8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported: August22, 2016

Function(x) Inc.

(Exact name of Registrant as Specified in its Charter)

Delaware	0-13803	33-0637631
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

902 Broadway, 11^th Floor
New York, New York (Address of principal executive offices) 10010 (Zip Code)

(212) 231-0092

(Registrant’s Telephone Number, including Area Code)

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2 below):

o             Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

o              Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

o             Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17  CFR 240.14d-2(b)).

o             Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Item 1.01    Entry into a Material Definitive Agreement.

(a)    Note Exchange Agreement

On August 22, 2016, the Company and Sillerman Investment Company III, LLC (“SIC III”), Sillerman Investment Company IV, LLC (“SIC IV”), and Sillerman Investment Company VI, LLC (“SIC VI”), each an affiliate of Robert F.X. Sillerman, the Company’s Executive Chairman and Chief Executive Officer, entered into an Note Exchange Agreement pursuant to which $30,174,969, which represents all of the outstanding principal and accrued interest of certain notes held by SIC III, SIC IV, and SIC VI (the “Sillerman Notes”) other than $900,000 of debt held by SIC IV pursuant to that certain Line of Credit Grid Promissory Note dated as of June 11, 2015 (the “SIC IV Note”), is to be exchanged for 30,175 shares of the Company’s Series C Preferred Stock. The exchange price (and therefore the number of shares set forth above) is $1,000 per share. The Note Exchange Agreement provides for the newly issued shares to be held subject to the obligations to convert the shares into common stock on the terms and on the conditions set forth in the Exchange Agreement described in the Company’s Form 8-K filed on July 13, 2016, and subject to the additional obligations set forth in the Subordination Agreement and the Lockup Agreements also described therein. The $900,000 of debt that remains outstanding under the SIC IV Note will also remain subject to the Exchange Agreement. A description of the Exchange Agreement, the Subordination Agreement and the Lockup Agreement is contained in such Form 8-K and is not complete and is subject to and qualified in its entirety by reference thereto, a copy of which is attached thereto as Exhibits 10.12, 10.4, and 10.11, respectively, to such Form 8-K. The foregoing transaction was intended to improve the Company’s balance sheet pursuant to the Company’s plan to remain listed on the NASDAQ Market System as further described in Item 3.01 hereof

The shares of the Company’s Series C Preferred Stock issued to each of SIC III, SIC IV, and SIC VI were issued in a transaction exempt from registration under the Securities Act of 1933, as amended, in reliance on Section 4(a)(2) thereunder and Rule 506 of Regulation D promulgated thereunder. 

The foregoing description of the Note Exchange Agreement is not complete and is subject to and qualified in its entirety by reference to the Note Exchange Agreement, a copy of which is attached as Exhibit 10.1 and incorporated herein by reference.

Because Mr. Sillerman is a director, executive officer and greater than 10% stockholder of the Company, a majority of the Company’s independent directors approved the transaction.

16b-3 Approvals

The Board of Directors also unanimously approved for purposes of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended, the transaction described in the foregoing section.

(b)    Amendment to Certificate of Designations of Series C Preferred Stock

On August 22, 2016, the Company filed an Amended and Restated Certificate of Designations of the Series C Convertible Preferred Stock of the Company (the "Amended Series C Certificate of Designations") with the Secretary of State of the State of Delaware. The Amended Series C Certificate of Designations provides that (a) the Series C Preferred Stock shall no longer be convertible into shares of the Company’s common stock; (b) the Holders of Series C Preferred Stock shall no longer be entitled to redeem their shares of Series C Preferred Stock if there should be a change of control of the Company; and (c) the Company shall no longer be required to redeem all outstanding shares of Series C Preferred Stock following the fifth anniversary of the initial issuance date. The Company retains the right to redeem the shares at its option from time to time. If the Company elects to redeem the shares, it must pay the stated value of the shares plus all accrued and unpaid dividends, plus a premium of 6% of the stated value of the shares, except that no premium is due if the Company redeems the shares using up to 33% of the proceeds of a qualified public offering. A qualified public offering includes a public offering in which the Company raises at least $10 million at a per share price of at least $5.00 per share.

The Company received the consent of the holders of a majority of the shares of Series C Convertible Preferred Stock to amend the Series C Certificate of Designation.

The foregoing description of the Amended Series C Certificate of Designations is not complete and is qualified in its entirety by reference to the full text of the Amended Series C Certificate of Designation, a copy of which is filed herewith as Exhibit 3.1, and incorporated herein by reference.

Item 3.01    Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

As disclosed on a Current Report on Form 8-K dated April 14, 2016, the Company attended a hearing before theNasdaq Listing Qualifications Panel (the “Panel”) to appeal a written notice received by the Company on November 18, 2015 from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market (“Nasdaq”) notifying the Company that the Staff has determined that the Company violated the minimum stockholders’ equity requirements of Listing Rule 5550(b), at which hearing the Panel granted the Company an extension through August 22, 2016 to evidence compliance with the $2.5 million stockholders’ equity requirement and all other applicable requirements for continued listing on The Nasdaq Capital Market.

