Exhibit 10.1

 
FORBEARANCE AGREEMENT
 

This Forbearance Agreement (the “Agreement”) is made and entered into as of July
31, 2015 (the “Effective Date”) by and between Viggle Inc. (“Viggle”) and
AmossyKlein Family Holdings, LLLP (“AmossyKlein”), in its capacity as agent and
attorney in fact for all of the former stockholders and note holders of Choose
Digital Inc. (“Choose Digital,” or the “Company”) who did not dissent from the
merger transaction described below (collectively, the “Stockholders”). Viggle
and AmossyKlein are collectively referred to herein as the “Parties.”
 
RECITALS
 

 
WHEREAS, on June 24, 2014, Viggle, Viggle Merger Sub III Inc., Choose Digital,
certain “Seller Parties” affiliated with Choose Digital, and AmossyKlein (in its
capacity as Stockholders’ agent) entered into an Agreement and Plan of Merger
(the “Merger Agreement”), pursuant to which Viggle agreed to purchase and
acquire all of the Company’s capital stock from the Stockholders.
 
WHEREAS, pursuant to Section 10.1 of the Merger Agreement, the Stockholders
appointed AmossyKlein as their agent and attorney in fact for purposes of, among
other things, taking any actions AmossyKlein deemed necessary or appropriate to
carry out the intent of the Merger Agreement.
 
WHEREAS, on June 24, 2014 (the “Closing Date”), the merger transaction
contemplated by the Merger Agreement (the “Merger”) closed.
 
WHEREAS, Section 1.8 of the Merger Agreement imposed an “irrevocable and
unconditional” obligation on Viggle to make a “Top-Up Payment” to the Company’s
Stockholders (in cash) within five business days of the first anniversary of the
Closing Date (the “Top-Up Payment Date”).
 
WHEREAS, the amount of the “Top-Up Payment” was to be determined using a formula
described in Annex I to the Merger Agreement (the “Top-Up Formula”).
 
WHEREAS, the “Top-Up Payment” was to be paid to the Stockholders on a pro rata
basis according to the percentage of ownership ascribed to each Stockholder in
the “Allocation Spreadsheet” delivered by the Company to Viggle on the Closing
Date.
 
WHEREAS, according to the Top-Up Formula, Viggle owed the Stockholders a total
of $4,791,673.94 on the Top-Up Payment Date (the “Top Up Payment Amount”).

WHEREAS, Viggle failed to make the “Top Up Payment” to the Stockholders on the
Top-Up Payment Date, and thereby breached its “irrevocable and unconditional”
obligation under Section 1.8 of the Merger Agreement; and
 
WHEREAS, Viggle has requested that AmossyKlein forbear from immediately
commencing litigation to recover the Top Up Payment Amount, so that Viggle can
pay the Top Up Payment Amount in a series of installment payments.
 
NOW, THEREFORE, in consideration of the recitals set forth above and promises
made herein, the receipt and sufficiency of which is hereby acknowledged, the
Parties hereto agree as follows:
 
 
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1. Viggle unconditionally and irrevocable agrees to make the following payments
(the “Installment Payments”) to the Stockholders on the schedule set forth
below. The principal amounts of the Installment Payments add up to the Top Up
Payment Amount. The Installment Payments also include 9% interest on the
outstanding balance of the Top Up Payment Amount from the Top Up Payment Date
until January 29, 2016, as well as the attorneys’ fees AmossyKlein has incurred
(as of the date hereof) in connection with seeking collection of the Top Up
Payment Amount. Such amounts will be wired to AmossyKlein, who agrees to further
distribute such amounts to the Stockholders in accordance with their percentage
interests as set forth in the Merger Agreement.
 
·  
July 31, 2015 -- $550,000.00 + $35,445.26 + $83,000.00 = $668,445.26;

 
·  
August 31, 2015 -- $500,000.00 + $32,422.66 = $532,422.66;

 
·  
September 30, 2015 -- $500,000.00 + $27,678.14 = $527,678.14;

 
·  
October 30, 2015 -- $500,000.00 + $23,979.51 = $523,979.51;

 
·  
November 30, 2015 -- $500,000.00 + $20,956.90 = $520,956.90;

 
·  
December 31, 2015 -- $500,000.00 + $17,134.99 = $517,134.99; and

 
·  
January 29, 2016 -- $1,741,673.94 + $12,454.16 = $1,754,128.10.

 
2. In addition to making the Installment Payments on the schedule provided
above, Viggle will also execute and deliver to AmossyKlein, no later than the
Effective Date, an Affidavit of Confession of Judgment in a form attached
hereto, which confesses judgment and authorizes entry of judgment against Viggle
as set forth therein. Viggle’s Affidavit of Confession of Judgment will be held
in escrow by counsel for AmossyKlein pending payment by Viggle of the
Installment Payments on the schedule set forth above. The Affidavit of
Confession of Judgment will only be released from escrow, filed and executed
upon if Viggle fails to make an Installment Payment on the schedule set forth
above.
 
3. AmossyKlein, in its individual capacity and in its capacity as Stockholders’
Agent, agrees that it will not commence litigation or seek entry of judgment
against Viggle related to the Top Up Payment for so long as the Installment
Payments are made on the schedule set forth above. However, the Parties agree
that AmossyKlein may file Viggle’s Affidavit of Confession of Judgment in the
Supreme Court of the State of New York, New York County, and seek to enter and
enforce judgment against Viggle immediately following any failure by Viggle to
make an Installment Payment on the schedule set forth above.
 
