Document:

2014 Q2 10Q Exh 10.1  Amend 2 to A&R LOC

Exhibit 10.1

EXECUTION COPY

AMENDMENT No. 2 TO AMENDED AND RESTATED 
REVOLVING CREDIT AGREEMENT
This AMENDMENT No. 2 TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this “Amendment No. 2”) is made as of May 23, 2014 among (a) Miami AP Hotel, L.L.C., FelCor/JPM Hospitality (SPE), L.L.C., DJONT/JPM Hospitality Leasing (SPE), L.L.C., FelCor/JPM Boca Raton Hotel, L.L.C., DJONT/JPM Boca Raton Leasing, L.L.C. and Charleston Mills House Hotel, L.L.C. (collectively, the “Borrowers”), (b) JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity, “Administrative Agent”) for the Lenders, and (c) the Lenders signatory hereto.
WHEREAS, Borrowers, the Lenders and Administrative Agent are parties to an Amended and Restated Revolving Credit Agreement, dated as of December 18, 2012, as amended by Amendment No. 1 thereto, dated as of March 1, 2013 (as amended, the “Existing Credit Agreement”), pursuant to which the Lenders have agreed to make loans to Borrowers on the terms and conditions set forth therein; and    
WHEREAS, Borrowers have requested that the Lenders clarify certain aspects of the minimum liquidity test set forth in Section 8.07(b) in connection with a refinancing of certain of the Senior Secured Notes;
NOW, THEREFORE, in consideration of the foregoing premises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and fully intending to be legally bound by this Amendment No. 2, the parties hereto agree as follows: 
1.    Definitions.  Capitalized terms used herein without definition shall have the meanings assigned to such terms in the Existing Credit Agreement.
2.    Amendment to the Existing Credit Agreement.  As of the Second Amendment Effective Date (as defined in Section 4 hereof), Section 8.07(b) of Existing Credit Agreement is hereby amended and restated in its entirety as follows:

“(b)     Minimum Liquidity Test.  On August 1, 2014, unrestricted cash and Permitted Investments of FelCor Trust and its Subsidiaries, unused and available Commitments and amounts available to be drawn under other credit facilities of FelCor Trust and its Subsidiaries shall equal or exceed the sum of (A) the aggregate principal amount of all recourse debt and the aggregate amount of preferred, convertible or other securities that require mandatory cash purchases, redemption or payments, in each case that matures within one-year of the Stated Maturity Date (without giving effect to any extension thereof), including the then outstanding principal balance of the Senior Secured Notes (2014), and (B) $25,000,000.”
3.    Provisions of General Application.
3.1.    Representations and Warranties.  Borrowers hereby represent and warrant as of the date hereof that (a) each of the representations and warranties of Borrowers contained in the 

Existing Credit Agreement, the other Loan Documents or in any document or instrument delivered pursuant to or in connection with the Existing Credit Agreement or this Amendment No. 2 are true as of the date as of which they were made and are true in all material respects (unless such representations are qualified as to “materiality”, “Material Adverse Effect” or with similar language, in which case such representations shall be true in all respects) at and as of the date of this Amendment No. 2 (except to the extent that such representations and warranties expressly speak as of a different date), (b) no Default or Event of Default exists on the date hereof, (c) the organizational documents of (i) each of the Borrowers (other than the Miami Owner and the Charleston Borrower) attached to the Secretary’s Certificate dated as of March 4, 2011, (ii) the Miami Owner attached to the Secretary’s Certificate dated as of December 11, 2012, and (iii) the Charleston Borrower attached to the Secretary’s Certificate dated as of March 1, 2013, in each case remain in full force and effect and such organizational documents have not been amended, modified, annulled, rescinded or revoked since March 4, 2011, December 11, 2012, or March 1, 2013, respectively, and (d) this Amendment No. 2 and each other Loan Document, certificate or other documentation delivered in connection herewith has been duly authorized, executed and delivered by each of Borrowers and is in full force and effect as of the Second Amendment Effective Date, and the agreements and obligations of each of Borrowers contained herein and therein constitute the legal, valid and binding obligations of each of Borrowers, enforceable against it in accordance with their respective terms, except to the extent that the enforcement thereof or the availability of equitable remedies may be limited by applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent transfer, fraudulent conveyance or similar laws now or hereafter in effect relating to or affecting creditors’ rights generally or by general principles of equity, or by the discretion of any court in awarding equitable remedies, regardless of whether such enforcement is considered in a preceding in equity or at law.
3.2.    No Other Changes.  Except as otherwise expressly provided or contemplated by this Amendment No. 2, all of the terms, conditions and provisions of the Existing Credit Agreement remain unaltered and in full force and effect and are hereby ratified and confirmed in all respects.  The Existing Credit Agreement and this Amendment No. 2 shall be read and construed as one agreement.
3.3.    Governing Law.  THIS AMENDMENT No. 2 SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
3.4.    Assignment.  This Amendment No. 2 shall be binding upon and inure to the benefit of each of the parties hereto and their respective permitted successors and assigns.
3.5.    Counterparts.  This Amendment No. 2 may be executed in any number of counterparts, but all such counterparts shall together constitute but one and the same agreement.  In making proof of this Amendment No. 2, it shall not be necessary to produce or account for more than one counterpart thereof signed by each of the parties hereto.
3.6    Loan Documents.  This Amendment No. 2 shall be deemed to be a Loan Document under the Existing Credit Agreement and shall be construed, administered, and applied in accordance with all of the terms and provisions of the Loan Documents.

