Exhibit 10.7


 


DRAFTKINGS INC.


 


AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT


 






     


     


    

 





This
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”) is entered into as of October 21, 2016, by
and between PACIFIC WESTERN BANK, a California state chartered bank (“Bank”), and DRAFTKINGS INC., a Delaware corporation
(“Borrower”), and amends and restates in its entirety that certain Loan and Security Agreement by and between Borrower
and Bank, as successor in interest by merger with SQUARE 1 BANK, a North Carolina banking corporation, dated as of October 11,
2013 (the “Original Agreement”).


 


RECITALS


 


Borrower
wishes to obtain credit from time to time from Bank, and Bank desires to extend credit to Borrower. The parties hereto wish to
amend and restate the terms of the Original Agreement in accordance with the terms hereof and this Agreement sets forth the terms
on which Bank will advance credit to Borrower, and Borrower will repay the amounts owing to Bank.


 


AGREEMENT


 


The parties agree as
follows:


 


1.            DEFINITIONS
AND CONSTRUCTION.


 


1.1            Definitions.
As used in this Agreement, all capitalized terms shall have the definitions set forth on Exhibit A. Any term used in the
Code and not defined herein shall have the meaning given to the term in the Code.


 


1.2            Accounting
Terms. Any accounting term not specifically
defined on Exhibit A shall be construed in accordance with GAAP and all calculations shall be made in accordance with GAAP
(except for non-compliance with FAS 123R in monthly reporting). The term “financial statements” shall include the
accompanying notes and schedules.


 


2.            LOAN
AND TERMS OF PAYMENT.


 


2.1            Credit
Extensions.


 


(a)            Promise
to Pay. Borrower promises to pay to Bank,
in lawful money of the United States of America, the aggregate unpaid principal amount of all Credit Extensions made by Bank to
Borrower, together with interest on the unpaid principal amount of such Credit Extensions at rates in accordance with the terms
hereof.


 


(b)            Term
Loans.


 


(i)            Subject
to and upon the terms and conditions of this Agreement, on the Closing Date, or as soon thereafter as all conditions precedent
thereto have been met, Bank shall make a term loan to Borrower in a principal amount of $5,000,000, which shall be used to refinance
the Existing Indebtedness (the “Initial Term Loan”). Thereafter, subject to and upon the terms and conditions of this
Agreement, Bank agrees to make 1 or more term loans to Borrower in an aggregate principal amount not to exceed an additional $15,000,000,
which shall be used for general working capital purposes and for capital expenditures (each a “Term Loan” and, together
with the Initial Term Loan, the “Term Loans”). Borrower may request Term Loans at any time from the Closing Date through
the Availability End Date.


 






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(ii)            Interest
shall accrue from the date of each Term Loan at the rate specified in Section 2.3(a), and prior to the Availability End Date
for the applicable Term Loan shall be payable monthly beginning on the last day of the month next following such Term Loan, and
continuing on the same day of each month thereafter. Any Term Loans that are outstanding on the Availability End Date shall be
payable in 24 equal monthly installments of principal, plus all accrued interest, beginning on January 31, 2018, and continuing
on the last day of each month thereafter through the Term Loan Maturity Date, at which time all amounts due in connection with
the Term Loans and any other amounts due under this Agreement shall be immediately due and payable. Term Loans, once repaid, may
not be reborrowed. Borrower may prepay any Term Loan without penalty or premium.


 


(iii)            When
Borrower desires to obtain a Term Loan, Borrower shall notify Bank (which notice shall be irrevocable) by facsimile transmission
to be received no later than 3:30 p.m. Eastern time on the day on which the Term Loan is to be made.  Such notice shall
be substantially in the form of Exhibit C.  The notice shall be signed by an Authorized Officer.


 


2.2            Intentionally
Left Blank.


 


2.3            Interest
Rates, Payments, and Calculations.


 


(a)            Interest
Rate. Except as set forth in Section 2.3(b),
the Term Loans shall bear interest, on the outstanding daily balance thereof, at a variable annual rate equal to the greater of:
(A) 1.50% above the Prime Rate then in effect; or (B) 5.00%.


 


(b)            Late
Fee; Default Rate. If any payment is not
made within 15 days after the date such payment is due, Borrower shall pay Bank a late fee equal to the lesser of (i) 5%
of the amount of such unpaid amount or (ii) the maximum amount permitted to be charged under applicable law. All Obligations
shall bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate equal to 5 percentage
points above the interest rate applicable immediately prior to the occurrence of the Event of Default.


 


(c)            Payments.
Bank shall charge all interest, all Bank Expenses, and all Periodic Payments against any of Borrower’s deposit accounts.
Any interest not paid when due shall be compounded by becoming a part of the Obligations, and such interest shall thereafter accrue
interest at the rate then applicable hereunder.


 


(d)            Computation.
In the event the Prime Rate is changed from time to time hereafter, the applicable rate of interest hereunder shall be increased
or decreased, effective as of the day the Prime Rate is changed, by an amount equal to such change in the Prime Rate. All interest
chargeable under the Loan Documents shall be computed on the basis of a 360 day year for the actual number of days elapsed.


 






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2.4            Crediting
Payments. When no Event of Default has occurred
and is continuing, Bank shall credit a wire transfer of funds, check or other item of payment to such deposit account or Obligation
as Borrower specifies. After the occurrence and during the continuance of an Event of Default, Bank shall have the right, in its
sole discretion, to immediately apply any wire transfer of funds, check, or other item of payment Bank may receive to conditionally
reduce Obligations, but such applications of funds shall not be considered a payment on account unless such payment is of immediately
available federal funds or unless and until such check or other item of payment is honored when presented for payment. Notwithstanding
anything to the contrary contained herein, any wire transfer or payment received by Bank after 5:30 p.m. Eastern time shall
be deemed to have been received by Bank as of the opening of business on the immediately following Business Day. Whenever any
payment to Bank under the Loan Documents would otherwise be due (except by reason of acceleration) on a date that is not a Business
Day, such payment shall instead be due on the next Business Day, and additional fees or interest, as the case may be, shall accrue
and be payable for the period of such extension.


 





2.5            Fees.
Borrower shall pay to Bank the following:


 


(a)            Facility
Fee. On or before the Closing Date, a fee
equal to $15,000, which shall be nonrefundable;


 


(b)            Bank
Expenses. On the Closing Date, all Bank
Expenses incurred through the Closing Date, and, after the Closing Date, all Bank Expenses, as and when they become due.


 


(c)            Success
Fee. Upon the earlier of (i) an Acquisition,
or (ii) the closing of Borrower’s initial public offering, in each case, an amount equal to (x) $150,000, plus
(y) 3% of the highest principal amount of any Term Loans made hereunder in excess of the Initial Term Loan. Notwithstanding
the foregoing, the closing of a transaction that Borrower and FanDuel Ltd. are parties to and in which, immediately following
the closing of such transaction the current  equity holders of Borrower own 50% of the outstanding voting securities of a
new entity of which Borrower and FanDuel Ltd. become direct and wholly owned subsidiaries shall not be considered an Acquisition
for purposes of this Section 2.5(c). Bank and Borrower both agree that, notwithstanding any provision in Section 2.6
hereof, Borrower’s obligation to pay the success fee described herein shall survive any termination of this Agreement.


 


2.6            Term.
This Agreement shall become effective on the Closing Date and, subject to Section 12.7, shall continue in full force and
effect for so long as any Obligations (other than inchoate indemnity obligations) remain outstanding or Bank has any obligation
to make Credit Extensions under this Agreement. Notwithstanding the foregoing, Bank shall have the right to terminate its obligation
to make Credit Extensions under this Agreement immediately and without notice upon the occurrence and during the continuance of
an Event of Default. Upon indefeasible payment in full in Cash of the Obligations (other than inchoate indemnity obligations)
in their entirety, Borrower may terminate this Agreement upon three (3) Business Days written notice to Bank. Following such
indefeasible payment in full in Cash of the Obligations (other than inchoate indemnity obligations) in their entirety, and at
such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall, at Borrower’s sole cost and expense,
and upon receipt of a written request from Borrower to do so, release its Liens in the Collateral, and all rights therein shall
revert to Borrower.


 






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3.            CONDITIONS
OF LOANS.


 


3.1            Conditions
Precedent to Closing.  The agreement
of Bank to enter into this Agreement on the Closing Date is subject to the condition precedent that Bank shall have received,
in form and substance satisfactory to Bank, each of the following items and completed each of the following requirements:


 


(a)            this
Agreement, duly executed by Borrower;


 


(b)            an
officer’s certificate of Borrower with respect to incumbency and resolutions authorizing the execution and delivery of this
Agreement;


 


(c)            a
financing statement (Form UCC-1);


 


(d)            an
amended and restated intellectual property security agreement, duly executed by Borrower;


 


(e)            an
amended and restated subordination agreement, duly executed by holders of Subordinated Debt holding not less than 84% of the aggregate
principal amount of all Subordinated Debt outstanding;


 


(f)            evidence
that the documents evidencing the Subordinated Debt have been amended to reflect that all such Subordinated Debt is specifically
subject to the terms of the Subordination Agreement referenced in Section 3.1(e) above and providing that Bank is an
intended third party beneficiary thereof;


 


(g)            an
amended and restated pledge and security agreement, duly executed by Borrower;


 


(h)            payment
of the fees and Bank Expenses then due specified in Section 2.5, which may be debited from any of Borrower’s accounts
with Bank;


 


(i)            current
SOS Reports indicating that except for Permitted Liens, there are no other security interests or Liens of record in the Collateral;


 






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(j)            current
financial statements, including company prepared consolidated and consolidating balance sheets, income statements, and statements
of cash flows for the most recently ended month in accordance with Section 6.2, and such other updated financial information
as Bank may reasonably request;


 


(k)            a
current Compliance Certificate in accordance with Section 6.2;


 


(l)            a
Loan Advance Request Form delivered to Bank for the Initial Term Loan pursuant to Section 2.1(b) of the Agreement;


 


(m)            evidence
satisfactory to Bank that the insurance policies required by Section 6.5 hereof are in full force and effect, together with
appropriate evidence showing loss payable and additional insured clauses or endorsements in favor of Bank


 





(n)            a
Borrower Information Certificate; and


 


(o)            such
other documents or certificates, and completion of such other matters, as Bank may reasonably request.


