Document:

Ex101SecuritiesPurchaseAgreement1024

Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of October 24, 2014, is by and among Viggle Inc., a Delaware corporation (the “Company”), and Sillerman Investment Company III LLC, a Delaware limited liability company (the “Buyer”).
RECITALS
A.    The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act.

B.    The Company has authorized the issuance of (i) a line of credit promissory note in the aggregate original principal amount of up to $20,000,000.00, in the form attached hereto as Exhibit A (the “Note”), (ii) 10,000 shares (the “Shares”) of its Series C Preferred Stock (the “Shares”), and (iii) warrants to purchase, subject to approval of the Company’s stockholders, up to 1,500,000 shares (the “Warrants”), each in the form of Exhibit B, of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”).

C.    The Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, (i) the Note, (ii) the Shares and (iii) the Warrants.  

D.    The Note, the Shares, the Warrants, the shares of Common Stock issuable upon the conversion of the Shares (the “Convertible Shares”), and the shares of Common Stock issuable upon the exercise of the Warrants (the “Warrant Shares”, and together with the Convertible Shares, the “Conversion Shares”) are collectively referred to herein as the “Securities.”
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Buyer hereby agree as follows:
		
	1.
	PURCHASE AND SALE OF THE NOTE, THE SHARES AND THE WARRANTS.

		
	(a)
	Note and Common Shares. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall issue and sell to the Buyer, and the Buyer shall purchase from the Company, the Note, the Shares and the Warrants.

(b)Closings. The initial closing (the “Initial Closing”) of the transactions described in Section 1(a) above shall occur at the offices of Greenberg Traurig, LLP, 200 Park Avenue, New York, New York 10166 on the date hereof.   At the Initial Closing, the Company shall issue to Buyer the Note, and the Buyer shall make an initial Advance (as defined in the Note) pursuant to the Note of $4,500,000.00.    The date and time of the closing of the purchase and sale of the Shares (the “Subsequent Closing”) shall be 10:00 a.m., New York time, on the fifth (5th) Business Day after which the Company has requested the Subsequent Closing and on which the conditions to the Subsequent Closing set forth in Sections 6 and 7 below are satisfied or waived (or such other date as is mutually agreed to by the Company and the Buyer). As used herein “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to remain closed.  The Company shall issue to the Buyer Warrants in proportion to amounts funded, such that for every $20 advanced under the Note or to purchase the Shares, a Warrant for 1 Warrant Share shall be issued (the “Issuance Ratio”).   For example, the Company shall issue Warrants to purchase 500,000 Warrant Shares at the funding of the $10,000,000 for the purchase by Buyer of the Shares.  Notwithstanding anything herein to the contrary, the Warrants may not be exercised until the Company’s stockholders shall have approved the exercise of the Warrants.  The exercise price of the Warrants shall equal 110% of the closing price of the Company’s Common Stock on the date of issuance (which shall be the date of the advance or funding for which the Warrant was issued.
(c)Payment; Delivery of Note, Shares and Warrants. At the Initial Closing, (i) the Buyer shall pay the initial Advance of $4,500,000 to the Company by wire transfer of immediately available funds in accordance with the Company’s written wire instructions and (ii) the Company shall deliver to the Buyer (A) the Note and (B) certificates evidencing the issuance of Warrants to purchase 225,000 shares (the Initial Warrants”), in all cases, duly executed on behalf of the Company and registered in the name of the Buyer.  The Buyer will make additional Advances of up to $15,500,000 subject to and in accordance with the terms of  the Note as and when from time to time requested by the Company and subject to the conditions set forth in the Note, and the Company shall issue additional Warrants in accordance with the Issuance Ratio at the time of such Advances.  At the Subsequent Closing, the Buyer shall pay $10,000,000 to the Company by wire transfer of immediately available funds in accordance with the Company’s written instructions, the Company shall deliver to the Buyer a stock certificate evidencing the Shares, and the Company shall issue Warrants to purchase 500,000 shares of the Company’s Common Stock.  The date of the Initial Closing and the date of the Subsequent Closing shall each be referred to hereunder as a “Closing Date,” and the Initial Closing and the Subsequent Closing shall each be referred to hereunder as a “Closing.”   
		
