Document:

Exhibit 10.1

MASTER NOTE

	
$30,000,000

	
Birmingham, Alabama

Date:  August 23, 2013

FOR VALUE RECEIVED, Hibbett Sports, Inc., a Delaware corporation, (the "Borrower") promises to pay on DEMAND, to the order of Regions Bank, an Alabama banking corporation, its successors and assigns, (the "Bank"; together with any other holder of this note, being sometimes herein referred to as the "Holder"), at the Bank's main office in Birmingham, Alabama or at such other place as the Holder may from time to time designate, the sum of Thirty Million and No/100 Dollars ($30,000,000), or so much thereof as the Bank, in its sole discretion may elect to advance to the Borrower hereunder (the "Loan"), plus interest on any amount advanced hereunder from the date advanced until the Loan is paid in full, at a fluctuating interest rate, (the "Floating Rate") equal to the higher of 1) the rate per annum designated by the Bank from time to time as its prime rate of interest (the "Prime Rate"), such rate being an index rate by the Bank for establishing lending rates and not necessarily the Bank's most favorable lending rate and changes in such rate being discretionary with the Bank, 2) the Federal Funds Rate for such day plus 1/2 of 1% or 3) the one month LIBOR Rate; provided, however, the Bank and the Borrower may agree from time to time that interest shall accrue on the unpaid principal balance of the Loan, or a portion thereof, at a fixed rate of interest for a specified period of time (a "Fixed Rate") instead of at the Floating Rate.  For purposes of determining the Floating Rate, the Federal Funds Rate means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the business day next succeeding such day; provided that (a) if such day is not a business day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding business day as so published on the next succeeding business day, and (b) if no such rate is so published on such next succeeding business day, the Federal Funds Rate for such day shall be the average rate (rounded upward if necessary, to a whole multiple of 1/100 of 1%) charged to Regions Bank on such day on such transactions.  The LIBOR Rate means the rate per annum determined by reference to the Bloomberg reporting service or, if available, other comparable financial information reporting service at the time employed as the London interbank offered rate for one month deposits in Dollars.  The amount of interest accrued on the unpaid principal balance of the Loan shall be computed on the basis of an assumed year of 360 days for the actual number of days elapsed, which means that the amount of interest accrued for each day will be computed by multiplying the unpaid principal balance of the Loan on such day by the Floating Rate or Fixed Rate as applicable on such day and dividing the result by 360. Any change in the interest rate applicable to the Loan caused by a change in the Floating Rate shall be effective on the date of the Floating Rate change without notice to the Borrower or any other action by the Bank.  If the Bank and the Borrower attempt to agree that the Loan, or a portion thereof, will bear interest at a Fixed Rate, but fail to agree on such Fixed Rate or on the period for which the Fixed Rate will be in effect, or if there is material uncertainty as to whether or not the Bank and the Borrower have agreed on a Fixed Rate, or as to the period for which a Fixed Rate will be in effect, then interest shall accrue on the Loan, or such portion thereof, at the Floating Rate during the period for which such Fixed Rate would otherwise be applicable.  If the Bank and the Borrower agree upon a Fixed Rate for a specified period for a portion of the Loan, such portion shall be deemed to be a separate loan with a maturity date of the last day of the period during which the Fixed Rate is in effect, which separate loan may be repaid upon its maturity date with an advance made under this note if no default has occurred and no demand for payment has been made.

The unpaid principal balance of the Loan, (including any portion bearing interest at a Fixed Rate) and all interest accrued thereon, shall be payable ON DEMAND, but no later than August 22, 2014; provided, however, that, prior to demand for payment being made by the Holder, interest computed on the basis of the Floating Rate shall be payable on the first day of each successive month in each year, and interest computed on the basis of a Fixed Rate shall be payable in full on the last day of the period during which the Fixed Rate is in effect.

Notwithstanding the foregoing, to enable the Holder to send periodic billing statements in advance of each interest payment date reflecting the amount of interest, if any, computed at the Floating Rate that is payable on such interest payment date, at the option of the Holder, the Floating Rate in effect 15 days prior to each interest payment date shall be deemed to be the Floating Rate as continuing in effect 15 days prior to each interest payment date.  If the Holder elects to use this billing method and if the Floating Rate changes during such 15-day period, the difference between the amount of interest that actually accrues during such period and the amount of interest paid will be added to or subtracted from, as the case may be, the interest otherwise payable in preparing the next billing statement.  In determining the amount of interest payable upon demand for the payment or upon full prepayment of this note, all changes in the Floating Rate occurring on or prior to the day before the final maturity date or the date of such prepayment shall be taken into account.

The Borrower may, from time to time, repay without premium or penalty the principal amount of the Loan, or any portion thereof, at any time; provided, however, the Borrower shall not prepay any portion of the Loan bearing interest at a Fixed Rate during the period that interest accrues thereon at the Fixed Rate.

All payments coming due on this note shall be made in cash or immediately available funds at the Holder's office at which the payment is made.  At its option, the Holder may elect to give the Borrower credit for any payment made by check or other instrument in accordance with Holder's  availability schedule in effect from time to time for such items and instruments, which schedule the Holder will make available to the Borrower on request.  Each payment on the Loan will first reduce charges owed by the Borrower that are neither principal nor interest.  The remainder of each payment will be applied first to accrued but unpaid interest and then to unpaid principal.

This note is a Master Note, and it is contemplated that the proceeds of the Loan will be advanced from time to time to the Borrower by the Holder in installments as requested by the Borrower and approved by the Holder, and repaid by the Borrower and subsequently re-advanced by the Holder, as requested by the Borrower and approved the Holder, in an amount not exceeding the face amount of this note.   By reason of prepayment of the Loan there may be times when no indebtedness is owing hereunder, and notwithstanding any such occurrence, this note shall remain valid and shall be in full force and effect as to each subsequent advance made hereunder.  Each advance hereunder and each payment made hereon may, at the Holder's option, be reflected by a notation made by the Holder on its internal records (which may be kept by computer or other means determined by the Holder) and the Holder is hereby authorized so to record thereon all such principal advances and payments.  The aggregate unpaid amounts reflected by notations made on the internal records of the Holder shall be deemed reflected by the notations made on the internal records of the Holder shall be deemed presumptive evidence of the principal amount remaining outstanding and unpaid on the note.  No failure of the Holder to record any advance or payment shall limit or otherwise affect the obligation of the Borrower hereunder with respect to any advance and no payment of principal by the Borrower shall be affected by the failure of the Holder to record the same.

Nothing herein contained shall obligate or require the Holder to make any advance hereunder, and all advances shall be made at the option of the Holder.  The Holder may elect to cease making advances under this note at any time.  This note shall be valid and enforceable as the aggregate amount advanced at any time hereunder, whether or not the full face amount thereof is advanced.

The Borrower and each endorser, surety and guarantor of this note (collectively, the "Obligor") severally hereby (a) waive as to the indebtedness evidenced hereby and any extension or renewal thereof demand, presentment, protest, notice of protest, notice of dishonor, suit against any party and all other requirements necessary to hold them or nay of them liable hereunder, (b) agrees that time of payment may be extended or renewal notes taken or other indulgences granted without notice of or consent to such action and without release of the liability of any Obligor; (c) consents to the Holder's releasing, agreeing not to sue, suspending the right to enforce this note against or otherwise discharging or compromising claims against the Borrower or any other Obligor, all without notice to or the consent of the Obligors.

The Borrower agrees to pay all costs of collecting or securing or attempting to collect or secure this note, including reasonable attorney's fees.

The Holder shall have all liens upon and, and rights of set-off given to the Holder by law, against all monies, securities and other property of any of the Obligors now or hereafter in the possession of, or on deposit with, the Holder, whether held in a general or special account of deposit, for safekeeping, or otherwise; and every such lien and right of set-off may be exercised without demand upon or notice to any Obligor, and the Holder shall have no liability with respect to any Obligor's checks or other items that may be returned or other funds transfers that may not be made due to insufficient funds thereafter.

