SUBSCRIPTION
AGREEMENT


 


This
Subscription Agreement (this “Agreement”) is being delivered to the purchaser identified on the signature page
to this Agreement (the “Subscriber”) in connection with its investment in the securities of Function(x) Inc.,
a Delaware corporation (the “Company”). The Company is conducting a private placement (the “Offering”)
of up to $20,000,000 (the “Maximum Offering Amount”)(subject to increase by the Board of Directors) of shares
of the Company’s Series G Convertible Preferred Stock, par value $0.001 per share (the “Shares”), which
are convertible into shares (the “Conversion Shares”) of the Company’s common stock, par value $0.001
per share (the “Common Stock”), with such rights and designations as set forth in the Company’s Certificate
of Designation of Series G Convertible Preferred Stock (the “Series G Certificate of Designation”). The Shares
will be sold at a purchase price (the “Purchase Price”) per Conversion Share equal to the lower of: (i) $1.05
per share and (ii) on and after June 1, 2017, the Closing Bid Price on the day prior to the Conversion Date in accordance with
NASDAQ Rule 5635 (as defined in the Series G Certificate of Designation). For purposes of this Agreement, the term “Securities”
shall refer to the Shares and the Conversion Shares.


 


IMPORTANT
INVESTOR NOTICES


 


NO
OFFERING LITERATURE OR ADVERTISEMENT IN ANY FORM MAY BE RELIED UPON IN THE OFFERING OF THESE SECURITIES EXCEPT FOR THIS AGREEMENT
AND ANY SUPPLEMENTS HERETO, AND NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY REPRESENTATIONS EXCEPT THOSE CONTAINED HEREIN.


 


UNTIL
SUCH TIME AS A FORM 8-K IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION DISCLOSING THE TRANSACTIONS CONTEMPLATED HEREBY,
THIS AGREEMENT IS CONFIDENTIAL AND THE CONTENTS HEREOF MAY NOT BE REPRODUCED, DISTRIBUTED OR DIVULGED BY OR TO ANY PERSONS OTHER
THAN THE RECIPIENT OR ITS REPRESENTATIVE, ACCOUNTANT OR LEGAL COUNSEL, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY. EACH
PERSON WHO ACCEPTS DELIVERY OF THIS AGREEMENT, ACKNOWLEDGES AND AGREES TO THE FOREGOING RESTRICTIONS.


 


THIS
AGREEMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION OF AN OFFER TO ANY PERSON OR IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION
IS UNLAWFUL OR NOT AUTHORIZED. EACH PERSON WHO ACCEPTS DELIVERY OF THIS AGREEMENT AGREES TO RETURN IT AND ALL RELATED DOCUMENTS
IF SUCH PERSON DOES NOT PURCHASE ANY OF THE SECURITIES DESCRIBED HEREIN.


 


THIS
AGREEMENT DOES NOT PURPORT TO BE ALL-INCLUSIVE OR TO CONTAIN ALL OF THE INFORMATION THAT YOU MAY DESIRE IN EVALUATING THE COMPANY,
OR AN INVESTMENT IN THE OFFERING. THIS AGREEMENT DOES NOT CONTAIN ALL OF THE INFORMATION THAT WOULD NORMALLY APPEAR IN A PROSPECTUS
FOR AN OFFERING REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). YOU MUST CONDUCT
AND RELY ON YOUR OWN EVALUATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED, IN DECIDING
WHETHER TO INVEST IN THE OFFERING.


 


NEITHER
THE DELIVERY OF THIS AGREEMENT AT ANY TIME NOR ANY SALE OF SECURITIES HEREUNDER SHALL IMPLY THAT INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THE COMPANY WILL EXTEND TO EACH PROSPECTIVE SUBSCRIBER (AND TO ITS REPRESENTATIVE,
ACCOUNTANT OR LEGAL COUNSEL, IF ANY) THE OPPORTUNITY, PRIOR TO ITS PURCHASE OF SHARES, TO ASK QUESTIONS OF AND RECEIVE ANSWERS
FROM THE COMPANY CONCERNING THE OFFERING AND TO OBTAIN ADDITIONAL INFORMATION, TO THE EXTENT THE COMPANY POSSESSES THE SAME OR
CAN ACQUIRE IT WITHOUT UNREASONABLE EFFORT OR EXPENSE, IN ORDER TO VERIFY THE ACCURACY OF THE INFORMATION SET FORTH HEREIN. ALL
SUCH ADDITIONAL INFORMATION SHALL ONLY BE PROVIDED IN WRITING AND IDENTIFIED AS SUCH BY THE COMPANY THROUGH ITS DULY AUTHORIZED
OFFICERS AND/OR DIRECTORS ALONE; NO ORAL INFORMATION OR INFORMATION PROVIDED BY ANY BROKER OR THIRD PARTY MAY BE RELIED UPON.


 




    	 	 	 



    	 



    

 


NO
REPRESENTATIONS, WARRANTIES OR ASSURANCES OF ANY KIND ARE MADE OR SHOULD BE INFERRED WITH RESPECT TO THE ECONOMIC RETURN, IF ANY,
THAT MAY ACCRUE TO AN INVESTOR IN THE COMPANY.


 


FOR
RESIDENTS OF ALL STATES


 


THIS
OFFERING IS BEING MADE SOLELY TO “ACCREDITED INVESTORS,” AS SUCH TERM IS DEFINED IN RULE 501 OF REGULATION D UNDER
THE SECURITIES ACT. THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE AND WILL
BE OFFERED AND SOLD IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION AFFORDED BY SECTION 4(a)(2) THEREUNDER AND REGULATION D (RULE
506) OF THE SECURITIES ACT AND CORRESPONDING PROVISIONS OF STATE SECURITIES LAWS.


 


THE
SECURITIES OFFERED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. SUBSCRIBERS
SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.


 


THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, ANY STATE
SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.


 


PROSPECTIVE
SUBSCRIBERS SHOULD NOT CONSTRUE THE CONTENTS OF THIS AGREEMENT AS INVESTMENT, LEGAL, BUSINESS, OR TAX ADVICE. EACH SUBSCRIBER
SHOULD CONTACT HIS, HER OR ITS OWN ADVISORS REGARDING THE APPROPRIATENESS OF THIS INVESTMENT AND THE TAX CONSEQUENCES THEREOF,
WHICH MAY DIFFER DEPENDING ON A SUBSCRIBER’S PARTICULAR FINANCIAL SITUATION. IN NO EVENT SHOULD THIS AGREEMENT BE DEEMED
OR CONSIDERED TO BE TAX ADVICE PROVIDED BY THE COMPANY.


 




    	 	 	 



    	 



    

 


1.
SUBSCRIPTION AND PURCHASE PRICE


 


(a)
Subscription. Subject to the conditions set forth in Section 2 hereof, the Subscriber hereby subscribes for and agrees
to purchase the number of Shares indicated on the signature page hereof on the terms and conditions described herein.


 


(b)
Purchase of Shares. The Subscriber understands and acknowledges that the purchase price to be remitted to the Company in
exchange for the Shares shall be set at $1.05 per Conversion Share ($1,050.00 per Share), for an aggregate purchase price as set
forth on the signature page hereof (the “Aggregate Purchase Price”). The Subscriber’s delivery of this
Agreement to the Company shall be accompanied by payment for the Shares subscribed for hereunder, payable in United States Dollars,
by wire transfer of immediately available funds delivered to the account of the Company, in accordance with instructions delivered
to the Subscriber on or prior to the Closing Date (as defined herein). The Subscriber understands and agrees that, subject to
Section 2 and applicable laws, by executing this Agreement, it is entering into a binding agreement.


 


2.
Acceptance, Offering Term and Closing Procedures


 


(a)
Acceptance. Subject to full, faithful and punctual performance and discharge by the Company of all of its duties, obligations
and responsibilities as set forth in this Agreement, the Series G Certificate of Designation and any other agreement entered into
between the Subscriber and the Company relating to this subscription (collectively, the “Transaction Documents”)
to be performed or discharged on or prior to the Closing in which such Subscriber participates, the Subscriber shall be legally
bound to purchase the Shares pursuant to the terms and conditions set forth in this Agreement. For the avoidance of doubt, upon
the occurrence of the failure by the Company to fully, faithfully and punctually perform and discharge any of its duties, obligations
and responsibilities as set forth in any of the Transaction Documents, which shall have been performed or otherwise discharged
prior to the Closing (as defined below), the Subscriber may, on or prior to the Closing, at its sole and absolute discretion,
elect not to purchase the Shares and provide instructions to the Company to receive the full and immediate refund of the Aggregate
Purchase Price. In the event the Closing does not take place because of (i) the election not to purchase the Shares by the Subscriber
or (ii) the failure to effectuate the Closing (as defined below) on or prior to June 1, 2017 (unless extended in the discretion
of the Board of Directors) for any reason or no reason, this Agreement and any other Transaction Documents shall thereafter be
terminated and have no force or effect, and the parties shall take all steps, including the execution of instructions to the Company,
to ensure that the Aggregate Purchase Price shall promptly be returned or caused to be returned to the Subscriber without interest
thereon or deduction therefrom.


