exv4w21



 






Exhibit 4.21




10% Convertible Promissory Note




			
	$«Amount»
	 	«Date»






          FOR VALUE RECEIVED, NGTV, a California corporation (the “Company”), with their primary
offices located at 9944 Santa Monica Blvd., Beverly Hills, California 90212, promises to pay to the
order of «Holder» (the “Holder”), upon the terms set forth below, the principal
sum of $«Amount» plus interest on the unpaid principal sum outstanding at the rate of 10%
per annum (this convertible promissory note, the “Note”). This Note has the same terms and
conditions as a series of notes (collectively, the “Notes”) of like tenor and kind in the
aggregate principal amount of not more than $6,000,000, issued in connection with an offering of
Notes by the Company in accordance with the terms and conditions of the Company’s Confidential
Private Offering Memorandum dated October 13, 2005 (the “Memorandum”). The Notes, other
than this Note, are sometimes hereinafter referred to as the “Other Notes”.





	 	1.	 	Principal Payments. Company shall be required to pay the Holder an amount in
cash, wire transfer or check equal to the outstanding principal amount and all accrued and
unpaid interest of this Note, on or before July 31, 2006 (the “Maturity Date”),
following which this Note shall become due and payable.
	 
	 	2.	 	Interest Payments. Commencing 30 days after the date hereof, accrued but
unpaid interest on this Note shall be due and payable on the 1st of each
calendar month thereafter. Interest payments shall be made in cash or by wire transfer as
instructed by the Holder from time to time. Whenever any payment required under the terms
of this Note shall be stated to be due on a day other than a business day, such payment
shall be made on the next succeeding business day, and such extension of time shall in
such case be included in the computation of payment of interest.
	 
	 	3.	 	Mandatory Conversion





          (a) This Note is subject to a mandatory conversion (the “Conversion”) whereby, in the event
that prior to the Maturity Date the Company completes an initial public offering of its securities,
resulting in gross proceeds to the Company of at least $20,000,000 (the “IPO”), the
outstanding principal amount of the Note and all accrued and unpaid interest thereon will be
converted into securities of the Company, as hereinafter described. The Conversion shall not take
effect unless the effective date of the IPO occurs prior to the Maturity Date. Upon the closing of
the IPO, all outstanding principal and any accrued and unpaid interest shall be converted at the
initial closing of the IPO into securities identical to the securities to be offered in the IPO
(the “IPO Securities”), at a conversion price equal
to a 33 1/
3% discount to the IPO offering
price.




          (b) Issuance of the IPO Securities shall only occur upon surrender of the original of this
Note to the Company at its principal place of business or delivery to the




 









 







Company of an Affidavit of Lost Note and such form of bond or security as is reasonably
satisfactory to the Company.




          (c) In the event the IPO is not completed prior to the Maturity Date, this Note will become
immediately due and payable without notice to or demand upon the Company and, in addition to
repayment of this Note on the Maturity Date, a warrant (the “Post-Maturity Warrant”) will
be issued to Holder entitling Holder to purchase the number of shares of common stock of NGTV as is
equal to the principal amount of this Note, exercisable for a period of five years from the date of
issuance at an exercise price equal to the fair market value of one share of common stock of the
Company as of the Maturity Date. The fair market value of the NGTV common stock will be mutually
agreed upon, in good faith, by NGTV and Capital Growth Financial, LLC, on behalf of the holders of
the Notes, as a group (“CGF”); or, in the absence of such agreement, by binding arbitration
to be conducted before the American Arbitration Association in Palm Beach County, Florida (the
“Arbitration”). In the absence of agreement between the Company and CGF as to the fair
market value of the Company’s common stock, either the Company or CGF may commence the Arbitration,
which shall be conducted in accordance with the AAA’s commercial rules for arbitration, before one
arbitrator. The expenses of the Arbitration shall be borne one-half by the Company and one-half by
the Holder and the holders of the Other Notes, as a group. By acceptance of this Note, Holder
agrees to pay its allocable portion of the expenses attributable to the holders of the Notes, as a
group, including the fees and expenses of counsel selected by CGF. The Post-Maturity Warrant will
be in the form attached as Exhibit B to the Memorandum, and will include the piggyback registration
rights set forth in Section 15 thereof.




