroll is payable on the fifteenth and the last day of each month. As an exempt employee, you will not be eligible for overtime pay.

(c) Option Grants: Subject to approval by the Company’s Compensation Committee, which is anticipated to occur no later than ninety (90) days after the Start Date, you shall receive an initial grant of 1,000,000 stock options at a strike price of $2.00 per share. The terms and conditions applicable to these options shall be no worse than those applicable to any other option grant to the CEO or President of the Company within 12 months of the date hereof.

(i) This award is part of our Company-wide stock option plan. Company-wide consideration of additional options (including any annual option grants) will be done annually and you will be considered for additional awards as part of that process. All additional awards, and the terms and conditions thereof, are made at the sole discretion of the Company and its Compensation Committee.

(ii) The stock option grants will vest and become exercisable ratably annually in arrears over five (5) years, with 20% vesting on signing and 20% on each of December 31, 2013, and December 31 of each year of the following three (3) years.

(d) Additional Grants: You shall also be entitled to qualify for additional equity or option grants each year.

4. Benefits. Subject to the eligibility requirements and other terms and conditions of the respective plan documents, you will be entitled to participate in benefits offered by the

Company for similarly situated employees of the Company, as may be in effect or modified from time to time. Furthermore, you are currently entitled to three (3) weeks of paid vacation time per calendar year (such vacation days to be prorated based on the date you commence employment with the Company) in accordance with, and subject to, the Company’s vacation policy, as it may change from time to time, with the timing of any such vacation to be agreed upon. You will be entitled to reimbursement of travel and other business expenses in accordance with the Company’s guidelines commensurate with your level of compensation and responsibility.

5. Severance.

(i) You shall receive the Termination Payments (as defined in Section 5(b) below);

(ii) You shall also be paid a lump sum of Two Million Dollars ($2,000,000.00) by the Company, which shall be paid as soon as practicable but not later than sixty (60) days following such termination date (the “Post Termination Salary Payment”);

(iii) You shall also be paid a pro-rated annual bonus, in a lump sum by the Company, which shall be paid as soon as practicable but not later than sixty (60) days following such termination date, in an amount equal to the prior year’s bonus, if any; and

(iv) Any stock options and/or restricted stock previously granted under Sections 3(c) and/or 3(d) of this Agreement shall vest as follows:

(A) If termination is by the Company without Cause or by you for Constructive Termination without Cause or due to your Death or Disability, or the Company elects not to renew your employment at the end of the Term, or if there is a Change of Control (as hereinafter defined) (1) in the case of such a termination, all unvested stock options and/or restricted stock granted to you that are scheduled to vest during or at the end of the Term shall vest as of the date of termination and (2) in the case of an election by the Company not to renew your employment, all unvested stock options and/or restricted stock granted to you shall vest; or

(b) In the event you voluntarily terminate your employment for any reason or your employment is terminated by the Company for Cause (as defined in Section 5(c) below), you shall be paid, as soon as practicable but no later than sixty (60) days following such termination, (i) all earned but unpaid Base Salary through the date of termination; (ii) any previously awarded and unpaid bonus; and (iii) all unpaid reimbursable expenses incurred by you through the date of termination (the “Termination Payments”). In the event your employment is terminated for Cause, you shall have no further obligation or liability to the

Company in connection with the performance of this agreement (except the continuing obligations specified in Sections 7, 8 and 10 of this Agreement).

(i) falsified or omitted information as required by Section 11 of this Agreement

(iii) engaged in any intentional act of fraud against the Company;

(iv) engaged in willful malfeasance or gross negligence in the performance of this Agreement or in your capacity as an employee of the Company;

(v) refused to perform the duties required or requested consistent with your obligations under this Agreement and under law;

(vi) been convicted of a felony or entering a plea of nolo contendre to a felony charge;

(vii) materially breached this Agreement, subject to a five (5) day cure period following the Company’s written notice of such breach to the extent such breach is curable;

(i) any material diminution in your authority, duties or responsibilities as Executive Vice President;

(ii) a material breach by the Company of this Agreement;

to fulfill its obligations under this Agreement within thirty (30) days after written notice thereof from you to the Company; or

(iv) relocating your principal place of work outside of the Tri-State New York Metropolitan area.

(e) “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i) any “person” (as such term is used in Section 13(d) and Section 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (an “Exchange Act Person”) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than thirty-five percent (35%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction, provided that, notwithstanding the foregoing, a Change in Control shall not be deemed to occur (1) if Robert F.X. Sillerman or affiliates of his (a “Sillerman Controlled Entity”) beneficially own more than such thirty-five percent (35%) at any time; or (2) solely because the level of ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided further that if a Change in Control would occur (but for the operation of this proviso) as a result of the acquisition of voting securities by the Company, and after such share acquisition, any such Subject Person (so long as not a Sillerman Controlled Entity) becomes the owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities owned by such Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur;

(iii) there is consummated a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries to an entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in

substantially the same proportion as their ownership of the Company immediately prior to such sale, lease, license or other disposition; or

(iv) during any period of 12 consecutive months, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof unless the election, or the nomination for election by stockholders, of each new director was approved by a vote of at least a majority of the directors then still in office who were directors at the beginning of the period.

(g) The Company will provide the following post-termination health and dental benefits under the circumstances outlined below:

(ii) In the event the Company terminates your employment without Cause (other than due to Disability or death), or there is a Constructive Termination without Cause, or in the event of a Change of Control, a continuation of the health and dental benefits provided to you and your covered dependents under the Company’s health and dental plans as in effect from time to time (except that if providing any such benefit under the terms of a plan would cause an adverse tax effect, the Company may provide you with equivalent cash payments outside of the plan at the same time the benefits would otherwise have been taxable to you) for a period of two (2) months following such termination, with no additional cost or charge payable by you.

6. Compliance with Policies and Procedures. You agree to be bound by and to comply fully with all of the Company’s policies and procedures for employees.

7. Confidentiality.

9. Section 409A.

10. Restrictive Covenants.

(a) During the Term and for a period of one (1) year after termination of your employment hereunder you shall not, directly or indirectly, (i) solicit, induce or cause any individual or entity with whom the Company had a business relationship to reduce or terminate such Person’s business relationship with the Company or any of its affiliates or its successors or assigns; and you shall not, directly or indirectly, approach any such individual or entity for any such purpose, or authorize or assist in the taking of any of such actions for any such purpose or authorize or assist in the taking of any such actions by any individual or entity, (ii) engage in any Restricted Activity, (iii) acquire, or own in any manner, any interest in any entity that engages in any Restricted Activity, or that engages in any business, activity or enterprise that directly competes with the Restricted Activity, or (iv) be interested in (whether as an owner, director, officer, partner, member, manager, joint venturer, lender, shareholder, vendor, consultant, employee, advisor, agent, independent contractor or otherwise), or otherwise participate in the management or operation of, any entity that engages in any Restricted Activity or in any business, activity or enterprise that directly competes with the Restricted Activity; provided, however, that this Section 10(a) shall not apply to the ownership of less than five percent (5%) of the outstanding stock of any Person who has a class of securities that is publicly traded.

solicit, persuade or encourage), or cause or authorize any other individual or entity to induce, solicit, persuade or encourage, any individual or entity to cease, diminish or not commence doing business with the Company or any successor or affiliate thereof or (iv) disparage the Company or any successor or affiliate thereof or the business in which the Company is engaged to any individual or entity.

(c) For purposes of this Section 10, the term “Restricted Activity” means any activity that is, or would reasonably be deemed to be, competitive with (i) any aspect of the business in which the Company is engaged (1) as operated on the date of this Agreement or (2) as contemplated by the Company to be operated in the future as of the date of this Agreement, in each case, anywhere in the world where the Company’s business may be conducted from time to time, or (ii) any business in which the Company and/or any of its affiliates are engaged in or has plans to engage in as of the date of termination of your employment hereunder.

14. Miscellaneous.

(e) This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving reference to the principles of conflicts of laws or where the parties are located at the time a dispute arises. Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in New York City before a single arbitrator. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. Judgment on the Award may be entered in any court having jurisdiction. This clause shall not preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction. Notwithstanding the foregoing, any action or proceeding initiated by the Company seeking any form of injunctive relief for a breach by you of any of Sections 7, 8 or 10 of this Agreement, including, without limitation, specific performance, shall be brought against you in the courts of the State of New York or, if the Company has or can acquire jurisdiction, in the United States District Court for the Southern District of New York (collectively, the “Courts”), and each party consents to the jurisdiction of the Courts in any such action or proceeding, and each party waives any objection to venue laid therein.

Signatures on following page


		Sincerely,


		/s/ Robert F.X. Sillerman
		Chief Executive Officer
		SFX Entertainment, Inc.


*Acknowledged and Agreed to:*


/s/ Mitchell Slater

Name:	Mitchell Slater

Date:	3/5/2013

SCHEDULE A

PERMITTED ACTIVITIES

1. Investment in Broadway production of “Diner”.

2. Owner of a golf ball manufacturing company.

3. Partner in fitness management company.

4. Partner in financial analytical tool.

5. Producer of sports documentary film on the NCAA.

SCHEDULE B

FORM OF RELEASE

FORM OF RELEASE

GENERAL RELEASE OF CLAIMS



			, 20

EX-10.5 13 a2215423zex-10_5.htm EX-10.5

Exhitbit 10.5

SFX HOLDING CORPORATION

650 Madison Avenue

15th Floor

New York, NY 10022

October 2, 2012

Dear Richard,

We are delighted to confirm to you that we are offering you the position of Executive Vice President, Head of Corporate Strategy and Development at SFX Holding Corporation (“SFX” or the “Company”), subject to the terms and conditions set forth herein. Assuming you accept our offer, you will become an employee commencing with the start date stated in Section 1 of this letter. The terms and conditions of your employment with SFX are set forth in this letter. This offer is subject to the satisfactory completion of the conditions set forth in Section 14(a) of this letter and signing an employment agreement in the form used by the Company.

1. Start Date. Your date of hire will be on or before October 2, 2012.

2. Duties. You will work in New York, New York and report to the Chief Executive Officer, and indirectly to the Executive Chairman upon his request. You shall devote your full time, attention, energy, knowledge, best professional efforts and skills to the duties assigned to you, however, the Company acknowledges and agrees that during the Term:

(a) You may continue or commence service as a director and officer (or in a similar capacity) on the governing or advisory board of other business entities whose business is not competitive with that of the Company or any of its subsidiaries and shall not involve a time commitment which shall impair your ability to perform the duties required hereunder;

(b) Nothing in this Section applies to your membership or contribution of your non-working time or services, in a non-remunerative capacity, to any: charitable or educational organization, foundation, or association; political organization or campaign; religious group, foundation, or organization; non-profit trade, professional, community, or recreational organization or club, or part-time teaching, so long as the purpose or aim of any such organization presents no conflict with the business of the Company or any of its subsidiaries, as determined by the Board.

(c) During the Term, you may devote a portion of your business time to personal investments and outside business commitments, provided, however that: (i) such activities do not conflict with the business of the Company or any of its subsidiaries, (ii) such activities do not interfere, directly or indirectly, with the performance your obligations under this agreement, and (iii) such activities do not result in a breach by the Company of any non-competition or any other similar type of agreement to which the Company or any of its subsidiaries may be a party.

(d) No provision of this agreement shall be construed to prohibit your: (i) acquisition, ownership, or trading, including without limitation your indirect ownership, of less than two percent (2%) of the issued and outstanding stock (or comparable bonds, options, derivatives, or negotiable instruments) of a business entity having securities publicly traded anywhere in the world, provided,

however, that the ownership limitations of this clause (i) shall not apply to (x) your ownership of any such securities through an open-end mutual fund or (y) your ownership of any such securities that precedes the Effective Date if, but only if, the issuer of the securities is not a competitor of the Company; or (ii) passive ownership of stock, partnership interests, or comparable ownership interests or securities in any for-profit private business entity that is not directly competitive with the business of the Company or any of its subsidiaries or (iii) compensation relating to any other position you may have on a Board of Directors of any company on which he may serve as permitted under this Section. The Company additionally agrees that nothing in this agreement shall operate to prohibit your acceptance of a testamentary gift, bequest, or its equivalent, or your retention of any such gift, bequest, or its equivalent following its delivery, so long as you retain the interest(s) solely for investment purposes.

3. Term: Five (5) years (the “Initial Term”), with an additional five (5) year term (the “Renewal Term”) if mutually agreed upon.

4. Compensation.

(a) Base Salary. In consideration for the performance of your services hereunder, you will be paid a base salary at the annual rate of Three Hundred Thousand Dollars ($300,000.00) (“Base Salary”), payable in accordance with the Company’s normal payroll practices and subject to applicable tax and payroll withholdings and deductions. Currently, the Company’s payroll is payable on the fifteenth and the last day of each month. As an exempt employee, you will not be eligible for overtime pay.

(b) Discretionary Bonus. You may also be eligible to receive a discretionary cash bonus, the existence and amount of which is determined in the sole discretion of the Company. Unless expressly and specifically agreed to in writing, no bonus compensation will be earned, paid or awarded unless you are in the continuous employment of the Company through the date of payment. Your minimum target bonus will be One Hundred Fifty Thousand Dollars ($150,000.00).

(c) Option Grants: If and when a Company-wide stock option plan is adopted by the Company’s Compensation Committee, you shall receive a minimum grant of One Hundred Thousand (100,000) stock options (“Sign On Options”) for the first year of your employment and a minimum grant of One Hundred Thousand (100,000) stock options for at the beginning of each subsequent year of the Initial Term.

(i) The number of options granted to you may be increased in the discretion of the Compensation Committee as part of the annual process for reviewing and granting stock option awards at any time after a Company-wide stock option plan is adopted by the Compensation Committee.

(ii) The strike price for the initial and additional options will be fixed by the Compensation Committee, but it is likely to be based on the fair market value of the Company’s common stock at the time of the grant; provided that the initial

(iii) The initial and annual stock options are anticipated to vest annually in arrears, at the end of the year in which granted. Any additional discretionary stock options shall vest in accordance with the Compensation Committee determination. The Sign On Options exercise price shall be confirmed at the time of signing this letter.

5. Benefits. Subject to the eligibility requirements and other terms and conditions of the respective plan documents, you shall be eligible to participate in benefits offered by the Company, as may

be in effect or modified from time to time, for senior executives of the Company. Furthermore, you are currently eligible for three (3) weeks of paid vacation time per calendar year (such vacation days to be prorated based on the date you commence employment with the Company) in accordance with, and subject to, the Company’s vacation policy, as it may change from time to time.

6. Severance.

(a) In the event your employment is terminated due to your death, Disability (as defined in Section 6(e) below) or is terminated by the Company without Cause (as defined in Section 6(c) below), or in the event there is a Change of Control (as defined in Section 6(d) below):

(i) You shall receive the Termination Payments (as defined in Section 6(b) below);

(ii) You shall also be paid a lump sum by the Company, which shall be paid as soon as practicable but not later than thirty (30) days following such termination date, equal to the Base Salary in effect on the date of termination for a six (6) month period following such termination (the “Post Termination Salary Payment”).

(iii) Any stock options previously granted under Section 3(c) of this letter agreement shall vest.

(b) In the event you voluntarily terminate your employment or your employment is terminated by the Company for Cause (as defined in Section 6(c) below), you shall be paid, as soon as practicable but no later than thirty (30) days following such termination, (i) all earned but unpaid Base Salary through the date of termination; (ii) any previously awarded and unpaid bonus; and (iii) all unpaid reimbursable expenses incurred by you through the date of termination (the “Termination Payments”). In the event your employment is terminated for Cause, you shall have no further obligation or liability to the Company in connection with the performance of this agreement (except the continuing obligations specified in Section 8 and Section 9 of this letter agreement).

(i) falsified or omitted information as required by Section 11 of this letter agreement;

(ii) committed an act which, as set forth in any employment handbook promulgated by the Company, may lead to termination of employment, unless curable, in which case such cure shall not have been completed within five (5) days following the Company’s notice to you;

(iii) engaged in any intentional act of fraud against the Company;

(iv) engaged in willful malfeasance or gross negligence in the performance of this letter agreement or capacity as an employee of the Company;

(v) refused to perform the duties required or requested consistent with your obligations under this letter agreement and under law, which refusal continues for more than five (5) days following the Company’s written notice of such refusal;

(vi) been convicted of a felony or entering a plea of nolo contendre to a felony charge;

(vii) materially breached this letter agreement; or

(viii) engaged in an act which leads to a finding by the Securities and Exchange Commission, which, in the opinion of independent counsel selected by the Company, could reasonably be expected to impair or impede the Company’s ability to register, list, or otherwise offer its stock to the public, or to maintain itself as a publicly-traded company in good standing with the Securities and Exchange Commission.

(d) For the purposes of this letter agreement, “Change of Control” shall mean the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (an “Exchange Act Person”) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than thirty-five percent (35%) of the combined voting power of the Company, then outstanding securities other than by virtue of a merger, consolidation or similar transaction, provided that, notwithstanding the foregoing, a Change in Control shall not be deemed to occur (i) if Robert F.X. Sillerman or affiliates of his (a “Sillerman Controlled Entity”) beneficially own more than such thirty-five percent (35%) at any time; or (ii) solely because the level of ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided further that if a Change in Control would occur (but for the operation of this proviso) as a result of the acquisition of voting securities by the Company, and after such share acquisition, any such Subject Person (so long as not a Sillerman Controlled Entity) becomes the owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities owned by such Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur;

(ii) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company if, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving entity in such merger, consolidation or similar transaction;

(e) For the purposes of this letter agreement, “Disability” shall mean your inability, or failure, to perform the essential functions of your position, with or without reasonable accommodation, for any period of six (6) consecutive months or more, by reason of any medically determinable physical or mental impairment.

(f) The Company will provide the following post-termination health and dental benefits under the circumstances outlined below:

(i) The Company agrees that in the event of the your death during the Term, the Company will pay to your estate the following, which shall be distributed in accordance with the your will or testamentary plan, as directed by any court having jurisdiction over such estate, or as directed by any duly appointed administrator or executor of your estate, the full costs relating to the continuation of any group health and dental plan provided through the Company in which you participated at the time of your death, and through which coverage was provided to any of your dependent(s) at the date of your death, for a period of two (2) months following your death, without regard to the availability or expiration of any continuation option or feature provided by the plan(s), or as otherwise provided to a lesser extent by applicable law at the time of your death.

(ii) In the event the Company terminates your employment without Cause or upon Change of Control, other than due to Disability or death, a continuation of the health and dental benefits provided to you and your covered dependents under the Company’s health and dental plans as in effect from time to time (except that if providing any such benefit under the terms of a plan would cause an adverse tax effect, the Company may provide you with equivalent cash payments outside of the plan at the same time the benefits would otherwise have been taxable to you) for a period of two (2) months following such termination, with no additional cost or charge payable by you.

(g) Notwithstanding the foregoing, if at the time of your Separation from Service (as defined in Treasury Regulation 1.409A-1(h)) you are a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i), any amount or benefits that constitutes “nonqualified deferred compensation” within the meaning of Code Section 409A that becomes payable to you on account of the your Separation from Service will not be paid until after the earlier of (i) first business day of the seventh month following your Separation from Service, or (ii) the date of the your death (the “ 409A Suspension Period “). Within fourteen (14) calendar days after the end of the 409A Suspension Period, you shall be paid a cash lump sum payment equal to any payments (including interest on any such payments), and benefits that the Company would otherwise have been required to provide under this Section 6 but for the imposition of the 409A Suspension Period delayed because of the preceding sentence. Thereafter, you shall receive any remaining payments and benefits due under this agreement in accordance with the terms of this Section (as if there had not been any Suspension Period beforehand).

(h) Notwithstanding any other provision of this agreement, no benefits or amounts shall be payable under this Section 6 unless you execute and deliver a general release of claims in a form and manner reasonably satisfactory to the Company including, but not limited to, a release of any and all claims arising out this agreement and your employment relationship with the Company, and such release has become irrevocable pursuant to its terms (it being understood, however, that in no event will such release expand any of the post-termination restrictions referred to in this Agreement). You shall forfeit all rights to such payments and benefits unless such release is signed and delivered (and no longer subject to revocation, if applicable) within thirty (30) days or such longer period which is provided by law for review and revocation) following the delivery of such release, signed by the Company,

to you. If such release is executed and delivered and no longer subject to revocation as provided in the preceding sentence, then the following shall apply:

(i) To the extent any such cash payment or continuing benefit to be provided is not “deferred compensation” for purposes of Code Section 409A, then such payment or benefit shall commence upon the first scheduled payment date immediately after the date the release is executed and no longer subject to revocation (the “Release Effective Date”). The first such cash payment shall include payment of all amounts that otherwise would have been due prior to the Release Effective Date under the terms of this agreement had such payments commenced immediately upon your termination of employment, and any payments made thereafter shall continue as provided herein. The delayed benefits shall in any event expire at the time such benefits would have expired had such benefits commenced immediately following the termination of your employment.

(j) To the extent any such cash payment or continuing benefit to be provided is “deferred compensation” for purposes of Code Section 409A, then such payments or benefits shall be made or commence upon the sixtieth (60) day following the termination of your employment. The first such cash payment shall include payment of all amounts that otherwise would have been due prior thereto under the terms of this agreement had such payments commenced immediately upon the termination of your employment, and any payments made thereafter shall continue as provided herein. The delayed benefits shall in any event expire at the time such benefits would have expired had such benefits commenced immediately following the termination of your employment.

(k) The Company may provide, in its sole discretion, that you may continue to participate in any benefits delayed, provided that you shall bear the full cost of such benefits during such delay period. Upon the date such benefits would otherwise commence pursuant to this Section 6 hereof, the Company shall reimburse you the Company’s share of the cost of such benefits, to the extent that such costs otherwise would have been paid by the Company or to the extent that such benefits otherwise would have been provided by the Company at no cost to you, in each case had such benefits commenced immediately upon the termination of your employment. Any remaining benefits shall be reimbursed or provided by the Company in accordance with the schedule and procedures specified herein.

7. Compliance with Policies and Procedures. You agree to be bound by and to comply fully with all Company policies and procedures for employees.

8. Confidentiality.

memoranda, notes, records, reports, and other documents (including electronically stored information) relating to the Company’s business which you obtained while employed by, or otherwise serving or acting on behalf of, the Company and which you may then possess or have under your control. You acknowledge that the disclosure of Confidential Information would have a material adverse effect on the operations and development of the business of the Company. Therefore, you agree that in the event of your failure to comply with the provisions of this Section 8(a) the Company shall be entitled to the entry of an injunction or other equitable relief and you shall not object to such injunction or equitable relief on the basis of an adequate remedy at law or other reason. This remedy shall be in addition to any other remedies available to the Company.

(b) You agree not to disclose the terms of this letter to anyone except your immediate family and your tax advisors or legal counsel, prospective employers (but with disclosure limited to terms relating to your post-employment restrictions under this letter), pursuant to a court or similar order, or in connection with any proceeding to enforce your rights under this letter or any other agreement between you and the Company, except as otherwise required by law.

9. Company Work Product. You acknowledge and agree that all of the ideas, concepts, inventions and work product rendered or provided by you during the term of your employment which directly or indirectly relate to the Company’s business, whether alone or in conjunction with others (collectively, and without limitation, the “Company Work Product”), whether created at home or at the office and whether or not created during normal business hours, shall (a) be the sole and exclusive property of the Company and you shall not have any right, title or interest therein and (b) constitute “works made for hire” under all applicable copyright, trademark, and similar or related statutes, regulations, or decisional law. In furtherance of the foregoing, you hereby assign to the Company all of your rights, title, and interest, whether choate or inchoate or whole or partial, in any Company Work Product created, developed, or discovered by you during the term of your employment. You further agree to cooperate fully and promptly with, and otherwise facilitate, any efforts by the Company to vest in the Company all rights, title and interest in and to the Company Work Product and to register, preserve, and protect the Company Work Product from use by others, or from dilution or diminution. You agree to execute and deliver any and all documents, agreements and instruments to evidence the rights of the Company in the Company Work Product as provided in this Section 9. You hereby irrevocably name the Company as your attorney-in-fact, and irrevocably grant to the Company a power of attorney to execute and deliver any and all documents, agreements and instruments in your name as may be reasonably required to give effect to this Section 9; provided, that this power of attorney shall be exercised only with respect to any document, agreement or instrument that you fail to execute and deliver after five days written request by the Company. The rights granted to the Company in this Section 9 shall continue in effect after the termination or expiration of your employment term to the extent necessary for the Company’s full enjoyment of such rights.

10. Restrictive Covenants.

(a) During the Term and for a period of one (1) year after termination of your employment hereunder, you shall not engage, whether directly or indirectly, through a sole proprietorship, or as an employee, officer, consultant, director, manager, managing member, stockholder, limited partner, general partner, trustee or member of any corporation, general partnership, limited partnership, trust, limited liability company or any other entity, in any business which is directly competitive with the Company’s Business. For purposes of this Section 10, the term “Business” shall mean (x) any business in which the Company is actually engaged as of the termination date of your employment or (y) any business in which, as of the termination date of your employment, the Company, with your knowledge and/or participation, is actively planning on becoming engaged during within the ensuing twelve (12) months from the termination date of your employment.

(b) During the Term and for a period of one (1) year after termination of your employment hereunder, you shall not:

(i) Request, induce or attempt to influence any person or entity who is or was a client, customer, contractor or supplier of the Company to limit, curtail or cancel its business with the Company; or

(ii) Request, induce, or attempt to influence any current or future officer, director, employee, consultant, agent or representative of the Company to: (A) terminate his, her, or its employment or business relationship with the Company; or (B) commit any act that, if committed by you, would constitute a breach of any term or provision of this Section 10.

11. Background Information. As more fully described on the following pages, the Company may conduct a background check, which may include a “consumer report” and/or an “investigative consumer report” prepared by SFX or by a third party. These reports may be obtained at any time after receipt of your authorization and, if you are hired, throughout your employment. Falsification or omission of any information previously provided to the Company or provided to the Company on the attached release may disqualify you for employment or result in your immediate dismissal, if hired. Your rights relating to this background check are more fully set forth on the attached release.

12. Representations. You represent, warrant and covenant to the Company that you are free to execute this letter and provide the services contemplated hereunder and the engagement hereunder does not conflict with or violate, and will not be restricted by any pre-existing business relationship or agreement to which you are a party or are otherwise bound. Without limiting the foregoing, you further represent, warrant and covenant to the Company that you are under no contractual commitments, including without limitation, any confidentiality, proprietary rights, non-solicitation, non-competition agreement or similar type of restrictive covenant agreement, inconsistent with your obligations to the Company and that you will not at any time during the course of your employment by the Company violate and/or breach any obligation or contractual/common law commitment that you may have to a third party or prior employer.

13. Superseding of Prior Understandings or Agreements; No Employment or Compensation Guarantees or Other Modifications Except as Provided Herein. You acknowledge that you have not relied on any oral or written representations or understandings not explicitly contained herein in executing this letter. This document supersedes any and all oral or written understandings or agreements regarding your employment with the Company or any of its affiliates. No employee or representative of the Company, other than in a writing signed by an authorized officer of the Company, may enter into any agreement or understanding (a) guaranteeing you employment with the Company for any specific duration, (b) providing you with a guaranteed level of compensation with the Company, whether incentive compensation, severance pay or otherwise, or (c) otherwise modifying the terms of this letter.

14. Miscellaneous.

(a) This offer is subject to the satisfactory completion of the Company’s standard drug, background and reference screening, authorization of your right to work in the United States, and the absence of any non-competition agreement or other restrictions that would prohibit or interfere with your working for the Company.

(b) If any provision of this letter is or becomes invalid, illegal or unenforceable in any respect under the law, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired.

(c) This letter shall be governed by and construed in accordance with the laws of the State of New York, without giving reference to the principles of conflicts of laws or where the parties are located at the time a dispute arises. Any controversy, dispute or claim arising out of or relating to this agreement or breach thereof shall first be submitted to mediation in New York City administered by JAMS. If the parties are unsuccessful at resolving the dispute through mediation, the parties agree to binding arbitration in New York City administered by JAMS pursuant to its Streamlined Arbitration Rules and Procedures. The arbitrator shall award to the prevailing party, if any, the costs and attorneys’ fees reasonably incurred by the prevailing party in connection with the arbitration. The parties shall maintain the confidential nature of the mediation and arbitration proceedings, and the award, unless otherwise required by law or judicial decision. Judgment on the award may be entered in any court having jurisdiction.

We look forward to you joining the Company. If the terms of this letter are acceptable to you and you are ready, willing and able to abide by all the conditions enumerated herein, please sign and date this letter below and return it to me.

		Sincerely,


		/s/ Robert F.X. Sillerman
		Robert F.X. Sillerman
		Chairman

*Acknowledged and Agreed to:*

/s/ Richard Rosenstein
Name:	Richard Rosenstein
Date:	10/2/2012

EX-10.6 14 a2215423zex-10_6.htm EX-10.6

Exhibit 10.6

SFX Entertainment Inc.

650 Madison Avenue, 15th Floor

New York, New York 10022

SUBSCRIPTION AGREEMENT

Gordon Crawford

c/o Capital Research & Management

333 South Hope Street, 55th Floor

Los Angeles, CA 90071

Mr. Crawford:

SFX Entertainment Inc., a Delaware corporation (the “Company”), is hereby privately offering 500,000 shares (the “Shares”) of common stock, $0.001 par value per share, of the Company (the “Common Stock”) at an aggregate purchase price of $2,500,000 (the “Purchase Price”) to the undersigned, in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), provided by Rule 506 of Regulation D under the Securities Act.