 


(b)
Closing. The closing of the purchase and sale of the Shares hereunder (the “Closing”) shall take place
at such time and place as determined by the Company. The Closing shall take place on a Business Day promptly following the satisfaction
of the conditions set forth in Section 6 below, as determined by the Company (the “Closing Date”). “Business
Day” shall mean from the hours of 9:00 a.m. (Eastern Time) through 5:00 p.m. (Eastern Time) of a day other than a Saturday,
Sunday or other day on which commercial banks in New York, New York are authorized or required to be closed. The Shares purchased
by the Subscriber will be delivered by the Company promptly following the Closing Date. The initial closing shall not be subject
to any minimum purchase, and shall be referred to as the “Initial Closing” and may be held upon receipt and
acceptance of subscriptions prior to June 1, 2017. The date of the Initial Closing is sometimes referred to as the “Initial
Closing Date.” Subsequent closings (each a “Subsequent Closing”) will be held until the earlier to
occur of: (i) the date on which the Maximum Offering Amount has been subscribed for and accepted by the Company, and (ii) June
30, 2017. The Offering may be extended up to July 31, 2017 (the “Final Closing” and such date of the Final
Closing, the “Final Closing Date”), without additional notice to Subscribers. Officers, directors and affiliates
of the Company and the placement agent, if any, may purchase Securities in the Offering.


 


(c)
Following Acceptance or Rejection. The Subscriber acknowledges and agrees that this Agreement and any other documents delivered
in connection herewith will be held by the Company. Prior to the Company’s execution, in the event that this Agreement is
not accepted by the Company for whatever reason, which the Company expressly reserves the right to do, this Agreement, the Aggregate
Purchase Price received (without interest thereon) and any other documents delivered in connection herewith will be returned to
the Subscriber at the address of the Subscriber as set forth in this Agreement. If this Agreement is accepted by the Company,
the Company is entitled to treat the Aggregate Purchase Price received as an interest free loan to the Company until such time
as the Subscription is accepted.


 




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(d)
Extraordinary Events Regarding Common Stock. In the event that the Company shall (i) issue additional shares of Common
Stock as a dividend or other distribution on outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock,
or (iii) combine its outstanding shares of the Common Stock into a smaller number of shares of Common Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Purchase
Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such
event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and
the product so obtained shall thereafter be the Purchase Price then in effect. The Purchase Price, as so adjusted, shall be readjusted
in the same manner upon the happening of any successive event or events described herein. The number of Shares that the Subscriber
shall thereafter be entitled to receive (including number of shares of Conversion Shares the Subscriber may thereafter be entitled
to receive upon conversion of the Preferred Shares) shall be adjusted to a number determined by multiplying the number of shares
of Common Stock that would otherwise (but for the provisions of this Section) be issuable on such conversion or exercise by a
fraction of which (A) the numerator is the Purchase Price that would otherwise (but for the provisions of this Section) be in
effect, and (B) the denominator is the Purchase Price then in effect.


 


(f)
Certificate as to Adjustments. In each case of any adjustment or readjustment in (i) the Shares, (ii) the Preferred Shares,
(iii) the number of Conversion Shares issuable upon conversion of the Preferred Shares and (iv) the conversion price of the Preferred
Shares, the Company, at its expense, will promptly cause its Chief Financial Officer or other appropriate designee to compute
such adjustment or readjustment in accordance with the terms hereof and of the Series G Certificate of Designation, and prepare
a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment
is based. The Company will forthwith mail a copy of each such certificate to the Subscriber. To the extent any such certificate
contains material non-public information, the Company shall, no later than the fourth (4th) Business Day after the
date of delivery of such certificate to the Subscriber, include such material non-public information in a Current Report on Form
8-K filed with the United States Securities and Exchange Commission (the “SEC”). From and after the filing
of such Form 8-K, the Company shall have disclosed all material non-public information (if any) delivered to the Subscriber by
the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with
the transactions described in such certificate.


 


(g)
Issuance Restrictions. If the Company has not obtained the approval of its shareholders, if required in accordance with
NASDAQ Listing Rule 5635(d), then the Company may not issue upon conversion of Shares a number of Conversion Shares, which, when
aggregated with any shares of Common Stock issued pursuant to this Subscription Agreement would exceed 19.99% shares of Common
Stock, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement (such number of shares, the “Issuable Maximum”).
The purchaser shall be entitled to a portion of the Issuable Maximum equal to the quotient obtained by dividing (x) the purchaser’s
original aggregate Share purchase price by (y) the aggregate original aggregate share purchase price of all purchasers in the
Offering. In addition, the purchaser may allocate its pro-rata portion of the Issuable Maximum among Shares held by it in its
sole discretion. Such portion shall be adjusted upward ratably in the event a purchaser no longer holds any Shares and the amount
of shares issued to such purchaser pursuant to its Subscription Agreement was less than such purchaser’s pro-rata share
of the Issuable Maximum. For avoidance of doubt, unless and until any required approval of the shareholders of the issuance of
Shares pursuant to the Subscription Agreement (“Shareholder Approval”) is obtained and effective, Shares shall
be unconvertible in excess of the Issuable Maximum unless and until such Shareholder Approval is obtained and effective. Notwithstanding
anything herein to the contrary, the restrictions of this Section 2(g) shall be inapplicable to any Shares issued at the greater
of the book or market value pursuant to NASDAQ Rule 5635(d). The limitations contained in this paragraph shall apply to a successor
holder of Shares.


 




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3.
THE SUBSCRIBER’s Representations, Warranties AND cOVENANTS


 


Each
Subscriber, severally and not jointly, hereby acknowledges, agrees with and represents, warrants and covenants to the Company,
as follows:


 


(a)
The Subscriber has full power and authority to enter into this Agreement, the execution and delivery of which has been duly authorized,
if applicable, and this Agreement constitutes a valid and legally binding obligation of the Subscriber, except as may be limited
by bankruptcy, reorganization, insolvency, moratorium and similar laws of general application relating to or affecting the enforcement
of rights of creditors, and except as enforceability of the obligations hereunder are subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equity or law).


 


(b)
The Subscriber acknowledges its understanding that the Offering and sale of the Securities is intended to be exempt from registration
under the Securities Act, by virtue of Section 4(a)(2) of the Securities Act and the provisions of Regulation D promulgated thereunder
(“Regulation D”). In furtherance thereof, the Subscriber represents and warrants to the Company and its affiliates
as follows:


 


(i)
The Subscriber realizes that the basis for the exemption from registration may not be available if, notwithstanding the Subscriber’s
representations contained herein, the Subscriber is merely acquiring the Securities for a fixed or determinable period in the
future, or for a market rise, or for sale if the market does not rise. The Subscriber does not have any such intention.


 


(ii)
The Subscriber realizes that the basis for exemption would not be available if the Offering is part of a plan or scheme to evade
registration provisions of the Securities Act or any applicable state or federal securities laws, except sales pursuant to a registration
statement or sales that are exempted under the Securities Act.


 


(iii)
The Subscriber is acquiring the Securities solely for the Subscriber’s own beneficial account, for investment purposes,
and not with a view towards, or resale in connection with, any distribution of the Securities.


 


(iv)
The Subscriber has the financial ability to bear the economic risk of the Subscriber’s investment, has adequate means for
providing for its current needs and contingencies, and has no need for liquidity with respect to an investment in the Company.


 


(v)
The Subscriber and the Subscriber’s attorney, accountant, purchaser representative and/or tax advisor, if any (collectively,
the “Advisors”) has such knowledge and experience in financial and business matters as to be capable of evaluating
the merits and risks of a prospective investment in the Securities. If other than an individual, the Subscriber also represents
it has not been organized solely for the purpose of acquiring the Securities.


 


(vi)
The Subscriber (together with its Advisors, if any) has received all documents requested by the Subscriber, if any, and has carefully
reviewed them and understands the information contained therein, prior to the execution of this Agreement.


 


(c)
The Subscriber is not relying on the Company or any of its employees, agents, sub-agents or advisors with respect to the legal,
tax, economic and related considerations involved in this investment. The Subscriber has relied on the advice of, or has consulted
with, only its Advisors. Each Advisor, if any, has disclosed to the Subscriber in writing (a copy of which is annexed to this
Agreement) the specific details of any and all past, present or future relationships, actual or contemplated, between the Advisor
and the Company or any affiliate or sub-agent thereof.


 


(d)
The Subscriber has carefully considered the potential risks relating to the Company and a purchase of the Securities, and fully
understands that the Securities are a speculative investment that involves a high degree of risk of loss of the Subscriber’s
entire investment. Among other things, the Subscriber has carefully considered each of the risks described under the heading “Risk
Factors” and “Forward Looking Statements” in the Company’s SEC Filings (as defined below) and
any additional disclosures in the nature of Risk Factors described herein.


 




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(e)
The Subscriber will not sell or otherwise transfer any Securities without registration under the Securities Act or an exemption
therefrom, and fully understands and agrees that the Subscriber must bear the economic risk of its purchase because, among other
reasons, the Securities have not been registered under the Securities Act or under the securities laws of any state and, therefore,
cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act
and under the applicable securities laws of such states, or an exemption from such registration is available. In particular, the
Subscriber is aware that the Securities are “restricted securities,” as such term is defined in Rule 144 promulgated
under the Securities Act (“Rule 144”), and they may not be sold pursuant to Rule 144 unless all of the conditions
of Rule 144 are met. The Subscriber also understands that the Company is under no obligation to register the Securities on behalf
of the Subscriber or to assist the Subscriber in complying with any exemption from registration under the Securities Act or applicable
state securities laws. The Subscriber understands that any sales or transfers of the Securities are further restricted by state
securities laws and the provisions of this Agreement.


 


(f)
No oral or written representations or warranties have been made, or information furnished, to the Subscriber or its Advisors,
if any, by the Company or any of its officers, employees, agents, sub-agents, affiliates, advisors or subsidiaries in connection
with the Offering, other than any representations of the Company contained herein, and in subscribing for the Shares the Subscriber
is not relying upon any representations other than those contained herein.


 


(g)
The Subscriber’s overall commitment to investments that are not readily marketable is not disproportionate to the Subscriber’s
net worth, and an investment in the Securities will not cause such overall commitment to become excessive.