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3.7    Further Assurances.  Borrowers shall, at any time and from time to time following the execution of this Amendment No. 2, execute and deliver all such further instruments and take all such further action as may be reasonably necessary or appropriate in order to carry out the provisions of this Amendment No. 2, in each case, as reasonably determined by Administrative Agent.
3.8    Credit Agreement References.  On and after to the Second Amendment Effective Date, each reference in the Existing Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import, and each reference to the Credit Agreement by the words “thereunder”, “thereof” or words of like import in any Loan Document or other document executed in connection with the Existing Credit Agreement, shall mean and be a reference to the Existing Credit Agreement, as amended by this Amendment No. 2 and any other amendments effective prior to the date hereof.
4.    Effectiveness of this Amendment No. 2.  This Amendment No. 2 shall become effective on the date on which the following conditions precedent are satisfied (the “Second Amendment Effective Date”): 
(a)    Each of the Administrative Agent, Borrowers, Guarantors and Lenders constituting Required Lenders shall have executed and delivered this Amendment No. 2, and Borrowers shall have delivered all other documentation, opinions, certificates as required hereunder. 
(b)    The representations and warranties of Borrowers contained in the Existing Credit Agreement and each of the other Loan Documents shall be true and correct in all material respects on and as of the Second Amendment Effective Date (except to the extent that such representations and warranties expressly speak as of a different date);
(c)     On and as of the Second Amendment Effective Date, no Default or Event of Default shall have occurred and be continuing;
(d)    Since the Restatement Date, there shall not have been any material adverse change in the business, condition, operations, performance, or properties of Borrowers that is reasonably likely to or which could reasonably be expected to have or result in a Material Adverse Effect;
(e)    Borrowers shall have delivered a certificate of an Authorized Officer (1) containing incumbency certificates of Borrowers and Guarantors, (2) attaching resolutions authorizing this Amendment No. 2, and (3) confirming (x) no changes to the Organizational Documents of Borrowers and Guarantors from those copies delivered on the Restatement Date or such other date indicated above and (y) satisfaction of the condition set forth in clause (d) above.
(f)    Borrowers shall have paid to Administrative Agent, for its own account, all reasonable, out-of-pocket fees and expenses (including legal fees and expenses) that are due and payable as of the date hereof.
[Remainder of page left blank intentionally]

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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Amendment No. 2 as of the date set forth above.

	
				
	BORROWERS:
	 
	FELCOR/JPM HOSPITALITY (SPE), L.L.C.

	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/Bianca Sandoval Green

	 
	 
	Name:
	Bianca Sandoval Green

	 
	 
	Title:
	Vice President and Associate General Counsel

	 
	 
	 
	 

	 
	 
	 
	 

	

	

	DJONT/JPM HOSPITALITY LEASING (SPE), L.L.C.

	

	

	

	

	

	

	

	

	

	By:
	/s/Bianca Sandoval Green

	

	

	Name:
	Bianca Sandoval Green

	

	

	Title:
	Vice President and Associate General Counsel

	 
	

	 
	 

	

	

	

	

	

	

	FELCOR/JPM BOCA RATON HOTEL, L.L.C.

	

	

	

	 
	

	

	

	

	

	By:
	/s/Bianca Sandoval Green

	

	

	Name:
	Bianca Sandoval Green

	

	

	Title:
	Vice President and Associate General Counsel

	

	

	

	

	 
	 
	 
	 

	 
	 
	DJONT/JPM BOCA RATON LEASING (SPE), L.L.C.

	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/Bianca Sandoval Green

	 
	 
	Name:
	Bianca Sandoval Green

	 
	 
	Title:
	Vice President and Associate General Counsel

	 
	 
	 
	 

	 
	 
	 
	 

	

	

	MIAMI AP HOTEL, L.L.C.

	

	

	

	

	

	

	

	

	

	By:
	/s/Bianca Sandoval Green

	

	

	Name:
	Bianca Sandoval Green

	

	

	Title:
	Vice President and Associate General Counsel

	

	

	

	

Signature Page to Amendment No. 2 to FelCor Amended and Restated Revolving Credit Agreement

	
				
	 
	 
	CHARLESTON MILLS HOUSE HOTEL, L.L.C.

	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/Bianca Sandoval Green

	 
	 
	Name:
	Bianca Sandoval Green

	 
	 
	Title:
	Vice President and Associate General Counsel

	 
	 
	 
	 

Signature Page to Amendment No. 2 to FelCor Amended and Restated Revolving Credit Agreement

GUARANTORS AND PRINCIPALS:    Each Guarantor and Principal, as applicable, by its signature below hereby (i) acknowledges Amendment No. 2 to the Existing Credit Agreement, (ii) reaffirms (a) its pledge or guaranty (including the Environmental Indemnity), as applicable, as security for the payment and performance when due of all of the Obligations of all Borrowers in accordance with the applicable Loan Documents to which it is a party, including the Credit Agreement, and (b) the representations, warranties and covenants set forth in Sections 6.34 and 7.23(e) of the Credit Agreement, as applicable, and (iii) confirms that the Loan Document(s) to which is party shall remain in full force and effect after giving effect to Amendment No. 2 to the Existing Credit Agreement.

