Document:

Ex 10.61_2013-12-31

Exhibit 10.61

FORM OF DIRECTOR DEFERRED SHARE UNIT AGREEMENT
PURSUANT TO THE
SIX FLAGS ENTERTAINMENT CORPORATION LONG-TERM INCENTIVE PLAN
 
*  *  *  *  *
 
Participant:  

Grant Date:  
 
Number of Deferred Share Units Granted:

*  *  *  *  *

THIS DEFERRED SHARE UNIT AWARD AGREEMENT (this “Agreement”), dated as of the Grant Date specified above, is entered into by and between Six Flags Entertainment Corporation, a corporation organized in the State of Delaware (the “Company”), and the Participant specified above, pursuant to the Six Flags Entertainment Corporation Long-Term Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Committee and the Board; 
WHEREAS, the Participant elected to receive Deferred Share Units (“DSUs”) in lieu of a portion of the cash retainer for the Participant’s service as a Director of the Company in accordance with the Participant’s Director Deferral Election form (“Deferral Election”); and
WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant DSUs provided herein to the Participant in accordance with the Participant’s Deferral Election.
NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:
1.Incorporation By Reference; Plan Document Receipt.  This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the Award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein.  Any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan.  The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content.  In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.
2.    Grant of Restricted Stock Unit Award.  The Company hereby grants to the Participant in accordance with the Deferral Election, as of the Grant Date specified above, the number of DSUs specified above. Each DSU corresponds to one share of Company Stock.  Except 

as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of the shares of Company Stock underlying the DSUs, except as otherwise specifically provided for in the Plan or this Agreement.  By accepting this Award, the Participant agrees that the Company by grant of the DSUs subject to this Agreement and by fulfillment of the terms of this Agreement will have fully discharged any and all obligations or commitments to grant equity awards to the Participant pursuant to the Deferral Election with respect to the current year.
3.    Vesting.  
(a)    Subject to the provisions of Sections 3(b) hereof, the DSUs subject to this Award shall become vested as follows, provided that the Participant has not ceased to be a Director of the Company prior to each such vesting date:
	
			
	Vesting Date
	 
	Number of DSUs

	Grant Date
	 
	50%

	July 2 following the Grant Date
	 
	25%

	October 1 following the Grant Date
	 
	25%

There shall be no proportionate or partial vesting in the periods prior to each vesting date and all vesting shall occur only on the appropriate vesting date, subject to the Participant’s continued service as a Director with the Company on each applicable vesting date.
(b)    Board Discretion to Accelerate Vesting.  Notwithstanding the foregoing, the Board may, in its sole discretion, provide for accelerated vesting of the DSUs at any time and for any reason.
(c)    Forfeiture.  Subject to Section 3(b) and the Board's discretion to accelerate vesting hereunder, all unvested DSUs shall be immediately forfeited upon the Participant’s cessation of service as a Director of the Company for any reason.
4.    Delivery of Shares.  
(a)    General.  Subject to the provisions of Sections 4(b) hereof, on the first business day following the 30th day after Participant’s service as a Director of the Company ceases, provided that the cessation of the Participant's service as a Director constitutes a "Separation from Service" for purposes of Section 409A of the Code as set forth in Section 8 of the Plan and such distribution is otherwise in compliance with Section 409A of the Code, the Participant shall receive the number of shares of Company Stock that correspond to the number of DSUs that have become vested.
(b)    Blackout Periods.  If the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would 