The Borrower understands that the Holder may from time to time enter into a participation agreement or agreements with one or more participants pursuant to which such participant or participants shall be given participations in the Loan and that such participation may from time to time similarly grant to other participants sub-participations in the Loan.  The Borrower agrees that any participant may exercise any and all rights of banker's lien or set-off, whether arising by operation of law or given to the Holder by the provisions of this note, with respect to the Borrower as fully as if such participant had made a loan directly to the Borrower.  For purposes of this paragraph only, the Borrower shall be deemed to be directly obligated to each participant or subparticipant in the amount of its participating interest in the principal of, and interest on, the Loan.

No failure or delay on the part of the Holder in exercising any right, power or privilege under this note shall operate as a waiver thereof.  No modification, amendment or waiver of any provision of this note shall be effective unless in writing and signed by a duly authorized officer of the Holder.  The unenforceability of any provision of this note shall not affect the validity and enforceability of the other provisions of this note, it being the intention of the Borrower and the Holder that the provisions of this note shall be severable.

The Borrower has executed this note without condition that anyone else should sign or become bound hereunder and without any other condition whatever being made.  The provision of this note shall be binding, jointly and severally, upon the successors and assigns of the Borrower (except that the Borrower may not assign or transfer its rights hereunder without the prior written consent of the Bank) and shall inure to the benefit of the Bank, its successors and assigns.  This note is given, executed and delivered under the seal of the Borrower.  Time is of the essence of this note.  This note shall be governed by the laws of the State of Alabama.

The Bank is hereby authorized by the Borrower to make advances hereunder and enter into agreements with respect to Fixed Rates at the request (whether written or oral) of any officer or representative of a partner of the Borrower or any other representative of the Borrower.

Any provision of this note that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

All rights, power and remedies of the Holder under this note and now or hereafter existing at law, in equity or otherwise shall be cumulative and may be exercised successively or concurrently.

This note contains the entire understanding and agreement between the Borrower and the Holder with respect to the Loan and supersedes any and all prior agreements, understandings, promises, and statements with respect to the Loan.

This is a DEMAND NOTE, and the Holder shall have the unlimited and unrestricted right to demand payment of the indebtedness evidenced hereby at any time and in the Holder's absolute sole discretion, regardless of whether or not a default hereunder has occurred or any other circumstance whatsoever, notwithstanding anything to the contrary contained in this note.  The Borrower agrees and the acknowledges that such right of the Holder to demand payment shall not be subject to the provisions of Section 7-1-208 of the Alabama Uniform Commercial Code or any other statute or principle of law imposing any obligation of good faith or fair dealing or that otherwise might in any way limit or restrict such right to demand payment at any time.

	
 

	
Hibbett Sports, Inc.

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ Scott Bowman

	
 

	
 

	
Scott Bowman

	
 

	
 

	
 

	
Its:

	
CFO

	
 

	
 

END OF EXHIBIT 10.1Exhibit 10.27

 

OPTION AGREEMENT

 

Dated as of March 20, 2013 (the “Effective Date”)

 

Proprietary and Confidential

 

Information provided in this binding option agreement (this “Option Agreement”) is considered “Confidential Information” as defined in the Mutual Confidentiality and Non-Circumvention Agreement, dated as of October 13, 2012 (the “Confidentiality Agreement”). By receiving this Option Agreement and any other information related to the Transactions, each of SFX Entertainment, Inc. (f/k/a SFX Holding Corporation) (“SFX”) and ID&T Holding B.V. (“ID&T” and, collectively with SFX, the “Parties”) shall not disclose or use the information in any manner without the prior written consent of the other Party; except that (A) each Party is permitted to disclose or use information to the extent permitted by the Confidentiality Agreement (as if “Proposed Transaction” defined thereunder were defined to include the Transactions) and/or to the extent permitted hereunder, and (B) the Parties agree that promptly after the Effective Date the Parties shall issue a joint press release regarding the terms hereof in the form attached as Exhibit A hereto.

 

	
THE   TRANSACTIONS:
    	
 
    	
By   signing this Option Agreement, the Sellers hereby grant to SFX and/or one or   more subsidiaries of SFX (as the case might be, the “Buyer”)   an option (the “Option”) to   acquire a 75% interest (the “Purchased Company   Interest”) in ID&T or in another entity owning the Business   (ID&T or such entity, as the case might be, the “Company”)(1),   in accordance with the terms hereof. Upon the Buyer transferring the   Consideration to the Sellers in accordance with the terms hereof (such   transfer, the “Exercise”), the Company shall   deliver the Purchased Company Interest to the Buyer.

 

On   the Effective Date, as an option fee SFX shall (i) pay to the Sellers an   amount equal to US$2,500,000 by wire transfer of immediately available funds   to an account designated by Sellers, and (ii) issue 2,000,000 shares of   SFX common stock, par value $0.001 per share (the “SFX Shares”)  (Clauses (i) and (ii) hereof are   collectively, the “Effective Date   Consideration”).

 

On   the Effective Date, SFX shall also (i) make an advance to the Sellers in   an amount equal to US$7,500,000 (the “Advance”) by   wire transfer of immediately available funds to an account designated by   Sellers, (ii) issue to the Sellers 2,000,000 shares of SFX common stock,   par value $0.001 per share (the “NAJV Stock Consideration”),   and (iii) issue to the Sellers the ID&T Warrants (as defined in that   certain Binding Term Sheet dated as of October 26, 2012 among the   Parties (the “NAJV Term Sheet”)).  Clauses (i), (ii) and (iii) hereof   are collectively, the “NAJV Consideration”   and are made pursuant to the requirements of the NAJV Term Sheet.  In addition, the parties acknowledge that   the Buyer has previously paid to the Seller US$12,500,000 (the “Initial  NAJV Consideration”)   in cash pursuant to the terms of the NAJV Term Sheet.

 

·                                          “Consideration” means the total consideration to be paid by   SFX in
    

 

(1)         Sellers contemplate that the Business will be owned by a New Dutch B.V. to be formed in connection with the transactions contemplated hereby, and such entity will be the “Company” hereunder.

 

 

	
 
    	
 
    	
order to exercise the Option, as adjusted pursuant to the bullet   points below, consisting of: (a) the Effective Date Consideration; (b) US$40,000,000   in cash (the “Exercise Price”), and (c) waiver   of repayment of the Advance, which at Exercise (should Exercise occur) shall   be deemed to constitute additional cash consideration payable by the Buyer   for the Purchased Company Interest.    Upon Exercise the NAJV Term Sheet shall be deemed amended to reflect   the revised treatment of the Advance.

 

·                  The   Consideration with respect to the Transactions will be adjusted based upon a   target consolidated indebtedness amount for the Company of US$0 as of   January 1, 2013.  To the   extent that, as of December 31, 2012, the amount of net current assets   of the Company (i) exceeded $0, the Company will distribute the excess   in cash to the Sellers or the amount of such excess shall increase the   Consideration payable to the Sellers, and (ii) was less than US$0, the   cash portion of the Consideration payable to the Sellers shall be reduced by   such amount.  Net current assets shall   be calculated based on the difference between current assets and current   liabilities, but including as current assets agreed upon amounts of retained   earnings and shareholders’ equity to account for certain differences between   Dutch and US GAAP.  Further, net   current assets will be reduced for any tax obligations of the Company   relating to the prior payment by Buyer of US$12,500,000 pursuant to the NAJV   Term Sheet, offset by the net present value of any tax benefits reasonably   expected to be realized by Buyer as a result of such payment.