	2.
	BUYER’S REPRESENTATIONS AND WARRANTIES.

The Buyer represents and warrants to the Company that: 
(a)    Organization; Authority. The Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.
(b)    No Public Sale or Distribution. The Buyer (i) is acquiring the Note, Shares and Warrants and (ii) upon conversion of the Shares or exercise, subject to approval of the Company’s stockholders, of the Warrants will acquire the Conversion Shares issuable upon conversion thereof, in each case, for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof in violation of applicable securities laws, except pursuant to sales registered or exempted under the 1933 Act; provided, however, by making the representations herein, the Buyer does not agree, or make any representation or warranty, to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act. The Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person (as defined below) to distribute any of the Securities in violation of applicable securities laws. “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.
(c)    Accredited Investor Status.  The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.
(d)    Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.
(e)    Information. The Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer. The Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company. The Buyer understands that its investment in the Securities involves a high degree of risk. The Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities.
(f)    No Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(g)    Transfer or Resale. The Buyer understands that: (i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) the Buyer shall have delivered to the Company (if requested by the Company) an opinion of counsel to the Buyer, in a form reasonably acceptable to the Company, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) the Buyer provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144 promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder, except as set forth in that certain Registration Rights Agreement by and among the Buyer and the Company dated as of the date hereof (the “Registration Rights Agreement”) in the form of Exhibit C attached hereto.
(h)    Validity; Enforcement. This Agreement and the other Transaction Documents to which the Buyer will be a party have been, or will be prior to the Initial Closing, duly and validly authorized, executed and delivered on behalf of the Buyer and constitutes the legal, valid and binding obligations of the Buyer enforceable against the Buyer in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
(i)    No Conflicts. The execution, delivery and performance by the Buyer of this Agreement and the other Transaction Documents to which the Buyer will be a party and the consummation by the Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of the Buyer, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Buyer is a party or (iii) result in a violation of any law, rule, regulation, order, judgment  or decree (including federal and state securities laws) applicable to the Buyer, except in the case of clause (ii) above, for such conflicts, defaults or rights which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Buyer to perform its obligations hereunder or thereunder.
(j)    Certain Trading Activities. The Buyer has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Buyer, engaged in any transactions in the securities of the Company (including, without limitation, any Short Sales (as defined below) involving the Company’s securities) commencing with the time the Buyer was first contacted by the Company or one of its representatives regarding the transaction contemplated by this Agreement and ending immediately prior to the execution of this Agreement by the Buyer. “Short Sales” means all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Securities Exchange Act of 1934, as amended (the “1934 Act”).
		
	3.
	REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to the Buyer that:
(a)    Organization and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly existing and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authorization to own their properties and to carry on their business as now being conducted. Each of the Company and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect on the business, properties, assets, liabilities, operations (including results thereof) or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole. Other than the Persons set forth on Schedule 3(a), the Company has no Subsidiaries. “Subsidiaries” means any Person in which the Company, directly or indirectly, owns 100% of the outstanding capital stock or holds 100% of the equity or similar interests of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary.” 

(b)    Authorization; Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents to which it will be a party and to issue the Securities in accordance with the terms hereof and thereof. Each Subsidiary has the requisite power and authority to enter into and perform its obligations under the Transaction Documents to which it will be a party.  The execution and delivery of this Agreement and the other Transaction Documents by the Company and its Subsidiaries, and the consummation by the Company and its Subsidiaries of the transactions contemplated hereby and thereby have been duly authorized by the Company’s board of directors and each of its Subsidiaries’ board of directors or other governing body, as applicable, and (other than the filing with the SEC of a Form D with the SEC (collectively, the “Required Filings”)) no further filing, consent or authorization is required by the Company, its Subsidiaries, their respective boards of directors or their stockholders or other governing body.  This Agreement has been, and the other Transaction Documents will be prior to the Initial Closing, duly executed and delivered by the Company, and each constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law.  “Transaction Documents” means, collectively, this Agreement, the Note, the Shares, the Warrants and the Registration Rights Agreement, as may be amended from time to time. 
(c)    Issuance of Securities. The issuance of the Note, the Shares and the Warrants is duly authorized, and upon issuance in accordance with the terms of the Transaction Documents, such Securities will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof. As of the Initial Closing, the Company shall have reserved from its duly authorized capital stock not less than the number of Conversion Shares issuable upon conversion of the Shares and the exercise of the Warrants (assuming for purposes hereof that the Shares are convertible at the initial Conversion Price (as defined in the Certificate of Designations of the Series C Preferred Stock)). Upon conversion in accordance with the Shares, or exercise in accordance with the Warrants, the Conversion Shares, when issued, will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. Subject to the accuracy of the representations and warranties of the Buyer in this Agreement, the offer and issuance by the Company of the Securities is exempt from registration under the 1933 Act.
(d)    No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and its Subsidiaries and the consummation by the Company and its Subsidiaries of the transactions contemplated hereby and thereby will not (i) result in a violation of the Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”) or the organizational documents of any of its Subsidiaries, the Company’s bylaws, as amended and as in effect on the date hereof (the “Bylaws”) or the bylaws of any of the Company’s Subsidiaries, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or (iii) result in a violation of any law, rule, regulation, order, judgment or decree applicable to the Company or any of its Subsidiaries other than, in the case of clauses (ii) and (iii) above, conflicts, defaults, rights or violations that could not reasonably be expected to have a Material Adverse Effect.
(e)    Consents. Neither the Company nor any of its Subsidiaries is required to obtain any consent from, authorization or order of, or make any filing or registration with (other than the Required Filings), any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its respective obligations under the Transaction Documents, in each case, in accordance with the terms thereof. All consents, authorizations, orders, filings and registrations which the Company or any of its Subsidiaries is required to obtain at or prior to the Initial Closing have been obtained or effected on or prior to the Initial Closing.
(f)    No General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its Subsidiaries, nor any Person acting on its or their behalf at their respective direction, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement agents’ fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by the Buyer or its investment advisor) relating to or arising out of the transactions contemplated hereby.
(g)    No Integrated Offering. Neither the Company, nor any of its Subsidiaries, nor any Person acting on its or their behalf at their respective direction, has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the issuance of any of the Securities under the 1933 Act, whether through integration with prior offerings or otherwise, or cause this offering of the Securities to require approval of stockholders of the Company under any applicable stockholder approval provisions.
(h)    SEC Documents; Financial Statements. During the one (1) year prior to the date hereof, the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”). As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and, none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). 
(i)    Conduct of Business; Contracts. Neither the Company nor any of its Subsidiaries is in material violation of any term of, or in material default under, as applicable, its Certificate of Incorporation or Bylaws or the organizational charter, certificate of formation or certificate of incorporation or bylaws of such Subsidiary of the Company. Neither the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or such Subsidiary, except in all cases for possible violations which would not reasonably be expected in the aggregate to have a Material Adverse Effect. Other than the contracts, agreements and instruments disclosed in the SEC Documents, neither the Company nor any of its Subsidiaries is a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect  
(j)    Sarbanes-Oxley Act. The Company and each Subsidiary is in material compliance with all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof.
(k)    Transfer Taxes. On the applicable Closing Date, any stock transfer taxes which are required to be paid by the Company in connection with the issuance of the Note and Shares by the Company hereunder will be, or will have been, fully paid or provided for by the Company.
		