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otherwise be made pursuant to Section 4(a) hereof, such distribution shall be instead made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (A) the end of the calendar year in which such distribution would otherwise have been made and (B) a date that is immediately prior to the expiration of two and one-half months following the date such distribution would otherwise have been made hereunder.
5.    Dividends; Rights as Stockholder.  As of each dividend payment date with respect to shares of Company Stock, a dollar amount equal to the amount of the dividend that would have been paid on the number of shares of Company Stock equal to the number of DSUs to which the Participant is entitled (without regard to vesting conditions) under this Agreement as of the close of business on the record date for such dividend shall be accumulated on a book entry account basis uninvested and without interest until the first annual meeting of stockholders of the Company after such dividend payment date ("Next Annual Meeting Date") and then converted into a number of DSUs equal to the number of whole shares (rounded up or down in accordance with a reasonable rounding procedure) of Company Stock that could have been purchased at the closing price on the Next Annual Meeting Date with such dollar amount.  In the case of any dividend declared on shares of Company Stock which is payable in shares of Company Stock, Participant shall be credited with an additional number of DSUs equal to the product of (x) the number of the DSUs which the Participant is entitled (without regard to vesting conditions) under this Agreement on the related dividend record date and the (y) the number of shares of Company Stock (rounded up or down in accordance with a reasonable rounding procedure) distributable as a dividend on a share of Company Stock.  DSUs which are credited to the Participant pursuant to this Section 5 shall be subject to the same terms and conditions of the Plan and this Agreement, including timing of distribution, applicable with respect to such DSUs with respect to which they relate.  Except as otherwise provided herein, the Participant shall have no rights as a stockholder with respect to any shares of Company Stock covered by any DSU unless and until the Participant has become the holder of record of such shares.
6.    Non-Transferability.  No portion of the DSUs may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to the Company as a result of forfeiture of the DSUs as provided herein, unless and until payment is made in respect of vested DSUs in accordance with the provisions hereof and the Participant has become the holder of record of the vested shares of Company Stock issuable hereunder.
7.    Governing Law.  All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the choice of law principles thereof.
8.    Withholding of Tax.  As a condition to receiving the shares of Company Stock hereunder, the Participant must remit to the Company an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Participant’s FICA and SDI obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law, rule or regulation with respect to the DSUs and, if the Participant fails to do so, the Company may refuse to issue or transfer any shares of Company Stock otherwise required to be issued pursuant to this Agreement.

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9.    Legend.  The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of Company Stock issued pursuant to this Agreement.  The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares of Company Stock acquired pursuant to this Agreement in the possession of the Participant in order to carry out the provisions of this Section 9.
10.    Securities Representations.  This Agreement is being entered into by the Company in reliance upon the following express representations and warranties of the Participant.  The Participant hereby acknowledges, represents and warrants that:
(a)    The Participant has been advised that the Participant may be an “affiliate” within the meaning of Rule 144 under the Securities Act and in this connection the Company is relying in part on the Participant’s representations set forth in this Section 10.
(b)    If the Participant is deemed an affiliate within the meaning of Rule 144 of the Securities Act, the shares of Company Stock issuable hereunder must be held indefinitely unless an exemption from any applicable resale restrictions is available or the Company files an additional registration statement (or a “re-offer prospectus”) with regard to such shares of Company Stock and the Company is under no obligation to register such shares of Company Stock (or to file a “re-offer prospectus”).
(c)    If the Participant is deemed an affiliate within the meaning of Rule 144 of the Securities Act, the Participant understands that (i) the exemption from registration under Rule 144 will not be available unless (A) a public trading market then exists for the Company Stock of the Company, (B) adequate information concerning the Company is then available to the public, and (C) other terms and conditions of Rule 144 or any exemption therefrom are complied with, and (ii) any sale of the shares of Company Stock issuable hereunder may be made only in limited amounts in accordance with the terms and conditions of Rule 144 or any exemption therefrom.
11.    Entire Agreement; Amendment.  This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter.  The Committee and the Board shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan.  This Agreement may also be modified or amended by a writing signed by both the Company and the Participant.  The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.
12.    Notices.  Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the General Counsel of the Company.  Any notice hereunder by the Company shall be given to the Participant in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Participant may have on file with the Company.

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13.    No Right to Be Director.  Any questions as to whether and when there has been a cessation of service as a Director and the cause of such cessation shall be determined in the sole discretion of the Board.  Nothing in this Agreement shall interfere with or limit in any way the right of the Company to terminate the Participant’s service as a Director at any time, for any reason and with or without cause.
14.    Transfer of Personal Data.  The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Subsidiary) of any personal data information related to the DSUs awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan).  This authorization and consent is freely given by the Participant.
15.    Compliance with Laws.  The grant of DSUs and the issuance of shares of Company Stock hereunder shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act of 1933, as amended, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law, rule, regulation or exchange requirement applicable thereto.  The Company shall not be obligated to issue the DSUs or any shares of Company Stock pursuant to this Agreement if any such issuance would violate any such requirements.  As a condition to the settlement of the DSUs, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation.
16.    Binding Agreement; Assignment.  This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns.  The Participant shall not assign (except in accordance with Section 6 hereof) any part of this Agreement without the prior express written consent of the Company.
17.    Headings.  The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.
18.    Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.
19.    Further Assurances.  Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.
20.    Severability.  The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this 

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Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.
21.    Acquired Rights.  The Participant acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the Award of DSUs made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company in accordance with the Participant’s Deferral Election; and (c) no past grants or awards (including, without limitation, the DSUs awarded hereunder) give the Participant any right to any grants or awards in the future whatsoever.