As a result of the transactions described in Item 1.01 above, the Company believes its stockholders’ equity is now at least $2.5 million and the Company now complies with the minimum stockholders’ equity requirements of Listing Rule 5550(b).

Item 9.01    Financial Statements and Exhibits

The following exhibits are furnished as part of this Current Report on Form 8-K:

Exhibit No.    Description

3.1    Amended and Restated Certificate of Designations of the Series C Preferred Stock of Function(x) Inc.

10.1    Note Exchange Agreement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FUNCTION(X) INC.
Date: August 22, 2016	By:	/s/ Mitchell J. Nelson
		Name:  Mitchell J. Nelson
		Title:   Executive Vice President

EX-3.1

AMENDED AND RESTATED CERTIFICATE OF DESIGNATIONS OF THE
SERIES C CONVERTIBLE PREFERRED STOCK OFFUNCTION(X) INC.

I, Mitchell J. Nelson, hereby certify that I am the Executive Vice President and Secretary of Function(x) Inc. (formerly known as Viggle Inc.) (the “Company”), a corporation organized and existing under the Delaware General Corporation Law (the “DGCL”), and further do hereby certify:

WHEREAS, pursuant to its authority as aforesaid, the Board of Directors of the Company previously fixed the rights, preferences, restrictions and other matters relating to Series C Preferred Stock, consisting of up to 100,000 shares of the Preferred Stock which the Corporation has the authority to issue, as set forth in a Certificate of Designations of the Series C Convertible Preferred Stock of Viggle Inc. dated October 14, 2014 (the “Certificate of Designations”): and

WHEREAS, the Board of Directors wishes to amend and restate the Certificate of Designations in its entirety pursuant to Section 151 of the Delaware General Corporation Law;

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby amend and restate the Certificate of Designations and does hereby provide for the issuance of a series of Preferred Stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of Preferred Stock as follows:

TERMS OF SERIES C PREFERRED STOCK

1.Designation and Number of Shares. There shall hereby be created and established a series of preferred stock of the Company designated as “Series C Convertible Preferred Stock” (the “Series C Preferred Stock”). The authorized number of shares of Series C Preferred stock shall be 100,000 shares. Each share of Series C Preferred Stock shall have a par value of $0.001.

2.Ranking. Except to the extent that the holders of at least a majority of the outstanding shares of Series C Preferred Stock (the “Required Holders”) expressly consent to the creation of Parity Stock (as defined below) or Senior Preferred Stock (as defined below), all shares of capital stock of the Company shall be junior in rank to all shares of Series C Preferred Stock with respect to the preferences as to dividends, distributions and payments upon a Liquidation Event (such junior stock is referred to herein collectively as “Junior Stock”). The rights of all such shares of capital stock of the Company shall be subject to the rights, preferences and privileges of the shares of Series C Preferred Stock. Without limiting any other provision of this Certificate of Designations, without the prior express consent of the Required Holders, voting separate as a single class, the Company shall not hereafter authorize or issue (i) any additional or other shares of capital stock that are of senior rank to the shares of Series C Preferred Stock in respect of the preferences as to dividends, distributions or payments upon the liquidation, dissolution and winding up of the Company (collectively, the “Senior Preferred Stock”), (ii) any additional or other shares of capital stock that are of pari passu rank to the shares of Series C Preferred Stock in respect of the preferences as to dividends, distributions or payments upon a Liquidation Event (collectively, the “Parity Stock”) or (iii) any Junior Stock having a maturity date (or any other date requiring redemption or repayment of such shares of Junior Stock) that is prior to the Maturity Date.

3.Dividends. From and after the date of issuance of a share of Series C Preferred Stock (the “Issuance Date”), the holder of such share of Series C Preferred Stock (each, a “Holder” and collectively, the “Holders”) shall be entitled to receive dividends (“Dividends”) on such share equal to twelve percent (12%) per annum (the “Dividend Rate”) of the Stated Value (as defined below) thereof in the manner provided below in this Section 3 before any Dividends shall be declared, set apart for or paid upon any Junior Stock or Parity Stock. Dividends on a share of Series C Preferred Stock shall accrue daily at the Dividend Rate, commence accruing on the Issuance Date thereof, compound annually, and be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends on the Series C Preferred Stock shall be cumulative and shall continue to accrue and compound whether or not declared and whether or not in any fiscal year there shall be net profits or surplus available for the payment of Dividends in such fiscal year, so that if in any fiscal year or years, Dividends in whole or in part are not paid upon the Series C Preferred Stock, unpaid Dividends shall accumulate as against the holders of Junior Stock and holders of Parity Stock. “Stated Value” shall mean $1,000 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the Initial Issuance Date with respect to the Series C Preferred Stock. “Initial Issuance Date” means the first date of issuance of any shares of Series C Preferred Stock.

