Exhibit 10.1

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

 

GROUP 10 HOLDINGS, LLC

CONVERTIBLE DEBENTURE

 

Issuance Date: January 27, 2015 Principal Amount: $36,750

 

FOR VALUE RECEIVED, Players Network, Inc., a Nevada corporation (“Borrower”),
hereby promises to pay to Group 10 Holdings LLC (“Holder”) or its registered
assigns or successors in interest, the sum of Thirty Six Thousand Seven Hundred
Fifty dollars ($36,750) (the “Principal Amount”), together with all accrued
interest thereon, on the one (1) year anniversary from the Issuance Date (the
“Maturity Date”), if not sooner paid.

 

The following terms and conditions shall apply to this Convertible Debenture
(the “Debenture”):

 

ARTICLE I
DEFINITIONS

 

1.1 Definitions. For the purposes hereof, in addition to the terms defined
elsewhere in this Debenture, the following terms shall have the following
meanings:

 

“Bankruptcy Event’’ means any of the following events: (a) Borrower or any
subsidiary (as such term is defined in Rule l-02(w) of Regulation S-X) thereof
commences a case or other proceeding under any bankruptcy, reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction relating to Borrower or any
subsidiary thereof; (b) there is commenced against Borrower or any subsidiary
thereof any such case or proceeding that is not dismissed within sixty (60) days
after commencement; (c) Borrower or any subsidiary thereof is adjudicated
insolvent or bankrupt or any order of relief or other order approving any such
case or proceeding is entered; (d) Borrower or any subsidiary thereof suffers
any appointment of any custodian or the like for it or any substantial part of
its property that is not discharged or stayed within sixty (60) calendar days
after such appointment; (e) Borrower or any subsidiary thereof makes a general
assignment for the benefit of creditors; (f) Borrower or any subsidiary thereof
calls a meeting of its creditors with a view to arrange a composition,
adjustment or restructuring of its debts; or (g) Borrower or any subsidiary
thereof, by any act or failure to act, expressly indicates its consent to,
approval of or acquiescence in any of the foregoing or takes any corporate or
other action for the purpose of effecting any of the foregoing.

 

“Business Day” means any day except any Saturday, any Sunday, any day which
shall be a federal legal holiday in the United States or any day on which
banking institutions in the State of New York are authorized or required by law
or other governmental action to close.

 

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“Change of Control Transaction” means the occurrence after the date hereof of
any of (i) an acquisition after the date hereof by an individual or legal entity
or “group” (as described in Rule 13d-5(b)(l) promulgated under the Exchange Act)
of effective control (whether through legal or beneficial ownership of capital
stock of Borrower, by contract or otherwise) of in excess of 50% of the voting
securities of Borrower (other than by means of conversion or exercise of this
Debenture and the securities issued together with this Debenture) or (ii)
Borrower merges into or consolidates with any other Person, or any Person merges
into or consolidates with Borrower and, after giving effect to such transaction,
the stockholders of Borrower immediately prior to such transaction own less than
50% of the aggregate voting power of Borrower or the successor entity of such
transaction, or (iii) Borrower sells or transfers all or substantially all of
its assets to another Person and the stockholders of Borrower immediately prior
to such transaction own less than 50% of the aggregate voting power of the
acquiring entity immediately after the transaction, or (iv) a replacement at one
time or within a three (3) year period of more than one-half of the members of
Borrower’s board of directors which is not approved by a majority of those
individuals who are members of the board of directors on the date hereof (or by
those individuals who are serving as members of the board of directors on any
date whose nomination to the board of directors was approved by a majority of
the members of the board of directors who are members on the date hereof), or
(v) the execution by Borrower of an agreement to which Borrower is a party or by
which it is bound, providing for any of the events set forth in clauses (i)
through (iv) above.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

 

“Issuance Date” means the date of the issuance of this Debenture, regardless of
any transfers of any Debenture and regardless of the number of instruments which
may be issued to evidence this Debenture.

 

“Lowest Closing Price” means, for any date, the price determined by the first of
the following clauses that applies: (a) the average of the two lowest closing
bid prices of Borrower’s Common Stock during the seventeen (17) Trading Days
prior to such date or (b) if the Common Stock is not then quoted on a Trading
Market, the fair market value of a share of Common Stock as determined by an
independent appraiser selected in good faith by Holder and reasonably acceptable
to Borrower.

 

“Most Recent Balance Sheet” means a true and complete copy of the balance sheet
of Borrower as of September 30, 2014 prepared in accordance with GAAP and
disclosed in Borrower’s Form 10-Q for the fiscal quarter ended on such date.

 

“Permitted Lien” means the individual and collective reference to the following:
(a) liens for taxes, assessments and other governmental charges or levies not
yet due or liens for taxes, assessments and other governmental charges or levies
being contested in good faith and by appropriate proceedings for which adequate
reserves (in the good faith judgment of the management of Borrower) have been
established in accordance with GAAP; and (b) liens imposed by law which were
incurred in the ordinary course of Borrower’s business, such as carriers’,
warehousemen’s and mechanics’ liens, statutory landlords’ liens, and other
similar liens arising in the ordinary course of Borrower’s business, and which
(x) do not individually or in the aggregate materially detract from the value of
such property or assets or materially impair the use thereof in the operation of
the business of Borrower and its consolidated subsidiaries or (y) are being
contested in good faith by appropriate proceedings, which proceedings have the
effect of preventing for the foreseeable future the forfeiture or sale of the
property or asset subject to such lien.