	4.
	COVENANTS.

(a)    Best Efforts.  The Buyer shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Section 6 of this Agreement. The Company shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Section 7 of this Agreement.
Public Information
(b)    Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder: (i) to pay off amounts understanding under the Company’s Term Loan Agreement with Deutsche Bank Trust Company Americas, and (ii) for general working capital, marketing, expansion and other general corporate purposes. 
(c)    Listing. The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Conversion Shares upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed or designated for quotation (as the case may be) if required by the rules and regulations thereof.
(d)    Fees and Expenses. The Company shall bear its own expenses in connection with the sale of the Securities to the Buyer.  The Company shall also pay up to $30,000.00 in the Buyer’s expenses relating to the sale of the Securities to the Buyer.
(e)    Disclosure of Transactions. The Company shall, on or before 9:00 a.m. New York time, on the fourth (4th) Business Day following the date of this Agreement, file a Current Report on Form 8‐K (or disclose in its Annual report on Form 10-K) describing all the material terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching all the material Transaction Documents.

		
	5.
	REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGENDS.

(a)    Register. The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the Holder), a register for the Note, the Shares and the Warrants in which the Company shall record the name and address of the Person in whose name such Securities have been issued (including the name and address of each transferee).
(b)    Legends. The Buyer understands that the Securities have been issued (or will be issued in the case of the Conversion Shares) pursuant to an exemption from registration or qualification under the 1933 Act and applicable state securities laws, and except as set forth below, the Securities shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):
[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
(c)    Removal of Legends. Certificates evidencing Conversion Shares shall not be required to contain the legend set forth in Section 5(b) above or any other legend (i) following any sale of such Conversion Shares pursuant to an effective registration statement containing a usable prospectus, (ii) following any sale of such Conversion Shares pursuant to Rule 144 (provided that the Buyer provides the Company with reasonable assurances (which shall include, without limitation, customary representation letters and an opinion of counsel) that such Conversion Shares were properly sold pursuant to, and in compliance with, Rule 144) or (iii) if such legend is not required under applicable requirements of the 1933 Act (including, without limitation, controlling judicial interpretations and pronouncements issued by the SEC). If a legend is not required pursuant to the foregoing, the Company shall no later than three (3) Trading Days following the delivery by the Buyer to the Company of a legended certificate representing such Conversion Shares (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, if applicable), together with any other deliveries from the Buyer as may be required above in this Section 5(c), as directed by the Buyer, either: (A) provided that the Company and its transfer agent are participating in the DTC Fast Automated Securities Transfer Program, credit the aggregate number of Conversion Shares to which the Buyer shall be entitled to the Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (B) if the Company or its transfer agent are not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight courier) to the Buyer, a certificate representing the Conversion Shares that is free from all restrictive and other legends, registered in the name of the Buyer or its designee. 
		
	6.
	CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.  

(a)    The obligation of the Company hereunder to issue to the Buyer the Note and the Initial Warrants at the Initial Closing and the Shares and associated Warrants at the Subsequent Closing is subject to the satisfaction, at or before the applicable Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing the Buyer with prior written notice thereof:
(i)The Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.
(ii)With respect to the Initial Closing, the Buyer shall have delivered to the Company the initial $4,500,000 Advance with respect to the Note, and with respect to the Subsequent Closing, the Buyer shall have delivered to the Company the purchase price with respect to the Shares, in each case, by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company.
(iii)The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of the applicable Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such date), and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the applicable Closing Date.
(iv)No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.
(v)Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result in a Material Adverse Effect.
		