 


(h)
The Subscriber understands and agrees that the certificates for the Securities shall bear substantially the following legend:


 


“[NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN][ THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE
OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.”


 


(i)
Certificates evidencing Securities shall not be required to contain the legend set forth in Section 3(h) above or any other legend
(i) while a registration statement covering the resale of such Securities is effective under the Securities Act, (ii) following
any sale of such Securities pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii) if such Securities
are eligible to be sold, assigned or transferred under Rule 144 and the Subscriber is not an affiliate of the Company (provided
that the Subscriber provides the Company with reasonable assurances that such Securities are eligible for sale, assignment or
transfer under Rule 144 which shall not include an opinion of the Subscriber’s counsel), (iv) in connection with a sale,
assignment or other transfer (other than under Rule 144), provided that the Subscriber provides the Company with an opinion of
counsel, in a form generally acceptable to the Company, to the effect that such sale, assignment or transfer of the Securities
may be made without registration under the applicable requirements of the Securities Act or (v) if such legend is not required
under applicable requirements of the Securities Act (including, without limitation, controlling judicial interpretations and pronouncements
issued by the SEC). If a legend is not required pursuant to the foregoing, the Company shall no later than three (3) business
days following the delivery by the Subscriber to the Company or the transfer agent (with notice to the Company) of a legended
certificate representing such Securities (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form
necessary to affect the reissuance and/or transfer, if applicable), together with any other deliveries from the Subscriber as
may be required above in this Section 3(i), as directed by the Subscriber, either: (A) provided that the Company’s transfer
agent is participating in the DTC Fast Automated Securities Transfer Program and such Securities are Common Shares or Conversion
Shares, credit the aggregate number of shares of Common Stock to which the Subscriber shall be entitled to the Subscriber’s
or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (B) if the Company’s
transfer agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight
courier) to the Subscriber, a certificate representing such Securities that is free from all restrictive and other legends, registered
in the name of the Subscriber or its designee. The Company shall be responsible for any transfer agent fees or DTC fees with respect
to any issuance of Securities or the removal of any legends with respect to any Securities in accordance herewith.


 




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(j)
Neither the SEC nor any state securities commission has approved the Securities or passed upon or endorsed the merits of the Offering.
There is no government or other insurance covering any of the Securities.


 


(k)
The Subscriber and its Advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from a person
or persons acting on behalf of the Company concerning the Offering and the business, financial condition, results of operations
and prospects of the Company, and all such questions have been answered to the full satisfaction of the Subscriber and its Advisors,
if any.


 


(l)
(i) In making the decision to invest in the Securities the Subscriber has relied solely upon the information provided by the Company
in the Transaction Documents. To the extent necessary, the Subscriber has retained, at its own expense, and relied upon appropriate
professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of the
Securities hereunder. The Subscriber disclaims reliance on any statements made or information provided by any Person or entity
in the course of Subscriber’s consideration of an investment in the Securities other than the Transaction Documents. 


 


(ii)
The Subscriber represents and warrants that: (x) the Subscriber was contacted regarding the sale of the Securities by the Company
(or an authorized agent or representative thereof) with whom the Subscriber had a prior substantial pre-existing relationship
and (y) no Securities were offered or sold to it by means of any form of general solicitation or general advertising, and in connection
therewith, the Subscriber did not (A) receive or review any advertisement, article, notice or other communication published in
a newspaper or magazine or similar media or broadcast over television or radio, whether closed circuit, or generally available;
or (B) attend any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or
general advertising; or (C) observe any website or filing of the Company with the SEC in which any offering of securities by the
Company was described and as a result learned of any offering of securities by the Company.


 


(m)
The Subscriber has taken no action that would give rise to any claim by any Person for brokerage commissions, finders’ fees
or the like relating to this Agreement or the transactions contemplated hereby.


 


(n)
The Subscriber is not relying on the Company or any of its employees, agents, or advisors with respect to the legal, tax, economic
and related considerations of an investment in the Securities, and the Subscriber has relied on the advice of, or has consulted
with, only its own Advisors.


 


(o)
The Subscriber acknowledges that any estimates or forward-looking statements or projections furnished by the Company to the Subscriber
were prepared by the management of the Company in good faith, but that the attainment of any such projections, estimates or forward-looking
statements cannot be guaranteed by the Company or its management and should not be relied upon.


 


(p)
No oral or written representations have been made, or oral or written information furnished, to the Subscriber or its Advisors,
if any, in connection with the Offering that are in any way inconsistent with the information contained herein.


 


(q)
(For ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed
of and understands the Company’s investment objectives, policies and strategies, and that the decision to invest “plan
assets” (as such term is defined in ERISA) in the Company is consistent with the provisions of ERISA that require diversification
of plan assets and impose other fiduciary responsibilities. The Subscriber or Plan fiduciary (i) is responsible for the decision
to invest in the Company; (ii) is independent of the Company and any of its affiliates; (iii) is qualified to make such investment
decision; and (iv) in making such decision, the Subscriber or Plan fiduciary has not relied primarily on any advice or recommendation
of the Company or any of its affiliates.


 




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(r)
This Agreement is not enforceable by the Subscriber unless it has been accepted by the Company, and the Subscriber acknowledges
and agrees that the Company reserves the right to reject any subscription for any reason.


 


(s)
The Subscriber is an “Accredited Investor” as defined in Rule 501(a) under the Securities Act. In general, an “Accredited
Investor” is deemed to be an institution with assets in excess of $5,000,000 or individuals with a net worth in excess of
$1,000,000 (excluding such person’s residence) or annual income exceeding $200,000 or $300,000 jointly with his or her spouse.


 


(t)
The Subscriber, 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 Offering, and has so evaluated the merits
and risks of such investment. The Subscriber has not authorized any person or entity to act as its Purchaser Representative (as
that term is defined in Regulation D of the General Rules and Regulations under the Securities Act) in connection with the Offering.
The Subscriber is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford
a complete loss of such investment.


 


4.
THE COMPANY’S Representations, Warranties and Covenants


 


The
Company hereby acknowledges, agrees with and represents, warrants and covenants to each Subscriber as of the date hereof and as
of the Closing Date, except as otherwise qualified by the SEC Filings, as follows:


 


(a)
Organization and Qualification. The Company is a corporation duly organized, validly existing and in good standing under
the laws of its state of incorporation. The Company is duly qualified to do business, and is in good standing in the states required
due to (i) the ownership or lease of real or personal property for use in the operation of the Company’s business or (ii)
the nature of the business conducted by the Company, except where the failure to so qualify would not, individually or in the
aggregate, have a Material Adverse Effect. The Company has all requisite power, right and authority to own, operate and lease
its properties and assets, to carry on its business as now conducted, to execute, deliver and perform its obligations under this
Agreement and the other Transaction Documents to which it is a party, and to carry out the transactions contemplated hereby and
thereby, subject to the Required Approvals (as defined herein). All actions on the part of the Company and its officers and directors
necessary for the authorization, execution, delivery and performance of this Agreement and the other Transaction Documents, the
consummation of the transactions contemplated hereby and thereby, and the performance of all of the Company’s obligations
under this Agreement and the other Transaction Documents have been taken or will be taken prior to the Closing. This Agreement
has been, and the other Transaction Documents to which the Company is a party on the Closing will be, duly executed and delivered
by the Company, and this Agreement is, and each of the other Transaction Documents to which it is a party on the Closing will
be, a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except
as may be limited by bankruptcy, reorganization, insolvency, moratorium and similar laws of general application relating to or
affecting the enforcement of rights of creditors, and except as enforceability of the obligations hereunder are subject to general
principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law).


 


(b)
Issuance of Securities. The Shares to be issued to the Subscriber pursuant to this Agreement and the applicable Transaction
Documents, when issued and delivered in accordance with the terms of this Agreement and the applicable Transaction Documents,
will be duly and validly issued and will be fully paid and non-assessable and the Conversion Shares, when issued and delivered
in accordance with the Series G Certificate of Designation, will be duly and validly issued and will be fully paid and non-assessable.


 




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(c)
Authorization; Enforcement. The execution, delivery and performance of this Agreement and the other Transaction Documents
by the Company, and the consummation of the transactions contemplated hereby and thereby, will not (i) constitute a violation
(with or without the giving of notice or lapse of time, or both) of any provision of any law or any judgment, decree, order, regulation
or rule of any court, agency or other governmental authority applicable to the Company, (ii) require any consent, approval or
authorization of, or declaration, filing or registration with, any Person, (iii) result in a default (with or without the giving
of notice or lapse of time, or both) under, acceleration or termination of, or the creation in any party of the right to accelerate,
terminate, modify or cancel, any agreement, lease, note or other restriction, encumbrance, obligation or liability to which the
Company is a party or by which it is bound or to which any assets of the Company are subject, (iv) result in the creation of any
lien or encumbrance upon the assets of the Company, or upon any shares of Common Stock, preferred stock or other securities of
the Company, (v) conflict with or result in a breach of or constitute a default under any provision of the certificate of incorporation
or bylaws of the Company, or (vi) invalidate or adversely affect any permit, license, authorization or status used in the conduct
of the business of the Company.


 


(d)
Filings, Consents and Approvals The Company is not required to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority
or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other
than: (i) approval (“NASDAQ Approval”) of the issuance and listing of the Conversion Shares by and on The NASDAQ
Capital Market (“NASDAQ”), (ii) approval of the Company’s stockholders of the issuance of the Conversion
Shares, which, if required by NASDAQ, has been obtained prior to the issuance of such shares or (iii) the filing of Form D with
the SEC and such filings as are required to be made under applicable state securities laws (collectively, the “Required
Approvals”).