 

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“Person” means a natural person, sole proprietorship, corporation, limited
liability company, firm, partnership, association, joint venture, trust,
unincorporated organization, or other entity, whether acting in an individual,
fiduciary, or other capacity.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

“Trading Day” means a day on which the principal Trading Market is open for
business.

 

“Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the American
Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange, the OTC Bulletin Board, or
the OTC Markets QX Market, QB Market of Pink Market.

 

 

ARTICLE II
INTEREST & AMORTIZATION

 

2.1 Contract Rate. Subject to Sections 7.1 and 8.8 hereof, interest payable on
this Debenture shall accrue at a rate per annum equal to twelve percent (12%)
and shall be computed on the basis of a 365-day year.

 

2.2 Consideration. In consideration for the Debenture, Holder shall pay to
Borrower a purchase price equal to Thirty Five Thousand dollars ($35,000),
payable by wire transfer or other immediately available funds. Thus, as of the
Issuance Date, there shall exist a One Thousand Seven Hundred Fifty ($1,750)
Original Issue Discount (the “OID”) from the Principal Amount. Interest shall
accrue and be payable on the full Principal Amount of the Debenture, inclusive
of the OID, and payment of the full Principal Amount shall be required
regardless of time and manner of payment or prepayment by Borrower. Upon
conversion, Holder shall receive credit for the full Principal Amount converted.

 

2.3 Payments. Payment of the aggregate Principal Amount, together with all
accrued interest thereon shall be made on the Maturity Date.

 

2.4 Prepayment Option. Subject to the approval of Holder for prepayments after
one hundred eighty (180) days, Borrower may prepay in cash all or any portion of
the Principal Amount of this Debenture and accrued interest thereon, with a
premium, as set forth below (each a “Prepayment Premium”), upon ten (10)
Business Days prior written notice to Holder. Holder shall have the right to
convert all or any portion of the Principal Amount and accrued interest thereon
in accordance with Article III hereof during such ten (10) Business Day notice
period. The amount of each Prepayment Premium shall be as follows: (a) one
hundred five percent (105%) of the prepayment amount if such prepayment is made
at any time from the Issuance Date until thirty (30) days thereafter; (b) one
hundred fifteen percent (115%) of the prepayment amount if such prepayment is
made at any time after thirty (30) days from the Issuance Date.

 

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ARTICLE III
CONVERSION REPAYMENT

 

3.1. Optional Conversion. Subject to the terms of this Article III, Holder shall
have the right, but not the obligation, at any time after the Issuance Date and
until the Maturity Date, or thereafter during an Event of Default, to convert
all or any portion of the outstanding Principal Amount, accrued interest and
fees due and payable thereon into fully paid and non-assessable shares of Common
Stock of Borrower at the Conversion Price, as defined below (the “Conversion
Shares”).

 

3.2. Calculation of Conversion Price. Subject to Section 4.6 hereof, the
conversion price (the “Conversion Price”) shall mean the lesser of (a)
fifty-eight percent (58%) multiplied by the Lowest Closing Price as of the date
a Notice of Conversion is given (which represents a discount rate of forty-two
percent (42%)) or (b) five cents ($0.05).

 

3.2.1 Conversion Price Adjustments. Conversion Price shall be subject to the
following adjustments:

i.If the market capitalization of the Borrower is less than Three Hundred
Thousand Dollars ($300,000) on the day immediately prior to the date of the
Notice of Conversion, then the Conversion Price shall be twenty-five percent
(25%) multiplied by the Lowest Closing Price as of the date a Notice of
Conversion is given (which represents a discount rate of seventy-five percent
(75%)); and

ii.If the closing price of the Borrower’s Common Stock on the day immediately
prior to the date of the Notice of Conversion is less than .001 then the
Conversion Price shall be twenty-five percent (25%) multiplied by the Lowest
Closing Price as of the date a Notice of Conversion is given (which represents a
discount rate of seventy-five percent (75%)).

 

3.3. Conversion Limitation. Notwithstanding anything contained herein to the
contrary, the number of Conversion Shares that may be acquired by Holder upon
conversion of this Debenture (or otherwise in respect hereof) shall be limited
to the extent necessary to ensure that, following such conversion (or other
issuance), the total number of shares of Common Stock then beneficially owned by
Holder and its affiliates and any other Persons whose beneficial ownership of
Common Stock would be aggregated with that of Holder for purposes of Section
13(d) of the Exchange Act does not exceed 4.99% of the total number of issued
and outstanding shares of Common Stock, including, for such purpose, the shares
of Common Stock issuable upon such conversion, but excluding the number of
shares of Common Stock issuable upon (a) conversion of the remaining,
unconverted Principal Amount of this Debenture beneficially owned by Holder or
any of its affiliates and (b) exercise or conversion of the unexercised or
unconverted portion of any other securities of Borrower subject to a limitation
on conversion or exercise analogous to the limitation contained herein
(including, without limitation, any other debenture or warrant) beneficially
owned by Holder or any of its affiliates. For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder.  By written notice to
Borrower, Holder may increase, decrease or waive the provisions of this Section
3.3 as to itself but any such waiver will not be effective until the sixty-first
(61st) day after delivery thereof.