	7.
	CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE.

(a)    The obligation of the Buyer hereunder to purchase the Note and the Initial Warrants at the Initial Closing and the Shares and associated Warrants with respect to the Subsequent Closing is subject to the satisfaction, at or before the applicable Closing Date, of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:
(i)    The Company and each Subsidiary (as the case may be) shall have duly executed and delivered to the Buyer each of the Transaction Documents to which it is a party, and the Company shall have duly executed and delivered to the Buyer, with respect to the Initial Closing, the Note and the Initial Warrants, and with respect to the Subsequent Closing, the Shares and associated Warrants.
(ii)    The Company shall have delivered to the Buyer a certificate evidencing the good standing of the Company issued by the Secretary of State of Delaware as of a date within ten (10) days of the applicable Closing Date.
(iii)    The Company shall have delivered to the Buyer a certificate, in a form reasonably acceptable to the Buyer, executed by the Secretary of the Company and dated as of the applicable Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company’s board of directors, (ii) the Certificate of Incorporation and (iii) the Bylaws, each as in effect at the Initial Closing.
(iv)    The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the applicable Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such date), and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the applicable Closing Date. 
(v)    The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale of, with respect to the Initial Closing,  the Note and the Initial Warrants, and with respect to the Subsequent Closing, the Shares and associated Warrants.
(vi)    No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.
(vii)    With respect to the Subsequent Closing only, the Company’s stockholders shall have approved the exercise of the Warrants, the Company shall have filed an information statement with respect to such stockholder action with the Securities and Exchange Commission, and will have distributed to the same to its shareholders.  The Company agrees that it will  file such information statement promptly after the Initial Closing and will use best efforts to cause such statement to be distributed to its shareholders and to cause such information statement to become effective. 
		
	8.
	TERMINATION.  

In the event that the Subsequent Closing shall not have occurred by December 31, 2014, then each party hereto shall have the right to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business on such date without liability of such party to any other party hereto; provided, however, the right of a party to terminate its obligations under this Agreement pursuant to this Section 8 shall not be available to a party if the failure of the transactions contemplated by this Agreement to have been consummated by such date is the result of such party’s breach of this Agreement. Nothing contained in this Section 8 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement. 
		
	9.
	MISCELLANEOUS.

(a)    Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement and the other Transaction Documents shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or under any of the other Transaction Documents or in connection herewith or therewith or with any transaction contemplated hereby or thereby or discussed herein or therein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude any party from bringing suit or taking other legal action against any other party to any of the Transaction Documents in any other jurisdiction to collect on such other party’s obligations to such party or to enforce a judgment or other court ruling in favor of such party. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
 
(b)    Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.
(c)    Headings; Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.”  The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in which they are found.
(d)    Severability. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
(e)    Entire Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyer, the Company, its Subsidiaries, their affiliates and Persons acting on their behalf solely with respect to the matters contained herein and therein, and this Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein contain the entire understanding of the parties solely with respect to the matters covered herein and therein. The parties hereto make no representations or warranties to each other, express (except as expressly contained in this Agreement) or implied, and any and all prior representations and warranties made by any party hereto or its representatives, whether verbally or in writing, are deemed to have been merged into this Agreement and the other written agreements contemplated hereby, it being intended that no such prior representations or warranties shall survive the execution and delivery of this Agreement. For clarification purposes, the Recitals are part of this Agreement. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Holders.
(f)    Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, if delivered personally; (ii) when sent, if sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); (iii) when sent, if sent by e-mail (provided that such sent e-mail is kept on file (whether electronically or otherwise) by the sending party and the sending party does not receive an automatically generated message from the recipient’s e-mail server that such e-mail could not be delivered to such recipient) and (iv) if sent by overnight courier service, one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:
If to the Company:  
Viggle Inc.
902 Broadway, 11th Floor
New York, NY 10010
E-mail: tom@viggle.com
Attention: General Counsel

With a copy (for informational purposes only) to:
Greenberg Traurig, LLP 
200 Park Avenue
New York, New York 10166 
E-mail:  blockd@gtlaw.com
Facsimile: (212) 801-6400 
Attention: Dennis J. Block, Esq.

If to the Buyer:
Sillerman Investment Company III LLC
430 Park Avenue
6th Floor
New York, NY 10019
Attention:  Robert F.X. Sillerman

, or to such other address, facsimile number and/or e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date and recipient facsimile number or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iv) above, respectively. A copy of the e-mail transmission containing the time, date and recipient e-mail address shall be rebuttable evidence of receipt by e-mail in accordance with clause (iii) above.
(g)    Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns, including, as contemplated below, any assignee of any of the Securities. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Buyer. Following the Initial Closing, the Buyer may assign some or all of its rights hereunder in connection with any transfer of any of the Securities without the consent of the Company, in which event such assignee shall be deemed to be the Buyer hereunder solely with respect to such assigned rights and the transferring Buyer shall no longer have the assigned rights.
(h)    No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
(i)    Survival. The representations and warranties shall survive the Subsequent Closing for a period of six (6) months following the Subsequent Closing, and the covenants and agreements shall survive the Subsequent Closing. The Buyer shall be responsible only for its own representations, warranties, agreements and covenants hereunder.
(j)    Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(k)    Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. Each and every reference to share prices, shares of Common Stock and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for stock splits, stock dividends, stock combinations and other similar transactions that occur with respect to the Common Stock after the date of this Agreement. 
(l)    Currency. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other Transaction Documents are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation.
[signature pages follow]

IN WITNESS WHEREOF, Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

	
	
	COMPANY:

	VIGGLE INC.
By:      /s/ Tom McLean 
Name: Tom McLean
   Title:  General Counsel

	 

IN WITNESS WHEREOF, Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

	
		