 


(e)
SEC Filings. The Company is subject to, and in material compliance with, the reporting requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company has made available to
each Subscriber through the EDGAR system true and complete copies of the Company’s filings for the prior two full fiscal
years plus any interim period (collectively, the “SEC Filings”), and all such SEC Filings are incorporated
herein by reference. The SEC Filings, when they were filed with the SEC (or, if any amendment with respect to any such document
was filed, when such amendment was filed), complied in all material respects with the applicable requirements of the Exchange
Act and the rules and regulations thereunder and did not, as of such date, contain an 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 therein, in the light of the
circumstances under which they were made, not misleading. All reports and statements required to be filed by the Company under
the Exchange Act have been filed, together with all exhibits required to be filed therewith. The Company and each of its direct
and indirect subsidiaries, if any (collectively, the “Subsidiaries”), are engaged in all material respects
only in the business described in the SEC Filings, and the SEC Filings contain a complete and accurate description in all material
respects of the business of the Company and the Subsidiaries.


 


(f)
No Financial Advisor. The Company acknowledges and agrees that each Subscriber is acting solely in the capacity of an arm’s
length purchaser with respect to the Securities and the transactions contemplated hereby. The Company further acknowledges that
Subscriber is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby and any advice given by any Subscriber or any of its representatives or agents
in connection with this Agreement and the transactions contemplated hereby is merely incidental to such Subscriber’s purchase
of the Securities. The Company further represents to each Subscriber that the Company’s decision to enter into this Agreement
has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.


 


(g)
Indemnification. The Company will indemnify and hold harmless each Subscriber and, where applicable, its directors, officers,
employees, agents, advisors and shareholders (each, an “Indemnitee”, from and against any and all loss, liability,
claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably
incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether
commenced or threatened) (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising
out of, or relating to (i) any misrepresentation or breach of any representation or warranty made by the Company or any Subsidiary
in any of the Transaction Documents, (ii) any breach of any covenant, agreement or obligation of the Company or any Subsidiary
contained in any of the Transaction Documents or (iii) any cause of action, suit, proceeding or claim brought or made against
such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company or any Subsidiary)
or which otherwise involves such Indemnitee that arises out of or results from (A) the execution, delivery, performance or enforcement
of any of the Transaction Documents, (B) any transaction financed or to be financed in whole or in part, directly or indirectly,
with the proceeds of the issuance of the Securities, or (C) the status of such Subscriber or holder of the Securities either as
an investor in the Company pursuant to the transactions contemplated by the Transaction Documents or as a party to this Agreement
(including, without limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other equitable
relief). To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make
the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable
law.


 




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(h)
Capitalization and Additional Issuances. The capitalization of the Company is as set forth in Schedule I and the
SEC Filings. Except as set forth in Schedule I and the SEC Filings, the Company has not issued any capital stock since
its most recently filed periodic report under the Exchange Act. Except as set forth in the SEC Filings, no Person has any right
of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated
by the Transaction Documents. Except as disclosed in the SEC Filings, there are no outstanding options, warrants, scrip rights
to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible
into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock,
or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue
additional shares of Common Stock or Common Stock equivalents. Except as set forth in the SEC Filings, the issuance and sale of
the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the
Subscribers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or
reset price under any of such securities. All of the outstanding shares of capital stock of the Company are duly authorized, validly
issued, fully paid and nonassessable, have been issued in material compliance with all federal and state securities laws, and
none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase
securities. No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance
and sale of the Securities. Except for NASDAQ Approval, no further approval or authorization of any stockholder, the Board of
Directors or others is required for the issuance and sale of the Securities. Except as disclosed in the SEC Filings, there are
no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to
which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.


 


(i)
Private Placements. Assuming the accuracy of each Subscriber’s representations and warranties set forth in Section
3, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Subscribers
as contemplated hereby.


 


(j)
Investment Company. The Company is not, and is not an affiliate of, and immediately after receipt of payment for the Shares
will not be or be an affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940,
as amended. The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act.


 


(k)
Reporting Company/Shell Company Status. The Company is a publicly-held company subject to reporting obligations pursuant
to Sections 12(g) and 13 of the Exchange Act. With the exception of the Form 10-Q for the quarterly period ended September 30,
2016, which was filed on November 11, 2017, and the Form 8-K which was filed on April 7, 2017, the Company has timely filed all
reports and other materials required to be filed by the Company thereunder with the SEC during the preceding twelve months pursuant
to the provisions of the Exchange Act. The Company, as of the Closing Date, is not, and has never been, a “shell company”,
as that term is employed in Rule 144 under the Securities Act within 12 months prior to the Initial Closing Date. Except as set
forth in the SEC Filings, the Company is in full compliance with the continued listing requirements of NASDAQ and has no reason
to believe that it will not in the foreseeable future continue to be in compliance with all such listing and maintenance requirements.


 




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(l)
Litigation. Except as set forth in the SEC Filings, there is no action, suit, proceeding, inquiry or investigation before
or by the Trading Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or,
to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any
of the Company’s or its Subsidiaries’ officers or directors which is outside of the ordinary course of business or
individually or in the aggregate material to the Company or any of its Subsidiaries. No director, officer or employee of the Company
or any of its Subsidiaries has willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable anticipation of
litigation. Without limitation of the foregoing, there has not been, and to the knowledge of the Company, there is not pending
or contemplated, any investigation by the SEC involving the Company, any of its Subsidiaries or any current or former director
or officer of the Company or any of its Subsidiaries. The SEC has not issued any stop order or other order suspending the effectiveness
of any registration statement filed by the Company under the Securities Act or the Exchange Act. “Governmental Entity”
means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state,
local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body
exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority
or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a
government or a public international organization or any of the foregoing. “Trading Market” means any of the
following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the New York
Stock Exchange, the NYSE MKT, The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market, OTCQX, OTCQB,
or the OTC Bulletin Board (or any successors to any of the foregoing).


 


(m)
Employee Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or
employs any member of a union. The Company believes that its and its Subsidiaries’ relations with their respective employees
are good. The Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting
labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where
failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect. “Material Adverse Effect” means any material adverse effect on (i) the business, properties,
assets, liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or
any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction
Documents or (iii) the authority or ability of the Company or any of its Subsidiaries to perform any of their respective obligations
under any of the Transaction Documents.


 


(n)
Tax Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income
and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid
all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably
adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Company and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify
as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.


 


(o)
Indebtedness and Other Contracts. Except as set forth in the SEC Filings, neither the Company nor any of its Subsidiaries,
(i) has any outstanding Indebtedness (as defined below), (ii) is a party to any contract, agreement or instrument, the violation
of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected
to result in a Material Adverse Effect, (iii) is in violation of any term of, or in default under, any contract, agreement or
instrument relating to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate,
in a Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance
of which, in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect. For purposes
of this Agreement: (x) “Indebtedness” of any Person means, without duplication (A) all indebtedness for borrowed
money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without
limitation, “capital leases” in accordance with generally accepted accounting principles and obligations related to
trade payables) obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations
evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds
of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which,
in connection with generally accepted accounting principles, consistently applied for the periods covered thereby, is classified
as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, claim, lien, tax, right of first
refusal, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract
rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the
payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (A) through (G) above; (y) “Contingent Obligation” means, as to any Person, any direct
or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation
of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with
respect thereto; and (z) “Person” means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, any other entity and any Governmental Entity or any department
or agency thereof.


 




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(p)
No Undisclosed Events, Liabilities, Developments or Circumstances. Since the date of the latest audited financial statements
included within the SEC Filings, except as specifically disclosed in a subsequent SEC Filing: (i) there has been no event, occurrence
or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has
not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in
the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made with the SEC, (iii) the Company has not altered its method
of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders
or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) except as set forth
in the SEC Filings, Company has not issued any equity securities to any officer, director or Affiliate. The Company does not have
pending before the SEC any request for confidential treatment of information. Except for the issuance of the Securities contemplated
by this Agreement or as set forth in the SEC Filings, no event, liability, fact, circumstance, occurrence or development has occurred
or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses,
properties, operations, assets or financial condition, that would be required to be disclosed by the Company under applicable
securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least two Trading
Days prior to the date that this representation is made.


 


(q)
No Additional Agreements. Neither the Company nor any of its Subsidiaries has any agreement or understanding with any Subscriber
with respect to the transactions contemplated by the Transaction Documents other than pursuant to documents substantially identical
to the Transaction Documents.


 


(r)
No Disqualification Events To the Company’s knowledge, none of the Company, any of its predecessors, any affiliated
issuer, any director, executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial
owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor
any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the
time of sale (each, an “Issuer Covered Person”) is subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person
is subject to a Disqualification Event.


 


(s)
General Solicitation None of the Company, any of its affiliates (as defined in Rule 501(b) under the Securities Act) or
any person acting on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Securities by
means of any form of general solicitation or general advertising within the meaning of Regulation D, including: (i) any advertisement,
article, notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or
radio; and (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.


 




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(t)
Compliance. To the Company’s knowledge, neither the Company nor any Subsidiary: (i) is in default under or in violation
of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by
the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under
or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party
or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation
of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation
of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal,
state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and
employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse
Effect.


 


(u)
Regulatory Permits. The Company and its Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described
in the SEC Filings, except where the failure to possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material Permit.


 


(v)
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property (if
any) owned by them and good and marketable title in all personal property owned by them that is material to the business of the
Company and the Subsidiaries, in each case free and clear of all liens, except for (i) liens as do not materially affect the value
of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and
the Subsidiaries and (ii) liens for the payment of federal, state or other taxes, for which appropriate reserves have been made
in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities
held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which
the Company and the Subsidiaries are in compliance.