4.Authorized Shares.

(a)Reservation. The Company shall reserve out of its authorized and unissued Common Stock a number of shares of Common Stock equal to the Conversion Rate with respect to the Conversion Amount of each share of Series C Preferred Stock as of the applicable Issuance Date thereof. So long as any of the shares of Series C Preferred Stock are outstanding, the Company shall take all action reasonably necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series C Preferred Stock, the number of shares of Common Stock as shall from time to time be necessary to effect the conversion of all of the shares of Series C Preferred Stock then outstanding, provided that at no time shall the number of shares of Common Stock so available be less than the number of shares required to be reserved by the previous sentence (the “Required Amount”). The number of shares of Common Stock reserved for conversions of the shares of Series C Preferred Stock and each increase in the number of shares so reserved shall be allocated pro rata among the Holders based on the number of shares of Series C Preferred Stock held by each Holder on the Initial Issuance Date or increase in the number of reserved shares (as the case may be) (the “Authorized Share Allocation”). In the event a Holder shall sell or otherwise transfer any of such Holder’s shares of Series C Preferred Stock, each transferee shall be allocated a pro rata portion of such Holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any shares of Series C Preferred Stock shall be allocated to the remaining Holders of shares of Series C Preferred Stock, pro rata based on the number of shares of Series C Preferred Stock then held by such Holders.

(b)Insufficient Authorized Shares. If, notwithstanding Section 4(a) and not in limitation thereof, at any time while any of the shares of Series C Preferred Stock remain outstanding the Company does not have a sufficient number of authorized and unissued shares of Common Stock to satisfy its obligation to have available for issuance upon conversion of the shares of Series C Preferred Stock at least a number of shares of Common Stock equal to the Required Amount (an “Authorized Share Failure”), then the Company shall promptly (but in no event later than one hundred eighty (180) days after the occurrence of such Authorized Share Failure) take all action reasonably necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve and have available the Required Amount for all of the shares of Series C Preferred Stock then outstanding. In connection therewith, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock or obtain the written consent of the holders of the required number of shares of Common Stock in lieu of such a meeting.

5.Voting Rights. Holders of shares of Series C Preferred Stock shall have no voting rights, except as required by law (including without limitation, the DGCL) and as expressly provided in this Certificate of Designations. To the extent that under the DGCL the vote of the holders of the Series C Preferred Stock, voting separately as a series, is required to authorize a given action of the Company, the affirmative vote or consent of the Required Holders shall constitute the approval of such action by the series. Holders of the Series C Preferred Stock shall be entitled to written notice of all stockholder meetings or written consents (and copies of proxy materials and other information sent to stockholders) with respect to which they would be entitled to vote, which notice would be provided pursuant to the Company’s bylaws and the DGCL).

6.Liquidation, Dissolution, Winding-Up. In the event of a Liquidation Event, each Holder of a share of Series C Preferred Stock shall be entitled to receive in cash out of the assets of the Company legally available for distribution to its stockholders, whether from capital or from earnings available for distribution to its stockholders (the “Liquidation Funds”), before any amount shall be paid to the holders of any shares of Junior Stock, an amount with respect to each share of Series C Preferred Stock then held by such Holder equal to the greater of (i) the Conversion Amount of such share of Series C Preferred Stock as of the date of the applicable Liquidation Event and (ii) the amount per share such Holder would receive if such Holder converted such share of Series C Preferred Stock into Common Stock immediately prior to such Liquidation Event, provided that if the Liquidation Funds are insufficient to pay the full amount due to the Holders and holders of shares of Parity Stock, then each Holder and each holder of Parity Stock shall receive a percentage of the Liquidation Funds equal to the full amount of Liquidation Funds payable to such Holder and such holder of Parity Stock as a liquidation preference, in accordance with their respective certificate of designations (or equivalent), as a percentage of the full amount of Liquidation Funds payable to all holders of shares of Series C Preferred Stock and all holders of shares of Parity Stock. To the extent necessary, the Company shall cause such actions to be taken by each of its subsidiaries so as to enable, to the maximum extent permitted by law, the proceeds of a Liquidation Event to be distributed to the Holders in accordance with this Section 6. All the preferential amounts to be paid to the Holders under this Section 6 shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution of any Liquidation Funds of the Company to the holders of shares of Junior Stock in connection with a Liquidation Event as to which this Section 6 applies.

7.Lost or Stolen Certificates. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any certificates representing shares of Series C Preferred Stock (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 an indemnification undertaking by the applicable Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of the certificate(s), the Company shall execute and deliver new certificate(s) of like tenor and date.

8.Failure or Indulgence Not Waiver. No failure or delay on the part of a 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. This Certificate of Designations shall be deemed to be jointly drafted by the Company and all Holders and shall not be construed against any Person as the drafter hereof.

9.Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Certificate of Designations 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:

Function(x)Inc.