 


3.2            Conditions
Precedent to all Credit Extensions. 
The obligation of Bank to make each Credit Extension, including the initial Credit Extension, is contingent upon Borrower’s
compliance with Section 3.1 above, and is further subject to the following conditions:


 


(a)            timely
receipt by Bank of the Loan Advance/Paydown Request Form as provided in Section 2.1;


 


(b)            Borrower
shall have transferred substantially all Cash assets into operating accounts held with Bank and otherwise be in compliance with
Section 6.6 hereof;


 


(c)            in
Bank’s sole discretion, there has not been a Material Adverse Effect; and


 


(d)            the
representations and warranties contained in Section 5 shall be true and correct in all material respects on and as of the
date of such Loan Advance/Paydown Request Form and on the effective date of each Credit Extension as though made at and as
of each such date, and no Event of Default shall have occurred and be continuing, or would exist after giving effect to such Credit
Extension (provided, however, that those representations and warranties expressly referring to another date shall be true, correct
and complete in all material respects as of such date). The making of each Credit Extension shall be deemed to be a representation
and warranty by Borrower on the date of such Credit Extension as to the accuracy of the facts referred to in this Section 3.2.


 


4.            CREATION
OF SECURITY INTEREST.


 


4.1            Grant
of Security Interest. Borrower grants and
pledges to Bank a continuing security interest in the Collateral to secure prompt repayment of any and all Obligations (other
than inchoate indemnity obligations) and to secure prompt performance by Borrower of each of its covenants and duties under the
Loan Documents.  Except for Permitted Liens or as disclosed in the Schedule, such security interest constitutes a valid,
first priority security interest in the presently existing Collateral, and will constitute a valid, first priority security interest
in later-acquired Collateral. Borrower also hereby agrees not to sell, transfer, assign, mortgage, pledge, lease, grant a
security interest in, or encumber any of its Intellectual Property Collateral. Notwithstanding any termination of this Agreement
or of any filings undertaken related to Bank’s rights under the Code, Bank’s Lien on the Collateral shall remain in
effect for so long as any Obligations (other than inchoate indemnity obligations) are outstanding.


 






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4.2            Perfection
of Security Interest. Borrower authorizes
Bank to file at any time financing statements, continuation statements, and amendments thereto that (i) either specifically
describe the Collateral or describe the Collateral as all assets of Borrower of the kind pledged hereunder, and (ii) contain
any other information required by the Code for the sufficiency of filing office acceptance of any financing statement, continuation
statement, or amendment, including whether Borrower is an organization, the type of organization and any organizational identification
number issued to Borrower, if applicable. Borrower shall have possession of the Collateral, except where expressly otherwise provided
in this Agreement or where Bank chooses to perfect its security interest by possession in addition to the filing of a financing
statement. Where Collateral is in possession of a third party bailee, Borrower shall take such steps as Bank reasonably requests
for Bank to (i) subject to Section 7.10 below, obtain an acknowledgment, in form and substance satisfactory to Bank,
of the bailee that the bailee holds such Collateral for the benefit of Bank, and (ii) obtain “control” of any
Collateral consisting of investment property, deposit accounts, letter-of-credit rights or electronic chattel paper (as such items
and the term “control” are defined in Revised Article 9 of the Code) by causing the securities intermediary or
depositary institution or issuing bank to execute a control agreement in form and substance reasonably satisfactory to Bank. Borrower
will not create any chattel paper without placing a legend on the chattel paper acceptable to Bank indicating that Bank has a
security interest in the chattel paper. Borrower from time to time may deposit with Bank specific cash collateral to secure specific
Obligations; Borrower authorizes Bank to hold such specific balances in pledge and to decline to honor any drafts thereon or any
request by Borrower or any other Person to pay or otherwise transfer any part of such balances for so long as the specific Obligations
are outstanding. Borrower shall take such other actions as Bank requests to perfect its security interests granted under this
Agreement.


 





5.            REPRESENTATIONS
AND WARRANTIES.


 


Borrower
represents and warrants as follows:


 


5.1            Due
Organization and Qualification. Borrower
and each Subsidiary is a corporation duly existing under the laws of the state in which it is organized and qualified and licensed
to do business in any state in which the conduct of its business or its ownership of property requires that it be so qualified,
except where the failure to do so would not reasonably be expected to cause a Material Adverse Effect.


 


5.2            Due
Authorization; No Conflict. The execution,
delivery, and performance of the Loan Documents are within Borrower’s powers, have been duly authorized, and are not in
conflict with nor constitute a breach of any provision contained in Borrower’s Certificate of Incorporation or Bylaws, nor
will they constitute an event of default under any material agreement by which Borrower is bound. Borrower is not in default under
any agreement by which it is bound, except to the extent such default would not reasonably be expected to cause a Material Adverse
Effect.


 


5.3            Collateral.
Borrower has rights in or the power to transfer the Collateral, and its title to the Collateral is free and clear of Liens, adverse
claims, and restrictions on transfer or pledge except for Permitted Liens. Other than movable items of personal property such
as laptop computers, all Collateral having an aggregate book value in excess of $100,000, is located solely in the Collateral
States, and such other locations as to which Borrower gives Bank prior written notice in accordance with this Agreement. All Inventory
is in all material respects of good and merchantable quality, free from all material defects, except for Inventory for which adequate
reserves have been made. Except as set forth in the Schedule or as permitted by Section 6.6, none of Borrower’s Cash
is maintained or invested with a Person other than Bank or Bank’s affiliates.


 






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5.4            Intellectual
Property Collateral. Borrower is the sole
owner of the Intellectual Property Collateral, except for licenses granted by Borrower to its customers in the ordinary course
of business. To Borrower’s knowledge, each of the Copyrights, Trademarks and Patents that is Intellectual Property Collateral
is valid and enforceable, and no part of the Intellectual Property Collateral has been judged invalid or unenforceable, in whole
or in part, and no claim has been made to Borrower that any part of the Intellectual Property Collateral violates the rights of
any third party except to the extent such claim would not reasonably be expected to cause a Material Adverse Effect.


 


5.5            Name;
Location of Chief Executive Office. Except
as disclosed in the Schedule (and except for changes of which Borrower has given notice in accordance with Section 7.2 of
this Agreement), Borrower has not done business under any name other than that specified on the signature page hereof, and
its exact legal name is as set forth in the first paragraph of this Agreement. The chief executive office of Borrower is located
at the address indicated in Section 10 hereof, except for changes of which Borrower has given notice in accordance with Section 7.2
of this Agreement.


 


5.6            Litigation.
Except as set forth in the Schedule, there are no actions or proceedings pending by or against Borrower or any Subsidiary before
any court or administrative agency in which a likely adverse decision would reasonably be expected to have a Material Adverse
Effect.


 


5.7            No
Material Adverse Change in Financial Statements.
All consolidated and consolidating financial statements related to Borrower and any Subsidiary that are delivered by Borrower
to Bank fairly present in all material respects Borrower’s consolidated and consolidating financial condition as of the
date thereof and Borrower’s consolidated and consolidating results of operations for the period then ended. There has not
been a material adverse change in the consolidated or in the consolidating financial condition of Borrower since the date of the
most recent of such financial statements submitted to Bank.


 


5.8            Solvency,
Payment of Debts. Borrower is able to pay
its debts (including trade debts) as they mature; the fair saleable value of Borrower’s assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities; and Borrower is not left with unreasonably small capital after the
transactions contemplated by this Agreement.


 


5.9            Compliance
with Laws and Regulations. Borrower and
each Subsidiary have met the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA.
No event has occurred resulting from Borrower’s failure to comply with ERISA that is reasonably likely to result in Borrower’s
incurring any liability that could reasonably be expected to have a Material Adverse Effect. Borrower is not an “investment
company” or a company “controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940. Borrower is not engaged principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T and U of the Board of Governors
of the Federal Reserve System). Borrower has not violated any statutes, laws, ordinances or rules applicable to it, the violation
of which would reasonably be expected to have a Material Adverse Effect. Borrower and each Subsidiary have filed or caused to
be filed all tax returns required to be filed, and have paid, or have made adequate provision for the payment of, all taxes reflected
therein except those being contested in good faith with adequate reserves under GAAP or where the failure to file such returns
or pay such taxes would not reasonably be expected to have a Material Adverse Effect.


 






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5.10            Subsidiaries.
Borrower does not own any stock, partnership interest or other equity securities of any Person, except for Permitted Investments.


 


5.11            Government
Consents. Borrower and each Subsidiary have
obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all governmental
authorities that are necessary for the continued operation of Borrower’s business as currently conducted, except where the
failure to do so would not reasonably be expected to cause a Material Adverse Effect.


 


5.12            Inbound
Licenses. Except as disclosed on the Schedule,
Borrower is not a party to, nor is bound by, any material license or other agreement important for the conduct of Borrower’s
business that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such
license or agreement or any other property important for the conduct of Borrower’s business, other than this Agreement or
the other Loan Documents.


 


5.13            Full
Disclosure. No representation, warranty
or other statement made by Borrower in any certificate or written statement furnished to Bank taken together with all such certificates
and written statements furnished to Bank contains any untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained in such certificates or statements not misleading in light of the circumstances in which
they were made, it being recognized by Bank that the projections and forecasts provided by Borrower in good faith and based upon
reasonable assumptions are not to be viewed as facts and that actual results during the period or periods covered by any such
projections and forecasts may differ from the projected or forecasted results.