 


(w)
Intellectual Property. 


 


1.
The term “Intellectual Property Rights” includes:


 


(i)
the name of the Company and each Subsidiary, all fictional business names, trading names, registered and unregistered trademarks,
service marks, and applications of the Company and each Subsidiary (collectively, “Marks’’);


 


(ii)
all patents, patent applications, and inventions and discoveries that may be patentable of the Company and each Subsidiary (collectively,
“Patents’’);


 


(iii)
all copyrights in both published works and published works of the Company and each Subsidiary (collectively, “Copyrights”);


 


(iv)
all rights in mask works of the Company and each Subsidiary (collectively, “Rights in Mask Works’’);
and


 


(v)
all know-how, trade secrets, confidential information, customer lists, software, technical information, data, process technology,
plans, drawings, and blue prints (collectively, “Trade Secrets’’); owned, used, or licensed by the Company
and each Subsidiary as licensee or licensor.


 


2.
Know-How Necessary for the Business. The Intellectual Property Rights are all those necessary for the operation of the
Company’s businesses as it is currently conducted or as represented, in writing, to the Subscriber to be conducted. The
Company is the owner of all right, title, and interest in and to each of the Intellectual Property Rights, free and clear of all
liens, security interests, charges, encumbrances, equities, and other adverse claims, and has the right to use all of the Intellectual
Property Rights. To the Company’s knowledge, no employee of the Company has entered into any contract that restricts or
limits in any way the scope or type of work in which the employee may be engaged or requires the employee to transfer, assign,
or disclose information concerning his work to anyone other than of the Company.


 




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3.
Patents. The Company is the owner of all right, title and interest in and to each of the Patents, free and clear of all
liens and other adverse claims, purchase price payments, or license agreements now or hereafter existing). 


 


4.
Trademarks. The Company is the owner of all right, title, and interest in and to each of the Marks, free and clear of all
liens and other adverse claims. All Marks that have been registered with the United States Patent and Trademark Office are currently
in compliance with all formal legal requirements (including the timely post-registration filing of affidavits of use and incontestability
and renewal applications), are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling
due within ninety days after the Closing Date. 


 


5.
Copyrights. The Company is the owner of all right, title, and interest in and to each of the Copyrights, free and clear
of all liens and other adverse claims. All the Copyrights have been registered and are currently in compliance with formal requirements,
are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety days after
the date of the Closing.


 


6.
Trade Secrets. With respect to each Trade Secret, the documentation relating to such Trade Secret is current, accurate,
and sufficient in detail and content to identify and explain it and to allow its full and proper use without reliance on the knowledge
or memory of any individual. The Company has taken all reasonable precautions to protect the secrecy, confidentiality, and value
of its Trade Secrets. The Company has good title and an absolute right to use the Trade Secrets. The Trade Secrets are not part
of the public knowledge or literature, and, to the Company’s knowledge, have not been used, divulged, or appropriated either
for the benefit of any Person (other the Company) or to the detriment of the Company. No Trade Secret is subject to any adverse
claim or has been challenged or threatened in any way.


 


(x)
Stock Option Plans. Each stock option granted by the Company under the stock option plan was granted (i) in accordance
with the terms of such stock option plan and (ii) with an exercise price at least equal to the fair market value of the Common
Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under any
stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or
practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release
or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.


 


(y)
Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director,
officer, agent, employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”).


 


(z)
Listing and Maintenance Requirements. The Common Stock is quoted The NASDAQ Capital Market under the symbol “FNCX.”
The Company has not, except as disclosed in the SEC Filings, in the twenty-four (24) months preceding the date hereof, received
notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not
in compliance with the listing or maintenance requirements of such Trading Market.


 


(aa)
Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly
or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation
for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company.


 




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(bb)
Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
in all material respects with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively,
the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company or any Subsidiary, threatened.


 


(cc)
Acknowledgment Regarding Subscriber’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary
notwithstanding, it is understood and acknowledged by the Company that: (i) none of the Subscribers has been asked by the Company
to agree, nor has any Subscriber agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by the Company or to hold the Securities for any specified term,
(ii) past or future open market or other transactions by any Subscriber, specifically including, without limitation, Short Sales
or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively
impact the market price of the Company’s publicly-traded securities, (iii) any Subscriber, and counter-parties in “derivative”
transactions to which any such Subscriber is a party, directly or indirectly, may presently have a “short” position
in the Common Stock and (iv) each Subscriber shall not be deemed to have any affiliation with or control over any arm’s
length counter-party in any “derivative” transaction. The
Company further understands and acknowledges that (y) one or more Subscribers may engage in hedging activities at various times
during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the
Common Shares or Conversion Shares deliverable with respect to Securities are being determined, and (z) such hedging activities
(if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that
the hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute
a breach of any of the Transaction Documents. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and
the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents.


 


(dd)
Acknowledgment Regarding Subscribers’ Purchase of Securities. The Company acknowledges and agrees that each of the
Subscribers is acting solely in the capacity of an arm’s length Subscriber with respect to the Transaction Documents and
the transactions contemplated thereby. The Company further acknowledges that no Subscriber is acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated
thereby and any advice given by any Subscriber or any of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the Subscribers’ purchase of the Securities.
The Company further represents to each Subscriber that the Company’s decision to enter into this Agreement and the other
Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company
and its representatives.


 


(ee)
No Integrated Offering. Assuming the accuracy of the Subscribers’ representations and warranties set forth in Section
3, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Securities to be integrated with prior offerings by the Company for purposes of: (i) the Securities Act which would require
the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any
Trading Market on which any of the securities of the Company are listed or designated.


 


(ff)
Application of Takeover Protections. The Company and the Board of Directors will have taken as of the Closing Date all
necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation
(or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Subscribers
as a result of the Subscribers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents,
including without limitation as a result of the Company’s issuance of the Securities and the Subscribers’ ownership
of the Securities.


 




    	13



    	 		 



    

 


(gg)
Registration Rights. No Person other than the Subscribers herein has any right to cause the Company or any Subsidiary to
effect the registration under the Securities Act of any securities of the Company or any Subsidiary.


 


(hh)
Certain Fees. No brokerage, finder’s fees, commissions or due diligence fees are or will be payable by the Company
or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by the Transaction Documents. The Subscribers shall have no obligation with respect
to any such fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section
4(hh) that may be due in connection with the transactions contemplated by the Transaction Documents.


 


(ii)
Sarbanes-Oxley; Internal Accounting Controls. Except as set forth in the SEC Filings, the Company and the Subsidiaries
are in material compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of
the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective
as of the date hereof and as of the Closing Date. Except as set forth in the Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as set forth in
the SEC Filings, the Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to
ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s
certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries
as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation
Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the
certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation
Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is
defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially
affect, the internal control over financial reporting of the Company and its Subsidiaries.


 


(jj)
Transactions With Affiliates and Employees. Except as set forth in the SEC Filings, none of the officers or directors of
the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is
presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental
of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner,
in each case in excess of $50,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement
for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any
stock option plan of the Company.


 


(kk)
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries
are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the Aggregate Purchase
Price. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business without a significant increase in cost.


 




    	14



    	 		 



    

 


(ll)
Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Subscribers
or their agents or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public
information regarding the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this
Agreement and the other Transaction Documents. The Company understands and confirms that each of the Subscribers will rely on
the foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the Subscribers
regarding the Company and its Subsidiaries, their businesses and the transactions contemplated hereby, including the schedules
to this Agreement, furnished by or on behalf of the Company or any of its Subsidiaries is true and correct and does not contain
any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or information
exists with respect to the Company or any of its Subsidiaries or its or their business, properties, liabilities, prospects, operations
(including results thereof) or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires
public disclosure at or before the date hereof or announcement by the Company but which has not been so publicly disclosed. The
Company acknowledges and agrees that no Subscriber makes or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.


 


(mm)
Foreign Corrupt Practices. Neither the Company nor any Subsidiary, to the knowledge of the Company or any Subsidiary, any
agent or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person
acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any
provision of Foreign Corrupt Practices Act.


 


5.
OTHER AGREEMENTS OF THE PARTIES


 


(a)
Furnishing of Information. As long as any Subscriber owns Securities, the Company covenants to timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date
hereof pursuant to the Exchange Act. As long as any Subscriber owns Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Subscribers and make publicly available in accordance with Rule
144(c) under the Securities Act such information as is required for the Subscribers to sell the Securities under Rule 144. The
Company further covenants that it will take such further action as any holder of Securities may reasonably request, at the sole
cost and expense of the Company including transfer agent and legal opinion fees and expenses, all to the extent required from
time to time to enable such person to sell such Securities without registration under the Securities Act within the limitation
of the exemptions proved by Rule 144 under the Securities Act.


 


(b)
Shareholder Rights Plan. No claim will be made or enforced by the Company or, to the knowledge of the Company, any other
person that any Subscriber is an “Acquiring Person” under any shareholder rights plan or similar plan or arrangement
in effect or hereafter adopted by the Company, or that any Subscriber could be deemed to trigger the provisions of any such plan
or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company
and the Subscribers.