 

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3.4. Mechanics of Holder’s Conversion. Subject to Section 3.3 hereof, this
Debenture may be converted by Holder, in whole or in part from time to time
after the Issuance Date, by submitting to Borrower and/or the transfer agent of
record a notice of conversion (“Notice of Conversion”), the form of which is
attached hereto as Exhibit A. Such Notice of Conversion shall specify the
Principal Amount of the Debenture to be converted and the date on which such
conversion shall be effected (the “Conversion Date”). Pursuant to the terms of
the Notice of Conversion, Borrower shall issue instructions to the transfer
agent within two (2) Trading Days from the receipt of the Notice of Conversion
and shall cause the transfer agent to transmit the certificates representing the
Conversion Shares to Holder by physical delivery or crediting the account of
Holder’s designated broker with the Depository Trust Corporation (“DTC”) through
its Deposit Withdrawal Agent Commission (“DWAC”) system within two (2) Trading
Days after receipt by Borrower of the Notice of Conversion (the “Delivery
Date”). In the case of the exercise of the conversion rights set forth herein,
the conversion privilege shall be deemed to have been exercised, and the
Conversion Shares issuable upon such conversion shall be deemed to have been
issued, upon the Delivery Date and Holder shall be treated for all purposes as
the record holder of such Common Stock, unless Holder provides Borrower with
written instructions to the contrary. Conversions hereunder shall have the
effect of lowering the outstanding Principal Amount of this Debenture in an
amount equal to the applicable conversion. Holder and Borrower shall maintain
records showing the Principal Amount(s) converted and the Conversion Date(s). In
the event of any dispute or discrepancy, the records of Holder shall be
controlling and determinative in the absence of manifest error.

 

3.5. Conversion Mechanics. The number of shares of Common Stock to be issued
upon each conversion of this Debenture shall be determined by dividing that
portion of the Principal Amount and interest and fees to be converted, if any,
by the then applicable Conversion Price.

 

3.6 Fractional Shares. No fractional shares shall be issued upon the conversion
of this Debenture. As to any fraction of a share which Holder would otherwise be
entitled to upon such conversion, Borrower shall round up to the next whole
share.

 

3.7 Late Delivery of Conversion Shares. Borrower understands that a delay in the
delivery of Conversion Shares in the form required pursuant to this Article III
beyond the Delivery Date could result in economic loss to Holder. As
compensation to Holder for such loss, Borrower agrees to pay late fees to Holder
for late issuance of such shares in the form required pursuant to this Article
III upon conversion of the Debenture, in the amount equal to one thousand
dollars ($1,000) per Business Day after the Delivery Date. Borrower shall pay
any fees incurred under this Section in immediately available funds upon demand
and such fees shall also be eligible to be converted into Common Stock pursuant
to this Article III.

 

3.8 Authorized and Reserved Shares. Borrower represents and warrants and
covenants and agrees that upon issuance, the Conversion Shares will be duly and
validly issued, fully issued and non-assessable. Borrower agrees that its
issuance of this Debenture shall constitute full authority to its officers and
agents who are charged with the duty of executing stock certificates to execute
and issue the necessary certificates for Conversion Shares in accordance with
the terms and conditions of this Debenture. At all times during which this
Debenture is outstanding, Borrower shall reserve and keep available from its
authorized and unissued shares of Common Stock (the “Share Reserve”) for the
sole purpose of issuance upon conversion of this Debenture and payment of
interest on this Debenture, each as herein provided, free from preemptive rights
or any other actual or contingent purchase rights of Persons other than Holder,
not less than such aggregate number of shares of the Common Stock that shall be
issuable (taking account the adjustments of Article IV) upon the conversion of
the outstanding Principal Amount of this Debenture and payment of interest
hereunder. Initially, the Share Reserve shall be equal to 20,000,000 and shall
be adjusted by the transfer agent from time to time. Borrower agrees that it
will take all such reasonable actions as may be necessary to assure that the
Conversion Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the applicable Trading
Market upon which the Common Stock may be listed. Borrower agrees to provide
Holder with confirmation evidencing the execution of such share reservation
within three (3) Business Days from the Issuance Date.

 

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3.9 Issuance of New Debenture. Upon any partial conversion of this Debenture, a
new Debenture containing the same date and provisions of this Debenture shall,
at the request of Holder, be issued by Borrower to Holder for the principal
balance of this Debenture and accrued interest which shall not have been
converted or paid. Subject to the provisions of Article VI, Borrower will pay no
costs, fees or any other consideration to Holder for the production and issuance
of a new Debenture.

 

3.10 Par Value; Further Assurances.

 

(a) Borrower covenants that during the period that the Principal Amount of this
Debenture and any accrued interest and fees thereon remain outstanding, it will
ensure that the par value of any Conversion Shares shall not exceed the amount
payable therefor upon such exercise immediately prior to such exercise. Borrower
further covenants that it shall take all appropriate actions, including, without
limitation, amending its articles or certificate of incorporation and any other
voluntary action, such as calling a meeting of stockholders to approve any such
amendment, to ensure that the amount payable for any Conversion Shares shall at
all times exceed the par value thereof by at least four hundred percent (400%).