 


6.            AFFIRMATIVE
COVENANTS.


 


Borrower
covenants that, until payment in full of all outstanding Obligations (other than inchoate indemnity obligations), and for so long
as Bank may have any commitment to make a Credit Extension hereunder, Borrower shall do all of the following:


 


6.1            Good
Standing and Government Compliance. Borrower
shall maintain its and each of its Subsidiaries’ corporate existence and good standing in their respective states of formation,
shall maintain qualification and good standing in each other jurisdiction in which the failure to so qualify would reasonably
be expected to have a Material Adverse Effect, and shall furnish to Bank the organizational identification number issued to Borrower
by the authorities of the state in which Borrower is organized, if applicable. Borrower shall meet, and shall cause each Subsidiary
to meet, the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA. Borrower shall
comply, and shall cause each Subsidiary to comply, with all statutes, laws, ordinances and government rules and regulations
to which it is subject, and shall maintain, and shall cause each of its Subsidiaries to maintain, in force all licenses, approvals
and agreements, the loss of which or failure to comply with which would reasonably be expected to have a Material Adverse Effect.


 






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6.2            Financial
Statements, Reports, Certificates. Borrower
shall deliver to Bank: (i) as soon as available, but in any event within 30 days after the end of each calendar month, a
company prepared consolidated and consolidating balance sheet, income statement, and statement of cash flows covering Borrower’s
operations during such period, in a form reasonably acceptable to Bank and certified by a Responsible Officer; (ii) as soon
as available, but in any event within 180 days after the end of Borrower’s fiscal year, audited (or such other level as
is required by the Investment Agreement, if any) consolidated and consolidating financial statements of Borrower prepared in accordance
with GAAP, consistently applied, together with an opinion, which is either unqualified or qualified only for going concern due
to a projected inability to finance future operations, on such financial statements of an independent certified public accounting
firm reasonably acceptable to Bank; (iii) an annual budget approved by Borrower’s Board of Directors as soon as available
but not later than January 31 of each fiscal year of Borrower during the term of this Agreement; (iv) if applicable,
copies of all statements, reports and notices sent or made available generally by Borrower to its security holders or to any holders
of Subordinated Debt and all reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission; (v) promptly
upon receipt of notice thereof, a report of any legal actions pending or threatened against Borrower or any Subsidiary that could
reasonably be expected to result in damages or costs to Borrower or any Subsidiary of $1,000,000 or more; (vi) promptly upon
receipt, each management letter prepared by Borrower’s independent certified public accounting firm regarding Borrower’s
management control systems; (vii) such budgets, sales projections, operating plans or other financial information generally
prepared by Borrower in the ordinary course of business as Bank may reasonably request from time to time; (viii) promptly
upon request by Bank (which in any event shall be delivered within 3 Business Days) such updates on regulatory and litigation
matters as Bank may reasonably request from time to time; and (ix) within 30 days of the last day of each fiscal quarter,
a report signed by Borrower, in form reasonably acceptable to Bank, listing any applications or registrations that Borrower has
made or filed in respect of any Patents, Copyrights or Trademarks and the status of any outstanding applications or registrations,
as well as any material change in Borrower’s Intellectual Property Collateral, including but not limited to any subsequent
ownership right of Borrower in or to any Trademark, Patent or Copyright not specified in Exhibits A, B, and C of any Intellectual
Property Security Agreement delivered to Bank by Borrower in connection with this Agreement.


 


(a)            Within
30 days after the last day of each month, Borrower shall deliver to Bank with the monthly financial statements (i) a Compliance
Certificate certified as of the last day of the applicable month and signed by a Responsible Officer in substantially the form
of Exhibit D hereto, (ii) aged listings by invoice date of accounts receivable and accounts payable, if any and (iii) a
cohort report, each in form and substance satisfactory to Bank.


 


(b)            As
soon as possible and in any event within 3 Business Days after becoming aware of the occurrence or existence of an Event of Default
hereunder, Borrower shall deliver to Bank a written statement of a Responsible Officer setting forth details of the Event of Default,
and the action which Borrower has taken or proposes to take with respect thereto.


 






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(c)            Bank
(through any of its officers, employees, or agents) shall have the right, upon reasonable prior notice, from time to time during
Borrower’s usual business hours but no more than twice a year (unless an Event of Default has occurred and is continuing),
to inspect Borrower’s Books and to make copies thereof and to check, test, inspect, audit and appraise the Collateral at
Borrower’s expense in order to verify Borrower’s financial condition or the amount, condition of, or any other matter
relating to, the Collateral.


 


Borrower
may deliver to Bank on an electronic basis any certificates, reports or information required pursuant to this Section 6.2,
and Bank shall be entitled to rely on the information contained in the electronic files, provided that Bank in good faith believes
that the files were delivered by a Responsible Officer. Borrower shall include a submission date on any certificates and reports
to be delivered electronically.


 


6.3            Inventory
and Equipment; Returns. Borrower shall keep
all Inventory and Equipment in good and merchantable condition, free from all material defects except for Inventory and Equipment
(i) sold in the ordinary course of business, and (ii) for which adequate reserves have been made, in all cases in the
United States and such other locations as to which Borrower gives prior written notice. Returns and allowances, if any, as between
Borrower and its account debtors shall be on the same basis and in accordance with the usual customary practices of Borrower,
as they exist on the Closing Date. Borrower shall promptly notify Bank of all returns and recoveries and of all disputes and claims
involving inventory having a book value of more than $1,000,000.


 


6.4            Taxes.
Borrower shall make, and cause each Subsidiary to make, due and timely payment or deposit of all material federal, state, and
local taxes, assessments, or contributions required of it by law, including, but not limited to, those laws concerning income
taxes, F.I.C.A., F.U.T.A. and state disability, and will execute and deliver to Bank, on demand, proof satisfactory to Bank indicating
that Borrower or a Subsidiary has made such payments or deposits and any appropriate certificates attesting to the payment or
deposit thereof; provided that Borrower or a Subsidiary need not make any payment if the amount or validity of such payment is
contested in good faith by appropriate proceedings and is reserved against (to the extent required by GAAP) by Borrower or such
Subsidiary.


 


6.5            Insurance.
Borrower, at its expense, shall (i) keep the Collateral insured against loss or damage, and (ii) maintain liability
and other insurance, in each case as ordinarily insured against by other owners in businesses similar to Borrower’s. All
such policies of insurance shall be in such form, with such companies, and in such amounts as reasonably satisfactory to Bank.
All policies of property insurance shall contain a lender’s loss payable endorsement, in a form satisfactory to Bank, showing
Bank as an additional loss payee, and all liability insurance policies shall show Bank as an additional insured and specify that
the insurer must give at least twenty (20) days notice to Bank before canceling its policy for any reason (other than non-payment
of premium, which shall require ten (10) days notice to Bank). Within 30 days of the Closing Date, Borrower shall cause to
be furnished to Bank a copy of its policies or certificate of insurance including any endorsements covering Bank or showing Bank
as an additional insured. Upon Bank’s request, Borrower shall deliver to Bank certified copies of the policies of insurance
and evidence of all premium payments. Proceeds payable under any casualty policy will, at Borrower’s option, be payable
to Borrower to replace the property subject to the claim, provided that any such replacement property shall be deemed Collateral
in which Bank has been granted a first priority security interest, provided that if an Event of Default has occurred and is continuing,
all proceeds payable under any such policy shall, at Bank’s option, be payable to Bank to be applied on account of the Obligations.


 






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6.6            “Primary
Depository”. Borrower shall maintain all its depository and operating accounts with Bank and its primary investment
accounts with Bank or Bank’s affiliates. Notwithstanding anything to the contrary in the foregoing or herein, Borrower may
also maintain outside operating accounts and/or PayPal account(s), or similar online payment system accounts, for purposes of
online vendor payments in the ordinary course of business and with aggregate balances not exceeding $500,000, and in each case,
no control agreements shall be required for such accounts. Prior to Borrower maintaining any investment accounts with Bank’s
affiliates, Borrower, Bank, and any such affiliate shall have entered into a securities account control agreement with respect
to any such investment accounts, in form and substance satisfactory to Bank.


 


6.7            Financial
Covenants. Borrower shall at all times maintain
the following ratios and covenants:


 


(a)            Minimum
Cumulative Revenue. Measured monthly and
calculated on a cumulative basis with the measuring period beginning on October 1, 2016, Borrower shall achieve Revenue of
at least the amounts shown in the table immediately below for the corresponding reporting periods.


 


	Reporting
    Period Ending	Minimum
    Cumulative Revenue
	October 31,
    2016	$17,000,000
	November 30,
    2016	$37,000,000
	December 31,
    2016	$55,000,000


 


For
subsequent reporting periods, Bank and Borrower hereby agree that, on or before January 31st of each year during
the term of this Agreement, Borrower shall provide Bank with a budget for such year, which shall be approved by Borrower’s
Board of Directors, and Bank shall use that budget to establish the minimum Revenue amounts (and calculation thereof) for such
year, with such amounts being incorporated herein by an amendment, which Borrower hereby agrees to execute.


 


6.8            Registration
of Intellectual Property Rights.


 


(a)            Borrower
shall promptly give Bank written notice of any applications or registrations of intellectual property rights filed with the United
States Patent and Trademark Office, including the date of such filing and the registration or application numbers, if any.


 






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(b)            Borrower
shall (i) give Bank not less than 10 days prior written notice of the filing of any applications or registrations with the
United States Copyright Office, including the title of such intellectual property rights to be registered, as such title will
appear on such applications or registrations, and the date such applications or registrations will be filed; (ii) prior to
the filing of any such applications or registrations, execute such documents as Bank may reasonably request for Bank to maintain
its perfection in such intellectual property rights to be registered by Borrower; (iii) upon the request of Bank, either
deliver to Bank or file such documents simultaneously with the filing of any such applications or registrations; and (iv) upon
filing any such applications or registrations, promptly provide Bank with a copy of such applications or registrations together
with any exhibits, evidence of the filing of any documents requested by Bank to be filed for Bank to maintain the perfection and
priority of its security interest in such intellectual property rights, and the date of such filing.