 

·                  The   Consideration will be further increased in the amount of undistributed   dividends of unconsolidated subsidiaries specified by the Sellers (the “Anticipated Dividends”).    To the extent that the Company does not receive the amount of   Anticipated Dividends within nine months of the Effective Date, then (A) to   the extent the shortfall in Anticipated Dividends is less than US$1,000,000   such amount shall be treated as an advance by Buyer to the Sellers and repaid   from 100% of distributions from the Company, and (B) to the extent the   shortfall in Anticipated Dividends is US$1,000,000 or greater, the Buyer   shall have the option to either (i) treat such amount as an advance   consistent with clause (A), or (ii) at Sellers’ election, (x) cancel   shares of SFX stock issued to Sellers as Consideration with a value equal to   such shortfall (at a price per share of $10 per share) or (y) receive a   cash payment from Seller in an amount equal to such shortfall.

 

·                                          “Business” means all of ID&T’s assets, businesses, and   operations, subject to agreed treatment of the North American JV as described   under “Structure” below.  Business   includes (whether such interests are directly held by ID&T, or by   shareholders of ID&T and relating primarily to the Business):  all equity interests of any subsidiary or
    

 

2

 

	
 
    	
 
    	
equity investments; all of ID&T’s intellectual property; 100% of   the interests in Q-Dance; a 50% interest in the ID&T Belgium BvBA   (Tomorrowland) joint venture (it being understood that as a result of the   transfer of the Business, SFX will receive 75% of the benefits and 75% of the   obligations associated with such joint venture currently owned by   ID&T(2)); a 50% interest in the b2s joint venture (it being understood   that as a result of the transfer of the Business, SFX will receive 75% of the   benefits and 75% of the obligations associated with the b2s joint venture   currently owned by ID&T(3));  all   equity interests of ID&T Merchandise BV; and any other asset used by   ID&T or any subsidiary in the conduct of its business or any contractual   right held by ID&T or any subsidiary.    The parties acknowledge and agree that satisfaction of any consent or   other requirements with respect to any change of control trigger relating to   the ID&T Belgium BvBA joint venture shall not be a condition to the   Transactions contemplated hereby; provided, that (i) the parties shall   cooperate and use their reasonable efforts to obtain any consent required or   satisfy any such other requirements in connection with any such change of   control trigger, and (ii) if the third party to the joint venture   exercises its rights under the joint venture agreement in connection with   such change of control trigger, SFX will receive its proportionate share of   any consideration paid by such third party to Sellers (or any of their   affiliates).  Further, the parties   agree to enter into a shareholders agreement containing customary governance   and transfer restrictions consistent with the terms contemplated herein with   respect to b2s.  The parties   acknowledge that ID&T is currently in discussions regarding certain   transactions as described in Exhibit B hereto, and that the   assets listed in Exhibit C hereto are not part of the Business.

 

·                                          “Sellers” means (i) ID&T, if the Company is not   ID&T but is instead another entity owning all of the Business, or   (ii) the shareholders of ID&T as of the Effective Date, if the   Company is ID&T.

 

The transactions   contemplated by this Option Agreement are herein referred to as, the “Transactions”.
    
	
 
    	
 
    	
 
    
	
M   DESIGN:
    	
 
    	
In   connection with the Transactions, on or prior to time of the Exercise, the   Sellers shall form an entity which is expected to be named “M Design” (“M Design”). M Design will be owned by existing   shareholders of ID&T (the “M Design Shareholders”).

 

Prior   to the Exercise, (i) M Design will not conduct any operations, and   (ii) the M Design Shareholders will be prohibited from transferring the   interests in M-Design.
    

 

(2)         As discussed with ID&T, SFX is negotiating with the Belgian co-owners of the Tomorrowland joint venture for worldwide rights with ID&T.

 

(3)         As discussed with ID&T, SFX is separately negotiating to purchase the 50% interest in the b2s joint venture not held by ID&T.  Consideration is being given to having ID&T acquire that 50% interest rather than SFX should the Option be exercised.

 

3

 

	
 
    	
 
    	
Upon   the occurrence of the Exercise, the following provisions will apply:

 

·                                          Duncan   Stutterheim (“Stutterheim”), Wouter Tavecchio   (“Tavecchio”), and certain individuals   who were employed by ID&T immediately prior to the Effective Date will be   employed solely by M Design (Stutterheim, Tavecchio, and such individuals,   collectively with any other individuals who become employed by M Design, the   “M Design Employees”); provided that   Stutterheim is expected to provide services to SFX while an M Design Employee   as specified in his employment agreement;

 

·                                          Stutterheim’s   (subject to the first bullet point hereof) and Tavecchio’s employment with M   Design will be for an initial term of five (the “Initial   Term”) years after the date on which the Exercise occurs (the “Exercise Date”);

 

·                                          For so long   as Stutterheim or Tavecchio is an owner of M Design, M Design, in   consultation with the Co-CEO of the Company appointed by ID&T and the   Chief Creative Officer of the Company (which may be the same person), will   maintain exclusive creative control over festivals, events or concerts,   brands, merchandise and related intellectual property (“Events”)   that the Company promotes or produces, spending with respect to events   (subject to the Company’s budget), and the use of brands, merchandise,   intellectual property and content in connection with the promotion and   production of Events.

 

·                                          the M Design   Employees will provide such creative services, through M Design,  pursuant to a contract to be agreed by the   parties (the “M Design Contract”) and for a   cost equal to the operating cost of M Design, including aggregate salary and   employee benefits that would otherwise be payable to M Design Employees for   such services were they employed with the Company (and M Design will not   charge the Company any premium or service fees with respect to costs incurred   by M Design on behalf of the Company);

 

·                                          M Design   will, for so long as the M Design Contract is in effect, not provide services   to any person other than to the Company or the Company’s subsidiaries and   will not otherwise engage in any business, except with the consent of Buyer   and the Company for the duration of M Design’s existence;

 

·                                          certain key M   Design Employees (including Stutterheim and Tavecchio), including those   listed on Exhibit E, will be required, as a condition of   employment with M Design, to enter into a non-competition agreement and   non-solicitation agreement with M Design, the Company and SFX that, among   other things, prohibits such M Design Employee from competing with the   Company, SFX or any of SFX’s subsidiaries (the “M Design   Employee Agreements”), and such non-competition and   non-solicitation agreement will survive termination of employment for one   year (or six months in the event of termination without cause); provided,   that in the case of Stutterheim and Tavecchio such agreement will survive for   the greater of (A) the term of employment and (B) the
    

 

4

 

	
 
    	
 
    	
Initial Term, plus in either case one year (or 6 months in the event   of termination without cause);

 

·                                          all   intellectual property, real property, goods or services developed by M Design   (whether in connection with performing services for the Company or otherwise)   are deemed to be works made for hire and will be owned solely by the Company   and will be registered with appropriate governmental or other entities in the   name of or at the direction of the Company, and all intellectual property,   real property, goods or services developed by an M Design employee during the   twelve month period post-employment termination which relate to EDM or the   type of business conducted by the Company will be presumed, subject to   rebuttal, to have been created as works made for hire and to be the property   of the Company;

 

·                                          M Design will   be operated with a financial plan to neither make a profit nor suffer a loss;

 

·                                          M Design and   the Company will agree to an annual budget; the Company, Buyer, and the M   Design Shareholders will enter into an agreement setting forth, among other   things, the provisions in this section “M Design”;

 

·                                          By action of   its Board, the Company may terminate the contract for breach or failure to   perform.  
    
	
 
    	
 
    	
 
    
	
EMPLOYMENT   TERMS
    	
 
    	
At   the Exercise Stutterheim or his personal holding company shall enter into an   employment agreement or management agreement, as applicable, with M-Design,   providing for him to serve as an employee of M-Design and to provide services   to SFX as further agreed, on terms and conditions including:

 

1.              Term of no   less than five (5) years;

2.              Salary of no   less than five hundred thousand dollars ($500,000) per annum, subject to an   annual increase of 3% per annum.

