Document:

Exhibit 10.1

 

 

SHARE PURCHASE AGREEMENT

 

 

relating to the sale and purchase of the entire issued share capital of

 

MONUMENTAL PRODUCTIONS B.V.

 

DATED 12 September 2014

 

between

 

SFXE NETHERLANDS HOLDINGS B.V.

 

as Purchaser

 

and

 

MONUMENTAL PRODUCTIONS BEHEER B.V.

 

as Seller

 

and

 

ROCHUS ABRAHAM PAULUS VEENBOER

 

and

 

SFX ENTERTAINMENT INC.

 

as Parent

 

and

 

MONUMENTAL PRODUCTIONS B.V.

 

as the Company

 

Share Purchase Agreement Monumental Productions B.V. — Execution Copy

 

1

 

INDEX

 

	
Clause
    	
 
    	
 
    	
 
    	
Page
    
	
1
    	
 
    	
DEFINITIONS AND INTERPRETATION
    	
 
    	
5
    
	
2
    	
 
    	
PURCHASE AND SALE SHARES
    	
 
    	
6
    
	
3
    	
 
    	
PURCHASE PRICE SHARES
    	
 
    	
6
    
	
4
    	
 
    	
LEAKAGE AND ADDITIONAL LEAKAGE
    	
 
    	
10
    
	
5
    	
 
    	
CONDITION PRECEDENT
    	
 
    	
11
    
	
6
    	
 
    	
PRE-COMPLETION UNDERTAKINGS
    	
 
    	
11
    
	
7
    	
 
    	
COMPLETION
    	
 
    	
14
    
	
8
    	
 
    	
WARRANTIES
    	
 
    	
17
    
	
9
    	
 
    	
BREACH
    	
 
    	
18
    
	
10
    	
 
    	
LIMITATION OF LIABILITY
    	
 
    	
19
    
	
11
    	
 
    	
SPECIFIC INDEMNITIES
    	
 
    	
22
    
	
12
    	
 
    	
TAX INDEMNITY
    	
 
    	
22
    
	
13
    	
 
    	
PROCEDURES FOR TAX CLAIMS
    	
 
    	
24
    
	
14
    	
 
    	
PERSONAL LIABILITY VEENBOER
    	
 
    	
25
    
	
15
    	
 
    	
POST COMPLETION COVENANTS
    	
 
    	
25
    
	
16
    	
 
    	
CONFIDENTIALITY
    	
 
    	
28
    
	
17
    	
 
    	
ACKNOWLEDGEMENT IN RELATION TO THE   TOTAL CONSIDERATION SHARES
    	
 
    	
29
    
	
18
    	
 
    	
TERMINATION
    	
 
    	
31
    
	
19
    	
 
    	
COSTS AND EXPENSES
    	
 
    	
32
    
	
20
    	
 
    	
PAYMENTS
    	
 
    	
32
    
	
21
    	
 
    	
ASSIGNMENT
    	
 
    	
34
    
	
22
    	
 
    	
ENTIRE AGREEMENT
    	
 
    	
34
    
	
23
    	
 
    	
AMENDMENTS
    	
 
    	
34
    
	
24
    	
 
    	
WAIVER
    	
 
    	
34
    
	
25
    	
 
    	
NO THIRD PARTY BENEFICIARIES
    	
 
    	
34
    
	
26
    	
 
    	
INVALIDITY
    	
 
    	
34
    
	
27
    	
 
    	
NOTICES
    	
 
    	
35
    
	
28
    	
 
    	
NOTARIAL INDEPENDENCE
    	
 
    	
36
    
	
29
    	
 
    	
NO RIGHT TO RESCIND OR NULLIFY   AGREEMENT
    	
 
    	
36
    
	
30
    	
 
    	
GOVERNING LAW AND DISPUTES
    	
 
    	
36
    
	
31
    	
 
    	
COUNTERPARTS
    	
 
    	
37
    
	
32
    	
 
    	
EXCHANGE RATE
    	
 
    	
37
    

 

2

 

	
ANNEXES
    
	
 
    
	
Annex 1.1
    	
 
    	
Definitions
    	
 
    	
 
    
	
Annex 3.3.4
    	
 
    	
Estimated Balance Sheet
    	
 
    	
 
    
	
Annex 3.3.10
    	
 
    	
Example of the determination of the EBITDA   of the Company
    	
 
    	
 
    
	
Annex 8.1
    	
 
    	
Seller’s Warranties
    	
 
    	
 
    
	
Annex 8.7
    	
 
    	
Purchaser’s Warranties
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
APPENDICES ANNEX 8.1
    
	
 
    
	
Appendix 10.2
    	
 
    	
Leases
    	
 
    	
 
    
	
Appendix 12.1
    	
 
    	
Employees
    	
 
    	
 
    
	
Appendix 13.1
    	
 
    	
Material Agreements
    	
 
    	
 
    
	
Appendix 19.1
    	
 
    	
Intellectual Property Rights
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SCHEDULES
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Schedule 1.1(a)
    	
 
    	
Data Room Index
    	
 
    	
 
    
	
Schedule 1.1(b)
    	
 
    	
Data Room DVD’s
    	
 
    	
 
    
	
Schedule 1.1(c)
    	
 
    	
Deed of Transfer
    	
 
    	
 
    
	
Schedule 7.3.1(f)
    	
 
    	
Key Employment Agreements
    	
 
    	
 
    
	
Schedule 7.3.1(j)
    	
 
    	
Lock-Up Agreement
    	
 
    	
 
    

 

3

 

THIS SHARE PURCHASE AGREEMENT is dated 11 September 2014 and made between:

 

(1)                                          SFXE Netherlands Holdings B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, having its official seat in Amsterdam, the Netherlands, and its office address at Prins Bernhardplein 200, 1097JB Amsterdam, the Netherlands (the Purchaser);

 

(2)                                          Monumental Productions Beheer B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, having its official seat in Amsterdam, the Netherlands, and its office address at Herengracht 433, (1017 BR) Amsterdam, the Netherlands (the Seller);

 

(3)                                          Mr. R.A.P. Veenboer, born in Leiden, the Netherlands on 28 January 1968, residing at Eeuwigelaan 44, (1861 CN) Bergen (NH), the Netherlands (Veenboer);

 

(4)                                          SFX Entertainment INC. a Delaware corporation, incorporated under the laws of Delaware, having its office address at 430 Park Ave., Sixth Floor, New York, New York, United States (the Parent); and

 

(5)                                          Monumental Productions B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, having its official seat in Amsterdam, the Netherlands, and its office address at Herengracht 433, (1017 BR) Amsterdam, the Netherlands (the Company).

 

Parties (1) through (5) are also jointly referred to as the Parties and individually also as a Party.

 

WHEREAS:

 

(A)                                        The Seller is the legal and beneficial owner of 18,000 (in words: eighteen thousand) ordinary shares with a nominal value of EUR 1 (in words: 1 euro) each, numbered 1 through 18,000 (the Shares) in the share capital of the Company.

 

(B)                                        The Shares constitute one hundred per cent. (100%) of the issued share capital of the Company.

 

(C)                                        The Company is engaged in the business of organizing, creating, producing, marketing and otherwise holding music events (the Business).

 

(D)                                        The Purchaser has conducted a financial, tax, legal and business due diligence investigation in respect of the Company and the Business.

 

(E)                                         Each of the Seller, the Purchaser and the Parent has obtained all necessary corporate approvals to enter into this Agreement and to complete the transaction contemplated hereby.

 

(F)                                          The Seller wishes to sell and transfer the Shares to the Purchaser and the Purchaser wishes to purchase and accept transfer of the Shares from the Seller on the terms and

 

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subject to the conditions of this Agreement.

 

(G)                                        Veenboer is the sole shareholder of the Seller and has agreed to be personally liable with the Seller for the due and punctual performance of the Seller’s obligations under this Agreement, subject to the terms and conditions hereof.

 

IT IS AGREED as follows:

 

1                                                  DEFINITIONS AND INTERPRETATION

 

1.1                                        Definitions

 

Capitalised words and expressions used in this Agreement have the meanings set out in Annex 1.1, unless the context clearly requires otherwise.

 

1.2                                        Interpretation

 

In this Agreement:

 

(a)                       the singular includes the plural and vice versa, and each gender includes the other genders;

 

(b)                       reference to “writing” shall be to letters, facsimiles and emails only;

 

(c)                        the words “include”, “including” and “includes” shall be deemed to be followed by the words “without limitation”;

 

(d)                       references to any time of day are to the time in the Netherlands;

 

(e)                        headings are inserted for convenience only and shall not affect the interpretation of this Agreement;

 

(f)                         reference to a statutory provision or law includes a reference to that statutory provision or law as amended, extended or applied by or under any other statute or law after Completion;

 

(g)                        references to Clauses, Annexes, Appendices or Schedules are, unless otherwise indicated, references to clauses, annexes, appendices or schedules of this Agreement;

 

(h)                      all Annexes, Appendices and Schedules to this Agreement form an integral part of this Agreement and shall have the same force and effect as any other provisions of this Agreement;

 

(i)                          no provision of this Agreement shall be interpreted adversely against a Party solely because that Party was responsible for drafting that particular provision;

 

(j)                          a reference to a person includes any individual, company, government, state or agency of a state or any joint venture, association or partnership (whether or not having separate legal personality); and

 

(k)                       references to any Dutch legal term shall in respect of any jurisdiction other than

 

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the Netherlands be construed as a reference to the term or concept which most nearly corresponds to it in that jurisdiction.

 

2                                                  PURCHASE AND SALE SHARES

 

2.1                                        Purchase and Sale

 

Subject to the terms and conditions of this Agreement, the Seller hereby sells the Shares and agrees to transfer on the Completion Date the Shares to the Purchaser, and the Purchaser hereby purchases the Shares and agrees to accept transfer of the Shares on the Completion Date, free from any and all Encumbrances and together with all rights attaching to them.

 

2.2                                        Benefit and risk

 

Subject to Completion and in accordance with the terms and conditions of this Agreement, the Company and the Shares, as well as all rights and obligations in connection with the Business, shall be for the benefit and risk of the Purchaser with effect as from the Effective Date, irrespective of the fact that Completion takes place at a date other than the Effective Date. The foregoing implies that, except as set out herein, after the Effective Date no Leakage has occurred or shall occur or that the Purchaser shall be compensated for the Total Leakage Amount.

 

3                                                  PURCHASE PRICE SHARES

 

3.1                                        Purchase Price Shares

 

3.1.1                              In consideration for the sale and transfer of the Shares, the Purchaser shall:

 

(a)                      pay an amount of USD 1,000,000 (in words: one million United States Dollars) (the Advance Payment) in cash to the Seller;

 

(b)                      pay an amount of EUR 11,000,000 (in words: eleven million euro) minus the Advance Payment (the Cash Consideration Payment) in cash to the Seller; and

 

(c)                       procure that the Parent, and the Parent hereby agrees that it, shall issue to the Seller a number of common stock in the share capital of the Parent (the Parent Common Stock), free from any Encumbrances (the Consideration Shares), which number of Consideration Shares shall be calculated as follows, subject to Clause 6.4:

 

(A * B) / C, whereby

 

A is an amount equal to EUR 3,000,000 (in words: three million euro);

 

B is the Exchange Rate at the day immediately preceding the Completion Date; and

 

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C is the volume weighted average share price at closing of trade of the Parent Common Stock five (5) trading days immediately preceding the Completion Date;

 

provided that, if, as a result of the foregoing calculation, the aggregate number of Consideration Shares to be issued to the Seller under this Clause 3.1.1 would require shareholder approval pursuant to NASDAQ Stock Market, Equity Rule 5635(d), then (i) the number of Consideration Shares issued to the Seller on the Completion Date shall be reduced to a number of shares equal to 19.99% of the total number of shares of Parent Common Stock outstanding as of the date of the required calculation and (ii) the Cash Consideration Payment shall be increased by an amount equal to the decrease in the amount of the Consideration Shares pursuant to the preceding subclause (i) multiplied by the value of such Consideration Shares on the date of issuance.

 

3.1.2                              The Advance Payment, the Cash Consideration Payment and the Consideration Shares hereinafter referred to as the Base Purchase Price and after adjustment in accordance with Clause 3.3, hereinafter referred to as the Purchase Price.

 

3.1.3                              The Seller acknowledges and agrees that the Consideration Shares will be subject to certain lock-up requirements all as further set out in the Lock-Up Agreement.

 

3.1.4                              The Parent agrees, and will use its reasonable best efforts to ensure, that after expiration of the lock-up period (as set out in the Lock-up Agreement) the Consideration Shares shall become transferable under Applicable Laws, all in accordance with Clause 17. To the extent Parent is not in compliance with the required SEC reporting under Rule 144 and such Consideration Shares are not then transferrable without volume limitations under Rule 144 or generally under Regulation S, Parent agrees for the next twelve (12) month period to include the registration of the resale of such shares in the first of any Form S-1 registration statement filed by the Parent for the account of others, as may be reasonably requested by the Seller, unless the managing underwriter reasonably objects to the inclusion of such shares in such registration statement.

 

3.2                                        Payment of the Advance Payment

 

The Purchaser shall procure that the Advance Payment shall have been paid in cash, in immediately available funds, by or on behalf of the Purchaser by wire transfer to the Seller’s Account under the reference “SFX Advance Payment” on the date of or prior to this Agreement.

 

3.3                                       Adjustment of the Base Purchase Price

 

3.3.1                              The Parties acknowledge and agree that the Base Purchase Price has been determined on the basis that the Company shall have a Working Capital equal to the negative amount of EUR 145,000 (in words: one hundred forty-five thousand euro) as at the Balance Sheet Date (the Target Working Capital) and that there is no Debt or

 

7

 

Cash as at the Balance Sheet Date. Should this assumption be incorrect as at the Balance Sheet Date, then the Base Purchase Price shall be adjusted in accordance with this Clause 3.3.

 

3.3.2                              The Base Purchase Price shall be decreased by an amount equal to the amount by which the Working Capital as at the Balance Sheet Date (the Actual Working Capital) is more negative than the negative amount of EUR 145,000 (in words: one hundred forty-five thousand euro), all as appears from the 2013 Accounts (the Working Capital Adjustment).

 

3.3.3                              The Base Purchase Price shall be decreased by the amount of any Debt of the Company as appears from the 2013 Accounts (the Debt Adjustment).

 

3.3.4                              The unaudited balance sheet of the Company as at the Balance Sheet Date, prepared in accordance with the Accounting Principles (the Estimated Balance Sheet) is attached hereto as Annex 3.3.4.

 

3.3.5                              No later than 1 May 2015, the Company shall provide the Seller with the 2013 Accounts and the amount of the Working Capital Adjustment and the Debt Adjustment, consisting of the line items set out in the Estimated Balance Sheet and the working papers in connection therewith, setting forth the amount of Working Capital, Cash and Debt as at the Balance Sheet Date.

 

3.3.6                              To the extent the Base Purchase Price paid by the Purchaser to the Seller at Completion, as computed using the Estimated Balance Sheet, differs from the Base Purchase Price as finally computed on the basis of the 2013 Accounts the Seller is obliged to pay the excess (the Base Purchaser Price Excess) to the Purchaser which amount shall be set off against the obligation of the Purchaser to pay the Purchaser Adjustment as set out in Clause 3.3.15 to the extent there is a Purchaser Adjustment and up to such Purchaser Adjustment. The Parties acknowledge and agree that if the Base Purchase Price Excess exceeds the Purchaser Adjustment such excess will be paid by the Seller to the Purchaser within ten (10) Business Days after the Product Calculation has been agreed in accordance with Clause 3.3.12 or has been finally determined in accordance with Clause 3.3.13.

 

3.3.7                              To the extent that the Base Purchase Price as derived from the 2013 Accounts is equal to or higher than the Base Purchase Price as derived from the Estimated Balance Sheet, there will be no further adjustment of the Base Purchase Price.

 

3.3.8                              Notwithstanding Clause 3.3.1 through 3.3.6 the Parties acknowledge and agree that the amount of the Base Purchase Price shall be adjusted following the calendar year 2014 with the Product pursuant to Clauses 3.3.9 through 3.3.15.

 

3.3.9                              For the purpose of calculating the Product the Purchaser shall use the 2014 Accounts.

 

3.3.10                       The Product shall be calculated as follows:

 

EBITDA * 8, whereby:

 

EBITDA is the EBITDA of the Company which will be calculated on the basis as set

 

8

 

forth in Annex 3.3.10 and which is subject to the procedure and calculation methods as set out in this Clause 3.3. Parties agree that for the purpose of determining the Product, the EBITDA shall not exceed EUR 2,600,000 (in words: two million six hundred thousand euro).

 

In deviation of this Clause 3.3.10 Parties hereby acknowledge and agree that to the extent that the EBITDA falls within the EBITDA Permitted Shortfall an amount equal to the EBITDA Adjustment will be added to the Product.

 

3.3.11                       No later than 15 April 2015, the Purchaser shall provide the Seller with the 2014 Accounts and the calculation of the Product (the Product Calculation) and the working papers from which the Product Calculation has been derived.

 

3.3.12                       Within twenty (20) Business Days after the receipt of the Product Calculation, the Seller shall inform the Purchaser in writing whether the Seller agrees to or disputes the Product Calculation in whole or in part. If no such Notice is received from the Seller within such twenty (20) Business Days term, the Product Calculation shall be deemed to be agreed between and binding upon the Parties. If the Product Calculation is disputed in a written Notice received by the Purchaser within such twenty (20) Business Day period, the Parties shall for twenty (20) Business Days after such receipt attempt to resolve their differences and reach agreement on the merits and amount of the disputed portion.

 

3.3.13                       If the Seller and Purchaser fail so to agree within the said twenty (20) Business Days period (or such longer period as agreed upon in writing between the Parties, either the Seller or the Purchaser may refer any dispute for resolution to a reputable “Big Four” international accounting firm (other than the existing auditors of the Seller or the Purchaser) (the Expert) appointed (i) by the Seller and the Purchaser or (ii) in default of agreement on such appointment within five (5) Business Days, by the chairman of the Netherlands Institute of Chartered Accountants (NBA, Nederlandse Beroepsorganisatie van Accountants). The Expert shall be instructed to render its opinion as soon as practicable and in any event within twenty (20) Business Days after the date of the engagement letter pursuant to which the Expert is formally instructed to render its opinion.

 

3.3.14                       In making its determination the Expert shall act as an expert and not as an arbitrator and the decision of the Expert shall (in the absence of manifest error) be final and binding on the Parties (bindend advies) and the Parties shall comply with and fulfil the obligations arising from and in connection with such decision. The expenses of the Expert shall be borne by the Seller and Purchaser in such equitable proportions as the Expert shall direct, taking into account the amount in dispute, the character of the dispute and the prevailing party in the dispute.