 





(c)            Borrower
shall execute and deliver such additional instruments and documents from time to time as Bank shall reasonably request to perfect
and maintain the perfection and priority of Bank’s security interest in the Intellectual Property Collateral.


 


(d)            Borrower
shall (i) protect, defend and maintain the validity and enforceability of the trade secrets, Trademarks, Patents and Copyrights,
(ii) use commercially reasonable efforts to detect infringements of the Trademarks, Patents and Copyrights and promptly advise
Bank in writing of material infringements detected, and (iii) not allow any material Trademarks, Patents or Copyrights to
be abandoned, forfeited or dedicated to the public without the written consent of Bank, which shall not be unreasonably withheld.


 


(e)            Bank
shall have the right, but not the obligation, to take, at Borrower’s sole expense, any actions that Borrower is required
under this Section 6.8 to take but which Borrower fails to take, after 15 days’ notice to Borrower. Borrower shall
reimburse and indemnify Bank for all reasonable costs and reasonable expenses incurred in the reasonable exercise of its rights
under this Section 6.8.


 


6.9            Consent
of Inbound Licensors. Prior to entering
into or becoming bound by any material inbound license or agreement (other than ‘off-the-shelf’ or other non-custom,
commercially available licenses), Borrower shall: (i) provide written notice to Bank of the material terms of such license
or agreement with a description of its likely impact on Borrower’s business or financial condition; and (ii) in good
faith use commercially reasonable efforts to obtain the consent of, or waiver by, any person whose consent or waiver is necessary
for Borrower’s interest in such licenses or contract rights to be deemed Collateral and for Bank to have a security interest
in it that might otherwise be restricted by the terms of the applicable license or agreement, whether now existing or entered
into in the future, provided, however, that the failure to obtain any such consent or waiver shall not constitute a default under
this Agreement.


 


6.10            Creation/Acquisition
of Subsidiaries. In the event any Borrower
or any Subsidiary of any Borrower creates or acquires any Subsidiary, Borrower or such Subsidiary shall promptly notify Bank of
such creation or acquisition, and Borrower or such Subsidiary shall take all actions reasonably requested by Bank to achieve any
of the following with respect to such “New Subsidiary” (defined as a Subsidiary formed after the date
hereof during the term of this Agreement):  (i) to cause such New Subsidiary to become either a co-Borrower hereunder
or a secured guarantor with respect to the Obligations, in each case, if such New Subsidiary is organized under the laws of the
United States; and (ii) to grant and pledge to Bank a perfected security interest in 100% of the stock, units or other evidence
of ownership held by Borrower or its Subsidiaries of any such New Subsidiary which is organized under the laws of the United States,
and 65% of the stock, units or other evidence of ownership held by Borrower or its Subsidiaries of any such New Subsidiary which
is not organized under the laws of the United States.


 






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6.11            Further
Assurances. At any time and from time to
time Borrower shall execute and deliver such further instruments and take such further action as may reasonably be requested by
Bank to effect the purposes of this Agreement.


 


6.12            Amended
and Restated Subordination Agreement. No
later than 30 days after the Closing Date, Borrower shall deliver to Bank an Amended and Restated Subordination Agreement duly
executed by all holders of Subordinated Debt.


 


7.            NEGATIVE
COVENANTS.


 


Borrower
covenants and agrees that, so long as any credit hereunder shall be available and until the outstanding Obligations (other than
inchoate indemnity obligations) are paid in full or for so long as Bank may have any commitment to make any Credit Extensions,
Borrower will not do any of the following without Bank’s prior written consent, which shall not be unreasonably withheld:


 


7.1            Dispositions.
Convey, sell, lease, license, transfer or otherwise dispose of (collectively, to “Transfer”), or permit any of its
Subsidiaries to Transfer, all or any part of its business or property, or move cash balances on deposit with Bank to accounts
opened at another financial institution (other than in accordance with Section 6.6 of this Agreement) other than Permitted
Transfers and Permitted Investments.


 


7.2            Change
in Name, Location, Executive Office, or Executive Management; Change in Business; Change in Fiscal Year; Change in Control.
Change its name or the state of Borrower’s formation or relocate its chief executive office without 30 days prior written
notification to Bank; replace or suffer the departure of its chief executive officer or chief financial officer without delivering
written notification to Bank within 10 days; fail to appoint interim replacement or fill a vacancy in the position of CEO or CFO
(or have someone who assumes, or a group of individuals who collectively assume, similar responsibilities to that of a CEO or
CFO) for more than 90 consecutive days; suffer a change on its board of directors which results in the failure of at least one
partner of The Raine Group or its Affiliates to serve as a voting member (unless such partner is replaced with a partner from
a venture capital investor who is appointed to the board of directors in connection with a sale of Borrower’s equity securities
with net Cash proceeds received by Borrower therefrom equal to or in excess of $50,000,000), without the prior written consent
of Bank which may be withheld in Bank’s sole discretion; suffer a change on its board of directors which results in the
failure of at least one partner of Redpoint or GGV Capital or their Affiliates to serve as a voting member (unless such partner
is replaced with a partner from a venture capital investor who is appointed to the board of directors in connection with a sale
of Borrower’s equity securities with net Cash proceeds received by Borrower therefrom equal to or in excess of $50,000,000),
without the prior written consent of Bank, which may be withheld in Bank’s sole discretion; or suffer the resignation of
one or more directors from its board of directors in anticipation of Borrower’s insolvency, without the prior written consent
of Bank which may be withheld in Bank’s sole discretion; take action to liquidate, wind up, or otherwise cease to conduct
business in the ordinary course; engage in any business, or permit any of its Subsidiaries to engage in any business, other than
or reasonably related or incidental to the businesses currently engaged in by Borrower; change its fiscal year end; have a Change
in Control.


 






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7.3            Mergers
or Acquisitions.  Merge or consolidate,
or permit any of its Subsidiaries to merge or consolidate, with or into any other business organization (other than mergers or
consolidations of a Subsidiary into another Subsidiary or into Borrower), or acquire, or permit any of its Subsidiaries to acquire,
all or substantially all of the capital stock or property of another Person except where (a) each of the following conditions
is applicable:  (i) the consideration paid in connection with such transactions (including assumption of liabilities)
does not in the aggregate exceed $1,000,000 during any fiscal year, (ii) no Event of Default has occurred, is continuing
or would exist after giving effect to such transactions, (iii) such transactions do not result in a Change in Control, and
(iv) Borrower is the surviving entity; or (b) the Obligations are repaid in full concurrently with the closing of any
merger or consolidation of Borrower in which Borrower is not the surviving entity; provided, however, that Borrower shall not,
without Bank’s prior written consent, enter into any  binding contractual arrangement with any Person to attempt to
facilitate a merger or acquisition of Borrower; provided however, Borrower may enter into any such agreement without Bank’s
prior written consent so long as (i) no Event of Default exists when such agreement is entered into by Borrower, (ii) 
such agreement does not give such Person the right to claim any fee, payment or damages from any parties, other than from Borrower
or Borrower’s investors, in connection with a sale of Borrower’s stock or assets pursuant to or resulting from an
assignment for the benefit of creditors, an asset turnover to Borrower’s creditors (including, without limitation, Bank),
foreclosure, bankruptcy or similar liquidation, and (iii) Borrower notifies Bank in advance of entering into such an agreement
(provided, the failure to give such notification shall not be deemed a material breach of this Agreement).


 


7.4            Indebtedness.
Create, incur, assume, guarantee or be or remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other
than Permitted Indebtedness, or prepay any Indebtedness or take any actions which impose on Borrower an obligation to prepay any
Indebtedness, except Indebtedness to Bank.


 


7.5            Encumbrances.
Create, incur, assume or allow any Lien with respect to its property, or assign or otherwise convey any right to receive income,
including the sale of any Accounts, or permit any of its Subsidiaries so to do, except for Permitted Liens, or covenant to any
other Person (other than (i) the licensors of in-licensed property with respect to such property or (ii) the lessors
of specific equipment or lenders financing specific equipment with respect to such leased or financed equipment) that Borrower
in the future will refrain from creating, incurring, assuming or allowing any Lien with respect to any of Borrower’s property.


 


7.6            Distributions.
Pay any dividends or make any other distribution or payment on account of or in redemption, retirement or purchase of any capital
stock, except that Borrower may (i) repurchase the stock of former employees, officers, directors and consultants pursuant
to stock repurchase agreements in an aggregate amount not to exceed $1,000,000 in any fiscal year, so long as an Event of Default
does not exist prior to such repurchase or would not exist after giving effect to such repurchase;(ii) repurchase the stock
of former employees, officers, directors and consultants pursuant to stock repurchase agreements in any amount where the consideration
for the repurchase is the cancellation of indebtedness owed by such former employees, officers, directors and consultants to Borrower
regardless of whether an Event of Default exists; (iii) convert any of its convertible securities into equity securities
pursuant to the terms of such convertible securities and (iv) Borrower’s Subsidiaries may issue dividends to other
Subsidiaries or to Borrower as part of tax planning.


 






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7.7            Investments.
Directly or indirectly acquire or own, or make any Investment in or to any Person, or permit any of its Subsidiaries so to do,
other than Permitted Investments, or maintain or invest any of its investment property with a Person other than Bank or Bank’s
Affiliates or permit any Subsidiary to do so unless such Person has entered into a control agreement with Bank, in form and substance
satisfactory to Bank, or suffer or permit any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary
from paying dividends or otherwise distributing property to Borrower.