The Company will use the proceeds from this offering (this “Offering”) to fund its short-term working capital requirements in order to develop (initially through acquisitions) a live entertainment enterprise engaged in production and marketing of electronic dance music, live music, sporting, and other entertainment events around the world (the “Business”) and to pay expenses incurred in connection therewith. The Company, through the efforts of Robert F.X. Sillerman, its Chairman, has been negotiating with the owners of various companies in the Business for the acquisition of all or a portion of their businesses (such businesses, the “Targets”) and will use a portion of the proceeds of this Offering, together with additional funds anticipated to be raised, to acquire such Targets.

1. Subscription. Subject to the terms and conditions of this subscription agreement (“Subscription Agreement”), the undersigned (including its permitted assignees (to the extent applicable), “Purchaser”) hereby agrees to be legally bound to purchase the Shares subscribed for hereunder, and upon written notice from the Company, subject to the terms of this Subscription Agreement, Purchaser and the Company shall hold a closing (the “Closing”) at which Purchaser shall fulfill its subscription by paying the Purchase Price by wire transfer in immediately available funds to an account designated by the Company as consideration for the issuance by the Company of the Shares. Original certificates reflecting the Shares shall be provided to Purchaser following the Closing.

2. Conditions to Subscription. Subject to other applicable provisions of this Subscription Agreement (including without limitation Sections 5, 11, and 18 hereof), Purchaser understands and agrees that this subscription is made subject to the following terms and conditions:

(a) This subscription shall be deemed to be accepted by the Company only when it is signed by the Company;

(b) Subscriber may not revoke, cancel or terminate this subscription unless the Company cancels or terminates the Offering; and

(c) Subscriber has executed and delivered this Subscription Agreement and hereby agrees to tender the Purchase Price at Closing in accordance with the terms hereof.

If this subscription is rejected by the Company in its sole and absolute discretion or because the Company terminates or cancels the Offering, this Subscription Agreement shall thereafter be of no further force or effect.

3. Representations and Warranties of Purchaser. Purchaser hereby represents and warrants to, and agrees with, the Company as of (i) the date Purchaser executes this Subscription Agreement and (ii) as of the Closing Date (as hereinafter defined), as follows:

(a) (i) Purchaser has received and has read and fully understands this Subscription Agreement.

(ii) Purchaser or its advisor(s) have had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Company concerning the

Confidential Treatment Requested. Confidential portions of this document have been redacted have been separately filed with the Commission.

Company and the Offering and all such questions have been answered to the full satisfaction of Purchaser.

(iii) No oral or written representations have been made other than as stated in this Subscription Agreement.

(iv) Purchaser has such knowledge and experience in financial, tax and business matters so as to enable it to utilize the information made available to it in connection with the Offering, to evaluate the merits and risks of an investment in the Shares and to make an informed decision with respect thereto; Purchaser acknowledges that there is a significant risk of loss of all or a portion of Purchaser’s investment in the Shares.

(v) Purchaser is not subscribing for the Shares pursuant to a general solicitation or general advertisement by the Company.

(b) Purchaser is an “accredited investor” within the meaning of Rule 501(a), as promulgated under the Securities Act, because Purchaser (i) had individual income (exclusive of any income attributable to Purchaser’s spouse) of more than $200,000 in each of the most recent two years or joint income with Purchaser’s spouse in excess of $300,000 in each of such years and reasonably expects to have income of at least the same level for the current year, or (ii) has an individual net worth, or a combined net worth with Purchaser’s spouse, in excess of $1,000,000. For purposes of this Subscription Agreement, “individual net worth” means the excess of total assets at fair market value, including personal property and real estate, cash, short-term investments, stock and securities, over total liabilities; provided, that the fair market value of such person’s primary residence is excluded from the calculation of net worth and, if the amount of the debt or other indebtedness secured by such person’s primary residence exceeds its fair market value, such excess liability must be deducted from such person’s net worth. Purchaser must also include as a liability any increase in the amount of debt secured by Purchaser’s primary residence incurred within 60 days prior to the date of Purchaser’s subscription hereunder unless such debt is incurred in connection with the acquisition of the primary residence.

(c) Purchaser’s overall commitment to investments which are not readily marketable is not excessive in relation to its net worth.

(d) (A) Purchaser has all requisite power and authority to execute and deliver this Subscription Agreement, (B) the execution and delivery by Purchaser of this Subscription Agreement and the performance by it of its obligations hereunder have been duly authorized by all necessary action of Purchaser, (C) this Subscription Agreement has been duly and validly executed and delivered by Purchaser and constitutes legal, valid and binding obligations of Purchaser, and (D) this Subscription Agreement is enforceable against Purchaser in accordance with its terms, subject as to enforcement of remedies to applicable bankruptcy, insolvency, reorganization or similar laws affecting generally the enforcement of creditors’ rights and the relief of debtors.

(e) Purchaser acknowledges and understands that an investment in the Company will involve substantial risks. Purchaser further acknowledges and understands that the following list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in an investment in the Company and additional risks or uncertainties may adversely affect the Company or the value of an investment in the Company:

(i) Mr. Robert F.X. Sillerman, as the beneficial owner of a majority of the Company’s outstanding Common Stock, is the controlling stockholder of the Company and has the ability to exert significant control over the Company’s management and affairs requiring stockholder approval, including the approval of significant corporate transactions and the ability to elect and remove directors.

(ii) The Company is a development stage company and its prior operating history will not be germane to future operations. The Company’s prospects must be evaluated in light of

the risks and uncertainties frequently encountered by a company in the early stage of development. The Business in which the Company intends to operate is highly competitive and makes these risks and certainties particularly pronounced. The Company may not succeed in developing a viable business and may never become profitable.

(iii) The Company has significant capital requirements to develop its business and will need to raise additional capital for the foreseeable future, which may occur through equity and/or debt financings. There can be no assurance that the Company will be able to raise such capital when needed or on terms and conditions acceptable to the Company, or at all. To the extent the Company raises additional capital by issuing equity securities, but subject to Section 6, the Company’s stockholders will experience dilution in their ownership of the Common Stock of the Company.

(iv) At Closing, the Company will initially acquire various businesses in the Business with whom it has been negotiating, after which the Registration Statement will be submitted to the Securities and Exchange Commission on Form S-1 to register for resale the Shares purchased by the Subscriber, together with those shares of Common Stock of other investors or businesses acquired for which shares of the Company’s Common Stock are given as consideration and any shares of Common Stock offered for sale by the Company. Except as set forth herein, there are no assurances as to the timing of the effectiveness of the Registration Statement.

(v) The loss of the services of Mr. Sillerman or one or more key members of management or other key employees of the Company could have a material adverse effect upon the Company’s business, operating results or financial condition. In addition, the future success of the Company will depend in large part upon its ability to attract and retain additional management and personnel. There can be no assurance that the Company will be successful in attracting and retaining such personnel, and the failure to do so would have a material adverse effect on the Company’s business, operating results and financial condition.

(vi) The Shares are “restricted securities” as defined in Rule 144 under the Securities Act and have not been registered under the Securities Act or any state securities laws. The Shares are highly illiquid. Until the Registration Statement is declared effective, the Shares to be issued will not be registered under the Securities Act or any state securities laws and, thus, will not be freely tradable or eligible for resale, unless an exemption from the registration requirements of the Securities Act, including Rule 144, is available. Purchaser will not be able to rely on Rule 144 to sell the Shares unless the sale complies with the conditions of that rule, including satisfaction of Purchaser’s holding period. An active public market for the Company’s Common Stock may not develop or be sustained. In addition, the number of unrestricted shares of the Company in the public float may represent only a small percentage of the shares of Company Common Stock outstanding.

(vii) The Company does not anticipate paying dividends on its Common Stock in the foreseeable future. In addition, the terms of future debt financings may prohibit the payment of cash dividends on the Common Stock.

(f) Purchaser acknowledges (to the extent applicable):

(i) Purchaser, if executing this Subscription Agreement in a representative or fiduciary capacity, has full power and authority to execute and deliver this Subscription Agreement and in such capacity and on behalf of the subscribing individual, ward, partnership, trust, estate, corporation, or other entity for whom Purchaser is executing this Subscription Agreement, and such individual, ward, partnership, trust, estate, corporation, or other entity has full right and power to perform pursuant to this Subscription Agreement and make an investment in the Company;

(ii) Purchaser consents to the placement of the following legend on any certificate or other document evidencing the Shares:

THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND HAVE BEEN SOLD IN RELIANCE UPON EXEMPTIONS THEREFROM. THESE SECURITIES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING THESE SECURITIES UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM.

(iii) The representations, warranties, and agreements of Purchaser contained herein shall survive the execution and delivery of this Subscription Agreement and the purchase of the Shares; and

(iv) In connection with any Transfer (as hereinafter defined) or attempted Transfer of Shares pursuant to an exemption from the registration requirements of the Act, the Company shall be permitted to require in its sole discretion an opinion of counsel reasonably satisfactory to the Company that such Transfer is exempt from registration.

4. Representations and Warranties of the Company. The Company hereby represents and warrants to, and agrees with, Purchaser as of (i) the date the Company executes this Subscription Agreement and (ii) as of the date of the Closing (the “Closing Date”), as follows:

(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to conduct its business as currently conducted.

(b) The Company has all requisite power and authority to execute, deliver and perform this Subscription Agreement and to carry out and consummate the transactions contemplated hereby. The execution, delivery and performance of this Subscription Agreement by the Company has been duly authorized by all requisite corporate action, and this Subscription Agreement has been duly executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject as to enforcement of remedies to applicable bankruptcy, insolvency, reorganization or similar laws affecting generally the enforcement of creditors’ rights and the relief of debtors.

(c) The execution, delivery and performance of this Subscription Agreement by the Company will not violate, conflict with, result in any breach of, result in the creation of any lien, security interest, charge or encumbrance upon any of the properties, assets or outstanding shares of the Company or constitute a default under, any provision of law, any rule or regulation of any governmental authority, any judgment, decree or order of any court binding on the Company, or any of the unwaived terms, conditions or provisions under its Certificate of Incorporation or By Laws or any indenture, mortgage, lease, agreement or other instrument to which the Company is a party or by which it or any of its properties is bound or affected.

(d) The Shares, when so issued, sold and delivered against payment therefor in accordance with the provisions of this Subscription Agreement, will be duly and validly issued, fully paid and nonassessable. The authorized capital stock of the Company consists of 300,000,000 shares of Common Stock. As of the Closing Date (but not including the Shares or any shares issued in the acquisitions of Targets or to other investors on or prior to such Closing Date), there will be 40,000,000 shares of Common Stock issued and outstanding and such shares have been duly and validly issued and are fully paid and nonassessable.

(e) Neither the Company nor anyone acting on behalf of the Company has engaged in any general advertising or solicitation in contravention of the Securities Act for the offer and sale of the Shares or any other shares of Common Stock. Assuming the accuracy of Purchaser’s representations contained in this Subscription Agreement, the offer, sale, issuance and delivery of the Shares are exempt from registration under the Securities Act and all action required to be taken prior to the offer or sale of the Shares has been taken under applicable state securities laws.

(f) The Company was formed for the purpose of acquiring the Targets and to operate in such related businesses and, prior to the acquisition of any Targets, had no operating history and has incurred no material liabilities other than in connection with financing and consummating the acquisition of the Targets.

(g) The Company is in material compliance with all laws, ordinances, and rules and regulations of governmental authorities applicable to or affecting it, its properties or its business, and the Company has not received notice of any claimed violation or default with respect to any of the foregoing which would reasonably be expected to have a material adverse effect on the Company.

(h) The operations of the Company are, and have been conducted at all times, in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened. Neither the Company nor, to the knowledge of the Company, any of its current officers, has on behalf of the Company or in connection with its business: (a) made any direct or indirect unlawful payments to any governmental officials or employees from corporate funds; or (b) violated or is in violation of in any material respect any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended.

(i) The representations, warranties, and agreements of Company contained herein shall survive the execution and delivery of this Subscription Agreement and the sale of the Shares.

5. Conditions to the Obligations of Purchaser. The obligation of Purchaser to purchase Shares at the Closing is subject to the fulfillment, or the waiver by Purchaser, of the following conditions on or before the Closing:

(a) Each representation and warranty contained in Section 4 shall be true and complete on and as of the Closing Date with the same effect as though such representation and warranty had been made on and as of that date.

(b) The Company shall have delivered to Purchaser a certificate, executed by the Chief Executive Officer of the Company, dated the Closing Date, certifying to the fulfillment of the conditions specified in Section 5(a) of this Subscription Agreement.

(c) All registrations, qualifications, permits and approvals required under applicable state and Federal securities laws for the lawful execution and delivery of this Agreement and the offer, sale, issuance and delivery of the Shares shall have been obtained, except for the notices required or permitted to be filed after the Closing with certain Federal and state securities commissions, which notices the Company will file on a timely basis.

(d) The Company will have acquired or will acquire on the Closing Date one or more Targets.

6. Affirmative Covenants of the Company. The Company covenants and agrees that, beginning upon the date the Company executes this Subscription Agreement and ceasing immediately prior to the time the Securities and Exchange Commission (“SEC”) declares effective a registration statement on Form S-1 (the “Registration Statement”) which registers the resale of the Company’s Common Stock or the sale by the Company of its Common Stock, in each case, including without limitation, the Shares (in either event, an “IPO”), the Company shall:

(a) Use its reasonable best efforts to acquire by August 15, 2012 Targets with a purchase price based on commercially reasonable multiples under current market conditions using a combination of cash and shares of Common Stock.

(b) Not issue shares of Common Stock or a derivative security containing a right to purchase Common Stock at a price per share that implies a valuation of the Company of less than $250,000,000.

(c) (i) Submit a registration statement to the SEC for its IPO by August 15, 2012, (ii) use its reasonable best efforts to have such registration statement declared effective under the Securities Act as soon as practicable thereafter, and (iii) use its reasonable best efforts to qualify as an “emerging growth company”. The Company covenants that such registration statement shall seek to register for resale some or all shares that are held by the Company’s shareholders (including the Shares issued to Purchaser). The Company further covenants it shall use its commercially reasonable efforts to include in such registration statement all shares requested to be included by Non-management Holders (as hereinafter defined) as is practicable, subject to market conditions.

Any and all fees, costs and expenses incident to the registration and the IPO shall be borne by the Company. If the managing underwriter in the IPO advises the Company in writing that in its opinion, the shares of Common Stock proposed to be included in the registration exceeds the number of shares that can be sold in such offering, the Company shall include in such registration the number of shares of Common Stock to be sold by Non-management Holders (as hereinafter defined) that such managing underwriter advises can be sold. In such event, the Company shall allocate that number of shares of Common Stock pro rata among the Non-management Holders (as hereinafter defined) of such shares of Common Stock. In no event, in connection with any indemnification obligations by any holder of shares of Common Stock that are incident to the registration of such holder’s shares, shall such holder’s liability exceed its proportionate amount of any such indemnity and the net amounts received by such holder from the sale of its shares of Common Stock pursuant to the Registration Statement.

(d) Furnish to Purchaser:

(i) As soon as available and in any event within 90 days after the end of each fiscal year of the Company, a consolidated balance sheet of the Company, a consolidated statement of operations of the Company, and consolidated statements of cash flows and stockholders’ equity of the Company as of the close of such fiscal year, all of the foregoing financial statements to be certified by independent public accountants and accompanied by a complete set of notes;

(ii) As soon as available and in any event within forty-five (45) days after the end of each fiscal quarter of the Company, a consolidated balance sheet and consolidated statements of operations, cash flows and stockholders’ equity, showing the financial condition of the Company; and

(iii) Such other reasonably requested documents and records of the Company.

(e) Use the proceeds from this Offering to fund the acquisitions of the Targets and to pay the expenses of its professionals (including auditor and attorney fees) in connection with the acquisitions of the Targets, this Offering and other capital raising transactions, and the IPO.

7. Tag Along Right. Beginning upon the date the Company executes this Subscription Agreement and ceasing immediately prior to the IPO, if Robert F.X. Sillerman and/or his affiliates (the “Selling Stockholder”) propose to sell or transfer, whether directly or indirectly (a “Transfer”), any shares of Common Stock to an unaffiliated third party (the “Proposed Transferee”), Purchaser shall be permitted to participate in such Transfer (a “Tag-along Sale”) on the terms and conditions set forth in this Section 7. Robert F.X. Sillerman shall acknowledge his agreement to comply with this Section 7 by executing the signature page hereof. The Selling Stockholder shall deliver to Purchaser a written notice of the proposed Transfer (the “Tag Notice”) no more than five business days after the execution and delivery by all the parties thereto of the definitive agreement entered into with respect to the Tag-along Sale and, in any event, no later than ten business days prior to the closing date of the Tag-along Sale. Purchaser shall be permitted to exercise its right to participate in the Tag-along Sale by delivering to the Selling Stockholder a written notice stating its election to do so and specifying the number of shares of Common Stock to be sold by it no later than five business days after receipt of the Tag Notice. Purchaser shall have the right to Transfer in a Transfer subject to this Section 7 the number of shares of Common Stock equal to the product obtained by multiplying (x) the number of shares of Common Stock held by Purchaser by (y) a fraction (A) the numerator of which is equal to the number of shares of Common Stock the Selling Stockholder proposes to Transfer to the Proposed Transferee and (B) denominator of which is equal to the number of shares of Common Stock then owned by such Selling Stockholder. If the Selling Stockholder is unable to cause the proposed transferee in the Tag-along Sale to purchase all of the shares of Common Stock proposed to be Transferred by Purchaser, then the number of shares of Common Stock that each such participating holder is entitled to Transfer shall be scaled back pro rata based on the number of shares of Common Stock held by such participating holder relative to the number of shares of Common Stock held by all participating holders in the Tag-along Sale. The Selling Stockholder shall have a period of 180 days after the expiration of the five business day period following the receipt of the Tag Notice to Transfer all of the shares of Common Stock agreed to be Transferred to the transferee, on the same terms specified in the Tag Notice. In connection with any Tag-along Sale in which Purchaser participates, Purchaser shall only be required to make or provide representations, warranties, covenants, indemnities and agreements customary for a minority stockholder selling in a Tag-along Sale similar to that described herein.

8. Other Protective Provisions. Beginning upon the Closing Date and ceasing immediately prior to the IPO, the Company shall not, without first obtaining the prior written consent or affirmative vote of non-management holders holding a majority of the shares of Common Stock (for avoidance of doubt, Sillerman and his affiliates shall be deemed to be management holders of shares of Common Stock) (“Non-management Holders”):

(a) amend, alter or repeal any provision of the Certificate of Incorporation of the Company or the By-Laws of the Company in a manner that adversely effects the rights, preferences, and privileges of any class of capital stock;

(b) enter into any transaction with any affiliate of the Company (other than pursuant to a compensation arrangement approved pursuant to Section 8(f) hereof;

(d) effect any material change in the nature of the Company’s business from the Business;

(e) effectuate any change in control of the Company resulting in Robert F.X. Sillerman (and his affiliates) no longer controlling the Company; or

(f) approve the payment for or make any payment in respect of compensation (including equity awards) to any senior officer of the Company unless such compensation amounts or terms are approved by the compensation committee of the board of directors.

9. Governance. Following the closing of the IPO, the Company shall comply, as if it were a Nasdaq listed company, with the corporate governance rules of The Nasdaq Stock Market LLC, including but not limited to, shareholder approval, related party transactions, and board independence requirements (subject to any phase-in periods that would be applicable to a company listing on the exchange).

10. Current Public Information. From and after the date in which the SEC declares the Registration Statement effective and for so long as Purchase owns Shares, the Company covenants to (i) timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company pursuant to the Exchange Act, even if the Company is not then subject to the reporting requirements of the Exchange Act, and (ii) maintain the listing or quotation of the Common Stock on the NASDAQ (if so listed). Concurrently with the IPO, the Company shall apply to list all of the shares of Common Stock, including without limitation, the Shares, on the NASDAQ and use its reasonable best efforts to secure the listing of such shares on the NASDAQ. Beginning on the sixth month anniversary of the Closing Date, if the Company has not submitted the Registration Statement to the SEC or has abandoned its previously submitted Registration Statement, then Purchaser shall have the right to require the Company to prepare and furnish to Purchaser and make publicly available in accordance with Rule 144(c) such information as is required for Purchaser to sell the Shares at any time Purchaser owns Shares. The Company further covenants that it will take such further action as Purchaser may reasonably request, to the extent required from time to time to enable Purchaser to sell the Shares without registration under the Securities Act.

11. Termination. This Subscription Agreement may be terminated prior to Closing at the option of Purchaser, in its sole discretion, upon the earlier to occur of (i) the date that is the three month anniversary of the Company’s execution of this Subscription Agreement, if the Closing has not then occurred, and (ii) the date of any breach of this Subscription Agreement by the Company that is not cured within ten days after receipt of written notice from Purchaser of such breach. Upon any election to terminate this Subscription Agreement by Purchaser in the manner set forth in this Section 11, Purchaser shall be relieved of its obligations with respect to purchasing all of the Shares subscribed for hereunder, without any liability to Purchaser.

12. Confidentiality. Each party, agrees that they will not disclose, or cause to be disclosed, the fact of the existence or contents of this Subscription Agreement, to any third person other than (a) their attorneys, accountants, employees, affiliates and representatives, (b) as required by law, rule or regulation, (c) as necessary to enforce this Subscription Agreement, (d) with respect to Purchaser to Purchaser’s direct and indirect investors and potential investors, or (e) in connection with capital raising efforts of the Company.

13. Prohibitions on Cancellation, Termination, Revocation, Transferability, and Assignment. Purchaser hereby acknowledges and agrees that, except as may be specifically provided herein, or by applicable law, Purchaser is not entitled to cancel, terminate, or revoke this Subscription Agreement, absent mutual written agreement to do so by the parties.

14. Notices. All notices hereunder shall be sufficient upon receipt for all purposes hereunder if in writing and delivered personally, sent by documented overnight delivery service or, to the extent receipt is confirmed, telecopy, telefax, or other electronic transmission service to the appropriate address or number (a) if to the Company, at the address set forth above, or (b) if to Purchaser, at the address set forth on the signature page hereof (or, in either case, to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 14).

15. Counterparts. This Subscription Agreement may be executed through the use of separate signature pages or in any number of counterparts, and each of such counterparts shall, for all purposes, constitute one agreement binding on all of the parties, notwithstanding that all parties are not signatories to the same counterpart. Execution and/or delivery by facsimile or electronic means shall constitute an original signature for all purposes.

16. Applicable Law. The internal laws of the State of New York (without giving effect to any choice or conflict of law provision or rule (whether of the State of York or any other jurisdiction) that would cause the application of laws of any other jurisdiction) shall govern all matters arising out of or relating to this Subscription Agreement, including its validity, interpretation, construction, performance and enforcement. Any action or proceeding arising out of or relating to this Subscription Agreement must be brought in the courts of the State of New York, New York County, or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of New York. Each of the parties knowingly, voluntarily and irrevocably submits to the exclusive jurisdiction of each such court in any such action or proceeding and waives any objection it may now or hereafter have to venue or to convenience of forum. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ALL RIGHTS TO TRIAL BY

JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS SUBSCRIPTION AGREEMENT, OR ANY TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST IT IN ACCORDANCE WITH THIS SECTION AND FURTHER WAIVES ANY CLAIM BASED ON FORUM NON CONVENIENS.

17. Disclosure Notices.

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. PURCHASERS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS SUBSCRIPTION AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

18 Expiration. The offer contained in this Subscription Agreement shall remain open for five days following the date of execution of this Subscription Agreement by Purchaser. Notwithstanding anything to the contrary contained in this Subscription Agreement, if the Company shall not have signed this Subscription Agreement within such five day period, this offer shall terminate and Purchaser shall be relieved of its obligations with respect to purchasing all of the Shares subscribed for hereunder, without any liability to Purchaser.

19. Assignment. Any assignment by either party of its rights and obligations under this Subscription Agreement shall require the prior written consent of the other party hereto; provided, however that Purchaser may assign its rights under this Subscription Agreement to one or more of its affiliates at any time prior to Closing.

20. Group Status. Nothing contained in this Subscription Agreement shall in any way be construed as Purchaser acting in concert or as a group with any other person with respect to the purchase, disposition or voting of securities or otherwise.

[SUBSCRIPTION PAGE FOLLOWS]

SUBSCRIPTION PAGE

IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement this 30th day of May, 2012.

Shares being purchased:		500,000 shares
Purchase Price:		$2,500,000

Wire Transfer Purchase Price to:

Bank:


ABA:
Account #:
Account Name:
Reference:		SFX Entertainment Subscription

TYPE OF OWNERSHIP (INITIAL ONE)

o PARTNERSHIP (Please include a copy of the statement of partnership of partnership agreement authorizing signature).		x TRUST (Please include name of trust, name of trustee, date trust was formed and copy of the trust agreement or other authorization)

o CORPORATION		o LIMITED LIABILITY COMPANY

o INDIVIDUAL		o OTHER (Please include type of entity below)

/s/ Gordon Crawford, Trustee

Please print exact name (registration) that Purchaser

desires on records of the Company

The Gordon & Dana Crawford Trust, UTD 8/23/77
520, Georgian Road,
La Canada, CA 91011


Telephone: ###-###-####

###-###-####
Fax Number

###-###-####
Social Security or Taxpayer I.D. Number

California
State of organization, if applicable

Confidential material redacted and filed separately with the Commission.

COMPANY’S ACCEPTANCE

This Subscription Agreement is only accepted as so acknowledged in writing by the Company.

ACCEPTED as to Shares:

SFX Entertainment Inc.


By:	/s/ Robert F.X. Sillerman
Name:
Title:

Date: June 5, 2012

ACCEPTED AND AGREED TO ONLY WITH RESPECT

TO TAG-ALONG RIGHT SET FORTH IN SECTION 7 OF

SUBSCRIPTION AGREEMENT

/s/ Robert F.X. Sillerman
Robert F.X. Sillerman

EX-10.7 15 a2215423zex-10_7.htm EX-10.7

Exhibit 10.7

SFX Entertainment Inc.

650 Madison Avenue, 15th Floor

New York, New York 10022

SUBSCRIPTION AGREEMENT

Och-Ziff Capital Investments LLC

9 West 57th Street

New York, NY 10019

Ladies and Gentlemen:

SFX Entertainment Inc., a Delaware corporation (the “Company”), is hereby privately offering 4,000,000 shares (the “Shares”) of common stock, $0.001 par value per share, of the Company (the “Common Stock”) at an aggregate purchase price of $10,000,000 (the “Purchase Price”) to the undersigned, in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), provided by Rule 506 of Regulation D under the Securities Act. Upon completion of this offering (the “Offering”), the undersigned will own approximately 9.9% of the Company, subject to future dilution in accordance with the terms of this Subscription Agreement (as hereinafter defined).

The Company will use the proceeds from the Offering to fund its short-term working capital requirements in order to develop (initially through acquisitions) a live entertainment enterprise engaged in production and marketing of electronic dance music, live music, sporting, and other entertainment events around the world (the “Business”) and to pay expenses incurred in connection therewith. The Company, through the efforts of Robert F.X. Sillerman, its Chairman, has been negotiating with the owners of various companies in the Business for the acquisition of all or a portion of their businesses (such businesses, the “Targets”) and will use a portion of the proceeds of this Offering, together with additional funds anticipated to be raised, to acquire such Targets.

The parties agree that Purchaser (as defined below) is, as of the date hereof and subject to the terms and conditions contained herein, committing to be the initial capital investor in the Company and as a result has conferred a pronounced benefit upon the Company.

2. Conditions to Subscription. Subject to other applicable provisions of this Subscription Agreement (including without limitation, Sections 5, 13 and 20 hereof), Purchaser understands and agrees that this subscription is made subject to the following terms and conditions:

(a) This subscription shall be deemed to be accepted by the Company only when it is signed by the Company;

(b) Subscriber may not revoke, cancel or terminate this subscription unless the Company cancels or terminates the Offering; and

(c) Subscriber has executed and delivered this Subscription Agreement and hereby agrees to tender the Purchase Price at Closing in accordance with the terms hereof.

(a) (i) Purchaser has received and has read and fully understands this Subscription Agreement.

(ii) Purchaser or its advisor(s) have had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Company concerning the Company and the Offering and all such questions have been answered to the full satisfaction of Purchaser.

(iii) No oral or written representations have been made other than as stated in this Subscription Agreement.

(v) Purchaser is not subscribing for the Shares pursuant to a general solicitation or general advertisement by the Company.

(b) Purchaser is an “accredited investor” within the meaning of Rule 501(d), as promulgated under the Securities Act because (i) Purchaser is an organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership not formed for the specific purpose of acquiring the Shares, with total assets in excess of $5,000,000, or (ii) because Purchaser is an entity in which all of the equity owners are accredited investors.

(c) Purchaser’s overall commitment to investments which are not readily marketable is not excessive in relation to its net worth.

(ii) The Company is a development stage company and its prior operating history will not be germane to future operations. The Company’s prospects must be evaluated in light of the risks and uncertainties frequently encountered by a company in the early stage of development. The Business in which the Company intends to operate is highly competitive and makes these risks and certainties particularly pronounced. The Company may not succeed in developing a viable business and may never become profitable.

(iii) The Company has significant capital requirements to develop its business and will need to raise additional capital for the foreseeable future, which may occur through equity and/or debt financings. There can be no assurance that the Company will be able to raise such capital when needed or on terms and conditions acceptable to the Company, or at all. To the extent the Company raises additional capital by issuing equity securities, but subject to Sections 6 and 7, the Company’s stockholders will experience dilution in their ownership of the Common Stock of the Company.

