Document:

ex10_1.htm

    

    
      Adult
Entertainment Capital, Inc.

      15641
Redhill Ave. Suite 200

      Tustin
Ca, 92780

    

    

     

    August
28, 2008

     

    ComedyNet.TV,

    444
Broadway 4th Floor

    New York,
NY 10013

    Attention:
Mark Graff

    

     

    Dear Mr.
Graff,

     

    This
Letter of Intent ("LOI") sets forth the terms and conditions of a Proposal by
Adult Entertainment Capital, Inc ("AEC"). AEC will acquire 100 % ofComedyNet.TV,
mc. ("CNET") via an Asset Purchase or Stock Purchase or other mutually agreed
acquisition structure. AEC and CNET may also be referred to herein collectively
as the "Parties".

     

    1. FORM
OF TRANSACTION. The transaction (the "Transaction") will consist of ABC
acquiring from CNET all assets and business operations of CNET. In addition AEC
will receive all license agreements, and all joint venture agreements of CNET,
whether internationally and domestic in nature.

     

    2.
PURCHASE PRICE. The purchase price $3,500,000. The payment shall be in two parts
as follows:

     

    1) The
assumption of debt and payables in the amount of approximately $2,100,000. The
$2,100,000 of debt will have an agreed-upon payout schedule based upon
successful capital formation amounts. Further, the debt holders of CNET
(approximately $1,600,000) will have an option to convert to equity of the AEC
at 5 cents per share for a period to be determined. $500,000 will be used to
reduce trade payables, pay deferred salary of the principals, and settle
outstanding Federal and State withholding tax obligations.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2)
$1,400,000 of common stock of the AEC at a basis of 3 cents per share. Of the
$1,400,000, the present CNET private placement shareholders will receive
$1,000,000, and the $400,000 balance will be distributed to the other CNET
shareholders on a pro-rata basis.

     

    3.
BUSINESS OPERATION. The parties agree that upon execution of this LOI, AEC will
assume the roles and responsibilities of managing and operating the CNET
business, retaining President Mark Graff and CFO/COO Jim Hatch. It further
agreed, that the parties will work together to ensure that necessary working
capital is made available to CNET.

     

    4.
TIMING. The parties hereto agree to use their best efforts to negotiate and
execute an Asset Purchase or Stock Purchase Agreement no later than 2 weeks
after the execution of this LOI and close (the "Closing") the Transaction no
later than 30 days after the execution of this LOI by the parties
hereof.

     

    5. EACH
PARTY TO BEAR OWN EXPENSES. AEC and CNET shall each be responsible for their own
respective expenses incurred in connection with this LOI and the contemplated
transaction, including, without limitation, legal fees and other professionals'
fees pertaining to due diligence, such as accountant's fees to prepare financial
statements of CNET, and the negotiations, preparation and execution of the Stock
Purchase Agreement and/or Asset Purchase Agreement.

     

    6.
EXCLUSIVITY. AEC and CNET agree that none of them nor any of their
representatives or affiliates shall initiate, solicit, respond to, provide
documents or information to nor enter into any discussions or negotiations
regarding any proposal or offer to engage in a similar equity transaction,
whether in the form of an asset or capital stock transaction or otherwise, with
any other party following their execution of this LOI until the Closing or the
termination of this LOI in the manner detailed in Paragraph 7
below.

     

    7.
CONFIDENTIALITY. AEC acknowledges that information to be provided by, or on
behalf of, the CNET, is highly confidential in nature ("CNET Confidential
Information"), which CNET Confidential Information will include, but not be
limited to, the CNET's customer lists, product pricing, product costs, and
contact information. CNET acknowledges that information to be provided by or on
behalf of AEC is bighly confidential in nature ("AEC Confidential Information"),
which ABC Confidential Information shall include, but is not limited to, all
proprietary information relating AEC. For purposes hereof, "CNET Confidential
information" and AEC Confidential Information shall be referred, in context, to
as "Confidential Information." Should the Transaction not Close, each party
hereto agrees to return all materials and all copies thereof to the party who
provided same, within ten business days of written notification there from, that
negotiations have been terminated. Each party hereto further agrees to maintain
confidentiality of such Confidential Information as may be learned during the
due diligence for a period of three years from the termination of
negotiations.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    Each
party hereto shall maintain the confidentiality of the existence and contents of
this LOI, the resultant due diligence investigations, the negotiations,
preparations and execution of the Stock Purchase or Asset Purchase Agreement and
the contents thereof from any and all third parties, including but not limited
to customers, employees, and suppliers of the CNET and the AEC during the
exclusivity period and for three years thereafter should the contemplated
transaction not take place. Each party to this LOI who, directly or indirectly,
receives Confidential Information in connection with this LOI (a" Receiving
Party") hereby agrees to indemnity any other party hereto (an "Indemnified
Party") who suffers damage as a result of such Receiving Party disclosing
Confidential Information, without the express prior written consent of the
Indemnified Party, which consent may be withheld or delayed in such party's sole
and absolute discretion. Such indemnification and damages shall include any
losses sustained by the Indemnified Party, including, but not limited to,
counsel fees. Without limitation to the foregoing each party to this LOI
acknowledges that the Confidential Information of the Disclosing Party provided
pursuant to this LOI, constitutes unique, valuable and special business of the
Disclosing Party, and that disclosure thereof may cause irreparable injury to
the Disclosing Party. Accordingly, each party to this LOI that receives any
Confidential Information pursuant to this LOI agrees that the remedy at law for
any breach of the covenants contained in this LOI may be inadequate, and in
recognition thereof, agrees that the Disclosing Party shall, in addition
thereto, be entitled to injunctive relief without bond, upon a finding by a
court of competent jurisdiction of a breach of any of the Confidential
Information provisions of this LOI, which relief shall in addition to and not in
derogation of any other remedies which may be available to the Disclosing Party
as a result of the breach.