 


7.8            Transactions
with Affiliates. Directly or indirectly
enter into or permit to exist any material transaction with any Affiliate of Borrower except for (i) transactions that are
in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than
would be obtained in an arm’s length transaction with a non-affiliated Person, and (ii) bona-fide equity financings
to existing investors provided there is no Change in Control.


 


7.9            Subordinated
Debt. Make any payment in respect of any
Subordinated Debt, or permit any of its Subsidiaries to make any such payment, except in compliance with the terms of such Subordinated
Debt, or amend any provision affecting Bank’s rights contained in any documentation relating to the Subordinated Debt without
Bank’s prior written consent, except in compliance with the terms of the applicable subordination agreement to which Bank
is a party.


 


7.10            Inventory
and Equipment. Store the Inventory or the
Equipment of a book value in excess of $1,000,000 with a bailee, warehouseman, collocation facility or similar third party unless
the third party has been notified of Bank’s security interest and Bank (a) has received an acknowledgment from the
third party that it is holding or will hold the Inventory or Equipment for Bank’s benefit or (b) is in possession of
the warehouse receipt, where negotiable, covering such Inventory or Equipment. Except for Inventory sold in the ordinary course
of business and for movable items of personal property having an aggregate book value not in excess of $1,000,000, and except
for such other locations as Bank may approve in writing, Borrower shall keep the Inventory and Equipment only at the location
set forth in Section 10 and such other locations of which Borrower gives Bank prior written notice and as to which Bank is
able to take such actions as may be necessary to perfect its security interest or to obtain a bailee’s acknowledgment of
Bank’s rights in the Collateral.


 


7.11            No
Investment Company; Margin Regulation. Become
or be controlled by an “investment company,” within the meaning of the Investment Company Act of 1940, or become principally
engaged in, or undertake as one of its important activities, the business of extending credit for the purpose of purchasing or
carrying margin stock, or use the proceeds of any Credit Extension for such purpose.


 






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7.12            Capitalized
Expenditures. Make Capitalized Expenditures
in excess of $1,000,000 in the aggregate in any fiscal year of Borrower.


 


8.            EVENTS
OF DEFAULT.


 


Any
one or more of the following events shall constitute an Event of Default by Borrower under this Agreement:


 


8.1            Payment
Default. If Borrower fails to pay any of
the Obligations when due;


 


8.2            Covenant
Default.


 


(a)            If
Borrower fails to perform any obligation under Sections 6.2 (financial reporting), 6.4 (taxes), 6.5 (insurance), 6.6 (primary
accounts), 6.7 (financial covenants) or 6.12 (amended and restated subordination agreement) or violates any of the covenants contained
in Article 7 of this Agreement; or


 


(b)            If
Borrower fails or neglects to perform or observe any other material term, provision, condition, or covenant contained in this
Agreement (other than the sections enumerated in Section 8.2(a) above), in any of the Loan Documents, or in any other
present or future agreement between Borrower and Bank and as to any default under such other term, provision, condition or covenant
that can be cured, has failed to cure such default within 15 days after Borrower receives notice thereof or any officer of Borrower
becomes aware thereof; provided, however, that if the default cannot by its nature be cured within the 15 day period or cannot
after diligent attempts by Borrower be cured within such 15 day period, and such default is likely to be cured within a reasonable
time, then Borrower shall have an additional reasonable period (which shall not in any case exceed 30 days) to attempt to cure
such default, and within such reasonable time period the failure to have cured such default shall not be deemed an Event of Default
but no Credit Extensions will be made.


 


8.3            Material
Adverse Change. If there occurs any circumstance
or any circumstances which would reasonably be expected to have a Material Adverse Effect;


 


8.4            Attachment.
If any material portion of Borrower’s assets is attached, seized, subjected to a writ or distress warrant, or is levied
upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure,
writ or distress warrant or levy has not been removed, discharged or rescinded within 10 days, or if Borrower is enjoined, restrained,
or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or if a judgment
or other claim becomes a lien or encumbrance upon any material portion of Borrower’s assets, or if a notice of lien, levy,
or assessment is filed of record with respect to any material portion of Borrower’s assets by the United States Government,
or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same
is not paid within ten days after Borrower receives notice thereof, provided that none of the foregoing shall constitute an Event
of Default where such action or event is stayed or an adequate bond has been posted pending a good faith contest by Borrower (provided
that no Credit Extensions will be made during such cure period);


 






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8.5            Insolvency.
If Borrower becomes insolvent, or if an Insolvency Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced
against Borrower and is not dismissed or stayed within 30 days (provided that no Credit Extensions will be made prior to the dismissal
of such Insolvency Proceeding);


 


8.6            Other
Agreements. If there is a default or other
failure to perform in any agreement to which Borrower is a party with a third party or parties (a) resulting in a right by
such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of
$1,000,000, (b) in connection with any lease of real property material to the conduct of Borrower’s business, if such
default or failure to perform results in the right of another party to terminate such lease, or (c) that would reasonably
be expected to have a Material Adverse Effect;


 


8.7            Judgments.
If a final, uninsured judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least
$1,000,000 shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of 10 days (provided that
no Credit Extensions will be made prior to the satisfaction or stay of the judgment); or


 


8.8            Misrepresentations.
If any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth
herein or in any certificate delivered to Bank by any Responsible Officer pursuant to this Agreement or to induce Bank to enter
into this Agreement or any other Loan Document.


 


8.9            Legality
of Online Fantasy Sports. If paid online
daily fantasy sports becomes illegal, unlawful, or restricted by federal law such that the Borrower is prohibited from offering
paid online daily fantasy sports contests to Borrower’s end users.


 


9.            BANK’S
RIGHTS AND REMEDIES.


 


9.1            Rights
and Remedies. Upon the occurrence and during
the continuance of an Event of Default, Bank may, at its election, without notice of its election and without demand, do any one
or more of the following, all of which are authorized by Borrower:


 


(a)            Declare
all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable
(provided that upon the occurrence of an Event of Default described in Section 8.5 (insolvency), all Obligations shall become
immediately due and payable without any action by Bank);


 


(b)            Demand
that Borrower (i) deposit cash with Bank in an amount equal to the amount of any Letters of Credit remaining undrawn, as
collateral security for the repayment of any future drawings under such Letters of Credit, and (ii) pay in advance all Letter
of Credit fees scheduled to be paid or payable over the remaining term of the Letters of Credit, and Borrower shall promptly deposit
and pay such amounts;


 






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(c)            Cease
advancing money or extending credit to or for the benefit of Borrower under this Agreement or under any other agreement between
Borrower and Bank;


 





(d)            Settle
or adjust disputes and claims directly with account debtors for amounts, upon terms and in whatever order that Bank reasonably
considers advisable;


 


(e)            Make
such payments and do such acts as Bank considers necessary or reasonable to protect its security interest in the Collateral. Borrower
agrees to assemble the Collateral if Bank so requires, and to make the Collateral available to Bank as Bank may designate. Borrower
authorizes Bank to enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or any
part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Bank’s determination
appears to be prior or superior to its security interest and to pay all expenses incurred in connection therewith. With respect
to any of Borrower’s owned premises, Borrower hereby grants Bank a license to enter into possession of such premises and
to occupy the same, without charge, in order to exercise any of Bank’s rights or remedies provided herein, at law, in equity,
or otherwise;


 


(f)            Place
a “hold” on any account of Borrower maintained with Bank and/or deliver a notice of exclusive control, any entitlement
order, or other directions or instructions pursuant to any control agreement or similar agreements providing control of any Collateral;


 


(g)            Set
off and apply to the Obligations any and all (i) balances and deposits of Borrower held by Bank, and (ii) indebtedness
at any time owing to or for the credit or the account of Borrower held by Bank;


 


(h)            Ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner provided for
herein) the Collateral. Bank is hereby granted a license or other right, solely pursuant to the provisions of this Section 9.1,
to use, without charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks,
service marks, and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production
of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this Section 9.1,
Borrower’s rights under all licenses and all franchise agreements shall inure to Bank’s benefit;


 


(i)            Sell
the Collateral at either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms,
in such manner and at such places (including Borrower’s premises) as Bank determines is commercially reasonable, and apply
any proceeds to the Obligations in whatever manner or order Bank deems appropriate. Bank may sell the Collateral without giving
any warranties as to the Collateral. Bank may specifically disclaim any warranties of title or the like. This procedure will not
be considered adversely to affect the commercial reasonableness of any sale of the Collateral. If Bank sells any of the Collateral
upon credit, Borrower will be credited only with payments actually made by the purchaser, received by Bank, and applied to the
indebtedness of the purchaser. If the purchaser fails to pay for the Collateral, Bank may resell the Collateral and Borrower shall
be credited with the proceeds of the sale;


 






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(j)            Bank
may credit bid and purchase at any public sale;


 





(k)            Apply
for the appointment of a receiver, trustee, liquidator or conservator of the Collateral, without notice and without regard to
the adequacy of the security for the Obligations and without regard to the solvency of Borrower, any guarantor or any other Person
liable for any of the Obligations; and


 


(l)            Any
deficiency that exists after disposition of the Collateral as provided above will be paid immediately by Borrower.


 


Bank
may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance
will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.