 

3.3.15                      After the Product Calculation has been agreed in accordance with Clause 3.3.12 or has been finally determined in accordance with Clause 3.3.13, the Base Purchase Price shall be adjusted as follows:

 

(a)                       to the extent the amount of the Product exceeds the Base Purchase Price (such amount the Purchaser Adjustment), the Purchaser shall, within ten (10)

 

9

 

Business Days after the Product Calculation has been agreed in accordance with Clause 3.3.12 or has been finally determined in accordance with Clause 3.3.13, pay to the Seller the Purchaser Adjustment as follows:

 

(i)                          11/14 (in words: eleven-fourteenth) shall be paid in cash; and

 

(ii)                       3/14 (in words: three-fourteenth) shall be paid by the issuance by the Parent, and the Parent hereby agrees to such issuance, of unregistered Parent Common Stock, free from any Encumbrances (the Additional Consideration Shares), whereby the number of the Additional Consideration Shares to be issued to the Seller shall be calculated as follows:

 

(A * B) / C, whereby:

 

A is an amount equal to three-fourteenth (3/14) of the Purchaser Adjustment;

 

B is the Exchange Rate at the day immediately preceding the day upon which the Additional Consideration Shares are issued; and

 

C is the volume weighted average share price at closing of trade of the Parent Common Stock five (5) trading days immediately preceding the day upon which the Additional Consideration Shares are issued.

 

(b)                       to the extent that the Product is equal to or less than the Base Purchase Price, there will be no further adjustment of the Base Purchase Price.

 

3.3.16                       The provisions of Clauses 3.1.3 and 3.1.4 are also applicable to the Additional Consideration Shares.

 

3.3.17                       Notwithstanding anything in this Agreement to the contrary, if any issuance of Parent Common Stock pursuant to this Agreement would, in the good faith judgment of the Purchaser, require shareholder approval pursuant to NASDAQ Stock Market, Equity Rule 5635(a), then (i) the number of Additional Consideration Shares to be issued to Seller shall be reduced such that the number of Additional Consideration Shares, together with the Consideration Shares, equals 19.99% of the total number of shares of Parent Common Stock outstanding as of the date of the required calculation and (ii) the cash portion of the Purchaser Adjustment shall be increased by an amount equal to the decrease in the amount of Additional Consideration Shares pursuant to the preceding clause (i) multiplied by the value of such Additional Consideration Shares on the date of issuance, in accordance with Clause 3.3.15.

 

3.3.18                       Parties agree that in preparing and determining the 2013 Accounts and 2014 Accounts they shall apply and instruct the relevant auditor(s), including the auditors requested to issue the accountant declaration, to apply the same Accounting Principles.

 

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4                                                  LEAKAGE AND ADDITIONAL LEAKAGE

 

4.1                                        Leakage

 

4.1.1                              The Seller warrants and undertakes to the Purchaser that since the Effective Date up to and including the Completion Date there neither has been nor will be any Leakage.

 

4.1.2                              In the event of any breach of Clause 4.1.1 the Seller shall compensate the Purchaser, on a euro for euro basis, the Total Leakage Amount in accordance with the provisions of Clause 20.3.

 

4.2                                        Leakage Notice

 

The Seller shall notify the Purchaser in writing (the Leakage Notice) of the Leakage Amount in relation to the period prior to Completion no later than five (5) Business Days prior to Completion.

 

4.3                                        Procedure for Additional Leakage

 

4.3.1                              If the Purchaser identifies any Additional Leakage prior to 1 May 2015, then the Purchaser shall at any time prior to 1 May 2015, be entitled to deliver a written notice to the Seller, setting out any such Additional Leakage identified together with reasonable evidence thereof and, to the extent reasonably possible, a calculation of the Leakage Amount relating to such additional Leakage (the Additional Leakage Amount).

 

4.3.2                              If the Seller and the Purchaser do not agree on the Additional Leakage Amount within twenty (20) Business Days of receipt of the written notice from the Purchaser by the Seller, as referred to in Clause 4.3.1, then the matter shall be referred to and resolved by the Expert in accordance with the provisions of Clause 3.3.13 and 3.3.14.

 

5                                                  CONDITION PRECEDENT

 

The obligation of the Purchaser to proceed with the Completion is subject only to condition precedent of the date of [8] October 2014 being reached (the Condition Precedent), or the waiver of such Condition Precedent in writing by the Purchaser at its sole discretion, at or prior to Completion.

 

6                                                  PRE-COMPLETION UNDERTAKINGS

 

6.1                                        Access and information

 

Until the Completion Date, the Seller and the Company shall (without in any way whatsoever dismissing or obviating any of the Warranties or other representations, warranties, indemnities, covenants or agreements of the Seller under this Agreement):

 

(a)                      allow the Purchaser, its employees and Representatives reasonable access, during regular business hours and upon reasonable advance notice, to all premises occupied by the Company and to all contracts, books and records and other documents and data (whether financial, operating or otherwise) of the Company as the Purchaser reasonably requests in connection with this Agreement; and

 

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(b)                      furnish the Purchaser, its employees and its Representatives with copies of all such contracts, books and records and other documents and data as the Purchaser may reasonably request.

 

6.2                                        Conduct of business

 

As from the date of signing of this Agreement until immediately prior to Completion, the Seller and the Company shall:

 

(a)                       operate the Business only in the ordinary course of business and consistent with past practice;

 

(b)                       not allow any Leakage to occur;

 

(c)                        conduct the Business in a manner most likely to preserve the value of the Company and the Business, and keep the Business and properties of the Company substantially intact, and to the extent reasonably possible for the Seller and the Company maintain the relations and goodwill with suppliers, customers, landlords, creditors, Employees and others having business relationships with the Company;

 

(d)                       maintain accounts receivable, inventory, accounts payable and other working capital accounts in a manner consistent with generally accepted business practices and past practice during the twelve (12) months prior to the date of this Agreement;

 

(e)                        comply in all material respects with all Applicable Laws;

 

(f)                         inform the Purchaser prior to entering into any contract (i) with a term in excess of twelve (12) months and a value of more than EUR 10,000 (in words: ten thousand euro), or (ii) that shall have a value of more than EUR 50,000 (in words: fifty thousand euro); and

 

(g)                        as soon as reasonably practicable report to the Purchaser on any matter, fact or circumstance which the Seller and the Company should reasonably understand to be of material importance to the Purchaser as a purchaser of the Shares.

 

6.3                                        Negative Covenant

 

6.3.1                              As from the date of signing this Agreement until immediately prior to Completion, the Seller and the Company shall not, except in each case (i) with the prior written consent of the Purchaser which shall not be unreasonably withheld or delayed but which may be made conditional, or (ii) as agreed in this Agreement:

 

(a)                       sell, transfer or otherwise dispose of any Assets that have a fair market value or for which consideration shall be due in excess of EUR 10,000 (in words: ten thousand euro) individually or EUR 50,000 (in words: fifty thousand euro) in the aggregate;

 

(b)                       pledge or permit the creation of any Encumbrance on any of its Assets;

 

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(c)                        make any investment or capital expenditure, whether by the purchase of shares or securities, contributions to capital, property transfers, or by the purchase of any property or assets, except for capital expenditures that do not exceed EUR 10,000 (in words: ten thousand euro) individually or EUR 25,000 (in words: twenty-five thousand euro) in the aggregate or that are otherwise expressly provided for in this Agreement;

 

(d)                       incur any indebtedness or assume, guarantee or otherwise become responsible for the obligations of, or make any loans or advances in excess of, EUR 10,000 (in words: ten thousand euro) individually or EUR 25,000 (in words: twenty-five thousand euro) in the aggregate unless in the ordinary course of business of the Company;

 

(e)                        make any material changes to employment terms and conditions (including compensation, fringe benefits or any other employment benefit plan or arrangement) of any Employees, including members of the management board, contractors or consultants;

 

(f)                         make any change to the terms upon which credit is extended to customers, discount prices, offer rebates or offer other terms or sales incentives in excess of an individual amount of EUR 25,000 (in words: twenty-five thousand euro);

 

(g)                        write up or down the value of any inventory or determine as collectible any notes or accounts receivable previously considered not to be collectible except to the extent actually collected;

 

(h)                       change the Accounting Principles, policies or practices as consistently applied;

 

(i)                           settle, compromise or initiate any judicial or arbitration proceedings with financial implications for the Company in excess of EUR 5,000 (in words: five thousand euro);

 

(j)                          grant, enter into or issue any shares or capital, any other debt or equity securities of the Company or options, warrants, other rights, enter into subscription agreements or commitments of any kind with respect thereto, nor dispose of any shares in the capital of the Company, or declare, set aside, pay or distribute dividends or other distributions or quasi distributions, whether in cash or in kind, other than to the extent expressly provided for in this Agreement;

 

(k)                      adopt a plan of complete or partial liquidation or authorise, approve or effect any dissolution, merger, demerger, split-off, share exchange, consolidation, restructuring, recapitalisation or reorganisation;

 

(l)                          (resolve to) amend the articles of association or by-laws of the Company;

 

(m)                   enter into any transaction or agreement with, or make any payment to any of the Seller or any of its Affiliates, other than sales or purchases of goods and services at arm’s length;

 

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(n)                       cancel or terminate any insurance policy that provides cover in respect of the Company, the Assets or its Employees;

 

(o)                       enter into, terminate, modify or cancel any contract, collective bargaining agreement, or any other agreement with a term greater than one year that is not terminable without liability to the Company upon thirty (30) days or less prior written notice or which involves the payment by the Company of more than EUR 100,000 (in words: one hundred thousand euro);

 

(p)                       do or omit to do or cause or allow to be done or omitted to be done any act or thing which would result in a material Breach of any Warranty or a material Breach of any other warranty, covenant or other provision of this Agreement;

 

(q)                       enter into a contract of which it is, upon the entering of such contract, apparent that it is a loss making contract; and/or

 

(r)                          agree or commit to any of the foregoing.

 

6.3.2                              As from the date of signing this Agreement until immediately prior to Completion, the Seller and the Company shall not, except in each case (i) with the prior written consent of the Purchaser (which consent may be withheld or delayed by the Purchaser in its sole discretion), or (ii) as agreed in this Agreement, enter into any new ticketing agreement or sponsorship agreement.

 

6.4                                        No other transaction pre-completion

 

6.4.1                              The Parent and/or its Affiliate(s) shall not consummate and/or announce any other acquisition prior to Completion.

 

6.4.2                              Should the Parent and/or any Affiliate(s) be in breach of its/their obligation under Clause 6.4.1, the last sentence under Clause 3.1.1(c) shall read as follows:

 

C is the volume weighted average share price at closing of trade of the Parent Common Stock five (5) trading days immediately preceding the date of this Agreement.

 

7                                                  COMPLETION

 

7.1                                        Date and Place

 

Subject to the terms and conditions of this Agreement, completion of the actions as set out in this Clause 7.2 and 7.3 shall be referred to as Completion and shall take place on the Business Day that is five (5) Business Days after the Condition Precedent as referred to in Clause 5 has been satisfied or waived (the Completion Date) at the offices of Loyens & Loeff N.V. at Fred. Roeskestraat 100, 1076 ED Amsterdam, the Netherlands.

 

7.2                                       Payment of the Cash Consideration Payment

 

The Purchaser shall procure that the Cash Consideration Payment shall have been paid in cash, in immediately available funds and with value on the Completion Date,

 

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by or on behalf of the Purchaser by wire transfer, and credited, to the Notary Account under the reference “Project Awake Cash Consideration Payment 70098427” by no later than 10h00 on the Completion Date. Such amount shall be held by the Notary in the Notary Account for and on behalf of the Purchaser, until the Deed of Transfer has been duly executed, and for and on behalf of the Seller immediately following such execution of the Deed of Transfer.

 

7.3                                        Completion Actions

 

7.3.1                              On the Completion Date but after the payment of the Cash Consideration Payment in accordance with Clause 7.2, the following actions will be taken, each such action being conditional upon all actions having occurred in the sequence set out below:

 

Prior to Completion:

 

(a)                       the Seller shall deliver to the Purchaser the original shareholders register of the Company which reflects the Seller as the owner of the Shares without any Encumbrances;

 

(b)                       the Seller shall deliver to the Purchaser evidence that with effect as of Completion (i) all indebtedness owed to the Company by either the Seller or any Related Person of the Seller, as applicable and (ii) all indebtedness owed by the Company to either the Seller or any Related Person of the Seller, as applicable, has been fully paid;

 

(c)                        the Seller shall deliver to the Purchaser copies of the written releases by (i) the Seller and/or any Related Person of the Seller, as applicable, and (ii) any third party creditor including lenders, as applicable, of all obligations (actual and/or contingent) assumed by the Company under joint financing agreements, guarantees issued by the Company or any other form of security granted or joint liability assumed by the Company for the benefit of the Seller and/or any Related Person of the Seller;

 

(d)                       the Seller shall deliver to the Purchaser evidence that the Company shall be released of the obligations in relation to Tax of any kind that the Company may have assumed, including obligations under any Tax sharing agreement, Tax indemnity agreement or Tax allocation agreement — whether in writing or not — to which the Company is a party;

 

(e)                        the Seller shall deliver to the Purchaser evidence that any existing proxy (volmacht) held by any Representative of the Seller or any of its Affiliates on behalf of Company is revoked;

 

(f)                         Veenboer, Ms N.M.M. Veenboer, Mr J. Schimmel and Mr M. van Beusekom (together, the Key Employees) each shall enter into an employment agreement with the Company, substantially in the form attached hereto as Schedule 7.3.1(f) (the Key Employment Agreements) and the Seller shall deliver to the Purchaser executed copies of the Key Employment Agreements;

 

(g)                        the Seller shall deliver to the Notary powers of attorney duly executed on behalf

 

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Seller and the Company, respectively, and the Purchaser shall deliver to the Notary a power of attorney duly executed on behalf of the Purchaser, authorising its representative to attend to and to execute the Deed of Transfer; and

 

(h)                       the Seller shall deliver to the Purchaser the written approval of Unilever Nederland B.V., Red Bull Nederland B.V. and InBev Nederland N.V. pursuant to which they waive their right to terminate the relevant sponsorship agreement as a result of the change of control in relation to the Company;

 

At Completion:

 

(i)                           the Shares shall be transferred by the Seller to the Purchaser by means of the execution of the Deed of Transfer;

 

(j)                          the Seller and the Parent shall enter into the Lock-Up Agreement; and

 

(k)                       the Parent shall issue the Consideration Shares to the Seller and shall deliver to the Seller one or more stock certificates representing the Consideration Shares. The Purchaser shall deliver to the Seller a copy of the instruction of the Parent to its agent to issue the Consideration Shares and a copy of the issuance of the Consideration Shares, accompanied with the confirmation of the agent of the Parent that the original deeds of issue will be immediately submitted by registered mail;

 

Immediately following Completion:

 

(l)                           the Notary shall hold the Cash Consideration Payment for and on behalf of the Seller and shall transfer the Cash Consideration Payment to the Seller’s Account in accordance with the instructions of the Seller; and

 

(m)                   the Purchaser shall pass the written shareholders’ resolutions of the Company appointing Mr D.C.P. Stutterheim and Mr R. Rosenstein to the management board of the Company with effect as of immediately after Completion.

 

7.3.2                              Payment of the Advance Payment in accordance with Clause 3.2 and the Cash Consideration Payment in accordance with Clause 7.2 and issuance of the Consideration Shares in accordance with Clause 7.3.1(k) shall discharge the Purchaser in respect of the payment of the Base Purchase Price.

 

7.4                                        Best efforts to consummate Completion

 

Each Party shall use its best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary or advisable to consummate the Completion as soon as practicable.

 

7.5                                        Awareness of satisfaction or threatening non-satisfaction

 

Each Party shall notify the other Party immediately upon becoming aware of the satisfaction of an action referred to in Clause 7.3 or upon becoming aware that an

 

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action as referred to in Clause 7.3 will or may not be satisfied (providing appropriate details and clarification to the other Party as to the reason why the relevant action will or may not be satisfied).

 

7.6                                        Failure to consummate Completion by the Seller

 

If the obligations of the Seller under Clause 7.3 are not complied with and such failure to comply is not remedied within three (3) Business Days after having been notified by the Purchaser, the Purchaser may in its sole discretion terminate this Agreement.

 

8                                                  WARRANTIES

 

8.1                                        Seller’s Warranties

 

The Seller hereby represents and warrants to the Purchaser that, except as Disclosed in the Disclosed Information:

 

(a)                       each of the warranties included in Annex 8.1 (the Seller’s Warranties) paragraph 1 (General), 2 (The Company), 4 (Shares), 5 (Leakage), 6 (Conduct of business), 11 (Taxes) and 21 (Full disclosure) is true and accurate on the date of this Agreement and on the Completion Date, unless specifically stated otherwise in Annex 8.1; and

 

(b)                       each of the other warranties included in Annex 8.1 is true and accurate on the date of this Agreement.

 

8.2                                        No implied Warranties

 

The Purchaser acknowledges and agrees that the Seller makes no representation or warranty as to the accuracy of any forecasts, estimates, projections, statements of intent or statements of opinion however provided to the Purchaser or any of its advisors. The Purchaser acknowledges that no representations or warranties, express or implied, have been given or are given other than the Seller’s Warranties.

 

8.3                                        Seller’s knowledge

 

Any statement in this Agreement which refers to the knowledge, information, belief or awareness of the Seller - including the expressions ‘to the Seller’s best knowledge’ and ‘known to the Seller’s and/or any similar expression - shall be deemed to comprise such knowledge, information, belief, awareness or knowledge that the Seller and/or the board of managing directors (bestuur) of the Seller actually (feitelijk) have, or are deemed to have after having made due and careful inquiries with the Key Employees.

 

8.4                                        Each Seller’s Warranty separate

 

Each of the Seller’s Warranties shall be construed as a separate warranty and shall not be limited or restricted, whether expressly or by reference to or inference from the terms of any other Seller’s Warranties or by any other provision of this Agreement and where a fact or circumstance would entitle the Purchaser to make a claim in respect of

 

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more than one Seller’s Warranty or both a Seller’s Warranty and an indemnity set out in Clause 11 or Clause 12, it shall be the sole discretion of the Purchaser to determine the provisions under which it makes a claim.

 

8.5                                        No knowledge of Purchaser

 

Purchaser hereby warrants to the Seller, on the basis of its review of the Disclosed Information, that on the date of this Agreement, it has no knowledge of any Warranty Breach.

 

8.6                                        Notification of Warranty Breach

 

The Seller shall forthwith after becoming aware of a breach of any of the Seller’s Warranties (a Warranty Breach) or of any event or circumstance that may to the knowledge of the Seller reasonably be expected to result in a Warranty Breach, inform the Purchaser in writing thereof, setting forth all relevant details in respect of such Warranty Breach.

 

8.7                                        Purchaser’s Warranties

 

The Purchaser hereby warrants to the Seller that each of the statements included in Annex 8.7 is true and accurate on the date of this Agreement and on the Completion Date (the Purchaser’s and Parent’s Warranties).

 

9                                                  BREACH

 

9.1                                        Breach by the Seller

 

Subject to the provisions of Clause 10, in the event of a Warranty Breach, the Seller shall be liable and shall compensate the Purchaser or, at the request of the Purchaser, the Company for the Damages suffered (or to be suffered) by the Purchaser and/or any of its Affiliates (inclusive the Company after Completion) resulting from such Warranty Breach. The right of the Purchaser (and the Company) to compensation for Damages shall be without prejudice to any other right of the Purchaser, including the right to demand specific performance (whereby it shall be the sole discretion of the Purchaser to seek compensation for Damages, specific performance or both).