 


(c)
Securities Laws Disclosure; Publicity. The Company shall by 8:30 a.m. (New York City time) (i) on the fourth (4th)
Business Day after this Agreement has been executed, issue a press release disclosing the material terms of the transactions contemplated
hereby and (ii) within four (4) Business Days after this Agreement has been executed, file a Current Report on Form 8-K with the
SEC (the “8-K Filing”). From and after the issuance of such press release and the filing of the 8-K Filing,
the Company shall have publicly disclosed all material, non-public information delivered to any of the Subscribers by the Company
or any of its Subsidiaries, or any of their respective officers, directors, employees or agents. The Company and each Subscriber
shall consult with each other in issuing any press releases with respect to the transactions contemplated hereby, and no Subscriber
shall issue any such press release or otherwise make any such public statement without the prior consent of the Company, which
consent shall not unreasonably be withheld. Notwithstanding the foregoing, the Company shall not publicly disclose the name of
any Subscriber, or include the name of any Subscriber in any filing with the SEC or any regulatory agency, without the prior written
consent of such Subscriber, except to the extent such disclosure is required by law in which case the Company shall provide the
Subscribers with prior notice of such disclosure. The Company understands that any such disclosure shall cause irreparable harm
and each Subscriber shall be entitled to injunctive relief and liquidated damages in connection therewith.


 




    	15



    	 		 



    

 


(d)
Integration. The Company shall not, and shall use its best efforts to ensure that no affiliate of the Company shall, after
the date hereof, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security that would be
integrated with the offer or sale of the Shares in a manner that would require the registration under the Securities Act of the
sale of the Shares to the Subscribers.


 


(e)
Reservation of Securities. 


 


(i)
The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction
Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents, but not less
than 100% of the maximum number of shares of Common Stock issuable pursuant to the Transaction Documents (the “Required
Minimum”).


 


(ii)
If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required
Minimum on such date, then the Board of Directors shall approve the amendment of the Company’s certificate of incorporation
to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum and submit such amendment
to the Company’s stockholders for approval, as soon as possible and in any event not later than the ninetieth (90th)
day after such date.


 


(iii)
The Company shall, if applicable: (A) in the time and manner required by The NASDAQ Capital Market or such other principal market
on which the Company’s Common Stock is then primarily traded (the “Principal Market”), prepare and file
with such Principal Market an additional shares listing application covering a number of shares of Common Stock at least equal
to the Required Minimum on the date of such application, (B) take all steps necessary to cause such shares of Common Stock to
be approved for listing or quotation on such Principal Market as soon as possible thereafter, (C) provide to the Subscribers evidence
of such listing or quotation and (D) maintain the listing or quotation of such Common Stock on any date at least equal to the
Required Minimum on such date on such Principal Market or another Principal Market. The Company will then take all commercially
reasonable action necessary to continue the listing or quotation and trading of its Common Stock on a Principal Market for as
long as any Subscriber holds Securities, and will comply in all material respects with the Company’s reporting, filing and
other obligations under the bylaws or rules of the Principal Market at least until five years after the Closing Date. In the event
the aforedescribed listing is not continuously maintained for five years after the Closing Date (a “Listing Default”),
then in addition to any other rights the Subscribers may have hereunder or under applicable law, on the first day of a Listing
Default and on each monthly anniversary of each such Listing Default date (if the applicable Listing Default shall not have been
cured by such date) until the applicable Listing Default is cured, the Company shall pay to each Subscriber an amount in cash,
as partial liquidated damages and not as a penalty, equal to 1% of (x) Aggregate Purchase Price of Shares or Conversion Shares
calculated on an “as converted” basis, as the case may be, held by such Subscriber on the date of a Listing Default
and (y) the aggregate purchase price of Shares held by such Subscriber on the day of a Listing Default and on every thirtieth
day (pro-rated for periods less than thirty days) thereafter with respect to Shares (or “as converted” Conversion
Shares) held as of each such date until the date such Listing Default is cured or Subscriber no longer holds any Shares, Preferred
Shares or Conversion Shares. If the Company fails to pay any liquidated damages pursuant to this Section in a timely manner, the
Company will pay interest thereon at a rate of 1.5% per month (pro-rated for partial months) to the Subscriber, up to a maximum
of sixteen (16%) percent for such interest and liquidated damages amounts, collectively.


 




    	16



    	 		 



    

 


(f)
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the
Transaction Documents, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide
any Subscriber or its agents or counsel with any information that the Company believes constitutes or could constitute material
non-public information, and each Subscriber agrees, and shall direct its agents and counsel not to, request any material non-public
information from the Company or any Person acting on its behalf, unless prior thereto such Subscriber shall have executed a written
agreement with the Company regarding the willingness to accept receipt of such material non-public information and acknowledges
the confidentiality and use of such information and the Company’s covenant to file a further SEC filing or report and the
period in which such information shall remain confidential or be required to not be disclosed. The Company understands and confirms
that each Subscriber shall be relying on the foregoing covenant in effecting transactions in securities of the Company. In addition,
effective upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company and any of its Subsidiaries or any of their respective officers,
directors, affiliates, employees or agents, on the one hand, and the Subscriber or any of its affiliates on the other hand, shall
terminate.


 


(g)
Capital Changes. Until the one year anniversary of the Closing Date, the Company shall not undertake a reverse or forward
stock split or reclassification of the Common Stock without 10 days prior written notice to the Subscribers, unless such reverse
split is made in conjunction with the listing of the Common Stock on a national securities exchange or maintaining compliance
with such listing.


 


(i)
DTC Program. From the Closing Date until such time as no Subscriber holds any of the Securities (such date, the “Release
Date”), the Company shall use its best efforts to employ as the transfer agent for the Common Shares and the Conversion
Shares a participant in the Depository Trust Company Automated Securities Transfer Program (FAST) and cause the Common Stock to
be transferable pursuant to such program.


 


(j)
Form D and Blue Sky. The Company shall file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof to each Subscriber promptly after such filing. The availability of the filed Form D on EDGAR shall
satisfy the foregoing delivery requirement. The Company shall, on or before the Closing Date, take such action as the Company
shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities for sale to the Subscribers
at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United
States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Subscribers
on or prior to the Closing Date. Without limiting any other obligation of the Company under this Agreement, the Company shall
timely make all filings and reports relating to the offer and sale of the Securities required under all applicable securities
laws (including, without limitation, all applicable federal securities laws and all applicable “Blue Sky” laws), and
the Company shall comply with all applicable federal, foreign, state and local laws, statutes, rules, regulations and the like
relating to the offering and sale of the Securities to the Subscribers.


 


(k)
Restriction on Redemption and Cash Dividends. From the date hereof through the Release Date, the Company shall not, directly
or indirectly, redeem, or declare or pay any cash dividend or distribution on, any securities of the Company without the prior
express written consent of the Subscribers holding a majority of the then outstanding Shares.


 


(l)
Corporate Existence. From the date hereof through the Release Date, the Company shall not be party to any Fundamental Transaction
(as defined in the Series G Certificate of Designation) unless the Company is in compliance with the applicable provisions governing
Fundamental Transactions set forth in the Series G Certificate of Designation.


 


(m)
Conversion Procedures. Each of the form of Notice of Conversion included in the Series G Certificate of Designation set
forth the totality of the procedures required of the Subscribers in order to convert the Preferred Shares. No legal opinion, other
information or instructions shall be required of the Subscribers to convert their Preferred Shares (other than customary 144 representation
letters if such Preferred Shares are to be sold in reliance upon the exemption provided by to Rule 144). The Company shall honor
conversions of the Preferred Shares and shall deliver the Conversion Shares in accordance with the terms, conditions and time
periods set forth in the Series G Certificate of Designation.


 


(n)
Closing Documents. On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or
cause to be delivered, to each Subscriber executed copies of the Transaction Documents and other document required to be delivered
to any party pursuant to this Agreement.


 




    	17



    	 		 



    

 


(o)
Fees. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, transfer
agent fees, the costs associated with any legal opinions required to be rendered to the Company’s transfer agent in connection
with the lifting of any legends on the Securities, DTC fees or broker’s commissions (other than for Persons engaged by any
Subscriber) relating to or arising out of the transactions contemplated hereby. The Company (subject to the foregoing qualification)
shall pay, and hold each Subscriber harmless against, any liability, loss or expense (including, without limitation, reasonable
attorneys’ fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment. For the avoidance
of doubt, the Company will not be responsible for the costs associated with any legal opinions required to be rendered to the
Company’s transfer agent in connection with the lifting of any legends on the Securities.


 


6.
CONDITIONS TO ACCEPTANCE OF SUBSCRIPTION


 


(a)
The Closing of the sale of the Shares is conditioned upon satisfaction of the following conditions precedent on or before the
Closing Date:


 


(i)
As of the Closing, no legal action, suit or proceeding shall be pending against the Company that seeks to restrain or prohibit
the transactions contemplated by this Agreement.


 


(ii)
The representations and warranties of the Company and the Subscribers contained in this Agreement shall have been true and correct
in all material respects on the date of this Agreement (except whether such representations are qualified by material or material
adverse effect, which shall be true and correct in all respects) and shall be true and correct as of the Closing as if made on
the Closing Date and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and
conditions required to be performed, satisfied or complied with by the Company in connection with the consummation of the transactions
contemplated by the Transaction Documents at or prior to the Closing Date.


 


(iii)
The Company shall deliver to the Subscribers a file stamped copy of the filed Series G Certificate of Designation, filed with
the Secretary of State of the State of Delaware, which shall not have been amended, waived, modified or revoked by the Company.


 


7.
Intentionally omitted. 


 


8.
MISCELLANEOUS PROVISIONS


 


(a)
All parties hereto have been represented by counsel, and no inference shall be drawn in favor of or against any party by virtue
of the fact that such party’s counsel was or was not the principal draftsman of this Agreement.


 


(b)
Each of the parties hereto shall be responsible to pay the costs and expenses of its own legal counsel in connection with the
preparation and review of this Agreement and related documentation.


 


(c)
Neither this Agreement, nor any provisions hereof, shall be waived, modified, discharged or terminated except by an instrument
in writing signed by the party against whom any waiver, modification, discharge or termination is sought.


 


(d)
The representations, warranties and agreement of each Subscriber and the Company made in this Agreement shall survive the execution
and delivery of this Agreement and the delivery of the Securities.