     

    It is
understood by the Parties that AEC desires to make a press release regarding
this letter of intent. No Party shall unreasonably withhold their written
consent allowing AEC to issue said press release in a timely manner. Parties
understand that AEC also has obligations to report all material transactions
pursuant to various SEC regulations, and the reporting of this transaction in
compliance with SEC regulations shall not breach the confidentiality provisions
of this section.

     

    8.
TERMINATION. Neither CNET nor AEC may terminate this Agreement unless a
definitive Asset Purchase or Stock Purchase Agreement is not executed within the
time provided herein, or only by mutual agreement between AEC and CNET, or by
the failure of one of the Parties to cooperate pursuant to the terms of this
LOI.

     

    9.
GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by the laws of
the State of Delaware. By executing this Agreement, the parties hereby expressly
consent that they will be subject to the personal jurisdiction of a state or
federal court sitting in the State of California, and any dispute arising under
this Agreement shall be resolved in such court.

     

    10.
BINDING AGREEMENT. When duly executed, this Agreement shall become binding upon
the parties and shall allow the parties to proceed with due diligence and to
complete the Stock Purchase Agreement as provided herein.

     

    
      
         

      

      
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    11.
FINDER'S FEES. None apply.

     

     

    Respectfully
yours,

     

    Adult
Entertainment Capital, INC

     

    

    By: /s/ Milton C. Ault
III

     

    Milton
“Todd” Ault III, CEO

     

    Approved
by:

     

    

     

    ComedyNet.TV,
Inc.

     

    

    By: /s/ Mark
Graff

     

    Mark
Graff, CEOJuly 16, 2008

 

 

Personal & Confidential

 

Harry W. Zike

639 Westwood Drive

Birmingham, MI 48009

 

Dear Harry:

We are pleased to confirm to you our offer of employment with Energy Conversion Devices, Inc. (the “Company”) according to the terms set forth in this letter:

	
            Position/Title:
 	
            You will serve as the Company’s chief financial executive with the title of Vice President and Chief Financial Officer.  
 
	
            Reporting:
 	
            In this role you will report directly to Mark Morelli President and CEO. 
 
	
            Commencement Date:
 	
            We expect you to commence your employment as a Vice President on a mutually agreed date as soon as practicable, but in no event later than July 28, 2008.  However, we expect you to begin serving in your role as chief financial officer with the title of Vice President and Chief Financial Officer effective on September 1, 2008, unless an earlier date is requested by the Company.
 
	
            Base Salary:
 	
            Your base salary will be $320,000 per annum, payable every other week (26 pays per year) and subject to periodic adjustment in accordance with the Company’s executive compensation program.
 
	
            Initial Equity Grants:
 	
            On your first day of employment, you will receive a grant of 10,000 stock options under the Company’s 2006 Stock Incentive Plan, vesting 0%, 33-1/3%, 33-1/3%, and 33-1/3%, respectively, on each anniversary of the grant date over four years.  Your stock options will be evidenced by a separate award agreement issued in accordance with this plan.
 
	
            Severance Plan:
 	
            You will participate in the Company’s Executive Severance Plan, under which you will be entitled to receive 12 months of severance benefits upon a “Qualifying Termination” (as defined in the plan).  Your participation in and rights under this plan will be evidenced by a separate Participant Agreement issued under the plan.  The Executive Severance Plan Agreement and Acceptance Letter will be provided to you via email.
 
	
            Transition Assistance:
 	
            Within 30 days following the commencement of your employment, you will receive a signing bonus of $15,000.   
 
	
            Annual Incentive Plan:
 	
            You will participate with other senior management in the Company's Annual Incentive Plan, with your initial target payout under the plan set at 60% of your annual base salary.  Your participation in and rights under this plan will be evidenced by a separate award letter pursuant to the terms of the plan.
 