 

9.2                                        Notification of claims

 

The Purchaser shall as soon as reasonable possible after being notified or becoming aware of any fact, circumstance or event which has led or may lead to a Warranty Breach, inform the Seller thereof in writing stating, to the extent reasonably possible, the facts, circumstances or events that have led or may lead to a Warranty Breach and a reasonable estimate of the Damages suffered or reasonably expected to be suffered. If for whatever reason, the Purchaser does not timely notify the Seller, no claim for Damages in respect of such Warranty Breach shall be taken into account to the extent that such Warranty Breach could have been mitigated and not timely notifying the Seller thereof causes damages to the Seller or limits the Seller’s possibilities to mitigate or limit its damages. Such a notification given within such

 

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period shall be considered a notification within the meaning of article 7:23(1) DCC.

 

9.3                                        Third party claims

 

9.3.1                              Subject to Clause 13.1, the Purchaser or the Company shall give written notice to the Seller of claims of any third party resulting in or relating to a Warranty Breach as soon as possible after becoming aware thereof. The Parties shall consult with each other on the course of action to be taken in respect of such claim. The Purchaser shall procure that the Company shall take the action (or refrain from taking action) so agreed between the Parties. If the Parties do not agree on the course of action to be taken, the Purchaser shall, at its sole discretion, be entitled to take, or procure that the Company takes, any action necessary to defend the third party claim, and to avoid, dispute, defend, appeal, compromise or settle the claim in any manner that the Purchaser deems appropriate and shall assume any liability (if any) arising in connection therewith. The Purchaser shall be obliged to comply with its statutory obligations to limit the Damages as much as possible.

 

9.3.2                              The Parties will cooperate with each other in dealing with any third party claim (not being a Tax Claim) and will allow each other access to all relevant books and records during normal business hours and at the place where the same are normally kept, with full right to make copies thereof or take extracts there from. Such books and records shall be subject to a duty of confidentiality except for disclosure necessary for resolving such third party claim or otherwise required by Applicable Laws or stock exchange rules.

 

9.4                                        Claim related documents

 

The Parties shall maintain and shall procure that each of its Affiliates shall maintain, post Completion, in good order all relevant documents, data and information relating to (i) any Warranty Breach or possible Warranty Breach, and (ii) any of the indemnities set out in Clause 11 and 12.

 

10                                           LIMITATION OF LIABILITY

 

10.1                                 Maximum liability

 

Subject to Clause 10.2 and except as provided for in Clause 10.3, the maximum aggregate liability of the Seller in respect of any and all Warranty Breaches shall not exceed an amount equal to EUR 3,000,000 (in words: three million euro).

 

10.2                                Minimum (aggregate) claims

 

Subject to Clause 10.3 the Seller shall not be liable in respect of a Warranty Breach:

 

(a)                       unless the amount of Damages with respect to any single claim or series of related claims exceeds EUR 50,000 (in words: fifty thousand euro); and

 

(b)                       unless the aggregate amount of Damages with respect to all claims payable as referred to in paragraph (a) above exceeds EUR 250,000 (in words: two hundred and fifty thousand euro), in which case the full amount shall be payable

 

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and not merely the excess.

 

10.3                                 No limitation of Seller’s liability

 

10.3.1                       The Parties agree that the limitations set out in Clauses 10.1 and 10.2 shall not apply in respect of claims resulting from, in connection with or attributable to:

 

(a)                       a Warranty Breach in respect of paragraph 5 (Leakage);

 

(b)                       a Warranty Breach in respect of paragraph 6 (Conduct of business) contained in Annex 8.1, provided, however, that the overall liability of the Seller under this paragraph shall in no event exceed fifty per cent. (50%) of the Purchase Price;

 

(c)                        a Warranty Breach in respect of paragraph 1 (General), paragraph 2 (The Company), paragraph 4 (Shares) contained in Annex 8.1, provided, however, that the overall liability of the Seller under these paragraphs shall in no event exceed hundred per cent. (100%) of the Purchase Price;

 

(d)                       a Warranty Breach in respect of paragraph 11 (Taxes) contained in Annex 8.1 or an indemnity under Clause 12, provided, however, that the overall liability of the Seller under this paragraph shall in no event exceed hundred per cent. (100%) of the Purchase Price;

 

(e)                        an indemnity under Clause 11 provided, however, that the overall liability of the Seller under an indemnity under Clause 11 shall in no event exceed an amount equal to seventy-five per cent. (75%) of the Purchase Price; and

 

(f)                         fraudulent conduct of the Seller or any of its Representatives.

 

10.3.2                       Subject to the provisions of Clause 10.3.1, the maximum aggregate liability of the Seller in respect of any and all Seller’s Breaches shall not exceed an amount equal to hundred per cent. (100%) of the Purchase Price.

 

10.4                                 Time limitation

 

The liability of the Seller in respect of a Warranty Breach shall continue until:

 

(a)                       the fifth (5th) anniversary of the Completion Date with respect to the Seller’s Warranties in paragraph 1 (General), paragraph 2 (The Company) and paragraph 4 (Shares) contained in Annex 8.1;

 

(b)                       the date that is thirty (30) Business Days after the last day on which a Tax Authority can claim the underlying Tax from the Company with respect to the Seller’s Warranties in paragraph 11 (Taxes) contained in Annex 8.1; and

 

(c)                        eighteen (18) months as of the date of signing this Agreement with respect to all other claims for a Warranty Breach.

 

The above shall apply instead of section 7:23(2) of the DCC.

 

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10.5                                 Reduction of liability

 

10.5.1                       In calculating the liability of the Seller in respect of any Warranty Breach and/or the Tax Indemnity as set out in Clause 12, such liability shall be reduced by the economic benefits relating to that claim, if any, including:

 

(a)                       any amount recovered from any third parties including insurers in respect of such claim or the event or circumstance giving rise to such claim;

 

(b)                       the amount of any provision in the Estimated Balance Sheet specifically allocated to the event or circumstance giving rise to the claim; or

 

(c)                        any amount of Tax saving, refund and/or benefit actually (to be) enjoyed or received by the Purchaser and/or the Company related to the event or circumstance giving rise to such claim.

 

10.5.2                       The Seller shall not be liable in respect of a Seller’s Warranty Breach to the extent it relates to a change in the Accounting Principles of the Purchaser, the Parent or an Affiliate of the Parent after the Completion Date, unless such change has been enacted to comply with the Accounting Principles, in the event the Company did not fully comply with the Accounting Principles at the Completion Date.

 

10.5.3                       If in respect of any fact, circumstance or event which would otherwise give rise to a Seller’s Breach, the Purchaser or the Company is entitled to seek recourse against any third party, the Seller and the Purchaser agree that the Company shall, to the extent commercially viable, seek recourse against such third party. If the Company decides to seek recourse in accordance with the provisions of the previous sentence, the Seller and the Purchaser agree that the Company shall use commercially reasonable efforts to pursue such recourse to the extent that it remains commercially viable to do so.  The amount of money recovered from such third party by the Purchaser (net of taxation and less any reasonable out of pocket costs of recovery) shall be applied to reduce pro rata parte or extinguish the claim for such Seller Breach.  If an amount has already been paid by the Seller in respect of such Seller’s Breach, the provisions of Clause 10.5.4 shall apply.

 

10.5.4                       Where the Seller is liable in respect of the Seller’s Breach and elects to make payment to the Purchaser and the Purchaser or the Company has a right of reimbursement (in whole or in part) against any person in respect of the same loss or damage that has been compensated by the Seller, to the extent the Seller is not subrogated in the rights of the Purchaser or the Company by operation of law, the Purchaser shall or shall procure that the Company shall assign and transfer to that Seller the benefit of that right for no further consideration. Where a third party’s consent to such assignment is required, the Purchaser shall use all reasonable efforts to obtain such consent. The Purchaser hereby agrees that if it or the Company receives a payment from a third party (a Recovery Amount) that represents the same loss or damage in respect of which the Seller had already paid an amount of Damages to the Purchaser, the Purchaser will as soon as reasonably possible transfer or procure transfer into the Seller’s Account an amount equal to the lesser of the Recovery Amount (net of taxation and less any reasonable out of pocket costs of recovery) and the sum paid by the Seller in relation to such Seller’s Breach.

 

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11                                           SPECIFIC INDEMNITIES

 

11.1                                 Subject to Clause 10.1, the Seller shall, on a euro-for-euro basis, indemnify (vrijwaren) and hold harmless the Purchaser, or at the direction of the Purchaser, the Affiliates of the Purchaser (which includes the Company after Completion - the Purchaser and its Affiliates including the Company after Completion herein collectively also referred to as the Purchaser Indemnified Parties) from, and shall compensate the Purchaser and the Purchaser Indemnified Parties for, any damages, losses, costs and expenses of whatever nature (including court costs and advisor’s fees) incurred by any of the Purchaser Indemnified Parties as a result of, in connection with or attributable to:

 

(a)                       any claim in connection with or as a result of the Company prior to Completion having sold more tickets to the public than allowed pursuant to the Venue Agreements;

 

(b)                       any and all costs and/or claims (both from a civil law and a tax perspective) either arising prior to Completion or post Completion in connection with or as a result of the Company making use of the services of any self-employed services providers (ZZP-ers/opdrachtnemers) prior to Completion;

 

(c)                        any and all claims of Employees regarding benefits under the Sickness Benefits Act and Labour Capacity Act; and

 

(d)                       any claim in connection with or as a result of a mandatory participation in the pension scheme of an industry wide pension fund by the Company.

 

11.2                                 None of the limitations of liability of the Seller (whether in amount, in terms of claim period or by way of reduction of liability) as set out in Clause 10, except for Clause 10.3.1(e), shall apply to liability of the Seller pursuant to the indemnities set out in Clauses 11 and 12, and shall, for the avoidance of doubt, not be limited to Damages only.

 

12                                           TAX INDEMNITY

 

12.1                                 Tax Indemnity

 

Subject to Clause 10.3.1(d), The Seller shall be responsible for, shall pay or cause to be paid, and shall, on a euro-for-euro basis, indemnify (vrijwaren) and hold harmless the Purchaser Indemnified Parties and their respective directors, officers, employees from, and shall compensate the Purchaser Indemnified Parties for, and will pay to the Purchaser Indemnified Parties, the amount of any Tax Liability of the Company (or any of their predecessors) relating to:

 

(a)                       the period between Effective Date and Completion Date if and to the extent the Tax Liability is incurred outside the ordinary course of business of the Company;

 

(b)                       the period up to the Effective Date;

 

(c)                        any Event occurring on or prior to the Effective Date;

 

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(d)                       any Event occurring between Effective Date and Completion Date if and to the extent such Event occurs outside the ordinary course of business of the Company;

 

(e)                        any costs or expenses, including but not limited to (reasonable) advisor’s fees, incurred by the Purchaser or the Company in connection with:

 

(i)                          any Tax Liability relating to the period up to the Effective Date (or, as the case may be, to the Completion Date if and to the extent the Tax Liability is incurred outside the ordinary course of business of the Company) or any Event occurring on or prior to the Effective Date (or, as the case may be, the Completion Date, if and to the extent such Event occurs outside the ordinary course of business of the Company); or

 

(ii)                       any action taken in avoiding, resisting or settling any such Tax Liability or taking any action under this Agreement;

 

(f)                         the consolidated, combined or unitary group of which the Company (or any of their predecessors) is or was a member on or prior to Completion, including, for the avoidance of doubt: (i) any claims under the 1990 Dutch Tax Collection Act (Invorderingswet 1990), and (ii) other liabilities that would not have arisen but for the relationship of the Company with the Seller’s Group, on or at any time prior to Completion;

 

(g)                        any correction imposed by any Tax Authority to the transfer prices reported by the Company;

 

(h)                       any and all Taxes due on the basis of section 34 (recipients’ liability) and section 35 (chain liability) of the Dutch Collection Act 1990 (Invorderingswet 1990) including any other levies, duties and other costs, which the Purchaser is obliged to pay to any Governmental Entity.

 

(i)                           all and any claims made by the collector of direct Taxes and indirect Taxes in the context of the chain and recipients’ liability, as well as any recovery claims based on such liabilities by subcontractors charged with (part of) the work; and

 

(j)                          all and any claims related to the Foreign Nationals (Employment) Act (Wet arbeid vreemdelingen) and the Dutch Placement of Personnel by Intermediaries Act (Wet allocatie arbeidskrachten door intermediairs),

 

(a payment due by the Seller pursuant to this paragraph, a Tax Indemnity Payment).

 

12.2                                 Exclusions

 

A Tax Indemnity Payment shall not be considered due if and to the extent a provision for the Tax Liability giving rise to the Tax Indemnity Payment was included in the Estimated Balance Sheet.

 

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12.3                                 No limitation for rights against other persons

 

The liability of the Seller to make any payment pursuant to this Clause 12 shall not be affected by any right the Purchaser or the Company may have against any other person.

 

13                                           PROCEDURES FOR TAX CLAIMS

 

13.1                                 Notification

 

The Parties shall forthwith after becoming aware of a Tax Claim or of any event that could lead to a Tax Claim inform the Purchaser or the Seller, as the case may be, thereof in writing, setting forth any and all relevant details in respect of such Tax Claim or such event. Such a notification given within such period shall be considered a notification within the meaning of section 7:23(1) of the DCC. As soon as possible following the date of that notification the Parties shall consult each other on the course of action to be taken.

 

13.2                                 Conditions for Seller’s co-ordination

 

The Parties may agree that the Seller shall co-ordinate all communication with the applicable Tax Authority under the following conditions:

 

(a)                       the Seller shall keep the Purchaser informed of all developments and events relating to a Tax Claim;

 

(b)                       the Seller shall prepare and file the requisite notifications and/or other documents (the Tax Documents) in co-operation with the Purchaser and the Company, excluding regular and periodic wage taxes and VAT filings related to the period prior to Completion, which shall be done by the Seller without notification and/or co-operation;

 

(c)                        the Seller shall procure that such Tax Documents shall be completed and correct in all respects and, in any case, the Seller shall not take any positions in the Tax Documents that could have an adverse effect on Tax position of the Purchaser and/or the Company;

 

(d)                       before making any filings of Tax Documents with any Tax Authority, a draft of the relevant requisite Tax Document shall be submitted by the Seller to the Purchaser (or such advisers as it shall nominate) at least fifteen (15) Business Days before its intended filing or submission;

 

(e)                        the Purchaser and its advisers shall in addition hereto be given access to all information necessary to determine its accuracy;

 

(f)                         if, within ten (10) Business Days of receiving any such draft, the Purchaser makes any comments, corrections or additions in respect of the draft Tax Document to the Seller those comments, corrections and additions shall, to the extent that they are reasonable, be reflected in the relevant Tax Document before filing hereof;

 

(g)                        despite the fact that the Seller co-ordinates communications with the Tax

 

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Authority, the Purchaser shall always be entitled, but not obliged, to participate in any proceedings, meetings or other communications that may have impact on the Tax Claim; and

 

(h)                       the Seller shall not take positions which could have a negative effect on the pre-Completion Tax position of the Purchaser or the Company and shall not settle or otherwise compromise any Tax Claim relating to a pre-Completion period with respect to the Company without first obtaining the written consent of the Purchaser.

 

13.3                                 Seller to co-ordinate

 

If the Parties do not agree on the course of action to be taken in relation to a Tax Claim, the Seller shall, at its sole discretion, be entitled to take, or procure the Company to take, any action necessary to defend the Tax Claim, and to avoid, dispute, deny, defend, resist, appeal, compromise, contest or settle the claim in any manner that the Seller deems appropriate. The Seller shall use reasonable endeavours to strike a fair balance between the interests of the Seller in keeping the Tax Claim as low as possible and the interests of the Company to maintain good business relations with any Tax Authority.

 

13.4                                 Co-operation

 

The Parties will co-operate with each other in dealing with any Tax Claim and will allow each other access to all relevant books and records during normal business hours and at the place where the same are normally kept, with full right to make copies thereof or take extracts therefrom. Such books and records shall be subject to a duty of confidentiality except for disclosure necessary for resolving such Tax Claim or otherwise required by Applicable Laws or stock exchange rules.

 

13.5                                 Tax Audit

 

The above Clause 13.1 through 13.4 relating to a Tax Claim shall apply mutatis mutandis to any Tax Audit.

 

14                                           PERSONAL LIABILITY VEENBOER

 

Veenboer agrees that he will be personally liable for the due and punctual performance of Seller’s obligations under this Agreement by way of separate and independent own obligation, and therefore not by way of surety (borgtocht), with respect to any and all claims that the Purchaser and the Company may have against the Seller in connection with or resulting from this Agreement, provided however that the liability of Veenboer shall never exceed an amount equal to the Purchase Price. Such liability of Veenboer resulting from this Clause 14 will only arise after the Seller has failed to perform its respective obligation under this Agreement. Veenboer waives any exceptions and defences afforded to sureties (borgen) pursuant to Dutch law.

 

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15                                          POST COMPLETION COVENANTS

 

15.1                                 Non-financial covenants

 

The Purchaser and the Parent hereby undertake towards both the Seller and the Company that they shall use best efforts to procure that:

 

(a)                       all events and festivals planned and/or booked by the Company up to 31 December 2014 shall continue to take place as planned;

 

(b)                       the name and website of “Awakenings” festival shall continue to exist for a period of five (5) years as from the Completion Date and the “Awakenings” brand will be mentioned second from above on the Parent’s website in the section “Our Companies” (after “ID&T”);

 

(c)                       Veenboer and the Key Employees shall each remain an employee of the Company for at least five (5) years as of Completion and each of the Key Employment Agreements will provide for an increase in salary as from 1 January 2015, unless one or more of such Key Employments Agreement is terminated  in accordance with the terms and conditions thereof;

 

(d)                       the Key Employees shall keep their current professional contact details for a period of five (5) years from the Completion Date or, if a Key Employment Agreement is terminated prior to such five (5) year period, such a shorter period; and

 

(e)                        Veenboer shall, until the earlier of:

 

(i)                          the fifth anniversary of the Completion Date; and

 

(ii)                       the date upon which Veenboer is no longer employed with the Company,

 

be in charge of and responsible for all events and/or bookings related to techno music in the Netherlands which are organized by the Parent and/or its Affiliates.  The responsibilities of Veenboer regarding new events and initiatives by the Parent and/or its Affiliates will be considered during this period on a case-by-case basis.

 

15.2                                 Covenants concerning consistency of business

 

15.2.1                       The Purchaser and the Parent agree that, up to and including the date on which the Purchaser Adjustment as set out in Clause 3.3.15 (if any) has been paid to the Seller:

 

(a)         the Seller shall constitute, together with two (2) individuals designated by the Purchaser (being Mr D.C.P. Stutterheim and Mr R. Rosenstein) the entire management board of the Company;

 

(b)                      the Seller shall be enabled to manage the Company in the ordinary course of business and consistent with past practice, it being understood that the Seller shall be granted a power of attorney to the effect that the Seller will be authorized to bind the Company for any legal acts not exceeding an amount of EUR 50,000; and

 

(c)                       the Accounting Principles of the Company will not be amended.