 

(b) Except and to the extent as waived or consented to by Holder, Borrower shall
not by any action, including, without limitation, amending its articles or
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Debenture, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this
Debenture against impairment. Without limiting the generality of the foregoing,
Borrower will (a) not increase the par value of any Conversion Shares above the
amount payable therefor upon such exercise immediately prior to such exercise,
(b) take all such action as may be necessary or appropriate in order that
Borrower may validly and legally issue fully paid and nonassessable Conversion
Shares upon the exercise of this Debenture and (c) use its commercially best
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
Borrower to perform its obligations under this Debenture.

 

3.11 Transfer Taxes. The issuance of certificates for Conversion Shares shall be
made without charge to Holder for any documentary stamp or similar taxes that
may be payable in respect of the issue or delivery of such certificates,
provided that Borrower shall not be required to pay any tax that may be payable
in respect of any transfer involved in the issuance and delivery of any such
certificate upon conversion in a name other than that of Holder and Borrower
shall not be required to issue or deliver such certificates unless or until the
Person or Persons requesting the issuance thereof shall have paid to Borrower
the amount of such tax or shall have established to the satisfaction of Borrower
that such tax has been paid.

 

3.12 Rule 144 Issuer’s Representation Letter. In the event that Holder’s brokers
dealer requires a Rule 144 Issuer’s Representation Letter (the “144 Letter”),
Holder will submit to Borrower the 144 Letter along with a corresponding Notice
of Conversion upon which Borrower will have forty-eight (48) hours to execute
and return the 144 Letter.

 

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ARTICLE IV
CERTAIN ADJUSTMENTS

 

4.1 Stock Dividends and Stock Splits. If Borrower, at any time while this
Debenture is outstanding: (a) pays a stock dividend or otherwise makes a
distribution or distributions payable in shares of Common Stock on shares of
Common Stock or any Common Stock equivalents (which, for avoidance of doubt,
shall not include any shares of Common Stock issued by Borrower upon conversion
of, or payment of interest on, this Debenture); (b) subdivides outstanding
shares of Common Stock into a larger number of shares; or (c) issues, in the
event of a reclassification of shares of the Common Stock, any shares of capital
stock of Borrower, then the Conversion Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock (excluding
any treasury shares of Borrower) outstanding immediately before such event and
of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made pursuant to this
Section shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.

 

4.2 Subsequent Rights Offerings. If Borrower, at any time within six (6) months
of the Issuance Date, shall issue rights, options or warrants to all holders of
Common Stock (and not to Holder) entitling them to subscribe for or purchase
shares of Common Stock at a price per share that is lower than the Lowest
Closing Price on the record date referenced below, then the Conversion Price
shall be multiplied by a fraction of which the denominator shall be the number
of shares of the Common Stock outstanding on the date of issuance of such rights
or warrants plus the number of additional shares of Common Stock offered for
subscription or purchase, and of which the numerator shall be the number of
shares of the Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of shares which the aggregate offering price of the
total number of shares issued (assuming delivery to Borrower in full of all
consideration payable upon exercise of such rights, options or warrants) would
purchase at such Lowest Closing Price. Such adjustment shall be made whenever
such rights or warrants are issued, other than to officers and directors under
equity incentive plans approved by the board of directors, and shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such rights, options or warrants.

 

4.3 Pro Rata Distributions. If Borrower, at any time while this Debenture is
outstanding, distributes to all holders of Common Stock (and not to Holder)
evidences of its indebtedness or assets (including cash and cash dividends) or
rights or warrants to subscribe for or purchase any security (other than the
Common Stock, which shall be subject to Section 4.1), then in each such case the
Conversion Price shall be adjusted by multiplying such Conversion Price in
effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the
denominator shall be the Lowest Closing Price determined as of the record date
mentioned above, and of which the numerator shall be such Lowest Closing Price
on such record date less the then fair market value at such record date of the
portion of such assets or evidence of indebtedness so distributed applicable to
one (1) outstanding share of the Common Stock as determined by the board of
directors of Borrower in good faith. In either case the adjustments shall be
described in a statement delivered to Holder describing the portion of assets or
evidences of indebtedness so distributed or such subscription rights applicable
to one (1) share of Common Stock. Such adjustment shall be made whenever any
such distribution is made and shall become effective immediately after the
record date mentioned above.

 

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4.4 Fundamental Transaction. If, at any time while this Debenture is
outstanding, (a) Borrower effects any merger or consolidation of Borrower with
or into another Person, (b) Borrower effects any sale of all or substantially
all of its assets in one transaction or a series of related transactions, (c)
any tender offer or exchange offer (whether by Borrower or another Person) is
completed pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (d) Borrower
effects any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property (in any such case, a
“Fundamental Transaction”), then, upon any subsequent conversion of this
Debenture, Holder shall have the right to receive, for each Conversion Share
that would have been issuable upon such conversion immediately prior to the
occurrence of such Fundamental Transaction, the same kind and amount of
securities, cash or property as it would have been entitled to receive upon the
occurrence of such Fundamental Transaction if it had been, immediately prior to
such Fundamental Transaction, holder of one (1) share of Common Stock (the
“Alternate Consideration”). For purposes of any such conversion, the
determination of the Conversion Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one (1) share of Common Stock in such Fundamental
Transaction, and Borrower shall apportion the Conversion Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then Holder shall be given the same choice as to
the Alternate Consideration it receives upon any conversion of this Debenture
following such Fundamental Transaction. To the extent necessary to effectuate
the foregoing provisions, any successor to Borrower or surviving entity in such
Fundamental Transaction shall issue to Holder a new Debenture consistent with
the foregoing provisions and evidencing Holder’s right to convert such Debenture
into Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this Section 4.4
and insuring that this Debenture (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.