3.              Severance in   the event of termination without cause for the longer of (x) the   remaining term of the agreement or (y) one year following such   termination (which amounts shall be reimbursed to M-Design by ID&T).

4.              Benefits on   the same basis provided to other senior executives of SFX.

5.              All other   terms and conditions shall be agreed upon between SFX and Mr. Stutterheim.

6.              The employee   will be subject to a non-compete that will survive the term of employment for   one year (or 6 months in the event of a termination without cause).

7.              Options   (transferrable with the consent of the SFX board) to acquire 200,000 SFX   shares (i) with an exercise price of $10 per share, (ii) with a   term of 5 years and (iii) which shall be fully vested at Exercise.

 

On   or prior to Exercise, Tavecchio or his personal holding company shall have   entered into an employment agreement or management agreement, as applicable,   with M-Design having the terms set forth on Exhibit E hereof,   which shall
    

 

5

 

	
 
    	
 
    	
include,   without limitation, severance in the event of termination without cause for   the longer of (x) the remaining term of the agreement or (y) one   year following such termination (which amounts shall be reimbursed to   M-Design by ID&T).

 

On   or prior to the Exercise, the key employees of ID&T set forth on Exhibit E   shall enter into employment agreements with ID&T having the terms set   forth on Exhibit E, which shall include, without limitation,   severance in the event of termination without cause for the longer of (x) the   remaining term of the agreement or (y) one year following such   termination.
    
	
 
    	
 
    	
 
    
	
COMPANY   SHAREHOLDERS’ AGREEMENT:
    	
 
    	
Upon   the occurrence of the Exercise, the Buyer and the Sellers (collectively, the   “Company Shareholders”) shall enter   into a shareholders’ agreement (the “Company Shareholders’   Agreement”) consistent with the terms hereof, that addresses,   among other things, management of the Company, rights to distributions from   the Company, liquidity events with respect to the Company, and provisions   regarding the transferability of equity in the Company. Certain terms to be   included in the Company Shareholders’ Agreement are set forth in this Option   Agreement under the following sections: “Management and Operation of the   Company,” “Distributions to Company Shareholders,” and “Transfers of Company   Shares.”  The Buyer and the Sellers   expect the Company Shareholders’ Agreement will incorporate and supersede   similar terms of the NAJV Term Sheet.
    
	
 
    	
 
    	
 
    
	
MANAGEMENT   AND OPERATION OF THE COMPANY:
    	
 
    	
The   following provisions will apply only upon occurrence of the Exercise:

 

·                                          The Company’s   board (the “Board”) will be composed   initially of five individuals. The Buyer will be entitled to appoint one more   than a majority of the Board members and the Sellers will be entitled to   appoint one less than a majority of Board members.  SFX, on behalf of the Buyer, hereby   designates Robert FX Sillerman , Mitchell Slater and Shelly Finkel as the   Buyer’s initial designated Board members and the Sellers hereby designate   Duncan Stutterheim and Ritty van Straalen as the Sellers’ initial designated   Board members.

 

·                                          Majority   board approval shall be required for the following actions:

 

(i)  To the extent that the Board has unanimously determined   that third party debt financing of the Company is required, the Board, by   majority approval shall have the right to determine the nature and terms of   any such financing (whether provided by SFX or by an independent third   party), provided that any such financing is on terms that are reasonably   consistent with terms that would reasonably be expected to be available from   a third party financing source);

 

(ii)                                  The approval   of the gross budget (meaning the company’s overall annual spend); provided   that (a) unanimous approval of the Board shall be required for approval   of line items in Event budgets, and (b) the gross budget may not be   decreased from the prior year’s gross budget without the unanimous consent of   the Board, unless the Company’s EBITDA declined compared to the prior year,   in which case the gross budget may
    

 

6

 

	
 
    	
 
    	
be reasonably adjusted to reduce expenses; and

 

(iii) The hiring and firing of personnel; provided that   unanimous approval of the Board shall be required for hiring and firing of   key employees set forth on Exhibit E, Stutterheim, Tavecchio and   the M Design Employees.

 

All other actions shall require unanimous board approval.

 

·                                          The following   persons shall initially be the senior management of the Company, and shall be   subject to the direction of the Board: Chris van Overbeeke, Marcel Elbertse,   Fatih Kahyaoglu, Jeroen Jansen and Bas Meijer.

 

·                                          The Company   will, in the course of seeking profitable operations, act to preserve and   expand the existing ID&T brands and develop new brands and opportunities.

 

·                                          SFX shall use   its reasonable efforts to avoid promoting Events which would reasonably be   expected to diminish or interfere with the use of the Company brands, in   particular, by virtue of the timing and location of performances.

 

·                                          Individuals   who are currently employed by or otherwise affiliated with ID&T will be   responsible for creative control of the Company, including creative control   over Events that the Company promotes or produces, spending with respect to   Events, and the use of brands in connection with the promotion and production   of Events.

 

·                                          SFX will have   primary responsibility and oversight of the non-Event, non-promotion aspects   of the Company’s operations, including financial planning, non-Event budget,   and general oversight of the Company’s operations. The Company will be   managed within overall budget guidelines that are established annually by the   Board as described above (the “Budget”).  If the Board is unable to agree on a Budget   and until such time as the Budget is agreed, the Company shall operate on the   basis of the prior year’s gross budget. Further, if the Board is unable to   agree on such an allocation of the gross Budget, the Company shall operate on   the basis of the prior year’s budget taking into account proportional changes   in each line item therein to account for the approved change in the gross budget.

 

·                                          One Co-CEO   and the CFO of the Company will be appointed by SFX.  Shelly Finkel (“Finkel”)   will serve initially as the JV’s Co-CEO appointed by SFX.  If Finkel resigns from, is removed from, or   otherwise no longer serves in his position as a Co-CEO, then SFX will be   entitled to appoint a replacement Co-CEO, but only if such appointee is   reasonably acceptable to ID&T.  It   is agreed that ID&T may withhold such approval if the replacement Co-CEO   is a competitor of ID&T, ID&T has had prior dealings with such person   that were unsatisfactory to ID&T or if ID&T perceives that such   person may have a conflict of
    

 

7

 

	
 
    	
 
    	
interest, including due to   such person’s work for another subsidiary of SFX.

 

·                                          One Co-CEO   and the Chief Creative Officer of the JV will be appointed by ID&T,   subject to SFX’s approval, which will not be withheld except where based on   clear evidence of: conflict, inability to competently perform the functions   of the office, criminal history or public opprobrium.

 

·                                          Other than   with respect to ID&T employees and members of ID&T management   providing services through M Design, as of the Effective Date, ID&T   employees (“Retained Employees”) will   continue to be employed by ID&T (or by the applicable ID&T   subsidiary, as applicable) on the same terms as they were previously employed   prior to the Effective Date; except that, to the extent permitted by   law, instead of receiving benefits and being eligible for ID&T equity   incentive plans, Retained Employees and M Design employees (as provided for   in the M Design Contract) will be eligible to participate in benefit plans   and equity incentive plans in which SFX’s employees are generally eligible to   participate, including SFX’s stock option plan.