4. Viggle further agrees that if any of the Installment Payments are not made as
set forth in Paragraph 1 above: (i) it will not take any action to interfere
with, hinder or enjoin AmossyKlein’s efforts to enter or enforce the judgment
contemplated by this Agreement; and
 
(ii) to the extent that the Clerk of the Court initially rejects Viggle’s
Affidavit of Confession of Judgment, Viggle will cooperate with AmossyKlein to
modify the Affidavit of Confession of Judgment so that it can be entered and
enforced.
 
5. Viggle agrees that upon execution of this Agreement, and regardless of
whether it satisfies its obligations under Paragraph 1 of this Agreement, Viggle
and all of its officers, directors, employees, agents and affiliates (including
but not limited to any predecessors, successors, assigns, parent corporations,
subsidiaries or divisions) shall release and discharge AmossyKlein, the
Stockholders, all of their affiliates (including but not limited to any
predecessors, successors, assigns, parent corporations, subsidiaries and
divisions) and each of their officers, directors, partners, employees and agents
from any and all claims, demands, suits, actions, causes of action, debts,
costs, fees (including attorneys’ fees), damages and liabilities of any kind or
nature, whether in law, equity or otherwise, that they may have that relate
(either directly or indirectly) to the Merger Agreement and/or the
transaction(s) contemplated thereby.
 
6. AmossyKlein agrees that upon execution of this Agreement, AmossyKlein shall,
in its individual capacity and in its capacity as Stockholders’ Agent for the
non-dissenting former shareholders and note holders of Choose Digital, release
and discharge Viggle and all of its affiliates (including but not limited to any
predecessors, successors, assigns, parent corporations, subsidiaries and
divisions) and each of their officers, directors, partners, employees and agents
from any and all claims, demands, suits actions, causes of action, debts, costs,
fees (including attorney’s fees), damages and liabilities of any kind or nature,
whether in law, equity or otherwise, that it may have that relate (either
directly or indirectly) to the Merger Agreement and/or the transaction(s)
contemplated thereby, provided however, that AmossyKlein expressly reserves, and
does not waive, release or discharge (either on its own behalf or in its
capacity as Stockholders’ Agent), all of the Stockholders’ rights and remedies
under: (i) Section 1.8 of the Merger Agreement (related to the Top Up Payment);
(ii) Sections 1.6(a) and 1.11(a) of the Merger Agreement (related to the few
Stockholders who have not yet exchanged their shares of Company stock for shares
of Viggle stock); and (iii) Sections 1.6(a) and 6 of the Merger Agreement
(related to the portion of the Merger Consideration that was initially held in
escrow). The foregoing proviso shall not be considered an expansion of any
rights set forth in Sections 1.6, 1.11 or 6 of the Merger Agreement, such that
the foregoing proviso shall not entitle AmossyKlein or any of the Stockholders
to receive for a second time any amounts (or correspondence) they have already
received pursuant to those sections. In addition, the foregoing proviso does not
allow AmossyKlein (in its individual capacity or in its capacity as
Stockholders’ Agent) to commence litigation related to the Top Up Payment for so
long as the Installment Payments are made on the schedule set forth above.
 
 
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7. The Parties expressly acknowledge and agree that Viggle’s obligations under
Section 1.8 of the Merger Agreement will not be deemed satisfied or discharged
until Viggle has made each and every one of the Installment Payments on the
schedule set forth above, and that Viggle’s obligations under Sections 1.6(a)
and 6 of the Merger Agreement will not be deemed satisfied or discharged until
the Stockholders have received all of the shares of Viggle stock that were
initially held in escrow under the Merger Agreement.
 
8. This Agreement shall be construed in accordance with, and governed in all
respects by, the laws of the State of New York (without giving effect to
conflicts of laws principles).
 
9. The Parties agree that any legal proceeding relating to this Agreement or the
enforcement of any provision hereof will be brought or otherwise commenced in
any state or federal court located in the Borough of Manhattan in the State of
New York. Each Party to this Agreement: (i) expressly and irrevocably consents
and submits to the exclusive jurisdiction of each state and federal court
located in the Borough of Manhattan in the State of New York (and each appellate
court located in the State of New York) in connection with any such legal
proceeding; (ii) agrees that each state and federal court located in the Borough
of Manhattan in the State of New York shall be deemed to be a convenient forum;
and (iii) agrees not to assert (by way of motion, as a defense or otherwise), in
any such legal proceeding commenced in any state or federal court located in the
Borough of Manhattan in the State of New York, any claim that such party is not
subject personally to the jurisdiction of such court, that such legal proceeding
has been brought in an inconvenient forum, that the venue of such proceeding is
improper or that this Agreement may not be enforced in or by such court.
 
10. Except as explicitly set forth herein, the terms of the Merger Agreement
shall remain in full force and effect.
 
11. This Agreement shall not be modified, altered, amended, or vacated without
the prior written consent of each of the Parties hereto.
 
12. Each person who executes this Agreement on behalf of a Party hereto
represents that he or she is duly authorized to do so.
 
13. This Agreement may be executed in counterparts, each of which when so
executed and delivered shall be an original, but all of which together shall
constitute one and the same document.

 

VIGGLE INC.
 

By:  /s/ John C. Small
Name:  John C. Small
Title: Chief Financial Officer

AMOSSYKLEIN FAMILY HOLDINGS,
LLLP, in its capacity as stockholders’ agent for the non-dissenting stockholders
and note holders of Choose Digital Inc.
 

By: /s/ Yossi Amossy   
Name: Yossi Amossy        
Title:                                                          
 
 
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