	 
	BUYER:  SILLERMAN INVESTMENT COMPANY III LLC

	 
	

By:  /s/ Robert F.X. Sillerman
Its:  Manager

1Ex102PromissoryNote1024

Exhibit 10.2
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE. 
VIGGLE INC.
LINE OF CREDIT PROMISSORY NOTE
	
		
	Issuance Date:  October 24, 2014
	Principal Amount: Up to U.S. $20,000,000.00

FOR VALUE RECEIVED, Viggle Inc., a Delaware corporation (the “Company”), hereby promises to pay to the order of Sillerman Investment Company III, LLC or its registered assigns (“Holder”) the Principal  (as defined below) when due, whether upon the Maturity Date, acceleration, payment or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate (as defined below) from the date of an Advance (as defined below) until the same becomes due and payable, whether upon any Interest Date or acceleration,  payment or otherwise (in each case in accordance with the terms hereof). Certain capitalized terms used herein are defined in Section 18.  For purposes hereof, “Principal” shall mean the aggregate amount of all Advances, as reduced pursuant to the terms hereof pursuant to payment or otherwise.   
Subject to the terms and conditions set forth herein, the Holder has agreed to make Advances to the Company and the Company has agreed to accept Advances from Holder.  Loans hereunder shall be funded in one or more advances (each, an “Advance”) of funds to the Company in accordance with the terms hereunder in an aggregate amount not to exceed $20,000,000.  Any principal amount repaid or prepaid may not be reborrowed hereunder. 
Subject to the satisfaction or waiver in writing by Holder of the conditions set forth in this paragraph, the Company shall have the right on any Business Day during the period commencing on the Issuance Date and ending on the Maturity Date to borrow funds from Holder in an aggregate principal amount up to $20,000,000; provided, that a borrowing shall be in a minimum amount of not less than $1,000,000 or an integral multiple of $100,000 in excess thereof.  In the case of any Advance requested by the Company, at least two (2) Business Days (or such shorter period of time as to which Holder may agree) prior to the funding date for such Advance, Holder shall have received a Notice of Advance, substantially in the form attached hereto as Exhibit A (a “Notice of Advance”), duly completed and signed by an authorized officer of the Company together with all of the information required to be included with such Notice of Advance.  Holder’s obligation to make any Advance hereunder is conditioned upon the accuracy, at the time of the Advance, of the Company’s representations and warranties set forth in Section 3 of that certain Securities Purchase Agreement, by and between the Company and Holder, dated as of the date hereof (the “Securities Purchase Agreement”).  In addition, the Company may not request Advances in excess of $5,000,000 unless and until the Company shall have paid all amounts owing under that certain Term Loan Agreement, by and between the Company and Deutsche Bank Trust Company Americas, dated as of March 11, 2013, as amended (the “Term Loan Agreement”); provided, however, that the Company may request Advances in excess of $5,000,000 to pay off amounts outstanding under the Term Loan Agreement on or after December 15, 2014 and after stockholder approval of the warrants in accordance with the provision of the Securities Purchase Agreement, and Holder may, at any time after the date hereof and upon notice to the Company, advance on behalf of the Company to the lender under the Term Loan Agreement the funds necessary to satisfy such loan, and such advances shall be deemed Advances hereunder as if requested by Company.  When Holder funds an Advance, the Holder shall fund the Advance with a 3% discount.  For example, if the Company requests an advance of $1,000,000, the Holder shall fund $970,000; provided, however, that the amount of such Advance and the Principal represented thereby shall be $1,000,000.    
1.PAYMENT. 
(a)Payment at Maturity. On the Maturity Date (as defined below), the Company shall pay to the Holder an amount in cash equal to all outstanding Principal, accrued and unpaid Interest and accrued and unpaid Late Charges on such Principal and Interest. 
(a)    Prepayment Right. Upon two (2) Business Days’ prior written notice to the Holder (each a “Prepayment Notice”), the Company may prepay all or any portion of the outstanding Principal, accrued and unpaid Interest or accrued and unpaid Late Charges on Principal and Interest, if any. The amount elected by the Company to be prepaid by the Company (each a “Prepayment Amount”) and the date selected by the Company for such prepayment (each a “Prepayment Date”) shall be set forth in the applicable Prepayment Notice. On the applicable Prepayment Date, the Company shall pay to the Holder the sum of (i) the applicable Prepayment Amount in cash plus (ii) if any portion of such Prepayment Amount constitutes Principal (the “Principal Portion”), an amount equal to the product of (1) the applicable Prepayment Premium (as defined below) multiplied by (2) the applicable Principal Portion (the product of clauses (1) and (2) is referred to herein as a “Prepayment Premium Amount”). Notwithstanding the foregoing, no Prepayment Premium Amount shall be due with respect to any Prepayment Amount that is paid from Qualified Public Offering Proceeds (as defined below). In the event of the Company’s prepayment of any portion of this Note under this Section 1(b), the Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any premium due under this Section 1(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty. 
2.    INTEREST. Interest on this Note shall commence accruing on the Issuance Date with respect to the amount of any outstanding Advances and shall accrue daily at the Interest Rate on the outstanding Principal amount from time to time, shall not compound, shall be computed on the basis of a 360-day year comprised of twelve 30-day months and shall be payable in arrears on each three (3) month anniversary of the Issuance Date while this Note remains outstanding (pro rated for partial periods) (each such three (3) month anniversary of the Issuance Date while this Note remains outstanding is referred to herein as an “Interest Date”), with the first Interest Date being January 24, 2014. Interest shall be payable on each Interest Date (or such earlier date as otherwise contemplated by the terms of this Note) to the record holder of this Note in cash. From and after the occurrence and during the continuance of any Event of Default, the Interest Rate shall automatically be increased to seventeen percent (17%), or the highest amount allowed by law, whichever is lower. In the event that such Event of Default is subsequently cured, the automatic increase referred to in the preceding sentence shall cease to be effective as of the date of such cure, provided that the Interest as calculated and unpaid at such increased rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of such cure of such Event of Default.
.

