SECURITIES EXCHANGE AGREEMENT

 

THIS SECURITIES EXCHANGE AGREEMENT (the “Agreement”) is dated March 24, 2016, by
and between DRAFTDAY FANTASY SPORTS, INC., a Delaware corporation formerly known
as Viggle, Inc. (the “Company”), MGT Sports, Inc., a Delaware corporation
partnership (“MGT Sports”) and MGT Capital Investments, Inc., a Delaware
corporation and the parent corporation of MGT Sports (“Parent,” and collectively
with the Company and MGT Sports, the “Parties”).

 

WHEREAS:

 

WHEREAS, on September 8, 2015, the Company, Parent and MGT Sports entered into
an Asset Purchase Agreement (the “Asset Purchase Agreement”), pursuant to which
the Company acquired certain assets comprising the DraftDay Business (as defined
in the Asset Purchase Agreement) in consideration for which, among other things,
MGT Sports received a promissory note in the principal amount of $1,875,000 (the
“Note”), which bears interest at a rate of 5% per annum;

 

WHEREAS, the Note was originally due on March 8, 2016, and is currently in
default due to nonpayment by the Company of the principal of the Note and
interest accrued thereunder;

 

WHEREAS, the Company desires to make a cash payment (the “Interest Payment”) to
MGT Sports for the entirety of the accrued interest due under the Note, which as
of the date hereof is $51,302.74, or $260.42 per day;

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the
“Securities Act”), the Company desires to exchange the Note, and MGT Sports
desires to so exchange the Note, for equity securities in the Company; and

 

WHEREAS, specifically, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 3(a)(9) of the Securities Act, the Company
desires to exchange the Note with MGT Sports, and MGT Sports desires to so
exchange the Note with the Company, as follows:

 

  a) A portion consisting of 824,207.40 of the outstanding principal of the Note
shall be exchanged for 2,747,358 shares (the “Common Shares”) of the common
stock of the Company, par value $0.001 (“Common Stock”);         b) An
additional portion of outstanding principal of the Note, equal to $110,000,
shall be exchanged for 110 shares (the “Preferred Shares”) of a newly created
class of convertible preferred stock of the Company (the “Preferred Class”),
which shall be convertible into shares of the Company’s common stock at a rate
of 3,333 shares of common stock for one share of converted  preferred stock,
such that the Preferred Shares will be convertible into an aggregate of 366,630
shares of the Company’s common stock;         c) Conversions of the Preferred
Shares shall be limited such that any given conversion shall not cause MGT
Sport’s aggregate beneficial ownership of the shares of Common Stock to exceed
9.99% of the Company’s outstanding common stock;         d) The remaining
portion of outstanding principal of the Note, consisting of a remaining
principal amount equal to $940,792.60 (the “Remaining Principal”), shall remain
outstanding and shall continue to bear interest at a rate of 5% per annum and
all the terms thereof shall remain unchanged except that the maturity date shall
be amended hereby to July 31, 2016. The Common Shares, the Preferred
Shares,  and the shares of common stock issuable upon conversion of the
Preferred Shares shall be referred to collectively herein as the “Exchange
Securities”.

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter contained, the Parties agree as follows:

  

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ARTICLE I

THE NOTE EXCHANGE

AND ISSUANCE OF EQUITY SECURITIES

 

1.1 Closing. The closing (the “Closing”) of the transactions contemplated by
this Agreement shall take place upon the full execution of this Agreement.

 

1.2 Exchange. At the Closing:

 

(a) the Company shall make the Interest Payment to MGT Sports in accordance with
the wire instructions attached hereto as Exhibit A;

 

(b) the Company shall cause its transfer agent to issue the Common Shares to MGT
Sports;

 

(c) the Company shall issue the Preferred Shares to MGT Sports, immediately
subsequent to any filing of the Certificate of Designations for the newly
created Preferred Class as may be required by the Secretary of State of
Delaware, but no later than March 30, 2016;

 

(c) the Company shall cause its transfer agent to reserve such number of shares
of common stock as may be issuable to MGT Sports upon conversion of the
Preferred Shares;

 

(d) MGT Sports shall issue a letter to the Company confirming the remaining
outstanding principal amount of the Note (collectively, the “Note Exchange
Transactions”).