*  *  *  *  *

-6-Exhibit 4.11

 

THE SECURITIES OFFERED
HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY SECTION 3(b) OF THE SECURITIES ACT OF 1933, AS AMENDED, AND
THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT)

 

 

US $50,000.00 

 

RED GIANT ENTERTAINMENT, INC.

6% CONVERTIBLE REDEEMABLE NOTE

DUE MAY 24, 2015

 

 

FOR
VALUE RECEIVED, Red Giant Entertainment, Inc. (the “Company”) promises to pay to the order of GEL Properties, LLC and
its authorized successors and permitted assigns ("Holder"), the aggregate principal face amount of Fifty Thousand
dollars exactly (U.S. $50,000.00) on May 21, 2015 ("Maturity Date") and to pay interest on the principal amount
outstanding hereunder at the rate of 6% per annum commencing on May 24, 2013 (the “Funding Date”). The Company acknowledges
that it has received the sum of Fifty Thousand Dollars less Two Thousand Five Hundred Dollars in Legal Fees and Five Thousand Dollars
in third party due diligence fees, all of which were paid by the Holder, for a total of $42,500.00. The interest will be paid to
the Holder in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note.
The principal of, and interest on, this Note are payable at 16192 Coastal Highway, Lewes, DE, 19958, initially,
and if changed, last appearing on the records of the Company as designated in writing by the Holder hereof from time to time. The
Company will pay each interest payment and the outstanding principal due upon this Note before or on the Maturity Date, less any
amounts required by law to be deducted or withheld, to the Holder of this Note by check or wire transfer addressed to such Holder
at the last address appearing on the records of the Company. The forwarding of such check or wire transfer shall constitute a payment
of outstanding principal hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the
sum represented by such check or wire transfer. Interest shall be payable in Common Stock (as defined below) pursuant to paragraph
4(b) herein.

 

This Note is subject
to the following additional provisions:

 

1.This Note is exchangeable
for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering
the same. No service charge will be made for such registration or transfer or exchange, except that Holder shall pay any tax or
other governmental charges payable in connection therewith.

    	1

    	 

    

 

2.The Company shall
be entitled to withhold from all payments any amounts required to be withheld under applicable laws.

 

3.This Note may
be transferred or exchanged only in compliance with the Securities Act of 1933, as amended ("Act") and applicable
state securities laws. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior to due presentment
for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered
on the Company's records as the owner hereof for all other purposes, whether or not this Note be overdue, and neither the Company
nor any such agent shall be affected or bound by notice to the contrary. Any Holder of this Note electing to exercise the right
of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a), and any prospective
transferee of this Note, also is required to give the Company written confirmation that this Note is being converted ("Notice
of Conversion") in the form annexed hereto as Exhibit A. The date of receipt (including receipt by telecopy) of
such Notice of Conversion shall be the Conversion Date.

 

4.(a)The Holder
of this Note is entitled, at its option, at any time after the requisite rule 144 holding period, and after full cash payment for
the shares convertible hereunder, to convert all or any amount of the principal face amount of this Note then outstanding
into shares of the Company's common stock (the "Common Stock") without restrictive legend of any nature, at a
conversion price ("Conversion Price") for each share of Common Stock equal to 70% of the lowest closing bid price
of the Common Stock as reported on the National Quotations Bureau OTCQB exchange which the Company’s shares are traded or
any exchange upon which the Common Stock may be traded in the future ("Exchange"), for any of the five trading
days including the day upon which a Notice of Conversion is received by the Company (provided such Notice of Conversion is delivered
by fax or other electronic method of communication to the Company after 4 P.M. Eastern Standard or Daylight Savings Time if the
Holder wishes to included the same day closing price). If the shares have not been delivered within 3 business days, the Notice
of Conversion may be rescinded. Such conversion shall be effectuated by the Company delivering the shares of Common Stock to the
Holder within 3 business days of receipt by the Company of the Notice of Conversion. Once the Holder has received such shares of
Common Stock, the Holder shall surrender this Note to the Company, executed by the Holder evidencing such Holder's intention to
convert this Note or a specified portion hereof, and accompanied by proper assignment hereof in blank. Accrued but unpaid interest
shall be subject to conversion. No fractional shares or scrip representing fractions of shares will be issued on conversion, but
the number of shares issuable shall be rounded to the nearest whole share..