(iv) At Closing, the Company will initially acquire various businesses in the Business with whom it has been negotiating, after which the Registration Statement will be submitted to the Securities and Exchange Commission on Form S-1 to register for resale the Shares purchased by the Subscriber and the Additional Shares (if any), together with those shares of Common Stock of other investors or businesses acquired for which shares of the Company’s Common Stock are given as consideration and any shares of Common Stock offered for sale by the Company. Except as set forth in Section 6, there are no assurances as to the timing of the effectiveness of the Registration Statement.

(vi) The Shares and the Additional Shares (if any) are “restricted securities” as defined in Rule 144 under the Securities Act and have not been registered under the Securities Act or any state securities laws. The Shares and the Additional Shares (if any) are highly illiquid. Until the Registration Statement is declared effective, the Shares and the Additional Shares (if any) to be issued will not be registered under the Securities Act or any state securities laws and, thus, will not be freely tradable or eligible for resale, unless an exemption from the registration requirements of the Securities Act, including Rule 144, is available. Purchaser will not be able to rely on Rule 144 to sell the Shares and the Additional Shares (if any) unless the sale complies with the conditions of that rule, including satisfaction of Purchaser’s holding period. An active public market for the Company’s Common Stock may not develop or be sustained. In addition, the number of unrestricted shares of the Company in the public float may represent only a small percentage of the shares of Company Common Stock outstanding.

(f) Purchaser acknowledges (to the extent applicable):

(ii) Agreement, and such individual, ward, partnership, trust, estate, corporation, or other entity has full right and power to perform pursuant to this Subscription Agreement and make an investment in the Company;

(iii) Purchaser consents to the placement of the following legend on any certificate or other document evidencing the Shares:

(iii) The representations, warranties, and agreements of Purchaser contained herein shall survive the execution and delivery of this Subscription Agreement and the purchase of the Shares; and

(d) The Shares, when so issued, sold and delivered against payment therefor in accordance with the provisions of this Subscription Agreement, will be duly and validly issued, fully paid and nonassessable. The authorized capital stock of the Company consists of 300,000,000 shares of Common Stock. As of the Closing Date (but not including any shares issued in the acquisitions of Targets or to other investors on such Closing Date), there will be 40,000,000 shares of Common

Stock issued and outstanding and such shares have been duly and validly issued and are fully paid and nonassessable.

(f) The Company is a newly organized entity formed for the purpose of acquiring the Targets and to operate in such related businesses and, as of the date hereof, has no operating history and has incurred no material liabilities other than in connection with consummating the Offering, or in connection with the acquisition of the Targets none of which have been acquired prior to the Closing Date.

(i) The representations, warranties, and agreements of Company contained herein shall survive the execution and delivery of this Subscription Agreement and the sale of the Shares.

(d) The Company will have a binding (though not necessarily final) agreement to acquire one or more Targets at the time of the Closing and shall deploy the proceeds of this Offering as set forth in Schedule I hereto (subject to the return of any funds to the Company resulting from a diminution in purchase price of any Target identified on Schedule I, which funds shall thereafter be used in connection with satisfying the Company’s obligation under Section 6(a) hereof.

(b) Not issue shares of Common Stock or a derivative security containing a right to purchase Common Stock at a price per share that implies a valuation of the Company of less than $100,000,000.

(c) (i) Submit a registration statement to the SEC for its IPO by August 15, 2012, (ii) use its reasonable best efforts to have such registration statement declared effective under the Securities Act as soon as practicable thereafter, and (iii) use its reasonable best efforts to qualify as an “emerging growth company”. The Company covenants that such registration statement shall seek to register for resale some or all shares that are held by the Company’s shareholders (including the Shares and the Additional Shares (if any) issued to Purchaser). The Company further covenants it shall use its commercially reasonable efforts to include in such registration statement all shares requested to be included by Non-management Holders (as hereinafter defined) as is practicable, subject to market conditions.

Any and all fees, costs and expenses incident to the registration and the IPO shall be borne by the Company. If the managing underwriter in the IPO advises the Company in writing that in its opinion, the shares of Common Stock proposed to be included in the registration exceeds the number of shares that can be sold in such offering, the Company shall include in such registration the number of shares of Common Stock to be sold by Non-management Holders (as hereinafter defined) that such managing underwriter advises can be sold. In such event, the Company shall allocate that number of shares of Common Stock pro rata among the Non-management Holders of such shares of Common Stock. In no event, in connection with any indemnification obligations by any holder of shares of Common Stock that are incident to the registration of such holder’s shares, shall such holder’s liability exceed its proportionate amount of any such indemnity and the net amounts received by such holder from the sale of its shares of Common Stock pursuant to the Registration Statement.

(d) Use its commercially reasonable efforts to arrange additional debt and equity financing necessary to fund the Company’s intended acquisitions and operations.

(e) Furnish to Purchaser:

(iii) Such other reasonably requested documents and records of the Company.

(f) Use the proceeds from this Offering to fund the acquisitions of the Targets and to pay the expenses of its professionals (including auditor and attorney fees) in connection with the acquisitions of the Targets, this Offering and other capital raising transactions, and the IPO.

7. Pre-emptive Right. Beginning upon the date the Company executes this Subscription Agreement and ceasing immediately prior to the IPO, Purchaser shall have the right to purchase its Pro Rata Portion of any New Securities (other than any Excluded Securities) that the Company may from time to time propose to issue or sell to any party. The Company shall give written notice to Purchaser of any proposed issuance or sale of New Securities (including a description of the material terms and conditions of such issuance) (the “Pre-emptive Right Notice”) and Purchaser shall have five business days to close on the purchase of its Pro Rata Portion of any such New Securities. In the event that the Company does not consummate the sale of all of the New Securities on the terms set forth in the Pre-emptive Rights Notice within 180 days after the expiration of the five business day period following the receipt of the Pre-emptive Rights Notice, the obligations on the Company to comply with this Section 7 shall be reinstated.

“New Securities” means any debt securities and all shares of Common Stock and any securities of the Company convertible into, or exchangeable or exercisable for, such shares, and options, warrants or other rights to acquire such shares.

“Pro Rata Portion” means the number of New Securities equal to the product of (i) the total number of New Securities to be issued by the Company on such date and (ii) the fraction determined by dividing (x) the number of shares of Common Stock owned by Purchaser immediately prior to such issuance by (y) the total number of shares of Common Stock outstanding on such date immediately prior to such issuance.

“Excluded Securities” means securities issued in connection with: (a) a grant to any existing or prospective consultants, employees, officers or directors pursuant to any stock option or similar equity-based plans or other compensation agreement that includes not more than 15% of the fully diluted capital stock of the Company; (b) any acquisition by the Company of the stock, assets, properties or business of any third party; (c) any merger, consolidation or other business combination involving the Company and any third party; (d) the IPO; (e) any revolving credit facility or term loan of the type customarily provided by banks or other financial institutions; (f) the issuance of 36,000,000 shares of Common Stock currently issued or contemplated to be issued to founders and other affiliates and investors; (g) any capital raise transaction of the Company that closes between the day after the Closing Date and thirty (30) days thereafter; or (h) a stock split, stock dividend or any similar recapitalization.

8. Tag Along Right. Beginning upon the date the Company executes this Subscription Agreement and ceasing immediately prior to the IPO, if Robert F.X. Sillerman and/or his affiliates (the “Selling Stockholder”) propose to sell or transfer, whether directly or indirectly (a “Transfer”), any shares of Common Stock to an unaffiliated third party (the “Proposed Transferee”), Purchaser shall be permitted to participate in such Transfer (a “Tag-along Sale”) on the terms and conditions set forth in this Section 8. Robert F.X. Sillerman shall acknowledge his agreement to comply with this Section 8 by executing the signature page hereof. The Selling Stockholder shall deliver to Purchaser a written notice of the proposed Transfer (the “Tag Notice”) no more than five business days after the execution and delivery by all the parties thereto of the definitive agreement entered into with respect to the Tag-along Sale and, in any event, no later than ten business days prior to the closing date of the Tag-along Sale. Purchaser shall be permitted to exercise its right to participate in the Tag-along Sale by delivering to the Selling Stockholder a written notice stating its election to do so and specifying the number of shares of Common Stock to be sold by it no later than five business days after receipt of the Tag Notice. Purchaser shall have the right to Transfer in a Transfer subject to this Section 8 the number of shares of Common Stock equal to the product obtained by multiplying (x) the number of shares of Common Stock held by Purchaser by (y) a fraction (A) the numerator of which is equal to the number of shares of Common Stock the Selling Stockholder proposes to Transfer to the Proposed Transferee and (B) denominator of which is equal to the number of shares of Common Stock then owned

by such Selling Stockholder. If the Selling Stockholder is unable to cause the proposed transferee in the Tag-along Sale to purchase all of the shares of Common Stock proposed to be Transferred by Purchaser, then the number of shares of Common Stock that each such participating holder is entitled to Transfer shall be scaled back pro rata based on the number of shares of Common Stock held by such participating holder relative to the number of shares of Common Stock held by all participating holders in the Tag-along Sale. The Selling Stockholder shall have a period of 180 days after the expiration of the five business day period following the receipt of the Tag Notice to Transfer all of the shares of Common Stock agreed to be Transferred to the transferee, on the same terms specified in the Tag Notice. In connection with any Tag-along Sale in which Purchaser participates, Purchaser shall only be required to make or provide representations, warranties, covenants, indemnities and agreements customary for a minority stockholder selling in a Tag-along Sale similar to that described herein.

9. Most Favored Nation. Beginning upon the date the Company executes this Subscription Agreement and ceasing immediately prior to the IPO, to the extent that a right or benefit is granted to a third-party purchasing or receiving Common Stock in any agreement between the Company and such third-party or by way of any waiver or amendment to any such agreement, then Purchaser shall be provided with substantially the same right or benefit as granted by the Company in such agreement, waiver or amendment.

10. Other Protective Provisions. Beginning upon the Closing Date and ceasing immediately prior to the IPO, the Company shall not, without first obtaining the prior written consent or affirmative vote of non-management holders holding a majority of the shares of Common Stock (for avoidance of doubt, Sillerman and his affiliates shall be deemed to be management holders of shares of Common Stock) (“Non-management Holders”):

(b) enter into any transaction with any affiliate of the Company (other than pursuant to a compensation arrangement approved pursuant to Section 10(f) hereof;

(d) effect any material change in the nature of the Company’s business from the Business;

(e) effectuate any change in control of the Company resulting in Robert F.X. Sillerman (and his affiliates) no longer controlling the Company; or

11. Governance. Following the closing of the IPO, the Company shall comply, as if it were a Nasdaq listed company, with the corporate governance rules of The Nasdaq Stock Market LLC, including but not limited to, shareholder approval, related party transactions, and board independence requirements (subject to any phase-in periods that would be applicable to a company listing on the exchange).

12. Current Public Information. From and after the date in which the SEC declares the Registration Statement effective and for so long as Purchase owns Shares and the Additional Shares (if any), the Company covenants to (i) timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company pursuant to the Exchange Act, even if the Company is not then subject to the reporting requirements of the Exchange Act, and (ii) maintain the listing or quotation of the Common Stock on the NASDAQ (if so listed). Concurrently with the IPO, the Company shall apply to list all of the shares of Common Stock, including without limitation, the Shares and the Additional Shares (if any), on the NASDAQ and use its reasonable best efforts to secure the listing of such shares on the NASDAQ. Beginning on the sixth month anniversary of the Closing Date, if the Company has not submitted the Registration Statement to the SEC or has abandoned its previously submitted Registration Statement, then Purchaser shall have the right to require the

Company to prepare and furnish to Purchaser and make publicly available in accordance with Rule 144(c) such information as is required for Purchaser to sell the Shares at any time Purchaser owns Shares. The Company further covenants that it will take such further action as Purchaser may reasonably request, to the extent required from time to time to enable Purchaser to sell the Shares without registration under the Securities Act.

13. Termination. Notwithstanding anything to the contrary contained in this Subscription Agreement, this Subscription Agreement may be terminated prior to Closing at the option of Purchaser, in its sole discretion, upon the earlier to occur of (i) the date that is the three month anniversary of the Company’s execution of this Subscription Agreement, if the Closing has not then occurred, and (ii) the date of any breach of this Subscription Agreement by the Company that is not cured within ten days after receipt of written notice from Purchaser of such breach. Upon any election to terminate this Subscription Agreement by Purchaser in the manner set forth in this Section 13, Purchaser shall be relieved of its obligations with respect to purchasing all of the Shares subscribed for hereunder, without any liability to Purchaser.

14. Confidentiality. Each party, agrees that they will not disclose, or cause to be disclosed, the fact of the existence or contents of this Subscription Agreement, to any third person other than (a) their attorneys, accountants, employees, affiliates and representatives, (b) as required by law, rule or regulation, (c) as necessary to enforce this Subscription Agreement, (d) with respect to Purchaser to Purchaser’s direct and indirect investors and potential investors, or (e) in connection with capital raising efforts of the Company; provided, that in the case of subclause (e), any written materials using the name “Och-Ziff” or “OZ” or any derivation thereof shall require prior written approval, not to be unreasonably withheld, of Purchaser.

15. Prohibitions on Cancellation, Termination, Revocation, Transferability, and Assignment. Purchaser hereby acknowledges and agrees that, except as may be specifically provided herein, or by applicable law, Purchaser is not entitled to cancel, terminate, or revoke this Subscription Agreement, absent mutual written agreement to do so by the parties.

16. Notices. All notices hereunder shall be sufficient upon receipt for all purposes hereunder if in writing and delivered personally, sent by documented overnight delivery service or, to the extent receipt is confirmed, telecopy, telefax, or other electronic transmission service to the appropriate address or number (a) if to the Company, at the address set forth above, or (b) if to Purchaser, at the address set forth on the signature page hereof (or, in either case, to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 16).

17. Counterparts. This Subscription Agreement may be executed through the use of separate signature pages or in any number of counterparts, and each of such counterparts shall, for all purposes, constitute one agreement binding on all of the parties, notwithstanding that all parties are not signatories to the same counterpart. Execution and/or delivery by facsimile or electronic means shall constitute an original signature for all purposes.

18. Applicable Law. The internal laws of the State of New York (without giving effect to any choice or conflict of law provision or rule (whether of the State of York or any other jurisdiction) that would cause the application of laws of any other jurisdiction) shall govern all matters arising out of or relating to this Subscription Agreement, including its validity, interpretation, construction, performance and enforcement. Any action or proceeding arising out of or relating to this Subscription Agreement must be brought in the courts of the State of New York, New York County, or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of New York. Each of the parties knowingly, voluntarily and irrevocably submits to the exclusive jurisdiction of each such court in any such action or proceeding and waives any objection it may now or hereafter have to venue or to convenience of forum. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS SUBSCRIPTION AGREEMENT, OR ANY TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST IT IN ACCORDANCE WITH THIS SECTION AND FURTHER WAIVES ANY CLAIM BASED ON FORUM NON CONVENIENS.

19. Disclosure Notices.

20. Expiration. The offer contained in this Subscription Agreement shall remain open for five days following the date of execution of this Subscription Agreement by Purchaser. Notwithstanding anything to the contrary contained in this Subscription Agreement, if the Company shall not have signed this Subscription Agreement within such five day period, this offer shall terminate and Purchaser shall be relieved of its obligations with respect to purchasing all of the Shares subscribed for hereunder, without any liability to Purchaser.

21. Assignment. Any assignment by either party of its rights and obligations under this Subscription Agreement shall require the prior written consent of the other party hereto; provided, however that Purchaser may assign its rights under this Subscription Agreement to one or more of its affiliates at any time prior to Closing.

22. Group Status. Nothing contained in this Subscription Agreement shall in any way be construed as Purchaser acting in concert or as a group with any other person with respect to the purchase, disposition or voting of securities or otherwise.

23. Liquidated Damages. Notwithstanding anything to the contrary herein, if the Company fails to submit a registration statement to the SEC for its IPO by August 15, 2012, as required by Section 6(c) of this Agreement (a “Registration Failure”), then the Company shall be obligated to issue to Purchaser, at the Per Share Closing Price (as hereinafter defined), $7,500 in additional shares of Common Stock for each day following the Registration Failure (which equates to 3,000 additional shares of Common Stock per day) until such date as the Registration Failure is cured (such additional shares of Common Stock, in the aggregate, the “Additional Shares”); provided, however, that from and after March 31, 2013, Purchaser may, at its option and in lieu of receiving any further Additional Shares, require that the Company make a cash payment to Purchaser of $7,500 for each day following March 31, 2013 that the Registration Failure remains in effect (such cash payment, in the aggregate, the “Cash Penalty Amount”). With respect to any month in which a Registration Failure has occurred, (a) the Additional Shares shall be issued to Purchaser within five business days following the end of the prior month, and (b) the Cash Penalty Amount, if applicable, shall be paid to Purchaser within five business days following the end of the prior month to an account designated in writing by Purchaser to the Company. The parties agree that in the event that a Registration Failure occurs, Purchaser will suffer damages and that the amount of such damages will be difficult to estimate. Accordingly, each party agrees that the issuance of the Additional Shares at the Per Share Closing Price and/or the payment by the Company of the Cash Payment Amount, if applicable, will constitute liquidated damages and that such liquidated damages are reasonable and shall be the sole measure of damages of Purchaser in the event that a Registration Failure occurs. For purposes hereof, the “Per Share Closing Price” shall be the price paid by Purchaser on the Closing Date for each share of Common Stock.

[SUBSCRIPTION PAGE FOLLOWS]

SUBSCRIPTION PAGE

IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement this 6 day of June, 2012.

Shares being purchased:		4,000,000 shares
Purchase Price:		$ 10,000,000

Wire Transfer Purchase Price to:

Bank:


ABA :
Account #:
Account Name:
Reference: SFX Entertainment Subscription

TYPE OF OWNERSHIP (INITIAL ONE)


o PARTNERSHIP (Please include a copy of the statement of partnership of partnership agreement authorizing signature).	o TRUST (Please include name of trust, name of trustee, date trust was formed and copy of the trust agreement or other authorization)

o CORPORATION	x LIMITED LIABILITY COMPANY

Entertainment Events Funding LLC

By:	/s/ Joel Frank
Title:		Authorized Person
Please print exact name (registration) that Purchaser
desires on records of the Company

c/o Och Ziff Capital Investments
9 West 57th Street
New York, NY 10019
212-790-0000


Social Security or Taxpayer I.D. Number

Delaware
State of Organization, if applicable

COMPANY’S ACCEPTANCE

This Subscription Agreement is only accepted as so acknowledged in writing by the Company.

ACCEPTED as to 4,000,000 Shares:

SFX Entertainment Inc.


By:	/s/ Robert F.X. Sillerman
Title:		President

Date: June 6, 2012


ACCEPTED AND AGREED TO ONLY WITH RESPECT
TO TAG-ALONG RIGHT SET FORTH IN SECTION 8 OF
SUBSCRIPTION AGREEMENT


/s/ Robert F.X. Sillerman

EX-10.8 16 a2215423zex-10_8.htm EX-10.8

Exhibit 10.8

SFX Entertainment Inc.

650 Madison Avenue, 15th Floor

New York, New York 10022

SUBSCRIPTION AGREEMENT

Baron Small Cap Fund

767 Fifth Avenue

49th Floor

New York, New York 10153

Ladies and Gentlemen:

SFX Entertainment Inc., a Delaware corporation (the “Company”), is hereby privately offering 5,000,000 shares (the “Shares”) of common stock, $0.001 par value per share, of the Company (the “Common Stock”) at an aggregate purchase price of $20,000,000 (the “Purchase Price”) to the undersigned, in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), provided by Rule 506 of Regulation D under the Securities Act.

(a) The first closing (“First Closing”) with respect to 1,250,000 Shares shall take place at the time both parties execute this Subscription Agreement. At the First Closing, Purchaser shall, following payment of the $5,000,000 purchase price, be issued such 1,250,000 Shares.

(b) The second closing (“Second Closing”) with respect to the remaining 3,750,000 Shares subscribed for hereunder shall take place simultaneously upon the acquisition of ID+T currently contemplated by the Company. At the Second Closing, Purchaser shall, following payment of the $15,000,000 purchase price, be issued 3,750,000 Shares.

The term “Closing” shall apply to the Initial Closing and the Second Closing, unless otherwise specified herein. The Purchase Price shall be paid, upon receipt of original certificates reflecting the Shares, by wire transfer in immediately available funds to an account designated by the Company as consideration for the issuance by the Company of the Shares. Original certificates reflecting the Shares purchased at each Closing shall be provided to Purchaser at Closing, it being understood that payment will be made upon receipt of the certificates.

(a) This subscription shall be deemed to be accepted by the Company only when it is signed by the Company;

(b) Subscriber may not revoke, cancel or terminate this subscription unless the Company cancels or terminates the Offering; and

(c) Subscriber has executed and delivered this Subscription Agreement and hereby agrees to tender the Purchase Price to be paid at each Closing in accordance with the terms hereof.

(a) (i) Purchaser has received and has read and fully understands this Subscription Agreement.

(iii) No oral or written representations have been made other than as stated in this Subscription Agreement.

(v) Purchaser is not subscribing for the Shares pursuant to a general solicitation or general advertisement by the Company.

(c) Purchaser’s overall commitment to investments which are not readily marketable is not excessive in relation to its net worth.

(iv) Following the date hereof, the Company will initially acquire various businesses in the Business with whom it has been negotiating, after which the Registration Statement will be submitted to the Securities and Exchange Commission on Form S-1 to register for resale the Shares purchased by the Subscriber, together with those shares of Common Stock of other investors or businesses acquired for which shares of the Company’s Common Stock are given as consideration and any shares of Common Stock offered for sale by the Company. Except as set forth herein, there are no assurances as to the timing of the effectiveness of the Registration Statement.

(f) Purchaser acknowledges (to the extent applicable):

(ii) Purchaser consents to the placement of the following legend on any certificate or other document evidencing the Shares:

(iii) The representations, warranties, and agreements of Purchaser contained herein shall survive the execution and delivery of this Subscription Agreement and the purchase of the Shares; and

4. Representations and Warranties of the Company. The Company hereby represents and warrants to, and agrees with, Purchaser as of (i) the date the Company executes this Subscription Agreement and (ii) as of the date of each Closing (a “Closing Date”), as follows:

(d) The Shares, when so issued, sold and delivered against payment therefor in accordance with the provisions of this Subscription Agreement, will be duly and validly issued, fully paid and nonassessable. The authorized capital stock of the Company consists of 300,000,000 shares of Common Stock. As of the date of the First Closing (but not including the Shares or any shares issued in the acquisitions of Targets or to other investors on or prior to such Closing), there will be shares of Common Stock issued and outstanding and such shares have been duly and validly issued and are fully paid and nonassessable.

(i) The representations, warranties, and agreements of Company contained herein shall survive the execution and delivery of this Subscription Agreement and the sale of the Shares.

5. Conditions to the Obligations of Purchaser. The obligation of Purchaser to purchase Shares at each Closing is subject to the fulfillment, or the waiver by Purchaser, of the following conditions on or before such Closing:

(a) Each representation and warranty contained in Section 4 shall be true and complete on and as of such Closing Date with the same effect as though such representation and warranty had been made on and as of that date.

(b) The Company shall have delivered to Purchaser a certificate, executed by the Chief Executive Officer of the Company, dated such Closing Date, certifying to the fulfillment of the conditions specified in Section 5(a) of this Subscription Agreement.

(c) All registrations, qualifications, permits and approvals required under applicable state and Federal securities laws for the lawful execution and delivery of this Agreement and the offer, sale, issuance and delivery of the Shares shall have been obtained, except for the notices required or permitted to be filed after such Closing with certain Federal and state securities commissions, which notices the Company will file on a timely basis.

(b) Not issue shares of Common Stock or a derivative security containing a right to purchase Common Stock at a price per share that implies a valuation of the Company of less than $250,000,000.

(d) Furnish to Purchaser:

(iii) Such other reasonably requested documents and records of the Company.

(e) Use the proceeds from this Offering to fund all or a portion of the acquisitions of the Targets (including payments into escrow accounts) and to pay the expenses of its professionals (including auditor and attorney fees) in connection with the acquisitions of the Targets, this Offering and other capital raising transactions, and the IPO.

8. Other Protective Provisions. Beginning upon the date of the Second Closing and ceasing immediately prior to the IPO, the Company shall not, without first obtaining the prior written consent or affirmative vote of non-management holders holding a majority of the shares of Common Stock (for avoidance of doubt, Sillerman and his affiliates shall be deemed to be management holders of shares of Common Stock) (“Non-management Holders”):

(b) enter into any transaction with any affiliate of the Company (other than pursuant to a compensation arrangement approved pursuant to Section 8(f) hereof;

(d) effect any material change in the nature of the Company’s business from the Business;

(e) effectuate any change in control of the Company resulting in Robert F.X. Sillerman (and his affiliates) no longer controlling the Company; or

10. Current Public Information. From and after the date in which the SEC declares the Registration Statement effective and for so long as Purchase owns Shares, the Company covenants to (i) timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company pursuant to the Exchange Act, even if the Company is not then subject to the reporting requirements of the Exchange Act, and (ii) maintain the listing or quotation of the Common Stock on the NASDAQ (if so listed). Concurrently with the IPO, the Company shall apply to list all of the shares of Common Stock, including without limitation, the Shares, on the NASDAQ and use its reasonable best efforts to secure the listing of such shares on the NASDAQ. Beginning on the sixth month anniversary of the date of the Second Closing, if the Company has not submitted the Registration Statement to the SEC or has abandoned its previously submitted Registration Statement, then Purchaser shall have the right to require the Company to prepare and furnish to Purchaser and make publicly available in accordance with Rule 144(c) such information as is required for Purchaser to sell the Shares at any time Purchaser owns Shares. The Company further covenants that it will take such further action as Purchaser may reasonably request, to the extent required from time to time to enable Purchaser to sell the Shares without registration under the Securities Act.

11. Termination. This Subscription Agreement may be terminated prior to the date of the Second Closing at the option of Purchaser, in its sole discretion, upon the earlier to occur of (i) the date that is the three month anniversary of the Company’s execution of this Subscription Agreement, if the Second Closing has not then occurred, and (ii) the date of any breach of this Subscription Agreement by the Company that is not cured within ten days after receipt of written notice from Purchaser of such breach. Upon any election to terminate this Subscription Agreement by Purchaser in the manner set forth in this Section 11, Purchaser shall be relieved of its obligations with respect to purchasing all of the unpurchased Shares subscribed for hereunder, without any liability to Purchaser.

17. Disclosure Notices.

[SUBSCRIPTION PAGE FOLLOWS]

SUBSCRIPTION PAGE

IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement this 6th day of June, 2012.

Shares being purchased:		5,000,000 shares
Purchase Price:		$ 20,000,000

Wire Transfer Purchase Price to:

Bank:


ABA :
Account #:
Account Name:
Reference: SFX Entertainment Subscription

TYPE OF OWNERSHIP (INITIAL ONE)

o PARTNERSHIP (Please include a		o TRUST (Please include name
copy of the statement of partnership		of trust, name of trustee, date trust
of partnership agreement authorizing		was formed and copy of the trust
signature).		agreement or other authorization)

o CORPORATION		o LIMITED LIABILITY COMPANY

o INDIVIDUAL		x OTHER (Please include type of entity below)

Baron Small Cap Fund — Stock Certificate to be in name of CORALNET & CO.

Please print exact name (registration) that Purchaser

desires on records of the Company

DTC/New York Window
55 Water Street
New York, NY 10041
212-855-2441
Telephone

06-1488157
Social Security or Taxpayer I.D. Number


State of Organization, if applicable

The undersigned hereby represents and warrants that the undersigned is a the investment adviser to the fund named below (“Purchaser”), and has been duly authorized by the Purchaser to acquire the Shares and that he has all requisite authority to acquire such Shares.

The undersigned represents and warrants that each of the above representations or agreements or understandings set forth herein applies to that Purchaser and he is authorized by such Purchaser to execute this Subscription Agreement.

June 6, 2012	Baron Small Cap Fund
Date	Name of Partnership
	(Please type or print)

	BAMCO, Inc., on behalf of its investment advisory client,
	Baron Small Cap Fund

	By:	/s/ Patrick M. Patalino
	Name:	Patrick M. Patalino
	Title:	General Counsel

COMPANY’S ACCEPTANCE

This Subscription Agreement is only accepted as so acknowledged in writing by the Company.

ACCEPTED as to Shares:

SFX Entertainment Inc.


By:	/s/ Robert F.X. Sillerman
Title: President

Date: June 6, 2012

ACCEPTED AND AGREED TO ONLY WITH RESPECT

TO TAG-ALONG RIGHT SET FORTH IN SECTION 7 OF

SUBSCRIPTION AGREEMENT

/s/ Robert F.X. Sillerman

EX-10.9 17 a2215423zex-10_9.htm EX-10.9

Exhibit 10.9

SFX Holding Corporation

430 Park Avenue, 6th Floor

New York, New York 10022

SUBSCRIPTION AGREEMENT

Adage Capital Management, L.P.

200 Clarendon Street

52nd Floor

Boston, MA 02116

Dear Sirs:

SFX Holding Corporation., a Delaware corporation (the “Company”), is hereby privately offering (this “Offering”) 2,000,000 shares (the “Shares”) of common stock, $0.001 par value per share, of the Company (the “Common Stock”) at an aggregate purchase price of $10,000,000 (the “Purchase Price”) to the undersigned, in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), provided by Rule 506 of Regulation D under the Securities Act.

2. Conditions to Subscription. This subscription shall be deemed to be accepted by the Company only when it is signed by the Company. Subscriber has executed and delivered this Subscription Agreement and hereby agrees to tender the Purchase Price at Closing in accordance with the terms hereof. If this subscription is rejected by the Company in its sole and absolute discretion or because the Company terminates or cancels the Offering, this Subscription Agreement shall thereafter be of no further force or effect.

