Exhibit 10.1
 
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
$110,000.50, 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 $940,505.10 (the “Remainiung 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 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.

 
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:
 
 
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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.
 
3.5              Purchase Entirely for Own Account.  The Exchange Securities
will be acquired for 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.
 
3.6              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.
 
3.7              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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3.8           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 HAS 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.
 
3.9              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.
 
3.10              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.
 
3.11           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.
 
 
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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.
 
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:
 
 
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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.
 
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;
 
6.4           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.
 
 
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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.
 
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.
 
 
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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.
 
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:________________________________
 
Name:
 
Title:
                 
MGT SPORTS, INC.
         
By: ________________________________
 
Name: Robert Ladd
 
Title: President and Chief Executive Officer
         
 
 
PARENT:
 
MGT CAPITAL INVESTMENTS, INC.
 
 
By: ________________________________
Name: Robert Ladd
Title: President and Chief Executive Officer
               

 
 
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EXHIBIT A
 
Wiring Instructions:
 
CitiBank
 
ABA# 021 000 089
 

 
Account #
 
499 869 9668
 
MGT Sports, Inc.
 

 
 
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SCHEDULE 2.7
 
On September 8, 2015, the Company entered into a promissory note with Kuusamo
Capital Ltd.  The Company intends to enter into a similar exchange agreement
with Kuusamo Capital pursuant to which a portion of such note may be satisfied
through the issuance of stock.  That stock, if issued, could be integrated with
the issuance of stock hereunder.
 

 
 
 
 

 
 
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SCHEDULE 2.9
 
The SEC opened a formal order of investigation relating to a matter regarding
certain dealings in our securities by an unaffiliated third party. We have also
received an informal request from the staff of the SEC, dated June 11, 2012, for
the voluntary production of documents and information concerning certain aspects
of our business and technology. We initially provided documents in response to
such request on July 2, 2012, and we have provided supplements and documents for
additional questions, as requested. We intend to cooperate with the SEC
regarding this matter and any other requests we may receive. However, there is
no assurance that the SEC will not take any action against us. A determination
by the SEC to take action against us could be costly and time consuming, could
divert the efforts and attention of our directors, officers and employees from
the operation of our business and could result in sanctions against us, any or
all of which could have a material adverse effect on our business and operating
results.

Our common stock has traded on the NASDAQ Capital Market under the symbol DDAY.
NASDAQ recently informed us that we have failed to comply with certain of
NASDAQ's continuing listing criteria, and that our stock will be delisted.  We
received two different de-listing notices.  One was regarding our failure to
maintain a price of at least $1.00, and one was relating to a failure to
maintain at least $2.5 million in stockholders equity.

With respect to the latter notice, we replied to Nasdaq with a plan for getting
back into compliance, and Nasdaq rejected that plan.  We have appealed the
decision, and we have a hearing scheduled with Nasdaq for the appeal. If our
appeal is unsuccessful, our stock will be delisted. Delisting will impair the
liquidity of our securities not only in the number of shares that could be
bought and sold at a given price, which may be depressed by the relative
illiquidity, but also through delays in the timing of transactions. As a result,
an investor may find it more difficult to dispose of shares of our common stock.
We believe that current and prospective investors will view an investment in our
common stock less favorably after it is delisted from NASDAQ. This failure to
meet the continuing NASDAQ listing requirements will likely have an adverse
impact on the value of and trading activity in our common stock.
 
 
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