3.    RIGHTS UPON EVENT OF DEFAULT.
(a)    Event of Default. Each of the following events shall constitute an “Event of Default”:
(i)    the Company’s failure to pay to the Holder any amount of Principal, Interest or Late Charges when and as due under this Note only if such failure remains uncured for a period of ten (10) Business Days after the occurrence thereof;
(ii)    bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or against the Company and, if instituted against the Company by a third party, shall not be dismissed within ninety (90) days of their initiation;
(iii)    the commencement by the Company of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, the taking of corporate action by the Company in furtherance of any such action or the commencement by any Person of a UCC foreclosure sale of a material portion of the Company’s assets or any other similar action under federal, state or foreign law;
(iv)    other than as specifically set forth in another clause of this Section 3(a), any breach or failure in any material respect by the Company to comply with any provision of this Note only if such breach or failure remains uncured for a period of fifteen (15) Business Days after written notice thereof from the Holder to the Company.

(b)    Notice of an Event of Default; Payment Right. Upon the occurrence of an Event of Default, the Company shall within five (5) Business Days deliver written notice thereof via facsimile or e-mail (an “Event of Default Notice”) to the Holder. At any time after the earlier of the Holder’s receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default, the Holder may require the Company to pay (only during the continuance of such Event of Default) all or any portion of this Note by delivering written notice thereof (the “Event of Default Payment Notice”) to the Company, which Event of Default Payment Notice shall indicate the portion of this Note the Holder is electing to the Company to pay (such elected amount so indicated plus all accrued and unpaid Interest and Late Charges thereon is referred to herein as the “Required Payment Amount”). The payment of the Required Payment Amount shall be made in accordance with the provisions of Section 6. To the extent payments required by this Section 3(b) are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such payments shall be deemed to be voluntary prepayments.
4.    RIGHTS UPON A CHANGE OF CONTROL. No later than the third (3rd) Business Day prior to the consummation of a Change of Control (as defined below) (or such later date if such Change of Control has not been publicly announced prior to such 3rd Business Day), the Company shall deliver written notice thereof via facsimile or e-mail to the Holder (a “Change of Control Notice”). At any time during the period beginning after the Holder’s receipt of a Change of Control Notice and one (1) Business Day prior to the consummation of such Change of Control, the Holder may require the Company to pay the entire amount of this Note outstanding as of the consummation of such Change of Control by delivering written notice thereof to the Company (a “Change of Control Payment Notice”). If the Holder timely delivers a Change of Control Payment Notice, then the amount to be paid to the Holder under this Section 4 in connection with such Change of Control shall be equal to the sum of (i) the entire amount outstanding under this Note as of the consummation of such Change of Control plus (ii) an amount equal to the product of (1) the applicable Change of Control Premium (as defined below) multiplied by (2) the principal amount of this Note outstanding as of the consummation of such Change of Control (the product of clauses (1) and (2) is referred to herein as the “Change of Control Premium Amount” and the sum of clauses (i) and (ii) is referred to herein as the “Change of Control Payment Amount”). The payment of the Change of Control Payment Amount shall be made in accordance with the provisions of Section 6. To the extent payments required by this Section 4 are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such payments shall be deemed to be voluntary prepayments. In the event of the Company’s payment of any portion of this Note under this Section 4, the Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any premium due under this Section 4 is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty.
5.    COVENANTS. Until all amounts owing by the Company hereunder have been repaid or otherwise satisfied in accordance with their terms (unless otherwise consented to by the Holder):
(a)    Affiliate Transactions. The Company shall not, and shall not permit any of its Subsidiaries to, make any loan or advance in excess of $500,000 to any employee, officer, director or affiliate of the Company, other than loans and advances (i) under the terms of an Approved Share Plan (as defined below), (ii) in the ordinary course of business consistent with past practice or (iii) to any of its Subsidiaries (as defined below).
(b)    Guarantee of Indebtedness. The Company shall not, and shall not permit any of its Subsidiaries to, guarantee any indebtedness for borrowed money of any unrelated third party.