 

(b)Interest on any
unpaid principal balance of this Note shall be paid at the rate of 6% per annum. Interest shall be paid by the Company in Common
Stock ("Interest Shares"). The Holder may, at any time, send in a Notice of Conversion to the Company for Interest Shares
based on the formula provided in Section 4(a) above. The dollar amount converted into Interest Shares shall be all or a portion
of the accrued interest calculated on the unpaid principal balance of this Note to the date of such notice.

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(c)At any time the
Company shall have the option to redeem this Note and pay to the Holder 150% of the unpaid principal amount of this Note, in full.
The Company shall give the Holder 5 days written notice and the Holder during such 5 days shall have the option to convert this
Note or any part thereof into shares of Common Stock at the Conversion Price set forth in paragraph 4(a) of this Note.

 

(d)Upon (i) a transfer
of all or substantially all of the assets of the Company to any person in a single transaction or series of related transactions,
(ii) a reclassification, capital reorganization or other change or exchange of outstanding shares of the Common Stock, or (iii)
any consolidation or merger of the Company with or into another person or entity in which the Company is not the surviving entity
(other than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification,
conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and (iii)
being referred to as a "Sale Event"), then, in each case, the Company shall, upon request of the Holder, redeem this
Note in cash for 150% of the principal amount, plus accrued but unpaid interest through the date of redemption, or at the election
of the Holder, such Holder may convert the unpaid principal amount of this Note (together with the amount of accrued but unpaid
interest) into shares of Common Stock immediately prior to such Sale Event at the Conversion Price.

 

(e)In case of any
Sale Event in connection with which this Note is not redeemed or converted, the Company shall cause effective provision to be made
so that the Holder of this Note shall have the right thereafter, by converting this Note, to purchase or convert this Note into
the kind and number of shares of stock or other securities or property (including cash) receivable upon such reclassification,
capital reorganization or other change, consolidation or merger by a holder of the number of shares of Common Stock that could
have been purchased upon exercise of the Note and at the same Conversion Price, as defined in this Note, immediately prior to such
Sale Event. The foregoing provisions shall similarly apply to successive Sale Events. If the consideration received by the holders
of Common Stock is other than cash, the value shall be as determined by the Board of Directors of the Company or successor person
or entity acting in good faith.

 

5.No provision of
this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and
interest on, this Note at the time, place, and rate, and in the form, herein prescribed.

 

6.The Company hereby
expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of dishonor, notice
of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder and shall be
directly and primarily liable for the payment of all sums owing and to be owing hereto.

 

7.The Company agrees
to pay all costs and expenses, including reasonable attorneys' fees and expenses, which may be incurred by the Holder in collecting
any amount due under this Note.

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8.If one or more
of the following described "Events of Default" shall occur:

 

(a)The Company shall
default in the payment of principal or interest on this Note or any other note issued to the Holder by the Company; or

 

(b)Any of the representations
or warranties made by the Company herein or in any certificate or financial or other written statements heretofore or hereafter
furnished by or on behalf of the Company in connection with the execution and delivery of this Note shall be false or misleading
in any respect; or

 

(c)The Company shall
fail to perform or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of the Company under
this Note; or

 

(d)The Company shall
(1) become insolvent; (2) admit in writing its inability to pay its debts generally as they mature; (3) make an assignment for
the benefit of creditors or commence proceedings for its dissolution; (4) apply for or consent to the appointment of a trustee,
liquidator or receiver for its or for a substantial part of its property or business; (5) file a petition for bankruptcy relief,
consent to the filing of such petition or have filed against it an involuntary petition for bankruptcy relief, all under federal
or state laws as applicable; or

 

(e)A trustee, liquidator
or receiver shall be appointed for the Company or for a substantial part of its property or business without its consent and shall
not be discharged within thirty (30) days after such appointment; or

 

(f)Any governmental
agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the
whole or any substantial portion of the properties or assets of the Company; or

 

(g)One or more money
judgments, writs or warrants of attachment, or similar process, in excess of ten thousand dollars ($10,000) in the aggregate, shall
be entered or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or
unstayed for a period of fifteen (15) days or in any event later than five (5) days prior to the date of any proposed sale thereunder;
or

 

(h)Bankruptcy, reorganization,
insolvency or liquidation proceedings, or other proceedings for relief under any bankruptcy law or any law for the relief of debtors
shall be instituted voluntarily by or involuntarily against the Company; or

 

(i)The Company shall
have its Common Stock delisted from an exchange (including the OTCBB exchange) or, if the Common Stock trades on an exchange, then
trading in the Common Stock shall be suspended for more than 10 consecutive days;

 

(j)If a majority
of the members of the Board of Directors of the Company on the date hereof are no longer serving as members of the Board; or

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(k)The Company shall
not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business days of
its receipt of a Notice of Conversion.