 


9.2            Power
of Attorney. Effective only upon the occurrence
and during the continuance of an Event of Default, Borrower hereby irrevocably appoints Bank (and any of Bank’s designated
officers, or employees) as Borrower’s true and lawful attorney to: (a) send requests for verification of Accounts or
notify account debtors of Bank’s security interest in the Accounts; (b) endorse Borrower’s name on any checks
or other forms of payment or security that may come into Bank’s possession; (c) sign Borrower’s name on any invoice
or bill of lading relating to any Account, drafts against account debtors, schedules and assignments of Accounts, verifications
of Accounts, and notices to account debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all claims
under and decisions with respect to Borrower’s policies of insurance; (f) settle and adjust disputes and claims respecting
the accounts directly with account debtors, for amounts and upon terms which Bank determines to be reasonable; (g) enter
into a short-form intellectual property security agreement consistent with the terms of this Agreement for recording purposes
only or modify, in its sole discretion, any intellectual property security agreement entered into between Borrower and Bank without
first obtaining Borrower’s approval of or signature to such modification by amending Exhibits A, B, and C, thereof, as appropriate,
to include reference to any right, title or interest in any Copyrights, Patents or Trademarks acquired by Borrower after the execution
hereof or to delete any reference to any right, title or interest in any Copyrights, Patents or Trademarks in which Borrower no
longer has or claims to have any right, title or interest; and (h) file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the Collateral; provided Bank may exercise such power of attorney
to sign the name of Borrower on any of the documents described in clauses (g) and (h) above, regardless of whether an
Event of Default has occurred. The appointment of Bank as Borrower’s attorney in fact, and each and every one of Bank’s
rights and powers, being coupled with an interest, is irrevocable until all of the Obligations (other than inchoate indemnity
obligations) have been fully repaid and performed and Bank’s obligation to provide advances hereunder is terminated.


 


9.3            Accounts
Collection. At any time after the occurrence
and during the continuation of an Event of Default, (i) Bank may notify any Person owing funds to Borrower of Bank’s
security interest in such funds and verify the amount of such Account, and (ii) Borrower shall collect all amounts owing
to Borrower for Bank, receive in trust all payments as Bank’s trustee, and immediately deliver such payments to Bank in
their original form as received from the account debtor, with proper endorsements for deposit.


 






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9.4            Bank
Expenses. If Borrower fails to pay any amounts
or furnish any required proof of payment due to third persons or entities, as required under the terms of this Agreement, then
Bank may do any or all of the following after reasonable notice to Borrower: (a) make payment of the same or any part thereof;
and/or (b) obtain and maintain insurance policies of the type discussed in Section 6.5 of this Agreement, and take any
action with respect to such policies as Bank deems prudent. Any amounts so paid or deposited by Bank shall constitute Bank Expenses,
shall be immediately due and payable, and shall bear interest at the then applicable rate hereinabove provided, and shall be secured
by the Collateral. Any payments made by Bank shall not constitute an agreement by Bank to make similar payments in the future
or a waiver by Bank of any Event of Default under this Agreement.


 





9.5            Bank’s
Liability for Collateral. Bank has no obligation
to clean up or otherwise prepare the Collateral for sale. All risk of loss, damage or destruction of the Collateral shall be borne
by Borrower, except for that which results from Bank’s gross negligence or willful misconduct.


 


9.6            No
Obligation to Pursue Others. Bank has no
obligation to attempt to satisfy the Obligations by collecting them from any other person liable for them and Bank may release,
modify or waive any collateral provided by any other Person to secure any of the Obligations, all without affecting Bank’s
rights against Borrower. Borrower waives any right it may have to require Bank to pursue any other Person for any of the Obligations.


 


9.7            Remedies
Cumulative. Bank’s rights and remedies
under this Agreement, the Loan Documents, and all other agreements shall be cumulative. Bank shall have all other rights and remedies
not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by Bank of one right or remedy shall be
deemed an election, and no waiver by Bank of any Event of Default on Borrower’s part shall be deemed a continuing waiver.
No delay by Bank shall constitute a waiver, election, or acquiescence by it. No waiver by Bank shall be effective unless made
in a written document signed on behalf of Bank and then shall be effective only in the specific instance and for the specific
purpose for which it was given. Borrower expressly agrees that this Section 9.7 may not be waived or modified by Bank by
course of performance, conduct, estoppel or otherwise.


 


9.8            Demand;
Protest. Except as otherwise provided in
this Agreement, Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment
and any other notices relating to the Obligations.


 


10.            NOTICES.


 


Unless
otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other agreement entered
into in connection herewith shall be in writing and (except for financial statements and other informational documents which may
be sent by first-class mail, postage prepaid or provided in accordance with Section 6.2 of this Agreement) shall be personally
delivered or sent by a recognized overnight delivery service, certified mail, postage prepaid, return receipt requested, or by
telefacsimile to Borrower or to Bank, as the case may be, at its addresses set forth below:


 






    20


     


    

 


	If to Borrower:	DRAFTKINGS INC.
	 	125 Summer Street
	 	Boston, MA 02110
	 	Attn: Tim Dent, Chief Financial
    Officer
	 	FAX: 	(617) 500-9915




 


	with a copy to:	COOLEY LLP
	 	1299 Pennsylvania Avenue, Suite 700
	 	Washington, DC 20004-2400
	 	Attn: Jonathan P. Bagg
	 	FAX: 	(202) 842-7899




 


	If to Bank:	PACIFIC WESTERN BANK
	 	406 Blackwell Street, Suite 240
	 	Durham, North Carolina 27701
	 	Attn: Loan Operations Manager
	 	FAX: 	(919) 314-3080




 


	with a copy to:	PACIFIC WESTERN BANK
	 	131 Oliver Street, 2nd
    Floor
	 	Boston, MA 02110
	 	Attn: 	Ben Pattison 
	 	FAX: 	(781) 547-0848




 


The
parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner
given to the other.


 


11.            CHOICE
OF LAW AND VENUE; JURY TRIAL WAIVER.


 


This
Agreement shall be governed by, and construed in accordance with, the internal laws of the State of North Carolina, without regard
to principles of conflicts of law. Jurisdiction shall lie in the State of North Carolina. All disputes, controversies, claims,
actions and similar proceedings arising with respect to Borrower’s account or any related agreement or transaction shall
be brought in the General Court of Justice of North Carolina sitting in Durham County, North Carolina or the United States District
Court for the Middle District of North Carolina, except as provided below with respect to arbitration of such matters. BANK AND
BORROWER EACH ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH OF THEM,
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL OF THEIR CHOICE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY RELATED INSTRUMENT OR LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTION OF ANY OF THEM. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN
ANY RESPECT OR RELINQUISHED BY BANK OR BORROWER, EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY EACH OF THEM. If the jury waiver set
forth in this Section 11 is not enforceable, then any dispute, controversy, claim, action or similar proceeding arising out
of or relating to this Agreement, the Loan Documents or any of the transactions contemplated therein shall be settled by final
and binding arbitration held in Durham County, North Carolina in accordance with the then current Commercial Arbitration Rules of
the American Arbitration Association by one arbitrator appointed in accordance with those rules. The arbitrator shall apply North
Carolina law to the resolution of any dispute, without reference to rules of conflicts of law or rules of statutory
arbitration. Judgment upon any award resulting from arbitration may be entered into and enforced by any state or federal court
having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary
or interim equitable relief, or to compel arbitration in accordance with this Section. The costs and expenses of the arbitration,
including without limitation, the arbitrator’s fees and expert witness fees, and reasonable attorneys’ fees, incurred
by the parties to the arbitration may be awarded to the prevailing party, in the discretion of the arbitrator, or may be apportioned
between the parties in any manner deemed appropriate by the arbitrator. Unless and until the arbitrator decides that one party
is to pay for all (or a share) of such costs and expenses, both parties shall share equally in the payment of the arbitrator’s
fees as and when billed by the arbitrator.


 






    21


     


    

 





12.            GENERAL
PROVISIONS.


 


12.1            Successors
and Assigns. This Agreement shall bind and
inure to the benefit of the respective successors and permitted assigns of each of the parties and shall bind all persons who
become bound as a debtor to this Agreement; provided, however, that neither this Agreement nor any rights hereunder may be assigned
by Borrower without Bank’s prior written consent, which consent may be granted or withheld in Bank’s sole discretion.
Bank shall have the right without the consent of or notice to Borrower to sell, assign, transfer, negotiate, or grant participation
in all or any part of, or any interest in, Bank’s obligations, rights and benefits hereunder.


 


12.2            Indemnification.
Borrower shall defend, indemnify and hold harmless Bank and its officers, employees, and agents (each, and “Indemnified
Party”) against: (a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection
with the transactions contemplated by this Agreement (each, a “Claim”); and (b) all losses or Bank Expenses in
any way suffered, incurred, or paid by Bank, its officers, employees and agents as a result of or in any way arising out of, following,
or consequential to transactions between Bank and Borrower whether under this Agreement, or otherwise (including without limitation
reasonable attorney’s fees and expenses), except for losses, Claims or Bank Expenses caused by Bank’s or any Indemnified
Party’s gross negligence or willful misconduct.


 


12.3            Time
of Essence. Time is of the essence for the
performance of all obligations set forth in this Agreement.


 


12.4            Severability
of Provisions. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any
specific provision.


 






    22


     


    

 


12.5            Amendments
in Writing, Integration. All amendments
to or terminations of this Agreement or the other Loan Documents must be in writing. All prior agreements, understandings, representations,
warranties, and negotiations between the parties hereto with respect to the subject matter of this Agreement and the other Loan
Documents, if any, are merged into this Agreement and the Loan Documents.


 





12.6            Counterparts.
This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one
and the same Agreement.  Executed copies of the signature pages of this Agreement sent by facsimile or transmitted electronically
in Portable Document Format (“PDF”), or any similar format, shall be treated as originals, fully binding and with
full legal force and effect, and the parties waive any rights they may have to object to such treatment.


 


12.7            Survival.
All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations
(other than inchoate indemnity obligations) remain outstanding or Bank has any obligation to make any Credit Extension to Borrower.
The obligations of Borrower to indemnify Bank with respect to the expenses, damages, losses, costs and liabilities described in
Section 12.2 shall survive until all applicable statute of limitations periods with respect to actions that may be brought
against Bank have run.