 

4.5 Calculations. All calculations under this Article III shall be made to four
decimal places or the nearest 1/100th of a share, as the case may be. For
purposes of this Article III, the number of shares of Common Stock deemed to be
issued and outstanding as of a given date shall be the sum of the number of
shares of Common Stock (excluding any treasury shares of Borrower) issued and
outstanding.

 

4.6 Notice to Holder.

 

a) Adjustment to Conversion Price. Whenever the Conversion Price is adjusted
pursuant to any provision of this Article IV, Borrower shall promptly deliver to
each Holder a notice setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment.

 

 

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b) Notice to Allow Conversion by Holder. If (i) Borrower shall declare a
dividend (or any other distribution in whatever form) on the Common Stock, (ii)
Borrower shall declare a special nonrecurring cash dividend on or a redemption
of the Common Stock, (iii) Borrower shall authorize the granting to all holders
of the Common Stock of rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights, (iv) the approval of any
stockholders of Borrower shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to which
Borrower is a party, any sale or transfer of all or substantially all of the
assets of Borrower, of any compulsory share exchange whereby the Common Stock is
converted into other securities, cash or property or (v) Borrower shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of Borrower, then, in each case, Borrower shall cause to be filed at
each office or agency maintained for the purpose of conversion of this
Debenture, and shall cause to be delivered to Holder at its last address as it
shall appear upon Borrower’s books and records, at least 20 calendar days prior
to the applicable record or effective date hereinafter specified, a notice
stating (A) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of the Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (B) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided that the
failure to deliver such notice or any defect therein or in the delivery thereof
shall not affect the validity of the corporate action required to be specified
in such notice. Holder is entitled to convert this Debenture during the 20-day
period commencing on the date of such notice through the effective date of the
event triggering such notice.

 

4.7 Most Favored Nations Status. So long as this Debenture is outstanding, upon
any issuance by Borrower or any of its subsidiaries of any security (in an
amount under one million dollars ($1,000,000)) with any term more favorable to
the holder of such security or with a term in favor of the holder of such
security that was not similarly provided to Holder in this Debenture, then
Borrower shall notify Holder of such additional or more favorable term and such
term, at Holder’s option, shall become a part of the transaction documents with
Holder. Such more favorable terms include, but are not limited to, terms
addressing conversion discounts, conversion look-back periods, interest rates,
original issue discounts, stock sale price, private placement price per share
and warrant coverage. 

 

4.8 Holder’s Adjustments. Upon the occurrence of either of the following events,
Holder may, within three (3) Business Days of such occurrence, provide the
transfer agent with written instructions to increase the Share Reserve in
accordance therewith: (a) closing price of Borrower’s Common Stock is less than
.001 for three (3) consecutive Trading Days then the reserve shall be increased
to 50,000,000 shares; (b) closing price of Borrower’s Common Stock is less than
.0005 for three (3) consecutive Trading Days then the reserve shall be increased
to 150,000,000 shares

 

ARTICLE V
NEGATIVE COVENANTS

 

As long as any portion of this Debenture remains outstanding, unless Holder
shall have otherwise given prior written consent, Borrower shall not, and shall
not permit any of its subsidiaries (whether or not a subsidiary on the Issuance
Date) to, directly or indirectly:

 

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5.1 other than Permitted Indebtedness, enter into, create, incur, assume,
guarantee or suffer to exist any indebtedness for borrowed money of any kind,
including but not limited to, a guarantee, on or with respect to any of its
property or assets now owned or hereafter acquired or any interest therein or
any income or profits therefrom;

 

5.2 other than Permitted Liens, enter into, create, incur, assume or suffer to
exist any liens or security interests of any kind, on or with respect to any of
its property or assets now owned or hereafter acquired or any interest therein
or any income or profits therefrom;

 

5.3 issue any shares of Common Stock in exchange for satisfaction or accord, in
whole or in part, of any outstanding accounts payable obligations of Borrower,
where such shares would be freely tradable (without restrictions, manner of sale
obligations or reporting obligations) by the recipient thereof (or any
transferee thereof) prior to the date which is six (6) months following the date
of issuance thereof, whether pursuant to Section 3(a)(10) of the Securities Act
or otherwise;

 

5.4 amend its charter documents, including, without limitation, its articles or
certificate of incorporation and bylaws, in any manner that materially and
adversely affects any rights of Holder;

 

