NOTE EXCHANGE AGREEMENT

THIS NOTE EXCHANGE AGREEMENT (this “Agreement”) is dated August [__], 2016, by
and between FUNCTION(X) INC., a Delaware corporation, (the “Company”), Sillerman
Investment Company III, LLC, a Delaware limited liability company (“SIC III”) ,
Sillerman Investment Company IV, LLC, a Delaware limited liability company (“SIC
IV”) and Sillerman Investment Company VI, LLC, a Delaware limited liability
company (“SIC VI,” and collectively with the Company, SIC III and SIC IV, the
“Parties”).
    
WHEREAS:
WHEREAS, on October 24, 2014, the Company filed a Certificate of Designations of
its Series C Preferred Stock; and
WHEREAS, on August [__], 2016, the Company amended such Certificate of
Designations; and
WHEREAS, the Company has approved (through unanimous consent of the independent
members of its Board of Directors as a result of the transactions contemplated
herein being a transaction with affiliates of the Chairman and Chief Executive
Officer of the Company, Robert F.X. Sillerman, who is a principal of SIC III,
SIC IV, and SIC VI) this Agreement in furtherance of the Company’s plan to (a)
remain listed on the Nasdaq Global Market, and (b) upon consummation, improve
its balance sheet and capital structure; and
WHEREAS, the Parties executed an exchange agreement dated as of July 8, 2016, as
amended by that certain First Amendment to Exchange Agreement (collectively, the
“Exchange Agreement”) obligating the Parties to, among other things, convert in
an exchange transaction the Notes (as defined in the Exchange Agreement) and
Series C Preferred Stock into shares of the Company’s common stock in accordance
with the terms thereof; and
WHEREAS, the Parties desire to exchange the Notes, to the extent of outstanding
indebtedness as of the date hereof, for Series C Preferred Stock, subject to the
obligations and provisions of the Exchange Agreement, the Subordination
Agreement (the “Subordination Agreement”) dated July 8, 2016 between SIC III,
SIC VI, SIC IV, Rant, Inc., Dominion Capital, LLC, L1 Capital Global
Opportunities Master Fund, Puritan Partners, LLC, Pinz Capital International,
Union Capital, LLC, and Adar Bays LLC, which is hereby reaffirmed, and the
Lock-Up Agreement (the “Lock-Up Agreement”) dated July 12, 2016 between Mitchell
J. Nelson, Robert F.X. Sillerman, , Dominion Capital, LLC, L1 Capital Global
Opportunities Master Fund, Puritan Partners, LLC, Pinz Capital International,
Union Capital, LLC, and Adar Bays LLC, which is hereby reaffirmed.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter contained, the Parties agree as follows:
ARTICLE I
THE EXCHANGE
AND ISSUANCE OF EQUITY SECURITIES

1.1     Exchange. The following shall occur at the Closing:
a)All of the outstanding principal and interest of the Notes (except for the
Remaining Amount (as defined below) shall be exchanged for shares of the
Company’s Series C Preferred Stock at a rate of $1,000 per share, which, based
on the outstanding principal balance and accrued interest as of August [__],
2016, will result in the issuance of [___________] shares of Series C Preferred
Stock. For purposes hereof, the “Remaining Amount”) shall mean $900,000 in
principal amount held by SIV IV pursuant to that Line of Credit Grid Promissory
Note dated as of June 11, 2015.
b)The Company shall issue the applicable number of shares of Series C Preferred
Stock to each of SIC III, SIC IV, and SIC VI in proportion to the amounts that
each is exchanging.

c)Each of SIC III, SIC IV, and SIC VI shall issue a letter to the Company
confirming there is no remaining outstanding principal amount due to it under
the Note(s), except that the letter issued by SIC IV will reflect that the
Remaining Amount shall remain outstanding.
1.2    Closing. The closing (the “Closing”) of the transactions contemplated by
this Agreement shall take place simultaneously with the signing of this
Agreement.
1.3    Delivery. The transactions contemplated by this Agreement shall be
completed at the Closing.
a)Each of SIC III, SIC IV, and SIC VI shall deliver original Notes to the
Company, with appropriate transfer documentation as may be reasonably required
by the Company; and