 

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15.3                                 No compete and non-solicitation

 

15.3.1                       Each of the Seller and Veenboer hereby undertakes towards both the Purchaser and the Company that it shall not, or allow any of its Affiliates, without the prior written consent of the Purchaser:

 

(a)                       for a period of three (3) years from the Completion Date in any capacity or in any way whatsoever in any jurisdiction in which the Company conduct business on the Completion Date, either directly or indirectly be engaged in or concerned with, or approach any person with a view to being engaged in or concerned with, the conduct of any business similar to or competing with Business;

 

(b)                       for a period of three (3) years from the Completion Date persuade or cause, or attempt to persuade any Employee or any distributor or commercial agent of the Company to terminate his relationship with any of the Company, or employ or engage any such person within one (1) year of the effective termination of his relationship with the Company, or take any action that may result in the impairment of the relationship between such employee or distributor or commercial agent and the Company; and

 

(c)                        for a period of three (3) years from the Completion Date persuade or cause or attempt to persuade any customer, supplier or person otherwise doing business with the Company to terminate his relationship with the Company or take any action that may result in the impairment of such relationship or assist or cause or attempt to assist any competitor of the Company in the conduct of any business referred to in Clause 15.3.1(a).

 

15.3.2                       Each of the Seller and Veenboer, as the case may be, will forfeit to the Purchaser or, at the Purchaser’s direction, to the Company, a penalty in the amount of EUR 100,000 (in words: one hundred thousand euro) for each breach of any of its respective obligations under Clause 15.3.1 and, furthermore, a penalty in the amount of EUR 10,000 (in words: ten thousand euro) for every day that such breach persists, commencing on the first day of the applicable breach. Penalties under this Clause 15.3.2 shall be forfeited automatically without any notice of the applicable breach being required and shall be forfeited in addition to and without prejudice to any other rights the Purchaser or the Company may have, including but not limited to the right to claim Damages in excess of the stated penalties or the right to claim specific performance (nakoming).

 

15.4                                 Further assurances

 

15.4.1                       Prior to, on or after Completion each Party shall, at its own cost and expense, execute and do (or procure to be executed and done by any other Party within the power of influence of the relevant Party) all such deeds, documents, acts and things as the other Party may from time to time reasonably require in order to give full effect to this Agreement.

 

15.4.2                       The Seller shall provide all cooperation reasonably requested by the Parent in connection with the Parent reporting the Transaction subject to this Agreement in

 

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accordance with Applicable Laws.

 

15.4.3                       Each Party agrees that such party will not make any verbal or written statements that disparage, defame, malign or harm the business, professional or personal reputation of any other party, including, without limitation, the members, directors, officers, and employees of the Parent.

 

16                                           CONFIDENTIALITY

 

16.1                                 Subject to Clause 16.2, the Parties (i) shall treat as strictly confidential all non-public information whether in writing, oral or otherwise received or obtained in respect of the subject matter of this Agreement and all transactions contemplated hereby and (ii) shall not, and shall not permit their Affiliates to, make any announcement or circular in respect of the subject matter of this Agreement and all transactions contemplated hereby, without the prior written consent of the other Party not to be unreasonably withheld.

 

16.2                                 Clause 16.1 shall not prohibit disclosure or use of any information if and to the extent:

 

(a)                       the disclosure or use is required by Applicable Laws or any recognized stock exchange on which the shares of any Party are listed;

 

(b)                       the disclosure or use is required for the purpose of any legal proceedings arising out of this Agreement or any other agreement entered into under or pursuant to this Agreement or the disclosure is made to a Tax Authority in connection with the Tax affairs of the disclosing Party;

 

(c)                        the disclosure is made to professional advisors of any Party on terms that such professional advisors undertake to comply with the provisions of Clause 16.1 in respect of such information as if they were a party to this Agreement; or

 

(d)                       the other Party has given prior written approval to the disclosure or use,

 

provided that prior to disclosure or use of any information pursuant to Clause 16.2(a) and 16.2(b) the Party concerned promptly notifies the other Party of such requirement with a view to providing the other Party with the opportunity to contest such disclosure or use or otherwise to agree the timing and content of such disclosure or use.

 

16.3                                 The Seller acknowledges that it is in possession of confidential information concerning the business of the Parent. Except as otherwise required by Applicable Laws, the Seller, shall, and shall cause its respective Affiliates and Representatives to, (i) treat confidentially and not disclose all or any portion of such confidential information, or (ii) not use such confidential information for the benefit of themselves or any other person. The Seller acknowledges and agrees that such confidential information is proprietary and confidential in nature and part of the business of the Parent. If the Seller, or any of its respective Affiliates or Representatives is requested or required to disclose (after such Seller has used its commercially reasonable efforts to avoid such disclosure and after promptly advising and consulting with the Parent about the

 

28

 

Seller’s intention to make, and the proposed contents of, such disclosure) any of the confidential information (whether by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process by a Governmental Authority), the Seller, shall, or shall cause its respective Affiliates or Representatives to, provide the Parent with prompt written notice of such request so that the Parent may, at its own expense, seek an appropriate protective order or other appropriate remedy. At any time that such protective order or remedy has not been obtained, the Seller or its respective Affiliate or Representative may disclose only that portion of the confidential information which such person is legally required to disclose or of which disclosure is required to avoid sanction for contempt or any similar sanction, and the Seller shall exercise its reasonable efforts to obtain assurance that confidential treatment will be accorded to such confidential information so disclosed. The Seller further agrees that, from and after the Completion Date, the Seller and its respective Affiliates and Representatives, upon the reasonable request of the Parent, promptly will deliver to the Parent all documents, or other tangible embodiments in its possession, constituting confidential information or other information with respect to the business of the Parent.

 

17                                           ACKNOWLEDGEMENT IN RELATION TO THE TOTAL CONSIDERATION SHARES

 

17.1                                 The Seller understands that both the Consideration Shares and the Additional Consideration Shares (together the Total Consideration Shares) have not been registered under the Securities Act of 1933, as amended (the Securities Act), on the grounds that the sale thereof pursuant to this Agreement is exempt pursuant to Section 4(a)(2) of the Securities Act and/or Regulation S, and the applicable state securities laws (the State Laws) and that the reliance of the Parent on such exemption is predicated in part on the representations, warranties, covenants and acknowledgments in this Clause 17.

 

17.2                                 The Seller (i) acknowledges that the Total Consideration Shares have not been registered under the Securities Act and the State Laws, and that the Total Consideration Shares must be held indefinitely by it unless it is subsequently registered under the Securities Act and the State Laws or an exemption from registration is available; (ii) is aware that any routine sales of the Total Consideration Shares made under Rule 144 of the Securities Act may be made only in limited amounts and in accordance with the terms and conditions of that Rule and that in such cases where Rule 144 is not applicable, compliance with some other registration exemption will be required; and (iii) is aware that Rule 144 is not presently available for use by the Parent for the offering of the Total Consideration Shares.

 

17.3                                 The Seller is an accredited investor as such term is defined in Rule 501(a) of Regulation D under the Securities Act.

 

17.4                                 The Seller can bear the economic risk of the investment, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment in the Total Consideration Shares. The Seller has been afforded the opportunity to obtain information necessary to verify the accuracy of any representations or information and has had all of its inquiries to the Parent answered

 

29

 

in full, and has been furnished all requested materials relating to the Parent, the offering of the Total Consideration Shares.

 

17.5                                 The Total Consideration Shares shall not be transferable, as set out in the Lock-Up Agreement, except upon the conditions specified in this Clause 17, which conditions are intended to insure compliance with the provisions of the Securities Act in respect of the transfer of the Total Consideration Shares. The Seller will not transfer any of the Total Consideration Shares in violation of the provisions of any applicable U.S. federal or state or other Applicable Laws regarding securities.

 

The Seller acknowledges that the Total Consideration Shares 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. The Parent agrees to make reasonable efforts to cooperate with the Seller in order to ensure transferability of the Total Consideration Shares in accordance with the Lock-Up Agreement and the provisions of the Securities Act.

 

17.6                                 The Seller acquires the Total Consideration Shares for investment purposes only, for its own account, and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act.

 

17.7                                 The offer of the Total Consideration Shares to the Seller is not made by any public or general means or pursuant to any public or general solicitation.

 

17.8                                 The Seller:

 

(a)                       is not a “U.S. Person” (as defined in Regulation S, promulgated under the Securities Act), was not formed under the Laws of any United States jurisdiction, and was not formed for the purpose of investing in securities not registered under the Securities Act;

 

(b)                       does not acquire the Total Consideration Shares for the account or on behalf of any U.S. Person;

 

(c)                        was outside the United States at the time the offer to purchase the Total Consideration Shares was received and as of the date hereof;

 

(d)                       does not acquire the Total Consideration Shares for the purpose of sale or distribution in the United States in a manner that does not comply with the requirements of Regulation S;

 

(e)                        acknowledges that the Total Consideration Shares bear a restrictive legend to this effect that the Parent might, in order to approve removal of the restrictive legend from certificates evidencing the Total Consideration Shares, require from the Seller (i) certain written representations to indicate that a sale of the Total Consideration Shares was made in a transaction that complies with the provisions of Regulation S, pursuant to a registration of the Total Consideration Shares under the Securities Act, or pursuant to an exemption from the registration requirements of the Securities Act and (ii) a legal opinion that

 

30

 

removal of the legend is appropriate;

 

(f)                         acknowledges that the Total Consideration Shares are not permitted to be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons except in accordance with Regulation S or pursuant to an exemption from the registration requirements of the Securities Act;

 

(g)                        has not made any pre-arrangement to transfer any of the Total Consideration Shares to a U.S. Person or to return any of the Total Consideration Shares to the United States securities markets (which includes short sales and hedging transactions in the United States within the periods restricted under Regulation S) and does not acquire the Total Consideration Shares as part of any plan or scheme to evade the registration requirements of the Securities Act;

 

(h)                       has not engaged in any “directed selling efforts” (as defined in Regulation S) in the United States regarding any of the Total Consideration Shares and has not engaged in any act intended to or that reasonably might have the effect of preconditioning the United States market for the resale of any of the Total Consideration Shares;

 

(i)                           is not a “distributor” (as defined in Regulation S) and is not an officer, director, or “affiliate” (as that term is defined in Rule 405 under the Securities Act) of any of the Parent or an “underwriter” or “dealer” (as such terms are defined in the federal securities Laws of the United States); and

 

(j)                          does not have a short position in, or other hedged position with respect to, any of the Total Consideration Shares or any other securities in the Parent.

 

17.9                                 At the time that the Seller acquires the Total Consideration Shares, the Seller is entitled to acquire the Total Consideration Shares under the Applicable Laws of all relevant jurisdictions that apply to the Seller and has fully observed such Applicable Laws and complied with all necessary formalities.

 

17.10                          The Seller shall hold the Total Consideration Shares, free and clear of all Encumbrances.

 

18                                           TERMINATION

 

18.1                                 This Agreement may be terminated prior to Completion and the Transaction may be abandoned by Notice given by the Purchaser:

 

(i)                          in accordance with Clause 7.6; or

 

(ii)                       if the Transaction shall have been permanently restrained or prohibited by a competent Governmental Entity.

 

In the event of termination of this Agreement by the Purchaser as a result of Clause 18.1(i) the Seller shall pay the Purchaser a break-up fee equal to an amount of the Advance Payment. The break-up fee as referred to above are the only damages that are due by the Seller in such event and the Purchaser hereby waives its right to claim

 

31

 

damages in excess of the amount of the break-up fee.

 

18.2                                 This Agreement may be terminated prior to Completion and the Transaction may be abandoned by Notice given by the Seller if the Transaction shall have been permanently restrained or prohibited by a competent Governmental Entity.

 

In the event of termination of this Agreement by the Seller as a result of this Clause 18.2 the Purchaser shall pay the Seller a break-up fee equal to an amount of the Advance Payment which break-up fee shall be set off against the Advance Payment. The break-up fee as referred to above are the only damages that are due by the Purchaser in such event and the Seller hereby waives its right to claim damages in excess of the amount of the break-up fee.

 

18.3                                 In the event of the termination of this Agreement and the abandonment of the Transaction pursuant to this Clause 18:

 

(a)                       all filings, applications and other submissions made pursuant to this Agreement shall, at the discretion of the Party that has made such filing, application or submission, and to the extent practicable, be withdrawn from the Governmental Entity to which it was made; and

 

(b)                       none of the Parties or their respective employees, Affiliates, or Representatives shall in any respect retain a residual liability towards any of the other Parties, except (i) to the extent that the termination is the result of a breach of this Agreement or the fraudulent or wilful misconduct or gross negligence of a Party, any of its Affiliates, employees or Representatives or (ii) in the event of termination by the Seller in accordance with the provisions of Clause 7.6.

 

19                                           COSTS AND EXPENSES

 

19.1                                 Costs and expenses

 

Save as expressly otherwise provided in this Agreement, each Party shall bear its own costs and expenses, including the fees and expenses of its legal and other advisers, incurred in connection with the preparation, negotiation and signing of this Agreement.

 

19.2                                 Notarial deed of transfer

 

The costs and expenses of the notarial deed of transfer related to this Agreement and other notarial documentation required to give effect to the transfer of the Shares shall be borne by the Purchaser.

 

20                                           PAYMENTS

 

20.1                                 Bank accounts

 

Unless expressly stated otherwise, all payments to be made under this Agreement shall be made in Euros:

 

(a)                       if to the Seller, to the Seller’s Account;

 

32

 

(b)                       if to the Purchaser, to the Purchaser’s Account; and

 

(c)                        if to the Notary, to the Notary Account.

 

20.2                                 Interest

 

Save as expressly otherwise provided in this Agreement, if a Party defaults in the payment when due of any sum payable under this Agreement, it shall pay interest on the basis of the then applicable three (3) months EURIBOR rate on that sum from the date on which payment is due until the date of actual payment (as well after as before judgment), which interest shall accrue from day to day and be compounded monthly.

 

20.3                                 No counterclaim or set-off

 

All payments made by the Seller under this Agreement shall be made free of any counterclaim or set off and without deduction or withholding of any kind other than any deduction or withholding required by Applicable Laws, it being understood that, without prejudice to any other remedies the Purchaser may have, the Purchaser shall be entitled, as a continued security for the due and punctual fulfilment by the Seller of its obligations and liabilities under this Agreement, to set off any liability of the Seller to the Purchaser to repay Leakage, including Additional Leakage, to the extent that the Additional Leakage Amount has been agreed in accordance with Clause 4.3.2 or has been finally determined in accordance with the provisions of Clause 3.3.13 and 3.3.14) with the obligation of the Purchaser to pay the Purchaser Adjustment as set out in Clause 3.3. To the extent that any Leakage has occurred, including Additional Leakage, to the extent that the Additional Leakage Amount has been agreed in accordance with Clause 4.3.2 or has been finally determined in accordance with the provisions of Clause 3.3.13 and 3.3.14), such Leakage shall be set off against the obligation of the Purchaser to pay the Purchaser Adjustment as set out in Clause 3.3.15 to the extent possible in light of the provisions of Clause 3.3.6. The Parties acknowledge and agree that if the Total Leakage Amount exceeds the Purchaser Adjustment such excess will be paid by the Seller to the Purchaser within ten (10) Business Days after the Product Calculation has been agreed in accordance with Clause 3.3.12 or has been finally determined in accordance with Clause 3.3.13.

 

20.4                                 Deduction or withholding

 

20.4.1                       If the Seller is required by Applicable Laws to make a deduction or withholding in respect of any sum payable under this Agreement, the Seller shall pay to the Purchaser such additional amounts as are necessary to ensure receipt by the Purchaser of the full amount which would have been received but for the deduction or withholding.

 

20.4.2                      If the Purchaser is required by Applicable Laws to make a deduction or withholding in respect of any sum payable under this Agreement, the Purchaser shall pay to the Seller such additional amounts as are necessary to ensure receipt by the Purchaser of the full amount which would have been received but for the deduction of the withholding.

 

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21                                           ASSIGNMENT

 

21.1                                 None of the Parties shall be entitled to assign (or cause to be transferred, whether by specific or general title) this Agreement or any of its rights hereunder, or transfer any of its duties or obligations under this Agreement, or create any Encumbrance on its rights hereunder, without the prior written consent of the Seller (in case of assignment by the Purchaser) or the Purchaser (in case of assignment by any of the Seller), provided that the Purchaser shall be entitled:

 

(a)                       to assign this Agreement to any of the companies in the Purchaser’s Group; and

 

(b)                       to assign this Agreement to a purchaser of the Company.

 

21.2                                 Any purported assignment, transfer or Encumbrance in contravention of this Clause 21 shall be deemed to be null and void.

 

22                                           ENTIRE AGREEMENT

 

This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and negotiations, oral or written between parties, with respect to the subject matter of this Agreement.

 

23                                           AMENDMENTS

 

This Agreement may not be amended, supplemented or terminated nor may any provisions thereof be waived except by a written instrument signed by the Parties.

 

24                                           WAIVER

 

Except as expressly stated otherwise in the Agreement, no omission or delay on the part of any Party in exercising any right, power, or remedy under this Agreement, shall prejudice or impair such right, power or remedy or be construed as a waiver thereof. Any single or partial exercise of such right, power or remedy shall not preclude any other or future exercise thereof or the exercise of any other right, power or remedy.

 

25                                           NO THIRD PARTY BENEFICIARIES

 

This Agreement is concluded for the benefit of the Parties and their respective Affiliates, successors and permitted assigns and nothing herein is intended to nor shall implicitly confer upon any other person any legal or equitable right, benefit or remedy of any nature whatsoever, except to the extent expressly stated otherwise in this Agreement.

 

26                                          INVALIDITY

 

If any of the provisions (or any part of a provision) of this Agreement, or the applicability thereof to any Party or circumstance, shall be found by a court, arbitrator or other Governmental Entity to be void or unenforceable or in conflict with the Applicable Laws of any state or jurisdiction it shall be deemed severed from this

 

34

 

Agreement and it shall not affect or impair:

 

(a)                       the legality, validity or enforceability in that jurisdiction of any other provision (or the remaining part of the relevant provision) of this Agreement; or

 

(b)                       the legality, validity or enforceability under the Applicable Laws of any other relevant jurisdiction of that or any other provision of this Agreement.

 

The subject provision shall be replaced by a valid, legal and enforceable provision which, seen in the context of this Agreement as a whole, approximates as close as possible to the original intent of the Parties and of the subject provision.

 

27                                           NOTICES

 

27.1                                 Any Notice shall be in writing and sent to the address or facsimile number of such other Party set out below or at such other address as the Party to be given Notice may have notified to the other Parties from time to time:

 

	
If   to the Seller:
    
	
 
    	
 
    
	
Attn:
    	
Mr. R.A.P. Veenboer
    
	
Address:
    	
Herengracht 433, (1017 BR) Amsterdam, the   Netherlands
    
	
 
    	
 
    
	
If   to Purchaser:
    
	
 
    	
 
    
	
Name:
    	
SFXE Netherlands Holdings B.V.
    
	
Attn:
    	
General Counsel
    
	
Address:
    	
430 Park Avenue, 6th floor, New York, NY 10022 USA
    
	
 
    	
 
    
	
If   to the Parent:
    
	
 
    	
 
    
	
Name:
    	
SFX Entertainment Inc.
    
	
Attn:
    	
General Counsel
    
	
Address:
    	
430 Park Avenue, 6th floor, New York, NY 10022 USA
    
	
 
    	
 
    
	
If   to the Company:
    
	
 
    	
 
    
	
Name:
    	
Monumental Productions B.V.
    
