Document:

ex1026.htm

Exhibit 10.26

 

  

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6EX-10.2

 Exhibit 10.2 

FIRST AMENDMENT TO STOCKHOLDER AGREEMENT 

THIS FIRST AMENDMENT TO THE STOCKHOLDER AGREEMENT (this “Amendment”) is dated as of July 10, 2014, and amends the
Stockholder Agreement, dated as of August 5, 2013, by and among Turtle Beach Corporation, a Nevada corporation (the “Corporation”) and certain stockholders of the Corporation (the “Original Agreement”).
Capitalized terms used, but not defined, herein shall have the respective meanings assigned to such terms in the Original Agreement. 

WHEREAS, the Corporation and certain of the Stockholders desire to amend certain provisions of the Original Agreement pursuant to
Section 11(i) thereof and upon such terms as set forth herein. 
 NOW, THEREFORE, in consideration of the promises and
the mutual consents and obligations hereinafter set forth, the parties hereby agree as follows: 
 Section 1. Extension of the
Lock-Up Expiration Date. Juergen Stark hereby agrees that the Lock-Up Expiration Time (as such term is defined in that certain Lock-Up Agreement, dated January 14, 2014 (the “Lock-Up Agreement”), by and between the Corporation,
VTB Holdings, Inc. and Juergen Stark) under the Lock-Up Agreement shall be extended with respect to his Lock-Up Shares to April 1, 2015 and the Corporation and each of the undersigned stockholders (together with Juergen Stark, the
“Stockholders”) hereby agrees that the Lock-Up Expiration Date shall be extended with respect to such Stockholder and its Lock-Up Shares to April 1, 2015; provided, that, such extensions shall not prevent a Stockholder from
transferring: (a) Lock-Up Shares to a single transferee through a privately negotiated transaction with a total market value of at least $200,000 that is executed apart and away from the open or electronic markets (a “Block
Trade”) where such transferee enters into a 12-month lock-up agreement with respect to such Lock-Up Shares on terms and conditions reasonably satisfactory to the Corporation, (b) up to the percentage set forth on its signature page
hereto (its “Pro Rata Portion”) of 300,000 Lock-Up Shares per quarter through Block Trades where the transferee does not enter into such a lock-up agreement (an “Unrestricted Block Trade”); and (c) up to its
Pro Rata Portion of 30,000 Lock-Up Shares per week (such portion, its “Weekly Allocation”) other than through Block Trades; provided, that, following any Unrestricted Block Trade by such Stockholder, such Stockholder may not
transfer any Lock-Up Shares pursuant to this subsection (c) until such time as (x) the aggregate number of shares that would have otherwise been available in such Stockholder’s Weekly Allocation following such Unrestricted Block Trade
equals (y) the aggregate number of Lock-Up Shares transferred by such Stockholder in any Unrestricted Block Trades. 

Section 2. Termination of Observer Rights. Section 10(d) of the Original Agreement is hereby deleted in its entirety.

 Section 3. Amendments. No amendment or waiver of any provision of this Amendment or the Original Agreement that would
adversely affect the rights, impose any new obligations or materially increase any existing obligations of any Significant Stockholder (as defined below) under the Original Agreement (as amended from time to time), whether or not disproportionately
to any other Stockholder, shall be binding upon such Significant Stockholder unless he, she or it has consented in writing to such amendment or waiver. The term “Significant Stockholder” shall mean any Stockholder that owns at least
1,500,000 shares of Common Stock (as adjusted for any forward or reverse stock split, stock dividend or similar transaction). 

Section 4. Due Authorization. Each party hereby represents and warrants to the other parties hereto that (a) this Amendment
has been duly and validly authorized, executed and delivered by such party, and no other action is required by such party to consummate the valid and binding execution and delivery of this Amendment to the other parties hereto and (b) such
party has the full legal right, power, capacity, and authority to enter into this Amendment.  
 Section 5.
Miscellaneous. Except as expressly modified hereby, all other terms and provisions of the Original Agreement shall remain in full force and effect and shall govern the conduct of the parties hereto. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of Delaware, applicable to contracts executed in and to be performed entirely within that State. This Amendment may be executed in counterparts (each of which shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement) and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. The failure of any Stockholder to execute
this Amendment does not make it invalid as against any other Stockholder. Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements,
certificates, instruments and other documents as any other party hereto reasonably may request in order to carry out the provisions of this Amendment and the consummation of the transactions contemplated hereby. 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above
written. 
  