 

·                                          To the extent   not financed by one or more third-party financing arrangements, SFX or one or   more of SFX’s subsidiaries (other than the Company and the Company’s   subsidiaries) (as the case might be, the “SFX   Funding Entity”) will provide debt financing to the Company on   terms approved by the Board (including reasonable market-based interest rates   for such loans). If the SFX Funding Entity incurs indebtedness in connection   with providing such financing, including pursuant to a credit facility to   which multiple SFX entities are loan parties, then (a) the Company will   enter into appropriate documentation that joins the Company as a loan party   under the loan documents governing such indebtedness, to the extent necessary   to guaranty as a primary obligor the portion of such indebtedness that is   incurred in order to provide such financing, (b) Buyer will be permitted   to pledge its interest in the Company, and (c) the Company will enter   into such documentation and take such actions as are necessary to provide   such guaranty.  In the event the SFX   Funding Entity elects not to provide such financing, the Company may enter   into third-party financing arrangements on terms approved by the Board (as   described above.  In either case, the   SFX Funding Entity (as applicable) and the Company shall use commercially   reasonable efforts to provide that any such financing arrangement allows for   yearly cash distributions of the annual profits of the Company to   shareholders of the Company.
    
	
 
    	
 
    	
 
    
	
SFX   BOARD OBSERVER
    	
 
    	
Commencing   one week following the Effective Date, Seller will have the right to appoint   and dismiss an observer to the SFX board who will have full rights to observe   and participate in meetings, subject to customary restrictions relating to   conflicts and privilege, including notice of meetings.  The parties agree that this right   supersedes and replaces Seller’s right to appoint a board observer pursuant   to the NAJV Term Sheet, and the NAJV Term Sheet shall be deemed amended 
    

 

8

 

	
 
    	
 
    	
to   remove ID&T’s right to appoint a board observer.    
    
	
 
    	
 
    	
 
    
	
DISTRIBUTIONS   TO COMPANY SHAREHOLDERS:
    	
 
    	
Provisions   regarding distributions (including, if the Company is a pass-through entity   for tax purposes, tax distributions) will be reflected in the Company   Shareholders’ Agreement.  The parties   agree that after Exercise, annual profits as reported in the Company’s   consolidated financial statements for the year as approved by the Board will   be distributed in cash to the Company Shareholders, taking into account   appropriate reserves as determined by the Board, as well as the Budget and   the Company’s contractual obligations (including covenant compliance under   debt facilities).
    
	
 
    	
 
    	
 
    
	
TRANSFERS   OF COMPANY SHARES:
    	
 
    	
Upon   the occurrence of the Effective Date, the following provisions will apply:

 

·                                          Restrictions   on Transfers; Permitted Transfers. Each Company Shareholder   shall not directly or indirectly transfer any of such Company Shareholder’s   equity interests in the Company (“Company Shares”),   except:

 

·                                           each Company   Shareholder is permitted to transfer all or any portion of such Company   Shares to one or more of such Company Shareholder’s subsidiaries, affiliates   or family members, to other Company Shareholders, provided, that such   transferee agrees to be bound by the terms of the Company Shareholders’   Agreement;

 

·                                           each Company   Shareholder is permitted to pledge all or any portion of such Company Shares   in connection with a financing;

 

·                                           the Sellers   are permitted to transfer Company Shares to a third party, subject to a right   of first refusal in favor of SFX with respect to any such transfer, if such   transfer (or series of transfers) relates to at least 50% of the shares held   by the Sellers collectively;

 

·                                           Until the   third anniversary of the Effective Date, Sellers shall have a right of first   refusal with respect to any proposed transfer by SFX of more than fifty   percent (50%) of its interest in the Company; and

 

·                  The Buyer is   permitted to (directly or indirectly) transfer all (but not less than all) of   the Buyer’s Company Shares (i) as part of a corporate reorganization, or   (ii) in connection with the sale or merger of the Buyer’s entire group.

 

·                                          Joinder. As a   condition to becoming a holder of Company Shares, any transferee of Company   Shares must agree to be bound by the terms of the Company Shareholders’   Agreement to the same extent as the transferring Company Shareholder with   respect to the Company Shares so transferred.

 

·                                          Foreclosure   on Company Shares. A bona fide pledgee of Company
    

 

9

 

	
 
    	
 
    	
                                                Shares that   acquires such Company Shares in connection with a foreclosure thereon will   succeed to such Company Shareholder’s economic interest, but not voting or   other control rights, under the Company Shareholders’ Agreement and such   foreclosure will not terminate existence of the Company.

 

·                                          Sellers’ Put   Right. Provided that the Exercise has occurred, during the period   beginning on the date that is the earlier of (i) the three-year   anniversary of the Effective Date and (ii) the date on which SFX   consummates a transfer of more than fifty percent (50%) of its interest in   the Company, the Sellers will be entitled to collectively put (by providing   notice to the Buyer during such period) all, but not less than all, of their   Company Shares and interests in M-Design to the Buyer for an aggregate purchase   price equal to the Company Shares Put Price as of the date when the Sellers   provide the Buyer notice of their election to exercise such put right.   SFX shall provide reasonable notice of any   sale triggering Sellers’ rights under this section, and Sellers shall provide   reasonable notice of any exercise of such rights.

 

·                                           “Company Shares Put Price” means, as of a given date of   determination, an amount equal to the greater of (a) 8 times Ratable LTM   EBITDA as of such date and (b) $31.25 million; except that if   (x) 12 times Ratable LTM EBITDA as of such date is less than $31.25   million and (y) SFX has not taken action prior to such date for the sole   purpose  of causing 12 times Ratable   LTM EBITDA to be less than $31.25 million, then “Company Shares Put Price”   means 12 times Ratable LTM EBITDA as of such date.

 

·                                           “Ratable LTM EBITDA” means, as of a given date of   determination, (a) 0.25 times (b) the Company’s consolidated   earnings before interest, taxes, depreciation, and amortization for the   12-month period ended as of the last day of the calendar month immediately   preceding the calendar month in which such date of determination is included.

 

The   Buyer will be obligated to pay the Company Shares Put Price as soon as   reasonably practicable, and in any event within one year of the date of the   notice of election.  If the Buyer fails   to pay the Company Shares Put Price within one year, then (i) the Buyer   shall provide the Sellers with the opportunity to elect to select one brand   (other than one brand specified by the Buyer) to be transferred to the   Sellers (the “Seller Brand”) and (ii) the   key employees set forth on Exhibit E, the M Design Employees, and   the former ID&T employees (including, but not limited to, Stutterheim and   Tavecchio) shall be released from their non-competition agreements with the   Company.  The Company shall cause the   Seller Brand (if Sellers elect to select a Brand) to be appraised and the   value of the Seller Brand shall be deducted from amounts owed by Buyer   pursuant to the Company Shares Put Price.    Sellers’ rights in the Seller Brand will be subject to the Company’s   ability to fulfill existing contractual obligations relating to such brand;   provided, that the  
    

 

10

 

	
 
    	
 
    	
economic   benefits of such contractual obligations shall be for the benefit of Sellers.
    
	
 
    	
 
    	
 
    
	
STRUCTURE:
    	
 
    	
The   Parties shall seek to structure the Transactions and the management of the   Company so as to optimize tax treatment to the Parties.

 

The   Parties shall structure the Transactions such that the joint venture between   the Parties (the “North America JV”)   that was created by virtue of the NAJV Term Sheet, between the Parties will   be included as part of the acquisition of the Company; except that   should the Exercise occur (a) the Parties shall structure the   Transactions such that (i) the Buyer will have a 75% ultimate beneficial   economic interest in the North America JV and the Sellers will have, in the   aggregate, a 25% ultimate beneficial economic interest in the North America   JV, (ii) the North America JV shall be solely managed, directly or   indirectly, by the Company on terms consistent with the terms set forth in   this Option Agreement (and there will be no separate board of directors) and   (iii) any dividends and distributions by the North America JV to the   Buyer derived from US-based events will be first and primarily taxable to the   Buyer in the United States; (b) the obligation to repay the Advance   shall be removed (it being understood that the amount of such Advance paid on   the Effective Date shall be deemed to constitute part of the Buyers cash   consideration for the Purchased Company Interests); (c) the obligation   to pay license fees on the terms set forth in the NAJV Term Sheet shall   modified as agreed to by the parties (it being understood that such license   fees shall be payable to Newco or one or more of its subsidiaries);   (d) the obligation of SFX to issue the EBITDA Warrants (as defined in   the NAJV Term Sheet) shall remain in full force and effect; and (e) the   provisions of the NAJV Term Sheet regarding Transfer of SFX Common Stock   shall remain in full force and effect with respect to NAJV Stock   Consideration.