          (d) In consideration of the investment in this Note, the Company has agreed, to the extent
described in this Note and the Memorandum, to register in the IPO Registration Statement (as such
term is defined in the Memorandum) resale of the securities into which this Note may be converted
(the “Conversion Securities”). In addition, if resale of the Conversion Securities is not then
covered by an effective registration statement and the Company shall determine to register any of
its securities either for its own account or the account of a security holder or holders (other
than a registration relating solely to employee benefit plans, or a registration relating to a
corporate reorganization or other transaction on Form S-4, or a registration on any registration
form that does not permit secondary sales), the Company will: (i) promptly notify the Holder of
such determination; and (ii) include in such registration statement (and any related qualifications
under applicable blue sky or other state securities laws), at the Company’s sole cost and expense,
except as set forth in subsection (x) below, those Conversion Securities specified in a written
request or requests made by any Holder and received by the Company within twenty (20) days after
the written notice from the Company described in clause (i) above is delivered by the Company. Such
written request may specify all or a part of Holder’s Conversion Securities. (x) If the
registration statement of which the Company gives notice is for a registered public offering
involving an underwriting, the Company shall so advise the Holder as a part of the written notice
given pursuant to subsection (a)(i), above. In such event, the right of Holder to registration
pursuant to this section shall be conditioned upon such Holder’s participation

 









 








in such underwriting and the inclusion of such Holder’s Shares in the underwriting to the
extent provided herein. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders of securities of the Company
with registration rights to participate therein distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company. Nothing in this Section shall prevent the
Company from withdrawing any registration statement it has filed or has proposed to file.




     4. Events of Default.



          (a) “Event of Default”, wherever used herein, means any one of the following events
(whatever the reason and whether it shall be voluntary or involuntary or effected by operation of
law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of
any administrative or governmental body):





(i) any default in the payment of the principal of this Note, as and when the same
shall become due and payable; or




(ii) any default in the payment of interest on this Note, as and when the same
shall become due and payable; or




(iii) Company shall fail to observe or perform any obligation required to be
performed by it hereunder or shall breach any term or provision of this Note; or




(iv) Company shall commence, or there shall be commenced against Company, a case
under any applicable bankruptcy or insolvency laws as now or hereafter in effect or
any successor thereto, or Company commence any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to Company, or there is commenced against Company, any
such bankruptcy, insolvency or other proceeding which remains undismissed for a
period of 60 days; or Company is adjudicated insolvent or bankrupt; or any order
of relief or other order approving any such case or proceeding is entered; or
Company suffer any appointment of any custodian or the like for it or any
substantial part of its property which continues undischarged or unstayed for a
period of 60 days; or Company, makes a general assignment for the benefit of
creditors.



          (b) If any Event of Default occurs, the full principal amount of this Note, together with all
accrued interest thereon, shall become, at the Holder’s election, immediately due and payable in
cash, with interest accruing from the date of the Event of Default at 18% per annum on any unpaid
obligations hereunder; provided that in the event of a default under Section 4(a)(i), above, no
election to accelerate on the part of the

 









 








Holder shall be required, and the Post-Maturity Warrant shall be forthwith issued to the
Holder. The Holder need not provide and Company hereby waives any presentment, demand, protest or
other notice of any kind, and the 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, provided, however, that any default susceptible of being cured, other than a
default under Section 4(a)(i), above, must first be given written notice to Company of the specific
nature of the default and the manner in which the default may be cured, in which case the Company
shall have a 30 day period to cure the default (except for a default under Section 4(a)(ii), above,
for which the cure period shall be five days). Such default notice may be rescinded and annulled by
Holder at any time prior to payment hereunder. No such rescission or annulment shall affect any
subsequent Event of Default or impair any right consequent thereon.




     5. No Waiver of Holder’s Rights. All payments of principal and interest shall be made
without setoff, deduction or counterclaim. No delay or failure on the part of the Holder in
exercising any of its options, powers or rights, nor any partial or single exercise of its options,
powers or rights shall constitute a waiver thereof or of any other option, power or right, and no
waiver on the part of the Holder of any of its options, powers or rights shall constitute a waiver
of any other option, power or right. Company hereby waives presentment of payment, protest, and all
notices or demands in connection with the delivery, acceptance, performance, default or endorsement
of this Note. Acceptance by the Holder of less than the full amount due and payable hereunder shall
in no way limit the right of the Holder to require full payment of all sums due and payable
hereunder in accordance with the terms hereof.



     6. Modifications. No term or provision contained herein may be modified, amended or
waived except by written agreement or consent signed by the party to be bound thereby.



     7. Cumulative Rights and Remedies; Usury. The rights and remedies of Holder expressed
herein are cumulative and not exclusive of any rights and remedies otherwise available under this
Note or applicable law (including at equity). The election of Holder to avail itself of any one or
more remedies shall not be a bar to any other available remedies, which Company agrees Holder may
take from time to time. If it shall be found that any interest due hereunder shall violate
applicable laws governing usury, the applicable rate of interest due hereunder shall be reduced to
the maximum permitted rate of interest under such law.