	
Attn:
    	
Mr R.A.P. Veenboer
    
	
Address:
    	
Herengracht 433, (1017 BR) Amsterdam, the   Netherlands
    
	
 
    	
 
    
	
If   to Veenboer
    
	
 
    	
 
    
	
Address:
    	
Eeuwigelaan 44, (1861 CN) Bergen (NH), the   Netherlands
    

 

27.2                                 Deemed delivery

 

Any Notice shall be delivered by hand or courier, or sent by registered post or facsimile, and shall be deemed to have been received or served upon receipt or refusal thereof.

 

35

 

27.3                                 Formal service of documents

 

The provisions of Clause 27.1 and 27.3 shall not apply in relation to the formal service of documents for the purpose of litigation. In relation of such formal service of documents for such purpose, the Parties hereby elect to have their domiciles (domiciliekeuze) at the addresses:

 

(a)        for the Purchaser and/or the Parent:

 

	
Name:
    	
Loyens & Loeff N.V.
    
	
Attn:
    	
Mr Harmen Holtrop
    
	
Address:
    	
Fred. Roeskestraat 100, (1076 ED) Amsterdam,   the Netherlands
    

 

(b)        for the Seller, the Company and/or Veenboer:

 

	
Name:
    	
Allen & Overy LLP
    
	
Attn:
    	
Mr Jan Louis Burggraaf
    
	
Address:
    	
Apollolaan 15, (1077AB) Amsterdam, the   Netherlands
    

 

28                                           NOTARIAL INDEPENDENCE

 

The Parties acknowledge that the Notary works with Loyens & Loeff N.V., the firm that advises the Purchaser in the Transaction. With reference to the Code of Conduct (Verordening beroeps- en gedragsregels) established by the Royal Notarial Professional Organisation (Koninklijke Notariële Beroepsorganisatie), the Parties hereby expressly agree that:

 

(a)                       the Notary shall execute any notarial deeds related to this Agreement; and

 

(b)                       the Purchaser is assisted and represented by Loyens & Loeff N.V. in relation to this Agreement and any agreements that may be concluded, or disputes that may arise, in connection therewith.

 

29                                           NO RIGHT TO RESCIND OR NULLIFY AGREEMENT

 

Except as otherwise provided for in this Agreement, to the extent permitted by Applicable Laws, the Parties hereby waive their rights, if any, to annul, rescind or, after Completion, nullify, in whole or in part (gehele danwel partiële ontbinding en vernietiging), or to demand in legal proceedings the rescission (ontbinding) in whole or in part, or, after Completion, nullification (vernietiging) of, this Agreement, whether on the basis of error (dwaling) or otherwise, or to cancel or terminate (opzeggen) this Agreement.

 

30                                           GOVERNING LAW AND DISPUTES

 

30.1                                 Governing law

 

This Agreement shall be governed by and construed in accordance with the Applicable Laws of the Netherlands, without giving effect to the principles of conflict of

 

36

 

laws thereof.

 

30.2                                 Disputes

 

30.2.1                       Any dispute (a Dispute) arising out of or in connection with this Agreement or any further agreement resulting from this Agreement, including questions in respect of the authority of the arbitrators or any injunctive relief or any other provisional measures, will be submitted to, resolved and finally and exclusively settled by arbitration in accordance with the rules of the Netherlands Arbitration Institute (Nederlands Arbitrage Instituut). The arbitral tribunal will be composed of three (3) arbitrators appointed in accordance with those rules. At least one (1) arbitrator will be qualified as an experienced senior commercial practicing lawyer (advocaat). The place of the arbitration will be Amsterdam, the Netherlands. The language of the arbitration will be English. The arbitrators will decide in accordance with the rules of the laws of the Netherlands (naar de regelen des rechts). The Netherlands Arbitration Institute may not have the arbitral judgment published. Consolidation of the arbitral proceedings with other arbitral proceedings pending in the Netherlands, as provided for in article 1046 of the Dutch Code of Civil Procedure (Wetboek van Burgerlijke Rechtsvordering), is excluded.

 

31                                           COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute an original. All the counterparts together shall constitute one and the same instrument and may be exchanged between the Parties by fax or by email as a PDF document.

 

32                                           EXCHANGE RATE

 

Where it is necessary to determine any monetary limit, threshold or amount for the purposes of this Agreement and the relevant monetary limit, threshold or amount is expressed in a currency other than Euros, the value of each limit, threshold or amount, as the case may be, shall be translated into Euros at the Exchange Rate on the date of occurrence of the event or circumstances bearing reference to the limit, threshold or amount to be so determined provided that should the event or circumstance relate to a period of more than one (1) day, then the applicable Exchange Rate shall be the average of the Exchange Rate over the duration of the event or circumstance.

 

IN WITNESS WHEREOF this Agreement has been entered into on the date stated at the beginning of this Agreement.

 

[ANNEXES, SCHEDULES AND SIGNATURE PAGE(S) TO FOLLOW]

 

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ANNEX 1.1 — DEFINITIONS

 

	
2012 Accounts
    	
 
    	
means the Company’s unaudited annual   accounts in respect of the period of 1 January 2012 up to and including   31 December 2012 consisting of a balance sheet and a profit and loss   account with explanatory notes thereto, all in accordance with the Accounting   Principles, and a director’s report of the Company’s board of managing   directors in accordance with DCC;
    
	
 
    	
 
    	
 
    
	
2013 Accounts
    	
 
    	
means the Company’s audited annual accounts   in respect of the period of 1 January 2013 up to and including 31   December 2013 consisting of a balance sheet, a cash flow statement and a   profit and loss account with explanatory notes thereto, all in accordance   with the Accounting Principles, and a director’s report of the Company’s   board of managing directors accompanied by an unqualified auditors statement   in accordance with DCC;
    
	
 
    	
 
    	
 
    
	
2014 Accounts
    	
 
    	
means the Company’s audited annual accounts   in respect of the period of 1 January 2014 up to and including 31   December 2014 consisting of a balance sheet, a cash flow statement and a   profit and loss account with explanatory notes thereto, all in accordance   with the Accounting Principles, and a director’s report of the Company’s   board of managing directors accompanied by an unqualified auditors statement,   all in accordance with DCC;
    
	
 
    	
 
    	
 
    
	
Accounting Principles
    	
 
    	
means the accounting policies, practices,   principles, treatments and the particular application thereof, of the Company   as consistently applied as from 1 January 2012, provided such policies,   practices, principles, treatments and the particular application thereof are   in accordance with Dutch GAAP;
    
	
 
    	
 
    	
 
    
	
Accounts
    	
 
    	
means the 2012 Accounts and the 2013   Accounts;
    
	
 
    	
 
    	
 
    
	
Act
    	
 
    	
has the meaning ascribed thereto in the   Lock-Up Agreement;
    
	
 
    	
 
    	
 
    
	
Action
    	
 
    	
means any suit, legal action, claim,   investigation, hearing, arbitration, audit, assessment or proceeding   (including any legal proceeding, administrative enforcement proceeding or   arbitration proceeding before any Governmental Authority);
    
	
 
    	
 
    	
 
    
	
Actual Working Capital
    	
 
    	
has the meaning ascribed thereto in Clause   3.3.2;
    

 

38

 

	
Additional Leakage
    	
 
    	
means any Leakage, except for the Leakage   Amount that has been notified by the Seller to the Purchaser pursuant to the   Leakage Notice;
    
	
 
    	
 
    	
 
    
	
Additional Leakage Amount
    	
 
    	
has the meaning ascribed thereto in Clause   4.3.1;
    
	
 
    	
 
    	
 
    
	
Advance Payment
    	
 
    	
has the meaning ascribed thereto in Clause   3.1.1(a);
    
	
 
    	
 
    	
 
    
	
Affiliate
    	
 
    	
means: (i) in relation to any person   other than an individual, any person who is Controlled by, Controls or is   under common Control with, such person; and (ii) in relation to an   individual, his close relatives. For the purposes of this definition, close   relatives means, in relation to any individual: (i) his spouse, parents,   siblings and children (including step children); (ii) the trustees,   acting in their capacity as such trustees, of any trust of which he or any of   his close relatives is a beneficiary, or in the case of a discretionary   trust, is a discretionary object; and (iii) any person of which he   and/or his close relatives have Control;
    
	
 
    	
 
    	
 
    
	
Agreement
    	
 
    	
means this agreement and all of its Annexes,   Schedules and Recitals, as it may be supplemented or amended from time to   time by the Parties in accordance with the terms hereof;
    
	
 
    	
 
    	
 
    
	
Annex
    	
 
    	
means the annexes attached to this   Agreement;
    
	
 
    	
 
    	
 
    
	
Appendices
    	
 
    	
means the appendices attached to this   Agreement;
    
	
 
    	
 
    	
 
    
	
Applicable Laws
    	
 
    	
means with respect to the relevant subject   matter or person, any and all governmental (whether national, supranational,   state, provincial, local or any other level), quasi-governmental, or   self-regulatory body’s laws, regulations, ordinances, rules and any   other provisions that are mandatory;
    
	
 
    	
 
    	
 
    
	
Assets
    	
 
    	
means all assets of the Company which are   reflected in the 2013 Accounts;
    
	
 
    	
 
    	
 
    
	
Base Purchase Price
    	
 
    	
has the meaning ascribed thereto in Clause   3.1;
    
	
 
    	
 
    	
 
    
	
Base   Purchaser Price Excess
    	
 
    	
has the meaning ascribed thereto in Clause   3.3.6;
    
	
 
    	
 
    	
 
    
	
Balance Sheet Date
    	
 
    	
means 31 December 2013;
    
	
 
    	
 
    	
 
    
	
Business
    	
 
    	
has the meaning given in Recital (C) to   this Agreement;
    
	
 
    	
 
    	
 
    
	
Business Day
    	
 
    	
means a day (other than a Saturday or a   Sunday or a public holiday) on which banks are open for business in the 
    

 

39

 

	
 
    	
 
    	
Netherlands and New York (United States of   America);
    
	
 
    	
 
    	
 
    
	
Cash
    	
 
    	
means all cash in hand or cash deposited in   bank accounts or cash equivalents held in the name of the Company;
    
	
 
    	
 
    	
 
    
	
Cash Consideration Payment
    	
 
    	
has the meaning ascribed thereto in Clause   3.1.1(b);
    
	
 
    	
 
    	
 
    
	
Clause
    	
 
    	
means a clause of this Agreement;
    
	
 
    	
 
    	
 
    
	
Company
    	
 
    	
has the meaning ascribed thereto in the   introduction of this Agreement;
    
	
 
    	
 
    	
 
    
	
Completion
    	
 
    	
means the transfer of the Shares and the   payment of the Base Purchase Price under the terms and conditions of this   Agreement;
    
	
 
    	
 
    	
 
    
	
Completion Date
    	
 
    	
has the meaning ascribed thereto in Clause   7.1;
    
	
 
    	
 
    	
 
    
	
Condition Precedent
    	
 
    	
has the meaning ascribed thereto in Clause   5;
    
	
 
    	
 
    	
 
    
	
Consideration Shares
    	
 
    	
has the meaning ascribed thereto in Clause   3.1.1(c);
    
	
 
    	
 
    	
 
    
	
Control
    	
 
    	
means: (i) the ownership or control   (directly or indirectly) of more than 50% of the ownership interests of the   relevant person; or (ii) the right to appoint or remove (or the ability   (whether in law or fact) to direct the appointment or removal of) the members   of the governing body of the relevant person holding a majority of the voting   rights at meetings of the governing body on all, or substantially all,   matters;
    
	
 
    	
 
    	
 
    
	
Current Assets
    	
 
    	
means, as of any date, the current assets of   the Company (including Cash) calculated as of such date in accordance with   Dutch GAAP consistently applied and as historically presented in the   Accounts;
    
	
 
    	
 
    	
 
    
	
Current Liabilities
    	
 
    	
means, as of any date, the current   liabilities of the Company calculated as of such date in accordance with   Dutch GAAP consistently applied and as historically presented in the   Accounts, for the avoidance of doubt excluding any Debt;
    

 

40

 

	
Data Room
    	
 
    	
means the documents contained in the digital   data room until the date of this Agreement prepared by the Seller for the   purpose of facilitating the Due Diligence Investigation and enabling the   Purchaser and the Purchaser’s Representatives to evaluate the Shares, the   Company and the Business, an index of which is attached hereto as Schedule 1.1(a) and   all of which are electronically stored on DVD’s attached as Schedule   1.1(b);
    
	
 
    	
 
    	
 
    
	
Damages
    	
 
    	
means the aggregate of all payments   necessary of the Purchaser and the Company to be brought in the position it   or they would have been in, if the Seller’s Breach had not occurred,   inclusive (i) any direct and indirect damages; and (ii) all   reasonable costs and expenses made and incurred by the Purchaser and/or the   Company in connection therewith (inclusive the fees of outside advisors and   legal counsel);
    
	
 
    	
 
    	
 
    
	
DCC
    	
 
    	
means the Dutch Civil Code;
    
	
 
    	
 
    	
 
    
	
Debt
    	
 
    	
means all (i) intra-group interest   bearing debt (unless otherwise agreed in writing by the Parties) and   (ii) all interest bearing external debt including short-term and   long-term interest bearing debts of any kind, financial lease obligations,   shareholder loans including accrued interest, corporate income tax   obligations relating to the period prior to the Effective Date, loans payable   to lessors, costs in connection with the Transaction, and non-accrued incentive   payments for the management of the Company, provided, however, that Debt   shall not include any accrued but not yet paid or distributed profits by the   Company over the financial year 2013 (as referred to in the Estimated Balance   Sheet as “Proposed dividends”, equal to an amount of EUR 1,657,000 (in words:   one million six hundred fifty seven thousand)). For the avoidance of doubt,   Debt shall also include all items that are considered debt in the Accounts   and the 2014 Accounts in accordance with the Accounting Principles;
    
	
 
    	
 
    	
 
    
	
Debt Adjustment
    	
 
    	
has the meaning ascribed thereto in Clause   3.3.3;
    
	
 
    	
 
    	
 
    
	
Deed of Transfer
    	
 
    	
means a notarial instrument for the transfer   of the Shares, substantially in the form attached hereto as Schedule 1.1(c);
    
	
 
    	
 
    	
 
    
	
Disclosed
    	
 
    	
means fairly disclosed in the Disclosed   Information, it being understood that facts or circumstances shall only be   deemed to be fairly disclosed, if such facts or circumstances are   (i) sufficiently clear from the face of the relevant document for a purchaser   of the Shares acting reasonably (and not simply by 
    

 

41

 

	
 
    	
 
    	
reference to a document that has not been   included in the Disclosed Information), and (ii) provided with such   detail as to enable the Purchaser and the Purchaser’s Representatives (inter alia taking into account their own knowledge of the   Business and relevant expertise (in any event including financial expertise))   to make a reasonable assessment of the risk associated with such fact or   circumstance;
    
	
 
    	
 
    	
 
    
	
Disclosed Information
    	
 
    	
means any and all information which is   contained in (i) this Agreement, (ii) the Data Room, (iii) the   answers by the Company to the questions by the legal counsel of the Purchaser   through the due diligence Q&A and (iv) all other documents shared or   correspondence between two or more of the Parties, to the extent that all   such information has been electronically stored on DVD’s attached as Schedule   1.1(b);
    
	
 
    	
 
    	
 
    
	
Dispute
    	
 
    	
has the meaning ascribed thereto in Clause   30.2.1;
    
	
 
    	
 
    	
 
    
	
Due Diligence Investigation
    	
 
    	
means the due diligence investigations   performed by and on behalf of the Purchaser and the Purchaser’s   Representatives in respect of financial, legal and business matter relating   to the Company;
    
	
 
    	
 
    	
 
    
	
EBITDA
    	
 
    	
means for the period of 1 January 2014   up to and including 31 December 2014 the Net Income, excluding: 

 

(a)                        income taxes; 

 

(b)                        interest expenses or income; 

 

(c)                         depreciation and loss on the sale of financial assets; and 

 

(d)                        depreciation on tangible fixed assets and amortization, 

 

as shown in the 2014 Accounts. 

 

Without limiting the foregoing, for the   avoidance of doubt, EBITDA shall not include any Exceptional Items.
    
	
 
    	
 
    	
 
    
	
EBITDA Adjustment
    	
 
    	
means the   amount by which the EBITDA exceeds EUR 2,450,000 (in words: two million four   hundred fifty thousand euro), multiplied by four (4) and not exceeding   an amount equal to EUR 200,000 (in words: two hundred thousand euro);
    
	
 
    	
 
    	
 
    
	
EBITDA Permitted Shortfall
    	
 
    	
means the amount between EUR 2,450,000 (in   words: two 
    

 

42

 

	
 
    	
 
    	
million four   hundred fifty thousand euro) and EUR 2,500,000 (in words: two million five   hundred thousand euro);
    
	
 
    	
 
    	
 
    
	
Effective Date
    	
 
    	
means 1 January 2014, 00:01 hours;
    
	
 
    	
 
    	
 
    
	
Employees
    	
 
    	
means a current or former employee of the   Company, which has or had an employment agreement with the Company.
    