 




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(e)
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered
via electronic mail or facsimile (provided the sender receives a machine-generated confirmation of successful transmission) at
the e-mail address or facsimile number specified in this Section 8(e) prior to 5:00 P.M., New York City time, on a Business Day,
(ii) the next Business Day after the date of transmission, if such notice or communication is delivered via electronic mail or
facsimile at the email address or facsimile number specified in this Section 8(e) on a day that is not a Business Day or later
than 5:00 P.M., New York City time, on any Business Day, (iii) the Business Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service with next day delivery specified, or (iv) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and communications shall be as follows:


 


	 	If
    to the Company:	 	Function(x)
    Inc.
	 	 	 	902
    Broadway, 11th Floor
	 	 	 	New
    York, New York 10010
	 	 	 	Telephone
    No.: (212) 231-0092
	 	 	 	Attention:
    Robert F. X. Sillerman
	 	 	 	E-mail:
    one@frxs1.com 
	 	 	 	 
	 	With
    a copy to:	 	Sichenzia
    Ross Ference Kesner LLP 
	 	 	 	61
                                         Broadway

        

        Suite
3200

        New
        York, NY 10006

	 	 	 	Telephone
    No.: (212) 930-9700
	 	 	 	Facsimile
    No.: (212) 930-9725
	 	 	 	Attention:
    Harvey Kesner, Esq.
	 	 	 	E-mail:
    hkesner@srfkllp.com
	 	 	 	 
	 	If
    to the Purchaser:	 	To
    the address set forth under the Purchaser’s name on the signature page hereof; or such other address as may be designated
    in writing hereafter, in the same manner, by the Purchaser.


 


(f)
Except as otherwise provided herein, this Agreement shall be binding upon, and inure to the benefit of, the parties to this Agreement
and their heirs, executors, administrators, successors, legal representatives and assigns. If any Subscriber is more than one
person or entity, the obligation of any Subscriber shall be joint and several and the agreements, representations, warranties
and acknowledgments contained herein shall be deemed to be made by, and be binding upon, each such person or entity and its heirs,
executors, administrators, successors, legal representatives and assigns. This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.


 


(g)
This Agreement is not transferable or assignable by the Company.


 


(h)
The Company hereby represents and warrants as of the date hereof and as of any Closing Date that none of the terms offered to
any Person with respect to any offer, sale or subscription of Securities (each a “Subscription Document”),
is or will be more favorable to such Person than those of the Subscriber and this Agreement shall be, without any further action
by the Subscriber or the Company, deemed amended and modified in an economically and legally equivalent manner such that the Subscriber
shall receive the benefit of the more favorable terms contained in such Subscription Document. Notwithstanding the foregoing,
the Company agrees, at its expense, to take such other actions (such as entering into amendments to the Transaction Documents)
as the Subscriber may reasonably request to further effectuate the foregoing.


 




    	19



    	 		 



    

 


(i)
The obligations of each Subscriber under any Transaction Document are several and not joint with the obligations of any other
Subscriber, and no Subscriber shall be responsible in any way for the performance or non-performance of the obligations of any
other Subscriber under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action
taken by any Subscriber pursuant hereto or thereto, shall be deemed to constitute the Subscribers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Subscribers are in any way acting in concert or
as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Subscriber shall
be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement
or out of the other Transaction Documents, and it shall not be necessary for any other Subscriber to be joined as an additional
party in any proceeding for such purpose. Each Subscriber has been represented by its own separate legal counsel in its review
and negotiation of the Transaction Documents. The Company has elected to provide all Subscribers with the same terms and Transaction
Documents for the convenience of the Company and not because it was required or requested to do so by any of the Subscribers.
It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is
between the Company and a Subscriber, solely, and not between the Company and the Subscribers collectively and not between and
among the Subscribers. The Company acknowledges that any actions of Subscribers now, and in the future, in which (A) any review
or approval is sought by the Company, including, without limitation, review, approval or acceptance of any reportable event required
to be reported in any SEC filing or report by the Company; or (B) any amendment, waiver, right of first refusal, participation
right, acquisition or financing, including any acquisition or financing is proposed, introduced, offered or arranged by any one
or more Subscribers or their affiliates or sought by the Company, shall not be claimed by the Company or any person seeking to
assert such a claim on behalf of the Company, to constitute the forming of any “Group” as such term is defined under
Section 13(d) or Section 16 of the Exchange Act, nor shall any activity permit the Company or any third party holder of securities
of the Company to assert any claim that any beneficial ownership limitations or conversion limitations of the Series G Certificate
of Designation have been exceeded and such Subscriber, alone or in conjunction with others, constitutes a “Group”
for purposes of the Exchange Act as a result thereof.


 


(j)
Except as otherwise provided herein, this Agreement shall not be changed, modified or amended and no right hereunder shall be
waived, except in writing signed by both (a) the Company and (b) Subscribers holding at least 60% of the Shares sold in the Offering
outstanding on the date of determination. The Company shall be prohibited from offering any additional consideration to any Subscriber
in this Offering (or such original Subscriber’s transferee) for the purposes of inducing such person to change, modify,
waive or amend any term of this Agreement or any other Transaction Document without making the same offer on a pro-rata basis
to all other Subscribers (and those transferees) in this Offering allocable to the securities acquired by such transferee(s).


 


(k)
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. Each party agrees that all proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective Affiliates,
employees or agents) shall be commenced exclusively in a court located in the City of New York, Borough of Manhattan (collectively,
the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New
York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives,
and agrees not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction of any such New York
Court, or that such proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for 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.


 


(l)
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY,
THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.


 


(m)
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.


 


(n)
Each party hereto acknowledges that it has been represented by independent legal counsel in the preparation of the Agreement and
each party waives any conflicts of interest and other allegations that it has not been represented by its own counsel.


 


[Signature
Pages Follow]


 




    	20



    	 		 



    

 


ALL
SUBSCRIBERS MUST COMPLETE THIS PAGE


 


IN
WITNESS WHEREOF, the Subscriber has executed this Agreement on the ____ day of _______, 2017.


 


	 	 	x
    $1,050 per share of Series G Preferred Stock ($1.05 per Conversion Share) =	 	 
	Shares
    subscribed for	 	 	 	Aggregate
    Purchase Price


 


Manner
in which Title is to be held (Please Check One):


 


	1.	___	Individual	7.	___	Trust/Estate/Pension
    or Profit sharing Plan
	 	 	 	 	 	Date
    Opened: ________________________
	2.	___	Joint
    Tenants with Right of Survivorship	8.	___	As
    a Custodian for
	 	 	 	 	 	______________________________________ 
	 	 	 	 	 	Under
    the Uniform Gift to Minors Act of the State of
	 	 	 	 	 	______________________________________ 
	3.	___	Community
    Property	9.	___	Married
    with Separate Property
	4.	___	Tenants
    in Common	10.	___	Keogh
	5.	___	Corporation/Partnership/
    Limited Liability Company	11.	___	Tenants
    by the Entirety
	6.	___	IRA	 	 	 


 


ALTERNATIVE
DISTRIBUTION INFORMATION


 


To
direct distribution to a party other than the registered owner, complete the information below. YOU MUST COMPLETE THIS SECTION
IF THIS IS AN IRA INVESTMENT.


 


Name
of Firm (Bank, Brokerage, Custodian):


 


Account
Name:


 


Account
Number:


 


Representative
Name:


 


Representative
Phone Number:


 


Address:


 


City,
State, Zip:


 




    	21



    	 		 



    

 


IF
MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN.

INDIVIDUAL SUBSCRIBERS MUST COMPLETE THIS PAGE.

SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE THE FOLLOWING
PAGE.


 


EXECUTION
BY NATURAL PERSONS


 


Exact
Name in Which Title is to be Held


 


	 	 	 
	Name
    (Please Print)	 	Name
    of Additional Purchaser
	 	 	 
	 	 	 
	Residence:
    Number and Street	 	Address
    of Additional Purchaser
	 	 	 
	 	 	 
	City,
    State and Zip Code	 	City,
    State and Zip Code
	 	 	 
	 	 	 
	Social
    Security Number	 	Social
    Security Number
	 	 	 
	 	 	 
	Telephone
    Number	 	Telephone
    Number
	 	 	 
	 	 	 
	Fax
    Number (if available)	 	Fax
    Number (if available)
	 	 	 
	 	 	 
	E-Mail
    (if available)	 	E-Mail
    (if available)
	 	 	 
	 	 	 
	(Signature)

        
	 	(Signature
    of Additional Purchaser)


 


ACCEPTED
this ___ day of _________ 2017, on behalf of the Company.


 


	 	By:	 


 


[SIGNATURE
PAGE FOR SUBSCRIPTION AGREEMENT]


 




    	22



    	 		 



    

 


EXECUTION
BY SUBSCRIBER WHICH IS AN ENTITY


(Corporation,
Partnership, LLC, Trust, Etc.)


 


Name
of Entity (Please Print)


 


Date
of Incorporation or Organization:


 


State
of Principal Office:


 


Federal
Taxpayer Identification Number:


 


	 	 	 
	Office
    Address	 	 
	 

                                                         
	 	 
	 	 	 
	

                                                         City, State and Zip Code
	 	 
	 	 	 
	 	 	 
	Telephone
    Number	 	 
	 	 	 
	 	 	 
	Fax
    Number (if available)	 	 
	 	 	 
	 	 	 
	E-Mail
    (if available)	 	 
	 	 	 
	 	By:
    	 
	 	Name:	 
	 	Title:	 
	 	 	 
	[seal]	 	 



 


	Attest: 	 	 	 
	(If Entity is a Corporation)	 	 



 





	 	 	 
	 	 	Address





 


ACCEPTED
this ____ day of __________ 2017, on behalf of the Company.