	
					
	 
	 
	FELCOR/JPM HOSPITALITY HOLDCO (SPE), L.L.C., 

	 
	 
	as Principal of Hospitality Owner

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/Bianca Sandoval Green

	 
	 
	Name:
	Bianca Sandoval Green

	 
	 
	Title:
	Vice President and Associate General Counsel

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	DJONT/JPM HOSPITALITY LEASING HOLDCO (SPE), L.L.C.

	 
	 
	as Principal of Hospitality Operating Lease

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/Bianca Sandoval Green

	 
	 
	Name:
	Bianca Sandoval Green

	 
	 
	Title:
	Vice President and Associate General Counsel

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	FELCOR LODGING LIMITED PARTNERSHIP,

	 
	 
	as Principal of Dana Point Owner

	 
	 
	 
	 
	 

	 
	 
	By:
	FelCor Lodging Trust Incorporated, its General Partner

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	By:
	/s/Bianca Sandoval Green

	 
	 
	 
	Name:
	Bianca Sandoval Green

	 
	 
	 
	Title:
	Vice President and Associate General Counsel

Signature Page to Amendment No. 2 to FelCor Amended and Restated Revolving Credit Agreement

	
				
	 
	 
	FELCOR TRS HOLDINGS, L.L.C.,

	 
	 
	as Principal of Dana Point Operating Lessee

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/Bianca Sandoval Green

	 
	 
	Name:
	Bianca Sandoval Green

	 
	 
	Title:
	Vice President and Associate General Counsel

	 
	 
	 
	 

	 
	 
	FELCOR PENNSYLVANIA COMPANY, L.L.C.,

	 
	 
	a Delaware limited liability company

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/Bianca Sandoval Green

	 
	 
	Name:
	Bianca Sandoval Green

	 
	 
	Title:
	Vice President and Associate General Counsel

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	FELCOR LODGING TRUST INCORPORATED,

	 
	 
	a Maryland corporation

	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/Bianca Sandoval Green

	 
	 
	Name:
	Bianca Sandoval Green

	 
	 
	Title:
	Vice President and Associate General Counsel

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	MIAMI AP HOTEL HOLDCO, L.L.C.

	 
	 
	as Principal of Miami Owner

	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/Bianca Sandoval Green

	 
	 
	Name:
	Bianca Sandoval Green

	 
	 
	Title:
	Vice President and Associate General Counsel

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	CHARLESTON MILLS HOUSE HOTEL HOLDCO, L.L.C.,

	 
	 
	as Principal of Charleston Owner

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/Bianca Sandoval Green

	 
	 
	Name:
	Bianca Sandoval Green

	 
	 
	Title:
	Vice President and Associate General Counsel

Signature Page to Amendment No. 2 to FelCor Amended and Restated Revolving Credit Agreement

	
				
	LENDERS:
	 
	JPMORGAN CHASE BANK, N.A.,

	 
	 
	as Administrative Agent and as a Lender

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/Mohammad Hasan

	 
	 
	Name:
	Mohammad Hasan

	 
	 
	Title:
	Vice President 

Signature Page to Amendment No. 2 to FelCor Amended and Restated Revolving Credit Agreement

	
				
	 
	 
	DEUTSCH BANK TRUST COMPANY AMERICAS

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/J.T. Johnston Coe

	 
	 
	Name:
	J.T. Johnston Coe

	 
	 
	Title:
	Managing Director

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/David Naranjo

	 
	 
	Name:
	David Naranjo

	 
	 
	Title:
	Vice President

	 
	 
	 
	 

Signature Page to Amendment No. 2 to FelCor Amended and Restated Revolving Credit Agreement

	
				
	 
	 
	THE BANK OF NOVA SCOTIA

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/George Sherman

	 
	 
	Name:
	George Sherman

	 
	 
	Title:
	Director

Signature Page to Amendment No. 2 to FelCor Amended and Restated Revolving Credit Agreement

	
				
	 
	 
	FIFTH THIRD BANK

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	By:
	/s/Casey Gehrig

	 
	 
	Name:
	Casey Gehrig

	 
	 
	Title:
	Vice President

Signature Page to Amendment No. 2 to FelCor Amended and Restated Revolving Credit AgreementExhibit 4.1

NEITHER THIS NOTE NOR THE SECURITIES THAT MAY BE ISSUED BY THE BORROWER UPON
CONVERSION HEREOF (COLLECTIVELY, THE "SECURITIES") HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION. NEITHER THE SECURITIES NOR ANY INTEREST OR
PARTICIPATION THEREIN MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED:
(i) IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE 1933 ACT, OR APPLICABLE STATE SECURITIES LAWS; OR (ii) IN THE ABSENCE
OF AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE ISSUER, THAT REGISTRATION
IS NOT REQUIRED UNDER THE 1933 ACT OR; (iii) UNLESS SOLD, TRANSFERRED OR
ASSIGNED PURSUANT TO RULE 144 UNDER THE 1933 ACT.