 


12.8            Confidentiality.
In handling any confidential information, Bank and Borrower and all employees and agents of such party shall exercise the same
degree of care that such party exercises with respect to its own proprietary information of the same types to maintain the confidentiality
of any non-public information thereby received or received pursuant to this Agreement except that disclosure of such information
may be made (i) in the case of Bank, to the subsidiaries or Affiliates of Bank or Borrower in connection with their present
or prospective business relations with Borrower, (ii) in the case of Bank, to prospective transferees or purchasers of any
interest in the Credit Extensions, provided that they have entered into a comparable confidentiality agreement in favor of Borrower
and have delivered a copy to Borrower, (iii) as required by law, regulations, rule or order, subpoena, judicial order
or similar order, (iv) in the case of Bank, as may be required in connection with the examination, audit or similar investigation
of Bank, and (v) as Bank may determine in connection with the enforcement of any remedies hereunder. Confidential information
hereunder shall not include information that either: (a) is in the public domain or in the knowledge or possession of the
receiving party when disclosed to such party, or becomes part of the public domain after disclosure to such receiving party through
no fault of such receiving party; or (b) is disclosed to such receiving party by a third party, provided such receiving party
does not have actual knowledge that such third party is prohibited from disclosing such information.


 


12.9            Effect
of Amendment And Restatement. This Agreement
is intended to and does completely amend and restate, without novation, the Original Agreement. All security interests granted
by Borrower under the Original Agreement are hereby confirmed and ratified and shall continue to secure all Obligations under
this Agreement. Any references to the Original Agreement in any other Loan Document shall be deemed to refer to this Agreement.


 


 


 [Balance
of Page Intentionally Left Blank]


 






    23


     


    

 


IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed as of the date first above written.


 


	 	DRAFTKINGS INC.
	 	 
	 	By: 	/s/
    Jason Robins
	 	 
	 	Name: 	Jason Robins
	 	 
	 	Title: 	CEO
	 	 
	 	PACIFIC WESTERN BANK
	 	 
	 	By: 	/s/ Ben
    Puttison
	 	 
	 	Name: 	Ben Puttison
	 	 
	 	Title: 	SVP




  



     


     


    




 


EXHIBIT A


 


DEFINITIONS


 


“Accounts”
means all presently existing and hereafter arising accounts, contract rights, payment intangibles and all other forms of obligations
owing to Borrower arising out of the sale or lease of goods (including, without limitation, the licensing of software and other
technology) or the rendering of services by Borrower and any and all credit insurance, guaranties, and other security therefor,
as well as all merchandise returned to or reclaimed by Borrower and Borrower’s Books relating to any of the foregoing.


 


“Acquisition”
means (a) any sale, license, or other disposition of all or substantially all of the assets (including intellectual property)
of the Borrower, or (b) any reorganization, consolidation, merger or sale of the voting securities of the Borrower or any
other transaction where the holders of the Borrower’s securities before the transaction beneficially own less than 50% of
the outstanding voting securities of the surviving entity after the transaction.


 


“Affiliate”
means, with respect to any Person, any Person that owns or controls directly or indirectly such Person, any Person that controls
or is controlled by or is under common control with such Person, and each of such Person’s senior executive officers, directors,
and general partners.


 


“Authorized
Officer” means someone designated as such in the corporate resolution provided by Borrower to Bank in which this Agreement
and the transactions contemplated hereunder are authorized by Borrower’s board of directors. If Borrower provides subsequent
corporate resolutions to Bank after the Closing Date, the individual(s) designated as “Authorized Officer(s)”
in the most recently provided resolution shall be the only “Authorized Officers” for purposes of this Agreement.


 


“Availability End
Date” means December 31, 2017.


 


“Bank
Expenses” means all reasonable costs or expenses (including reasonable attorneys’ fees and expenses, whether generated
in-house or by outside counsel) incurred in connection with the preparation, negotiation, administration, and enforcement of the
Loan Documents; reasonable Collateral audit fees; and Bank’s reasonable attorneys’ fees and expenses (whether generated
in-house or by outside counsel) incurred in amending, enforcing or defending the Loan Documents (including fees and expenses of
appeal), incurred before, during and after an Insolvency Proceeding, whether or not suit is brought.


 


“Borrower’s
Books” means all of Borrower’s books and records including: ledgers; records concerning Borrower’s assets or
liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment,
containing such information.


 


“Business
Day” means any day that is not a Saturday, Sunday, or other day on which banks in the State of North Carolina are authorized
or required to close.


 


“Capitalized
Expenditures” means current period unfinanced cash expenditures that are capitalized and amortized over a period of time
in accordance with GAAP, including but not limited to capitalized cash expenditures for capital equipment, capitalized manufacturing
and labor costs as they relate to inventory, and capitalized cash expenditures for software development.


 


“Cash” means
unrestricted cash and cash equivalents.


 






     


     


    

 


“Change
in Control” means a transaction (other than a bona fide equity financing or series of financings) in which any “person”
or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934)
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly
or indirectly, of a sufficient number of shares of all classes of stock then outstanding of Borrower ordinarily entitled to vote
in the election of directors, empowering such “person” or “group” to elect a majority of the Board of
Directors of Borrower, who did not have such power before such transaction.


 


“Chargebacks”
means amounts owed by Borrower to credit card processors for disputed transactions.


 


“Closing Date”
means the date of this Agreement.


 


“Code” means
the North Carolina Uniform Commercial Code as amended or supplemented from time to time.


 


“Collateral”
means the property described on Exhibit B attached hereto and all Negotiable Collateral and Intellectual Property Collateral
to the extent not described on Exhibit B, except to the extent any such property (i) is non-assignable by its terms
without the consent of the licensor thereof or another party (but only to the extent such prohibition on transfer is enforceable
under applicable law, including, without limitation, §25-9-406 and §25-9-408 of the Code), (ii) is property for
which the granting of a security interest therein is contrary to applicable law, provided that upon the cessation of any such
restriction or prohibition, such property shall automatically become part of the Collateral, (iii) constitutes the capital
stock of a controlled foreign corporation (as defined in the IRC), in excess of 65% of the voting power of all classes of capital
stock of such controlled foreign corporations entitled to vote, or (iv) is property (including any attachments, accessions
or replacements) that is subject to a Lien that is permitted pursuant to clause (c) of the definition of Permitted Liens,
if the grant of a security interest with respect to such property pursuant to this Agreement would be prohibited by the agreement
creating such Permitted Lien or would otherwise constitute a default thereunder, provided, that such property will be deemed “Collateral”
hereunder upon the termination and release of such Permitted Lien.


 


“Collateral State”
means the state or states where the Collateral is located, which is Massachusetts.


 


“Compliance
Certificate” means a compliance certificate, in substantially the form of Exhibit D attached hereto, executed by a
Responsible Officer of Borrower.


 


“Contingent
Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with
respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation of another, including, without limitation,
any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or
in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect to undrawn
letters of credit, corporate credit cards or merchant services issued for the account of that Person; and (iii) all obligations
arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement,
or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates
or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection
or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated
or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided,
however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support
arrangement.


 


“Copyrights”
means any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship
and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, now
or hereafter existing, created, acquired or held.


 






     


     


    

 


“Credit
Extension” means each Term Loan, or any other extension of credit, by Bank to or for the benefit of Borrower hereunder.


 


“Entry Fees”
means amounts paid by customers to enter daily fantasy contests.


 


“Equipment”
means all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments
in which Borrower has any interest.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder.


 


“Event of Default”
has the meaning assigned in Article 8.


 


“Existing
Indebtedness” means Obligations existing as of the Closing Date other than certain cash secured credit card services and
Letters of Credit.


 


“GAAP”
means generally accepted accounting principles, consistently applied, as in effect from time to time in the United States.


 


“Indebtedness”
means (a) all indebtedness for borrowed money or the deferred purchase price of property or services, including without limitation
reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by
notes, bonds, debentures or similar instruments, (c) all capital lease obligations, and (d) all Contingent Obligations,
including but not limited to any sublimit contained herein.


 


“Initial Term Loan”
is defined in Section 2.1(b)(i).


 


“Insolvency
Proceeding” means any proceeding commenced by or against any Person or entity under any provision of the United States Bankruptcy
Code, as amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal
or informal moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement,
or other relief.


 


“Intellectual Property
Collateral” means all of Borrower’s right, title, and interest in and to the following:


 


(a)            Copyrights,
Trademarks and Patents;


 


(b)            Any
and all trade secrets, and any and all intellectual property rights in computer software and computer software products now or
hereafter existing, created, acquired or held;


 


(c)            Any
and all design rights which may be available to Borrower now or hereafter existing, created, acquired or held;


 


(d)            Any
and all claims for damages by way of past, present and future infringement of any of the rights included above, with the right,
but not the obligation, to sue for and collect such damages for said use or infringement of the intellectual property rights identified
above;


 


(e)            All
licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all license fees and royalties arising from
such use to the extent permitted by such license or rights;


 


(f)            All
amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents; and


 


(g)            All
proceeds and products of the foregoing, including without limitation all payments under insurance or any indemnity or warranty
payable in respect of any of the foregoing.


 






     


     


    

 


“Inventory”
means all present and future inventory in which Borrower has any interest.


 


“Investment”
means any beneficial ownership of (including stock, partnership or limited liability company interest or other securities) any
Person, or any loan, advance or capital contribution to any Person.


 


“Investment
Agreement” means, collectively, Borrower’s stock purchase and other agreement(s) pursuant to which Borrower most
recently issued its preferred stock.


 


“IRC” means
the Internal Revenue Code of 1986, as amended, and the regulations thereunder.


 


“Letter
of Credit” means a commercial or standby letter of credit or similar undertaking issued by Bank at Borrower’s request.


 


“Lien” means
any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.


 


“Loan
Documents” means, collectively, this Agreement, any note or notes executed by Borrower, and any other document, instrument
or agreement entered into in connection with this Agreement, all as amended or extended from time to time.