902 Broadway, 11^th Floor

New York, New York 10022

E-mail: mitchell@functionxinc.com

Facsimile: (212) 750-3034

Attention: General Counsel

If to a Holder, to its address, facsimile number or e-mail address (as the case may be) set forth in the books and records of the Company, 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.

10.Transfer of Series C Preferred Stock. A Holder may transfer some or all of its shares of Series C Preferred Stock without the consent of the Company so long as such transfer complies with all applicable securities laws.

11.Series C Preferred Stock 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 Holders), a register for the Series C Preferred Stock, in which the Company shall record the name, address, facsimile number and e-mail address of the Persons in whose name the shares of Series C Preferred Stock have been issued, as well as the name and address of each transferee. The Company may treat the Person in whose name any Series C Preferred Stock is registered on the register as the owner and holder thereof for all purposes, notwithstanding any notice to the contrary, but in all events recognizing any properly made transfers.

12.Stockholder Matters; Amendment.

(a)
Stockholder Matters. Any stockholder action, approval or consent required, desired or otherwise sought by the Company pursuant to the DGCL, the Certificate of Incorporation, this Certificate of Designations or otherwise with respect to the issuance of Series C Preferred Stock may be effected by written consent of the Company’s stockholders or at a duly called meeting of the Company’s stockholders, all in accordance with the applicable rules and regulations of the DGCL. This provision is intended to comply with the applicable sections of the DGCL permitting stockholder action, approval and consent affected by written consent in lieu of a meeting.

(b)
Amendment. This Certificate of Designations or any provision hereof may be amended by obtaining the affirmative vote at a meeting duly called for such purpose, or written consent without a meeting in accordance with the DGCL, of the Required Holders, voting separate as a single class, and with such other stockholder approval, if any, as may then be required pursuant to the DGCL and the Certificate of Incorporation.

13.
Redemption at Option of Company. The Company shall have the right to redeem, from time to time, any or all outstanding shares of Series C Preferred Stock as set forth in this Section 13 (each a “Company Optional Redemption”).

(a)
Mechanics of Company Optional Redemption. The Company may exercise its right to require redemption under this Section 13 from time to time by delivering a written notice thereof by facsimile, e-mail or otherwise to all, but not less than all, of the Holders of shares of Series C Preferred Stock (the “Company Optional Redemption Notice” and the date all of the Holders receive such notice is referred to as the “Company Optional Redemption Notice Date”). The Company Optional Redemption Notice shall (x) state the aggregate number of shares of Series C Preferred Stock subject to the applicable Company Optional Redemption and the number of shares of Series C Preferred Stock to be redeemed from each Holder (which shall be determined with respect to each Holder by multiplying (1) the aggregate number of shares of Series C Preferred Stock subject to such Company Optional Redemption times (2) the quotient of (I) the number of shares of Series C Preferred Stock then held by such Holder divided by (II) the aggregate number of shares of Series C Preferred Stock then outstanding, with such product being rounded up or down (as the case may be) to the nearest whole number of shares) and (y) state the date on which the applicable Company Optional Redemption shall occur (each a “Company Optional Redemption Date”), which date shall not be less than three (3) Trading Days following the Company Optional Redemption Notice Date.

(b)
Payment of Optional Redemption Price. The redemption price for each share of Series C Preferred Stock subject to the applicable Company Optional Redemption shall be determined as of the applicable Company Optional Redemption Date and shall be equal to the sum of (i) the Conversion Amount thereof as of the applicable Company Optional Redemption Date plus (ii) an amount equal to the product of (1) the applicable Optional Redemption Premium (as defined below) multiplied by (2) the Stated Value of such share of Series C Preferred Stock (the product of clauses (1) and (2) is referred to herein as the “Company Optional Redemption Premium Amount” and the sum of clauses (i) and (ii) is referred to herein as the “Company Optional Redemption Amount”). Notwithstanding the foregoing, no Company Optional Redemption Premium Amount shall be due with respect to shares of Series C Preferred Stock subject to the applicable Company Optional Redemption that are being redeemed by the Company’s use of any Qualified Public Offering Proceeds (as defined below) for such redemption. The Company shall pay the applicable Company Optional Redemption Amount for each share of Series C Preferred Stock subject to the applicable Company Optional Redemption on the applicable Company Optional Redemption Date. In the event of the Company’s redemption of any portion of the shares of Series C Preferred Stock under this Section 13, such 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 a Holder. Accordingly, any redemption premium due under this Section 13 is intended by the parties to be, and shall be deemed, a reasonable estimate of such Holder’s actual loss of its investment opportunity and not as a penalty.