5.5 repay, repurchase or offer to repay, repurchase or otherwise acquire any
indebtedness for borrowed money (except for this Debenture in accordance with
the terms hereof and except for the Permitted Indebtedness described under
clauses (a), (b) and (d) of the definition thereof in accordance with the terms
of such indebtedness as in effect on the date hereof), other than regularly
scheduled principal and interest payments as such terms are in effect as of the
Issuance Date;

 

5.6 pay cash dividends or distributions on any equity securities of Borrower;

 

5.7 combine (including by way of a reverse stock split) outstanding shares of
Common Stock into a smaller number of shares;

 

5.8 enter into any transaction with any affiliate of Borrower which would be
required to be disclosed in any public filing with the Securities and Exchange
Commission (the “SEC”), unless such transaction is made on an arm’s-length basis
and expressly approved by a majority of the disinterested directors of Borrower
(even if less than a quorum otherwise required for board approval); or

5.9 enter into any agreement with respect to any of the foregoing.

 

ARTICLE VI
EVENTS OF DEFAULT

 

The occurrence of any of the following events, while this Debenture is
outstanding, shall be an “Event of Default;” provided that any Event of Default
may be cured within a one (1) Business Day except as otherwise provided herein:

 

6.1 Failure to Pay Principal, Interest or Other Fees. Borrower fails to pay the
Principal Amount, interest or other fees hereon as and when the same shall
become due and payable and such failure shall continue for a period of one (1)
Business Day following the date upon which any such payment was due.

 

6.2 Breach of Covenant. Borrower breaches any covenant or other term or
condition of this Debenture, including, but not limited, to the negative
covenants provided in Article V, in any material respect and such breach, if
subject to cure, continues for a period of one (1) Business Day after the
occurrence thereof.

 

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6.3 Breach of Representations and Warranties. Any representation or warranty of
Borrower made herein or in any other report, financial statement or certificate
made or delivered to Holder shall be false or misleading in any material respect
as of the date when made or deemed made.

 

6.4 SEC Filings. At any point while this Debenture is outstanding, Borrower is
not current with its reporting responsibilities under Section 13 of the Exchange
Act. Furthermore, Borrower fails to timely file, when due, any SEC report,
including any required XBRL file along with such report (e.g., Forms 8-K, 10-Q
or 10-K, or Schedules 14A, 14C or 14(f)), or, if the filing date of such report
is properly extended pursuant to SEC Rule 12b-25, when the date of any such
filing extension lapses, or any post-effective amendment to any SEC Registration
Statement.

 

6.5 Stop Trade. An SEC stop trade order or trading suspension of the Common
Stock on the applicable Trading Market shall be in effect for five (5)
consecutive Trading Days or five (5) Trading Days during a period of ten (10)
consecutive Trading Days, provided that Borrower shall not have been able to
cure such trading suspension within thirty (30) Business Days of the notice
thereof or list the Common Stock on another Trading Market within sixty (60)
Business Days of such notice.

 

6.6 SEC Reporting Status Matters.

 

(a) Borrower indicates by check mark on the cover page of an SEC report filing
that it has not (i) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (ii) has been
subject to such filing requirements for the past ninety (90) days.

(b) Borrower indicates by check mark on the cover page of an SEC report filing
that it has not submitted electronically and posted on its corporate website, if
any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T during the preceding twelve (12) months (or for such
shorter period that the registrant was required to submit and post such files).

 

(c) Borrower indicates by check mark on the cover page of an SEC report filing
that it is a shell company (as defined in Rule 12b-2 of the Exchange Act); or

 

(d) Borrower files a Form 15 with the SEC to deregister its Common Stock. In
such an event, Borrower shall file current reports with attorney opinions on not
less than a quarterly basis on www.otcmarkets.com until such time as Borrower
re-registers its Common Stock with the SEC.

 

6.7 Change of Control. Borrower shall be a party to any Change of Control
Transaction or Fundamental Transaction or shall agree to sell or dispose of all
or substantially all of its assets in one transaction or a series of related
transactions (whether or not such sale would constitute a Change of Control
Transaction).

 

6.8 Receiver or Trustee. Each of Borrower or its subsidiaries, if any, shall
make an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business; or such a receiver or trustee shall otherwise be
appointed; or shall become insolvent or generally fails to pay, or admits in
writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any.

 

6.9 Judgments. Any money judgment, writ or similar final process shall be
entered or filed against Borrower or any of its subsidiaries or any of their
respective property or other assets for more than one hundred thousand dollars
($100,000) in the aggregate for Borrower, and shall remain unvacated, unbonded
or unstayed for a period of thirty (30) days.

 

6.10 Bankruptcy. Borrower or any of its subsidiaries shall be subject to a
Bankruptcy Event.

 

11

 

 

6.11 DTC Eligibility. Borrower shall lose its status as “DTC Eligible” or
Borrower’s stockholders shall lose the ability to deposit (either electronically
or by physical certificates, or otherwise) shares into the DTC System through a
“deposit chill” or otherwise.

 

6.12 Reservation of Shares. Borrower shall fail timely to reserve shares of
Common Stock from its authorized and unissued shares pursuant to Section 3.8.