 

Then, or at any time thereafter, unless
cured, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver
shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion,
the Holder may consider this Note immediately due and payable, without presentment, demand, protest or (further) notice of any
kind (other than notice of acceleration), all of which are hereby expressly waived, anything herein or in any note or other instruments
contained to the contrary notwithstanding, and the Holder may immediately, and without expiration of any period of grace, enforce
any and all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law. Upon an Event
of Default, interest shall be accrue at a default interest rate of 24% per annum or, if such rate is usurious or not permitted
by current law, then at the highest rate of interest permitted by law. In the event of a breach of 8(j) the penalty shall be $250
per day the shares are not issued beginning on the 4th day after the conversion notice was delivered to the Company.
This penalty shall increase to $500 per day beginning on the 10th day.

 

If the Holder shall commence an action
or proceeding to enforce any provisions of this Note, including without limitation engaging an attorney, then the Holder shall
be reimbursed by the Company for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation
and prosecution of such action or proceeding.

 

9.In case any provision
of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such
provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the
validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.

 

10.Neither this
Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the Company
and the Holder.

 

11.The Company represents
that it is not a “shell” issuer and has never been a “shell” issuer or that if it previously has been a
“shell” issuer that at least 12 months have passed since the Company has reported form 10 type information indicating
it is no longer a “shell issuer. Further. The Company will instruct its counsel to either (i) write a 144- 3(a)(9) opinion
to allow for salability of the conversion shares or (ii) accept such opinion from Holder’s counsel.

 

12.The Company will
issue irrevocable transfer agent instructions reserving 21,500,000 shares of Common Stock for conversion under this Note. The reserve
shall be replenished as needed to allow for conversions of this Note. Upon full conversion of this Note, the reserve representing
this Note shall be cancelled. From this reserve, the Holder may send a Conversion Notice to the Company, and the Company will duly
pass to its transfer agent, a conversion for a tranche of shares to be converted (Tranche Conversion”) This/these Tranche
Conver

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sion(s) may be actually transferred by
the transfer agent to the Holder, or via DWAC to the Holder’s designated Broker-Dealer(s) to be held in street name FBO the
Holder, yet unconverted on the books and records of the Company in a Creditor in Possession Escrow. (“CPE”) When the
CPE is active, by having shares therein, the Holder must submit daily transaction journals, on days that there were a sale, in
the Company’s securities (“Runs”) to the Company to calculate the price of conversion (“Basis”) of
any conversion and the amount and date thereunder.

 

13.The Company will
give the Holder direct notice of any corporate actions including but not limited to name changes, stock splits, recapitalizations
etc. This notice shall be given to the Holder as soon as possible under law. The Company will email such notices to Goldy@pisc.us.

 

14.This Note shall
be governed by and construed in accordance with the laws of New York applicable to contracts made and wholly to be performed within
the State of New York and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company hereby
mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of New York. This Agreement
may be executed in counterparts, and the facsimile transmission of an executed counterpart to this Agreement shall be effective
as an original.

 

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

 

 

Dated: 5/24/13

 

 

 

 

RED GIANT ENTERTAINMENT, INC.

 

By: /s/ Benny R. Powell

 

Title: CEO                    

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A

 

 

NOTICE OF CONVERSION

 

(To be Executed by the Registered Holder
in order to Convert the Note)

 

The undersigned hereby
irrevocably elects to convert $___________ of the above Note into _________ Shares of Common Stock of Red Giant Entertainment,
Inc. (“Shares”) according to the conditions set forth in such Note, as of the date written below.

 

If Shares are to be
issued in the name of a person other than the undersigned, the undersigned will pay all transfer and other taxes and charges payable
with respect thereto.

 

Date of Conversion:                                                                                                             

Applicable Conversion Price:                                                                                               

Signature:                                                                                                                            

[Print Name of Holder and Title of Signer]

Address:                                                                                                                             

______________________________________________________________________

 

SSN or EIN:                                                  

Shares are to be registered in the following name:                                                                 

 

Name:                                                                                                                                 

Address:                                                                                                                             

Tel:                                                               

Fax:                                                              

SSN or EIN:                                                

 

Shares are to be sent or delivered to the following account:

 

Account Name:                                                                                                                 

Address:                                                                                                                           

 

 

 

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