14.
Dispute Resolution. In the case of a dispute as to the determination of the the arithmetic calculation of the Conversion Rate, the Company or the applicable Holder (as the case may be) shall submit the disputed determinations or arithmetic calculations (as the case may be) via facsimile or e-mail (i) within five (5) Business Days after receipt of the applicable notice giving rise to such dispute to the Company or such Holder (as the case may be) or (ii) if no notice gave rise to such dispute, at any time after such Holder learned of the circumstances giving rise to such dispute. If such Holder and the Company are unable to agree upon such determination or calculation within ten (10) Business Days of such disputed determination or arithmetic calculation (as the case may be) being submitted to the Company or such Holder (as the case may be), then the Company shall, within five (5) Business Days, submit (via facsimile or e-mail) the disputed arithmetic calculation of the Conversion Rate, to an independent, outside accountant or accounting firm selected by the Company. The Company shall cause such investment bank or such accountant or accounting firm (as the case may be) to perform the determinations or calculations (as the case may be) and notify the Company and such Holder of the results no later than ten (10) Business Days from the time it receives such disputed determinations or calculations (as the case may be). Such investment bank’s, accountant’s or accounting firm’s determination or calculation (as the case may be) shall be binding upon all parties absent demonstrable error or fraud, and the fees and expenses of such investment bank, such accountant or such accounting firm (as the case may be) shall be borne equally by the Company and such Holder.

15.
Non-Redeemable. Except as otherwise expressly contemplated by Section 13 of this Certificate of Designations, the shares of Series C Preferred Stock shall not be redeemable either at the Company’s option or at the option of any of the Holders at any time.

16.
Participation. The Company shall not declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”) until such time as accrued dividends on the Series C Preferred Stock have been paid in full.

17.
Certain Defined Terms. For purposes of this Certificate of Designations, the following terms shall have the following meanings:

(a)
“1933 Act”meansthe Securities Act of 1933, as amended.

(b)
“1934 Act”meansthe Securities Exchange Act of 1934, as amended.

(c)
“Additional Amount” means, as of the applicable date of determination, with respect to a particular share of Series C Preferred Stock, all accrued and unpaid Dividends on such share of Series C Preferred Stock.

(d)
“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.

(e)
“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.

(f)
“Liquidation Event” means, whether in a single transaction or series of transactions, the voluntary or involuntary liquidation, dissolution or winding up of the Company or such subsidiaries of the Company the assets of which constitute all or substantially all of the assets of the business of the Company and its subsidiaries, taken as a whole.

(g)
“OptionalRedemption Premium” means, with respect to a particular Company Optional Redemption Date, (as applicable) 6%.

(h)
“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.

(i)
“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. Any dispute as to the arithmetic calculation of Proceeds shall be resolved pursuant to Section 14 above, with the term “Proceeds” being substituted for the term “Conversion Rate.”

(j)
“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 at least $10,000,000 is raised and the per share offering price is greater than or equal to $5.00 per share (adjusted for any stock dividend, stock split, stock combination or other similar transaction).

(k)
“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.

(l)
“SEC” means the Securities and Exchange Commission or the successor thereto.

(m)
“Trading Day” means any day on which The New York Stock Exchange (and each successor thereto) is open for trading of securities.

* * * * *

RESOLVED, FURTHER, that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions of Delaware law.

IN WITNESS WHEREOF, the undersigned have executed this Certificate this 22^nd day of August, 2016.

     __________________________________________

     Name: Mitchell J. Nelson

     Title: Executive Vice President and Secretary

EX-10.1

NOTE EXCHANGE AGREEMENT

THIS NOTE EXCHANGE AGREEMENT (this “Agreement”) is dated August [__], 2016, by and between FUNCTION(X) INC., a Delaware corporation, (the “Company”), Sillerman Investment Company III, LLC, a Delaware limited liability company (“SIC III”) , Sillerman Investment Company IV, LLC, a Delaware limited liability company (“SIC IV”) and Sillerman Investment Company VI, LLC, a Delaware limited liability company (“SIC VI,” and collectively with the Company, SIC III and SIC IV, the “Parties”).

WHEREAS:

WHEREAS, on October 24, 2014, the Company filed a Certificate of Designations of its Series C Preferred Stock; and

WHEREAS, on August [__], 2016, the Company amended such Certificate of Designations; and

WHEREAS, the Company has approved (through unanimous consent of the independent members of its Board of Directors as a result of the transactions contemplated herein being a transaction with affiliates of the Chairman and Chief Executive Officer of the Company, Robert F.X. Sillerman, who is a principal of SIC III, SIC IV, and SIC VI) this Agreement in furtherance of the Company’s plan to (a) remain listed on the Nasdaq Global Market, and (b) upon consummation, improve its balance sheet and capital structure; and

WHEREAS, the Parties executed an exchange agreement dated as of July 8, 2016, as amended by that certain First Amendment to Exchange Agreement (collectively, the “Exchange Agreement”) obligating the Parties to, among other things, convert in an exchange transaction the Notes (as defined in the Exchange Agreement) and Series C Preferred Stock into shares of the Company’s common stock in accordance with the terms thereof; and