 

1.3 No Consideration. The Exchange Securities shall be issued to MGT Sports
solely in exchange for the cancellation of a portion of the Note, and MGT Sports
shall not pay or be required to pay any additional consideration to the Company
in order to effectuate the issuance of such shares;

 

1.4 Delivery. The Note Exchange Transactions shall be completed as soon as
practicable following the Closing Date. As of the Closing Date, the Note shall
be null and void and any and all rights arising thereunder shall be
extinguished.

 

1.5 Waiver. Upon execution of this Agreement, any and all Events of Default
under the Note (“Events of Default”), and remedies arising out of Events of
Default, each as set forth in the Note, occurring prior to this Agreement, shall
be deemed waived without further recourse by MGT Sports and Parent. Upon
completion of the Note Exchange Transactions, MGT and Parent shall release and
discharge the Company from all actions, causes of action, amounts due, owing or
accruing, promises and claims whatsoever, in law, arising from or related to the
Note, except to the extent of the Remaining Principal and interest thereon as
contemplated thereby.

 

1.6 Amendment of the Note. The Note shall be amended hereby to change the
maturity date of the Note to July 31, 2016.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES

OF THE COMPANY

 

2.1 Authorization and Binding Obligation. The Company has the requisite power
and authority to enter into and perform its obligations under this Agreement and
to complete the Note Exchange Transactions, including the issuance of the Common
Shares and the Preferred Shares, in accordance with the terms hereof. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby, including,
without limitation, the issuance of the Exchange Securities and the reservation
for issuance of shares of the Company’s common stock issuable upon conversion of
the Preferred Shares, have been duly authorized by the Company’s Board of
Directors and no further filing, consent, or authorization is required by the
Company, its Board of Directors or its stockholders. This Agreement has been
duly executed and delivered by the Company, and constitutes the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies and except as rights to indemnification and to contribution may be
limited by federal or state securities laws.

 

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2.2 No Conflict. The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the Note Exchange
Transactions contemplated will not (i) result in a violation of the Certificate
of Incorporation, as amended, or other organizational document of the Company or
any of its subsidiaries, any capital stock of the Company or any of its
subsidiaries or bylaws of the Company or any of its subsidiaries, (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its subsidiaries is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including foreign, federal and state securities laws and applicable to the
Company or any of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries is bound or affected except, in the case of
clause (ii) or (iii) above, to the extent such violations that could not
reasonably be expected to have a material adviser effect on the Company or its
subsidiaries.

 

2.3 Securities Law Exemptions. Assuming the accuracy of the representations and
warranties of MGT Sports contained herein, the offer and issuance by the Company
of the Exchange Securities is exempt from registration pursuant to the exemption
provided by Section 3(a)(9) of the Securities Act.

 

2.4 Issuance of Securities. The issuance of the Common Shares and the Preferred
Shares is duly authorized and upon issuance in accordance with the terms of this
Agreement, the Common Shares and the Preferred Shares shall be validly issued,
fully paid and non-assessable and free from all taxes, liens, charges and other
encumbrances with respect to the issuance thereof and shall not be subject to
any preemptive, participation, rights of first refusal and other similar rights.
Upon conversion of the Preferred Shares in accordance with the terms thereof,
and subject to the 9.99% maximum ownership limitation, the common stock issuable
upon such exercise, when issued, will be validly issued, fully paid and
non-assessable and free from all preemptive or similar rights, taxes, liens,
charges and other encumbrances with respect to the issue thereof, and MGT Sports
shall be entitled to all rights accorded to a holder of such shares of common
stock.