 


	 	By:	 
	 	Name:	 
	 	Title:	 


 


[SIGNATURE
PAGE FOR SUBSCRIPTION AGREEMENT]


 




    	23



    	 		 



    

 


INVESTOR
QUESTIONNAIRE


 


Instructions:
Check all boxes below which correctly describe you.


 


	[  ]	You
    are (i) a bank, as defined in Section 3(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”),
    (ii) a savings and loan association or other institution, as defined in Section 3(a)(5)(A) of the Securities Act, whether
    acting in an individual or fiduciary capacity, (iii) a broker or dealer registered pursuant to Section 15 of the Securities
    Exchange Act of 1934, as amended (the “Exchange Act”), (iv) an insurance company as defined in Section
    2(13) of the Securities Act, (v) an investment company registered under the Investment Company Act of 1940, as amended
    (the “Investment Company Act”), (vi) a business development company as defined in Section 2(a)(48)
    of the Investment Company Act, (vii) a Small Business Investment Company licensed by the U.S. Small Business Administration
    under Section 301 (c) or (d) of the Small Business Investment Act of 1958, as amended, (viii) a plan established and
    maintained by a state, its political subdivisions, or an agency or instrumentality of a state or its political subdivisions,
    for the benefit of its employees and you have total assets in excess of $5,000,000, or (ix) an employee benefit plan
    within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and (1)
    the decision that you shall subscribe for and purchase Shares, is made by a plan fiduciary, as defined in Section 3(21) of
    ERISA, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or (2) you
    have total assets in excess of $5,000,000 and the decision that you shall subscribe for and purchase the Shares is made solely
    by persons or entities that are accredited investors, as defined in Rule 501 of Regulation D promulgated under the Securities
    Act (“Regulation D”) or (3) you are a self-directed plan and the decision that you shall subscribe for
    and purchase the Securities is made solely by persons or entities that are accredited investors.
	 	 
	[  ]	You
    are a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as amended.
	 	 
	[  ]	You
    are an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”),
    a corporation, Massachusetts or similar business trust or a partnership, in each case not formed for the specific purpose
    of making an investment in the Securities and its underlying securities in excess of $5,000,000.
	 	 
	[  ]	You
    are a director or executive officer of the Company.
	 	 
	[  ]	You
    are a natural person whose individual net worth, or joint net worth with your spouse, exceeds $1,000,000 (excluding residence)
    at the time of your subscription for and purchase of the Securities.
	 	 
	[  ]	You
    are a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income
    with your spouse in excess of $300,000 in each of the two most recent years, and who has a reasonable expectation of reaching
    the same income level in the current year.
	 	 
	[  ]	You
    are a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities and
    whose subscription for and purchase of the Securities is directed by a sophisticated person as described in Rule 506(b)(2)(ii)
    of Regulation D.
	 	 
	[  ]	You
    are an entity in which all of the equity owners are persons or entities described in one of the preceding paragraphs.


 




    	24



    	 		 



    

 


Check
all boxes below which correctly describe you.


 


With
respect to this investment in the Securities, your:


 


	 	Investment
    Objectives: 	[  ]	Aggressive
    Growth 	[  ]	Speculation	 	 
	 	 	 	 	 	 	 	 
	 	Risk
    Tolerance: 	[  ]	Low
    Risk	[  ]	Moderate
    Risk 	[  ]	High
    Risk


 


Are
you associated with a FINRA Member Firm? [  ] Yes [  ] No


 


Your
initials (purchaser and co-purchaser, if applicable) are required for each item below:


 


____
____ I/We understand that this investment is not guaranteed.


 


____
____ I/We are aware that this investment is not liquid.


 


____
____ I/We are sophisticated in financial and business affairs and are able to evaluate the risks and merits of an investment in
this offering.


 


____
____ I/We confirm that this investment is considered “high risk.” (This type of investment is considered high risk
due to the inherent risks including lack of liquidity and lack of diversification. Success or

failure of private placements such as this is dependent
on the corporate issuer of these securities and is outside the control of the investors. While potential loss is limited to the
amount invested, such loss is possible.)


 


The
Subscriber hereby represents and warrants that all of its answers to this Investor Questionnaire are true as of the date of its
execution of the Subscription Agreement pursuant to which it purchased the Securities.


 


	 	 	 
	Name
                                         of Purchaser [please print]

        
	 	Name
    of Co-Purchaser [please print]
	 	 	 
	 	 	 
	Signature
                                         of Purchaser (Entities please

        provide
        signature of Purchaser’s duly

        authorized
        signatory.)
	 	Signature
    of Co-Purchaser
	 	 	 
	 	 	 
	Name
    of Signatory (Entities only)	 	 
	 	 	 
	 	 	 
	Title
    of Signatory (Entities only)	 	 


 


[SIGNATURE
PAGE FOR INVESTOR QUESTIONNAIRE]


 




    	25



    	 		 



    

 


 


WIRE
INSTRUCTIONS


 


 


	Company:	Function
                                         (X) Inc.

        902
        Broadway, 11th Floor

        New
        York, New York 10010

	Telephone
    Number:	212-231-0092
	Fax
    Number:	646-349-5988
	 	 
	Bank:	Deutsche
                                         Bank

        345
        Park Avenue, 27th Floor

        New
        York, NY 10154

	 	 
	Account
    Name:	Function(x),
    Inc.
	ABA
    Routing Number:	021001033
	Account
    Number: 	42954582


 


 




    	26



    	 		 



    

 


SCHEDULE
I


 


Pro
Forma Capitalization Table


 


 


	Cap
    Table (all figures shown in $MM, except share amounts)	 	Current
    (2)	 	 	%	 	 	Adjusted
    for Transaction(3)	 	 	%	 	 	Adjusted
    for Conversion (4)	 	 	%	 	 	Adjusted
    for Conversion (5)	 	 	%	 
	Sillerman
    Debt and Accrued Interest (1)	 	$	5.7	 	 	 	 	 	 	$	5.7	 	 	 	 	 	 	$	5.7	 	 	 	 	 	 	$	5.7	 	 	 	 	 
	New
    Note (1)	 	$	3.3	 	 	 	 	 	 	$	3.3	 	 	 	 	 	 	 	–	 	 	 	 	 	 	 	–	 	 	 	 	 
	Series
    E	 	$	1.5	 	 	 	 	 	 	$	1.5	 	 	 	 	 	 	 	–	 	 	 	 	 	 	 	–	 	 	 	 	 
	Series
    F	 	 	–	 	 	 	 	 	 	$	2.0	 	 	 	 	 	 	 	–	 	 	 	 	 	 	 	–	 	 	 	 	 
	Other
    Notes (1)	 	$	0.3	 	 	 	 	 	 	$	0.3	 	 	 	 	 	 	$	0.3	 	 	 	 	 	 	$	0.3	 	 	 	 	 
	Private
    Placement Warrants	 	$	2.3	 	 	 	 	 	 	$	2.3	 	 	 	 	 	 	$	2.3	 	 	 	 	 	 	$	2.3	 	 	 	 	 
	Placement
    Agent Warrants	 	$	0.3	 	 	 	 	 	 	$	0.3	 	 	 	 	 	 	$	0.3	 	 	 	 	 	 	$	0.3	 	 	 	 	 
	Representative
    Warrants	 	$	0.1	 	 	 	 	 	 	$	0.1	 	 	 	 	 	 	$	0.1	 	 	 	 	 	 	$	0.1	 	 	 	 	 
	Sillerman
    (Shares)	 	 	17,776,415	 	 	 	58.8	%	 	 	17,776,415	 	 	 	58.8	%	 	 	17,776,415	 	 	 	45.4	%	 	 	17,776,415	 	 	 	32.3	%
	Public
    (Shares)	 	 	9,683,143	 	 	 	32.0	%	 	 	9,683,143	 	 	 	32.0	%	 	 	9,683,143	 	 	 	24.7	%	 	 	9,683,143	 	 	 	17.6	%
	Series
    E (Shares)	 	 	2,778,797	 	 	 	9.2	%	 	 	2,778,797	 	 	 	9.2	%	 	 	4,196,277	 	 	 	10.7	%	 	 	4,196,277	 	 	 	7.6	%
	Series
    F (Shares)	 	 	–	 	 	 	 	 	 	 	–	 	 	 	 	 	 	 	4,400,000	 	 	 	11.2	%	 	 	20,240,000	 	 	 	36.8	%
	New
    Note (Shares)	 	 	–	 	 	 	 	 	 	 	–	 	 	 	 	 	 	 	3,135,959	 	 	 	8.0	%	 	 	3,135,959	 	 	 	5.7	%
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net
    Debt, Preferreds & Warrants	 	$	13.6	 	 	 	 	 	 	$	15.6	 	 	 	 	 	 	$	8.8	 	 	 	 	 	 	$	8.8	 	 	 	 	 
	Total
    Outstanding Shares	 	 	30,238,355	 	 	 	100.0	%	 	 	30,238,355	 	 	 	100.0	%	 	 	39,191,794	 	 	 	100.0	%	 	 	55,031,794	 	 	 	100.0	%



 


(1)
Accrued Interest as of 4/25/17


(2)
Current Capitalization of the Company as of 4/25/17


(3)
Represents the anticipated capitalization of the Company should the Series F be issued


(4)
Represents the anticipated capitalization of the Company should the Series E, Series F and Rant Note be converted. Assumes Series
F conversion at $0.46 or higher.


(5)
Represents the anticipated capitalization of the Company should the Series E, Series F and Rant Note be converted. Assumes Series
F conversion at $0.10.


 



    	27