3. Representations and Warranties of Purchaser. Purchaser hereby represents and warrants to, and agrees with, the Company as of the date Purchaser executes this Subscription Agreement, as follows:

(a) (i) Purchaser has received and has read and fully understands this Subscription Agreement.

(ii) Purchaser acknowledges and understands that an investment in the Company will involve substantial risks. Purchaser or its advisor(s) have had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Company concerning the Company and the Offering and all such questions have been answered to the full satisfaction of Purchaser.

(iii) No oral or written representations have been made other than as stated in this Subscription Agreement.

(v) Purchaser is not subscribing for the Shares pursuant to a general solicitation or general advertisement by the Company.

(c) Purchaser’s overall commitment to investments which are not readily marketable is not excessive in relation to its net worth.

(e) Purchaser acknowledges:

(i) Purchaser consents to the placement of the following legend on any certificate or other document evidencing the Shares:

(ii) The representations, warranties, and agreements of Purchaser contained herein shall survive the execution and delivery of this Subscription Agreement and the purchase of the Shares; and

(iii) In connection with any transfer or attempted transfer of Shares pursuant to an exemption from the registration requirements of the Act, the Company shall be permitted to require in its sole discretion an opinion of counsel reasonably satisfactory to the Company that such transfer is exempt from registration.

4. Representations and Warranties of the Company. The Company hereby represents and warrants to, and agrees with, Purchaser as of the date the Company executes this Subscription Agreement, as follows:

(d) The Shares, when so issued, sold and delivered against payment therefor in accordance with the provisions of this Subscription Agreement, will be duly and validly issued, fully paid and nonassessable. Neither the Company nor anyone acting on behalf of the Company has engaged in any general advertising or solicitation in contravention of the Securities Act for the offer and sale of the Shares or any other shares of Common Stock. Assuming the accuracy of Purchaser’s representations contained in this Subscription Agreement, the offer, sale, issuance and delivery of the Shares are exempt from registration under the Securities Act and all action required to be taken prior to the offer or sale of the Shares has been taken under applicable state securities laws.

(e) The operations of the Company are, and have been conducted at all times, in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened. Neither the Company nor, to the knowledge of the Company, any of its current officers, has on behalf of the Company or in connection with its business: (a) made any direct or indirect unlawful payments to any governmental officials or employees from corporate funds; or (b) violated or is in violation of in any material respect any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended.

(i) The representations, warranties, and agreements of the Company contained herein shall survive the execution and delivery of this Subscription Agreement and the sale of the Shares.

5. Confidentiality. Each party, agrees that they will not disclose, or cause to be disclosed, the fact of the existence or contents of this Subscription Agreement, to any third person other than (a) their attorneys, accountants, employees, affiliates and representatives, (b) as required by law, rule or regulation (including in the Registration Statement), (c) as necessary to enforce this Subscription Agreement, (d) with respect to Purchaser to Purchaser’s direct and indirect investors and potential investors, or (e) in connection with capital raising efforts of the Company.

6. Notices. All notices hereunder shall be sufficient upon receipt for all purposes hereunder if in writing and delivered personally, sent by documented overnight delivery service or, to the extent receipt is confirmed, telecopy, telefax, or other electronic transmission service to the appropriate address or number (a) if to the Company, at the address set forth above, or (b) if to Purchaser, at the address set forth on the signature page hereof (or, in either case, to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 7).

7. Counterparts. This Subscription Agreement may be executed through the use of separate signature pages or in any number of counterparts, and each of such counterparts shall, for all purposes, constitute one agreement binding on all of the parties, notwithstanding that all parties are not signatories to the same counterpart. Execution and/or delivery by facsimile or electronic means shall constitute an original signature for all purposes.

8. Applicable Law. The internal laws of the State of New York (without giving effect to any choice or conflict of law provision or rule (whether of the State of York or any other jurisdiction) that would cause the application of laws of any other jurisdiction) shall govern all matters arising out of or relating to this Subscription Agreement, including its validity, interpretation, construction, performance and enforcement. Any action or proceeding arising out of or relating to this Subscription Agreement must be brought in the courts of the State of New York, New York County, or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of New York. Each of the parties knowingly, voluntarily and irrevocably submits to the exclusive jurisdiction of each such court in any such action or proceeding and waives any objection it may now or hereafter have to venue or to convenience of forum. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS SUBSCRIPTION AGREEMENT, OR ANY TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST IT IN ACCORDANCE WITH THIS SECTION AND FURTHER WAIVES ANY CLAIM BASED ON FORUM NON CONVENIENS.

9. Disclosure Notices.

10. Assignment. Any assignment by either party of its rights and obligations under this Subscription Agreement shall require the prior written consent of the other party hereto.

11. Group Status. Nothing contained in this Subscription Agreement shall in any way be construed as Purchaser acting in concert or as a group with any other person with respect to the purchase, disposition or voting of securities or otherwise.

[SUBSCRIPTION PAGE FOLLOWS]

SUBSCRIPTION PAGE

IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement this 28th day of December, 2012.

Shares being purchased:		2,000,000 shares
Purchase Price:		$10,000,000

Wire Transfer Purchase Price to:

Bank:

ABA:

Account #:

Account Name:

Reference: SFX Holding Corporation Subscription

TYPE OF OWNERSHIP (INITIAL ONE)

x	PARTNERSHIP (Please include a	o	TRUST (Please include name
	copy of the statement of partnership		of trust, name of trustee, date trust
	agreement authorizing signature).		was formed and copy of the trust
			agreement or other authorization)

o	CORPORATION	o	LIMITED LIABILITY COMPANY

o	INDIVIDUAL	o	OTHER (Please include type of entity below)

Adage Capital Partners, L.P.
Please print exact name (registration) that Purchaser
desires on records of the Company

200 Clarendon Street, 52nd Floor
Boston, MA 02116


Telephone


Fax Number


Social Security or Taxpayer I.D. Number

DE
State of Organization, if applicable

PARTNERSHIPS

If the subscriber is a PARTNERSHIP, complete the following and sign in the space provided:

The undersigned hereby represents and warrants that the undersigned is a general partner of the partnership named below (“Partnership”), and has been duly authorized by the Partnership to acquire the Shares and that he has all requisite authority to acquire such Shares.

The undersigned represents and warrants that each of the above representations or agreements or understandings set forth herein applies to that Partnership and he is authorized by such Partnership to execute this Subscription Agreement.

January 7, 2013	Adage Capital Partners, L.P.
Date	Name of Partnership
	(Please type or print)

	By:	/s/ Dan Lehan
	Name: Dan Lehan
	Title: COO

COMPANY’S ACCEPTANCE

This Subscription Agreement is only accepted as so acknowledged in writing by the Company.

ACCEPTED as to 2,000,000 Shares:

SFX Holding Corporation:

By:	/s/ Shelly Finkel
Name: Shelly Finkel
Title: President

Date: January 8, 2013

EX-10.10 18 a2215423zex-10_10.htm EX-10.10

Exhibit 10.10

October 28, 2012

Baron Capital

767 Fifth Avenue

49th Floor

New York, New York 10153

Re: Put Option Letter Agreement

Dear Ladies and Gentlemen,

This letter when countersigned by you constitutes our agreement that, pursuant to (i) the Assignment and Assumption Agreement dated as of June 21, 2012 between SFX Holding Corporation (“SFX”) and SFX Entertainment Inc. and acknowledged and agreed to by BAMCO, Inc. on behalf of Baron Small Cap Fund (“Baron”), (ii) the Share Exchange Agreement dated as of June 21, 2012 between SFX, SFX Entertainment Inc. and Baron, and (iii) the Subscription Agreement dated June 6, 2012 between SFX Entertainment Inc. and Baron (the “Subscription Agreement”), which was terminated by Baron on October 28, 2012, Baron will promptly fund $5,000,000 to purchase 1,250,000 shares (the “Additional Shares”) of SFX common stock. The parties agree that the proceeds received by SFX with respect to the Additional Shares are being used to fund the formation of the joint venture with ID&T.

SFX further agrees that:

(A) If SFX does not have a registration statement covering the resale of Baron’s common stock declared effective by the SEC by January 15, 2013, Baron will be permitted to require SFX to each month repurchase up to 10% of the total number of shares originally issued under the Subscription Agreement and this letter that continue to be held by Baron at the original issuance price thereof. Baron shall be entitled to sell such shares to SFX for ten consecutive months starting February 15, 2013 on the terms provided in the previous sentence.

(B) If the public offering price of the first primary offering of common stock by SFX or by Baron in a resale secondary offering is less than $4.00 per share, then SFX will issue additional shares to Baron so that Baron following such issuance (and taking into account the 2,500,000 shares issued to it under the Subscription Agreement and this letter) owns an amount of shares equal to the quotient of (($4.00 per share) multiplied by (the number of shares then held by Baron)) divided by the public offering price per share.

(C) If, prior to the effectiveness of the registration statement referred to in paragraph (A), SFX sells common stock to repay $10,000,000 of advances from Robert F.X. Sillerman to fund the formation of the joint venture with ID&T and such common stock is priced at less than $4.00 per share, then SFX will issue additional shares to Baron so that Baron following such issuance (and taking into account the 2,500,000 shares issued to Baron under the Subscription Agreement and this letter) owns an amount of shares equal to the quotient of

(($4.00 per share) multiplied by (the number of shares then held by Baron)) divided by such price per share.

This letter shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. Each party may not assign this letter or any rights or obligations hereunder without the prior written consent of the other party. All questions concerning the construction, validity, enforcement and interpretation of this Letter Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.

If this letter accurately sets forth your understanding of the terms with respect to the matters discussed above, please so indicate by executing a copy of this letter below and returning the executed copy to us. After receipt of your confirmation, we will provide wiring instructions to deliver the purchase price with respect to the 1,250,000 shares to be purchased pursuant to this letter.

	Sincerely,


	SFX HOLDING CORPORATION


	By:	/s/ Robert F.X. Sillerman

	Robert F.X. Sillerman
	Chairman and CEO
	SFX Holding Corporation

Acknowledged and Agreed:

BAMCO, Inc. on behalf of its investment
advisory client, Baron Small Cap Fund


By	/s/ Patrick Patalino
Name: Patrick Patalino
Title: General Counsel

EX-10.11 19 a2215423zex-10_11.htm EX-10.11

Exhibit 10.11

ASSET CONTRIBUTION AGREEMENT

by and among

SFX HOLDING CORPORATION,

SFX-DISCO OPERATING LLC,

SFX ENTERTAINMENT INC.,

DISCO PRODUCTIONS, INC.

and

JAMES DONALD ESTOPINAL

dated as of June 19, 2012

TABLE OF CONTENTS

			Page

ARTICLE 1 DEFINITIONS			2

ARTICLE 2 CONTRIBUTION			12

	2.1	Contribution of Transferred Assets	12
	2.2	Assumption of Liabilities	13
	2.3	Excluded Assets	13
	2.4	Retained Liabilities	14
	2.5	Consideration	14
	2.6	Tax Treatment; Allocation of Consideration	15
	2.7	Withholding Rights	16
	2.8	Post-Closing Adjustment of Consideration	17
	2.9	Working Capital Amount	19

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF TRANSFEROR PARTIES			20

	3.1	Corporate Existence	20
	3.2	Authorization	20
	3.3	Capital Structure	21
	3.4	Governmental Authorization	21
	3.5	Non-Contravention	21
	3.6	Ownership and Absence of Liens	21
	3.7	Sufficiency of the Transferred Assets	22
	3.8	Litigation	22
	3.9	Contracts	22
	3.10	Permits; No Required Consents	23
	3.11	Compliance with Applicable Laws	23
	3.12	Intellectual Property	23
	3.13	Advisory Fees	25
	3.14	Taxes	25
	3.15	Financial Statements	25
	3.16	Absence of Liabilities, Changes and Events	26
	3.17	Operation of the Business	26
	3.18	Employment and Labor Matters	26
	3.19	Employee Benefit Matters	27
	3.20	Insurance	28
	3.21	Real Property	28
	3.22	Books and Records	28
	3.23	Solvency	28
	3.24	No Other Agreements to Sell the Transferred Assets or Transferor Common Stock	29
	3.25	Affiliates	29

	3.26	Securities Law Matters	29
	3.27	Legends	29
	3.28	Restricted Securities	30
	3.29	Access to Information	30
	3.30	Reliance Upon Representations	30
	3.31	Exculpation	31
	3.32	Material Misstatements Or Omissions	31

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING PARTIES			31

	4.1	Corporate Existence and Power	31
	4.2	Capital Structure	32
	4.3	Authorization	32
	4.4	Governmental Authorization, Other Consents	32
	4.5	Litigation	32
	4.6	Non-Contravention	33
	4.7	[Intentionally omitted]	33
	4.8	[Intentionally omitted]	33
	4.9	Absence of Undisclosed Liabilities	33
	4.10	Restrictions on Business Activities	33
	4.11	Title to Property/Leases	33
	4.12	Taxes	33
	4.13	Compliance With Laws	34
	4.14	No Other Representations and Warranties	34

ARTICLE 5 COVENANTS OF THE PARTIES			34

	5.1	Further Assurances	34
	5.2	Certain Filings	34
	5.3	Public Announcements; Confidentiality	34
	5.4	Offer of Employment	35
	5.5	Assignment of Contracts and Claims	36
	5.6	Third Party Notification	36
	5.7	Non-Solicitation	36
	5.8	Non-Competition	37
	5.9	Parent SEC Documents	38
	5.10	Insomniac Dispute	39
	5.11	Auditor’s Fees	40
	5.12	Registration Statement	40

ARTICLE 6 [INTENTIONALLY OMITTED]			41

ARTICLE 7 [INTENTIONALLY OMITTED]			41

ARTICLE 8 CLOSING			41

	8.1	Closing Date	41
	8.2	Closing Deliveries	41

ARTICLE 9 INDEMNIFICATION			41

	9.1	Transferor Parties’ Agreement to Indemnify	41
	9.2	Acquiring Parties’ Agreement to Indemnify	42
	9.3	Limitations on Duties to Indemnify	43
	9.4	Survival of Representations, Warranties and Covenants	43
	9.5	Claims for Indemnification	44
	9.6	Defense of Claims	44
	9.7	Nature of Payments	45
	9.8	Exclusive Remedy	45
	9.9	Acquiring Parties’ Right of Offset	45
	9.10	Miscellaneous Indemnity Provisions	46
	9.11	Property Taxes	46
	9.12	Transfer and Sales Tax Returns	46

ARTICLE 10 [INTENTIONALLY OMITTED]			47

ARTICLE 11 MISCELLANEOUS			47

	11.1	Notices	47
	11.2	Amendments; No Waivers	47
	11.3	Expenses	48
	11.4	Successors and Assigns	48
	11.5	Governing Law	48
	11.6	Consent to Jurisdiction; Venue; Service of Process	48
	11.7	Waiver of Jury Trial	49
	11.8	Counterparts; Effectiveness	49
	11.9	Entire Agreement	49
	11.10	Titles and Headings; Construction	49
	11.11	Severability	49
	11.12	No Third Party Beneficiaries	50
	11.13	Specific Performance	50

EXHIBITS

A	Assignment and Assumption Agreement

B	Lockup Agreement

C	Registration Rights Agreement

D	Employment Agreement

iii

ASSET CONTRIBUTION AGREEMENT

This Asset Contribution Agreement (this “Agreement”) is dated as of June 19, 2012, by and among SFX HOLDING CORPORATION, a Delaware corporation (“Parent”), SFX-DISCO OPERATING LLC, a Delaware limited liability company wholly owned by Parent (“Acquiror”), SFX ENTERTAINMENT INC., a Delaware corporation (“SFX”, and together with Parent and Acquiror, the “Acquiring Parties”), DISCO PRODUCTIONS, INC., a Louisiana corporation (“Transferor”) and JAMES DONALD ESTOPINAL, an individual resident of Puerto Rico and the sole stockholder of Transferor (“Estopinal”). Estopinal and Transferor are collectively referred to herein as the “Transferor Parties”. The Acquiring Parties and the Transferor Parties are collectively referred to herein as the “Parties” and each a “Party.”

WHEREAS, Transferor is engaged in the business of the promotion and production of electronic dance music festivals and shows (the “Business”);

WHEREAS, (i) the Transferor Parties desire to contribute to Acquiror all of the Transferred Assets, for the consideration and on the terms and subject to the conditions set forth herein, and (ii) Acquiror desires to acquire all of the Transferred Assets from the Transferor Parties for the consideration and on the terms and subject to the conditions set forth herein;

WHEREAS, on or about the date hereof, as part of an overall plan (the “Plan”) to enter into this Agreement and the Other Contribution Agreements, SFX entered into an exchange agreement with Parent (the “Exchange Agreement”), pursuant to which the stockholders of SFX will, on the terms and subject to the conditions set forth therein, contribute all outstanding shares of common stock, par value $0.01 per share, of SFX to Parent in exchange for shares of common stock, par value $0.001 per share, of Parent (“Parent Common Stock”), with SFX continuing as a wholly owned Subsidiary of Parent (the “Exchange”);

WHEREAS, on or about the date hereof, as part of the Plan, Parent, certain wholly owned limited liability company Subsidiaries of Parent, and SFX entered into one or more contribution agreements (each, an “Other Contribution Agreement”) with one or more other individuals or entities engaged in businesses that are synergistic with those of SFX and the Transferor (the “Other Parties”), pursuant to which a wholly owned limited liability company Subsidiary of Parent will, on the terms and subject to the conditions set forth therein, acquire certain assets and assume certain liabilities thereof with a view to combining and expanding the overall business activities of Parent, SFX, the Transferor and the Other Parties in the field of live entertainment;

WHEREAS, the parties to the Transaction Documents and each of the parties to the Other Contribution Agreements intend to consummate the transactions contemplated thereby in accordance with the Plan such that the transactions contemplated by the Transaction Documents and the Other Contribution Agreements will qualify as a tax-free exchange transaction pursuant to Section 351 of the Code to the extent that the Consideration and the consideration payable to the Other Parties is paid in Parent Common Stock; and

WHEREAS, upon the closing of the transactions contemplated by the Exchange Agreement, Parent shall concurrently, but in the following order (i) effect the Exchange, with

SFX continuing as a wholly owned Subsidiary of Parent, and consummate the other transactions, all as contemplated by the Exchange Agreement, and (ii) consummate the transactions contemplated by this Agreement and by the Other Contribution Agreements.

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements herein contained, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE 1
DEFINITIONS

The following terms, as used herein, have the following meanings:

“Accredited Investor Representations” has the meaning ascribed to it in Section 3.30.

“Acquiror” has the meaning ascribed to it in the introduction to this Agreement.

“Acquiring Party Indemnitees” has the meaning ascribed to it in Section 9.1.

“Acquiring Parties” has the meaning ascribed to it in the introduction to this Agreement.

“Actions” means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority.

“Adjustment Amount” has the meaning ascribed to it in Section 2.8(b).

“Affiliate” means, with respect to a specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, the specified Person. For purposes of this definition, the term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. With respect to any determination herein that a Person is an Affiliate of Transferor, the Acquiring Parties are relying solely on the representations, warranties and other information provided to them by the Transferor Parties.

“Agreement” has the meaning ascribed to it in the introduction to this Agreement.

“Allocation” has the meaning ascribed to it in Section 2.6(b).

“Applicable Law” means any domestic or foreign, federal, state or local statute, law, common law, ordinance, binding policy, binding guidance, rule, administrative interpretation, regulation, order, writ, injunction, directive, judgment, decree, permit or other requirement of any Governmental Authority applicable to the Transferor Parties, the Business or the transactions contemplated hereby.

“Assignment and Assumption Agreement” means that certain Assignment and Assumption Agreement substantially in the form attached hereto as Exhibit A.

“Assumed Liability” or “Assumed Liabilities” has the meaning ascribed to it in Section 2.2.

“Balance Sheet Rules” means, collectively, the accounting principles, methods and practices used in preparing the Transferor Audited Financial Statements, applied on a consistent basis and in accordance with GAAP.

“Business” has the meaning ascribed to it in the introduction to this Agreement.

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.

“Cash Payment” has the meaning ascribed to it in Section 2.5.

“Closing” has the meaning ascribed to it in Section 8.1.

“Closing Date” has the meaning ascribed to it in Section 8.1.

“Closing Statement” has the meaning ascribed to it in Section 2.8(b).

“Code” means the Internal Revenue Code of 1986, as amended, or any successor law, and regulations issued by the IRS pursuant to the Internal Revenue Code or any successor law.

“Confidential Information” has the meaning ascribed to it in Section 5.3(b).

“Consideration” has the meaning ascribed to it in Section 2.5.

“Contract(s)” means contracts, agreements, permits, leases, licenses, franchises, warranties, guaranties, mortgages, notes, bonds, options, warrants, rights, commitments, understandings and other obligations in each case, whether written or oral, proposed, contingent or otherwise.

“Damages” means any loss, liability, claim, damage or expense (including reasonable costs of investigation and defense and reasonable attorneys’ fees), net of (a) insurance proceeds actually received, and proceeds from related third party indemnification, contribution or similar claims actually received, and (b) an amount equal to any net reduction in cash Taxes actually payable which directly relate to such Damages. With respect to a Transferor Party, for the avoidance of doubt, in no event shall Damages include any loss, liability, claim, damage or expense (including reasonable costs of investigation and defense and reasonable attorneys’ fees) incurred by Parent or any of its Subsidiaries.

“Designated Employees” has the meaning ascribed to it in Section 3.18.

“Difference” has the meaning ascribed to it in Section 2.8(e).

“Dispute” has the meaning ascribed to it in Section 2.8(c).

“Disputed Assets” has the meaning ascribed to it in Section 5.10(a).

“Domain Names” means all identifiers or URL registrations for Internet websites.

“Employee Assets” means all of Transferor’s assets, including without limitation, computers, work stations, third party software licensed for such computers or work stations, electronic files, multi-function printers and copiers, office furniture and other tangible assets presently used or formerly used principally by Estopinal or the Designated Employees that SFX elects to employ, which are necessary or useful for Estopinal or each Designated Employee to continue to perform his or their respective duties for Parent or any of its Subsidiaries after the Closing without interruption.

“Employment Agreement” has the meaning ascribed to it in Section 5.4.

“Equipment” means all servers, hardware, other equipment and Equipment Embodiments and Documentation used in connection with the Business.

“Equipment Embodiments and Documentation” means all object code, source code, technical documentation, engineering notes, information sheets, specifications, compilers, tools, data schema, databases, data warehouses, software, marketing and promotional materials, software libraries, know-how, invention disclosures and technology used in connection with the Business.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Estopinal” has the meaning ascribed to it in the introduction to this Agreement.

“Eventbrite” means Eventbrite, Inc., a Delaware corporation.

“Eventbrite Agreement” means the Ticketing Services Agreement, dated as of April 12, 2012, between Eventbrite and Transferor.

“Exchange” has the meaning ascribed to it in the introduction to this Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exchange Agreement” has the meaning ascribed to it in the introduction to this Agreement.

“Excluded Assets” has the meaning ascribed to it in Section 2.3.

“Excluded Representations and Warranties” means the representations and warranties set forth in Sections 3.1, 3.2, 3.4, 3.6, 3.13, 3.14, 3.15, 3.18, 3.19, 4.1, 4.2, 4.3, 4.9, 4.10, 4.11 and 4.12.

“Existing Patents and Applications” has the meaning ascribed to it in the definition of “Transferor IP” in Article 1.

“Final Adjustment Amount” has the meaning ascribed to it in Section 2.8(e).

“GAAP” means generally accepted accounting principles in the United States as in effect on the date hereof and applied on a consistent basis.

“Governmental Authority” means any foreign, domestic, federal, territorial, state or local governmental authority, quasi-governmental authority, instrumentality, court, government or self-regulatory organization, commission, tribunal or organization or any regulatory, administrative or other agency, or any political or other subdivision, department or branch of any of the foregoing.

“Governmental Authorization” means any approval, consent, ratification, waiver or other authorization, license, franchise, permit, exemption, clearance or registration issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Applicable Law.

“Indemnifying Party” means: (a) with respect to any Acquiring Party Indemnitee asserting a claim under Section 9.1, the Transferor Parties, jointly and severally; and (b) with respect to any Transferor Party Indemnitee asserting a claim under Section 9.2, the Acquiring Parties, jointly and severally.

“Indemnitee” means: (a) the Acquiring Party Indemnitees with respect to any claim for which any Transferor Party is an Indemnifying Party under Section 9.1; and (b) the Transferor Party Indemnitees with respect to claims for which any Acquiring Party is an Indemnifying Party under Section 9.2.

“Independent Accounting Firm” has the meaning ascribed to it in Section 2.6(b).

“Insomniac” means Insomniac Inc.

“Insomniac Dispute” has the meaning ascribed to it in Section 5.10(a).

“Intellectual Property” means United States and foreign patents, copyrights, Trade Secrets, Marks, any registrations or applications with respect to any of the foregoing, any similar or other intellectual property rights, and any rights under or with respect to any of the foregoing, including, without limitation, the right to file patent applications with respect to inventions that have been conceived or reduced to practice in whole or part as of the date hereof, any such applications that are in fact filed, the right to file applications to register copyrights in copyrightable works that have been created in whole or part as of the date hereof, and any such applications that are in fact filed.

“Intellectual Property Embodiments and Documentation” means all object code, source code, technical documentation, engineering notes, information sheets, specifications, compilers, tools, data schema, databases, data warehouses, software, marketing and promotional materials, software libraries, know-how, invention disclosures and technology.

“IP Agreements” has the meaning ascribed to it in Section 3.12(e).

“IRS” means the U.S. Internal Revenue Service.

“IT Assets” means all computers, firmware, middleware, servers, workstations, routers, hubs, switches, data communications lines, and all other information technology equipment (including any such assets as may be used to support any electronic information and ordering web-based or virtual platform) owned, leased or licensed by Transferor and used in connection with the Business as presently conducted, wherever located, and all associated documentation.

“Knowledge of SFX” or “SFX’s Knowledge” has the meaning ascribed to it in Article 4.

“Knowledge of Transferor” or “Transferor’s Knowledge” means the actual knowledge of Estopinal, after a reasonable investigation of the surrounding circumstances.

“Leased Real Property” means all real property leased or licensed to a Person, or to which such Person, has any other rights, under the Leases.

“Leases” means all of the existing leases, subleases, licenses, occupancy agreements, options, rights, concessions or other agreements or arrangements, written or oral, with respect to real property to which a Person is a party or by which such Person or the Transferred Assets, as applicable, is bound, but with respect to Transferred Assets, only to the extent that the foregoing are used in connection with the Business.

“Liability” means, with respect to any Person, any liability, debt or other obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise and whether or not the same is required to be accrued on the financial statements of such Person or is disclosed on any schedule to this Agreement.

“Lien” means, with respect to any asset, any mortgage, title defect or objection, lien, pledge, charge, claim, security interest, equitable interest, option, hypothecation, easement, right of way, restriction, encumbrance, preference, priority, right of first refusal, condition or limitation of any kind in respect of such asset and any agreement to grant any of the foregoing, excluding (a) liens for Taxes that are not due and payable or that are being contested in good faith by appropriate legal proceedings in a manner that will prevent foreclosure of the applicable lien during the pendency of such proceedings, (b) statutory liens of landlords and liens of carriers, warehousemen, mechanics, materialmen and other similar Persons and other liens imposed by Applicable Law incurred in the Ordinary Course of Business for sums not yet delinquent, (c) liens relating to deposits made in the Ordinary Course of Business in connection with workers’ compensation, unemployment insurance and other types of social security, and (d) liens securing any Assumed Liability.

“Lockup Agreement” means a lockup agreement among Parent and Transferor with respect to shares of Parent Stock owned by Transferor, substantially in the form of Exhibit B.

“Marks” means trademarks, service marks, trade dress and others indicators of source, origin, sponsorship, certification or endorsement, and all goodwill in and to any such trademarks, service marks, trade dress and other indicators of source, origin, sponsorship, certification or endorsement.

“Material Adverse Effect” means, with respect to any Person, any change, event, circumstance, development or effect that has, or could reasonably be expected to have, either individually or in the aggregate, a material adverse effect on (i) such Person’s consolidated financial condition, business, assets, properties, results of operations, operations, Liabilities or reserves, (ii) with respect to Transferor, the Transferred Assets or the Assumed Liabilities, other than, in the case of clauses (i) and (ii) above, any change, event, circumstance, development or effect that directly results from (a) changes in United States or global economic conditions that do not disproportionately impact the Business, the Transferred Assets or the Assumed Liabilities or (b) changes in the industry in which the Business operates that do not disproportionately impact the Business, the Transferred Assets or the Assumed Liabilities and (iii) with respect to Transferor, the ability of the Transferor Parties to consummate the transactions contemplated by the Transaction Documents or to timely perform any of their respective obligations under the Transaction Documents.

“Net Assets” means Transferor Assets, minus Transferor Liabilities as determined in accordance with the Balance Sheet Rules, each calculated immediately before, and without giving effect to, the Closing.

“Objections Statement” has the meaning ascribed to it in Section 2.8(c).

“Ordinary Course of Business” means, with respect to any Person, business practices (a) consistent with the past practices of such Person or (b) in the ordinary course of the normal day-to-day operations of such Person.

“Other Contribution Agreement” has the meaning ascribed to it in the introduction to this Agreement.

“Other Parties” has the meaning ascribed to it in the introduction to this Agreement.

“Parent” has the meaning ascribed to it in the introduction to this Agreement.