 

2.5 Transfer Taxes. On the Closing Date, all share transfer or other taxes
(other than income or similar taxes) which are required to be paid in connection
with the issuance of the Exchange Securities will be, or will have been, fully
paid or provided for by the Company, and all laws imposing such taxes will be or
will have been complied with.

 

2.6 Disclosure. The Company confirms that neither it nor any other person acting
on its behalf has provided MGT Sports or its agents or counsel with any
information that constitutes or could reasonably be expected to constitute
material, non-public information concerning the Company or any of its
subsidiaries, other than the existence of the transactions contemplated by this
Agreement. The Company understands and confirms that MGT Sports may rely on the
foregoing representations in effecting transactions in securities of the
Company.

 

2.7 No Integrated Offering. Except as set forth on Schedule 2.7, the Company has
not sold or issued, nor will sell or issue any securities that would be
integrated with the offering of the Exchange Securities contemplated by this
Agreement pursuant to the Securities Act and the rules and regulations or the
interpretations thereunder of the Securities and Exchange Commission. Other than
as disclosed on Schedule 2.7 hereto, the Company will not make, directly or
indirectly, any offers or sales of any security under circumstances that would
require the transactions contemplated by this Agreement to be approved by the
Company’s shareholders under applicable shareholder approval provisions,
including, without limitation, under the rules and regulations of any exchange
or automated quotation system on which any of the securities of the Company are
listed or designated.

 

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2.8 SEC Reports; Financial Statements.

 

(a) The Company has filed all registration statements, prospectuses, forms,
reports, definitive proxy statements, schedules and other documents and filings
required to be filed by it under the Securities Act or the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), as the case may be (the “SEC
Reports”), since January 1, 2015; provided that the Company’s Form 10-Q for the
quarter ended December 31, 2015 was filed late. None of the Company’s
subsidiaries is required to file periodic reports with the Securities and
Exchange Commission pursuant to the Exchange Act. Each SEC Report (i) as of the
time it was filed (or if subsequently amended, when amended), complied in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, except with regard to timeliness, and (ii) did not, at
the time it was filed (or if subsequently amended or superseded by an SEC
Report, then, on the date of such subsequent filing), contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading.

 

(b) The Company’s consolidated financial statements (including, in each case,
any notes thereto) contained in the Form 10-K for the fiscal year ended June 30,
2015 (the “Company Consolidated Financial Statements”) were prepared in
accordance with generally accepted accounting principles as in effect in the
United States of America (“GAAP”), applied on a consistent basis throughout the
periods indicated (except as may be indicated in the notes thereto or as may
have been required by regulatory accounting principles applicable to the Company
or the Bank) or, in the case of interim consolidated financial statements, where
information and footnotes contained in such financial statements are not
required to be in compliance with GAAP), and in each case such Company
Consolidated Financial Statements fairly presented, in all material respects,
the consolidated financial position, results of operations, cash flows and
shareholders equity of the Company and its consolidated subsidiaries as of the
respective dates thereof and for the respective periods covered thereby
(subject, in the case of unaudited financial statements, to normal year-end
adjustments which were not and which are not expected to be, individually or in
the aggregate, material to the Company and its consolidated subsidiaries taken
as a whole).

 

(c) Except as set forth in the Company’s filings with the SEC, including without
limitation, the risk factors contained therein, and except as and to the extent
set forth on the consolidated balance sheet of the Company as of June 30, 2015
(the “Company 2015 Balance Sheet”), between June 30, 2015 and the date hereof
neither the Company nor any of its consolidated subsidiaries has incurred any
debts, liabilities or obligations (whether accrued, absolute, contingent,
liquidated or otherwise, whether due or to become due) of a nature that would be
required to be reflected on a balance sheet or in notes thereto prepared in
accordance with GAAP consistently applied, except for liabilities or obligations
(i) that, in the aggregate, are adequately provided for in the Company 2015
Balance Sheet, or (ii) incurred in the ordinary course of business between June
30, 2015 and the date hereof that would not, individually or in the aggregate,
have any material adverse effect on (x) the business, financial condition,
results of operations or assets of the Company and its subsidiaries taken as a
whole, or (y) the ability of the Company to consummate the transactions
contemplated by this Agreement.