WHEREAS, the Parties desire to exchange the Notes, to the extent of outstanding indebtedness as of the date hereof, for Series C Preferred Stock, subject to the obligations and provisions of the Exchange Agreement, the Subordination Agreement (the “Subordination Agreement”) dated July 8, 2016 between SIC III, SIC VI, SIC IV, Rant, Inc., Dominion Capital, LLC, L1 Capital Global Opportunities Master Fund, Puritan Partners, LLC, Pinz Capital International, Union Capital, LLC, and Adar Bays LLC, which is hereby reaffirmed, and the Lock-Up Agreement (the “Lock-Up Agreement”) dated July 12, 2016 between Mitchell J. Nelson, Robert F.X. Sillerman, , Dominion Capital, LLC, L1 Capital Global Opportunities Master Fund, Puritan Partners, LLC, Pinz Capital International, Union Capital, LLC, and Adar Bays LLC, which is hereby reaffirmed.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants hereinafter contained, the Parties agree as follows:

ARTICLE I

THE EXCHANGE

AND ISSUANCE OF EQUITY SECURITIES

1.1     Exchange. The following shall occur at the Closing:

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

b)The Company shall issue the applicable number of shares of Series C Preferred Stock to each of SIC III, SIC IV, and SIC VI in proportion to the amounts that each is exchanging.

c)Each of SIC III, SIC IV, and SIC VI shall issue a letter to the Company confirming there is no remaining outstanding principal amount due to it under the Note(s), except that the letter issued by SIC IV will reflect that the Remaining Amount shall remain outstanding.

1.2    Closing. The closing (the “Closing”) of the transactions contemplated by this Agreement shall take place simultaneously with the signing of this Agreement.

1.3    Delivery. The transactions contemplated by this Agreement shall be completed at the Closing.

a)Each of SIC III, SIC IV, and SIC VI shall deliver original Notes to the Company, with appropriate transfer documentation as may be reasonably required by the Company; and

b)The Company shall issue the shares of Series C Preferred Stock to the applicable Party.

1.4    The indebtedness ($__________________) evidenced by the Notes is hereby exchanged for [______] shares of the Series C Preferred Stock. The Parties hereto agree to perform the obligations under the Exchange Agreement as if the Series C Preferred Stock issued pursuant to this Agreement has been substituted in lieu of the Notes for which it was issued.

1.5    Subordination/Lock-Up Agreements. Each Party acknowledges and agrees that the Series C Preferred Stock issued by the Company pursuant to this Note Exchange Agreement is expressly held subject to and in accordance with the provisions of the Subordination Agreement and the Lock-Up Agreement. SIC IV also acknowledges that the Remaining Amount remains subject to the provisions of the Subordination Agreement as well.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

OF THE COMPANY

2.1     Authorization and Binding Obligation. The Company has the requisite power and authority to enter into and perform its obligations under this Agreement and to complete the transactions described herein, including the issuance of the shares of Series C Preferred Stock, in accordance with the terms hereof. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the shares of Series C Preferred Stock, have been duly authorized by the Company's Board of Directors and upon satisfaction of the closing conditions, no further filing, consent, or authorization is required by the Company, its Board of Directors or its stockholders. This Agreement has been duly executed and delivered by the Company, and constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities laws.

2.2     No Conflict. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated herein will not (a) result in a violation of the Certificate of Incorporation, as amended, or other organizational document of the Company or any of its subsidiaries, any capital stock of the Company or any of its subsidiaries or bylaws of the Company or any of its subsidiaries, (b) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its subsidiaries is a party, or (c) result in a violation of any law, rule, regulation, order, judgment or decree (including foreign, federal and state securities laws and applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries is bound or affected except, in the case of clause (ii) or (iii) above, to the extent such violations that could not reasonably be expected to have a material adviser effect on the Company or its subsidiaries.

2.3     Securities Law Exemptions. Assuming the accuracy of the representations and warranties of each of SIC III, SIC IV, and SIC VI contained herein, the offer and issuance by the Company of the shares of Series C Preferred Stock is exempt from registration pursuant to the exemption provided by Section 3(a)(9) of the Securities Act.

2.4     Issuance of Securities. The issuance of the shares of Series C Preferred Stock is duly authorized and upon issuance in accordance with the terms of this Agreement, the shares of Series C Preferred Stock shall be validly issued, fully paid and non-assessable and free from all taxes, liens, charges and other encumbrances with respect to the issuance thereof and shall not be subject to any preemptive, participation, rights of first refusal and other similar rights, and each of SIC III, SIC IV, and SIC VI shall be entitled to all rights accorded to a holder of such shares of Series C Preferred Stock.