“Parent Common Stock” has the meaning ascribed to it in the introduction to this Agreement.

“Parent SEC Documents” has the meaning ascribed to it in Section 5.9.

“Party” or “Parties” has the meaning ascribed to it in the introduction to this Agreement.

“Per Share Price” means (a) for the purposes of Section 2.8, $5.00 per share of Parent Common Stock and (b) for the purposes of Section 9.9, $5.00 per share of Parent Common Stock, unless shares of Parent Common Stock are then listed on a national securities exchange or traded on the over-the-counter market, in which case the Per Share Price shall be the volume weighted average closing price per share of Parent Common Stock on such exchange or market during the thirty (30) trading days ending on the second (2nd) trading day immediately preceding measurement.

“Person” means an individual, corporation, partnership, limited liability company, joint venture, unincorporated organization, association, trust, estate or other entity or organization, including a Governmental Authority.

“Plan” has the meaning ascribed to it in the introduction to this Agreement.

“Post-Closing Tax Period” has the meaning ascribed to it in Section 9.11.

“Pre-Closing Tax Period” has the meaning ascribed to it in Section 9.11.

“Property Taxes” has the meaning ascribed to it in Section 9.11.

“Receivables” means any and all accounts receivable, notes and other amounts receivable from third parties, including customers and employees, arising from the conduct of the Business before the Closing, whether or not in the ordinary course and including any and all accounts receivables that have been written off or otherwise accounted for or reserved against as bad debts, together with any unpaid financing charges accrued thereon.

“Registration Rights Agreement” means a registration rights agreement among Parent and Transferor with respect to shares of Parent Stock owned by Transferor, substantially in the form of Exhibit C.

“Registration Statement” has the meaning ascribed o it in Section 5.12.

“Related Person” means: (a) with respect to a particular individual: (i) each other member of such individual’s Family; (ii) any Person that is directly or indirectly controlled by such individual or one or more members of such individual’s Family; and (iii) any Person with respect to which such individual or one or more members of such individual’s Family serves as a director, officer, partner, manager, executor, or trustee (or in a similar capacity); and (b) with respect to a specified Person other than an individual: (i) any Person that directly or indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under common control with such specified Person; (ii) each Person that serves as a director, officer, partner, manager, executor, or trustee of such specified Person (or in a similar capacity); and (iii) any Person with respect to which such specified Person serves as a general partner or a trustee (or in a similar capacity). For purposes of this definition, “Family” of an individual means (A) the individual, (B) the individual’s spouse (or any former spouse), and (C) any individual who resides with such individual, and “control” of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by contract or otherwise and, in any event and without limitation of the previous sentence, any Person owning fifty percent

(50%) or more of the voting securities of a second Person shall be deemed to control that second Person.

“Required Consents” means any approval, consent, ratification, waiver or other authorization of the other party or parties to each Transferred Contract that is required by the terms of such Transferred Contract to be obtained by any of the Transferor Parties by virtue of the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby to avoid the invalidity of such Transferred Contract, the termination thereof, the incurrence of any penalty or fee or adverse change in amounts payable to or by either of the Acquiring Parties or obligations of either of the Acquiring Parties as compared to Transferor or a breach or default thereunder (whether with or without the passage of time, the giving of notice or both), and all other approvals, consents, ratifications, waivers or other authorizations required to be obtained prior to the Closing Date for the consummation of the transactions contemplated by the Transaction Documents.

“Restricted Activity” means any activity that is, or would reasonably be deemed to be, competitive with (a) any aspect of the Business (i) as operated prior to the date of this Agreement or (ii) as contemplated by any of the Transferor Parties to be operated in the future as of the date of this Agreement, in each case, anywhere in the world where the Business may be conducted from time to time, or (b) any business in which any Acquiring Party and/or any of their respective Affiliates are engaged or likely to engage as of the date hereof or as of the date of termination of Estopinal’s employment with a Transferor Party or one of its Affiliates.

“Retained Liabilities” has the meaning ascribed to it in Section 2.4.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“SFX” has the meaning ascribed to it in the introduction to this Agreement.

“SFX Disclosure Schedule” has the meaning ascribed to it in Article 4.

“SFX’s Accountant” means an independent auditor of recognized national standing selected by SFX, in its sole discretion.

“Software” means all (a) computer programs, applications, systems and code, in both object code and Source Code, including software implementations of algorithms, models and methodologies and program interfaces and (b) Internet and intranet websites, databases and compilations, including data and collections of data, whether machine-readable or otherwise, but with respect to clauses (a) and (b), only to the extent used in connection with the Business.

“Source Code” means the human-readable version of a computer program that can be compiled into executable or object code.

“Stock Consideration” has the meaning ascribed to it in Section 2.5.

“Straddle Period” has the meaning ascribed to it in Section 9.11.

“Subsidiary” of any Person means any corporation, partnership, joint venture or other legal entity of which such Person (either alone or through or together with any other Subsidiary), owns, directly or indirectly, a majority of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation, partnership, joint venture or other legal entity, or otherwise owns, directly or indirectly, such equity interests, that would confer control of any such corporation, partnership, joint venture or other legal entity, or any Person that would otherwise be deemed a “subsidiary” under Rule 12b-2 promulgated under the Exchange Act.

“Target” has the meaning ascribed to it in Section 2.8(b).

“Tax” means (a) all taxes imposed of any nature including federal, state, local or foreign net income tax, alternative or add-on minimum tax, profits or excess profits tax, franchise tax, gross income, adjusted gross income or gross receipts tax, employment related tax (including employee withholding or employer payroll tax, FICA or FUTA), real or personal property tax or ad valorem tax, sales or use tax, excise tax, stamp tax or duty, any withholding or back up withholding tax, value added tax, severance tax, prohibited transaction tax, premiums tax, environmental tax, intangibles tax, business license tax, transfer tax, occupation tax, customs tax, duties or other taxes, fees, assessments or charges, together with any interest, penalty, or addition to tax imposed by any Governmental Authority (domestic or foreign) responsible for the imposition of any such tax, (b) any liability for payment of amounts described in clause (a) whether as a result of transferee liability, of being a member of an Affiliated, consolidated, combined or unitary group for any period, or otherwise through operation of law and (c) any obligations under any tax sharing, tax allocation, or tax indemnity agreements or arrangements with respect to any amounts described in clause (a) or (b) above.

“Tax Return” means any return, declaration, report, election, claim for refund or information return or other statement or form relating to Tax, filed or required to be filed with any Governmental Authority, including any schedule or attachment thereto or any amendment thereof.

“Threshold Amount” has the meaning ascribed to it in Section 9.3(a).

“Trade Secrets” means all “Trade Secrets” as defined in the Uniform Trade Secrets Act.

“Transaction Documents” means this Agreement, the Lockup Agreement, the Registration Rights Agreement, the Assignment and Assumption Agreement, the Employment Agreement and all other agreements and documents entered into by one or more of the Parties as contemplated by or in connection with this Agreement and the transactions contemplated hereby (excluding the Exchange Agreement and the Other Contribution Agreements).

“Transferred Assets” has the meaning ascribed to it in Section 2.1.

“Transferred Contracts” has the meaning ascribed to it in Section 2.1(c).

“Transfer and Sales Taxes” means all sales tax, use taxes, stamp taxes, conveyance taxes, transfer taxes, filing fees and other similar duties, taxes and fees, if any, imposed upon, or resulting from, the transfer of the Transferred Assets.

“Transferor” has the meaning ascribed to it in the introduction to this Agreement.

“Transferor Assets” means the assets and properties of the Business.

“Transferor Audited Financial Statements” has the meaning ascribed to it in Section 3.15.

“Transferor Common Stock” has the meaning ascribed to it in Section 3.3.

“Transferor Financial Statements” has the meaning ascribed to it in Section 3.15.

“Transferor Interim Financial Statements” has the meaning ascribed to it in Section 3.15.

“Transferor IP” means all Intellectual Property, Intellectual Property Embodiments and Documentation, Domain Names or Software used in or relating to the Business. For avoidance of doubt, Transferor IP includes, without limitation, (a) all of the patents and patent applications referenced in the foregoing sentence that are or have been issued or filed as of the Closing Date (the “Existing Patents and Applications”), (b) all other patent applications that are filed after the Closing Date that disclose or claim any inventions first conceived or reduced to practice in whole or part on or before the Closing Date that relate to the Intellectual Property Embodiments and Documentation, including, without limitation, all continuations, continuations-in-part, divisional, reexamined and reissued patent applications and patents that relate to the Existing Patents and Applications, (c) all foreign counterparts with respect to any of the foregoing, and (d) all patents that issue with respect to any of the foregoing patent applications.

“Transferor Liabilities” means the liabilities of the Business.

“Transferor Organization Documents” has the meaning ascribed to it in Section 3.1.

“Transferor Party Indemnitees” has the meaning ascribed to it in Section 9.2.

“Transferor Parties” has the meaning ascribed to it in the introduction to this Agreement.

“Transferor’s Disclosure Schedule” has the meaning ascribed to it in Article 3.

“Working Capital Amount” has the meaning ascribed to it in Section 2.9.

ARTICLE 2
CONTRIBUTION

2.1 Contribution of Transferred Assets. On the terms and subject to the conditions of this Agreement, at the Closing, the Transferor Parties shall contribute, sell, transfer, convey, assign and deliver to Acquiror, and Acquiror shall purchase, accept and acquire from the Transferor Parties, free and clear of any Liens, all of the assets constituting the Business, including without limitation, the following properties, assets, rights and claims, whether tangible or intangible, including goodwill and going concern value but excluding the Excluded Assets (the “Transferred Assets”):

(a) all of the Transferor IP and IT Assets, including, without limitation, the Transferor IP identified on Schedule 2.1(a);

(b) all of the Equipment, including, without limitation, the assets identified on Schedule 2.1(b);

(c) all of the Contracts identified on Schedule 2.1(c) (the “Transferred Contracts”), except that Transferred Contracts shall not include any contract if SFX elects on or after the Closing not to accept a contract for which a Required Consent is necessary;

(d) all of the Employee Assets which are listed on Schedule 2.1(d) (as it may be adjusted at Closing to reflect the Designated Employees who have accepted employment offers, if any, from SFX or any of its Affiliates as of the Closing);

(e) all websites, URLs, Domain Names and webpages used, held for use or under development in connection with the Business, whether or not registered, including without limitation, the Domain Names identified on Schedule 2.1(e), together with all Intellectual Property associated therewith other than trademarks set forth therein which are not otherwise part of the Transferred Assets;

(f) all advertising, marketing and sales materials developed for, or used in connection with, the Business together with all Intellectual Property embodied therein other than Intellectual Property set forth therein which are not otherwise part of the Transferred Assets;

(g) all files, invoices, customer lists, records pertaining to customers and end-users (present, past and potential), all supplier lists and records pertaining to suppliers, books of account, files and ledgers, and other records to the extent solely and specifically for the Transferred Assets or the Assumed Liabilities and copies of the Tax books and records (redacted to exclude information not relating to the Transferred Assets or the Assumed Liabilities) relating to the Transferred Assets or the Assumed Liabilities and not otherwise provided pursuant to this clause (g);

(h) without limiting anything set forth in clause (g) of this Section 2.1, all Intellectual Property Embodiments and Documentation;

(i) all Governmental Authorizations of all Governmental Authorities set forth on Schedule 2.1(i);

(j) all rights relating to deposits, advances, loan repayments, return of investments, prepaid expenses and other upfront payments, claims for refunds and rights of offset (other than refunds of Tax Liabilities relating to Tax periods (or portions thereof) ending on or prior to the Closing Date) that are not excluded under Section 2.3(c) related to the Transferred Assets or the Assumed Liabilities;

(k) all rights to insurance proceeds to the extent such rights arise from or are related to any casualty or Liability affecting the Transferred Assets or the Assumed Liabilities;

(l) all legal and equitable privileges, rights and claims against any third parties, and all choses in action relating to the Transferred Assets, the Business or the Assumed Liabilities;

(m) all goodwill of the Business;

(n) all Receivables;

(o) all of the rights, title and interest of the Transferor Parties in and to festivals and shows, whether through partnership agreements, profit sharing agreements, or otherwise, including those set forth on Schedule 2.1(o);

(p) all of Transferor’s right, title and interest in and to the corporate name “Disco Productions, Inc.” and any other corporate name formerly used in connection with the Business.

Notwithstanding the foregoing, the transfer of the Transferred Assets pursuant to this Agreement does not include the assumption of any Liability related to the Transferred Assets unless SFX expressly assumes that Liability pursuant to Section 2.2.

2.2 Assumption of Liabilities. On the terms and subject to the conditions of this Agreement and in reliance upon the representations, warranties, covenants and agreements of the Transferor Parties set forth herein, Acquiror agrees, effective at the Closing, to assume, perform and timely pay and discharge only the following (collectively, the “Assumed Liabilities” and each an “Assumed Liability”): those executory obligations arising after the Closing under the Transferred Contracts which do not relate to (i) any breach of, or failure to comply with, prior to the Closing, any representation, warranty, covenant or obligation in any such Transferred Contract, (ii) any event that occurred prior to the Closing which, with or without notice, lapse of time or both, would constitute such a breach or failure, or (iii) any indemnification claim relating to any of the matters set forth in clauses (i) or (ii) of this Section 2.2.

2.3 Excluded Assets. Notwithstanding anything to the contrary herein, the following assets (the “Excluded Assets”) shall be excluded from the Transferred Assets and retained by Transferor:

(a) all cash, cash equivalents and marketable securities of Transferor on hand or on deposit with any financial institution;

(b) any bank or brokerage accounts of Transferor;

(d) original copies of all minute books, records, stock ledgers, Tax records and other materials Transferor is required by law to retain;

(e) all Contracts that are not Transferred Contracts;

(f) all assets of Transferor which are not used in the Business;

(g) all legal and equitable privileges, rights and claims against any third parties, and all choses in action relating to the Excluded Assets or Retained Liabilities;

(h) all rights to insurance proceeds to the extent such rights arise from or are related to any casualty or Liability affecting the Excluded Assets or the Retained Liabilities;

(i) the Disputed Assets; and

(j) all ownership and other rights with respect to any Pension Plan, Welfare Plan and Compensation Program of Transferor.

2.4 Retained Liabilities. Notwithstanding any other provision of this Agreement or any of the other Transaction Documents or any other writing to the contrary, and regardless of any information disclosed to the Acquiring Parties or any of their respective Affiliates or representatives, neither Acquiror nor any Affiliates of Acquiror assumes, and Acquiror and Affiliates of Acquiror shall not at any time hereafter (including on or after the Closing) become liable or responsible for, any Liabilities of any of the Transferor Parties other than the Assumed Liabilities and as provided in Section 2.8 and Section 2.9 (such unassumed Liabilities, the “Retained Liabilities”). Transferor shall remain bound by and liable and responsible for, and shall retain, pay, perform and discharge when due, all Retained Liabilities.

2.5 Consideration. Subject to adjustment as set forth in Section 2.8, upon the terms and subject to the conditions contained in this Agreement, as consideration for the sale, transfer, assignment, conveyance and delivery of the Transferred Assets and in full payment therefor, the Acquiring Parties shall pay or cause to be paid to Transferor: (i) $4,000,000 in cash, of which (A) $3,000,000 in cash will be delivered by wire transfer to an account designated by Transferor (the “Cash Payment”) and (B) $1,000,000 in cash will be held by Parent in escrow and released in accordance with Section 2.9, and (ii) 1,000,000 shares of Parent Common Stock (the “Stock Consideration”), and Parent shall assume the Assumed Liabilities as provided in Section 2.2 (together, the “Consideration”). The shares of Parent Common Stock comprising the Stock Consideration shall be held in escrow by Parent pending receipt by Parent of:

(a) all Required Consents required for the assignment of those Transferred Contracts set forth on Schedule 3.10 shall have been obtained or made, and no limitation, restriction or condition not already applicable to the Transferor Parties shall be imposed in connection with such Required Consents on any Acquiring Party or any of their Affiliates or their ownership or use of any of the Transferred Assets or the conduct or operation of the Business;

(b) true and complete copies of (i) the audited consolidated balance sheets and the related consolidated statements of income and expenses, stockholders’ equity, and cash flows of the Business for each of the two fiscal years ended as of December 31, 2011 and December 31, 2010, together with all related notes and schedules thereto, accompanied by the reports thereon of Transferor’s accountants, in each case, audited by SFX’s Accountant; (ii) the unaudited consolidated balance sheets and the related consolidated statements of income and expenses, stockholders’ equity, and cash flows of the Business as of the quarterly period ended March 31, 2012 and March 31, 2011, in each case, audited by SFX’s Accountant, and (iii) for each of 2012 and 2011, the year-to-date period ended on the last day of the full calendar month immediately preceding the Closing, in each case, reviewed by SFX’s Accountant, together with all related notes and schedules thereto accompanied by the reports thereon;

(c) evidence satisfactory to Parent that the Transferred Assets are free and clear of all Liens currently in favor of any Person, including, without limitation, JPMorgan Chase Bank, NA and Factor Funding LLC;

(d) evidence satisfactory to Parent that each of the Domain Names listed on Schedule 2.1(e) have been registered to, and in the name of, Parent or one of its Affiliates; and

(e) evidence satisfactory to Parent that Transferor shall have changed its corporate name to a corporate name that is reasonably satisfactory to Parent.

Subject to Section 2.8, upon receipt by Parent of the items set forth in this Section 2.5(a) through (e), Parent shall release the shares of Parent Common Stock comprising the Stock Consideration to Transferor. Until the later to occur of (x) release of the shares of Parent Common Stock comprising the Stock Consideration from escrow in accordance with this Section 2.5 and (y) consummation of the Exchange, Transferor hereby irrevocably designates, constitutes and appoints Robert F.X. Sillerman as the Transferor’s attorney, agent and proxy, with full power of substitution, to vote and otherwise act (including, without limitation, for purposes of calling any meeting of the stockholders or directors of Parent or taking any action or providing any approval or consent required or permitted) with respect to the shares of Parent Common Stock comprising the Stock Consideration in any and all matters upon which stockholders owning capital stock of Parent are entitled to vote, as if actually present and voting, and with the same force and effect as if voted by Transferor, at any meeting of the stockholders of Parent, in any action by written consent of the stockholders of Parent or otherwise. Such proxy and power of attorney is irrevocable and coupled with an interest and shall be automatically terminated and of no further or continuing force or effect upon the later to occur of (r) release of the shares of Parent Common Stock comprising the Stock Consideration from escrow in accordance with this Section 2.5 and (s) consummation of the Exchange.

2.6 Tax Treatment; Allocation of Consideration.

Assets shall be considered transferred separately in exchange for a portion of each of the above categories of Consideration received, and the fair market value of each category of such Consideration shall be separately allocated to each of the Transferred Assets in proportion to the relative fair market values of each of the Transferred Assets.

(b) Basis Allocation. The Parties agree that any portion of the Consideration that results in an increase in the basis of the Transferred Assets in the hands of Acquiror over the amount of such basis in the hands of Transferor shall be allocated among the Transferred Assets in proportion to the amounts by which their values exceed Transferor’s bases in such assets (the “Allocation”). Within sixty (60) days after the Closing, Acquiror shall provide Transferor with a proposed Allocation for Transferor’s review and comment. If Transferor does not provide any comments to Acquiror in writing within ten (10) Business Days following delivery by Acquiror of the proposed Allocation, then the Allocation proposed by Acquiror shall be deemed to be final and binding absent manifest error. If, however, Transferor submits comments to Acquiror within such ten (10) Business Day period, Acquiror and Transferor shall negotiate in good faith to resolve any differences within ten (10) Business Days. If Transferor and Acquiror are unable to reach a resolution within such ten (10) Business Day period, then all remaining disputed items shall be submitted for resolution by an independent accounting firm mutually selected by Acquiror and Transferor (“Independent Accounting Firm”), which shall make a final determination as to the disputed items within twenty (20) Business Days after such submission, and such determination shall be final, binding and conclusive on Transferor and Acquiror. The fees and disbursements of the Independent Accounting Firm shall be shared equally between Transferor and Acquiror. Any subsequent adjustments to the sum of the Consideration shall be reflected in the Allocation in a manner consistent with the above procedure. For all Tax purposes, Acquiror and Transferor agree that the transactions contemplated in this Agreement shall be reported in a manner consistent with the terms of this Agreement, including the Allocation, and that none of them will take any position inconsistent therewith in any Tax Return, in any refund claim, in any litigation, or otherwise. Each of Acquiror and Transferor agrees that it will file with its Tax Return for the year in which the Closing occurs the statement required by Treasury Regulation 1.351-3(a) or 1.351-3(b), as applicable.

2.7 Withholding Rights.

(a) Each of the Acquiring Parties shall be entitled to deduct and withhold from the Consideration otherwise payable pursuant to this Agreement to Transferor such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code, or any provision of state, local or foreign tax law, and to pay the same to any U.S. federal, state, local or foreign Governmental Authority as required by Applicable Law. To the extent that amounts are so withheld and paid by the Acquiring Parties, such amounts shall be treated for all purposes of this Agreement as having been paid as Consideration to Transferor in respect of which such deduction or withholding and payment was made.

such Acquiring Party, on demand, the amount of the shortfall, and such Acquiring Party shall pay such amount to the Governmental Authority.

(c) Transferor agrees to furnish each of the Acquiring Parties with such representations and forms as it shall reasonably request to assist it in determining the extent of, and in fulfilling, any obligations it may have to withhold and pay over amounts to any Governmental Authority and/or to file any Tax Returns or information returns with respect to the payment of the Consideration to Transferor or the payment of any Taxes to any Governmental Authority in respect of Transferor arising in connection with this Agreement.

(d) The Transferor Parties agree, jointly and severally, to indemnify and hold harmless the Acquiring Parties and their respective officers, directors, employees and agents, from and against any liability with respect to Taxes, interest or penalties which may be asserted by reason of (i) the failure to deduct and withhold Tax on the Consideration payable to Transferor or (ii) the failure to file any Tax or information returns with respect to Transferor due in connection with this Agreement, unless such failure described in either phrase (i) or (ii) of this sentence was attributable to the fraud, gross negligence or willful misconduct of the Acquiring Parties or any of their respective officers, directors, employees, agents or Affiliates. Notwithstanding the foregoing, to the extent the Acquiring Parties fail to deduct and withhold Tax on the Consideration payable to Transferor, Transferor shall remain liable for payment of such Tax.

2.8 Post-Closing Adjustment of Consideration. The Consideration shall be subject to adjustment at or after the Closing as specified in this Section 2.8:

(a) [Intentionally omitted].

(b) Closing Statement. Within 120 days following the Closing Date, Parent shall prepare and deliver to the Transferor a certificate (the “Closing Statement”) setting forth Parent’s determination of Net Assets and the amount, if any, by which the estimated Net Assets set forth in the Closing Statement exceeds negative one million five hundred thousand dollars (($1,500,000)) (the “Target”; and, the amount if any, by which the estimated Net Assets set forth in the Closing Statement exceeds the Target being the “Adjustment Amount”; for the avoidance of doubt, if the estimated Net Assets set forth in the Closing Statement is negative two million dollars (($2,000,000)), then the Adjustment Amount would be five hundred thousand dollars ($500,000)), in each case determined in accordance with the Balance Sheet Rules. Following delivery of the Closing Statement, Parent shall provide Transferor with any supporting documentation for the Closing Statement that Transferor may reasonably request.

(c) Dispute Resolution. Within 30 days after Transferor’s receipt of the Closing Statement, Transferor shall deliver to Parent a written statement either accepting the Closing Statement or specifying any objections thereto in reasonable detail (an “Objections Statement”). If Transferor does not deliver an Objections Statement within such 30-day period, then the Closing Statement shall become final and binding upon all parties. If Transferor does deliver an Objections Statement within such 30-day period, then Transferor and Parent shall negotiate in good faith for 15 days following Parent’s receipt of such Objections Statement to resolve such objections (any unresolved objection, a “Dispute”). After such 15-day period, any item or matter

set forth in the Closing Statement that is not a Dispute shall become final and binding upon all parties. If Parent and Transferor are unable to resolve all objections during such 15-day period, then any remaining Disputes, and only such remaining Disputes, shall be resolved by an Independent Accounting Firm. The Independent Accounting Firm shall be instructed to resolve any such remaining Disputes in accordance with the terms of this Agreement within 30 days after its appointment. The resolution of such Disputes by the Independent Accounting Firm (i) shall be set forth in writing, (ii) shall be within the range of dispute between Parent and Transferor, (iii) shall constitute an arbitral award, and (iv) shall be conclusive and binding upon all the parties upon which a judgment may be rendered by a court having proper jurisdiction thereover. Upon delivery of such resolution, the Closing Statement, as modified in accordance with such resolution, shall become final and binding upon all parties.

(d) Fees and Expenses of Independent Accounting Firm. The fees, costs and expenses of the Independent Accounting Firm shall be borne by either Parent or the Transferor as follows: (i) if the Independent Accounting Firm determines that the Final Adjustment Amount is more than five percent (5%) greater or lower than the Adjustment Amount determined by Parent, then Parent shall bear the fees, costs and expenses of the Independent Accounting Firm, and (ii) if the Independent Accounting Firm determines that the Final Adjustment Amount is less than five percent (5%) greater or lower than the Adjustment Amount determined by Parent, then Transferor shall bear the fees, costs and expenses of the Independent Accounting Firm through the payment of such fees, costs and expenses by Parent.

(e) Final Adjustment Amount. As used herein, “Final Adjustment Amount” means (i) if Transferor fails to deliver an Objections Statement in accordance with Section 2.8(c), the Adjustment Amount as set forth in the Closing Statement, or (ii) if the Adjustment Amount set forth in the Closing Statement is resolved by resolution of Parent and Transferor or by submission of any remaining Disputes to the Independent Accounting Firm, as contemplated by Section 2.8(c), the Adjustment Amount as so resolved. To the extent that an Acquiring Party becomes liable for or pays any of the Final Adjustment Amount, the Consideration shall be adjusted downward by an amount equal to the Final Adjustment Amount as follows: at the election of Parent in its sole discretion, either (x) the Transferor Parties shall promptly, but in no event later than five (5) Business Days following determination of the Final Adjustment Amount in accordance with this Section 2.8, pay to Parent an amount in cash equal to Final Adjustment Amount, (y) Parent shall cancel, in the manner set forth in Section 9.9, a number of fully paid non-assessable shares of Parent Common Stock equal to the Final Adjustment Amount divided by the Per Share Price or (z) the obligations under this Section 2.8(e) shall be satisfied using a combination of a cash payment under (x) and a cancellation of Parent Common Stock under (y); provided, however, that if SFX elects to cancel shares of Parent Common Stock to satisfy obligations of the Transferor Parties under this Section 2.8(e), the Transferor Parties may instead elect to pay cash to satisfy such obligations. For the avoidance of doubt, if the Net Assets set forth in the Closing Statement, as finally determined in accordance with this Section 2.8, is negative two million dollars (($2,000,000)), the Final Adjustment Amount would be $500,000 (the amount by which the Net Assets set forth in the Closing Statement, as finally determined in accordance with this Section 2.8, “exceeds” the Target of negative one million five hundred thousand dollars (($1,500,000)).

(f) Eventbrite Agreement. Notwithstanding anything to the contrary set forth in this Section 2.8, the Parties agree that if an Acquiring Party makes any payment to Eventbrite required by the Eventbrite Agreement, then Parent shall be entitled to cancel, in the manner set forth in Section 9.9, a number of fully paid non-assessable shares of Parent Common Stock equal to the amount of such payment divided by the Per Share Price; provided, however, that if SFX elects to cancel shares of Parent Common Stock to satisfy obligations of the Transferor Parties under this Section 2.8(f), the Transferor Parties may instead elect to pay cash to satisfy such obligations. The Parties acknowledge and agree that Transferor Parties have made additional investments in festivals and shows occurring subsequent to Closing in an amount totaling approximately $700,000 to which Parent is entitled, and to the extent any of such investments, whether through the repayment of a loan or otherwise, are recouped by or repaid to a Transferor Party, such Transferor Party shall immediately pay such funds over to Parent.