	
 
    	
 
    	
 
    
	
Encumbrance
    	
 
    	
means a mortgage, charge, pledge, lien or   any other security interest of any kind (zakelijk zekerheidsrecht);
    
	
 
    	
 
    	
 
    
	
Estimated Balance Sheet
    	
 
    	
has the meaning ascribed thereto in Clause   3.3.4;
    
	
 
    	
 
    	
 
    
	
Event
    	
 
    	
means any transaction, event, act or   omission and any transaction, event, action or omission deemed to occur for   Tax purposes;
    
	
 
    	
 
    	
 
    
	
Exceptional Items
    	
 
    	
means all items arising not in the ordinary   course of the Business, including (without prejudice to the generality of the   foregoing): 

 

(a)                        proceeds received in connection with litigation (if and to the   extent only in excess of the associated litigation costs); for the avoidance   of doubt, any punitive or other special damages received therein shall be   deemed an “Exceptional Item”; 

 

(b)                        losses incurred in connection with a litigation, if and to the   extent such losses are the result of the payment of punitive or other special   damages; 

 

(c)                         proceeds received under any other insurance policy if and to the   extent only in excess of the replacement costs of the relevant insured asset;   

 

(d)                        insured losses, if and to the extent such insured losses exceed the   insurance proceeds; 

 

(e)                         any foreign currency translation gains or losses; 

 

(f)                          release of any prior period accruals; 

 

(g)                         interest (including in respect of any loans to the Purchaser at   rates from time to time agreed) received by the Purchaser or the 
    

 

43

 

	
 
    	
 
    	
Company; 

 

(h)                        cost associated with this Transaction; 

 

(i)                            any costs or charges relating to (i) reporting duties of the   Company, (ii) overhead or (iii) any services, between (an Affiliate   of) the Parent and the Company, that are not consistent with past practice, 

 

for the avoidance of doubt, and subject to   the Accounting Principles, any losses or gains arising from bad debts are   considered as arising in the ordinary course of Business;
    
	
 
    	
 
    	
 
    
	
Exchange Rate
    	
 
    	
means, in relation to any currency to be   converted into or from Euros for the purposes of this Agreement, the average   five (5) day spot rate of exchange (closing mid-point) for that currency   into or, as the case may be, from Euros, as published in the London edition   of the Financial Times published on the five (5) Business Days   immediately prior to the relevant date or, where no such rate of exchange is   published in respect of that date, at the rate quoted on the appropriate   page of the Reuters screen as at the close of business in Amsterdam on   the five (5) Business Days immediately prior to the relevant date;
    
	
 
    	
 
    	
 
    
	
Expert
    	
 
    	
has the meaning ascribed thereto in Clause   3.3.13;
    
	
 
    	
 
    	
 
    
	
FCPA
    	
 
    	
has the meaning ascribed thereto in clause   18.6 of Annex 8.1;
    
	
 
    	
 
    	
 
    
	
Governmental Entity
    	
 
    	
means any international, European Union,   national, provincial or local governmental body, regulatory body or authority   exercising an executive, legislative, judicial, regulatory, administrative or   other governmental function with jurisdiction in respect of the relevant   matter;
    
	
 
    	
 
    	
 
    
	
Intellectual Property Rights
    	
 
    	
means all the intellectual property rights   as listed in Appendix 19.1;
    
	
 
    	
 
    	
 
    
	
Key Employees
    	
 
    	
has the meaning ascribed thereto in Clause   7.3.1(f);
    
	
 
    	
 
    	
 
    
	
Key Employment Agreements
    	
 
    	
means the employment agreements to be   entered into by and between the Company and the Key Employees in the agreed   form attached hereto as Schedule 7.3.1(f);
    
	
 
    	
 
    	
 
    
	
Leakage
    	
 
    	
means, unless constituting Permitted   Leakage, any of the following items occurring or having occurred in the   period as of the Effective Date and up to and including the Completion Date: 
    

 

44

 

	
 
    	
 
    	
(a)                       any dividends or other distributions, whether by way of share   redemption, share capital reduction or otherwise, and any other payment in   respect of the share capital of the Company, in each case whether in cash or   in kind, paid or made by the Company to or for the benefit of the Seller   and/or its Affiliates; 

 

(b)                       any payments (including interest or management fees) made or   benefits or assets conferred by the Company to the Seller and/or its   Affiliates; 

 

(c)                        any waiver or forgiveness of any indebtedness or liability owed by   or otherwise for the benefit of the Seller and/or its Affiliates to the   Company, or any indebtedness or liability incurred by the Company for no   consideration or a consideration which is not at arm’s length to or otherwise   for the benefit of the Seller and/or its Affiliates; 

 

(d)                       any bonus (in cash or in kind) paid or payable to any shareholder,   director, employee, advisor or consultant of the Seller and/or its Affiliates   or the Company incurred or reimbursed by, or charged to, the Company, as an   incentive to complete, or triggered by, the Transaction; 

 

(e)                        any payments made, or costs, expenses or liabilities incurred, in   relation to the (effectuation) of the Transaction (except to the extent such   payments, costs, expenses or liabilities are for the Purchaser’s account or   the Company’s account pursuant to the terms of this Agreement); 

 

(f)                         any liability pursuant to guarantees, indemnifications or securities   granted by the Company and any liability incurred, assumed or indemnified for   the benefit of the Seller and/or its Affiliates; 

 

(g)                        any agreement or undertaking by the Company to do any of the items   referred to in (a) up to and including (f). above; and 

 

(h)                       any Tax Liability in respect of any of the items referred to in (a).   up to and including (g) above;
    
	
 
    	
 
    	
 
    
	
Leakage Amount
    	
 
    	
means any amount of Leakage;
    

 

45

 

	
Leakage Notice
    	
 
    	
has the meaning ascribed thereto in Clause   4.2;
    
	
 
    	
 
    	
 
    
	
Leases
    	
 
    	
all leases the Company has entered into, as   listed in Appendix 10.2;
    
	
 
    	
 
    	
 
    
	
Lock-Up Agreement
    	
 
    	
means the lock-up agreement to be entered   into by and between the Parent and the Seller substantially in the form   attached hereto as Schedule 7.3(j);
    
	
 
    	
 
    	
 
    
	
Material Agreements
    	
 
    	
has the meaning ascribed thereto in clause   13.1 of Appendix 8.1;
    
	
 
    	
 
    	
 
    
	
Net Income
    	
 
    	
means the net income of the Company for the   period of 1 January 2014 up to and including 31 December 2014 as   derived from the 2014 Accounts;
    
	
 
    	
 
    	
 
    
	
Notary
    	
 
    	
means Mr. P.G. van Druten or another   civil law notary (notaris) (or   such notary’s substitute) of Loyens & Loeff N.V. in Amsterdam;
    
	
 
    	
 
    	
 
    
	
Notary Account
    	
 
    	
means the trust account (kwaliteitsrekening) of the Notary   (account number: 55.72.97.133 in the name of Loyens & Loeff   Amsterdam Derdengelden Notariaat, Postbus 2888, 3000 CW Rotterdam at ABN AMRO   Bank; Swift/BIC ABNANL2A; IBAN: NL 62 ABNA0557 2971 33;
    
	
 
    	
 
    	
 
    
	
Notice
    	
 
    	
means a notice to be given by a Party to   another Party under this Agreement;
    
	
 
    	
 
    	
 
    
	
Parent
    	
 
    	
has the meaning ascribed thereto in the   introduction of this Agreement;
    
	
 
    	
 
    	
 
    
	
Parent Common Stock
    	
 
    	
has the meaning ascribed thereto in Clause 3.1.1(c);
    
	
 
    	
 
    	
 
    
	
Party or Parties
    	
 
    	
has the meaning ascribed thereto in the   introduction of this Agreement;
    
	
 
    	
 
    	
 
    
	
Permits
    	
 
    	
has the meaning ascribed thereto in clause   17.1 of Annex 8.1;
    
	
 
    	
 
    	
 
    
	
Permitted Leakage
    	
 
    	
means any management fees or salaries   payable during the period as of the Effective Date and up to and including   the Completion Date pursuant to Disclosed management agreements and/or   Disclosed employment agreements entered into by and between the Company and   the shareholders of the Seller or any of their respective Affiliates;
    
	
 
    	
 
    	
 
    
	
Product
    	
 
    	
has the meaning ascribed thereto in Clause   3.3.10;
    

 

46

 

	
Product Calculation
    	
 
    	
has the meaning ascribed thereto in Clause   3.3.11;
    
	
 
    	
 
    	
 
    
	
Purchase Price
    	
 
    	
has the meaning ascribed thereto in Clause 3.1.2;
    
	
 
    	
 
    	
 
    
	
Purchaser
    	
 
    	
has the meaning ascribed thereto in the   introduction of this Agreement;
    
	
 
    	
 
    	
 
    
	
Purchaser Adjustment
    	
 
    	
has the meaning ascribed thereto in Clause 3.3.15;
    
	
 
    	
 
    	
 
    
	
Purchaser’s Account
    	
 
    	
means the bank account of the Purchaser as   specified by the Purchaser to the Notary, or the Seller, as applicable, from   time to time;
    
	
 
    	
 
    	
 
    
	
Purchaser Indemnified Parties
    	
 
    	
shall have the meaning ascribed thereto in Clause   11;
    
	
 
    	
 
    	
 
    
	
Purchaser’s Group
    	
 
    	
means the Purchaser and its Affiliates;
    
	
 
    	
 
    	
 
    
	
Purchaser’s Warranties
    	
 
    	
has the meaning ascribed thereto in Clause 8.7;
    
	
 
    	
 
    	
 
    
	
Recovery Amount
    	
 
    	
has the meaning ascribed thereto in Clause 10.5.4;
    
	
 
    	
 
    	
 
    
	
Related Person
    	
 
    	
means any Affiliate and any other person or   legal entity forming part of the group (as meant in section 2:24c DCC of   which the legal entity concerned forms part;
    
	
 
    	
 
    	
 
    
	
Relief
    	
 
    	
means any relief, allowance (including   without limitation amortisation or depreciation), credit, deduction,   exemption or set-off in respect of any Tax or relevant to the computation of   any income, profits or gains for the purposes of any Tax, or any right to repayment   of or savings of Tax;
    
	
 
    	
 
    	
 
    
	
Representatives
    	
 
    	
means any and all persons authorised to   represent the entity concerned, whether or not the authority is subject to   limitations, as well as any of the professional advisors or other   representatives (however named) of such entity;
    
	
 
    	
 
    	
 
    
	
Schedules
    	
 
    	
means the schedules attached to this   Agreement;
    
	
 
    	
 
    	
 
    
	
Securities Act
    	
 
    	
has the meaning ascribed thereto in Clause   17.1;
    
	
 
    	
 
    	
 
    
	
Seller
    	
 
    	
has the meaning ascribed thereto in the   introduction of this Agreement;
    
	
 
    	
 
    	
 
    
	
Seller’s Account
    	
 
    	
means the bank account of the Seller as   specified by the Seller to the Notary, or the Purchaser, as applicable, from   time 
    

 

47

 

	
 
    	
 
    	
to time;
    
	
 
    	
 
    	
 
    
	
Seller’s Breach
    	
 
    	
means any breach by the Seller under or in   connection with this Agreement;
    
	
 
    	
 
    	
 
    
	
Seller’s Group
    	
 
    	
means the Seller and its Affiliates (other   than the Company) at any time before Completion;
    
	
 
    	
 
    	
 
    
	
Seller’s Warranties
    	
 
    	
means the warranties included in Annex 8.1;
    
	
 
    	
 
    	
 
    
	
Shares
    	
 
    	
has the meaning ascribed thereto in Recital (A) to   this Agreement;
    
	
 
    	
 
    	
 
    
	
State Laws
    	
 
    	
has the meaning ascribed thereto in Clause   17.1;
    
	
 
    	
 
    	
 
    
	
Target Working Capital
    	
 
    	
has the meaning ascribed thereto in Clause   3.3.1;
    
	
 
    	
 
    	
 
    
	
Tax
    	
 
    	
means all forms of tax, levy, duty, impost,   social security charges and contributions, health security contributions, any   other contributions, any other obligations comparable to tax related   ancillary obligations, withholdings of any nature whatsoever as well as   special charges of any kind and other monetary obligations, together with all   interest, penalties, additions, damage, fines, thereto, relating to any of   them, whether disputed or not and regardless of whether these items are   chargeable directly or primarily against or attributable directly or   primarily to any other person and of whether any amount in respect of any of   them is recoverable from any other person;
    
	
 
    	
 
    	
 
    
	
Tax Audit
    	
 
    	
an investigation by any Tax Authority in   connection with Tax relating to or affecting the Company;
    
	
 
    	
 
    	
 
    
	
Tax Authority
    	
 
    	
means any Governmental Entity, taxing   authority or other authority competent to impose or collect any Tax;
    
	
 
    	
 
    	
 
    
	
Tax Claim
    	
 
    	
means the issue of any notice, letter or   other document by or on behalf of any Tax Authority (or the taking of any   other action by or on behalf of any Tax Authority) from which notice, letter,   document or action it appears that a Tax Liability is to be, or may come to   be, imposed on or collected from the Company;
    
	
 
    	
 
    	
 
    
	
Tax Documents
    	
 
    	
has the meaning ascribed thereto in Clause   13.2(b);
    
	
 
    	
 
    	
 
    
	
Tax Indemnity Payment
    	
 
    	
has the meaning ascribed thereto in Clause   12.1;
    

 

48

 

	
Tax Liability
    	
 
    	
means (i) any liability to make actual   payments of Tax (or amounts in respect of Tax), regardless of whether any   such liability shall have been discharged in whole or in part on or before   Completion, and (ii) the loss of any Relief, including a loss as a   result of the setting off of any Relief against income, profits or gains or   against any Tax otherwise chargeable;
    
	
 
    	
 
    	
 
    
	
Tax Return
    	
 
    	
means any return, (including any information   return), report, statement, declaration, schedule, notice, form, or other   document or information filed with or submitted to, or required to be filed   with or submitted to, any Tax Authority in connection with the determination,   assessment, collection, or payment of any Tax or in connection with the   administration, implementation, or enforcement of or compliance with any   requirement relating to Tax;
    
	
 
    	
 
    	
 
    
	
Total Consideration Shares
    	
 
    	
has the meaning ascribed thereto in Clause   17.1;
    
	
 
    	
 
    	
 
    
	
Total Leakage Amount
    	
 
    	
means the Leakage Amount together with the   Additional Leakage Amount;
    
	
 
    	
 
    	
 
    
	
Transaction
    	
 
    	
means the sale and purchase of the Shares,   on the terms and subject to the conditions of this Agreement;
    
	
 
    	
 
    	
 
    
	
Veenboer
    	
 
    	
has the meaning ascribed thereto in the   introduction of this Agreement;
    
	
 
    	
 
    	
 
    
	
Warranty Breach
    	
 
    	
has the meaning ascribed thereto in Clause   8.6;
    
	
 
    	
 
    	
 
    
	
Working Capital
    	
 
    	
means, as of any date, the Current Assets   minus the Current Liabilities calculated as of such date in accordance with   the Accounting Principles; and
    
	
 
    	
 
    	
 
    
	
Working Capital Adjustment
    	
 
    	
has the meaning ascribed thereto in Clause   3.3.2.
    

 

49

 

SIGNATURE PAGES

 

Seller

 

	
Monumental   Productions Beheer B.V.
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ R.A.P.   Veenboer
    	
 
    
	
Name:
    	
R.A.P. Veenboer
    	
 
    
	
Title:
    	
Director
    	
 
    
	
 
    	
 
    
	
Address:
    	
Herengracht 433, (1017 BR) Amsterdam, the   Netherlands
    
	
Attention:
    	
Mr R.A.P. Veenboer
    	
 
    
	
Tel:
    	
020-3308822
    	
 
    
	
Fax:
    	
020-3308777
    	
 
    
	
E-mail:
    	
rocco@awakenings.nl
    	
 
    

 

50

 

	
Mr. R.A.P Veenboer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ R.A.P Veenboer
    	
 
    
	
 
    	
 
    	
 
    
	
Address:
    	
Eeuwigelaan 44, (1861 CN) Bergen (NH), the   Netherlands
    
	
Tel:
    	
020-3308822
    	
 
    
	
Email:
    	
rocco@awakenings.nl
    	
 
    

 

51

 

Purchaser

 

	
SFXE   Netherlands Holdings B.V.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
/s/ Mitch Slater
    	
 
    	
/s/ Shelly Finkel
    
	
Name:
    	
Mr M.J. Slater
    	
 
    	
Name:
    	
Mr S. Finkel
    
	
Title:
    	
Director A
    	
 
    	
Title:
    	
Director B
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Address:
    	
Prins Bernhardplein 200, (1097JB) Amsterdam,   the Netherlands
    
	
Attention:
    	
General Counsel
    	
 
    	
 
    	
 
    
	
Tel:
    	
646-561-6385
    	
 
    	
 
    	
 
    
	
Fax:
    	
646-417-7393
    	
 
    	
 
    	
 
    
	
E-mail:
    	
howard@sfxii.com
    	
 
    	
 
    	
 
    

 

52

 

Parent

 

	
SFX Entertainment Inc.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Rich Rosenstein
    	
 
    	
/s/ Ritty van Straalen
    
	
Name: Rich Rosenstein
    	
 
    	
Name: Ritty van Straalen
    
	
Title: CFO
    	
 
    	
Title: COO
    

 

	
Address:
    	
430 Park Avenue, 6th floor, New York, NY 10022 USA
    
	
Attention:
    	
General Counsel
    
	
Tel:
    	
646-561-6385
    
	
Fax:
    	
646-417-7393
    
	
E-mail:
    	
howard@sfxii.com
    

 

53

 

Company

 

	
Monumental   Productions B.V., by 
    	
 
    
	
Monumental   Productions Beheer B.V.
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ R.A.P Veenboer
    	
 
    
	
Name:
    	
R.A.P. Veenboer
    	
 
    
	
Title:
    	
Director
    	
 
    
	
 
    	
 
    
	
Address:
    	
Herengracht 433, (1017 BR) Amsterdam, the   Netherlands
    
	
Attention:
    	
Mr R.A.P. Veenboer
    
	
Tel:
    	
020-3308822
    
	
Fax:
    	
020-3308777
    
	
E-mail:
    	
natasja@awakenings.nl
    

 

54Exhibit 10.1

 Exhibit 10.1 
  

					
	Exelis Inc.	 	703 790 6330	 	
	1650 Tysons Blvd., Suite 1700	 	703 790 6360 Fax	 	
	McLean, VA 22102	 	www.exelisinc.com	 	

  
 

 
 Dear Ken: 
 The purpose of
this letter is to set forth the terms and conditions of your employment with Vectrus, Inc. (the “Company”), effective as of the Distribution Date, (the Distribution Date has the meaning set forth in the Distribution Agreement). The Company
agrees to employ you as Chief Executive Officer and President and you agree to discharge faithfully, diligently, and to the best of your ability, your duties. You will report directly to the Board of Directors of the Company (the “Board”).
Your principal work location will be Colorado Springs, CO. You will be an at-will employee at all times. 
  

	 	1.	Compensation and Benefits 

  

	 	a.	Annual Base Salary. Your beginning annual base salary will be $600,000. Your salary will be subject to review by the Compensation and Personnel Committee of the Board from time to time for consideration of
possible increases based on your performance and other relevant circumstances. 

  

	 	b.	Target Annual Incentive. Effective as of the Distribution Date, your annual incentive target will be set at 100% of base salary (“Target Annual Incentive”). The amount earned by you in respect of
your Target Annual Incentive is discretionary and subject to your individual and Company performance, as determined by the Compensation and Personnel Committee of the Board. 

 

	 	c.	2015 Long-Term Incentive Awards. You are eligible to participate in the Company’s long-term incentive program with an annual target long-term incentive compensation opportunity. Your 2015 Long-Term
Incentive Award will be set at $900,000, valued using the same methodology used to value 2015 long-term incentive awards to other senior management of the Company generally. The forms of award will be based on the 2015 Vectrus, Inc. long-term
incentive award program, subject to review and approval of the Compensation and Personnel Committee of the Board. Such long-term incentive awards will be granted under the terms of the Vectrus, Inc. 2014 Omnibus Incentive Plan (or a successor plan).

  

	 	d.	Founders’ Grant. Your Founder’s Grant will be granted shortly following the spin-off of the Company from Exelis Inc., and will have a value of $1,350,000, such value determined by the
Compensation and Personnel Committee of the Vectrus Board using the same methodology used to value founders’ grants to other senior management of the Company generally. In the event that stock options are used, they will vest in equal annual
installments on the first, second and third anniversaries of the grant date subject to your continued employment through each such vesting date. Should your employment be terminated by the Company other than for Cause (as defined below) before any
stock options vest in full, they will continue to vest for the period during which you are receiving Severance Pay (as defined below), notwithstanding any provision of the applicable award agreement to the contrary. In the event restricted stock
units are used, they will vest in equal annual installments on the first, second and third anniversaries of the grant date subject to your continued employment through each such vesting date. Upon vesting, these units will be settled immediately in
shares of common stock of the Company, subject to satisfaction of all taxes due. Should your employment be terminated by the Company other than for Cause before such units vest, a prorated portion of such units will vest and be settled immediately
upon your termination date, with your termination date considered to be the Scheduled Termination Date (as defined below), it being understood that in determining the prorated portion of such units that will vest, you shall be deemed to have
continued your employment until the last day of the Severance Pay Period (as defined below), notwithstanding any provision of the applicable award agreement to the contrary. The Founder’s Grant equity award will be granted under the terms of
the Vectrus, Inc. 2014 Omnibus Incentive Plan (or a successor plan). 