b)The Company shall issue the shares of Series C Preferred Stock to the
applicable Party.
1.4    The indebtedness ($__________________) evidenced by the Notes is hereby
exchanged for [______] shares of the Series C Preferred Stock. The Parties
hereto agree to perform the obligations under the Exchange Agreement as if the
Series C Preferred Stock issued pursuant to this Agreement has been substituted
in lieu of the Notes for which it was issued.
1.5    Subordination/Lock-Up Agreements. Each Party acknowledges and agrees that
the Series C Preferred Stock issued by the Company pursuant to this Note
Exchange Agreement is expressly held subject to and in accordance with the
provisions of the Subordination Agreement and the Lock-Up Agreement. SIC IV also
acknowledges that the Remaining Amount remains subject to the provisions of the
Subordination Agreement as well.
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 transactions described herein, including the
issuance of the shares of Series C Preferred Stock, 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 shares of Series C Preferred
Stock, have been duly authorized by the Company's Board of Directors and upon
satisfaction of the closing conditions, 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.
2.2     No Conflict. The execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated herein will not (a) 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, (b) 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 (c)
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 each of SIC III, SIC IV, and SIC VI contained herein, the
offer and issuance by the Company of the shares of Series C Preferred Stock 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 shares of Series C Preferred
Stock is duly authorized and upon issuance in accordance with the terms of this
Agreement, the shares of Series C Preferred Stock 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,
and each of SIC III, SIC IV, and SIC VI shall be entitled to all rights accorded
to a holder of such shares of Series C Preferred 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 shares of Series C Preferred Stock 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    Lock-Up. In the event that the underwriters of an underwritten public
offering of Company stock undertaken within ninety (90) days of the closing of
the transactions contemplated herein require each or any of SIC III, SIC IV,
and/or SIC VI to enter into a lock-up agreement in connection with such
offering, then such party or parties shall execute such lock-up agreement as the
underwriters may reasonably require. The shares issued to SIC III, SIC IV, and
SIC VI shall be subject to the lock-up agreements entered into in connection
with the convertible debenture financing to be provided by Dominion Capital LLC.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF SIC III, SIC IV, AND SIC VI

As a material inducement to the Company to enter into this Agreement and
consummate the exchange, each of SIC III, SIC IV, and SIC VI represents,
warrants and covenants with and to the Company as follows:
3.1    Authorization and Binding Obligation. Each of SIC III, SIC IV, and SIC VI
has the requisite legal capacity, power and authority to enter into, and perform
under, this Agreement. Each of SIC III, SIC IV, and SIC VI has the requisite
legal capacity, power and authority to purchase the shares of Series C Preferred
Stock. The execution, delivery and performance of this Agreement by each of SIC
III, SIC IV, and SIC VI, and the consummation by each of SIC III, SIC IV, and
SIC VI of the transactions contemplated herein, have been duly authorized by all
requisite corporate action on the part of each of SIC III, SIC IV, and SIC VI,
as applicable, and no further consent or authorization is required. This
Agreement has been duly authorized, executed and delivered by each of SIC III,
SIC IV, and SIC VI, and constitutes the legal, valid and binding obligations of
each of SIC III, SIC IV, and SIC VI, enforceable against each of SIC III, SIC
IV, and SIC VI 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 each of the Notes owned by it, (a)
each of SIC III, SIC IV, and SIC VI owns, beneficially and of record, good and
marketable title to the Note(s) owned by it, free and clear of any taxes or
encumbrances; (b) none of the Notes are 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; (c) none of SIC III, SIC IV, and SIC VI has entered into any
agreement or understanding with any person or entity to dispose of the any
portion of any of the Notes; and (d) at the Closing, each of SIC III, SIC IV,
and SIC VI will convey to the Company good and marketable title to the Note(s)
owned by it in its entirety, free and clear of any security interests, liens,
adverse claims, taxes or encumbrances.
3.3    Accredited Investor. Each of SIC III, SIC IV, and SIC VI is an accredited
investor as defined in Rule 501(a) of Regulation D, as amended, under the
Securities Act, and none of SIC III, SIC IV, and SIC VI was organized for the
specific purpose of acquiring the shares of Series C Preferred Stock.
3.4    Experience of Investor. Each of SIC III, SIC IV, and SIC VI, 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 shares of Series C Preferred Stock,
and has evaluated the merits and risks of such investment. Each of SIC III, SIC
IV, and SIC VI 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 shares of Series C Preferred Stock
will be acquired for the account of each of SIC III, SIC IV, and SIC VI, 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 neither SIC III, SIC IV, and SIC
VI has any present intention of selling, granting any participation in, or
otherwise distributing the same in violation of the Securities Act without
prejudice, however, to the right of each of SIC III, SIC IV, and SIC VI 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 and in accordance
with the Exchange Agreement. Nothing contained herein shall be deemed a
representation or warranty by any of SIC III, SIC IV, and SIC VI to hold the
shares of Series C Preferred Stock for any period of time. None of SIC III, SIC
IV, and SIC VI is 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. Each of SIC III, SIC IV, and SIC VI 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. Each
of SIC III, SIC IV, and SIC VI 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 shares of Series C Preferred Stock.
Neither such inquiries nor any other due diligence investigation conducted by
each of SIC III, SIC IV, and SIC VI shall modify, amend or affect the right of
each of SIC III, SIC IV, and SIC VI to rely on the Company’s representations and
warranties contained in this Agreement.
3.8    Proceedings. No proceedings relating to any of the Notes are pending or,
to the knowledge of any of SIC III, SIC IV, and SIC VI, threatened before any
court, arbitrator or administrative or governmental body that would adversely
affect the right and ability of SIC III, SIC IV, and/or SIC VI to surrender and
exchange the Note(s) owned by it.
3.9    Tax Consequences. Each of SIC III, SIC IV, and SIC VI acknowledges that
the purchase of the shares of Series C Preferred Stock, may involve tax
consequences to it, and that the contents of this Agreement do not contain tax
advice. Each of SIC III, SIC IV, and SIC VI 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(s). Each of SIC III, SIC IV, and SIC VI 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. Each of SIC III, SIC IV, and SIC VI 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 the representations of each
of SIC III, SIC IV, and SIC VI, and compliance with, the representations,
warranties, agreements, acknowledgments and understandings of each of SIC III,
SIC IV, and SIC VI set forth herein in order to determine the availability of
such exemptions and the eligibility of each of SIC III, SIC IV, and SIC VI to
acquire the shares of Series C Preferred Stock.
3.11    Approval of Transactions. Each of the signatories hereto shall vote any
common or preferred shares owned by it to approve the transactions contemplated
hereby as required at a meeting called for such purpose or by written consent in
lieu of a meeting.
ARTICLE IV
CONDITIONS TO THE OBLIGATIONS
OF THE PARTIES HEREUNDER