 

Harry W. Zike

July 16, 2008

Page 2

 

 

	
            Long Term Incentive: 
 	
            You will be eligible for annual stock awards as a component of the Company’s executive compensation program, with your initial target award having an aggregate fair market value on the date of grant set at 70% of your annual base salary.  The amounts, terms and timing of any stock awards will be determined by the Compensation Committee, and the valuation will be based on application of the stock-based compensation pricing model as then adopted by the Company.  Your annual stock awards will be evidenced by separate award agreements issued in accordance with the Stock Plan.
 
	
            Other Benefit Plans:
 	
            You will be eligible for the standard retirement and other health and welfare benefit programs provided for officers of the Company, subject to the right of the Company to amend or rescind such programs in accordance with their terms.  Without limiting the generality of the foregoing, these benefits currently include: medical, dental, vision, life, accidental death and disability insurance and a 401(k) savings plan. See the enclosed brochure for more details regarding these plans.
 
	
             
 	
            You will be eligible for twenty (20) days of vacation per calendar year of employment, treated on a prorated basis (based on your start date) for calendar year 2008. You are immediately eligible for the fourteen (14) company holidays scheduled during each calendar year as well as two (2) personal days which will also be prorated for calendar year 2008.
 
	
            Separation:
 	
            Your employment will be "at will".  Either you or the Company may terminate your employment at any time for any reason.  
 
	
            Representations:
 	
            You represent and warrant to the Company that there are no contractual or legal impediments that restrict your acceptance of this employment in accordance with the terms set forth herein and that you will not bring to your employment or use in connection with such employment any confidential or proprietary information or property that you used or had access to by reason of any previous employment that is the property of any previous employer.
 
	
            Assignment/Successors:
 	
            This letter agreement is personal in its nature and neither of the parties will, without the consent of other, assign or transfer this letter agreement or any rights or obligations hereunder, provided that, in the event of the merger, consolidation, transfer, or sale of all or substantially all of the assets of the Company with or to any other individual or entity, this letter agreement will, subject to its provisions, be binding upon and inure to the benefit of such successor and such successor will discharge and perform all the promises, covenants, duties, and obligations of the Company under this letter agreement, and all references herein to the “Company” will refer to such successor.  
 
	
            Governing Law/Disputes:
 	
            Any disputes that may arise involving the terms of this letter agreement or your employment with the Company will be resolved exclusively by final and binding arbitration before the American Arbitration Association; provided that the Company may seek equitable relief for violations of this letter agreement by you pending the outcome of arbitration proceedings.  The 
 

 

Harry W. Zike

July 16, 2008

Page 3

 

 

	
             
 	
            award of the arbitrator will be entered in any court of competent jurisdiction.  The validity, interpretation and performance of this letter agreement will be governed by the laws of Michigan, regardless of the laws that might be applied under applicable principles of conflicts of laws.
 

 

All cash amounts referred to in this letter agreement are subject to applicable tax withholding.  This letter agreement, including the various separate agreements referred to in this letter agreement, embodies our entire understanding and supersedes all prior understandings, whether oral or written, relating to this offer.  If there is any conflict between a term of this letter agreement and the applicable separate agreement referred to in this letter agreement, the separate agreement will govern.  This letter agreement cannot be amended or otherwise modified except in writing signed by you and the Company.

This offer is contingent upon the successful completion of a background check (Release Authorization Form, this form already completed and signed by you on July 10, 2008), and a satisfactorily completion of a pre-employment drug screen.  The results must be received prior to your start date.

 

We look forward to welcoming you to the Company.

Sincerely yours,

ENERGY CONVERSION DEVICES, INC.

/S/ Art Rogers 

Art Rogers 

Vice President Human Resources

 

Accepted:

 

	
            /S/ Harry W. Zike
 

Harry W. Zike

Attachments for your review:

	
             
 	
            •
 	
            Application for Employment (upon immediate completion, please fax to 248-844-2260)
 

	
             
 	
            •
 	
            Form I-9, Employment Eligibility Verification
 

	
             
 	
            •
 	
            Agreement for At-Will Employment
 

	
             
 	
            •
 	
            Mandatory Complaint Procedure
 

	
             
 	
            •
 	
            Code of Business Conduct and Ethics
 

	
             
 	
            •
 	
            Employee Confidentiality and Proprietary Information Agreement
 

	
             
 	
            •
 	
            Acceptable Computer Usage Policy
 

	
             
 	
            •
 	
            Third-Party Access Policy
 

	
             
 	
            •
 	
            Benefits Enrollment Guide
 

	
             
 	
            •
 	
            Annual Incentive Plan
 

	
             
 	
            •
 	
            2006 Stock Incentive Plan

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