                              12% CONVERTIBLE NOTE

                        Maturity date of January 25, 2015

                  $100,000 July 25, 2014 (the "Issuance Date")

     FOR VALUE RECEIVED, Red Giant Entertainment, Inc., a Nevada Corporation
(the "Company") doing business in Clermont, FL hereby promises to pay to the
order of JSJ Investments Inc., an accredited investor and Texas Corporation, or
its assigns (the "Holder") the principal amount of One Hundred Thousand Dollars
($100,000), on demand of the Holder at any time on or after January 25, 2015
(the "Maturity Date"), and to pay interest on the unpaid principal balance
hereof at the rate of Twenty-Two Percent (22%) per annum (the "Interest Rate")
from the date hereof (the "Issuance Date") until the same becomes due and
payable, whether at maturity or upon acceleration or by prepayment or otherwise;
PROVIDED, that any amount of principal or interest on this Note which is not
paid when due shall bear interest at such rate on the unpaid principal balance
hereof plus Default Interest from the due date thereof until the same is paid in
full. Interest shall commence accruing on the Issuance Date, shall be computed
on the basis of a 365-day year and the actual number of days elapsed and shall
accrue daily and, after the Maturity Date, compound quarterly.

     1. Payments of Principal and Interest.

     (a) Payment of Principal. Upon the Maturity Date, this note has a cash
redemption premium of 150% of the principal amount only upon approval and
acceptance by JSJ Investments Inc. This provision only may be exercised if the
consent of the Note holder is obtained. The principal balance of this Note shall
be paid to the Holder hereof on demand.

     (b) Default Interest. Any amount of principal on this Note which is not
paid when due shall bear Twenty-Two percent (22%) interest per annum from the
date thereof until the same is paid ("Default Interest") and the Holder, at the
Holder's sole discretion, may include any accrued but unpaid Default Interest in
the Conversion Amount.

     (c) General Payment Provisions. This Note shall be made in lawful money of
the United States of America by check to such account as the Holder may from
time to time designate by written notice to the Company in accordance with the
<PAGE>
provisions of this Note. Whenever any amount expressed to be due by the terms of
this Note is due on any day which is not a Business Day (as defined below), the
same shall instead be due on the next succeeding day which is a Business Day
and, in the case of any interest payment date which is not the date on which
this Note is paid in full, the extension of the due date thereof shall not be
taken into account for purposes of determining the amount of interest due on
such date. For purposes of this Note, "Business Day" shall mean any day other
than a Saturday, Sunday or a day on which commercial banks in the State of Texas
are authorized or required by law or executive order to remain closed.

     2. Conversion of Note. At any time prior to the Maturity Date, or after the
Maturity Date, the Conversion Amount of this Note shall be convertible into
shares of the Company's common stock, share (the "Common Stock"), on the terms
and conditions set forth in this Paragraph 2.

          (a) Certain Defined Terms. For purposes of this Note, the following
terms shall have the following meanings:

     i. "Conversion Amount" means the sum of (A) the principal amount of this
Note to be converted with respect to which this determination is being made, and
(B) interest; and (C) Default Interest, if any, on unpaid interest and
principal, if so included at the Holder's sole discretion.

     ii. "Conversion Price" means the lower of (i) a 45% discount to the average
of the three lowest daily trading prices for the previous twenty (20) trading
days to the date of Conversion; or (ii) a 45% discount to the average of the
three lowest daily trading prices for the previous twenty (20) trading days
before the date that this note was executed.

     iii. "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.

     iv. "Shares" means the Shares of the Company into which any balance on this
Note may be converted upon submission of a Conversion Notice.

     (b) Holder's Conversion Rights. At any time or times on or after the
Issuance Date, the Holder shall be entitled to convert all of the outstanding
and unpaid principal amount of this Note into fully paid and non-assessable
shares of Common Stock in accordance with the stated Conversion Price.

     (c) Fractional Shares. The Company shall not issue any fraction of a share
of Common Stock upon any conversion; if such issuance would result in the
issuance of a fraction of a share of Common Stock, the Company shall round such
fraction of a share of Common Stock up to the nearest whole share.

     (c) Conversion Amount. The Conversion Amount shall be converted pursuant to
Rule 144(b)(1)(ii) and Rule 144(d)(1)(ii) as promulgated by the Securities and
Exchange Commission under the Securities Act of 1933, as amended, into
free-trading shares at the Conversion Price.