  
 1 

	 	e.	Benefits. You and your eligible dependents will be eligible to participate in the benefit programs and plans of the Company and its subsidiaries for which you are now eligible or for which you may become
eligible in accordance with their provisions during the term of this agreement as in effect from time to time. Nothing in this letter agreement shall limit the Company’s ability to change, modify, cancel or amend any such policies or plans.

  

	 	f.	Paid Time Off. You will be eligible to participate in the paid time off policy set by Vectrus, Inc. with the same parameters as given to other senior management of the Company. 

 

	 	2.	Termination of Employment. 

  

	 	a.	Termination of Employment for Cause. You will not be eligible for Severance Pay if your employment is terminated by the Company for Cause or if you voluntarily terminate your employment for any reason
(including as a result of your retirement after reaching the Normal Retirement Date (as defined below) or failing to return from an approved leave of absence, including a medical leave of absence). 

 

	 	i.	“Cause” shall mean action by you involving willful malfeasance or gross negligence or your failure to act involving material nonfeasance that would tend to have a materially adverse effect on the
Company. No act or omission on your part shall be considered “willful” unless it is done or committed in bad faith or without reasonable belief that the action or omission was in the best interests of the Company. 

 

	 	ii.	“Normal Retirement Date” shall mean the first day of the month which coincides with or follows your 65th birthday. 

  

	 	b.	Severance Pay Upon Termination of Employment Not for Cause. If the Company terminates your employment other than for Cause and other than as a result of your death or disability, in any case prior to your
Normal Retirement Date, you shall be provided severance pay in an amount equal to two (2) times the annual base salary rate (“Severance Pay”) in effect on the effective date of the termination of your employment (the “Scheduled
Termination Date”). 

  

	 	i.	Terms and Conditions Applicable to Severance Pay. Severance Pay shall be paid in the form of periodic payments over a period of 24 months after the Scheduled Termination Date according to the regular payroll
schedule (the “Severance Pay Period”). 

  

	 	1.	Severance Pay will, subject to your obligation to timely execute and deliver to the Company and not revoke the Release (as defined herein), commence on the first business day after the 60th day following the Scheduled
Termination Date, with any installments of Severance Pay that would otherwise have been paid during the first 60 days after the Scheduled Termination Date delayed and paid in a lump sum on such payment after the Scheduled Termination Date.

  

	 	2.	In the event of your death during the Severance Pay Period, the amount of Severance Pay remaining shall be paid in a discounted lump sum to your spouse or to such other beneficiary or beneficiaries designated by you in
writing, or, if you are not married and failing such designation, to your estate. 

  

	 	3.	During the Severance Pay Period you must continue to be available to render to the Company reasonable assistance, consistent with the level of your prior position with the Company, at times and locations that are
mutually acceptable. In requesting such services, the Company will take into account any other commitments which you may have. After the Scheduled Termination Date and normal wind-up of your former duties pursuant to the prior two sentences, you
will not be required to perform any regular services for the Company. 

  

	 	4.	Severance Pay will cease if you are rehired by the Company. 

  

	 	ii.	Benefits During Severance Pay. During the Severance Pay Period, except as provided herein, you will continue to be eligible for participation in Company employee benefit plans in accordance with the provisions of
such plans as in effect from time to time. You will not be eligible to participate in any Company tax qualified retirement plans, non-qualified excess or supplemental benefit plans, short-term or long-term disability plans, the Company business
travel accident plan or any new employee benefit plan or any improvement to any existing employee benefit plan adopted by the Company after the Scheduled Termination Date. 

 

	 	iii.	 Excluded Executive Compensation Plans, Programs, Arrangements, and Perquisites. During the Severance Pay Period, you will not be eligible to
accrue any paid time off or participate in or receive awards under any (i) annual incentive plan or bonus program, (ii) special termination programs, (iii) tax or financial advisory services, (iv) stock option or stock related
plans for executives (provided that you will be eligible to exercise any outstanding stock options in accordance with the terms of any 

  
 2 

	 	
applicable stock option plan), (v) new or revised executive compensation programs that may be introduced after the Scheduled Termination Date or (vi) other executive compensation
program, plan, arrangement, practice, policy or perquisites (except as provided otherwise in clause (v) above), unless specifically authorized by the Company in writing. 

 

	 	c.	Disqualifying Conduct. If during the Severance Pay Period, you (i) engage in any activity which is inimical to the best interests of the Company; (ii) disparage the Company, its business, employees or
directors; (iii) fail to comply with any Company Covenant Against Disclosure and Assignment of Rights to Intellectual Property; (iv) without the Company’s prior written consent, induce any employee of the Company to leave his or her
Company employment; (v) without the Company’s prior written consent, engage in, become affiliated with, or become employed by any business competitive with the Company; or (vi) fail to comply with applicable provisions of the
Company’s Code of Conduct or applicable Company Corporate Policies or any applicable Company Subsidiary Code or policies, then the Company will have no further obligation to provide Severance Pay. 

 

	 	d.	Release. The Company shall not be required to pay or continue any installments of Severance Pay or provide any termination benefits in accordance with this agreement unless you execute and deliver to the Company
within 52 days following the Scheduled Termination Date a release, in a form provided by the Company, pursuant to which you discharge and release the Company, its affiliates, and their respective directors, officers, employees and employee
benefit plans from all claims (other than for benefits to which you are entitled under any Company employee benefit plans) arising out of your employment or termination of employment (the “Release”), and such Release is not revoked by you
within the seven-day statutory revocation period. You will also be required to resign your officership and any directorship upon your last day of active service with the Company and any of its subsidiaries. 

 

	 	e.	Treatment of Severance Pay and Other Compensation. Any Severance Pay or other compensation, including but not limited to any equity awards provided to you under this agreement, shall be treated in a manner
consistent with the provisions of Section 409A of the Code. Coordination of Severance Pay with any pay or benefits provided by any applicable Company short-term or long-term disability plan shall be in accordance with the provisions of those
plans. 

  

	 	f.	Miscellaneous. Except as provided in this agreement, you shall not be entitled to any notice of termination or pay in lieu thereof. 

 

	 	i.	In cases where Severance Pay is provided under this agreement, pay in lieu of any unused current year vacation entitlement will be paid to you in a lump sum. 

 

	 	ii.	Benefits under this agreement are paid for entirely by the Company from its general assets. 

  

	 	iii.	Any outstanding long-term incentive awards will be treated in accordance with the applicable plans and award agreements. 

  

	 	3.	Termination due to an Acceleration Event. If your employment is terminated due to a severance-qualifying termination under the terms of the Special Senior Executive Severance Pay Plan attached to this
letter as Exhibit A, you will be entitled to receive the severance benefits provided under the terms of the Special Senior Executive Severance Pay Plan in lieu of any benefits described in this agreement. 

 

	 	4.	 Compliance with Section 409A of the Code. This agreement is intended to comply with Section 409A of the Code and will be
interpreted in a manner intended to comply with Section 409A of the Code. Notwithstanding anything herein to the contrary, (i) any payments that qualify for the “short-term deferral” exception or another exception under
Section 409A of the Code shall be paid under the applicable exception, (ii) to the extent necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, all payments made and benefits provided upon
your termination of employment shall only be made and provided upon a “separation from service” within the meaning of Section 409A of the Code, (iii) if at the time of your termination of employment with the Company you are a
“specified employee” as defined in Section 409A of the Code and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent
any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or
provided to you) until the date that is six months following your termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code without any accelerated or additional tax under Section 409A
of the Code), at which point all payments 

  
 3 

	 	
deferred pursuant to such six-month delay shall be paid to you in a lump sum, and (iv) if any other payments of money or other benefits due hereunder could cause the application of an
accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral would avoid such accelerated or additional tax under Section 409A of the Code, or otherwise such payment or other
benefits shall be restructured, to the extent possible, in a manner, determined by the Company, that does not cause such an accelerated or additional tax. To the extent any reimbursements or in-kind benefits due under this Plan constitute
“deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv). Each payment made under this Plan shall be
designated as a “separate payment” within the meaning of Section 409A of the Code. The Company shall consult with you in good faith regarding the implementation of the provisions of this section; provided that neither the Company nor
any of its employees or representatives shall have any liability to you with respect thereto. 

  

	 	5.	Miscellaneous.  

  

	 	a.	Notices. Notices given pursuant to this letter agreement shall be in writing and shall be deemed received when personally delivered, or on the date of written confirmation of receipt by (i) overnight
carrier, (ii) telecopy, (iii) registered or certified mail, return receipt requested, postage paid, or (iv) such other method of deliver as provides a written confirmation of delivery. Notice to the Company shall be directed to: SVP,
Chief Human Resources Officer, Vectrus, Inc., Colorado Springs, CO. 

 Notices to or with respect to you will be directed to
you, or in the event of your death, your executors, personal representatives or distributes, at your home address as set forth in the records of the Company. 
  

	 	b.	Assignment of this Letter Agreement. This letter agreement is personal to you and shall not be assignable by you without the prior written consent of the Company. This letter agreement shall inure to the
benefit of and be binding upon the Company and its respective successors and assigns. The Company may assign this letter agreement, without your consent, to any successor (whether directly or indirectly, by agreement, purchase, merger,
consolidation, operation of law or otherwise) to all, substantially all or a substantial portion of the business and/or assets of the Company, as applicable. If and to the extent that this letter agreement is so assigned, the “Company” as
used throughout this letter agreement shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid. In the event of your death, all amounts and benefits then payable or otherwise due to you will be paid
or provided to your estate except to the extent you have appointed a beneficiary in writing pursuant to the terms of any particular plan, policy or arrangement. 

  

	 	c.	Merger of Terms. Except as expressly provided herein, this letter agreement supersedes all prior discussions and agreements between you and the Company with respect to the subject matters covered herein.

  

	
	Very truly yours,
	
	 /s/ Paul J. Kern

	Paul J. Kern, Chair
	Exelis Inc. Compensation & Personnel Committee

 Accepted: 
  

							
	 /s/ Kenneth W. Hunzeker
	 		  	September 15, 2014	  	
	Kenneth W. Hunzeker	 		  	Date	  	
	 Chief Executive Officer and President
 Vectrus,
Inc.
	 		  		  	

  
 4 

 Vectrus, Inc. 

Special Senior Executive Severance Pay Plan 
  

	1.	Purpose 

 The purpose of this Vectrus, Inc. Special Senior Executive Severance Pay Plan
(“Plan”) is to assist in occupational transition by providing Severance Benefits, as defined herein, for employees covered by this Plan whose employment is terminated under conditions set forth in this Plan. 

The Plan first became effective as of September 27, 2014 following the spin-off of Vectrus, Inc. (“Vectrus”) from Exelis Inc.
(“Exelis) on September 27, 2014. Exelis was spun off from ITT Corporation (together with Exelis, the “Predecessor Corporations”) on October 31, 2011. The Predecessor Corporations maintained similar plans prior to the
respective spin-offs (the “Predecessor Plans”), and the Plan was created to continue service accruals under the Predecessor Plans. The Plan shall remain in effect as provided in Section 9 hereof, and covered employees shall receive
full credit for their service with the Predecessor Corporations as provided in Section 5 hereof. 
  

	2.	Covered Employees 

 Covered employees under this Plan (“Special Severance Executives”)
are active full-time, regular salaried employees of Vectrus and of any subsidiary company (“Vectrus Subsidiary”) (collectively or individually as the context requires “Company”) (including Special Severance Executives who are
short-term disabled as of a Potential Acceleration Event within the meaning of the Company’s short term disability plans) (other than Special Severance Executives on periodic severance as of a Potential Acceleration Event) who are in Band A or
B or were in Band A or B at any time within the two year period immediately preceding an Acceleration Event and such other employees of the Company who shall be designated as covered employees in Band A or B under the Plan by the Compensation and
Personnel Committee of Vectrus’ Board of Directors. 
 “Bands A and B” shall have the meaning given such terms under the
executive classification system of the Vectrus Human Resources Department as in effect immediately preceding an Acceleration Event. After the occurrence of an Acceleration Event, the terms “Vectrus”, “Vectrus Subsidiary” and
“Company” as used herein shall also include, respectively and as the context requires, any successor company to Vectrus or any successor company to any Vectrus Subsidiary and any affiliate of any such successor company. 

 

	3.	Definitions 

 An “Acceleration Event” shall occur if (i) a report on Schedule 13D
shall be filed with the Securities and Exchange Commission pursuant to Section 13(d) of the Securities Exchange Act of 1934 (the “Act”) disclosing that any person (within the meaning of Section 13(d) of the Act), other than
Vectrus or a subsidiary of Vectrus or any employee benefit plan sponsored by Vectrus or a subsidiary of Vectrus, is the beneficial owner directly or indirectly of twenty percent (20%) or more of the outstanding Common Stock, $0.01 par value, of
Vectrus (the “Stock”); (ii) any person (within the meaning of Section 13(d) of the Act), other than Vectrus or a subsidiary of Vectrus, or any employee benefit plan sponsored by Vectrus or a subsidiary of Vectrus, shall purchase
shares pursuant to a tender offer or exchange offer to acquire any Stock of Vectrus (or securities convertible into Stock) for cash, securities or any other consideration, provided that after consummation of the offer, the person in question is the
beneficial owner (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, of twenty percent (20%) or more of the outstanding Stock of Vectrus (calculated as provided in paragraph (d) of Rule 13d-3 under the Act in the
case of rights to acquire Stock); (iii) the consummation of (A) any consolidation, business combination or merger involving Vectrus, other than a consolidation, business combination or merger involving Vectrus in which holders of Stock
immediately prior to the consolidation, business combination or merger (x) hold fifty percent (50%) or more of the combined voting power of Vectrus (or the corporation resulting from the merger or consolidation or the parent of such
corporation) after the merger and (y) have the same proportionate ownership of common stock of Vectrus (or the corporation resulting from the merger or consolidation or the parent of such corporation), relative to other holders of Stock
immediately prior to the merger, business combination or consolidation, immediately after the merger as immediately before, or (B) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or
substantially all the assets of Vectrus, (iv) there shall have been a change in a majority of the members of the Board of Directors of Vectrus within a 12-month period unless the election or nomination for election by Vectrus’ stockholders
of each new director during such 12-month 

  
 5 

 
period was approved by the vote of two-thirds of the directors then still in office who (x) were directors at the beginning of such 12-month period or (y) whose nomination for election
or election as directors was recommended or approved by a majority of the directors who were directors at the beginning of such 12-month period or (v) any person (within the meaning of Section 13(d) of the Act) (other than Vectrus or any
subsidiary of Vectrus or any employee benefit plan (or related trust) sponsored by Vectrus or a subsidiary of Vectrus) becomes the beneficial owner (as such term is defined in Rule 13d-3 under the Act) of twenty percent (20%) or more of the
Stock. 
 “Cause” shall mean action by the Special Severance Executive involving willful malfeasance or gross negligence or the
Special Severance Executive’s failure to act involving material nonfeasance that would tend to have a materially adverse effect on the Company. No act or omission on the part of the Special Severance Executive shall be considered
“willful” unless it is done or omitted in bad faith or without reasonable belief that the action or omission was in the best interests of the Company. 

“Good Reason” shall mean (i) without the Special Severance Executive’s express written consent and excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company or its affiliates within 30 days after receipt of notice thereof given by the Special Severance Executive, (A) a reduction in
the Special Severance Executive’s annual base compensation (whether or not deferred), (B) the assignment to the Special Severance Executive of any duties inconsistent in any material respect with the Special Severance Executive’s
position (including status, offices, titles and reporting requirements), authority, duties or responsibilities, or (C) any other action by the Company or its affiliates which results in a material diminution in such position, authority, duties
or responsibilities; (ii) without the Special Severance Executive’s express written consent, the Company’s requiring the Special Severance Executive’s work location to be other than within twenty-five (25) miles of the
location where such Special Severance Executive was principally working immediately prior to the Acceleration Event; or (iii) any failure by the Company to obtain the express written assumption of this Plan from any successor to the Company;
provided that “Good Reason” shall cease to exist for an event on the 90th day following the later of its occurrence or the Special Severance Executive’s knowledge thereof, unless the Special Severance Executive has given the Company
notice thereof prior to such date, and the date of the Special Severance Executive’s termination of employment for Good Reason must occur, if at all, within one hundred and eighty (180) days following the later of the occurrence of the
Good Reason event or the Special Severance Executive’s knowledge thereof. 
 “Potential Acceleration Event” shall mean the
execution of an agreement or the commencement of a tender offer, in either case, in respect of a transaction or event that if consummated would result in an Acceleration Event. 

 

	4.	Severance Benefits Upon Termination of Employment 

 If a Special Severance Executive’s
employment with the Company is terminated due to a Qualifying Termination, he or she shall receive the severance benefits set forth in Section 5 hereof (“Severance Benefits”). For purposes hereof, (i) a “Qualifying
Termination” shall mean a termination of a Special Severance Executive’s employment with the Company either (x) by the Company without Cause (A) within the two (2) year period commencing on the date of the occurrence of an
Acceleration Event or (B) prior to the occurrence of an Acceleration Event and either (1) following the public announcement of the transaction or event which ultimately results in such Acceleration Event or (2) at the request of a
party to, or participant in, the transaction or event which ultimately results in an Acceleration Event; or (y) by a Special Severance Executive for Good Reason within the two (2) year period commencing with the date of the occurrence of
an Acceleration Event and (ii) a determination by a Special Severance Executive that he or she has “Good Reason” hereunder shall be final and binding on the parties hereto unless the Company can establish by a preponderance of the
evidence that “Good Reason” does not exist. 
  

	5.	Severance Benefits 

 Band A Benefits 

Severance Benefits for Special Severance Executives (i) in Band A at the time of a Qualifying Termination or at any time during the two
(2) year period immediately preceding the Acceleration Event or (ii) designated as a covered employee in Band A in accordance with Section 2 hereof: 
  

	 	•	 	 Accrued Rights – The Special Severance Executive’s base salary through the date of termination of employment, any annual bonus earned but
unpaid as of the date of termination for any previously 

  
 6 

	 	 
completed fiscal year, reimbursement for any unreimbursed business expenses properly incurred by the Special Severance Executive in accordance with Company policy prior to the date of the Special
Severance Executive’s termination of employment and such employee benefits, if any, as to which the Special Severance Executive may be entitled under the employee benefit plans of the Company, including without limitation, the payment of any
accrued or unused paid time off under the Company’s paid time off policy. 

  

	 	•	 	Severance Pay – The sum of (x) three (3) times the current annual base salary rate paid or in effect (whether or not deferred) with respect to the Special Severance Executive at the time of the Special
Severance Executive’s termination of employment, and (y) three (3) times the target annual bonus with respect to the Special Severance Executive at the time of the Special Severance Executive’s termination of employment.

  

	 	•	 	Health and Life Insurance Benefits 

  

	 	•	 	Continued health and life insurance benefits for a three (3) year period following the Special Severance Executive’s termination of employment at the same cost to the Special Severance Executive, and at the
same coverage levels, as provided to the Special Severance Executive (and the Special Severance Executive’s eligible dependents) immediately prior to his or her termination of employment. 