2.9 Working Capital Amount. At Closing, the Acquiring Parties shall hold in escrow in a segregated account for the benefit of Acquiror an amount in cash equal to $2,500,000 (the “Working Capital Amount”). Subsequent to Closing, prior to Acquiror or any Transferor Party paying any payables or otherwise making payments to satisfy Liabilities related to the Business, Acquiror shall submit a reasonably detailed invoice to Parent for approval and authorization for the release of payment amounts from the Working Capital Amount. The Working Capital Amount shall be used solely and exclusively for the payment by Acquiror of the payables arising from the day-to-day operations of the Business set forth on Schedule 2.9 (excluding any fees or costs for attorneys, accountants, or financial advisors engaged by a Transferor Party, whether engaged in connection with the negotiation, execution and delivery of the Transaction Documents, and the advice related thereto, or otherwise, regardless of whether such fees or costs are set forth on Schedule 2.9). The Working Capital Amount shall be held by Parent in a segregated account until Parent receives written instructions executed by Larry Madden or Shelly Finkel, which instructions shall (i) set forth the amount to be released from escrow and (ii) not be unreasonably withheld, conditioned or delayed. Upon receipt of such instructions, Parent shall release and deliver to Acquiror an amount from the Working Capital Amount being held in escrow equal to the amount set forth in the instructions. The Parties acknowledge and agree that, as described in Section 2.5, $1,000,000 of the Consideration for the Transferred Assets is being held in escrow by Parent as a portion of the Working Capital Amount to be used solely and exclusively for the payment by Acquiror of payables arising from the day-to-day operations of the Business as set forth in this Section 2.9. On June 19, 2013, any remaining amounts comprising the Working Capital Amount remaining in escrow, up to $1,000,000, shall be released and delivered to Transferor, and any portion of the Working Capital Amount, in excess of $1,000,000, remaining in escrow on June 19, 2013, shall be released and delivered to Parent. The Parties also acknowledge and agree that, for the avoidance of doubt and in consideration for Parent’s agreement to pay certain payables of the Business as set forth in this Section 2.9, Parent shall be entitled to all Receivables. Notwithstanding anything to the contrary set forth in this Section 2.9, Parent’s obligation to pay payables under this Section 2.9 shall in no event exceed $2,500,000 unless and until Parent collects Receivables, in which case Parent shall pay payables arising from the day-to-day operations of the Business set forth on Schedule 2.9 (excluding fees and costs for attorneys, accountants, or financial advisors engaged by a Transferor Party) over such $2,500,000 threshold in an amount equal to the amount of Receivables collected by an Acquiring Party. If an Acquiring Party pays, on behalf of a Transferor Party, any amounts

Parent is not required to pay under this Section 2.9, then (x) the Transferor Parties shall promptly, but in no event later than five (5) Business Days following payment by Parent of such amount, pay to Parent an amount in cash equal to such amount, (y) Parent shall cancel, in the manner set forth in Section 9.9, a number of fully paid non-assessable shares of Parent Common Stock equal to such amount divided by the Per Share Price or (z) the obligations under this Section 2.9 shall be satisfied using a combination of a cash payment under (x) and a cancellation of Parent Common Stock under (y); provided, however, that if Parent elects to cancel shares of Parent Common Stock to satisfy obligations of the Transferor Parties under this Section 2.9, the Transferor Parties may instead elect to pay cash to satisfy such obligations.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF TRANSFEROR PARTIES

As an inducement to the Acquiring Parties to enter into this Agreement and to consummate the transactions contemplated herein and except as set forth on Transferor’s disclosure schedule attached hereto and incorporated herein, comprising schedules numbered according to the sections of this Article 3 and as specifically set forth herein (the “Transferor’s Disclosure Schedule”), the Transferor Parties, jointly and severally, make the following representations and warranties to the Acquiring Parties, as of the date of this Agreement (except if another date is specified in the representation or warranty). Each exception set forth in the Transferor’s Disclosure Schedule will be deemed to qualify (a) the corresponding representation and warranty set forth in this Agreement that is specifically identified (by cross-reference or otherwise) in the Transferor’s Disclosure Schedule and (b) all other representations and warranties to the extent the relevance of such exception to such other representation and warranty is reasonably clear.

3.1 Corporate Existence. Transferor is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Louisiana, with full corporate power and authority to conduct its business as it is presently being conducted and to own and lease its properties and assets. Copies of the Articles of Incorporation of Transferor, and all amendments thereto, heretofore made available to SFX (the “Transferor Organization Documents”) are accurate and complete as of the date hereof.

3.2 Authorization. Transferor has all requisite corporate power and authority, and has taken all corporate action necessary, to execute and deliver this Agreement, to consummate the transactions contemplated by this Agreement and the Transaction Documents to which Transferor is party and to perform its obligations hereunder and thereunder. Estopinal has the right, power and authority, and has taken all action necessary, to execute and deliver this Agreement and the Transaction Documents to which Estopinal is a party, to consummate the transactions contemplated hereby and thereby and to perform his obligations hereunder and thereunder. The execution and delivery by Transferor of this Agreement and the Transaction Documents to which it is a party, and the consummation by Transferor of the transactions contemplated hereby and thereby, have been duly authorized and approved by Estopinal. No other corporate proceedings on the part of Transferor are necessary to authorize this Agreement and the Transaction Documents to which it is a party and the transactions contemplated hereby and thereby. This Agreement and the Transaction Documents to which Transferor is a party

have been duly executed and delivered by Transferor and are the legal, valid and binding obligations of Transferor enforceable against Transferor in accordance with their terms, except that such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to creditors’ rights generally, and is subject to general principles of equity. This Agreement and the Transaction Documents to which Estopinal is a party have been duly executed and delivered by Estopinal and are the legal, valid and binding obligations of Estopinal enforceable against Estopinal in accordance with their terms, except that such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to creditors’ rights generally, and is subject to general principles of equity.

3.3 Capital Structure. The authorized capital stock of Transferor consists of 100 shares of common stock, no par value (“Transferor Common Stock”), that have the rights, preferences, privileges and restrictions set forth in the Transferor Organization Documents and Applicable Law and of which there were issued and outstanding as of the close of business on the date hereof, one (1) share of Transferor Common Stock. Estopinal is the record and beneficial owner of one hundred percent (100%) of the issued and outstanding shares of Transferor Common Stock, free and clear of any Liens. All issued and outstanding shares of Transferor Common Stock have been duly authorized and validly issued in compliance with Applicable Laws. Other than the shares of Transferor Common Stock held by Estopinal, there are no other shares of Transferor Common Stock or other shares of capital stock of Transferor outstanding. Set forth on Schedule 3.3 are all options, warrants and other securities of Transferor that are exercisable for or convertible into capital stock of Transferor.

3.4 Governmental Authorization. To the Knowledge of Transferor, the execution, delivery and performance by each of the Transferor Parties of this Agreement and the Transaction Documents to which he or it is a party requires no Governmental Authorization from any Governmental Authority other than (a) any Governmental Authorizations otherwise expressly referred to in this Agreement or any schedule hereto; (b) any filings required to be made by any of the Acquiring Parties in accordance with Applicable Law; (c) notice filings that are not material to the Business; and (d) Governmental Authorizations required by Governmental Authorities outside of the U.S. to effectuate or record the transfer of any Transferred Assets.

3.5 Non-Contravention. The execution, delivery and performance by each of the Transferor Parties of this Agreement and the Transaction Documents to which a Transferor Party is a party does not and will not (a) contravene or conflict with the Transferor Organization Documents, true and correct copies of which have been delivered to SFX by Transferor (b) to the Knowledge of Transferor, contravene or conflict with or constitute a violation of any provision of any Applicable Law binding upon any of the Transferor Parties, the Business or any of the Transferred Assets; (c) result in the creation or imposition of any Lien on any of the Transferred Assets; or (d) contravene, conflict with or constitute a violation or breach of any agreement to which any of the Transferor Parties is a party or by which any of the Transferor Parties has any obligation to third parties pursuant to any Transferred Contracts.

Transferred Assets are in normal operating condition and free from any significant defects, ordinary wear and tear excepted, and have been properly serviced and maintained by Transferor. To Transferor’s Knowledge, no third party has made any claim or assertion challenging Transferor’s sole and exclusive ownership of all right, title and interest in and to the capital stock of Transferor and any options, warrants and other securities of Transferor that are exercisable for or convertible into capital stock of Transferor, free and clear of all Liens.

3.7 Sufficiency of the Transferred Assets. Upon consummation of the transactions contemplated by this Agreement (including, without limitation, payment of the Cash Payment and the Stock Consideration) and the Transaction Documents, the Transferor Parties will have sold, assigned, transferred and conveyed to Acquiror the Transferred Assets, free and clear of all Liens. Except as noted on Schedule 3.7, the Transferred Assets comprise all of the assets: (a) necessary for Acquiror to conduct the Business (other than personnel) as it is presently being conducted and (b) utilized by Transferor in the Business (other than personnel) as it is presently conducted. Without limiting the foregoing, the Transferred Assets are all assets (other than personnel) necessary for Acquiror to fulfill the obligations under the Transferred Contracts, and are all operating assets of Transferor used in the Business. Except as noted on Schedule 3.7, no assets necessary for or related to the conduct of the Business are owned or used by any Person other than Transferor

3.8 Litigation. Except as set forth on Schedule 3.8, there are no Actions that have been brought by or against or before any Governmental Authority or any other Person pending or, to the Knowledge of Transferor, threatened, nor have any of the Transferor Parties received any written correspondence regarding any such pending or threatened Actions, with respect to any of the Transferor Parties that seek to enjoin or rescind the transactions contemplated by this Agreement or the Transaction Documents, and there are no existing Actions, orders, judgments or decrees against or binding upon any of the Transferor Parties or any of the Transferred Assets, or that would prevent the performance by any of the Transferor Parties of the transactions contemplated by this Agreement.

3.9 Contracts.

(a) The Transferor Parties have made available to SFX true, correct and complete copies of all written Transferred Contracts, which Transferred Contracts are listed on Schedule 3.9(a). Each of the Transferred Contracts is valid and effective in accordance with its terms, and is binding and enforceable against Transferor and, to the Transferor’s Knowledge, against each other party thereto and in full force and effect. Transferor and, to the Transferor’s Knowledge, the other parties to the Transferred Contracts have performed all of their respective material obligations required to be performed under the Transferred Contracts. There is not under any of such Transferred Contracts (i) any existing or claimed default by any of the Transferor Parties or event which, with the notice or lapse in time, or both, would constitute a default by such Transferor Party or (ii) to the Knowledge of Transferor, any existing or claimed default by any other party or event which with notice or lapse of time, or both, would constitute a material default by any such party. There is no actual or, to the Knowledge of Transferor, threatened termination, cancellation or limitation of any of the Transferred Contracts. To the Knowledge of Transferor, there is no pending or threatened bankruptcy, insolvency or similar proceeding with respect to any other party to the Transferred Contracts.

(b) The Transferred Contracts constitute all material Contracts relating to the Business to be conducted after the Closing.

(c) Except as noted on Schedule 3.9(c), the Transferred Contracts, respectively, do not contain provisions relating to any of the following matters:

(i) any covenant not to compete or confidentiality agreement of any of the Transferor Parties or for the benefit of another Person;

(ii) any arrangement limiting the freedom of any of the Transferor Parties to conduct the Business in any manner or use the Transferred Assets in any manner;

(iii) any agreement restricting transfer or sale by the Transferor Parties of the Transferor IP or the other Transferred Assets; and

(iv) any rights granted to, or retained by, any Affiliate of any of the Transferor Parties or any member, manager, officer or employee of Transferor.

3.10 Permits; No Required Consents. Schedule 2.1(i) sets forth all Governmental Authorizations of all Governmental Authorities that are, to the Transferor’s Knowledge, necessary for the operation of the Transferred Assets and the Business in substantially the same manner as currently operated by Transferor. Except as set forth in Schedules 2.1(i) and 3.10, to the Transferor’s Knowledge, there are no consents are required for the Transferor Parties to sell the Transferred Assets.

3.11 Compliance with Applicable Laws. Except as noted on Schedule 3.11, none of the Transferor Parties is in material violation of any Applicable Law or any order, writ, injunction or decree of any Governmental Authority applicable to the Transferred Assets or the Business. All documentation, correspondence, reports, data, analysis and certifications relating to or regarding the Transferred Assets filed or delivered (or, if amended, as of the date for which such amendment speaks) by or on its behalf to any Governmental Authority were true and accurate in all material respects when so filed or delivered and remain, to the extent required by any Applicable Laws.

3.12 Intellectual Property.

(a) Schedule 3.12(a) sets forth an accurate and complete list, as of the date hereof, of all Transferor IP and IT Assets. Transferor is the exclusive owner of the entire and unencumbered right, title and interest in and to, all Transferor IP and IT Assets purported to be owned by Transferor, and Transferor has a valid right to use all Transferor IP and IT Assets in the ordinary course of the Business as currently conducted or as contemplated to be conducted free and clear of any and all Liens. The consummation of the transactions contemplated under the Transaction Documents will not alter, impair, or extinguish any Transferor IP.

(b) To the Knowledge of Transferor, all of the Transferor IP is valid, enforceable and subsisting. Transferor has not received any written notice or claim challenging or questioning the ownership, validity or enforceability of any Transferor IP. To the Transferor’s

Knowledge, the Transferor IP is not subject to any outstanding decree, order, injunction, judgment or ruling restricting the use of such Transferor IP or that would materially impair the validity or enforceability of such Transferor IP.

(c) To the Knowledge of Transferor, except as set forth on Schedule 3.12(d), neither the Transferor IP nor the conduct by Transferor of the Business as currently conducted or contemplated to be conducted conflicts with, infringes, misappropriates or dilutes any intellectual property or other proprietary rights, including rights of privacy, publicity and endorsement, of any third Person. Except as set forth on Schedule 3.12(d), Transferor has not received any notice or claim asserting or suggesting that any such infringement, misappropriation or dilution may be occurring or has occurred (including, without limitation, offers to license), nor, to Transferor’s Knowledge, is there any basis therefor. To Transferor’s Knowledge, no third party is misappropriating, infringing or diluting any Transferor IP.

(d) Except as set forth on Schedule 3.12(d), no litigation (or other proceeding in or before any Governmental Authority or arbitral body) charging Transferor with infringement or unauthorized or unlawful use of any Transferor IP, or alleging that any services provided by, processes used by, or products manufactured or sold by Transferor infringe or misappropriate any Intellectual Property right of any third party, is pending, or to Transferor’s Knowledge, threatened; nor, to Transferor’s Knowledge, is there any reasonable basis for any such litigation or proceeding.

(e) Transferor has not licensed, distributed or otherwise granted any rights to any third party with respect to any Transferor IP. Except as may be set forth in any Transferred Contracts made available to the Acquiring Parties, Transferor has not given any party an indemnity in connection with the Transferor IP. Schedule 3.12(e)(2) identifies all material licenses and other agreements currently in effect pursuant to which a third party has licensed, distributed or otherwise granted to Transferor any rights to such third party’s Intellectual Property, Intellectual Property Embodiments and Documentation, Domain Names or Software that are used in connection with the Business (the foregoing constituting the “IP Agreements”). Except as set forth on Schedule 3.12(e)(3), the Transferor Parties are not obligated to pay any material on-going license fees, royalties or any other amount to any other Person in connection with the IP Agreements, the operation of the Business, any license of the Transferor IP or any of the transactions contemplated hereunder, and have no liabilities thereunder. Consummation of the transactions contemplated by this Agreement will not result in any increase of any fees with respect to any of the IP Agreements. Except as set forth on Schedule 3.12(e)(4), none of the parties to the Transferred Contracts have received, or have a right to receive, any discounts, special pricing or other benefits in connection with the Business other than those expressly set forth in the Transferred Contract entered into by such party. Neither Transferor nor, to the Knowledge of Transferor, any other party to any IP Agreement, is in material breach or default thereof, and each IP Agreement is fully valid and enforceable in accordance with its terms, except that such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to creditors’ rights generally, and is subject to general principles of equity.

(f) To the Knowledge of Transferor, the IT Assets operate and perform in all material respects in accordance with their operation and performance prior to the date of this

Agreement. To the Knowledge of Transferor, no Person has gained unauthorized access to the IT Assets.

(g) To the Knowledge of Transferor, Transferor’s operation of any web sites used in connection with the Business, and content thereof and data processed, collected, stored or disseminated in connection therewith, do not violate any Applicable Laws, or any Person’s right of privacy or publicity. Transferor (i) has obtained all necessary permits, approvals, consents, authorizations or licenses to lawfully operate its web sites and to use its data and (ii) is operating its web sites and using its data in accordance with the scope of such permits, approvals, consents, authorizations or licenses. Transferor has posted a privacy policy governing Transferor’s use of data, and disclaimers of liability on its web sites, and Transferor has complied with such privacy policy in all material respects. Transferor has taken all steps in accordance with normal industry practice to secure its web sites and data, and any portion thereof, from unauthorized access or use by any Person.

3.13 Advisory Fees. There is no broker, finder, agent or other intermediary who has been retained by or is expressly authorized to act on behalf of any of the Transferor Parties or their respective Affiliates and is entitled to any fee, commission or reimbursement of expenses upon consummation of the transactions contemplated by the Transaction Documents. For the avoidance of doubt, no manager, member, employee or officer of Transferor is considered to be a broker, finder, agent or other intermediary of Transferor, even if they are acting as a finder for, or are planning to become employees of, an Acquiring Party.

3.14 Taxes. Each Transferor Party has timely filed all Tax Returns required to be filed by such Transferor Party and all such Tax Returns have been true, correct, and complete in all material respects. Each Transferor Party has timely paid all Taxes imposed on such Transferor Party when the same have become due. Each Transferor Party has complied with all Applicable Laws relating to the withholding and collection of Tax with respect to the Business (including any withholding with respect to wages or other amounts paid or owing to any employee, independent contractor, creditor, member, shareholder or other third party), and has timely reported such amounts and paid them over to the applicable Governmental Authority. There is no outstanding claim, audit or other examination or proceeding with respect to Taxes with respect to any Transferor Party and, to the Knowledge of Transferor, no such claim, audit, examination or proceeding is threatened. No written claim has ever been made by a Governmental Authority in a jurisdiction where the Transferor does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no Liens on any of the Transferred Assets that arose in connection with any failure (or alleged failure) to pay any Tax. The Transferor Parties have complied in all material respects with Applicable Laws with respect to the Business with respect to record retention of Tax Records. Transferor does not have any obligation under any agreement providing for the allocation or sharing of Taxes or an agreement providing for an indemnification for Taxes. True and complete copies of the Tax Returns of Transferor for each of the three fiscal years ended as of December 31, 2011, December 31, 2010 and December 31, 2009, and the related schedules and work papers have been made available to SFX.

3.15 Financial Statements. True and complete copies of (i) the audited consolidated balance sheets and the related consolidated statements of income and expenses, stockholders’

equity, and cash flows of the Business for each of the two fiscal years ended as of December 31, 2011 and December 31, 2010, together with all related notes and schedules thereto, accompanied by the reports thereon of Transferor’s accountants (the “Transferor Audited Financial Statements”) and (ii) the unaudited consolidated balance sheets and the related consolidated statements of income and expenses, stockholders’ equity, and cash flows of the Business for the quarterly period ended March 31, 2012 and March 31, 2011 and, for each of 2012 and 2011, the year-to-date period ended on the last day of the full calendar month immediately preceding the Closing together with all related notes and schedules thereto accompanied by the reports thereon of Transferor’s accountants (the “Transferor Interim Financial Statements” and, together with the Transferor Audited Financial Statements, the “Transferor Financial Statements”) have been delivered or will be delivered by Transferor to SFX. The Transferor Financial Statements (A) were prepared in accordance with the books of account and other financial records of Transferor, (B) present fairly the consolidated financial condition and results of operations of Transferor as of the dates thereof or for the periods covered thereby, (C) have been prepared in accordance with GAAP applied on a basis consistent with the past practices of Transferor and (D) include all adjustments (consisting only of normal recurring accruals) that are necessary for a fair presentation of the consolidated financial condition of Transferor and the results of the operations of Transferor as of the dates thereof or for the periods covered thereby.

3.16 Absence of Liabilities, Changes and Events. Since March 31, 2012, none of the Transferor Parties has (a) incurred any material debts, liabilities, claims against or obligations, other than in the Ordinary Course of Business, and to Transferor’s Knowledge, there is no reasonable legal basis therefor, that may adversely affect any of the Transferor Parties’ ability to perform his or its obligations hereunder or under the other Transaction Documents or may adversely affect the ownership of the Transferred Assets or the use thereof by Acquiror in the manner currently used by Transferor, whether accrued, absolute, contingent or otherwise, and whether due or to become due, including but not limited to liabilities on account of Taxes, other governmental charges, duties, penalties, interest or fines; (b) sold, assigned, transferred or licensed any tangible or intangible asset of Transferor used in the operation of the Business other than in the Ordinary Course of Business; (c) modified or terminated any IP Agreements; (d) except as set forth on Schedule 3.16, increased any salaries, wages or employee benefits or made any arrangement for payment of any bonus or special compensation for any employee of Transferor who primarily perform services with respect to the Business other than in the Ordinary Course of Business; (e) agreed to take any action described in (a) through (d) above, or (f) had a Material Adverse Effect with respect to Transferor.

3.17 Operation of the Business. Since March 31, 2012, the Transferor Parties and their respective Affiliates have conducted the Business, including ownership and use of the Transferred Assets, only through Transferor and not through any other divisions or any direct or indirect Subsidiary or Affiliate of any of the Transferor Parties. Since March 31, 2012, Transferor has operated the Business in the Ordinary Course of Business. To the Knowledge of Transferor, as of the date hereof, there are no material adverse changes, modifications or amendments contemplated to be made to any of the Transferred Contracts or any of Transferor’s existing, scheduled or planned revenue generating activities with respect to the Business.

3.18 Employment and Labor Matters. Schedule 3.18 lists all employees of Transferor who primarily perform services with respect to the Business (the “Designated Employees”).

Transferor has complied in all material respects with all Applicable Laws respecting employment and employment practices, terms and conditions of employment, wages and hours, and occupational safety and health. With respect to the Designated Employees:

(a) except for routine government inquiries, examinations and inspections which Transferor has no reason to believe are material, to the Transferor’s Knowledge, there are no charges, governmental audits, investigations, administrative proceedings or complaints, grievances or actions concerning the employment practices of Transferor pending, nor has any of the Transferor Parties been notified of any such matter being threatened, before any Governmental Authority and, to the Knowledge of Transferor, no basis for any such matter exists;

(b) Transferor is not a party to any union or collective bargaining agreement, no union attempts to organize its employees have been made, nor are any such attempts now threatened;

(c) Transferor has not experienced any organized slowdown, work interruption, strike, or work stoppage by any of its employees;

(d) none of such employees have filed any complaints against Transferor or any, to the Transferor’s Knowledge, managers, members, officers or employees of Transferor, or initiated any Actions against any of the Transferor Parties or been subject to any disciplinary actions by Transferor;

(e) Transferor will not incur any Liability to any such employee or violate any Applicable Laws respecting employment and employment practices as a result of the transactions contemplated by this Agreement; and

(f) Transferor has valid written documentation that each such employee is a U.S. resident or is authorized to work in the U.S. and has made such documentation available to Acquiror.

3.19 Employee Benefit Matters.

(a) A true, correct and complete list of the names, titles, base salaries, bonus information, date of hiring, sick and vacation leave that is accrued and unused and all other benefits of the Designated Employees as of the date hereof is included on Schedule 3.19. To Transferor’s Knowledge, except as contemplated by this Agreement (i) it is not expected that any of the Designated Employees will be terminating employment with Transferor prior to the Closing Date or will not commence employment with Acquiror as of the Closing Date, (ii) none of the Designated Employees or former employees of Transferor have violated any confidentiality agreement or covenant not to compete and (iii) none of the Designated Employees have violated (A) any material Applicable Laws in the course of their employment with Transferor, or (B) any material Transferor’s policies, in each case excepting such violations as would not be expected to have a Material Adverse Effect with respect to Transferor.

(b) The Transferor does not maintain and has not maintained any employee pension benefit plans, as defined in Section 3(2) of ERISA. Transferor has not maintained or

contributed within the last six (6) years to any other employee pension benefit plan, as defined in Section 3(2) of ERISA, which was subject to Title IV of ERISA.

(c) The Transferor does not maintain and has not maintained any employee welfare benefit plans, as defined in Section 3(1) of ERISA (including but not limited to, life insurance, medical, hospitalization, holiday, vacation, disability dental and vision plans).

(d) The Transferor does not maintain and has not maintained any unwritten incentive compensation, material fringe benefit, material payroll or employment practice, bonus, option, stock purchase, severance, sick pay, salary continuation, deferred compensation, supplemental executive compensation plans, employment agreements (other than those terminable at will without severance) and consulting agreements for the benefit of their officers, directors, employees, former employees, or independent contractors.

(e) Neither the execution and delivery of this Agreement nor the consummation of any of the transactions contemplated hereby or by the Transaction Documents will (i) result in any payment (including, without limitation, severance, unemployment compensation, golden parachute or otherwise) becoming due to any Designated Employee.

3.20 Insurance. With respect to the Business, Transferor maintain the insurance policies that are listed on Schedule 3.20, which insurance policies are in full force and effect and enforceable in accordance with their terms.

3.21 Real Property. Transferor does not own a fee interest in any real property. Schedule 3.21 sets forth a true, correct and complete list of all Transferor’s Leases. Transferor has made true, complete and correct copies of all such Leases (including, all amendments, modifications and supplements thereof) available to Acquiror and each such Lease is in full force and effect. Transferor, as tenant under its Leases, is not in arrears in the payment of any rent under such Leases.

3.22 Books and Records. Transferor has made available to the Acquiring Parties the books of account, minute books, stock or other ownership record books and other records of Transferor relating to the Business. At the time of the Closing, all of such books and records will be in the possession of Transferor.

3.23 Solvency.

(a) Transferor is not now insolvent and will not be rendered insolvent by the transactions contemplated by this Agreement. As used in this section, “insolvent” means that the sum of the Liabilities of Transferor exceeds the present fair market value of Transferor’s assets.

(b) Immediately after giving effect to the consummation of the transactions contemplated by this Agreement: (i) Transferor will be able to pay its Liabilities as they become due in the ordinary course of its business; (ii) Transferor will not have unreasonably small capital with which to conduct its present or proposed business; and (iii) taking into account all pending and threatened Actions, final judgments against Transferor in actions for money damages are not reasonably anticipated to be rendered at a time when, or in amounts such that, Transferor will be unable to satisfy any such judgments in accordance with their terms (taking into account the

maximum probable amount of such judgments in any such actions and the earliest reasonable time at which such judgments might be rendered) as well as all other obligations of Transferor.

(c) No bankruptcy, reorganization, debt arrangement or other case or Action under any bankruptcy or insolvency law has been commenced with respect to Transferor.

3.24 No Other Agreements to Sell the Transferred Assets or Transferor Common Stock. None of the Transferor Parties, nor any of their respective representatives or Affiliates, is a party to any Contract with any other Person (other than the Acquiring Parties with respect to clause (a) of this Section 3.24) to (a) sell, assign, transfer or effect a sale of the Business or any of the Transferred Assets, (b) issue, sell, assign, transfer or effect a sale of any Transferor Common Stock, or (c) effect any merger, consolidation, liquidation, dissolution or other reorganization of Transferor, or to enter into any Contract or cause the entering into of any Contract with respect to any of the foregoing.

3.25 Affiliates. Other than Estopinal, Transferor is not controlled by any Person and Transferor is not in control of any other Person. Other than in connection with Estopinal’s ownership interest in Transferor, neither Estopinal nor any of his Related Persons own, directly or indirectly, or otherwise has an interest in whole or in part, any material tangible or intangible property (including the Transferor IP) that Transferor uses or the use of which is necessary for the conduct of the Business or the ownership or operation of the Transferred Assets.

3.26 Securities Law Matters. The offer and sale of the shares of Parent Common Stock comprising the Stock Consideration to Transferor is being made as a private placement pursuant to Section 4(2) of the Securities Act and Regulation D thereunder, and is not being registered under the Securities Act. Each of the Transferor Parties hereby acknowledges that the shares of Parent Common Stock comprising the Stock Consideration have not been registered under the Securities Act, or registered or qualified for sale under any state securities laws, and cannot be resold without registration thereunder or exemption therefrom. Each of the Transferor Parties is an “accredited investor,” as such term is defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D of the Securities Act, and will acquire the shares of Parent Common Stock comprising the Stock Consideration for his, her or its own account and not with a view to a sale or distribution thereof in violation of the Securities Act, and the rules and regulations thereunder, any applicable state “blue sky” laws or any other applicable securities laws. Each of the Transferor Parties has sufficient knowledge and experience in financial and business matters to enable him or it to evaluate the risks of investment in the shares of Parent Common Stock comprising the Stock Consideration is acquiring the shares of Parent Common Stock comprising the Stock Consideration with a full understanding of all of the terms, conditions and risks thereof, and at the Closing Date will bear and has the ability to bear the economic risk of this investment for an indefinite period of time.

3.27 Legends. Each of the Transferor Parties acknowledges that, to the extent applicable, each certificate evidencing the shares of Parent Common Stock comprising the Stock Consideration shall be endorsed with a legend substantially in the form set forth below, as well as any additional legend imposed or required by applicable securities laws:

“THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY U.S. STATE, NOR IS ANY SUCH REGISTRATION CONTEMPLATED. THIS SECURITY AND ANY SECURITY ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.

THE HOLDER OF THIS SECURITY AGREES THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO SFX HOLDING CORPORATION, OR ITS SUCCESSOR, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY THE BUYER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THE SECURITIES EXCEPT AS PERMITTED UNDER THE SECURITIES ACT.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A CERTAIN LOCK-UP AGREEMENT BETWEEN SFX HOLDING CORPORATION (THE “COMPANY”) AND THE REGISTERED OWNER OF THIS CERTIFICATE, AND SUCH AGREEMENT IS AVAILABLE FOR INSPECTION WITHOUT CHARGE AT THE OFFICE OF THE COMPANY.”

3.28 Restricted Securities. Each of the Transferor Parties acknowledges that the shares of Parent Common Stock comprising the Stock Consideration are “restricted securities” (as such term is defined in Rule 144 under the Securities Act) and must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available.

issued will not be registered under the Securities Act on the ground that the sale provided for in this Agreement and the issuance of securities hereunder is exempt from the registration requirements of the Securities Act; and (d) no state or federal agency has made any finding or determination as to the fairness of the terms of the sale of the shares of Parent Common Stock comprising the Stock Consideration or any recommendation or endorsement thereof. If any of the representations made by the Transferor Parties in connection with their acquisition of the shares of Parent Common Stock comprising the Stock Consideration are no longer accurate prior to Closing, the Transferor Parties will promptly notify SFX.

3.31 Exculpation. Each of the Transferor Parties acknowledges that it is not relying upon any Person or firm, including, without limitation, any of the Acquiring Parties, in making its investment or decision to invest in Parent, other than the representations and warranties of the Acquiring Parties contained in this Agreement.