					
	TURTLE BEACH CORPORATION:
		
	By:	 	/s/Juergen Stark
		
	Name:	 	Juergen Stark
		
	Title:	 	Chief Executive Officer

  

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above
written. 
  

	
	STOCKHOLDER:
	
	SG VTB HOLDINGS, LLC
	(Print Name of Stockholder)
	
	/s/ Kenneth A. Fox
	(Signature)
	
	Kenneth A. Fox, Managing Member
	(Print name and title if signing on behalf of an entity)
	
	Pro Rata Portion: 51.13%

  
  

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above
written. 
  

	
	STOCKHOLDER:
	
	Juergen Stark
	(Print Name of Stockholder)
	
	/s/ Juergen Stark
	(Signature)
	
	   

	(Print name and title if signing on behalf of an entity)
	
	Pro Rata Portion: .13%

  

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above
written. 
  

	
	STOCKHOLDER:
	
	Carmine Bonanno
	(Print Name of Stockholder)
	
	/s/ Carmine Bonanno
	(Signature)
	
	   

	(Print name and title if signing on behalf of an entity)
	
	Pro Rata Portion: 19.35%

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above
written. 
  

	
	STOCKHOLDER:
	
	Frederick T. Romano
	(Print Name of Stockholder)
	
	/s/ Frederick T. Romano
	(Signature)
	
	   

	(Print name and title if signing on behalf of an entity)
	
	Pro Rata Portion: 19.35%

  

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above
written. 
  

	
	STOCKHOLDER:
	
	Martha M. Doornink Irrevocable Trust, Dated November 30, 2012
	(Print Name of Stockholder)
	
	/s/ Lonn Selbst
	(Signature)
	
	Lonn Selbst, Vice President of the Goldman Sachs Trust Company of Delaware as Trustee of the Martha M. Doornink Irrevocable Trust
	(Print name and title if signing on behalf of an entity)
	
	Pro Rata Portion: 3.34%

  

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above
written. 
  

	
	STOCKHOLDER:
	
	Ronald Doornink Irrevocable Trust, Dated November 30, 2012
	(Print Name of Stockholder)
	
	/s/ Lonn Selbst
	(Signature)
	
	Lonn Selbst, Vice President of the Goldman Sachs Trust Company of Delaware as Trustee of the Ronald Doornink Irrevocable Trust
	(Print name and title if signing on behalf of an entity)
	
	Pro Rata Portion: 3.34%

  

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first above
written. 
  

	
	STOCKHOLDER:
	
	Ronald T. Doornink Revocable Living Trust, Dated December 17, 1996
	(Print Name of Stockholder)
	
	/s/ Ronald T. Doornink
	(Signature)
	
	Ronald T. Doornink as Trustee of the Ronald T. Doornink Revocable Living Trust, Dated December 17, 1996
	(Print name and title if signing on behalf of an entity)
	
	Pro Rata Portion: 3.36%Exhibit 4.1

        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 $40,000.00

                          RED GIANT ENTERTAINMENT, INC
                         8% CONVERTIBLE REDEEMABLE NOTE
                               DUE APRIL 28, 2015
                                  BACK END NOTE

     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 Forty
Thousand dollars exactly (U.S.  $40,000.00) on April 28, 2015 ("Maturity  Date")
and to pay interest on the principal amount outstanding hereunder at the rate of
8% per annum  commencing on April 28, 2014.  Upon cash funding of this Note, the
Company  confirms it will  receive the sum of $40,000  less $2,000 in legal fees
and $4,000 in fees owed to Direct Capital,  Inc. for a total of $34,000.00.  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
<PAGE>
transfer or exchange, except that Holder shall pay any tax or other governmental
charges payable in connection therewith.

     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  180  days,  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 price  ("Conversion
Price") for each share of Common  Stock  equal to 62% 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 the FIVE  prior
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.  IN THE EVENT THE COMPANY  EXPERIENCES A DTC "CHILL" ON
ITS SHARES,  THE CONVERSION PRICE SHALL BE DECREASED TO 55% INSTEAD OF 62% WHILE
THAT "CHILL" IS IN EFFECT.