                                       2
<PAGE>
          (d) Mechanics of Conversion. The conversion of this Note shall be
conducted in the following manner:

     i. Holder's Conversion Requirements. To convert this Note into shares of
Common Stock on any date set forth in the Conversion Notice by the Holder (the
"Conversion Date"), the Holder hereof shall transmit by email, facsimile or
otherwise deliver, for receipt on or prior to 11:59 p.m., Eastern Time on such
date or on the next business day, a copy of a fully executed notice of
conversion in the form attached hereto as Exhibit 1 (the "Conversion Notice") to
the Company.

     ii. Company's Response. Upon receipt by the Company of a copy of a
Conversion Notice, the Company shall as soon as practicable, but in no event
later than one (1) Business Day after receipt of such Conversion Notice, send,
via email, facsimile or overnight courier, a confirmation of receipt of such
Conversion Notice to such Holder indicating that the Company will process such
Conversion Notice in accordance with the terms herein. Within two (2) Business
Days after the date of the Conversion Confirmation, the Company shall have
issued and electronically transferred the shares to the Broker indicated in the
Conversion Notice; should the Company be unable to transfer the shares
electronically, it shall, within two (2) Business Days after the date of the
Conversion Confirmation, have surrendered to FedEx for delivery the next day to
the address as specified in the Conversion Notice, a certificate, registered in
the name of the Holder, for the number of shares of Common Stock to which the
Holder shall be entitled.

     iii. Record Holder. The person or persons entitled to receive the shares of
Common Stock issuable upon a conversion of this Note shall be treated for all
purposes as the record holder or holders of such shares of Common Stock on the
Conversion Date.

     iv. Timely Response by Company. Upon receipt by Company of a Conversion
Notice, Company shall respond in a timely manner to Holder by provision within
two business days of the Shares requested in the Conversion Notice.

     v. Penalty for Delinquent Response. If Company fails to deliver for
whatever reason (including any neglect or failure by, E.G. the Company, its
counsel or the transfer agent) to Holder the Shares as requested in a Conversion
Notice and within three business days of the receipt thereof, there shall accrue
a penalty of Additional Shares due to Holder equal to 25% of the number stated
in the Conversion Notice beginning on the Fourth business day after the date of
the Notice. The Additional Shares shall be issued and the amount of the Note
retired will not be reduced beyond that stated in the Conversion Notice. Each 5
additional business days beyond the Fourth business day after the date of this
Notice shall accrue an additional 25% penalty for delinquency, without any
corresponding reduction in the amount due under the Note, for so long as Company
fails to provide the Shares so demanded.

     vi. Conversion Right Unconditional. If the Holder shall provide a Notice of
Conversion as provided herein, the Company's obligations to deliver Common Stock
shall be absolute and unconditional, irrespective of any claim of setoff,
counterclaim, recoupment, or alleged breach by the Holder of any obligation to
the Company.

                                       3
<PAGE>
     vii. Transfer Agent Fees and Legal Fees. The issuance of the certificates
shall be without charge or expense to the Holder. The Company shall pay any and
all Transfer Agent fees and legal fees required for processing of any Notice of
Conversion, including but not limited to the cost of obtaining a legal opinion
with regard to the conversion.

     3. Exclusive Funding. From the Issuance Date of this Note until October
31st, 2014 the Company will only accept investment funding from the Holder.

     4. Right of First Refusal, Debt Assignment. For Twenty-Four (24) Months
following the Issuance Date of this Note the Company grants the Holder the right
of first refusal with regard to any Debt Assignment Agreement.

     5. Other Rights of Holders. Reorganization, Reclassification,
Consolidation, Merger or Sale. Any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or substantially all of the
Company's assets to another Person or other transaction which is effected in
such a way that holders of Common Stock are entitled to receive (either directly
or upon subsequent liquidation) stock, securities or assets with respect to or
in exchange for Common Stock is referred to herein as "Organic Change." Prior to
the consummation of any (i) Organic Change or (ii) other Organic Change
following which the Company is not a surviving entity, the Company will secure
from the Person purchasing such assets or the successor resulting from such
Organic Change (in each case, the "Acquiring Entity") a written agreement (in
form and substance reasonably satisfactory to the Holder) to deliver to Holder
in exchange for this Note, a security of the Acquiring Entity evidenced by a
written instrument substantially similar in form and substance to this Note, and
reasonably satisfactory to the Holder. Prior to the consummation of any other
Organic Change, the Company shall make appropriate provision (in form and
substance reasonably satisfactory to the Holders of a majority of the Conversion
Amount of the Notes then outstanding) to ensure that each of the Holders will
thereafter have the right to acquire and receive in lieu of or in addition to
(as the case may be) the shares of Common Stock immediately theretofore
acquirable and receivable upon the conversion of such Holder's Note, such shares
of stock, securities or assets that would have been issued or payable in such
Organic Change with respect to or in exchange for the number of shares of Common
Stock which would have been acquirable and receivable upon the conversion of
such Holder's Note as of the date of such Organic Change (without taking into
account any limitations or restrictions on the convertibility of the Note). All
provisions of this Note must be included to the satisfaction of Holder in any
new Note created pursuant to this section.

     6. Representations and Warranties of the Company. In connection with the
transactions provided for herein, the Company hereby represents and warrants to
the Holders the following.

     (a) Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation and has all requisite corporate power and
authority to carry on its business as now conducted. The Company is duly
qualified to transact business and is in good standing in each jurisdiction in
which the failure to so qualify would have a material adverse effect on its
business or properties.