 

2.9 Exchange Act Registration, NASDAQ.

 

(a) The Common Stock is registered pursuant to Section 12(b) of the Exchange Act
and is listed on the NASDAQ Capital Market, and other than as disclosed on
Schedule 2.9 hereto, the Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the Common Stock under the
Exchange Act or delisting the Common Stock from the NASDAQ Capital Market, nor
has the Company received any notification that the Securities and Exchange
Commission or the NASDAQ Capital Market is contemplating terminating such
registration or listing.

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

OF MGT SPORTS

 

As a material inducement to the Company to enter into this Agreement and
consummate the exchange, MGT Sports represents, warrants and covenants with and
to the Company as follows:

 

3.1 Authorization and Binding Obligation. MGT Sports and Parent, each have the
requisite legal capacity, power and authority to enter into, and perform under,
this Agreement. MGT Sports has the requisite legal capacity, power and authority
to purchase the Exchange Securities. Each of the execution, delivery and
performance of this Agreement by MGT Sports and Parent, and the consummation by
MGT Sports of the Note Exchange Transactions, have been duly authorized by all
requisite corporate action on the part of MGT Sports and Parent, as applicable,
and no further consent or authorization is required. This Agreement has been
duly authorized, executed and delivered by MGT Sports and Parent, and
constitutes the legal, valid and binding obligations of MGT Sports and Parent,
enforceable against MGT Sports and Parent in accordance with its terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies and except as rights to indemnification and to
contribution may be limited by federal or state securities laws.

 

3.2 Beneficial Owner. With respect to the Note, (i) MGT Sports owns,
beneficially and of record, good and marketable title to the Note, free and
clear of any taxes or encumbrances; (ii) the Note is not registered under the
Securities Act and, therefore, cannot be resold unless registered under the
Securities Act or in a transaction exempt from or not subject to the
registration requirements of the Securities Act; (iii) MGT Sports has not
entered into any agreement or understanding with any person or entity to dispose
of the any portion of the Note; and (iv) at the Closing, MGT Sports will convey
to the Company good and marketable title to the Note in its entirety, free and
clear of any security interests, liens, adverse claims, taxes or encumbrances.

 

3.3 Accredited Investor. MGT Sports is an accredited investor as defined in Rule
501(a) of Regulation D, as amended, under the Securities Act, and MGT Sports was
not organized for the specific purpose of acquiring the Exchange Securities.

 

3.4 Experience of Investor. MGT Sports, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Exchange Securities, and has evaluated the
merits and risks of such investment. MGT Sports is able to bear the economic
risk of an investment in such securities and, at the present time, is able to
afford a complete loss of such investment.

 

3.4 Purchase Entirely for Own Account. The Exchange Securities will be acquired
for the MGT Sports’s own account, not as nominee or agent, and not with a view
to the resale or distribution of any part thereof in violation of the Securities
Act, and MGT Sports has no present intention of selling, granting any
participation in, or otherwise distributing the same in violation of the
Securities Act without prejudice, however, to such MGT Sports’s right at all
times to sell or otherwise dispose of all or any part of such Securities in
compliance with applicable federal and state securities laws. Nothing contained
herein shall be deemed a representation or warranty by MGT Sports to hold the
Exchange Securities for any period of time. MGT Sports is not a broker-dealer or
agent of a broker-dealer required to be registered with the Securities and
Exchange Commission under Section 15 of the Securities Exchange Act of 1934 (the
“Exchange Act”), nor an entity or individual engaged in a business that would
require it to be so registered.