 

	 	•	 	Payment of a lump sum amount (“Savings Plan Lump Sum Amount”) equal to three (3) times the following amount: the highest annual base salary rate determined above under “Severance Pay” times the
highest percentage rate of Company Contributions (not to exceed four percent (4%)) with respect to the Special Severance Executive under the Vectrus 401(k) Plan and/or the Vectrus Excess Savings Plan (or corresponding savings plan arrangements
outside the United States) (“Savings Plans”) (including matching contributions and floor contributions) at any time during the three (3) year period immediately preceding the Special Severance Executive’s termination of
employment or the three (3) year period immediately preceding the Acceleration Event. This provision shall apply to any Special Severance Executive who is a member of any of the Savings Plans at any time during such three (3) year period.

  

	 	•	 	Outplacement – Outplacement services for one (1) year. 

  
 7 

 Band B Benefits 

Severance Benefits for Special Severance Executives (i) in Band B at the time of a Qualifying Termination or at any time during the two
(2) year period immediately preceding the Acceleration Event or (ii) designated as a covered employee in Band B in accordance with Section 2 hereof; provided, that a Special Severance Executive who is in Band B at the time of a
Qualifying Termination but was in Band A anytime during the two (2) year period immediately preceding the Acceleration Event shall be entitled to Severance Benefits as a Special Severance Executive in Band A and shall not be entitled to the
Severance Benefits set forth below: 
  

	 	•	 	Accrued Rights – The Special Severance Executive’s base salary through the date of termination of employment, any annual bonus earned but unpaid as of the date of termination for any previously completed
fiscal year, reimbursement for any unreimbursed business expenses properly incurred by the Special Severance Executive in accordance with Company policy prior to the date of the Special Severance Executive’s termination of employment and such
employee benefits, if any, as to which the Special Severance Executive may be entitled under the employee benefit plans of the Company, including without limitation, the payment of any accrued or unused paid time off under the Company’s paid
time off policy. 

  

	 	•	 	Severance Pay – The sum of (x) two (2) times the current annual base salary rate paid or in effect (whether or not deferred) with respect to the Special Severance Executive at the Special Severance
Executive’s termination of employment, and (y) two (2) times the target annual bonus with respect to the Special Severance Executive at the time of the Special Severance Executive’s termination of employment. 

 

	 	•	 	Health and Life Insurance Benefits 

  

	 	•	 	Continued health and life insurance benefits for a two year period following the Special Severance Executive’s termination of employment at the same cost to the Special Severance Executive, and at the same coverage
levels, as provided to the Special Severance Executive (and the Special Severance Executive’s eligible dependents) immediately prior to his or her termination of employment. 

 

	 	•	 	Payment of a lump sum amount (“Savings Plan Lump Sum Amount”) equal to two (2) times the following amount: the highest annual base salary rate determined above under “Severance Pay” times the
highest percentage rate of Company Contributions (not to exceed four percent (4%)) with respect to the Savings Plans (including matching contributions and floor contributions) at any time during either the three (3) year period immediately
preceding the Special Severance Executive’s termination of employment or the three (3) year period immediately preceding the Acceleration Event. This provision shall apply to any Special Severance Executive who is a member of any of the
Savings Plans at any time during such three (3) year period. 

  

	 	•	 	Outplacement – Outplacement services for one year. 

 General 

With respect to the provision of health and life insurance benefits described above during the above described respective three and two year
periods, if, for any reason at any time, the Company (i) is unable to treat the Special Severance Executive as being eligible for ongoing participation in any Company health and life insurance benefit plans or policies in existence immediately
prior to the termination of employment of the Special Severance Executive, and if, as a result thereof, the Special Severance Executive does not receive a benefit or perquisite or receives a reduced benefit or perquisite, or (ii) determines
that ongoing participation in any such Company benefit plans or policies would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Internal Revenue Code of 1986, as amended (the “Code”) or any other Code
section, statute or regulation of similar effect (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), the Company shall provide such benefits or
perquisites by making available equivalent benefits or perquisites from other sources in a manner consistent with Section 15 below. 

Notwithstanding any other provision of the Plan to the contrary, all prior service by a Special Severance Executive with the Predecessor
Corporations shall be credited in full towards a Special Severance Executive’s service with the Company. 

  
 8 

	6.	Form of Payment of Severance Pay and Lump Sum Payments 

 Severance Pay shall be paid in cash, in
non-discounted equal periodic installment payments corresponding to the frequency and duration of the severance payments that the Special Severance Executive would have been entitled to receive from the Company as a normal severance benefit in the
absence of the occurrence of an Acceleration Event, with such terms governing the frequency and duration of the severance payments being deemed incorporated herein by reference. If the Special Severance Executive would not have been entitled to
receive any severance payments from the Company as a normal severance benefit in the absence of the occurrence of an Acceleration Event, the Severance Pay shall be paid in cash, in non-discounted equal periodic installment payments over a period of
(i) thirty-six (36) months (in the case of a Special Severance Executive in Band A) or (ii) twenty four (24) months (in the case of a Special Severance Executive in Band B). The Savings Plan Lump Sum Amount shall be paid in cash
within thirty (30) calendar days after the date the employment of the Special Severance Executive terminates. 
  

	7.	Termination of Employment – Other 

 The Severance Benefits shall only be payable upon a
Special Severance Executive’s termination of employment due to a Qualifying Termination; provided, that if, following the occurrence of an Acceleration Event, a Special Severance Executive is terminated due to the Special Severance
Executive’s death or disability (as defined in the long-term disability plan in which the Special Severance Executive is entitled to participate (whether or not the Special Severance Executive voluntarily participates in such plan)) and, at the
time of such termination, the Special Severance Executive had grounds to resign with Good Reason, such termination of employment shall be deemed to be a Qualifying Termination. 

 

	8.	Administration of Plan; Claims and Appeals Procedures 

 This Plan shall be administered by the
Company, who shall have the exclusive right to interpret this Plan, adopt any rules and regulations for carrying out this Plan as may be appropriate and decide any and all matters arising under this Plan, including but not limited to the right to
determine appeals. Subject to applicable Federal and state law, all interpretations and decisions by Vectrus shall be final, conclusive and binding on all parties affected thereby. 

Any employee or other person who believes he or she is entitled to any payment under the Plan may submit a claim in writing to the Plan’s
administrator (in accordance with Section 16) within ninety (90) days after the earlier of (i) the date the claimant learned the amount of their severance benefits under the Plan or (ii) the date the claimant learned that he or
she will not be entitled to any benefits under the Plan. If the claim is denied (in full or in part), the claimant will be provided a written notice explaining the specific reasons for the denial and referring to the provisions of the Plan on which
the denial is based. The notice will also describe any material or information necessary for the claimant to perfect the claim, and an explanation of why such material or information is necessary, and an explanation of the Plan’s procedures
(and time limits) for appealing the denial, including a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on appeal. The denial notice will be provided within
ninety (90) days after the claim is received. If special circumstances require an extension of time (up to ninety (90) days), written notice of the extension will be given within the initial ninety (90) day period. This notice of
extension will indicate the special circumstances requiring the extension of time and the date by which the administrator expects to render its decision on the claim. 

If the claimant’s claim is denied, the claimant (or his or her authorized representative) may apply in writing to the administrator for a
review of the decision denying the claim. Review must be requested within sixty (60) days following the date the claimant received the written notice of their claim denial or else the claimant loses the right to review. The claimant (or
representative) then has the right to review and obtain copies of all documents and other information relevant to the claim, upon request and at no charge, and to submit issues and comments (as well as documents, records and other information
related to the claim) in writing. The administrator will provide written notice of its decision on review within sixty (60) days after it receives a review request. If additional time (up to sixty (60) days) is needed to review the
request, the claimant (or representative) will be given written notice of the reason for the delay. This notice of extension will indicate the special circumstances requiring the extension of time and the date by which the administrator expects to
render its decision. 

  
 9 

 If the claim is denied (in full or in part), the claimant will be provided a written notice
explaining the specific reasons for the denial and referring to the provisions of the Plan on which the denial is based. The notice will also include a statement that the claimant will be provided, upon request and free of charge, reasonable access
to, and copies of, all documents and other information relevant to the claim and a statement regarding the claimant’s right to bring an action under Section 502(a) of ERISA. 

If the claims procedures set forth above have been exhausted and a claimant wishes to challenge a final determination by the Plan
administrator, , such claim shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules and the entire cost thereof shall be borne by the Company. The location of the arbitration
proceedings shall be reasonably acceptable to the Special Severance Executive. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The Company shall pay all legal fees, costs of litigation,
prejudgment interest, and other expenses which are incurred in good faith by the Special Severance Executive as a result of the Company’s refusal to provide any of the Severance Benefits to which the Special Severance Executive becomes entitled
under this Plan, or as a result of the Company’s (or any third party’s) contesting the validity, enforceability, or interpretation of this Plan, or as a result of any conflict between the Special Severance Executive and the Company
pertaining to this Plan. The Company shall pay such fees and expenses from the general assets of the Company. 
  

	9.	Termination or Amendment 

 Vectrus may terminate or amend this Plan (“Plan Change”) at
any time except, that following the occurrence of (i) an Acceleration Event or (ii) a Potential Acceleration Event, no Plan Change that would adversely affect any Special Severance Executive may be made without the prior written consent of
such Special Severance Executive affected thereby; provided, however, that (ii) above shall cease to apply if such Potential Acceleration Event does not result in the occurrence of an Acceleration Event. 

 

	10.	Offset 

 Any Severance Benefits provided to a Special Severance Executive under this Plan shall
be in lieu of, and not in addition to, any severance pay or benefits the Special Severance Executive would otherwise be entitled to receive (i) pursuant to any other Company policy, practice program or arrangement, (ii) pursuant to any
Company employment agreement or other agreement with the Company, or (iii) by virtue of any law, custom or practice excluding, however, any unemployment compensation in the United States. 

 

	11.	Excise Tax 

 In the event that it shall be determined that any Payment would constitute an
“excess parachute payment” within the meaning of Section 280G of the Code, then the aggregate of all Payments shall be reduced so that the Present Value of the aggregate of all Payments does not exceed the Safe Harbor Amount;
provided, however, that no such reduction shall be effected, if the Net After-tax Benefit to Special Severance Executive of receiving all of the Payments exceeds the Net After-tax Benefit to Special Severance Executive resulting from having such
Payments so reduced. In the event a reduction is required pursuant hereto, the order of reduction shall be first all cash payments on a pro rata basis, then any equity compensation on a pro rata basis, and lastly medical and dental coverage. 

For purposes of this Section 11, the following terms have the following meanings: 

(i) “Net After-tax Benefit” shall mean the Present Value of a Payment net of all federal state and local income, employment and
excise taxes imposed on Special Severance Executive with respect thereto, determined by applying the highest marginal rate(s) applicable to an individual for Special Severance Executive’s taxable year in which the Change in Control occurs. 

(ii) “Payment” means any payment or distribution or provision of benefits by the Company to or for the benefit of Special Severance
Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any reductions required by this Section 11. 

(iii) “Present Value” shall mean such value determined in accordance with Section 280G(d)(4) of the Code. 

(iv) “Safe Harbor Amount” shall be an amount expressed in Present Value which maximizes the aggregate Present Value of Payments
without causing any Payment to be subject to excise tax under Section 4999 of the Code or the deduction limitation of Section 280G of the Code. 

  
 10 

 All determinations required to be made under this Section 11, including whether and when a
reduction is required and the amount of such reduction and the assumptions to be utilized in arriving at such determination, shall be made by a nationally recognized accounting firm mutually agreed to by the Special Severance Executive and the
Company (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Special Severance Executive within ten (10) business days of the receipt of notice from the Special Severance Executive
that there has been a Payment, or such earlier time as is requested by the Company; provided that for purposes of determining the amount of any reduction, the Special Severance Executive shall be deemed to pay federal income tax at the highest
marginal rates applicable to individuals in the calendar year in which any such payment is required to be made. 
 All fees and expenses of
the Accounting Firm shall be borne solely by the Company. If the Accounting Firm determines that no excise tax is payable by the Special Severance Executive, it shall so indicate to the Special Severance Executive in writing. Any determination by
the Accounting Firm shall be binding upon the Company and the Special Severance Executive. 
  

	12.	Miscellaneous 

 The Special Severance Executive shall not be entitled to any notice of
termination or pay in lieu thereof. 
 Severance Benefits under this Plan are paid entirely by the Company from its general assets. 

This Plan is not a contract of employment, does not guarantee the Special Severance Executive employment for any specified period and does not
limit the right of the Company to terminate the employment of the Special Severance Executive at any time. 
 If a Special Severance
Executive should die while any amount is still payable to the Special Severance Executive hereunder had the Special Severance Executive continued to live, all such amounts shall be paid in accordance with this Plan to the Special Severance
Executive’s designated heirs or, in the absence of such designation, to the Special Severance Executive’s estate. 
 The numbered
section headings contained in this Plan are included solely for convenience of reference and shall not in any way affect the meaning of any provision of this Plan. 

If, for any reason, any one or more of the provisions or part of a provision contained in this Plan shall be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Plan not held so invalid, illegal or unenforceable, and each other provision or part of a provision
shall to the full extent consistent with law remain in full force and effect. 
 The Plan shall be governed by and construed in accordance
with the laws of the State of New York without regard to the conflicts of laws provisions thereof. 
 The Plan shall be binding on all
successors and assigns of the Vectrus and a Special Severance Executive. 
  

	13.	Notices 

 Any notice and all other communication provided for in this Plan shall be in writing
and shall be deemed to have been duly given when delivered by hand or overnight courier or three (3) days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective
addresses set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. 

If to the Company: 
 Vectrus, Inc.

 655 Space Center Drive 

Colorado Springs, Colorado 80915 

Attention: General Counsel 

  
 11 

 If to Special Severance Executive: 

To the most recent address of Special Severance Executive set forth in the personnel records of the Company. 

 

	14.	Adoption Date 

 This Plan was initially adopted by Vectrus on September 27, 2014
(“Adoption Date”) and does not apply to any termination of employment which occurred or which was communicated to the Special Severance Executive prior to the Adoption Date. 

 

	15.	Section 409A 

 This Plan is intended to comply with Section 409A of the Code (or an applicable
exemption therefrom) and will be interpreted in a manner consistent with such intent. Notwithstanding anything herein to the contrary, (i) if at the time of the Special Severance Executive’s termination of employment with the Company the
Special Severance Executive is a “specified employee” as defined in Section 409A of the Code (and any related regulations or other pronouncements thereunder) and the deferral of the commencement of any payments or benefits otherwise
payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments
or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to the Special Severance Executive) until the date that is six months following the Special Severance Executive’s termination of employment
with the Company (or the earliest date as is permitted under Section 409A of the Code), at which point all payments deferred pursuant to this Section 15 shall be paid to the Special Severance Executive in a lump sum and (ii) if any
other payments of money or other benefits due hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or
other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Company, that does not cause such an accelerated or additional
tax. To the extent any reimbursements or in-kind benefits due under this Plan constitute “deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid in a manner consistent with
Treas. Reg. Section 1.409A-3(i)(1)(iv), the terms of which shall be deemed incorporated herein by reference. Notwithstanding the definition of Acceleration Event contained herein, where required to avoid additional tax under Section 409A,
the event constituting an Acceleration Event must also be an event described in Treas. Reg. Section 1.409A-3(i)(5). All payments to be made upon a termination of employment that constitute deferred compensation under this Plan may only be made
upon a “separation from service” (as that term is used in Section 409A). Each payment made under this Plan shall be designated as a “separate payment” within the meaning of Section 409A of the Code. The Company shall
consult with Special Severance Executives in good faith regarding the implementation of the provisions of this section; provided that neither the Company nor any of its employees or representatives shall have any liability to Special Severance
Executives with respect thereto. 
  

	16.	Additional Information. 

  

			
	Plan Name:	  	Vectrus, Inc. Special Senior Executive Severance Pay Plan
		
	Plan Sponsor:	  	Vectrus, Inc.
		  	655 Space Center Drive
		  	Colorado Springs, CO 80915
		
	Employer Identification Number:	  	[    ]
		
	Plan Number:	  	50[    ]
		
	Plan Year:	  	Vectrus’ Fiscal Year

  
 12 

			
	Plan Administrator:	  	Vectrus, Inc.
		  	Attention: Administrator of the Vectrus, Inc. Special Senior Executive Severance Pay Plan
		  	655 Space Center Drive
		  	Colorado Springs, CO 80915
		  	([    ]) [    ]-[    ]
		
	Agent for Service of Legal Process:	  	Vectrus, Inc.
		  	Attention: General Counsel
		  	655 Space Center Drive
		  	Colorado Springs, CO 80915
		  	([    ]) [    ]-[    ]
		
		  	Service of process may also be made upon the Plan administrator.
		
	Type of Plan	  	Employee Welfare Benefit Plan – Severance Pay Plan
		
	Plan Costs	  	The cost of the Plan is paid by Vectrus, Inc.

  

	17.	Statement of ERISA Rights. 

 As participants in the Plan, Special Senior Executives have the
following rights and protections under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”): 
  

	 	•	 	Special Senior Executives may examine, without charge, at the Plan administrator’s office and at other specified locations, such as worksites, all documents governing the plan, including insurance contracts and a
copy of the latest annual report (Form 5500 Series) filed by the plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration; and 

 

	 	•	 	Special Senior Executives may obtain, upon written request to the Plan administrator, copies of documents governing the operation of the Plan, including insurance contracts and copies of the latest annual report (Form
5500 Series) and updated summary plan description. The Plan administrator may make a reasonable charge for the copies. 

 In
addition to creating rights for participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate the Plan (called “fiduciaries”) have a duty to do so prudently and in the
interests of Plan participants. No one, including Vectrus or any other person, may fire a Plan participant or otherwise discriminate against a Plan participant in any way to prevent the participant from obtaining a benefit under the Plan or
exercising rights under ERISA. If a claim for a severance benefit is denied, in whole or in part, the person seeking benefits must receive a written explanation of the reason for the denial. Plan participants have the right to have the denial of the
claim reviewed. (The claim review procedure is explained in Section 8 above.) 
 Under ERISA, there are steps Plan participants can
take to enforce the above rights. For instance, if a Plan participant requests materials and does not receive them within thirty (30) days, the Participant may file suit in a federal court. In such a case, the court may require the
Administrator to provide the materials and to pay the Plan participant up to $110 a day until the participant receives the materials, unless the materials were not sent because of reasons beyond the control of the Administrator. If a Plan
participant has a claim which is denied or ignored, in whole or in part, the participant may file suit in a federal court. If it should happen that the participant is discriminated against for asserting his or her rights, the participant may seek
assistance from the U.S. Department of Labor, or the participant may file suit in a federal court. 
 In any case, the court will decide who
will pay court costs and legal fees. If the Plan participant is successful, the court may order the person the Plan participant sued to pay these costs and fees. If the Plan participant loses, unless the Plan requires the Vectrus to pay the costs,
he court may order the Plan participant to pay these costs and fees, for example, if it finds that the Participant’s claim is frivolous. 

  
 13 

 If the Plan participant has any questions regarding the Plan, the participant should contact the
Plan administrator (see Section 16 for the contract in formation). If the Plan participant has any questions about this statement or about his or her rights under ERISA, the Plan participant may contact the nearest area office of the Employee
Benefits Security Administration (formerly the Pension and Welfare Benefits Administration), U.S. Department of Labor, listed in his or her telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits Security
Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W. Washington, D.C. 20210. The Plan participant may also obtain certain publications about his or her rights and responsibilities under ERISA by calling the publications hotline of
the Employee Benefits Security Administration. 

  
 14

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