 

The   Parties acknowledge and agree that subject to the terms of this Option   Agreement, the Definitive Agreements will harmonize the terms of the NAJV   Term Sheet with the terms of this Option Agreement.  The Parties acknowledge and agree that if   the Option is not Exercised, the NAJV Term Sheet shall remain in effect, but   modified as specifically provided herein.

 

The   structure of the Transactions is subject to continuing review and analysis   and the Parties acknowledge that it may be necessary or appropriate to   restructure the form of all or a portion of the Transactions as a result of   tax, accounting, or other considerations.
    
	
 
    	
 
    	
 
    
	
US   GAAP AUDIT:
    	
 
    	
ID&T   shall prepare 2012 financial statements, which will include 2011 comparatives   on a US GAAP basis, with respect to ID&T and the Business consistent with   United States generally accepted accounting principles.  ID&T shall engage Ernst &   Young (“E&Y”) as independent accountants   to complete an audit of the US GAAP financial statements under United States   generally accepted auditing standards (the “US Audit”)   for such historical financial
    

 

11

 

	
 
    	
 
    	
periods   and pursuant to which E&Y will agree to complete and provide a report   with respect to the US Audit as soon as practicable.
    
	
 
    	
 
    	
 
    
	
SFX’S   RIGHT TO UNWIND
    	
 
    	
If   the financial statements that are the subject of the US Audit are not in a   form that is able to be filed with the SEC as a part of SFX’s registration   statement (it being understood that receipt of a qualified audit opinion   shall not, in and of itself, mean that the US Audit is not able to be so   filed), then, upon notice from SFX to the Sellers, the Parties shall take   such actions as are necessary unwind the Transactions and to put the Parties   in their same respective positions as of immediately prior to the Effective   Date as if the Transactions were void ab initio;  including that the Sellers shall be   obligated to refund the Effective Date Consideration.  For avoidance of doubt, notwithstanding the   refund of the Effective Date Consideration, the Sellers shall retain   (i) the $7,500,000 constituting the Advance, which shall continue to   constitute the ID&T Advance under and subject to the terms of the NAJV   Term Sheet; (ii) the NAJV Stock Consideration, (iii) the ID&T   Warrants, in each case, subject to the terms of the NAJV Term Sheet and   (iv) the Initial NAJV Consideration.

 

If   within 15 days following delivery by Sellers to Buyer of a US Audit that is   in a form that is able to be filed with the SEC as part of SFX’s registration   statement (a “Good Audit”), the Buyer notifies   the Sellers that it has determined not to Exercise the Option (a “Non-Exercise Notice”) as provided herein: (i) the   Option shall terminate, (ii) Sellers shall not be obligated to refund   the Effective Date Consideration and (iii) the $7,500,000 constituting   the Advance shall be deemed to constitute a break-up fee paid by the Buyer to   the Sellers (and Seller shall retain said amount) for failure to Exercise the   Option and shall no longer be deemed to be an advance under the NAJV Term   Sheet (which shall be deemed amended to reflect such characterization).  For avoidance of doubt, under such   circumstances, the Sellers shall retain (i) the NAJV Stock   Consideration, (ii) the ID&T Warrants, in each case, subject to the   terms of the NAJV Term Sheet and (iii) the Initial NAJV Consideration.  If the Buyer does not Exercise the Option, then   the provision “Transfers of SFX Shares—Sellers’ Put Option” shall   terminate and have no further force or effect.  Buyer may exercise or not exercise the   Option in its sole discretion.  On or   prior to the date that is 90 days after delivery of the Good Audit, SFX will   pay to the Sellers US$10,000,000 in cash (and, for avoidance of doubt, such   payment shall be payable regardless of whether Buyer has delivered a timely   Non-Exercise Notice or has elected to Exercise the Option).

 

If   the Buyer does not provide a Non-Exercise Notice within the 15 days following   delivery of the Good Audit, the Buyer shall exercise the Option and pay the   Exercise Price no later than 60 days following delivery of the Good Audit as   described in “Exercise”.

 

Except   as otherwise provided herein, the terms of the NAJV Term Sheet and the terms   of the following sections of this Option Agreement will continue in force   following the unwinding of the Transactions or upon Buyer’s determination not   to exercise the Option: the introductory paragraph to this Option Agreement;   “SFX’s Right to Unwind”; “Costs”; “Confidential Information”; “Governing   Law”; “Consent to Jurisdiction and Venue”; “Counterparts”; “Amendment;   Waiver; Signed Writings”; “Successors and Assigns; Parties in Interest”; and 
    

 

12

 

	
 
    	
 
    	
“Construction   and Interpretation.”
    
	
 
    	
 
    	
 
    
	
DUE   DILIGENCE:
    	
 
    	
SFX   and its representatives are entitled to conduct a business, financial, legal,   tax, and accounting due diligence investigation of ID&T and the Business,   as well as undertake other normal and customary due diligence   procedures.  ID&T shall, and shall   cause their respective representatives to, (a) make available to SFX and   its representatives all information relating to ID&T and the Business reasonably   requested by SFX or its representatives and (b) otherwise reasonably   cooperate with SFX and its representatives in connection with the   aforementioned due diligence investigation.     ID&T shall provide all necessary consents and instructions to   cause its auditors, professional advisory firms and consultants to provide   access to such information as SFX may request from time to time, including   through telephonic and in-person diligence sessions.  SFX shall use reasonable efforts to reduce   the diligence process through the use of materials previously provided by   ID&T.  SFX shall provide Seller   with a copy of SFX’s registration statement as currently on file with the SEC   and all amendments thereto (unless publicly available), and copies of   documents relating to SFX’s option plan.    Seller shall be given reasonable opportunity to review and comment on   any disclosure with respect to ID&T or the transactions contemplated   hereby in SFX’s registration statement, as amended.
    
	
 
    	
 
    	
 
    
	
CERTAIN   OBLIGATIONS:
    	
 
    	
The   Sellers shall notify SFX upon the occurrence of material events with respect   to the Company promptly upon becoming aware of such events.

 

The   Parties shall use their respective reasonable efforts to ensure that the   Transactions are approved under applicable anti-trust laws (or that such laws   have been determined to be inapplicable to the Transactions).

 

The   Parties shall cooperate to obtain all necessary consents to the Transactions   from governmental entities and third parties.
    
	
 
    	
 
    	
 
    
	
EXERCISE:
    	
 
    	
Unless   the Buyer has delivered a timely Non-Exercise Notice, on or before the date   that is 60 days after the date on which a Good Audit report is delivered to   SFX (or on the next succeeding business day if such date is not a business   day), the Buyer shall Exercise the Option by paying to the Sellers the unpaid   Consideration (i.e., $40 million in cash, subject to adjustment as described   under “The Transactions” above) to the Sellers.  Further, upon the Exercise, the $7,500,000   constituting the Advance shall be deemed to constitute additional cash   consideration payable by the Buyer for the Exercise of the Option and shall   no  longer be deemed to be an advance   under the NAJV Term Sheet (which shall be deemed amended to reflect such   characterization).  For avoidance of   doubt, upon the Exercise, Sellers shall be entitled to retain the Effective   Date Consideration, in which event the Effective Date Consideration will be   deemed to be part of the purchase price.    
    