 

3.5 Disclosure of Information. MGT Sports has access to and has reviewed the
Company’s filings with the Securities and Exchange Commission, at WWW.SEC.GOV,
including the “Risk Factors” contained therein. MGT Sports has had the
opportunity to ask questions of and receive answers from the Company regarding
the Company, its business and the terms and conditions of the offering of the
Exchange Securities. Neither such inquiries nor any other due diligence
investigation conducted by MGT Sports shall modify, amend or affect MGT Sports’s
right to rely on the Company’s representations and warranties contained in this
Agreement.

 

3.6 Restricted Securities. MGT Sports understands that the Exchange Securities
are characterized as “restricted securities” as that term is defined under Rule
144 of the Securities Act, and have not been registered under the Securities Act
or any applicable state securities law, and may not be resold without
registration under the Securities Act or the existence of an exemption
therefrom. MGT Sports represents that it is familiar with Rule 144 promulgated
under the Securities Act, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act. MGT Sports agrees and
acknowledges that, in connection with the transfer of any portion of, or all of,
such securities, the Company may require MGT Sports to provide the Company an
opinion of counsel selected by MGT Sports and reasonably acceptable to the
Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Exchange Securities under the Securities Act.
As a condition of transfer, any such transferee shall agree in writing to be
bound by the terms of this Agreement and shall have the rights of an investor
under this Agreement.

 

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3.7 Legends. MGT Sports agrees to the imprinting, so long as is required by this
Section 4.1, of a legend on any of the Exchange Securities, or certificates
evidencing such securities, in the following form:

 

THIS SECURITY NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.

 

MGT Sports agrees also to the imprinting of any legend required by the “blue
sky” laws of any state to the extent such laws are applicable to the securities
to be so legended. Certificates evidencing such securities shall not contain any
legend (including the legend set forth in this Section 3.7 hereof): (i) while a
registration securities pursuant to Rule 144, or (iii) if such legend is not
otherwise required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of
the Commission), as reasonably determined by the Company.

 

3.8 Proceedings. No proceedings relating to the Note are pending or, to the
knowledge of MGT Sports, threatened before any court, arbitrator or
administrative or governmental body that would adversely affect MGT Sports’s
right and ability to surrender and exchange the Note.

 

3.9 Tax Consequences. MGT Sports acknowledges that the purchase of Exchange
Securities, may involve tax consequences to MGT Sports, and that the contents of
this Agreement do not contain tax advice. MGT Sports acknowledges that it has
not relied and will not rely upon the Company with respect to any tax
consequences related to the exchange of the Note. MGT Sports assumes full
responsibility for all such consequences and for the preparation and filing of
any tax returns and elections which may or must be filed in connection with such
Note.

 

3.10 Reliance on Exemptions. MGT Sports understands that the securities being
offered and exchanged hereunder are being offered and exchanged in reliance on
specific exemptions from the registration requirements of United States federal
and state securities laws, and that the Company is relying in part upon the
truth and accuracy of, and MGT Sports’s representations, and compliance with,
the representations, warranties, agreements, acknowledgments and understandings
of MGT Sports set forth herein in order to determine the availability of such
exemptions and the eligibility of MGT Sports to acquire the Exchange Securities.

 

ARTICLE IV

COVENANTS AND OTHER AGREEMENTS

 

4.1 Holding Period. For the purposes of Rule 144, the Company acknowledges that
the holding period of the Note may be tacked onto the holding period of the
Exchange Securities, and the Company agrees not to take a position contrary to
this Section 4.1.

 

4.2 Redemption of the Preferred Shares. The Company and MGT Sports agree that
the Company shall have the right, at any time, to redeem the Preferred Shares in
whole or in part, for cash, at an amount equal to 110% of the stated value of
such shares at the time such redemption is requested.

 

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4.3 Expenses. Each Party agrees to pay for its own expenses related to the
research, preparation and review of the transactions contemplated by this
Agreement.