The obligations of the Company and each of SIC III, SIC IV, and SIC VI hereunder
are subject to the satisfaction of each of the following conditions, provided
that these conditions may be waived only with the consent of all applicable
Parties.
4.1    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.
4.2     The Company shall have obtained all governmental, regulatory or third
party consents and approvals, if any, necessary for the consummation of the
transactions contemplated herein. 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.
4.3    The Company shall not have filed for or be the subject of a filing for
bankruptcy, reorganization or assignment for the benefit of creditors or similar
relief in any Federal or state proceeding.
ARTICLE V
TERMINATION

5.1    Expenses. Each Party agrees to pay for its own expenses related to the
research, preparation and review of the transactions contemplated by this
Agreement.
5.2    Cooperation. The Parties shall cooperate with each other in connection
with taking such actions as may be reasonably necessary to consummate the
transactions contemplated herein, including without limitation obtaining the
consent of Nasdaq and any governmental or market regulatory agencies as may be
appropriate.

5.3     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.
5.4     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.
5.5     Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
5.6    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).
5.7     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. Notwithstanding the provisions of this
Section 5.7, this Agreement shall be subject to the obligations to comply with
that certain Exchange Agreement dated July 8, 2016 between the parties, as it
may be amended.
5.8    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: (a) upon receipt, when delivered
personally; (b) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (c) 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:    Function(X) Inc.
902 Broadway, 11th Floor
New York, NY 1010
Telephone: 212.231.0092  
Attention: Mitchell J. Nelson, Esq.
Email: mitchell@functionxinc.com

If to the SIC III, SIC IV, or SIC VI:        Sillerman Investment Company, LLC
902 Broadway, 11th Floor
New York, NY 10010
ATTN: Robert F.X. Sillerman
Email: one@rfxs1.com

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 (i) given by the recipient of such notice, consent, waiver or other
communication, (ii) electronically generated by the sender's email program
containing the time, date, recipient email address and copy of the message or
(iii) 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 (a), (b) or (c) above, respectively.
5.9     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 each of SIC III, SIC IV, and SIC VI. Any of
SIC III, SIC IV, and SIC VI 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.
5.10    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.
Signatures on following page

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:
 
 
 
FUNCTION(X) INC.
 
 
 
By:________________________________
 
Name: Mitchell J. Nelson
 
Title: Executive Vice President
 
 
 
 
 
SILLERMAN INVESTMENT COMPANY
III, INC.
 
 
 
 
 
By: ________________________________
 
Name: Robert F.X. Sillerman
 
Title: Manager
 
 
 
 
 
SILLERMAN INVESTMENT COMPANY
IV, INC.
 
 
 
 
 
By: ________________________________
 
Name: Robert F.X. Sillerman
 
Title: Manager
 
 
 
 
 
 
 
SILLERMAN INVESTMENT COMPANY
VI, INC.
 
 
 
 
 
By: ________________________________
 
Name: Robert F.X. Sillerman
 
Title: Manager
 
 

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