	
 
    	
 
    	
 
    
	
DEFINITIVE   DOCUMENTS:
    	
 
    	
SFX   and its legal counsel shall prepare the initial draft of the definitive   documents with respect to the Transactions (the “Definitive   Documents”), including a management services agreement between the   Company and M Design. It is expected that Definitive Documents will be   prepared no later than 30 days after the Effective Date. The Parties shall   use their respective reasonable efforts to enter into the Definitive   Documents on terms that are consistent with
    

 

13

 

	
 
    	
 
    	
the   terms hereof.

 

Prior   to entering into the Definitive Documents, (a) with respect to the terms   hereof that apply only upon the occurrence of the Exercise, the Parties shall   conduct the operations of the Company and M Design in accordance with this   Option Agreement from and after the occurrence of the Exercise and   (b) with respect to the other terms hereof, the Parties shall conduct   the operations of the Company and M Design in accordance with this Option   Agreement from and after the Effective Date.

 

The   following provisions shall apply with respect to indemnification claims   against the Sellers for breaches of representations and warranties under the   Definitive Documents:

 

·                  Cap on   liability equal to $15,375,000(4) for breaches of representations and   warranties (including with respect to taxes and intellectual property);   provided, that there shall be an additional $10,250,000(5) added to such   amount solely for breaches of representations and warranties with respect to   taxes and intellectual property.

 

·                  Deductible of   $200,000.

 

·                  Survival   period of 18 months, except that the fundamental representations shall   survive indefinitely.

 

The   cap and deductible shall not apply to breaches of fundamental representations   or in the case of fraud.

 

Indemnification   obligations of the Sellers shall be satisfied, first, by the return of SFX   shares issued to Sellers in connection with the transactions (including the   NAJV Stock Consideration), at a price per share of $10 per share.
    
	
 
    	
 
    	
 
    
	
REPRESENTATIONS,   WARRANTIES AND COVENANTS:
    	
 
    	
The   Sellers shall make customary representations and warranties under the   Definitive Documents as of the Effective Date and as of the Exercise Date,   including representations and warranties regarding organization, good   standing, financial statements, authority, authorization, enforceability,   title to assets, distributions of SFX stock, and representations and   warranties regarding the Business, generally consistent with Exhibit D.

 

The   Sellers shall, under the Definitive Documents, make further customary   representations and warranties related to the US Audit and Business as of the   Exercise Date, and shall be required to comply with customary post-Effective   Date covenants, each to be as agreed to by the parties.

 

The   Buyer shall make customary representations and warranties under the   Definitive Documents as of the Effective Date and as of the Exercise Date,   including with respect to the SFX shares to be issued in connection with the 
    

 

(4)  Draft note: Amount equal to 15% of the aggregate consideration value of $102,500,000.

 

(5)  Draft note:  Amount equal to 10% of the aggregate consideration value.

 

14

 

	
 
    	
 
    	
transactions.
    
	
 
    	
 
    	
 
    
	
NON-COMPETITION AND NON-SOLICITATION:
    	
 
    	
The   Definitive Documents will include non-competition and non-solicitation   obligations of the Sellers, to the extent such obligations are not otherwise   addressed in an employment agreement between such Seller and the Company. The   Definitive Documents will include non-competition and non-solicitation   obligations of the Buyer.  Existing key   employees of ID&T will be required to enter into non-solicitation   agreements with respect to the operations and employees of the Company and   the operations and employees of SFX. 
    
	
 
    	
 
    	
 
    
	
ARBITRATION   PROVISIONS IN DEFINITIVE DOCUMENTS:
    	
 
    	
The   Definitive Documents will provide that any disputes thereunder will be   resolved pursuant to Binding Arbitration. Disputes arising under this Option   Agreement will be resolved pursuant to Binding Arbitration. “Binding Arbitration” means binding arbitration in New   York, New York under the rules of the JAMS in which the prevailing party   in any such arbitration will be entitled to such party’s reasonable   attorney’s fees and costs.
    
	
 
    	
 
    	
 
    
	
TRANSFERS   OF SFX SHARES:
    	
 
    	
The   following provisions will apply to the SFX Shares issued as part of the   Effective Date Consideration to the Sellers, and shall not alter the Sellers’   rights with respect to SFX Shares issued as part of the NAJV Consideration:

 

·                                          Lock-up   Period. Each Seller will not transfer any SFX Shares   (except to affiliates and family members) prior to the date that is the   one-year anniversary of the earlier of (x) the date on which a Qualified   IPO is consummated and (y) the Effective Date (such one-year period, the   “Lock-up Period”). After the end of   the Lock-up Period, each Seller will be permitted to sell the SFX Shares, but   only if such Seller first provides SFX with notice thereof at least 5   business days prior to any such sale. “Qualified IPO”   means the sale of shares pursuant to a registration statement declared   effective by the United States Securities and Exchange Commission (the “SEC”) under circumstances in which the SFX common stock is   accepted for listing on the NASDAQ Global Market or the New York Stock   Exchange.

 

·                                          Registration. SFX shall   use commercially reasonable efforts to register the SFX Shares for resale   with the SEC and to pursue a Qualified IPO. The Sellers will enter into a   customary lock-up agreement as reasonably requested by SFX’s underwriters in   connection with a Qualified IPO, which shall be no more burdensome than   lock-up with respect to shares of SFX common stock held by Robert Sillerman   (“Sillerman”).

 

·                                          Sellers’ Put   Option. If the Option is Exercised and a Qualified IPO   is not consummated within 12 months following the Effective Date, then the   Sellers’ will collectively have the right to require SFX to acquire the SFX   Shares that the Sellers hold at such time for a per-SFX Share cash purchase   price of US$10 (the aggregate purchase price in connection with such sale,   the “SFX Shares  Put Price”).   SFX will be required to pay the SFX Shares Put Price as soon as SFX has the   resources to do so.  This Put Option is   separate from any put option under the NAJV Term Sheet relating to the NAJV   Stock Consideration.
    

 

15

 

	
 
    	
 
    	
·                                          Drag-along   Rights. Until a Qualified IPO occurs, if Sillerman sells   to a bona fide third party all the SFX common stock that he owns at a price   per share of SFX common stock that is equal to or greater than 120% of the   SFX Share Acquisition Price (as adjusted for any stock splits, corporate   reorganizations, or similar events), then, at Sillerman’s option, the Sellers   will be required to sell for cash or marketable securities (i.e., listed on   NASDAQ Global Exchange, NYSE or a comparable European exchange), on the same   terms and conditions as received by Sillerman, all the SFX Shares, to the   extent held by the Sellers at such time; provided, that such marketable   securities shall not exceed fifty percent (50%) of the consideration to be   received by the Sellers for the SFX shares in such sale. “SFX Share Acquisition Price” means the implied price per   share of the SFX Shares at the time that the Sellers acquire the SFX Shares   as set forth in the Definitive Documents or the definitive documents with   respect to the North American JV.

 

·                                          Tag-along   Rights. Until a Qualified IPO occurs, if the owner of   Sillerman’s SFX common stock proposes to sell to a third party more than 50%   of the SFX common stock that he (directly or indirectly) owns, then the   Sellers will have the right to cause that owner of Sillerman’s SFX common   stock to include in such sale all the SFX Shares, to the extent held by the   Sellers at such time, on the same terms and conditions as received by that   owner of Sillerman’s SFX common stock.
    
	
 
    	
 
    	
 
    
	
OTHER   TERMS OF DEFINITIVE DOCUMENTS:
    	
 
    	
The   Definitive Documents will contain customary representations and warranties,   obligations, indemnities, and other terms as are appropriate for transactions   of the nature of the Transactions.
    
	
 
    	
 
    	
 
    
	
NAME:
    	
 
    	
The   Company and its subsidiaries may bear the name “SFX” in conjunction with the   name “ID&T”, but all business will be conducted under an ID&T trade   name without reference to “SFX”.
    