3.32 Material Misstatements Or Omissions. No representations or warranties by any of the Transferor Parties in this Agreement (including the Transferor’s Disclosure Schedule) or any Transaction Document to which any of them is a party contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary to make the statements or facts contained therein not misleading. Transferor has furnished or caused to be furnished to the Acquiring Parties or any of their respective officers, directors, agents, employees or other representatives for review complete and correct copies of all agreements and documents set forth on or referred to in the Transferor’s Disclosure Schedule.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING PARTIES

In this Article 4, any reference to the “Knowledge of SFX” or “SFX’s Knowledge” means SFX’s actual knowledge after reasonable inquiry of SFX’s directors and executive officers (within the meaning of Rule 405 under the Securities Act).

Except as disclosed in that section of the document of even date herewith delivered by SFX to the Transferor prior to the execution and delivery of this Agreement (the “SFX Disclosure Schedule”; all references in this Article 4 to a “Schedule” mean a Schedule of SFX Disclosure Schedule) corresponding to the Section of this Agreement to which any of the following representations and warranties specifically relate or as disclosed in another section of the SFX Disclosure Schedule if it is reasonably apparent from the nature of the disclosure that it is applicable to another Section of this Agreement, each Acquiring Party represents and warrants to the Transferor Parties as follows:

4.1 Corporate Existence and Power. Each of the Acquiring Parties is a corporation or limited liability company duly incorporated or formed, validly existing and in good standing, and no certificate of dissolution has been filed, under the laws of the jurisdiction of its incorporation or formation. Each of the Acquiring Parties has the corporate or limited liability company power to own its properties and to carry on its respective business as now being conducted and as proposed to be conducted. Each of the Acquiring Parties has delivered or made available to the Transferor Parties a true and correct copy of its charter, bylaws or equivalent organizational

documents, each as amended to date. No Acquiring Party is in violation of any of the provisions of its charter, bylaws or equivalent organizational documents.

4.2 Capital Structure. The authorized capital stock of Parent consists of 300 million shares of Parent Common Stock, of which there were issued and outstanding as of the close of business on the date hereof, one share of Parent Common Stock. The shares of Parent Common Stock comprising the Stock Consideration have been duly authorized by all necessary corporate action and, when issued and delivered against payment therefor in accordance with the terms of this Agreement, the shares of Parent Common Stock comprising the Stock Consideration will be validly issued, fully paid and non-assessable. All outstanding shares of Parent Common Stock are duly authorized, validly issued, fully paid and nonassessable and are free of any Liens other than any Liens created by or imposed upon the holders thereof, and are not subject to preemptive rights or rights of first refusal created by statute, the charter, bylaws or equivalent organizational documents of an or any agreement to which any Acquiring Party is a party or by which it is bound.

4.3 Authorization. Each of the Acquiring Parties has all requisite corporate or limited liability company, as the case may be, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by each of the Acquiring Parties of this Agreement and the consummation of the transactions contemplated by this Agreement and the Transaction Documents are within the corporate powers of each of the Acquiring Parties and have been duly authorized by all necessary corporate or limited liability company, as the case may be, action on the part of each of the Acquiring Parties. This Agreement has been duly and validly executed by each of the Acquiring Parties and each of the Transaction Documents will be duly and validly executed by and does or will constitute the legal, valid and binding agreement of each of the Acquiring Parties, enforceable against such party in accordance with its terms (assuming execution by the other parties thereto), subject to general principles of equity (regardless of whether such enforceability is considered in an action in equity or at law).

4.4 Governmental Authorization, Other Consents. The execution, delivery and performance by each of the Acquiring Parties of this Agreement and the Transaction Documents to which such Acquiring Party is a party requires no action by, consent or approval of, or filing with any Governmental Authority or other Person other than any actions, consents or approvals otherwise expressly referred to in this Agreement and any filings that any Acquiring Party shall make in accordance with Applicable Law.

4.5 Litigation. There are no Actions that have been brought by or against or before any Governmental Authority or any other Person pending or, to the Knowledge of SFX, threatened with respect to any Acquiring Party or any of their respective properties or officers or directors (in their capacities as such). There are no Actions that seek to enjoin or rescind the transactions contemplated by this Agreement or the Transaction Documents, and there are no existing actions, orders, judgments or decrees against or binding upon any Acquiring Party that could reasonably be expected to prevent the performance by any Acquiring Party of the transactions contemplated by this Agreement.

4.6 Non-Contravention. The execution, delivery and performance by each of the Acquiring Parties of this Agreement and the Transaction Documents to which such Acquiring Party is a party does not and will not (a) contravene or conflict with the organizational documents of any Acquiring Party, true and correct copies of which have been delivered to Transferor by such Acquiring Party; (b) contravene or conflict with or constitute a violation of any provision of any Applicable Law binding upon any Acquiring Party; or (c) contravene, conflict with or constitute a violation or breach of any agreement to which any Acquiring Party is a party.

4.7 [Intentionally omitted].

4.8 [Intentionally omitted].

4.9 Absence of Undisclosed Liabilities. No Acquiring Party has any Liabilities other than (i) those incurred in the Ordinary Course of Business, (ii) those incurred in connection with this Agreement and (iii) those that would not reasonably be expected to have a Material Adverse Effect on the Acquiring Parties.

4.10 Restrictions on Business Activities. There is no agreement or order of a Governmental Authority binding upon any Acquiring Party which has or reasonably could be expected to have the effect of prohibiting or materially impairing any business practice of any Acquiring Party, any acquisition of property by any Acquiring Party or the conduct of business by any Acquiring Party.

4.11 Title to Property/Leases. No Acquiring Party owns a fee interest in any real property. Schedule 4.11 sets forth a true, correct and complete list of all Leases to which an Acquiring Party is party. SFX, as tenant under the Leases set forth on Schedule 4.11, is not in arrears in the payment of any rent under the leases. The Acquiring Parties enjoy peaceful and undisturbed possession of all the Leased Real Property in the manner provided for in the Leases set forth on Schedule 4.11 and there are no contractual or legal restrictions that preclude or restrict the ability to conduct and operate the Acquiring Parties’ respective businesses on such Leased Real Property as it is presently being conducted and operated thereon.

4.12 Taxes. Each Acquiring Party has timely filed all Tax Returns required to be filed by such Acquiring Party, if any, and all such Tax Returns have been true, correct, and complete in all material respects. Each Acquiring Party has timely paid all Taxes imposed on such Acquiring Party, if any, when the same have become due. Each Acquiring Party has complied with all Applicable Laws relating to the withholding and collection of Tax (including any withholding with respect to wages or other amounts paid or owing to any employee, independent contractor, creditor, member, shareholder or other third party related to such Acquiring Party), and has timely reported such amounts and paid them over to the applicable Governmental Authority. There is no outstanding claim, audit or other examination or proceeding with respect to Taxes with respect to any Acquiring Party and, to the Knowledge of SFX, no such claim, audit, examination or proceeding is threatened. Each Acquiring Party has complied in all material respects with all Applicable Laws with respect to such Acquiring Party with respect to record retention. No Acquiring Party has any obligation under any agreement providing for the allocation or sharing of Taxes or an agreement providing for an indemnification for Taxes.

4.13 Compliance With Laws. Each Acquiring Party has complied with, is not in violation of, and has not received any notices of violation with respect to, any Applicable Law with respect to the conduct of its respective business, or the ownership or operation of its respective business, except as would not reasonably be expected to have a Material Adverse Effect on the Acquiring Parties.

4.14 No Other Representations and Warranties. Except as expressly set forth in this Article 4, no Acquiring Party makes any representation or warranty, express or implied, at law or in equity, with respect to the Acquiring Parties, their affiliates, their businesses or financial condition or any of their assets, Liabilities or operations or any other matter, and any such other representations or warranties are hereby expressly disclaimed.

ARTICLE 5
COVENANTS OF THE PARTIES

5.1 Further Assurances. The Parties agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be reasonably necessary in order to consummate or implement on a timely basis the transactions contemplated by this Agreement. In addition, at such times and from time to time on and after the Closing Date, upon reasonable request by any of the Acquiring Parties, and at no expense to the Transferor Parties, the Transferor Parties will execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered, all such further acts, including using commercially reasonable efforts to obtain the Required Consents, deeds, assignments, transfers, conveyances, licenses, powers of attorney, and assurances that may reasonably be required for the better conveying, transferring, assigning, delivering and confirming ownership to, or reducing to the possession of, Acquiror all of the Transferred Assets and to otherwise carry out the purposes of this Agreement.

5.2 Certain Filings. Without limiting the generality of Section 5.1, the Parties shall cooperate with one another in determining whether any action by or in respect of, or filing with, any Governmental Authority is reasonably necessary or appropriate, or any action, consent, approval or waiver from any party to any of the Transferred Contracts is reasonably necessary or appropriate, in connection with the consummation of the transactions contemplated by this Agreement. Subject to the terms and conditions of this Agreement, in taking such actions or making any such filings, the Parties shall furnish information reasonably required in connection therewith and seek timely to obtain any such actions, consents, approvals or waivers.

5.3 Public Announcements; Confidentiality.

Parent from disclosing any information regarding the Transferor Parties, the Business, this Agreement or the transactions contemplated hereby to Other Parties.

(b) “Confidential Information” means any confidential business or technical information relating to the operations, business plans, or intellectual property of the Business (and not the other operations of Transferor) and includes without limitation Transferor’s Software, the Transferor IP, the Intellectual Property Embodiments and Documentation, the Equipment Embodiments and Documentation, in each case, relating to the Business, and all other confidential information relating to the Business, but excludes (i) information any of the Acquiring Parties discloses to any third party who has not agreed to non-disclosure restrictions similar to those contained in this Section 5.3(b); (ii) information that is or becomes known to the public or enter the public domain, other than by any fault of any of the Transferor Parties; (iii) information rightfully disclosed to any Transferor Party by a third party that is legally free to disclose such matters; and (iv) information developed by any Transferor Party, alone or with others, that does not utilize the Confidential Information. Except as otherwise required by Applicable Law, a court of competent jurisdiction or the enforcement of this Agreement or the other Transaction Documents, from and after the Closing Date, none of the Transferor Parties shall, without the prior written consent of SFX, disclose to any other Person or use (whether for the account of Transferor or any other party) any Confidential Information; provided, however that each Transferor Party may disclose to its members, accountants, attorneys and lenders Tax and financial information relating to its ownership and operation of the Business. In the event that any Transferor Party believes that it is required to disclose any such Confidential Information pursuant to Applicable Laws, such Transferor Party shall give timely written notice to SFX so that SFX and its Affiliates may have an opportunity to obtain a protective order or other appropriate relief at the Acquiring Parties’ sole expense. The Transferor Parties shall use commercially reasonable efforts to cooperate in any such action by SFX and its Affiliates at the Acquiring Parties’ sole expense. Notwithstanding anything to the contrary set forth in this Section 5.3(b), the individual identities of an event, venue, promoter, artist or customer shall not be Confidential Information; however, any lists of customers comprising Transferred Assets shall not be so excluded.

5.4 Offer of Employment. To the extent a Designated Employee is not party to an employment agreement with Transferor that is a Transferred Contract, Transferor shall cooperate, at no expense to Transferor, with the Acquiring Parties and shall use commercially reasonable efforts to seek to obtain on behalf of the Acquiring Parties the acceptance of an offer of employment by any Designated Employees that the Acquiring Parties may hereafter elect to employ, and Transferor consents to the Acquiring Parties or any of their respective Affiliates communicating directly with such Designated Employees about offers of employment commencing ten (10) days prior to the Closing Date or such earlier date as Transferor may agree to in its sole discretion. Estopinal has agreed by his execution of this Agreement to execute and deliver at Closing an employment agreement, substantially in the form attached hereto as Exhibit D (the “Employment Agreement”). Except for obligations to Transferor, to the Knowledge of Transferor, Estopinal is not obligated under or bound by any agreement or instrument, or any judgment, decree, or order of any court of administrative agency, that (a) conflicts or may conflict with his agreements and obligations to use his commercially reasonable efforts to promote the interests of the Acquiring Parties, (b) conflicts or may conflict with the business or operations of the Acquiring Parties as presently conducted, or (c) restricts or may restrict the use

or disclosure of any information that may be useful to the Acquiring Parties. Without regard to whether Acquiror employs Estopinal or the Designated Employees, Transferor shall be solely responsible for all outstanding payments due to Estopinal and the Designated Employees under their existing terms of employment with Transferor (including but not limited to salary, severance obligations, vacation pay or any other payment) through the Closing Date and Transferor acknowledges and agrees that none of the Acquiring Parties shall assume or in any fashion be bound by any employment Contract between Transferor and Estopinal or a Designated Employee.

5.5 Assignment of Contracts and Claims. Notwithstanding any other provisions of this Agreement, nothing in this Agreement or any related document shall be construed as an attempt to assign (a) any Contract which, as a matter of law or by its terms, is nonassignable without the consent of the other parties thereto unless such consent has been given or (b) any Contract or claim as to which all of the remedies for the enforcement thereof enjoyed by Transferor would not, as a matter of law or by their terms, pass to Acquiror as an incident of the transfers and assignments to be made under this Agreement. Nothing in this Section 5.5 shall relieve Transferor of its obligations to obtain any Required Consents required for the transfer of the Transferred Assets and all rights thereunder to Acquiror.

5.6 Third Party Notification. Each Party agrees to inform any actual or potential third party purchasers, licensees, or transferees of the restrictions imposed by the Transaction Documents on the rights licensed to or retained by Transferor, and on the rights acquired by Acquiror, in this transaction.

5.7 Non-Solicitation.

(a) Restricted Conduct. Until the fifteen (15) month anniversary of the date of termination of the Employment Agreement, Transferor shall not, directly or indirectly (i) hire or offer employment to or seek to hire any Designated Employee or any other employee of any Acquiring Party or any successor or Affiliate thereof, unless such Acquiring Party first terminates the employment of such employee or gives its written consent to such employment or offer of employment, (ii) induce, solicit, persuade or encourage (or in any manner attempt to induce, solicit, persuade or encourage), or cause or authorize any other Person to induce, solicit, persuade or encourage, any such Designated Employee or any other such employee of any Acquiring Party or any successor or Affiliate thereof, to leave the employ of his or her employer, (iii) induce, solicit, persuade or encourage (or in any manner attempt to induce, solicit, persuade or encourage), or cause or authorize any other Person to induce, solicit, persuade or encourage, any Person to cease, diminish or not commence doing business with any Acquiring Party or any successor or Affiliate thereof or (iv) disparage the Business or any Acquiring Party or any successor or Affiliate thereof to any Person. Until the fifteen (15) month anniversary of the date of termination of the Employment Agreement, the Acquiring Parties agree not to disparage any of the Transferor Parties; provided, however, that an Acquiring Party shall not be deemed to disparage a Transferor Party to the extent such Acquiring Party discloses factual information about that Transferor Party as required by Applicable Law.

(b) Enforceability. The terms of this Section 5.7 are a material inducement to the Acquiring Parties to enter into this Agreement and the Transaction Documents to which they

are a party and to consummate the transactions contemplated hereunder and thereunder. The Parties acknowledge and agree that any violation of this Section 5.7 will result in irreparable injury to the Acquiring Parties and agree that the Acquiring Parties shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of this Section 5.7, which rights shall be cumulative and in addition to any other rights or remedies to which the Acquiring Parties may be entitled. The Parties acknowledge and agree that the restrictive covenants contained herein are reasonable under the circumstances and further agree that the covenants contained in this Section 5.7 should be interpreted in such a manner as to be effective and valid under Applicable Law. In the event any portion of this Section 5.7 shall be held to be illegal or unenforceable, the remainder of this Section 5.7 shall remain in full force and effect. If any of the restrictions contained in this Section 5.7 shall for any reason be held to be excessively broad as to duration, scope, activity or subject, such provision shall be construed by limiting or reducing it so as to be enforceable to the maximum extent compatible with Applicable Law.

5.8 Non-Competition.

(a) Until the fifteen (15) month anniversary of the date of termination of the Employment Agreement, Transferor shall not, directly or indirectly, (i) solicit, induce or cause any Person with whom any Transferor Party had a business relationship with respect to the Business to reduce or terminate such Person’s business relationship with an Acquiring Party or any of their respective Affiliates or their successors or assigns; and Transferor shall not, directly or indirectly, approach any such Person for any such purpose, or authorize or assist in the taking of any of such actions for any such purpose or authorize or assist in the taking of any such actions by any Person, (ii) engage in any Restricted Activity, (iii) acquire, or own in any manner, any interest in any Person that engages in any Restricted Activity, or that engages in any business, activity or enterprise that competes with any aspect of any of Restricted Activity, or (iv) be interested in (whether as an owner, director, officer, partner, member, manager, joint venturer, lender, shareholder, vendor, consultant, employee, advisor, agent, independent contractor or otherwise), or otherwise participate in the management or operation of, any Person that engages in any Restricted Activity or in any business, activity or enterprise that competes with any Restricted Activity; provided, however, that this Section 5.8 shall not apply to the ownership of less than five percent (5%) of the outstanding stock of any Person who has a class of securities that is publicly traded.

forth in Section 5.8(a). In addition, the Parties acknowledge and agree that the provisions of Section 5.8(a) and the period of time, geographic area and scope and type of restrictions on its activities set forth in such Section, are reasonable and necessary for the protection of the Acquiring Parties, which are paying substantial consideration and other benefits to the Transferor Parties in consideration for the covenants of the Transferor Parties hereunder.

(c) If any provision contained in any of Section 5.8(a) shall be determined by any court or other tribunal of competent jurisdiction to be invalid or unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, (i) such provision shall be interpreted to extend over the maximum period of time for which it may be enforceable and/or over the maximum geographical area as to which it may be enforceable and/or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court or other tribunal making such determination, and (ii) in its reduced form, such provision shall then be enforceable, but such reduced form of provision shall only apply with respect to the operation of such provision in the particular jurisdiction in or for which such adjudication is made. It is the intention of the Parties that the provisions of Section 5.8(a) shall be enforceable to the maximum extent permitted by Applicable Law.

(d) The Parties acknowledge and agree that any breach or threatened breach of the covenants or other provisions contained in Section 5.8(a) may cause the Acquiring Parties material and irreparable damage, the exact amount of which will be difficult to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, the Acquiring Parties shall, in addition to all other available rights and remedies (including, but not limited to, seeking such damages as it can show it has sustained by reason of such breach and recovery of costs and expenses including, but not limited to, attorneys’ fees and expenses), be entitled to seek specific performance and injunctive relief (including, without limitation, a temporary and/or permanent restraining order and/or a permanent injunction) in respect of any breach or threatened breach of any of such covenants or provisions.

(e) Notwithstanding anything to the contrary set forth in Section 5.7 or this Section 5.8, if the restrictions set forth in Section 10 of the Employment Agreement terminate in accordance with the terms thereof, the restrictions set forth in Section 5.7 and this Section 5.8 shall immediately terminate.

5.9 Parent SEC Documents. Each of the Transferor Parties shall, at no expense to the Transferor Parties, promptly furnish to Parent in writing all information concerning such Transferor Party that may be required by applicable securities laws or reasonably requested by Parent for inclusion in any registration statements, prospectuses, forms, reports, definitive proxy statements, schedules, statements and documents filed or furnished by Parent under the Securities Act or the Exchange Act, as the case may be, together with all certifications required pursuant to the Sarbanes-Oxley Act of 2002, such documents and any other documents to be filed by Parent with the SEC (collectively, the “Parent SEC Documents”). Each of the Transferor Parties agrees to promptly correct any information provided by it for use in any Parent SEC Document, if and to the extent that it shall have, to the Transferor’s Knowledge, become false or misleading in any material respect or as otherwise required by Applicable Law. With respect to any Parent SEC Document that references a Transferor Party by name, such

Transferor Party and his, her or its counsel, shall be given a reasonable opportunity to review such Parent SEC Document before it is filed with the SEC, and Parent shall give due consideration to the reasonable additions, deletions or changes suggested thereto by such party. In addition, with respect to any Parent SEC Document that references a Transferor Party by name, Parent shall provide such Transferor Party and his, her or its counsel, with copies of any written comments, and shall inform them of any oral comments, that Parent or its counsel may receive from time to time from the SEC or its staff with respect to any Parent SEC Document promptly after receipt of such comments, and any written or oral responses thereto. With respect to any Parent SEC Document that references a Transferor Party by name, such Transferor Party and his, her or its counsel, shall be given a reasonable opportunity to review any such written responses and Parent shall give due consideration to the reasonable additions, deletions or changes suggested thereto by such party.

5.10 Insomniac Dispute.

(a) In connection with any claim, action, suit, arbitration, inquiry, proceeding or investigation (the “Insomniac Dispute”) involving the Transferor Parties, or any of their respective Affiliates, and Insomniac, or any of its Affiliates, regarding assets, including Intellectual Property, of Transferor (the “Disputed Assets”), the Transferor Parties hereby agree (i) to keep Parent and its Affiliates reasonably apprised regarding the status of and discussions regarding the Insomniac Dispute, otherwise report periodically to Parent and its Affiliates regarding the status of and discussions regarding the Insomniac Dispute and to provide any information regarding the Insomniac Dispute reasonably requested by Parent; and (ii) that upon written notice by Parent of its intent to assume control of the handling of the Insomniac Dispute, which notice, if delivered by Parent at its sole election, must be delivered on or before the date that is one hundred eighty (180) days following the Closing Date, on the fifth (5th) Business Day following delivery by Parent of such written notice, Transferor Parties shall relinquish control of the defense, settlement or other handling of the Insomniac Dispute to Parent and, upon reasonable request by any of the Acquiring Parties, and at no expense to the Transferor Parties, the Transferor Parties will execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered, all such further acts that may reasonably be required for Parent to assume the control of the handling of the Insomniac Dispute. If Parent shall have so assumed the defense, settlement or other handling of the Insomniac Dispute, Parent and its Affiliates shall (x) become entitled to all rights, interests, title and other benefits, in assets, properties, Intellectual Property or other items subject to the Insomniac Dispute resulting from any settlement, judgment or other resolution of the Insomniac Dispute; (y) reimburse Transferor for all costs, fees and expenses reasonably incurred by Transferor to the extent directly related to Transferor’s handling of the Insomniac Dispute and (z) not consent to a settlement of or to the entry of any judgment arising from or otherwise resolve the Insomniac Dispute in a manner that would adversely affect a Transferor Party in a manner inconsistent with this Agreement and the Transaction Documents. Immediately upon delivery by Parent of a written notice to Transferor of its desire that the Disputed Assets constitute Transferred Assets, subject to this Section 5.10, the Disputed Assets shall become Transferred Assets hereunder.

(b) If Parent does not assume the defense, settlement or other handling of the Insomniac Dispute within the 180-day period following the Closing Date, the Transferor Parties shall be entitled to prosecute, defend, settle, arbitrate, or otherwise handle the Insomniac

Dispute; provided, however, that, upon reimbursement by Parent of Transferor for all costs, fees and expenses reasonably incurred by Transferor to the extent directly related to Transferor’s handling of the Insomniac Dispute, sole rights, title, interests, and other benefits in and to Disputed Assets (other than cash proceeds received from a settlement or other resolution) which are the subject of the Insomniac Dispute shall, effective as of settlement of, or the entry of any judgment or other final disposition of the Insomniac Dispute, constitute Transferred Assets; and upon the settlement of, or the entry of any judgment or other final disposition of the Insomniac Dispute, the Acquiring Parties shall have sole ownership of any benefits, in assets, properties, Intellectual Property or other items (other than cash proceeds received from a settlement or other resolution) which are the subject of the Insomniac Dispute, resulting from any settlement, judgment or other disposition of the Insomniac Dispute.

(c) Notwithstanding anything to the contrary set forth in this Section 5.10, no Transferor Party shall at any time following execution of this Agreement be authorized to consent to a settlement of or to the entry of any judgment arising from the Insomniac Dispute without the prior written consent of Parent, which consent shall not be unreasonably withheld.

5.11 Auditor’s Fees. Parent agrees to reimburse Transferor for fifty percent (50%) of all costs, fees and expenses incurred by Transferor that directly relate to Transferor’s engagement of its auditor, Larry Mitchell, up to a maximum of fifty thousand dollars ($50,000), to the extent such costs, fees and expenses were incurred by Transferor solely for the purpose of preparing, or assisting in the preparation of, Transferor’s Financial Statements.

5.12 Registration Statement. If a registration statement relating to an offering by Parent for its own account or the account of others under the Securities Act of any of its common stock (other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans) (the “Registration Statement”), has not been filed with the Securities Exchange Commission on or before December 31, 2012 or been declared effective by the Securities Exchange Commission on or before June 30, 2014, or if on or before June 30, 2014, Parent does not have shares of Parent Common Stock registered pursuant to Section 12 of the Exchange Act, Parent will, if requested in writing by Transferor, repurchase from the Transferor all shares of Parent Common Stock comprising the Stock Consideration then owned by the Transferor, at a deemed price per share of Parent Common Stock equal to five dollars ($5.00). Parent shall have thirty (30) days to complete the repurchase contemplated by this Section 5.12. If Parent fails to complete such repurchase within a thirty (30) day period after written notice, in addition to its other rights and remedies, the restrictions set forth in Section 5.7 and Section 5.8 and Section 10 of the Employment Agreement shall terminate with respect to the Transferor Parties. Notwithstanding anything to the contrary set forth in this Section 5.12, if shares of Parent Common Stock are then listed on a national securities exchange, Parent shall not be required to repurchase any shares of Parent Common Stock pursuant to this Section 5.12 if such shares are eligible for sale pursuant to Rule 144 of the Securities Act.

ARTICLE 6

[INTENTIONALLY OMITTED]

ARTICLE 7

[INTENTIONALLY OMITTED]

ARTICLE 8

CLOSING

8.1 Closing Date. The closing (the “Closing”) of the transactions contemplated by this Agreement shall take place on the date hereof (the “Closing Date”).

8.2 Closing Deliveries.

(a) At Closing, SFX shall pay or deliver, or cause to be paid or delivered, as the case may be, to Transferor:

(i) an amount equal to the Cash Payment;

(ii) an original stock certificate evidencing the Stock Consideration, to be held in escrow as set forth in Section 2.5; and

(iii) Transaction Documents duly executed by the Acquiring Parties, as applicable.

(b) At the Closing, the Transferor Parties shall deliver to Acquiror:

(i) The Transferred Assets, including without limitation, copies of all books, records, files, and documents of Transferor relating to any of the Transferred Assets or otherwise related or necessary to the commercial exploitation of the Transferred Assets or the Business, and without limiting the foregoing, electronic media including complete and accurate copies of all Intellectual Property Embodiments and Documentation, with all electronic media to be delivered fully functioning; provided that if Acquiror waives the closing condition that a Required Consent be obtained for any Transferred Contract, such Transferred Contract shall not be assigned to Acquiror at the Closing, but shall instead be assigned at such time as the Required Consent is obtained; and

(ii) Transaction Documents duly executed by the Transferor Parties, as applicable.

ARTICLE 9

INDEMNIFICATION

9.1 Transferor Parties’ Agreement to Indemnify. The Transferor Parties shall, jointly and severally, indemnify and hold harmless the Acquiring Parties and their Affiliates, directors, managers, members, officers, employees, attorneys, agents, representatives, successors and permitted assigns (collectively, the “Acquiring Party Indemnitees”) in respect of any and all

Damages reasonably incurred by any Acquiring Party Indemnitee in connection with, or resulting from, any or all of the following:

(a) any breach of any representation or warranty made by any of the Transferor Parties in this Agreement or the Transaction Documents (excluding the Employment Agreement), without regard and without giving effect to any “materiality”, “Material Adverse Effect” or similar qualification contained in any such representation or warranty;

(b) any breach in the performance of any covenant, agreement or obligation of any of the Transferor Parties contained in this Agreement or the Transaction Documents (excluding the Employment Agreement);

(c) any Liabilities of any of the Transferor Parties or their respective Affiliates, other than the Assumed Liabilities and as set forth in Section 2.8 and Section 2.9, including, without limitation, all Liabilities related to (i) the Insomniac Dispute unless Parent has expressly assumed the control of the defense, settlement or other resolution of the Insomniac Dispute under Section 5.10; and (ii) past due license fees and penalties owed by Transferor to any domestic or international performing rights organization in connection with Transferor’s conduct of the Business prior to the Closing Date;

(d) any Transfer and Sales Taxes in connection with the transactions contemplated hereunder;

(e) except as otherwise provided in this Agreement or any of the Transaction Documents, any Tax for which any of the Transferor Parties is or becomes liable; and

(f) any fees, expenses or other payments incurred or owed by any of the Transferor Parties to any agent, broker, investment banker or other firm or Person retained or employed by it in connection with the transactions contemplated by this Agreement and the Transaction Documents.

9.2 Acquiring Parties’ Agreement to Indemnify. The Acquiring Parties shall, jointly and severally, indemnify and hold harmless the Transferor Parties and their attorneys, agents, representatives, successors and permitted assigns (collectively, the “Transferor Party Indemnitees”) in respect of any and all Damages reasonably incurred by any Transferor Party Indemnitee to the extent caused by any or all of the following:

(a) any breach of any representation or warranty made by any Acquiring Party in this Agreement or the Transaction Documents, without regard and without giving effect to any “materiality”, “Material Adverse Effect” or similar qualification contained in any such representation or warranty;

(b) any breach in the performance of any covenant, agreement or obligation of any Acquiring Party contained in this Agreement or the Transaction Documents (excluding the Employment Agreement);

(d) the operation of the Business after the Closing; and

(e) any fees, expenses or other payments incurred or owed by any of the Acquiring Parties to any agent, broker, investment banker or other firm or Person retained or employed by it in connection with the transactions contemplated by this Agreement or the Transaction Documents (excluding the Employment Agreement).