 

 

ARTICLE VII  

DEFAULT RELATED PROVISIONS AND OTHER PRIVILEGES

 

7.1 Default Interest Rate. If any Event of Default occurs, the outstanding
Principal Amount of this Debenture, plus accrued but unpaid interest, liquidated
damages and other amounts owing in respect thereof through the date of
acceleration, shall become, at Holder’s election, immediately due and payable in
cash in the sum of (a) one hundred eighteen percent (118%) of the outstanding
Principal Amount of this Debenture plus one hundred percent (100%) of accrued
and unpaid interest thereon and (b) all other amounts, costs, expenses and
liquidated damages due in respect of this Debenture (“Mandatory Default
Amount”). After the occurrence of any Event of Default, the interest rate on
this Debenture shall accrue at an interest rate equal to the lesser of eighteen
percent (18%) per annum or the maximum rate permitted under applicable law. Upon
the payment in full of the Mandatory Default Amount, Holder shall promptly
surrender this Debenture to or as directed by Borrower. In connection with such
acceleration described herein, Holder need not provide, and Borrower hereby
waives, any presentment, demand, protest or other notice of any kind, and Holder
may immediately and without expiration of any grace period enforce any and all
of its rights and remedies hereunder and all other remedies available to it
under applicable law. Such acceleration may be rescinded and annulled by Holder
at any time prior to payment hereunder and Holder shall have all rights as a
holder of his Debenture until such time, if any, as Holder receives full payment
pursuant to this Section 7.1. No such rescission or annulment shall affect any
subsequent Event of Default or impair any right consequent thereon.

 

7.2 Default Penalty Payment. Following the occurrence and during the continuance
of an Event of Default, Borrower agrees to pay to Holder in the amount equal to
one thousand dollars ($1,000) per Business Day commencing the Business Day
following the date of the Event of Default. Borrower shall pay any fees incurred
under this Section in immediately available funds upon demand and such fees
shall also be eligible to be converted into Conversion Shares as set forth in
Article III. Such conversion privileges shall remain in full force and effect
immediately from the date hereof and until this Debenture is paid in full.

 

ARTICLE VIII  

MISCELLANEOUS

 

8.1 Piggyback Registration Rights. Borrower shall include on the next
registration statement Borrower files with the SEC (or on the subsequent
registration statement if such registration statement is withdrawn) all shares
issuable upon conversion of this Debenture. Failure to do so will result in
liquidated damages of twenty-five percent (25%) of the outstanding Principal
Amount of this Debenture, but not less than twenty-five thousand dollars
($25,000), being immediately due and payable to Holder at its election in the
form of cash payment or addition to the balance of this Debenture.
Notwithstanding the foregoing, in the event a registration statement is filed
with respect to an underwritten offering or a selling stockholder registration
statement relating solely to holders of Borrower’s Common Stock who paid cash
for such Common Stock in a sale placed by an independent placement agent, the
number of shares of Common Stock owned by Holder to be included in any such
registration statement may be limited if in the opinion of the underwriter or
placement agent, the sale of such shares by Holder would adversely impact the
sale of shares by the underwriter or selling stockholders included therein.

 

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8.2 Failure or Indulgence Not Waiver. No failure or delay on the part of Holder
hereof 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. All rights and remedies existing hereunder are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

8.3 Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by FedEx or other reputable express courier service with charges
prepaid, (iv) transmitted by hand delivery, telegram, e-mail or facsimile,
addressed as set forth below or (v) sent via Email whereby a return Email
confirming receipt has been delivered. Any notice or other communication
required or permitted to be given hereunder shall be deemed effective (y) upon
hand delivery or delivery by facsimile, with accurate confirmation generated by
the transmitting facsimile machine, at the address or number designated below
(if delivered on a Business Day during normal business hours where such notice
is to be received), or the first Business Day following such delivery (if
delivered other than on a Business Day during normal business hours where such
notice is to be received) or (z) on the next Business Day following the date of
mailing by express courier service, fully prepaid, addressed to such address, or
upon actual receipt of such mailing, whichever shall first occur. The addresses
for such communications shall be:

 

If to Borrower:

 

Players Network, Inc.

Attn: Mark Bradley

1771 E. Flamingo Road

Las Vegas, NV 89119

 

 

If to Holder:

 

Group 10 Holdings LLC

Attn: Adam Wasserman

11 Island Ave. #1108

Miami Beach, FL 33139

EIN # 32-0409845

adam@group10llc.com

 

No change in any of such addresses shall be effective insofar as notices under
this Section 8.3 are concerned unless such changed address is located in the
United States of America and notice of such change shall have been given to such
other party hereto as provided in this Section 8.3.

 

8.4 Amendment Provision. Any term of this Debenture may be amended only with the
written consent of Holder and Borrower. . The term “Debenture” and all reference
thereto, as used throughout this instrument, shall mean this instrument as
originally executed, or if later amended or supplemented, then as so amended or
supplemented, and any successor instrument as it may be amended or supplemented.

 

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8.5 Assignability. This Debenture shall be binding upon Borrower and its
successors and assigns, and shall inure to the benefit of Holder and its
successors and assigns, and may not be assigned by Borrower without the prior
written consent of Holder, which consent may not be unreasonably withheld.

 

8.6 Prevailing Party and Costs. In the event any attorney is employed by any
party with regard to any legal or equitable action, arbitration or other
proceeding brought by such party for the enforcement of this Debenture or
because of an alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Debenture, the prevailing party in
such proceeding will be entitled to recover from the other party reasonable
attorneys' fees and other costs and expenses incurred, in addition to any other
relief to which the prevailing party may be entitled.