2.5     Transfer Taxes. On the Closing Date, all share transfer or other taxes (other than income or similar taxes) which are required to be paid in connection with the issuance of the shares of Series C Preferred Stock will be, or will have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

2.6    Lock-Up. In the event that the underwriters of an underwritten public offering of Company stock undertaken within ninety (90) days of the closing of the transactions contemplated herein require each or any of SIC III, SIC IV, and/or SIC VI to enter into a lock-up agreement in connection with such offering, then such party or parties shall execute such lock-up agreement as the underwriters may reasonably require. The shares issued to SIC III, SIC IV, and SIC VI shall be subject to the lock-up agreements entered into in connection with the convertible debenture financing to be provided by Dominion Capital LLC.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

OF SIC III, SIC IV, AND SIC VI

As a material inducement to the Company to enter into this Agreement and consummate the exchange, each of SIC III, SIC IV, and SIC VI represents, warrants and covenants with and to the Company as follows:

3.1    Authorization and Binding Obligation. Each of SIC III, SIC IV, and SIC VI has the requisite legal capacity, power and authority to enter into, and perform under, this Agreement. Each of SIC III, SIC IV, and SIC VI has the requisite legal capacity, power and authority to purchase the shares of Series C Preferred Stock. The execution, delivery and performance of this Agreement by each of SIC III, SIC IV, and SIC VI, and the consummation by each of SIC III, SIC IV, and SIC VI of the transactions contemplated herein, have been duly authorized by all requisite corporate action on the part of each of SIC III, SIC IV, and SIC VI, as applicable, and no further consent or authorization is required. This Agreement has been duly authorized, executed and delivered by each of SIC III, SIC IV, and SIC VI, and constitutes the legal, valid and binding obligations of each of SIC III, SIC IV, and SIC VI, enforceable against each of SIC III, SIC IV, and SIC VI in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities laws.

3.2     Beneficial Owner. With respect to each of the Notes owned by it, (a) each of SIC III, SIC IV, and SIC VI owns, beneficially and of record, good and marketable title to the Note(s) owned by it, free and clear of any taxes or encumbrances; (b) none of the Notes are registered under the Securities Act and, therefore, cannot be resold unless registered under the Securities Act or in a transaction exempt from or not subject to the registration requirements of the Securities Act; (c) none of SIC III, SIC IV, and SIC VI has entered into any agreement or understanding with any person or entity to dispose of the any portion of any of the Notes; and (d) at the Closing, each of SIC III, SIC IV, and SIC VI will convey to the Company good and marketable title to the Note(s) owned by it in its entirety, free and clear of any security interests, liens, adverse claims, taxes or encumbrances.

3.3    Accredited Investor. Each of SIC III, SIC IV, and SIC VI is an accredited investor as defined in Rule 501(a) of Regulation D, as amended, under the Securities Act, and none of SIC III, SIC IV, and SIC VI was organized for the specific purpose of acquiring the shares of Series C Preferred Stock.

3.4    Experience of Investor. Each of SIC III, SIC IV, and SIC VI, together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the shares of Series C Preferred Stock, and has evaluated the merits and risks of such investment. Each of SIC III, SIC IV, and SIC VI is able to bear the economic risk of an investment in such securities and, at the present time, is able to afford a complete loss of such investment.

3.5    Purchase Entirely for Own Account. The shares of Series C Preferred Stock will be acquired for the account of each of SIC III, SIC IV, and SIC VI, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the Securities Act, and neither SIC III, SIC IV, and SIC VI has any present intention of selling, granting any participation in, or otherwise distributing the same in violation of the Securities Act without prejudice, however, to the right of each of SIC III, SIC IV, and SIC VI at all times to sell or otherwise dispose of all or any part of such securities in compliance with applicable federal and state securities laws and in accordance with the Exchange Agreement. Nothing contained herein shall be deemed a representation or warranty by any of SIC III, SIC IV, and SIC VI to hold the shares of Series C Preferred Stock for any period of time. None of SIC III, SIC IV, and SIC VI is a broker-dealer or agent of a broker-dealer required to be registered with the Securities and Exchange Commission under Section 15 of the Securities Exchange Act of 1934 (the “Exchange Act”), nor an entity or individual engaged in a business that would require it to be so registered.

3.5    Disclosure of Information. Each of SIC III, SIC IV, and SIC VI has access to and has reviewed the Company’s filings with the Securities and Exchange Commission, at WWW.SEC.GOV, including the “Risk Factors” contained therein. Each of SIC III, SIC IV, and SIC VI has had the opportunity to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the shares of Series C Preferred Stock. Neither such inquiries nor any other due diligence investigation conducted by each of SIC III, SIC IV, and SIC VI shall modify, amend or affect the right of each of SIC III, SIC IV, and SIC VI to rely on the Company’s representations and warranties contained in this Agreement.

3.8    Proceedings. No proceedings relating to any of the Notes are pending or, to the knowledge of any of SIC III, SIC IV, and SIC VI, threatened before any court, arbitrator or administrative or governmental body that would adversely affect the right and ability of SIC III, SIC IV, and/or SIC VI to surrender and exchange the Note(s) owned by it.