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<PAGE>
     (b) Authorization. All corporate action has been taken on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement. The Company has taken
all corporate action required to make all of the obligations of the Company
reflected in the provisions of this Agreement, valid and enforceable
obligations. The shares of capital stock issuable upon conversion of the Notes
have been authorized or will be authorized prior to the issuance of such shares.

     (c) Fiduciary Obligations. The Company hereby represents that it intends to
use the proceeds of the Notes primarily for the operations of its business and
not for any personal, family, or household purpose. The Company hereby
represents that its board of directors, in the exercise of its fiduciary duty,
has approved the execution of this Agreement based upon a reasonable belief that
the loan provided for herein is appropriate for the Company after reasonable
inquiry concerning its financial objectives and financial situation.

     7. Covenants of the Company. So long as the Company shall have any
obligations under this Note, the Company shall not without the Holder's written
consent pay, declare or set apart for such payment any dividend or other
distribution (whether in cash, property, or other securities) on share of
capital stock solely in the form of additional shares of Common Stock.

     (a) So long as the Company shall have any obligations under this Note, the
Company shall not without the Holder's written consent redeem, repurchase, or
otherwise acquire (whether for cash or in exchange for property or other
securities) in any one transaction or series of transactions any shares of
capital stock of the Company or any warrants, rights, or options to acquire any
such shares.

     (b) So long as the Company shall have any obligations under this Note, the
Company shall not without the Holder's written consent incur any liability for
borrowed money, except (a) borrowings in existence as of this date and of which
the Company has informed the Holder in writing before the date hereof or (b)
indebtedness to trade creditors or financial institutions incurred in the
ordinary course of business.

     (c) So long as the Company shall have any obligations under this Note, the
Company shall not without the Holder's written consent sell, lease, or otherwise
dispose of a significant portion of its assets outside the ordinary course of
business. Any consent to the disposition of any assets may be conditioned upon a
specified use of the proceeds thereof.

     8. Issuance of Common Stock Equivalents. If the Company, at any time after
the Issuance Date, shall issue any securities convertible into or exchangeable
for, directly or indirectly, Common Stock ("Convertible Securities"), other than
the Note, or any rights or warrants or options to purchase any such Common Stock
or Convertible Securities, shall be issued or sold (collectively, the "Common
Stock Equivalents") and the aggregate of the price per share for which
Additional Shares of Common Stock may be issuable thereafter pursuant to such
Common Stock Equivalent, plus the consideration received by the Company for
issuance of such Common Stock Equivalent divided by the number of shares of
Common Stock issuable pursuant to such Common Stock Equivalent (the "Aggregate
Per Common Share Price") shall be less than the applicable Conversion Price then
in effect, or if, after any such issuance of Common Stock Equivalents, the price

                                       5
<PAGE>
per share for which Additional Shares of Common Stock may be issuable thereafter
is amended or adjusted, and such price as so amended shall make the Aggregate
Per Share Common Price be less than the applicable Conversion Price in effect at
the time of such amendment or adjustment, then the applicable Conversion Price
upon each such issuance or amendment shall be adjusted on the basis that (1) the
maximum number of Additional Shares of Common Stock issuable pursuant to all
such Common Stock Equivalents shall be deemed to have been issued (whether or
not such Common Stock Equivalents are actually then exercisable, convertible or
exchangeable in whole or in part) as of the earlier of (A) the date on which the
Company shall enter into a firm contract for the issuance of such Common Stock
Equivalent, or (B) the date of actual issuance of such Common Stock Equivalent.
No adjustment of the applicable Conversion Price shall be made under this
subsection (vii) upon the issuance of any Convertible Security which is issued
pursuant to the exercise of any warrants or other subscription or purchase
rights therefor, if any adjustment shall previously have been made to the
exercise price of such warrants then in effect upon the issuance of such
warrants or other rights pursuant to this subsection (vii). No adjustment shall
be made to the Conversion Price upon the issuance of Common Stock pursuant to
the exercise, conversion or exchange of any Convertible Security or Common Stock
Equivalent where an adjustment to the Conversion Price was made as a result of
the issuance or purchase of any Convertible Security or Common Stock Equivalent.

     9. Reservation of Shares. The Company shall at all times, so long as any
principal amount of the Note is outstanding, reserve and keep available out of
its authorized and unissued Common Stock, solely for the purpose of effecting
the conversion of the Note, such number of shares of Common Stock as shall at
all times be sufficient to effect the conversion of all of the principal amount
of the Note then outstanding. The initial number of shares of Common Stock
reserved for conversions of the Notes and each increase in the number of shares
so reserved shall be allocated pro rata among the Holders of the Note based on
the principal and interest amount of the Notes held by each Holder at the time
of issuance of the Notes or increase in the number of reserved shares, as the
case may be. In the event a Holder shall sell or otherwise transfer any of such
Holder's Note, each transferee shall be allocated a pro rata portion of the
number of reserved shares of Common Stock reserved for such transferor. Any
shares of Common Stock reserved and allocated to any Person which ceases to hold
any Note shall be allocated to the remaining Holders, pro rata based on the
principal amount of the Note then held by such Holders.