 

4.4 Limitation on Conversion of Preferred Shares. The Company and MGT Sports
agree that the Company shall not issue such number of the shares of Common Stock
issuable upon conversion of Preferred Shares pursuant to this Agreement to the
extent that after giving effect to such Conversion, MGT Sports (together with
MGT Sports’s affiliates) would beneficially own in excess of 9.99% of the Common
Stock outstanding immediately after giving effect to such conversion, based on
information provided by MGT Sports to the Company. MGT Sports acknowledges that
as a result of this restriction, the number of shares that may be issued upon
the conversion may change depending upon changes in the outstanding shares of
Common Stock. Any portion of Preferred Shares not converted due to the above
limitations will remain as Preferred Shares.

 

4.5 Acceptance of MGT Sport’s Counsel’s 144 Opinion. The Company covenants that
it shall give specific authorization to its transfer agent and its legal counsel
that the transfer agent may accept MGT Sports’s legal counsel’s 144 opinion with
regard to sale of the Common Shares or any shares of Common Stock underlying any
of the Equity Securities as long as MGT Sports holds any Equity Securities;
provided that the transfer agent shall be instructed to contact the Company for
approval of all opinions before giving effect to the removal of any restrictive
legends therefrom. The Company shall be allowed two (2) business days to review
an opinion and if no objection is affirmatively raised then the Company’s
approval shall be deemed given.

 

ARTICLE V

CONDITIONS TO COMPANY’S OBLIGATIONS HEREUNDER

 

The obligations of the Company to MGT Sports hereunder are subject to the
satisfaction of each of the following conditions, provided that these conditions
are for the Company’s sole benefit and may be waived by the Company at any time
in its sole discretion by providing the Investor with prior written notice
thereof:

 

5.1 MGT Sports shall have duly executed this Agreement and delivered the same to
the Company.

 

5.2 The representations and warranties of MGT Sports shall be true and correct
in all material respects as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date which shall be true and correct as of such specified
date), and MGT Sports shall each have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by MGT Sports at or prior
to the Closing Date.

 

5.3 No statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction that prohibits the consummation
of any of the transactions contemplated by this Agreement.

 

ARTICLE VI

CONDITIONS TO THE OBLIGATIONS

OF MGT SPORTS HEREUNDER

 

The obligations of MGT Sports hereunder are subject to the satisfaction of each
of the following conditions (except to the extent such condition is expressly
conditional to a specific closing, in which case such condition shall only apply
to such specific closing), provided that these conditions are for the sole
benefit of MGT Sports and may be waived by MGT Sports at any time in its sole
discretion by providing the Company with prior written notice thereof:

 

6.1 The Company shall have duly executed and delivered this Agreement and
provided it to MGT Sports.

 

6.2 Each and every representation and warranty of the Company shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though originally made at that time (except for representations and
warranties that speak as of a specific date, which shall be true and correct as
of such date) and the Company shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required to
be performed, satisfied or complied with by the Company at or prior to the
Closing Date.

 

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6.3 The Company shall have obtained all governmental, regulatory or third party
consents and approvals, if any, necessary for the Note Exchange Transactions,
including but not limited to filing the Certificate of Designations for the
Preferred Class as may be required to be filed with the Secretary of State of
the State of Delaware.

 

6.4 The Company shall have issued an instruction letter to its transfer agent to
issue the Common Shares and the Preferred Shares to MGT Sports.

 

6.5 The Company shall have delivered an irrevocable letter of instruction to its
transfer agent to reserve for issuance to MGT Sports such number of shares of
the Company’s common stock as may be issuable upon conversion of the Preferred
Shares;

 

6.6 No statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction that prohibits the consummation
of any of the transactions contemplated by this Agreement.