 

8.7 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Debenture
shall be governed by, and construed in accordance with, the internal laws of the
State of New York, without regard to principles of conflicts of law. HOLDER AND
BORROWER WAIVE ANY RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS DEBENTURE OR ANY TRANSACTION CONTEMPLATED HEREIN,
INCLUDING CLAIMS BASED ON CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER COMMON
LAW OR STATUTORY BASES. Each party hereby submits to the exclusive jurisdiction
of the state and federal courts located in the County of Miami-Dade, State of
Florida. If the jury waiver set forth in this Section is not enforceable, then
any dispute, controversy or claim arising out of or relating to this Debenture
or any of the transactions contemplated herein will be finally settled by
binding arbitration in Miami-Dade County, Florida in accordance with the then
current Commercial Arbitration Rules of the American Arbitration Association by
one arbitrator appointed in accordance with said rules. The arbitrator shall
apply New York law to the resolution of any dispute, without reference to rules
of conflicts of law or rules of statutory arbitration. Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. Notwithstanding the foregoing, the parties may apply to any court of
competent jurisdiction for preliminary or interim equitable relief, or to compel
arbitration in accordance with this paragraph. The expenses of the arbitration,
including the arbitrator’s fees and expert witness fees, incurred by the parties
to the arbitration, may be awarded to the prevailing party, in the discretion of
the arbitrator, or may be apportioned between the parties in any manner deemed
appropriate by the arbitrator. Unless and until the arbitrator decides that one
party is to pay for all (or a share) of such expenses, both parties shall share
equally in the payment of the arbitrator’s fees as and when billed by the
arbitrator.

 

8.8 Maximum Payments. Nothing contained herein 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 hereunder exceed the maximum permitted by
such law, any payments in excess of such maximum shall be credited against
amounts owed by Borrower to Holder and thus refunded to Borrower.

 

8.9 Construction. Borrower acknowledges that its legal counsel participated in
the preparation of this Debenture and, therefore, stipulates that the rule of
construction that ambiguities are to be resolved against the drafting party
shall not be applied in the interpretation of this Debenture to favor any party
against the other.

 

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8.10 Absolute Obligation. Except as expressly provided herein, no provision of
this Debenture shall alter or impair the obligation of Borrower, which is
absolute and unconditional, to pay the Principal Amount of, interest and
liquidated damages (if any) on, this Debenture at the time, place, and rate, and
in the coin or currency, herein prescribed. This Debenture is a direct debt
obligation of Borrower.

 

8.11 Lost or Mutilated Debenture. If this Debenture shall be mutilated, lost,
stolen or destroyed, Borrower shall execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated Debenture, or in lieu of
or in substitution for a lost, stolen or destroyed Debenture, a new Debenture
for the Principal Amount of this Debenture so mutilated, lost, stolen or
destroyed.

 

8.12 Opinion of Counsel. An opinion of the following counsels shall be deemed
acceptable to Borrower: Law Firm of Richardson & Patel LLP, Geenberg Trauirg
LLP, Bauman & Associates Law Firm and Law Office of Clifford J. Hunt.

 

 

[Signature page follows.]

 

 

 

 

 

 

 

 

 

15

 

 

IN WITNESS WHEREOF, Borrower has caused this Convertible Debenture to be signed
in its name effective as of the date first above indicated.

 

BORROWER:

 

Players Network, Inc

 

 

By:    ________________________

 

Name: Mark Bradley

Title: CEO

 

 

 

HOLDER:

Group 10 Holdings, LLC

 

By:    ________________________

Name: Adam Wasserman

Title: Managing Member

 

 

 

 

 

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EXHIBIT A

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal under the Convertible
Debenture (“Debenture”) of Players Network, a Nevada corporation (“Borrower”),
into shares of common stock (the “Common Stock”) of Borrower according to the
conditions hereof, as of the date written below. If shares of Common Stock are
to be issued in the name of a Person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by Borrower in
accordance therewith. No fee will be charged to the undersigned for any
conversion, except for such transfer taxes, if any.

 

By the delivery of this Notice of Conversion the undersigned represents and
warrants to Borrower that its ownership of Common Stock does not exceed the
amount specified under Section 3.3 of the Debenture, as determined in accordance
with Section 13(d) of the Exchange Act.

 

The undersigned agrees to comply with the prospectus delivery requirements under
the applicable securities laws in connection with any transfer of the aforesaid
shares of Common Stock pursuant to any prospectus.

 

Conversion calculations:         Date to Effect Conversion:  

 

 

 

Principal Amount of Note to be Converted:

 

 

  Interest Accrued on Account   of Conversion at Issue:  

 

  Number of shares of Common Stock to be issued:  

 

 

  Signature:  

 

  Name: Group 10 Holdings LLC

 

    Address for Delivery of Common Stock Certificates:     11 Island Ave #1108  
  Miami Beach, FL 33139     EIN# 32-0409845     Tel: 917.374.8229, Fax:
305.359.5180

 

  Or  

 

  DWAC Instructions:

 

  Broker No:     Account No:  

 

 

 

 

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