     10. Voting Rights. Holders of this Note shall have no voting rights, except
as required by law.

     11. Reissuance of Note. In the event of a conversion or redemption pursuant
to this Note of less than all of the Conversion Amount represented by this Note,
the Company shall promptly cause to be issued and delivered to the Holder, upon
tender by the Holder of the Note converted or redeemed, a new note of like tenor
representing the remaining principal amount of this Note which has not been so
converted or redeemed and which is in substantially the same form as this Note,
as set forth above.

                                       6
<PAGE>
     12. Default and Remedies.

     (a) Event of Default. An "Event of Default" is: (i) default for ten (10)
days in payment of interest or Default Interest on this Note; (ii) default in
payment of the principal amount of this Note when due; (iii) failure by the
Company for thirty (30) days after notice to it to comply with any other
material provision of this Note; (iv) breach of any covenants, warranties or
representations by the Company herein; (v) cessation of operations by the
Company or a material subsidiary; (vi) if the Company pursuant to or within the
meaning of any Bankruptcy Law; (A) commences a voluntary case; (B) consents to
the entry of an order for relief against it in an involuntary case; (C) consents
to the appointment of a Custodian of it or for all or substantially all of its
property; (D) makes a general assignment for the benefit of its creditors; or
(E) admits in writing that it is generally unable to pay its debts as the same
become due; or (vi) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (I) is for relief against the Company in an
involuntary case; (2) appoints a Custodian of the Company or for all or
substantially all of its property; or (3) orders the liquidation of the Company
or any subsidiary, and the order or decree remains unstayed and in effect for
thirty (30) days. The Term "Bankruptcy Law" means Title 11, U.S. Code, or any
similar Federal or State Law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.

     (b) Remedies. If an Event of Default occurs and is continuing, the Holder
of this Note may declare all of this Note, including any interest and Default
Interest and other amounts due, to be due and payable immediately.

     13. Vote to Change the Terms of this Note. This Note and any provision
hereof may only be amended by an instrument in writing signed by the Company and
holders of a majority of the aggregate Conversion Amount of the Notes then
outstanding.

     14. Lost or Stolen Note. Upon receipt by the Company of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Note, and, in the case of loss, theft or destruction, of an indemnification
undertaking by the Holder to the Company in a form reasonably acceptable to the
Company and, in the case of mutilation, upon surrender and cancellation of the
Notes, the Company shall execute and deliver a new Note of like tenor and date
and in substantially the same form as this Note; provided, however, the Company
shall not be obligated to re-issue a Note if the Holder contemporaneously
requests the Company to convert such remaining principal amount into Common
Stock.

     15. Payment of Collection, Enforcement and Other Costs. If: (i) this Note
is placed in the hands of an attorney for collection or enforcement or is
collected or enforced through any legal proceeding; or (ii) an attorney is
retained to represent the Holder of this Note in any bankruptcy, reorganization,
receivership or other proceedings affecting creditors' rights and involving a
claim under this Note, then the Company shall pay to the Holder all reasonable
attorneys' fees, costs and expenses incurred in connection therewith, in
addition to all other amounts due hereunder.

     16. Cancellation. After all principal and accrued interest at any time owed
on this Note has been paid in full, this Note shall automatically be deemed
canceled, shall be surrendered to the Company for cancellation and shall not be
reissued.

                                       7
<PAGE>
     17. Waiver of Notice. To the extent permitted by law, the Company hereby
waives demand, notice, protest and all other demands and notices in connection
with the delivery, acceptance, performance, default or enforcement of this Note.

     18. Governing Law. This Note shall be construed and enforced in accordance
with, and all questions concerning the construction, validity, interpretation
and performance of this Note shall be governed by, the laws of the State of
Texas, without giving effect to provisions thereof regarding conflict of laws.
Each party hereby irrevocably submits to the non-exclusive jurisdiction of the
state and federal courts sitting in Texas for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by sending by certified mail or overnight courier a copy thereof to
such party at the address for such notices to it under this Agreement 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. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

     19. Remedies, Characterizations, Other Obligations, Breaches and Injunctive
Relief. The remedies provided in this Note shall be cumulative and in addition
to all other remedies available under this Note, at law or in equity (including
a decree of specific performance and/or other injunctive relief), and no remedy
contained herein shall be deemed a waiver of compliance with the provisions
giving rise to such remedy and nothing herein shall limit a Holder's right to
pursue actual damages for any failure by the Company to comply with the terms of
this Note. The Company covenants to each Holder of Notes that there shall be no
characterization concerning this instrument other than as expressly provided
herein. Amounts set forth or provided for herein with respect to payments,
conversion and the like (and the computation thereof) shall be the amounts to be
received by the Holder thereof and shall not, except as expressly provided
herein, be subject to any other obligation of the Company (or the performance
thereof).

     20. Specific Shall Not Limit General; Construction. No specific provision
contained in this Note shall limit or modify any more general provision
contained herein. This Note shall be deemed to be jointly drafted by the Company
and all Holders and shall not be construed against any person as the drafter
hereof.

     21. Failure or Indulgence Not Waiver. No failure or delay on the part of
this Note in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege.

                                       8
<PAGE>
     22. Partial Payment. In the event of partial payment by the Holder, the
principal sum due to the Holder shall be prorated based on the consideration
actually paid by lender such that the company is only required to repay the
amount funded and the company is not required to repay any unfunded portion of
this note.