 

ARTICLE VI

MISCELLANEOUS

 

7.1 Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City and County of New York, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

 

7.2 Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together will constitute one and the same
Agreement. This Agreement, to the extent delivered by means of a facsimile
machine or electronic mail (any such delivery, an “Electronic Delivery”), shall
be treated in all manner and respects as an original agreement or instrument and
shall be considered to have the same binding legal effect as if it were the
original signed version thereof delivered in person. At the request of any party
hereto, each other party hereto shall re-execute original forms hereof and
deliver them in person to all other parties. No party hereto shall raise the use
of Electronic Delivery to deliver a signature or the fact that any signature or
agreement or instrument was transmitted or communicated through the use of
Electronic Delivery as a defense to the formation of a contract, and each such
party forever waives any such defense, except to the extent such defense related
to lack of authenticity.

 

7.3 Headings. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.

 

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7.4 Severability. If any provision of this Agreement is prohibited by law or
otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or
unenforceable shall be deemed amended to apply to the broadest extent that it
would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this
Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter
hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties.
The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of
which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).

 

7.5 Entire Agreement; Amendments. This Agreement supersedes all other prior oral
or written agreements between the Investor, the Company, their affiliates and
persons acting on their behalf with respect to the matters discussed herein, and
this Agreement, contains the entire understanding of the Parties with respect to
the matters covered herein and, except as specifically set forth herein, neither
the Company nor the Investor makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
amended other than by an instrument in writing signed by the Parties, and any
amendment to this Agreement made in conformity with the provisions of this
Section shall be binding upon the Parties. No provision hereof may be waived
other than by an instrument in writing signed by the Party against whom
enforcement is sought.

 

7.6 Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one business day after deposit with an overnight
courier service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:

 

  If to the Company: DraftDay Fantasy Sports, Inc.     902 Broadway, 11th Floor
    New York, NY 1010     Telephone: 212.231.0092     Attention: General Counsel
    Email: tom@wetpaint.com         If to the Investor: MGT Sports, Inc.     500
Mamaroneck Avenue, Suite 320     Harrison, NY 10528     ATTN: Robert B. Ladd,
President and CEO     Phone: (914)630-7430     Email: rladd@mgtci.com        
With a copy to:            Sichenzia Ross Friedman Ference LLP     61 Broadway,
32nd Floor     New York, New York 10006     Telephone: (212) 930-9700     Email:
jkaplowitz@srrff.com     Attention: Jay Kaplowitz, Esq.

 

to its address and email address set forth above, or to such other address
and/or email address and/or to the attention of such other person as the
recipient party has specified by written notice given to each other Party five
(5) days prior to the effectiveness of such change. Written confirmation of
receipt (A) given by the recipient of such notice, consent, waiver or other
communication, (B) electronically generated by the sender’s email program
containing the time, date, recipient email address and copy of the message or
(C) provided by an overnight courier service shall be rebuttable evidence of
personal service, receipt by email or receipt from an overnight courier service
in accordance with clause (i), (ii) or (iii) above, respectively.

 

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7.8 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors and assigns. The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of MGT Sports. MGT Sports may assign some or
all of its rights hereunder without the consent of the Company, except as may be
inconsistent with the terms of this Agreement.

 

7.9 Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party. No specific
representation or warranty shall limit the generality or applicability of a more
general representation or warranty.

 

[signature page follows]

 

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IN WITNESS WHEREOF, the Investor and the Company have caused their respective
signature pages to this Agreement to be duly executed as of the date first
written above.

 

  COMPANY:       DRAFTDAY FANTASY SPORTS, INC.       By: /s/ Tom McLean   Name:
Tom McLean    Title: General Counsel       MGT SPORTS, INC.       By: /s/ Robert
Ladd   Name: Robert Ladd   Title: President and Chief Executive Officer        
PARENT:           MGT CAPITAL INVESTMENTS, INC.       By: /s/ Robert Ladd  
Name: Robert Ladd   Title: President and Chief Executive Officer

 

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