9.3 Limitations on Duties to Indemnify. Except for (i) their duty to indemnify the other party for claims of fraud, gross negligence, actions taken in bad faith or intentional misrepresentation of material facts, the Parties’ respective indemnification obligations for a breach of a representation or warranty (other than Excluded Representations and Warranties) shall be subject to each of the following limitations:

(a) An Indemnifying Party has no obligation to indemnify any Indemnitee unless the aggregate of all Damages for which the Indemnifying Party would be liable exceeds on a cumulative basis an amount exceeding $100,000 (the “Threshold Amount”), whereupon the amount of all such Damages (above and below the Threshold Amount), and all subsequent Damages, shall become due and payable. Notwithstanding anything to the contrary set forth in this Section 9.3(a), the Threshold Amount shall not apply to indemnification claims by the Transferor Parties for the Acquiring Parties’ failure to perform executory obligations under Transferred Contracts.

9.4 Survival of Representations, Warranties and Covenants.

(a) All representations, warranties, covenants, agreements and obligations of each Indemnifying Party contained in this Agreement and all claims of any Acquiring Party Indemnitee or Transferor Party Indemnitee in respect of any breach of any representation, warranty, covenant, agreement or obligation of any Indemnifying Party contained in this Agreement, shall survive the execution of this Agreement, and shall expire 24 months following the Closing Date, except that:

(i) the covenants, agreements or obligations of any of the Transferor Parties or any of the Acquiring Parties which by their terms are to be performed after the execution of this Agreement shall survive the Closing Date and shall not expire unless otherwise expressly provided in this Agreement, including, without limitation, the covenants, agreements or obligations of any of the Transferor Parties or any of the Acquiring Parties in Article 5 or Sections 9.1, 9.2 and 9.4; and

(ii) the Excluded Representations and Warranties, and all claims of any Transferor Party Indemnitee or Acquiring Party Indemnitee in respect of any breach of any such representation or warranty, shall survive the Closing Date and shall expire 30 days after the expiration of all applicable statutes of limitations, including extensions thereof.

(b) Notwithstanding anything herein to the contrary, indemnification for claims for which written notice as provided in Section 9.5 has been given prior to the expiration of the representation, warranty, covenant, agreement or obligation upon which such claim is based shall not expire, and claims for indemnification thereon may be pursued, until the final resolution of such claim.

(c) Notwithstanding anything herein to the contrary, indemnification for claims which arise out of the fraud, gross negligence, action taken in bad faith or intentional misrepresentation of the Indemnifying Party shall expire 30 days after the expiration of all applicable statutes of limitations, including extensions thereof.

(d) No Indemnifying Party is required to indemnify any Indemnitee under this Agreement for any loss resulting from an inaccurate representation herein if the Indemnifying Party establishes that the Indemnitee had knowledge of that inaccuracy before the Closing.

9.5 Claims for Indemnification. If any Indemnitee shall believe that such Indemnitee is entitled to indemnification pursuant to this Article 9 in respect of any Damages, such Indemnitee shall give the appropriate Indemnifying Party prompt written notice thereof. Any such notice shall set forth in reasonable detail and to the extent then known the basis for such claim for indemnification. The failure of such Indemnitee to give notice of any claim for indemnification promptly, but within the applicable periods specified by Section 9.4, shall not adversely affect such Indemnitee’s right to indemnity hereunder except to the extent (and only to the extent) that such failure adversely affects the right of the Indemnifying Party to assert all reasonable defenses to such claim. Each such claim for indemnity shall expressly state that the Indemnifying Party shall have only the 20 calendar-day period referred to in the next sentence to dispute or deny such claim. The Indemnifying Party shall have 20 calendar days following its receipt of such notice either (y) to acquiesce in such claim and its respective responsibilities to indemnify the Indemnitee in respect thereof in accordance with the terms of this Article 9 by giving such Indemnitee written notice of such acquiescence or (z) to object to the claim by giving such Indemnitee written notice of the objection. If the Indemnifying Party does not object thereto within such 20 calendar-day period, such Indemnifying Party shall be deemed to have acquiesced in such claim and its respective responsibilities to indemnify the Indemnitee in respect thereof in accordance with the terms of this Article 9.

promptly pursue the resolution thereof. If the Indemnifying Party shall have assumed the defense of any claim or Action in accordance with this Section 9.6, the Indemnifying Party shall be authorized to consent to a settlement of or to the entry of any judgment arising from, any such claim or Action, to the extent that the settlement or judgment requires only the payment of monetary damages, includes no injunctive provisions or performance requirements of Indemnitee and includes no admission of guilt or liability. Or in the alternative, the Indemnifying Party will seek consent of the Indemnitee (which consent shall not be unreasonably withheld or delayed). If the Indemnifying Party has so elected to assume the defense, each Indemnitee shall be entitled to participate in (but not control) the defense of any such action, with its own counsel and, except as provided herein, at its own expense. Each Indemnitee shall, and shall cause each of its Affiliates, officers, employees, consultants and agents to, cooperate fully with the Indemnifying Party in the defense of any claim or Action being defended by the Indemnifying Party pursuant to this Section 9.6. If the Indemnifying Party does not assume the defense of any claim or Action resulting therefrom in accordance with the terms of this Section 9.6, or the Indemnifying Party does not acknowledge to the Indemnitee the Indemnitee’s right to indemnity pursuant hereto in respect of the entirety of such claim (as such claim may have been modified through written agreement of the Parties) or the Indemnifying Party does not provides assurances, reasonably satisfactory to such Indemnitee, that the Indemnifying Party will be financially able to satisfy such claim in full if such claim or Action is decided adversely, such Indemnitee may defend against such claim or Action in such manner as it may deem reasonably appropriate at the reasonable cost of the Indemnifying Party.

9.7 Nature of Payments. Except for payments pursuant to the Parties’ obligations under Sections 9.1(c) and 9.2(c), any payment under Article 9 shall be treated for tax purposes as an adjustment to the Cash Payment to the extent such characterization is proper and permissible under relevant Tax authorities, including court decisions, statutes, regulations and administrative promulgations.

9.8 Exclusive Remedy. After the Closing, and except for claims of fraud, gross negligence, actions taken in bad faith or intentional misrepresentation and except for the specific performance of covenants, where appropriate under Applicable Law, the obligations to indemnify under this Article 9 shall provide the exclusive remedy against a party for any breach of any representation, warranty, covenant or other claim arising out of or relating to this Agreement or any other Transaction Document.

basis. Upon a reduction and cancellation of shares of Parent Common Stock comprising the Stock Consideration in connection with the exercise by the Acquiring Parties of the right of set-off under this Section 9.9, each of the Transferor Parties agrees to immediately return to Parent certificates representing the Stock Consideration, and Parent will deliver revised stock certificates in substitution thereof reflecting the reduction to the Stock Consideration. In all other respects the substituted stock certificates shall be identical to the previously outstanding stock certificates and shall carry the same rights that were carried by the previously outstanding stock certificates. In furtherance of any exercise by the Acquiring Parties of the right of set-off under this Section 9.9, each of the Transferor Parties hereby appoints Parent as their respective attorney-in-fact to take such action as is reasonably necessary to cause the cancellation and the substitution of the certificates representing the Stock Consideration.

9.10 Miscellaneous Indemnity Provisions. The Indemnifying Parties’ indemnification obligations herein are intended solely for the benefit of the Indemnitees, and are in no way intended to, nor shall they, constitute an agreement for the benefit of, or be enforceable by, any other Person. Nothing herein shall be deemed to prevent an Indemnitee from making a claim under this Article 9 for potential or contingent claims or demands; provided that the notice of such claim delivered pursuant to Section 9.5 sets forth the specific basis for any such contingent claim to the extent then feasible and the Indemnitee has reasonable grounds to believe that such a claim may be made.

9.11 Property Taxes. All property taxes and similar ad valorem taxes (“Property Taxes”) levied with respect to the Transferred Assets for any period commencing before and ending after the Closing Date (“Straddle Period”) shall be apportioned between Acquiror and Transferor based on the number of days of such Straddle Period included in the portion of the period ending on the Closing Date (“Pre-Closing Tax Period”) and the number of days of such Straddle Period included in the period commencing on the day after the Closing Date (“Post-Closing Tax Period”). Transferor shall be liable for the proportionate amount of such Property Taxes that is attributable to the Pre-Closing Tax Period, and Acquiror shall be liable for the proportionate amount of such Property Taxes that is attributable to the Post-Closing Tax Period. Upon receipt of any bill for such Property Taxes, Acquiror or Transferor, as applicable, shall present a statement to the other setting forth the amount of reimbursement to which each is entitled under this Section 9.11 together with such supporting evidence as is reasonably necessary to calculate the proration amount. The proration amount shall be paid by the party owing it to the other within ten (10) days after delivery of such statement.

9.12 Transfer and Sales Tax Returns. Transferor shall timely prepare and file all Transfer and Sales Tax returns and reports relating to the transactions contemplated by this Agreement. The Transferor Parties shall be jointly and severally liable for any Transfer and Sales Taxes relating to such transactions. Transferor shall furnish to Acquiror a copy of each such Tax Return promptly after it is filed, together with proof of payment of the Transfer and Sales Tax shown thereon to be due.

ARTICLE 10

[INTENTIONALLY OMITTED]

ARTICLE 11

MISCELLANEOUS

11.1 Notices. All notices, requests and other communications to either party hereunder shall be in writing (including facsimile, PDF or e-mail) and shall be given,

If to an Acquiring Party, to:

SFX Entertainment Inc.

650 Madison Avenue

New York, NY 10022

Attention: Mitch Nelson, Esq.

Fax: (212) 750-3034

With a copy to:

Greenberg Traurig, LLP

MetLife Building

200 Park Avenue

New York, NY 10166

Attention: Dennis J. Block, Esq.

Michael D. Helsel, Esq.

Fax: (212) 801-6400

If to a Transferor Party, to:

c/o Disco Productions, Inc.

1000 Seaboard St.

Charlotte, NC 28206

With a copy to:

Eisner, Kahan & Gorry, a Professional Corporation

9601 Wilshire Blvd, Suite 700

Beverly Hills, CA 90210

Attention: Sal LaVina, Esq.

Fax: (310) 855-3201

Email: slavina@eisnerlaw.com

shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

11.3 Expenses. Except as otherwise provided herein, all costs and expenses incurred in connection with this Agreement shall be paid by the Party incurring such cost or expense. In the event of any litigation arising from breach of this Agreement or any of the Transaction Documents (excluding the Employment Agreement), the prevailing party shall be entitled to recover from the non-prevailing party all reasonable costs incurred including staff time, court costs, attorneys fees, and all other related expenses incurred in such litigation.

11.4 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

11.5 Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of New York, without regard to the conflicts of law rules of such state.

11.6 Consent to Jurisdiction; Venue; Service of Process.

(a) Each Party, by its execution hereof, (i) hereby irrevocably submits to the exclusive jurisdiction of any New York federal court sitting in the Borough of Manhattan of The City of New York for the purpose of any Action among the parties arising in whole or in part under or in connection with this Agreement; provided, however, that if such federal court does not have jurisdiction over such Action, such Action shall be heard and determined exclusively in any New York state court sitting in the Borough of Manhattan of The City of New York, (ii) hereby waives to the extent not prohibited by Applicable Law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such Action brought in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred or removed to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any other court other than one of the above-named courts, or that this Agreement or any of the other Transaction Documents or the subject matter hereof and thereof may not be enforced in or by such court, and (iii) hereby agrees to commence any such Action only before one of the above-named courts. Notwithstanding the immediately preceding sentence, a party may commence any Action in a court other than the above-named courts solely for the purpose of enforcing an order or judgment issued by one of the above-named courts.

(b) Each Party hereby agrees that service of any process, summons, notice or document by U.S. registered mail, return receipt requested, at its address specified pursuant to Section 11.1 shall constitute good and valid service of process in any Action among the Parties arising in whole or in part under or in connection with this Agreement or any other Transaction Documents, and each Party hereby waives and agrees not to assert (by way of motion, as a defense, or otherwise) in any such Action any claim that service of process made in accordance with this Section 11.6(b) does not constitute good and valid service of process.

11.7 Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY. ANY ACTION WHATSOEVER AMONG THEM RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR ANY OF THE CONTEMPLATED TRANSACTIONS SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

11.8 Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto were upon the same instrument. This Agreement shall become effective when each party shall have received a counterpart hereof signed by the other Parties.

11.9 Entire Agreement. This Agreement, the Transaction Documents, any non-disclosure agreement between SFX and Transferor, and the ancillary agreements related thereto constitute the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the Parties with respect to the subject matter of this Agreement.

11.10 Titles and Headings; Construction. The titles and headings to Sections herein and to the Exhibits and Schedules hereto are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. This Agreement shall be construed without regard to any presumption or other rule requiring construction hereof against the party causing this Agreement to be drafted. The words “include”, “includes”, “included”, “including” and “such as” do not limit the preceding words or terms and shall be deemed to be followed by the words “without limitation”. All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require. All terms defined in this Agreement in their singular or plural forms, have correlative meanings when used herein in their plural or singular forms, respectively. All references herein to a Section, Article, Exhibit or Schedule are to a Section, Article, Exhibit or Schedule of or to this Agreement, unless otherwise indicated.

11.11 Severability. If any provision of this Agreement is held invalid, unenforceable or void by a court of competent jurisdiction, the remaining provisions shall not for that reason alone be unenforceable or invalid. In such case, the Parties agree to negotiate in good faith to create an enforceable contractual provision to achieve the purpose of the invalid provision. Further, if any provision is held to be overbroad as written, such provision shall be deemed amended to narrow its application to the extent necessary to make the provision enforceable according to Applicable Law and shall be enforced as amended.

11.12 No Third Party Beneficiaries. Except for the provisions of Article 9 relating to Indemnified Parties, this Agreement shall be binding upon and inure solely to the benefit of the Parties and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person, including any union or any employee or former employee of Transferor, any legal or equitable right, benefit or remedy of any nature whatsoever, including any rights of employment for any specified period, under or by reason of this Agreement.

11.13 Specific Performance. The Transferor Parties acknowledge and agree that the Acquiring Parties would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that any breach of this Agreement by any of the Transferor Parties could not be adequately compensated in all cases by monetary damages alone. Accordingly, in addition to any other right or remedy to which the Acquiring Parties may be entitled, at law or in equity, they shall be entitled to enforce and provision of this Agreement by a decree of specific performance and to temporary, preliminary and permanent injunctive relief to prevent breaches or threatened breaches of any of the provisions of this Agreement, without posting any bond or other undertaking.

[Signature Page Follows.]

IN WITNESS WHEREOF, the Parties hereto caused this Agreement to be duly executed by their respective authorized officers as of the date first written above.

	SFX HOLDING CORPORATION,
	a Delaware corporation


	By:	/s/ Robert F.X. Sillerman
	Name: Robert F.X. Sillerman
	Title: Chief Executive Officer

	SFX ENTERTAINMENT INC.
	a Delaware corporation


	By:	/s/ Robert F.X. Sillerman
	Name: Robert F.X. Sillerman
	Title: Chief Executive Officer

	SFX-DISCO OPERATING LLC,
	a Delaware limited liability company

	By: SFX Holding Corporation, its sole member


	By:	/s/ Robert F.X. Sillerman
	Name: Robert F.X. Sillerman
	Title: Chief Executive Officer

	DISCO PRODUCTIONS, INC.
	a Louisiana corporation


	By:	/s/ James Estopinal
	Name: James Estopinal
	Title: President


	JAMES ESTOPINAL
	an individual resident of Puerto Rico

	/s/ James Estopinal

EX-10.12 20 a2215423zex-10_12.htm EX-10.12

Exhibit 10.12

ASSET CONTRIBUTION AGREEMENT

by and among

SFX HOLDING CORPORATION,

SFX-LIC OPERATING LLC,

DAYGLOW LLC,

COMMITTEE ENTERTAINMENT, LLC,

SEBASTIAN SOLANO,

PAUL CAMPBELL,

PATRYK TRACZ

and

LUKASZ TRACZ

dated as of July 31, 2012

TABLE OF CONTENTS

			Page

ARTICLE 1 DEFINITIONS			2

ARTICLE 2 CONTRIBUTION			14

	2.1	Contribution of Transferred Assets	14
	2.2	Assumption of Liabilities	15
	2.3	Excluded Assets	15
	2.4	Retained Liabilities	16
	2.5	Consideration	16
	2.6	Tax Treatment; Allocation of Consideration	17
	2.7	Withholding Rights	17
	2.8	Earn-Out	18
	2.9	Pre-Closing and Post-Closing Adjustment of Consideration	20

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF TRANSFEROR PARTIES			22

	3.1	Limited Liability Company Existence	23
	3.2	Authorization	23
	3.3	Capital Structure	23
	3.4	Governmental Authorization	24
	3.5	Non-Contravention	24
	3.6	Ownership and Absence of Liens	24
	3.7	Sufficiency of the Transferred Assets	24
	3.8	Litigation	25
	3.9	Contracts	25
	3.10	Permits; No Required Consents	26
	3.11	Compliance with Applicable Laws	26
	3.12	Intellectual Property	26
	3.13	Advisory Fees	29
	3.14	Taxes	29
	3.15	Financial Statements	29
	3.16	Absence of Liabilities, Changes and Events	30
	3.17	Operation of the Business	30
	3.18	Employment and Labor Matters	30
	3.19	Employee Benefit Matters	31
	3.20	Insurance	32
	3.21	Real Property	32
	3.22	Books and Records	32
	3.23	Solvency	33
	3.24	No Other Agreements to Sell the Transferred Assets or Transferor Interests	33
	3.25	Affiliates	33
	3.26	Securities Law Matters	34

	3.27	Legends	34
	3.28	Restricted Securities	35
	3.29	Access to Information	35
	3.30	Reliance Upon Representations	35
	3.31	Exculpation	35
	3.32	Material Misstatements Or Omissions	35

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING PARTIES			36

	4.1	Corporate Existence and Power	36
	4.2	Capital Structure	36
	4.3	Authorization	37
	4.4	Governmental Authorization, Other Consents	37
	4.5	Litigation	37
	4.6	Non-Contravention	38
	4.7	[Intentionally omitted]	38
	4.8	[Intentionally omitted]	38
	4.9	Absence of Undisclosed Liabilities	38
	4.10	Restrictions on Business Activities	38
	4.11	Title to Property/Leases	38
	4.12	Taxes	38
	4.13	Employee Benefit Plans	39
	4.14	Labor Matters	39
	4.15	Compliance With Laws	39
	4.16	No Other Representations and Warranties	39

ARTICLE 5 COVENANTS OF THE PARTIES			39

	5.1	Further Assurances	39
	5.2	Certain Filings	39
	5.3	Public Announcements; Confidentiality	40
	5.4	Offer of Employment	40
	5.5	Assignment of Contracts and Claims	41
	5.6	Third Party Notification	41
	5.7	Non-Solicitation	41
	5.8	Non-Competition	42
	5.9	Parent SEC Documents	43
	5.10	KottonZoo Agreement	44

ARTICLE 6 [INTENTIONALLY OMITTED]			44

ARTICLE 7 [INTENTIONALLY OMITTED]			44

ARTICLE 8 CLOSING			45

	8.1	Closing Date	45

iii

	8.2	Closing Deliveries	45

ARTICLE 9 INDEMNIFICATION			46

	9.1	Transferor Parties’ Agreement to Indemnify	46
	9.2	Acquiring Parties’ Agreement to Indemnify	46
	9.3	Limitations on Duties to Indemnify	47
	9.4	Survival of Representations, Warranties and Covenants	47
	9.5	Claims for Indemnification	48
	9.6	Defense of Claims	48
	9.7	Nature of Payments	49
	9.8	Exclusive Remedy	49
	9.9	Acquiring Parties’ Right of Offset	49
	9.10	Miscellaneous Indemnity Provisions	50
	9.11	Property Taxes	50
	9.12	Transfer and Sales Tax Returns	50

ARTICLE 10 [INTENTIONALLY OMITTED]			51

ARTICLE 11 MISCELLANEOUS			51

	11.1	Notices	51
	11.2	Amendments; No Waivers	51
	11.3	Expenses	52
	11.4	Successors and Assigns	52
	11.5	Governing Law	52
	11.6	Consent to Jurisdiction; Venue; Service of Process	52
	11.7	Waiver of Jury Trial	53
	11.8	Counterparts; Effectiveness	53
	11.9	Entire Agreement	53
	11.10	Titles and Headings; Construction	53
	11.11	Severability	53
	11.12	No Third Party Beneficiaries	54
	11.13	Specific Performance	54

EXHIBITS

A Assignment and Assumption Agreement

B Lockup Agreement

C Registration Rights Agreement

D Employment Agreement

ASSET CONTRIBUTION AGREEMENT

This Asset Contribution Agreement (this “Agreement”) is dated as of July 31, 2012, by and among SFX HOLDING CORPORATION, a Delaware corporation (“Parent”), SFX-LIC OPERATING LLC, a Delaware limited liability company wholly owned by Parent (“Acquiror”, and together with Parent, the “Acquiring Parties”), DAYGLOW LLC, a Florida limited liability company (“Dayglow”), COMMITTEE ENTERTAINMENT, LLC, a Florida limited liability company (“Committee”), SEBASTIAN SOLANO, an individual resident of Florida and member of Dayglow and Committee (“Solano”), PAUL CAMPBELL, an individual resident of Florida and member of Dayglow and Committee (“Campbell”), PATRYK TRACZ, an individual resident of Florida and member of Dayglow and Committee (“P. Tracz”), and LUKASZ TRACZ, an individual resident of Florida and member of Dayglow and Committee (“L. Tracz” and, together with Solano, Campbell and P. Tracz, the “Members”). Dayglow and Committee are collectively referred to herein as the “Transferors” and each a “Transferor”. The Members and the Transferors are collectively referred to herein as the “Transferor Parties”. The Acquiring Parties and the Transferor Parties are collectively referred to herein as the “Parties” and each a “Party”.

WHEREAS, the Transferors and Advanced Concert Productions LLC, a Florida limited liability company (“ACP”) are engaged in the business of entertainment services, namely, organizing, arranging, conducting and hosting paint parties, social events and festivals featuring live entertainment, performers and artists, music and audio-visual material and DJ performances; and social club services, namely, arranging, organizing, conducting and hosting social events, paint parties, special-event parties and nightclub parties (such business of Transferors and ACP only, and not of any other Person, the “Business”);

WHEREAS, as part of an overall plan (the “Plan”) to enter into this Agreement and the Other Contribution Agreements, SFX Entertainment Inc. (“SFX”) entered into an exchange agreement with Parent (the “Exchange Agreement”), pursuant to which the stockholders of SFX, on the terms and subject to the conditions set forth therein, contributed all outstanding shares of common stock, par value $0.01 per share, of SFX to Parent in exchange for shares of common stock, par value $0.001 per share, of Parent (“Parent Common Stock”), with SFX continuing as a wholly owned Subsidiary of Parent (the “Exchange”);

WHEREAS, as part of the Plan, Parent, certain wholly owned limited liability company Subsidiaries of Parent, and SFX entered into one or more contribution agreements (each, an “Other Contribution Agreement”) with one or more other individuals or entities engaged in businesses that are synergistic with those of SFX and the Transferors (the “Other Parties”), pursuant to which a wholly owned limited liability company Subsidiary of Parent will, on the terms and subject to the conditions set forth therein, acquire certain assets and assume certain liabilities thereof with a view to combining and expanding the overall business activities of Parent, SFX, the Transferors and the Other Parties in the field of live entertainment; and

WHEREAS, the parties to the Transaction Documents and each of the parties to the Exchange Agreement and the Other Contribution Agreements intend to consummate the transactions contemplated thereby in accordance with the Plan such that the transactions contemplated by the Transaction Documents, the Exchange Agreement and the Other Contribution Agreements will qualify as a tax-free exchange transaction pursuant to Section 351 of the Code to the extent that the Consideration and the consideration payable to the Other Parties is paid in Parent Common Stock.

ARTICLE 1
DEFINITIONS

The following terms, as used herein, have the following meanings:

“Accredited Investor Representations” has the meaning ascribed to it in Section 3.30.

“ACP” has the meaning ascribed to it in the introduction to this Agreement.

“Acquiror” has the meaning ascribed to it in the introduction to this Agreement.

“Acquiror’s EBITDA” has the meaning ascribed to it in Section 2.8(a)(i).

“Acquiring Party Indemnitees” has the meaning ascribed to it in Section 9.1.

“Acquiring Parties” has the meaning ascribed to it in the introduction to this Agreement.

“Actions” means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority.

“Adjustment Amount” has the meaning ascribed to it in Section 2.9(a).

“Affiliate” means, with respect to a specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, the specified Person. For purposes of this definition, the term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. With respect to any determination herein that a Person is an Affiliate of a Transferor, the Acquiring Parties are relying solely on the representations, warranties and other information provided to them by the Transferor Parties.

“Agreement” has the meaning ascribed to it in the introduction to this Agreement.

“Allocation” has the meaning ascribed to it in Section 2.6(b).

“Assignment and Assumption Agreement” means that certain Assignment and Assumption Agreement substantially in the form attached hereto as Exhibit A.

“Assumed Liability” or “Assumed Liabilities” has the meaning ascribed to it in Section 2.2.

“Business” has the meaning ascribed to it in the introduction to this Agreement.

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.

“Business Net Income” means, for the applicable fiscal period, the net revenue of a Transferor, Parent or any Subsidiary of Parent that is directly and solely attributable to the conduct of the Business (a) prior to the Closing by the Transferors and ACP and (b) from and after the Closing, by Acquiror determined in conformity with GAAP. For the avoidance of doubt, the use of the term “Business” in this definition means, solely and exclusively, the business of the Transferors and ACP, and not similar businesses of the Other Parties or Persons acquired by the Acquiring Parties in connection with the Plan.

“Campbell” has the meaning ascribed to it in the introduction to this Agreement.

“Cash Payment” has the meaning ascribed to it in Section 2.5.

“Closing” has the meaning ascribed to it in Section 8.1.

“Closing Date” has the meaning ascribed to it in Section 8.1.

“Closing Statement” has the meaning ascribed to it in Section 2.9(b).

“Code” means the Internal Revenue Code of 1986, as amended, or any successor law, and regulations issued by the IRS pursuant to the Internal Revenue Code or any successor law.

“Committee” has the meaning ascribed to it in the introduction to this Agreement.

“Compensation Programs” has the meaning ascribed to it in Section 3.19(d).

“Confidential Information” has the meaning ascribed to it in Section 5.3(b).

“Consideration” has the meaning ascribed to it in Section 2.5.

“Current Assets” means the consolidated current assets of the Business of the Transferors and ACP only to the extent acquired pursuant to the terms of this Agreement, which current assets shall include only the line items set forth on Schedule 2.9 under the heading “Current Assets” and no other assets].

“Current Liabilities” means the consolidated current liabilities of the Business of the Transferors and ACP only to the extent assumed pursuant to the terms of this Agreement, which current liabilities shall include only the line items set forth on Schedule 2.9 under the heading “Current Liabilities” and no other liabilities.

“Dayglow” has the meaning ascribed to it in the introduction to this Agreement.

“Designated Employees” has the meaning ascribed to it in Section 3.18.

“Difference” has the meaning ascribed to it in Section 2.9(e).

“Dispute” has the meaning ascribed to it in Section 2.9(c).

“Domain Names” means all identifiers or URL registrations for Internet websites.

“Earn-Out Objection Notice” has the meaning ascribed to it in Section 2.8(c).

“Earn-Out Payment” has the meaning ascribed to it in Section 2.8.

“Earn-Out Period” has the meaning ascribed to it in Section 2.8.

“Earn-Out Period Payment Date” has the meaning ascribed to it in Section 2.8(d)(i).

“Earn-Out Shares” has the meaning ascribed to it in Section 2.8(d)(i).

“Earn-Out Statement” has the meaning ascribed to it in Section 2.8(b).

“EBITDA” means an amount equal to Business Net Income plus (A) the following, to the extent deducted in calculating Business Net Income (without duplication): (1) Interest Charges, (2) all federal, state, local and foreign income Tax expense, (3) depreciation and amortization expense, (4) non-cash impairment of assets (tangible and intangible) and related non-cash charges, (5) non-cash charges and expenses related to equity-based compensation awards, (6) all inventory step-up expense recognized in conjunction with Consideration accounting adjustments, (7) one-time and non-recurring extraordinary expenses, including closing costs and professional fees incurred by Transferor in connection with the completion of the transfer of assets to the Acquiror, (8) allocated or indirect expenses, other than reasonable allocated or indirect expenses as reasonably determined by SFX and Transferor, (9) compensation and benefits and other business expenses of a Transferor that are not directly and solely attributable to the management of a Transferor, (10) one-time and non-recurring expenses related to the production and promotion of the November 2012 edition of the Dancegiving Music Festival; provided, however, that whether or not Acquiror is involved in the production and/or promotion of the November 2012 edition of the Dancegiving Music Festival shall be within the sole discretion of Parent; and minus (B) the following to the extent included in calculating Business Net Income (without duplication): (1) federal, state, local and foreign income Tax credits and (2) all non-cash items increasing Business Net Income, including interest income, in each case with respect to the applicable fiscal period.

“Employee Assets” means all of the Transferors’ assets, including without limitation, computers, work stations, third party software licensed for such computers or work stations, electronic files, multi-function printers and copiers, office furniture and other tangible assets presently used or formerly used principally by the Members or the Designated Employees that SFX elects to employ, which are necessary or useful for the Members or each Designated Employee to continue to perform his or their respective duties for Parent or any of its Subsidiaries after the Closing without interruption.