     23. Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
herein. None of the terms of this Agreement can be waived or modified, except by
an express agreement signed by the Parties.

     24. Representations and Warranties. The Company expressly acknowledges that
the Holder, including but not limited to its officer, directors, employees,
agents, and affiliates, have not made any representation or warranty to it
outside the terms of this Agreement. The Company further acknowledges that there
have been no representations or warranties about future financing or subsequent
transactions between the parties.

     25. Notices. All notices and other communications given or made to the
Company pursuant hereto shall be in writing (including facsimile or similar
electronic transmissions) and shall be deemed effectively given: (i) upon
personal delivery, (ii) when sent by electronic mail or facsimile, as deemed
received by the close of business on the date sent, (iii) five (5) days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid or (iv) one (1) day after deposit with a nationally recognized
overnight courier, specifying next day delivery. All communications shall be
sent either by email, or fax, or to the address specified on the signature page.
The physical address, email address, and phone number provided on the signature
page shall be considered valid pursuant to the above stipulations; should the
Company's contact information change from that listed on the signature page, it
is incumbent on the Company to inform the Holder.

     26. Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the rest of the Agreement shall be enforceable in accordance
with its terms.

     27. Usury. If it shall be found that any interest or other amount deemed
interest due hereunder violates the applicable law governing usury, the
applicable rate of interest due hereunder shall automatically be lowered to
equal the maximum rate of interest permitted under applicable law. The Company
covenants (to the extent that it may lawfully do so) that it will not seek to
claim or take advantage of any law that would prohibit or forgive the Company
from paying all or a portion of the principal or interest on this Note.

     28. Successors and Assigns. This Agreement shall be binding upon successors
and assigns.

                          --SIGNATURE PAGE TO FOLLOW--

                                       9
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed by its CEO, on
and as of the Issuance Date.

                                      COMPANY

                                      By:
                                         -------------------------------
                                      Title:   CEO
                                      Address: 614 E. Hwy 50 #235
                                               Clement, FL 34711

                                      HOLDER

                                      ----------------------------------
                                      Sameer Hirji
                                      JSJ Investments, Inc.

                                       10
<PAGE>
                                    EXHIBIT 1
                                CONVERSION NOTICE

Reference is made to the Convertible Note issued by Red Giant Entertainment,
Inc. (the "Note"), dated July 25, 2014 in the principal amount of $100,000. This
note currently holds a principal balance of $________ and accrued interest in
the amount of $_______. The features of conversion stipulate a Conversion Price
the lower of: (i) a 45% discount to the average of the three lowest daily
trading prices for the previous twenty (20) trading days to the date of
Conversion; or (ii) a 45% discount to the average of the three lowest daily
trading prices for the previous twenty (20) trading days before the date that
this note was executed, pursuant to the provisions of Section 2(a)(2) in the
Note.

In accordance with and pursuant to the Note, the undersigned hereby elects to
convert $___________ of the PRINCIPAL/INTEREST balance of the Note, indicated
below into shares of Common Stock (the "Common Stock"), of the Company, by
tendering the Note specified as of the date specified below.

Date of Conversion: ____________________________

Please confirm the following information:

Conversion Amount: $____________________________

Conversion Price: $_____________________________   (__% discount from $________)

Number of shares of Common Stock to be issued:____________________________

Current Issued/Outstanding:____________________________

PLEASE ISSUE THE COMMON STOCK INTO WHICH THE NOTE IS BEING CONVERTED IN THE NAME
OF THE HOLDER OF THE NOTE AND TRANSFER THE SHARES ELECTRONICALLY TO:

[BROKER INFORMATION]

HOLDER AUTHORIZATION:
JSJ INVESTMENTS, INC.
2665 VILLA CREEK DRIVE, SUITE 214
DALLAS, TX 75234
403.605.1977

Tax ID:

Sameer Hirji, President

Date:

                                       11
<PAGE>
PLEASE BE ADVISED, pursuant to Section 2(e)(2) of the Note, "Upon receipt by the
Company of a copy of the Conversion Notice, the Company shall as soon as
practicable, but in no event later than one (1) Business Day after receipt of
such Conversion Notice, SEND, VIA EMAIL, FACSIMILE OR OVERNIGHT COURIER, A
CONFIRMATION OF RECEIPT OF SUCH CONVERSION NOTICE TO SUCH HOLDER INDICATING THAT
THE COMPANY WILL PROCESS SUCH CONVERSION NOTICE in accordance with the terms
herein. Within two (2) Business Days after the date of the Conversion
Confirmation, the Company shall have issued and electronically transferred the
shares to the Broker indicated in the Conversion Notice; should the Company be
unable to transfer the shares electronically, they shall, within two (2)
Business Days after the date of the Conversion Confirmation, have surrendered to
FedEx for delivery the next day to the address as specified in the Conversion
Notice, a certificate, registered in the name of the Holder, for the number of
the Note and shares of Common Stock to which the following address:

Signature:

                                      By:
                                         -------------------------------
                                         Benny Powell
                                         CEO
                                         Red Giant Entertainment Inc.

                                       12

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