     8. Collection Expenses. If Holder shall commence an action or proceeding to enforce
this Note, then Company shall reimburse Holder for its costs of collection and reasonable attorneys
fees incurred with the investigation, preparation and prosecution of such action or proceeding.



     9. Severability. If any provision of this Note is declared by a court of competent
jurisdiction to be in any way invalid, illegal or unenforceable, the balance of this Note



 









 




shall remain in effect, and if any provision is inapplicable to any person or circumstance, it
shall nevertheless remain applicable to all other persons and circumstances. If it shall be found
that any interest or other amount deemed interest due hereunder shall violate applicable laws
governing usury, the applicable rate of interest due hereunder shall automatically be lowered to
equal the maximum permitted rate of interest.




     10. Successors and Assigns. This Note shall be binding upon Company and its successors
and shall inure to the benefit of the Holder and its successors and assigns. The term “Holder” as
used herein, shall also include any endorsee, assignee or other holder of this Note.



     11. Lost or Stolen Promissory Note. If this Note is lost, stolen, mutilated or
otherwise destroyed, Company shall execute and deliver to the Holder a new promissory note
containing the same terms, and in the same form, as this Note. In such event, Company may require
the Holder to deliver to Company an affidavit of lost instrument and customary indemnity in respect
thereof as a condition to the delivery of any such new promissory note. Any costs incurred pursuant
to this paragraph shall be the responsibility of the Holder.



     12. Due Authorization. This Note has been duly authorized, executed and delivered by
Company and is the legal obligation of Company, enforceable against Company in accordance with its
terms.



     13. Governing Law. The Company, and by acceptance of this Note the Holder, hereby:
(a) agree that all questions concerning the construction, validity, enforcement and interpretation
of this Note shall be governed by and construed and enforced in accordance with the internal laws
of the State of Florida, without regard to the principles of conflicts of law thereof; (b) agree
that all legal proceedings concerning the interpretations, enforcement and defense of this Note
shall be commenced in the Courts of the State of Florida or the courts of the United States of
America for the State of Florida, in each case located in Palm Beach County, Florida, and appellate
courts from any thereof (the “Florida Courts”); (c) irrevocably submit to the exclusive
jurisdiction of the Florida Courts for the adjudication of any dispute hereunder (including with
respect to the enforcement of this Note); (d) irrevocably waive and agree not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any
of such Florida Courts, or that such suit, action or proceeding is improper; (e) irrevocably waive
personal service of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to the other at the address in effect for notices to it under this Note 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); and (f) irrevocably waive, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Note or the transactions contemplated hereby.



 









 





     14. Prepayment. Company may not prepay this Note in whole or in part at any time
other than expressly provided by this Note without the express written consent of Holder. If the
contemplated IPO has not taken place by the Maturity Date, then this Note shall be paid in full
without reference to the conversion rights set forth in paragraph 3 above. Nothing in this Note or
the related documents provided to the Holder shall create an obligation of the Company to complete
an IPO.



     15. Designation and Indemnification of CGF. By its acceptance of this Note (a) the
Holder hereby irrevocably designates CGF, by its Chief Executive Officer holding such office from
time-to-time, as the agent of the undersigned to make the determination of fair market value of the
Company’s common stock, as contemplated by Section 3(b) of this Note, and agrees that any such
determination made by CGF under Section 3(b), shall be conclusive and binding on Holder, (b) the
Holder agrees that, in the event of an Arbitration as contemplated by
Section 3(b) of this Note,
CGF is hereby designated as the agent of the undersigned to prosecute, defend and/or settle the
Arbitration on behalf of the Holder and the holders of the other Notes, (c) the Holder hereby
indemnifies and holds CGF harmless from any and all actions, suits, proceedings, losses, damages
and expenses that may arise as a result of CGF’s performance of its duties under this Section and
Section 3(b), above, except to the extent of CGF’s willful misconduct or gross negligence and (d)
the Holder hereby agrees to pay its allocable share of Arbitration expenses as described in Section
3(b) above.



     16. Other Notes. This Note shall rank parri passu with the Other Notes.



          IN WITNESS WHEREOF, the Company has caused this Note to be executed by its officer thereunto
duly authorized.




	 	 	 	 	 
	Dated: «Date»
	 	 	 	 
	 
	 	 	 	 
	 	 	NGTV
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Jay Vir, Co-President and Secretary