	
 
    	
 
    	
 
    
	
COSTS:
    	
 
    	
Each   Party shall bear all of its own expenses (including expenses of legal counsel,   investment bankers, accountants, and other advisers) incurred at any time in   connection with this Option Agreement, or in pursuing or consummating the   Definitive Documents and the Transactions; except that SFX shall pay the cost   of preparing the US GAAP Audit and U.S. GAAP reconciliation of ID&T’s   historical periods to the extent required by SFX, and ID&T shall pay the   cost of preparing audited Dutch GAAP financial statements. 
    
	
 
    	
 
    	
 
    
	
CONFIDENTIAL   INFORMATION:
    	
 
    	
All   information conveyed by one Party to the other Party in connection with this   Option Agreement, including the terms of this Option Agreement, is and will   be deemed to be “Confidential Information”   under the Confidentiality Agreement. Notwithstanding the immediately   foregoing sentence or anything to the contrary herein, SFX is permitted:   (a) to disclose or use Confidential Information, this Option Agreement   and the terms hereof, the Definitive Documents and the terms thereof, and the   Transactions (any of the foregoing, “SEC-Disclosable   Information”) in and in connection with the preparation of any   registration statement relating to the registration of shares of SFX’s common   stock (a “Registration Statement”), to the   extent such disclosure or use is required by law, and in connection with any   subsequent reporting obligations relating to such 
    

 

16

 

	
 
    	
 
    	
filing,   to the extent such disclosure or use is required by law; (b) to disclose   SEC-Disclosable Information to, or to use SEC-Disclosable Information in   connection with corresponding with, the SEC, to the extent such disclosure or   use is required by law; and (c) to disclose SEC-Disclosable Information   to SFX’s representatives in connection with (i) the due diligence   relating to a Registration Statement or a bank financing with respect to SFX   or any of its subsidiaries, (ii) the preparation of a Registration   Statement, or (iii) the preparation of any documentation relating to any   such bank financing.  SFX and Buyer   recognize the confidential nature and value of the Company’s creative program   and development of intellectual property, and to the extent consistent with   SFX’s obligations as a public company will keep such matters confidential,   unless otherwise agreed by the Company’s Board.

 

The   confidentiality restrictions set forth in the immediately foregoing paragraph   are subject to the section of this Option Agreement entitled “Joint Press   Release.”
    
	
 
    	
 
    	
 
    
	
JOINT   PRESS RELEASE:
    	
 
    	
As   discussed above, promptly after Effective Date, the Parties shall cooperate   to issue a joint press release regarding the terms hereof in the form   attached as Exhibit A hereto.
    
	
 
    	
 
    	
 
    
	
GOVERNING   LAW:
    	
 
    	
This   Option Agreement is governed by and is to be construed in accordance with the   internal laws of the State of New York applicable to contracts entered into   and performed entirely within the State of New York, without giving effect to   principles of conflict of laws.
    
	
 
    	
 
    	
 
    
	
CONSENT   TO JURISDICTION AND VENUE:
    	
 
    	
Each   Party hereby irrevocably and unconditionally submits to the exclusive   jurisdiction of, and venue in, any state or federal court located in the City   of New York, State of New York for the purposes of any suit, action, or   proceeding arising out of this Option Agreement, and shall commence any such   suit, action, or proceeding only in such courts. Each Party hereby   irrevocably and unconditionally waives any objection to the laying of venue   of any suit, action, or proceeding arising out of this Option Agreement in   such courts, and hereby irrevocably and unconditionally waives and shall not   to plead or claim in any such court that any such suit, action or proceeding   brought in any such court has been brought in an inconvenient forum.
    
	
 
    	
 
    	
 
    
	
COUNTERPARTS:
    	
 
    	
This   Option Agreement can be executed in one or more counterparts and can be   delivered via facsimile or similar instantaneous electronic transmission   device pursuant to which the signature of or on behalf of a Party can be seen   (including via a pdf attached to an email).
    
	
 
    	
 
    	
 
    
	
AMENDMENT;   WAIVER; SIGNED WRITINGS:
    	
 
    	
This   Option Agreement can be amended or waived only in a writing signed by the   Parties (or, in the case of a waiver, by the Party against which such waiver   is to be enforced).  Emails, including   emails that bear an electronic “signature block” identifying the sender, do   not constitute signed writings for purposes of this paragraph.
    
	
 
    	
 
    	
 
    
	
NOTICES:
    	
 
    	
All   notices, requests and other communications hereunder, to be valid, must be in   writing.  Any notice, request or other   communication hereunder will be deemed duly given (a) three business   days after it is sent by registered or
    

 

17

 

	
 
    	
 
    	
certified   mail, return receipt requested, postage prepaid, (b) one day after   receipt is electronically confirmed, if sent by fax (provided that a hard   copy shall be promptly sent by first class mail), or (c) one business   day following deposit with a recognized national overnight courier service   for next day delivery, charges prepaid, and, in each case, addressed to the   intended recipient as set forth below:

 

If   to SFX:

 

430   Park Avenue

6th   Floor

New   York, NY 10022

Attention:  Howard Tytel

Fax:

 

with   a copy (which shall not constitute effective notice) to:

 

Reed   Smith LLP

599   Lexington Avenue

22nd   Floor

New   York, NY 10022

Attention:  Aron Izower

Fax:  (212) 521-5450

 

If   to Sellers:

 

De   Entree 300

1101   EE  AMSTERDAM

Attention:   Chris van Overbeeke

Fax:   +31 (0)20 - 851 06 99

 

with   a copy (which shall not constitute effective notice) to:

 

DLA   Piper LLP (US)

1251   Avenue of the Americas

New   York, NY 10020

Attention:   Jonathan Klein, Esq.

Fax:  (212) 884-8502

 

Any   Party may change the address to which notices, requests and other   communications hereunder are to be delivered by giving the other Parties   notice in the manner herein set forth.
    
	
 
    	
 
    	
 
    
	
SUCCESSORS   AND ASSIGNS; PARTIES IN INTEREST:
    	
 
    	
Each   Party shall not assign or delegate (or enter into any contract (whether   written or oral) that would (whether with or without the passage of time, the   occurrence of any event, the existence of any circumstance, or otherwise)   otherwise effect the assignment or delegation of) any of such Party’s rights   or obligations hereunder without the prior written consent of the other   Party, and any such purported assignment without obtaining such written   consent will be void. No provision hereof is intended to confer upon any   person other than the Parties, their respective successors and their respective   permitted assigns any 
    

 

18

 

	
 
    	
 
    	
rights   or remedies hereunder.
    
	
 
    	
 
    	
 
    
	
CONSTRUCTION   AND INTERPRETATION:
    	
 
    	
For   the purposes of this Option Agreement, except as otherwise expressly provided   herein: (a) the terms “hereof,” “herein,” “hereunder,” “hereby,”   “hereto,” and “herewith” and words of similar import are to be construed to   refer to this Option Agreement as a whole and not to any particular provision   of this Option Agreement; and (b) the words “include,” “includes,” and   “including” when used in this Option Agreement are in all cases deemed to be   followed by the words “without limitation.”

 
    

 

[Signature page follows]

 

19

 

The Parties are signing this Option Agreement as of the Effective Date.

 

	
SFX   ENTERTAINMENT, INC.
    	
 
    
	
(f/k/a   SFX HOLDING CORPORATION)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Shelly Finkel
    	
 
    
	
 
    	
Name:   Shelly Finkel
    	
 
    
	
 
    	
Title:   President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
ID&T   HOLDING B.V.
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   W. Tavecchio
    	
 
    
	
 
    	
Name:   W. Tavecchio
    	
 
    
	
 
    	
Title:   Director
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   W. Timmerman
    	
 
    
	
 
    	
Name:   W. Timmerman
    	
 
    
	
 
    	
Title:   Director
    	
 
    
				

 

Signature Page to March 20, 2013 Option Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}]]