(c)    Incurrence of Indebtedness. The Company shall not, and shall not permit any of its Subsidiaries to, incur any indebtedness for borrowed money, other than (i) the indebtedness for borrowed money evidenced by this Note,  and (ii) Permitted Indebtedness (as defined below).
(d)    Change in Nature of Business. The Company shall not change the principal business of the Company or exit the line of business in which the Company is engaged on the Issuance Date, other than (i) in connection with a Change of Control or a merger, acquisition, consolidation or other business combination or (ii) as determined by the Company’s board of directors in compliance with their fiduciary duties.
(e)    Restriction on Transfer of Material Technology and Intellectual Property Assets. The Company shall not, and shall not permit any of its Subsidiaries to, sell or assign any of its material technology or intellectual property assets, other than (i) sales or assignments of such assets in the ordinary course of business consistent with past practice, (ii) sales and assignments of such assets that do not have a fair market value in excess of $500,000 in the aggregate in any twelve (12) month period or (3) sales or assignments of such assets in connection with a Change of Control or a merger, acquisition, consolidation or other business combination.
(f)    Strategic Relationships. The Company shall not, and shall not permit any of its Subsidiaries to, enter into any corporate strategic relationship involving the payment, contribution or assignment by the Company of its assets that have a fair market value of greater than $1,000,000 at the time the Company enters into such relationship (without implication or admission that securities of the Company constitute assets of the Company).
(g)    Liquidation, Dissolution and Winding Up. The Company shall not, and shall not permit any of its material Subsidiaries to, liquidate or dissolve the Company or wind up the business of the Company, other than (i) in connection with a Change of Control or a merger, acquisition, consolidation or other business combination or (ii) as determined by the Company’s board of directors in compliance with their fiduciary duties.
6.    PAYMENT MECHANICS.
(a)    Mechanics. The Company shall deliver the applicable Required Payment Amount (subject to the reduction contemplated by the last sentence of Section 3(b)) to the Holder in cash within five (5) Business Days after the Company’s receipt of the Holder’s applicable Event of Default Payment Notice. The Company shall deliver the applicable Change of Control Payment Amount (subject to the reduction contemplated by the last sentence of Section 4) to the Holder in cash within five (5) Business Days following the date of consummation of the applicable Change of Control.
7.    VOTING RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law (including, without limitation, the Delaware General Corporation Law) and as expressly provided in this Note.
8.    AMENDING THE TERMS OF THIS NOTE. Provisions of this Note may be amended only with the written consent of the Company and the Holder. Any amendment effected in accordance with this Section 8 shall be binding upon the Holder and the Company.
9.    TRANSFER. This Note may be offered, sold, assigned or transferred by the Holder without the consent of the Company, subject only to compliance with applicable securities laws.
10.    REISSUANCE OF THIS NOTE.
(a)    Transfer. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note (in accordance with Section 10(d)), registered as the Holder may request, representing the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred, a new Note (in accordance with Section 10(d)) to the Holder representing the outstanding Principal not being transferred.
(b)    Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver to the Holder a new Note (in accordance with Section 10(d)) representing the outstanding Principal.
(c)    Note Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Note (in accordance with Section 10(d) and in principal amounts of at least $5,000,000) representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.
(d)    Issuance of New Note. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding (or in the case of a new Note being issued pursuant to Section 10(a) or Section 10(c), the Principal designated by the Holder which, when added to the principal represented by the other new Note issued in connection with such issuance, does not exceed the Principal remaining outstanding under this Note immediately prior to such issuance of new Note), (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest and Late Charges on the Principal and Interest of this Note, from the Issuance Date.
11.    PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS.  If (a) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the reasonable and documented costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, reasonable attorneys’ fees and disbursements.
12.    CONSTRUCTION; HEADINGS.  This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of, this Note.
13.    FAILURE OR INDULGENCE NOT WAIVER; WAIVERS. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.
14.    NOTICES; PAYMENTS.
(a)    Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be to the Holder at:
430 Park Avenue
6th Floor
New York, NY 10019

And to the Company at:

902 Broadway, 11th Floor
New York, NY 10010
Attention:  General Counsel

 The Company will give written notice to the Holder at least five (5) days prior to the date on which the Company closes its books or takes a record for determining rights to vote with respect to any dissolution or liquidation.
(b)    Currency.  All dollar amounts referred to in this Note are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Note shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Note, the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed that where an amount is calculated with reference to, or over, a period of time, the date of calculation shall be the final date of such period of time).
(c)    Payments. Whenever any payment is to be made by the Company to any Person pursuant to this Note, unless otherwise expressly set forth herein, such payment shall be made in lawful money of the United States of America by a check drawn on the account of the Company and sent via overnight courier service to such Person at such address as previously provided to the Company in writing, provided that the Holder may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Company with prior written notice setting out such request and the Holder’s wire transfer instructions.
15.    CANCELLATION. After all Principal, accrued Interest and other amounts at any time owed on this Note have been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.
16.    WAIVER OF NOTICE.  To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note.
17.    GOVERNING LAW.  This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Note. Nothing contained herein (i) shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder or to enforce a judgment or other court ruling in favor of the Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 14. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.
18.    CERTAIN DEFINITIONS.  For purposes of this Note, the following terms shall have the following meanings:
(a)    “1933 Act” means Securities Act of 1933, as amended.
(b)    “Approved Share Plan” means any plan which has been approved by the Company’s board of directors pursuant to which shares of Common Stock, options to purchase shares of Common Stock, RSUs, stock appreciation rights and the like may be issued to any employee, officer, director or consultant.
(c)     “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.
(d)    “Change of Control” means (i) a sale of all or substantially all of the assets of the Company or (ii) the issuance by the Company of Common Stock that results in any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) becoming the “beneficial owner” (as defined in Rule 13d-3 promulgated under the 1934 Act) of a majority of the aggregate ordinary voting power represented by issued and outstanding Common Stock (other than as a result of, or in connection with, any merger, acquisition, consolidation or other business combination in which the Company is the surviving entity following the consummation thereof), excluding, with respect to each of (i) and (ii), transactions with affiliates of the Company.
(e)    “Change of Control Premium” means, with respect to a particular Change of Control, (as applicable) 6%.
(f)     “Common Stock” means (i) the Company’s shares of common stock, $0.001 par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(g)    “Convertible Securities” means any capital stock, note, debenture or other security of the Company or any of its Subsidiaries that is directly or indirectly convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital stock or other equity security of the Company (including, without limitation, Common Stock) or any of its Subsidiaries.
(h)      “Interest Rate” means twelve percent (12%) per annum, as may be adjusted from time to time in accordance with Section 2.
(i)    “Maturity Date” shall mean October 24, 2017.
(j)    Intentionally Omitted.
(k)    “Note” means this Line of Credit Promissory Note, dated as of October 24, 2014, made by the Company in favor of the Holder.
(l)    “Permitted Indebtedness” means (i) indebtedness for borrowed money that is made expressly subordinate in right of payment to the indebtedness for borrowed money evidenced by the Note, as reflected in a written agreement reasonably acceptable to the Holder acting in good faith, and (ii) other indebtedness for borrowed money of the Company and its Subsidiaries which is presently outstanding,  and (iii) other indebtedness for borrowed money hereafter incurred by the Company with the prior approval of the Holder or other indebtedness for borrowed money incurred by the Company or any of its Subsidiaries in an aggregate principal amount not to exceed $1,000,000.
(m)    “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.
(n)     “Prepayment Premium” means, with respect to a particular Prepayment Date, (as applicable) 6%. 
(o)    “Proceeds” means, with respect to a particular Qualified Public Offering, the gross amount of cash received directly or indirectly by the Company with respect to such Qualified Public Offering less all costs and expenses incurred by the Company in connection with such Qualified Public Offering. 
(p)    “Qualified Public Offering” means a Subsequent Placement (as defined below) (i) that was effected pursuant to a registration statement filed by the Company with the SEC and (ii) in which the per share offering price is greater than or equal to (or, if the primary security issued in such Subsequent Placement is a Convertible Security, is deemed to be greater than or equal to) $5.00 per share (adjusted for any stock dividend, stock split, stock combination or other similar transaction).
(q)    “Qualified Public Offering Proceeds” means, with respect to a particular Qualified Public Offering, an amount equal to 33% of the Proceeds from such Qualified Public Offering.
(r)     “SEC” means the United States Securities and Exchange Commission or the successor thereto.
(s)      “Subsequent Placement” means the issuance or sale by the Company of any equity security of the Company, any Convertible Securities or any preferred stock of the Company.
(t)    “Subsidiary” means any Person in which the Company, directly or indirectly, owns a majority of the outstanding capital stock or holds a majority of the equity or similar interest of such Person, and all of the foregoing, collectively, “Subsidiaries.”
 
19.    MAXIMUM PAYMENTS. Nothing contained in this Note shall, or shall be deemed to, establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges under this Note exceeds the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.
 [signature page follows]

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance Date set out above.

	
	
	VIGGLE INC.

	By: /s/ Tom McLean

	Name: Tom McLean

	Title: General Counsel

EXHIBIT A
to 
Line of Credit Promissory Note 
by and between 
Viggle Inc. 
and 
Sillerman Investment Company III LLC
NOTICE OF ADVANCE REQUEST
Date: __________, 2014
Sillerman Investment Company III LLC 
430 Park Avenue 
6th Floor
New York, NY 10022
Dear Sir or Madam:
This Notice of Advance is executed and delivered by the Company to the Holder pursuant to that certain Line of Credit Promissory Note, dated as of October 24, 2014 (the “Note”).  Capitalized terms not defined herein shall have the meanings assigned to such terms in the Note.
1.    The Company is requesting an Advance in the principal amount of $_________________. 
2.    Please complete the following:
(a)    The Business Day on which such Advance is to occur is __________, 2014.
(b)    The payment instructions/wire instructions for the delivery of such Advance as follows:
________________________ 
________________________ 
ABA No.:________________ 
Account No.:_____________
3.    In connection with the Advance requested herein, the Company hereby represents, warrants, and certifies to Holder that all of the conditions precedent set forth in Section 3 of the Securities Purchase Agreement, dated as of October 24, 2014, by and between the Company and the Holder have been satisfied, and the Advance is permitted under the terms of the Note.
[Remainder of Page Intentionally Blank. 
Signature Page Follows.]

This Notice of Advance is executed as of the date set forth above by the undersigned and the undersigned hereby certifies each and every matter contained herein to be true and correct.
VIGGLE INC.
		
	By: _
	 
Name: 
Title:

1

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