     (b) Interest on any unpaid principal  balance of this Note shall be paid at
the rate of 8% 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)

                                       2
<PAGE>
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.

     (c) This Note may not be prepaid.

     (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.

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

                                       3
<PAGE>
     (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 any other note issued to the Holder; 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 fifty thousand dollars ($50,000) 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)  defaulted  on or breached  any term of any other note of similar  debt
instrument  into which the Company  has entered and failed to cure such  default
within the appropriate grace period; 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;

                                       4
<PAGE>
     (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; or

     (l) The Company  shall not  replenish  the reserve set forth in Section 12,
within 3 business days of the request of the Holder ; or

     (m) The  Company's  Common Stock has a closing bid price of less than $0.01
per share for at least 5 consecutive trading days; or

     (n) The aggregate  dollar trading  volume of the Company's  Common Stock is
less than forty thousand dollars ($40,000.00) in any 5 consecutive trading days;
or

     (o) The  Company  shall  cease  to be  "current"  in its  filings  with the
Securities and Exchange Commission.

Then,  or at any time  thereafter,  unless cured (except for 8(m) and 8(n) which
are incurable defaults the sole remedy of which is to allow the Holder to cancel
offsetting  back end notes  issued to the  Company),  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.  Further,  if the Note becomes due and  payable,  the Holder may use the
outstanding  principal  and  interest  due under the Note to offset any  payment
obligations  it may have to the  Company.  In the  event of a breach of 8(k) 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.

                                       5
<PAGE>
     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. Prior to cash funding of this Note, the Company will issue  irrevocable
transfer  agent  instructions  reserving 4x the number of shares of Common Stock
necessary  to allow the  holder to  convert  this note  based on the  discounted
conversion  price set forth in Section  4(a).  The Company  shall bear all costs
(except the fees for legal opinions) for the issuing and delivery of the shares.
The reserve  shall be  replenished  as needed to allow for  conversions  of this
Note. The Holder will initially submit a conversion notice/request for a tranche
of shares to be issued  with an agreed to  conversion  price  equal to $1000 (an
"Initial  Tranche  Request").  The shares  that are the  subject to the  Initial
Trance Request may be subsequently  reconverted and repriced as follows: (i) the
Holder shall  immediately  reduce the outstanding  balance of the Note by $1,000
and simultaneously  send to the Company a live" or "repriced"  conversion notice
for the $1,000 priced using the conversion  formula set forth in Section 4(a) of
this Note,  (ii) As the balance of the shares in the Initial Tranche Request are
converted via the delivery of the "live" or "repriced"  conversion  notice,  the
balance of the Note shall be reduced using the formula set forth in Section 4(a)
of this Note, as if such shares had  originally  been  converted as set forth in
Section  4(a).  By way of  example,  if the Tranche  Conversion  Request was for
1,000,000  shares and the face amount of the Note was  $25,000 the Holder  would
initially  reduce  $1,000 from the face amount  leaving a balance of $24,000 and
send the Company a repriced  conversion  notice  deducting that number of shares
from the Initial Tranche Request necessary to equal $1,000 using the formula set
forth in Section 4(a).  Additionally,  if, the following  day, the Holder sent a
"live" or  "repriced"  conversion  notice to the Company for 25,000  shares and,
using the formula set forth in Section 4(a) the true conversion price would have
been $6,000, then the Holder shall make an additional reduction of $6,000 on the
Note and shall  indicate both the Note balance and the share reserve  balance on
the "live" conversion  notice.  This process shall be repeated until there is no
balance  remaining  outstanding on the Note.  Upon full conversion of this Note,
the any shares remaining in the Share Reserve shall be cancelled.

     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.

     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.

                                       6
<PAGE>
     IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by
an officer thereunto duly authorized.

Dated: April 28, 2014

                                    RED GIANT ENTERTAINMENT, INC

                                    By: /s/ Benny R. Powell
                                       ----------------------------------------
                                    Title: CEO and Board Member

                                       7
<PAGE>
                                    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: _______________________________________________________________________

                                       8

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