3.9    Tax Consequences. Each of SIC III, SIC IV, and SIC VI acknowledges that the purchase of the shares of Series C Preferred Stock, may involve tax consequences to it, and that the contents of this Agreement do not contain tax advice. Each of SIC III, SIC IV, and SIC VI acknowledges that it has not relied and will not rely upon the Company with respect to any tax consequences related to the exchange of the Note(s). Each of SIC III, SIC IV, and SIC VI assumes full responsibility for all such consequences and for the preparation and filing of any tax returns and elections which may or must be filed in connection with such Note.

3.10     Reliance on Exemptions. Each of SIC III, SIC IV, and SIC VI understands that the securities being offered and exchanged hereunder are being offered and exchanged in reliance on specific exemptions from the registration requirements of United States federal and state securities laws, and that the Company is relying in part upon the truth and accuracy of, and the representations of each of SIC III, SIC IV, and SIC VI, and compliance with, the representations, warranties, agreements, acknowledgments and understandings of each of SIC III, SIC IV, and SIC VI set forth herein in order to determine the availability of such exemptions and the eligibility of each of SIC III, SIC IV, and SIC VI to acquire the shares of Series C Preferred Stock.

3.11    Approval of Transactions. Each of the signatories hereto shall vote any common or preferred shares owned by it to approve the transactions contemplated hereby as required at a meeting called for such purpose or by written consent in lieu of a meeting.

ARTICLE IV

CONDITIONS TO THE OBLIGATIONS

OF THE PARTIES HEREUNDER

The obligations of the Company and each of SIC III, SIC IV, and SIC VI hereunder are subject to the satisfaction of each of the following conditions, provided that these conditions may be waived only with the consent of all applicable Parties.

4.1    Each and every representation and warranty of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Closing Date.

4.2     The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the consummation of the transactions contemplated herein. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by this Agreement.

4.3    The Company shall not have filed for or be the subject of a filing for bankruptcy, reorganization or assignment for the benefit of creditors or similar relief in any Federal or state proceeding.

ARTICLE V

TERMINATION

5.1    Expenses. Each Party agrees to pay for its own expenses related to the research, preparation and review of the transactions contemplated by this Agreement.

5.2    Cooperation. The Parties shall cooperate with each other in connection with taking such actions as may be reasonably necessary to consummate the transactions contemplated herein, including without limitation obtaining the consent of Nasdaq and any governmental or market regulatory agencies as may be appropriate.

5.3     Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City and County of New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

5.4     Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement. This Agreement, to the extent delivered by means of a facsimile machine or electronic mail (any such delivery, an “Electronic Delivery”), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other party hereto shall re‑execute original forms hereof and deliver them in person to all other parties. No party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense related to lack of authenticity.

5.5     Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

5.6    Severability. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

5.7     Entire Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Investor, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement, contains the entire understanding of the Parties with respect to the matters covered herein and, except as specifically set forth herein, neither the Company nor the Investor makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended other than by an instrument in writing signed by the Parties, and any amendment to this Agreement made in conformity with the provisions of this Section shall be binding upon the Parties. No provision hereof may be waived other than by an instrument in writing signed by the Party against whom enforcement is sought. Notwithstanding the provisions of this Section 5.7, this Agreement shall be subject to the obligations to comply with that certain Exchange Agreement dated July 8, 2016 between the parties, as it may be amended.

5.8    Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (c) one business day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Company:    Function(X) Inc.

902 Broadway, 11^th FloorNew York, NY 1010

Telephone: 212.231.0092  

Attention: Mitchell J. Nelson, Esq.

Email: mitchell@functionxinc.com

If to the SIC III, SIC IV, or SIC VI:        Sillerman Investment Company, LLC

902 Broadway, 11^th Floor

New York, NY 10010

ATTN: Robert F.X. Sillerman

Email: one@rfxs1.com

to its address and email address set forth above, or to such other address and/or email address and/or to the attention of such other person as the recipient party has specified by written notice given to each other Party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) electronically generated by the sender's email program containing the time, date, recipient email address and copy of the message or (iii) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by email or receipt from an overnight courier service in accordance with clause (a), (b) or (c) above, respectively.

5.9     Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of each of SIC III, SIC IV, and SIC VI. Any of SIC III, SIC IV, and SIC VI may assign some or all of its rights hereunder without the consent of the Company, except as may be inconsistent with the terms of this Agreement.

5.10    Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the generality or applicability of a more general representation or warranty.

Signatures on following page

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

COMPANY:

FUNCTION(X) INC.

By:________________________________

Name: Mitchell J. Nelson

Title: Executive Vice President

SILLERMAN INVESTMENT COMPANY

III, INC.

By: ________________________________

Name: Robert F.X. Sillerman

Title: Manager

SILLERMAN INVESTMENT COMPANY

IV, INC.

By: ________________________________

Name: Robert F.X. Sillerman

Title: Manager

SILLERMAN INVESTMENT COMPANY

VI, INC.

By: ________________________________

Name: Robert F.X. Sillerman

Title: Manager

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