 


“Material
Adverse Effect” means a material adverse effect on: (i) the operations, business or financial condition of Borrower
and its Subsidiaries taken as a whole; (ii) the ability of Borrower to repay the Obligations or otherwise perform its obligations
under the Loan Documents; or (iii) Borrower’s interest in, or the value, perfection or priority of Bank’s security
interest in the Collateral.


 


“Negotiable
Collateral” means all of Borrower’s present and future letters of credit of which it is a beneficiary, drafts, instruments
(including promissory notes), securities, documents of title, and chattel paper, and Borrower’s Books relating to any of
the foregoing.


 


“Obligations”
means all debt, principal, interest, Bank Expenses and other amounts owed to Bank by Borrower pursuant to this Agreement or any
other agreement (other than any warrants issued to Bank), whether absolute or contingent, due or to become due, now existing or
hereafter arising, including any interest that accrues after the commencement of an Insolvency Proceeding and including any debt,
liability, or obligation owing from Borrower to others that Bank may have obtained by assignment or otherwise (other than any
warrants issued to Bank).


 


“Patents”
means all patents, patent applications and like protections including without limitation improvements, divisions, continuations,
renewals, reissues, extensions and continuations-in-part of the same.


 


“Payouts”
means amounts awarded by Borrower to players from daily fantasy contests.


 


“Periodic
Payments” means all installments or similar recurring payments that Borrower may now or hereafter become obligated to pay
to Bank pursuant to the terms and provisions of any instrument, or agreement now or hereafter in existence between Borrower and
Bank.


 


“Permitted Indebtedness”
means:


 


(a)            Indebtedness
of Borrower in favor of Bank arising under this Agreement or any other Loan Document;


 


(b)            Indebtedness
existing on the Closing Date and disclosed in the Schedule;


 






     


     


    

 


(c)            Indebtedness
not to exceed $1,000,000 in the aggregate at any time secured by a lien described in clause (c) of the defined term “Permitted
Liens,” provided such Indebtedness does not exceed at the time it is incurred the lesser of the cost or fair market value
of the property financed with such Indebtedness;


 





(d)            Subordinated
Debt;


 


(e)            Indebtedness
to trade creditors incurred in the ordinary course of business; and


 


(f)            Extensions,
refinancings and renewals of any items of Permitted Indebtedness, provided that the principal amount is not increased or the terms
modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.


 


“Permitted
Investments” means:


 


(a)            Investments
existing on the Closing Date disclosed in the Schedule;


 


(b)            (i) Marketable
direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing
within one year from the date of acquisition thereof, (ii) commercial paper maturing no more than one year from the date
of creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s Corporation
or Moody’s Investors Service, (iii) Bank’s certificates of deposit maturing no more than one year from the date
of investment therein, (iv) Bank’s money market accounts; (v) Investments in regular deposit or checking accounts
held with Bank or as otherwise permitted by, and subject to the terms and conditions of, Section 6.6 of this Agreement and
(vi) Investments consistent with any investment policy adopted by Borrower’s board of directors;


 


(c)            Investments
accepted in connection with Permitted Transfers;


 


(d)            Investments
of Subsidiaries in or to other Subsidiaries or Borrower and Investments by Borrower in Subsidiaries not to exceed $1,000,000 in
the aggregate in any fiscal year;


 


(e)            Investments
not to exceed $1,000,000 outstanding in the aggregate at any time consisting of (i) travel advances and employee relocation
loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or
directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plan
agreements approved by Borrower’s Board of Directors;


 


(f)            Investments
(including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement
of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of Borrower’s
business;


 


(g)            Investments
consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates,
in the ordinary course of business, provided that this subparagraph (i) shall not apply to Investments of Borrower in any
Subsidiary;


 


(h)            Joint
ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the non-exclusive licensing
of technology, the development of technology or the providing of technical support, provided that any cash Investments by Borrower
do not exceed $1,000,000 in the aggregate in any fiscal year; and


 


(i)            Investments
permitted under Section 7.3.


 






     


     


    

 


“Permitted Liens”
means the following:


 





(a)            Any
Liens existing on the Closing Date and disclosed in the Schedule (excluding Liens to be satisfied with the proceeds of the Credit
Extensions) or arising under this Agreement, the other Loan Documents, or any other agreement in favor of Bank;


 


(b)            Liens
for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings and for which Borrower maintains adequate reserves;


 


(c)            Liens
not to exceed $1,000,000 in the aggregate at any time (i) upon or in any Equipment (other than Equipment financed by a Credit
Extension) acquired or held by Borrower or any of its Subsidiaries to secure the purchase price of such Equipment or indebtedness
incurred solely for the purpose of financing the acquisition or lease of such Equipment, or (ii) existing on such Equipment
at the time of its acquisition, in each case provided that the Lien is confined solely to the property so acquired and improvements
thereon, and the proceeds of such Equipment;


 


(d)            Liens
incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in
clauses (a) through (c) above, provided that any extension, renewal or replacement Lien shall be limited to the property
encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase;


 


(e)            Liens
arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Sections 8.4 (attachment)
or 8.7 (judgments);


 


(f)            Liens
on the Collateral securing Subordinated Debt;


 


(g)            Subject
to Section 6.6 of this Agreement, Liens in favor of other financial institutions arising in connection with Borrower’s
deposit accounts held at such institutions to secure standard fees for deposit services charged by, but not financing made available
by, such institutions;


 


(h)            Deposits
in the ordinary course of business under worker’s compensation, unemployment insurance, social security and other similar
laws, or to secure the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure
indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment
of borrowed money) or to secure statutory obligations (other than liens arising under ERISA or environmental liens) or surety
or appeal bonds, or to secure indemnity, performance or other similar bonds; and


 


(i)            Liens
of materialmen, mechanics, warehousemen, carriers, artisan's or other similar Liens arising in the ordinary course of Borrower's
business or by operation of law, which are not past due or which are being contested in good faith by appropriate proceedings
and for which reserves satisfactory to Bank have been established.


 


“Permitted
Transfer” means the conveyance, sale, lease, transfer or disposition by Borrower or any Subsidiary of:


 


(a)            Inventory
in the ordinary course of business;


 


(b)            licenses
and similar arrangements for the use of the property of Borrower or its Subsidiaries in the ordinary course of business;


 


(c)            worn-out,
surplus or obsolete Equipment;


 






     


     


    

 


(d)            grants
of security interests and other Liens that constitute Permitted Liens; and


 





(e)            other
assets of Borrower or its Subsidiaries that do not in the aggregate exceed $150,000 during any fiscal year.


 


“Person”
means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency.


 


“Prime
Rate” means the variable rate of interest, per annum, most recently announced by Bank, as its “prime rate,”
whether or not such announced rate is the lowest rate available from Bank.


 


“Responsible
Officer” means each of the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, Vice President
of Finance and the Controller of Borrower, as well as any other officer or employee identified as an Authorized Officer in the
corporate resolution delivered by Borrower to Bank in connection with this Agreement.


 


“Revenue”
means Entry Fees minus Payouts minus Chargebacks.


 


“Schedule”
means the schedule of exceptions attached hereto and approved by Bank, if any.


 


“SOS
Reports” means the official reports from the Secretaries of State of each Collateral State, the state where Borrower’s
chief executive office is located, the state of Borrower’s formation and other applicable federal, state or local government
offices identifying all current security interests filed in the Collateral and Liens of record as of the date of such report.


 


“Subordinated
Debt” means any debt incurred by Borrower that is subordinated in writing to the debt owing by Borrower to Bank on terms
reasonably acceptable to Bank (and identified as being such by Borrower and Bank).


 


“Subsidiary”
means any corporation, partnership or limited liability company or joint venture in which (i) any general partnership interest
or (ii) more than 50% of the stock, limited liability company interest or joint venture of which by the terms thereof ordinary
voting power to elect the Board of Directors, managers or trustees of the entity, at the time as of which any determination is
being made, is owned by Borrower, either directly or through an Affiliate.


 


“Term Loan”
and “Term Loans” is defined in Section 2.1(b)(i) hereof.


 


“Term Loan Maturity
Date” means December 31, 2019.


 


“Trademarks”
means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same
and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.


 






     


     


    

 


	DEBTOR:	DRAFTKINGS INC.



 


	SECURED
                                         PARTY:	PACIFIC
                                         WESTERN BANK







 


EXHIBIT B


 


COLLATERAL
DESCRIPTION ATTACHMENT TO AMENDED AND RESTATED


 


LOAN
AND SECURITY AGREEMENT


 


All
personal property of Borrower (herein referred to as “Borrower” or “Debtor”) whether presently existing
or hereafter created or acquired, and wherever located, including, but not limited to:


 


(a)            all
accounts (including health-care-insurance receivables), chattel paper (including tangible and electronic chattel paper), deposit
accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto), financial assets,
general intangibles (including patents, trademarks, copyrights, goodwill, payment intangibles, domain names, and software), goods
(including fixtures), instruments (including promissory notes), inventory (including all goods held for sale or lease or to be
furnished under a contract of service, and including returns and repossessions), investment property (including securities and
securities entitlements), letter of credit rights, money, and all of Debtor’s books and records with respect to any of the
foregoing, and the computers and equipment containing said books and records;


 


(b)            any
and all cash proceeds and/or noncash proceeds of any of the foregoing, including, without limitation, insurance proceeds, and
all supporting obligations and the security therefor or for any right to payment. All terms above have the meanings given to them
in the North Carolina Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9 of the
Uniform Commercial Code-Secured Transactions.


 






     


     


    

 





EXHIBIT C


 





LOAN
ADVANCE/PAYDOWN REQUEST FORM


 


[Please
refer to New Borrower Kit]


 






     


     


    

 


 


EXHIBIT D


 


COMPLIANCE
CERTIFICATE


 


[Please
refer to New Borrower Kit]