Document:

exv4w19

 

Exhibit 4.19

COMMON STOCK PURCHASE AGREEMENT

     THIS COMMON STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of February 12, 2004 by and
among NGTV, a California corporation (the “Company”) and each person listed on Schedule A,
attached hereto (individually a “Purchaser” and collectively, the “Purchasers”).

RECITALS

     WHEREAS, the Gene Simmons, Richard Abramson and Allan Brown (collectively, the “Group”) has in
the past, loaned the Company an aggregate of $150,000, evidenced in part by certain promissory
notes (the “Debt”); and

     WHEREAS, it was contemplated from the outset that the Debt would be converted into equity and
the Company wishes now to 20,520,903 shares of Common Stock of the Company in full and final
satisfaction of the Debt and any interest accrued thereon, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged.

     NOW, THEREFORE, the parties hereto hereby agree as follows:

AGREEMENT

1. Sale and Issuance of Common Stock.

     1.1 Sale and Issuance of Shares. Subject to the terms and conditions of this
Agreement, Purchasers agree to purchase at the Closing and the Company agrees to sell, issue and
deliver to Purchasers at the Closing 20,520,903 shares of common stock, no par value per share, of
the Company (such shares to be so purchased, the “Shares”) allocated in accordance with
Schedule A.

     1.2 Payment for Shares. As payment in full for the Shares being acquired by
Purchasers hereunder, the Debt will be irrevocably deemed canceled and satisfied in full (the
“Purchase Price”). For the avoidance of doubt, the parties agree that no portion of the Shares is
being issued to a Purchaser for past, present or future services of any kind and the Company’s
obligation to close and the rights of the Purchasers to the Shares and retention of same are not
dependant upon the performance of Services by a Purchaser for any person.

2. The Closing. The consummation of the sale and purchase of the Shares (the “Closing”)
shall take place simultaneously with the Closing of the Private Placement offering led by Standard
Capital Securities Corporation and the repurchase of all outstanding shares of Series A-1 Preferred
Stock.

     2.1 Deliveries by Purchaser. At or before the Closing, Purchaser shall deliver the
following items to the Company:

     (i) a Subscription Application in the form attached hereto as Exhibit 1, duly
executed by each Purchaser;

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     (ii) the original of the Promissory Note, dated as of March 11, 2003, issued by Company to
the Group in the amount of Fifty Thousand Dollars ($50,000).

     (iii) this Agreement duly executed by each Purchaser.

     2.2 Deliveries by Company. At the Closing, Company shall deliver to each Purchaser a
stock certificate representing the Shares purchased as specified on Schedule A, duly
executed by the Company, against receipt by the Company of the Purchase Price therefore and a copy
of this Agreement duly executed by Company.

     2.3 Conditions to Closing. The Closing shall not take place until the following
conditions have been satisfied or waived:

     (i) the deliveries under sections 2.1 and 2.2 have been made; and

     (ii) all outstanding shares of Series A-1 Preferred Stock shall have been repurchased by the
Company.

3. Representations and Warranties of the Company. The Company hereby represents and
warrants to Purchaser as follows:

     3.1. Organization. The Company is duly organized, validly existing and in good
standing under the laws of the State of California and is qualified to conduct its business as a
foreign corporation in each jurisdiction where the failure to be so qualified would have a material
adverse effect on the Company.

     3.2. Authorization of Agreement, Etc. The execution, delivery and performance by the
Company of this Agreement and the Subscription Application (collectively, the “Financing
Documents”) have been duly authorized by all requisite corporate action of the Company; and this
Agreement has been duly executed and delivered by the Company. This Agreement, when executed and
delivered by the Company, constitutes the valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws affecting creditors’ rights
and remedies generally, and subject as to enforceability to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in equity).

     3.3. The Company agrees that the Purchasers will have the benefit of all the representations,
warranties and covenants given by the Company in the Subscription Agreements referred to in the
Agency Agreement between the Company and Standard Securities Capital Corporation and further agrees
that all such representations, warranties and covenants will be deemed to be incorporated herein as
if they were reproduced in their entirety, with such changes as are necessary in order to reflect
that such representations, warranties and covenants are being made by the Company to the Purchasers
herein.

4. Representations and Warranties of Purchasers. Each Purchaser hereby represents and
warrants to the Company as follows:

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     4.1. Authorization of the Documents. Purchaser has all requisite power and authority
(corporate or otherwise) to execute, deliver and perform the Financing Documents and the
transactions contemplated thereby, and each such Financing Document, when executed and delivered by
Purchaser, constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser
in accordance with its terms.

     4.2. Investment Representations. All of the representations, warranties and
information of each Purchaser provided in the Subscription Application are incorporated herein and
made a part hereof by this reference and shall be true at the Closing with the same effect as
though made at the Closing.

     4.3. U.S.A. Patriot Act Representations. Each Purchaser represents, warrants and covenants
that Purchaser:

          o (i)(a) is subscribing for the Common Stock for Purchaser’s own account, own risk and own
beneficial interest, (b) is not acting as an agent, representative, intermediary, nominee or in a
similar capacity for any other person or entity, nominee account or beneficial owner, whether a
natural person or entity (each such natural person or entity, an “Underlying Beneficial Owner”) and
no Underlying Beneficial Owner will have a beneficial or economic interest in the Common Stock
being purchased by Purchaser (whether directly or indirectly, including without limitation, through
any option, swap, forward or any other hedging or derivative transaction), (c) if it is an entity,
including, without limitation, a fund-of-funds, trust, pension plan or any other entity that is not
a natural person (each, an “Entity”), has carried out thorough due diligence as to and established
the identities of such Entity’s investors, directors, officers, trustees, beneficiaries and
grantors (to the extent applicable, each a “Related Person” of such Entity), holds the evidence of
such identities, will maintain all such evidence for at least five years from the date of
Purchaser’s resale or other disposition of all the Common Stock, will request such additional
information as the Company may require to verify such identities as may be required by applicable
law, and will make such information available to the Company upon its request, and (d) does not
have the intention or obligation to sell, pledge, distribute, assign or transfer all or a portion
of the Common Stock to any Underlying Beneficial Owner or any other person; or (check and
initial one box)

          o (ii)(a) is subscribing for the Common Stock as a record owner and will not have a beneficial
ownership interest in the Common Stock, (b) is acting as an agent, representative, intermediary,
nominee or in a similar capacity for one or more Underlying Beneficial Owners (as defined in
(A)(i)(a) above), and understands and acknowledges that the representations, warranties and
agreements made in the Financing Documents are made by Purchaser with respect to both Purchaser and
the Underlying Beneficial Owner(s), (c) has all requisite power and authority from the Underlying
Beneficial Owner(s) to execute and perform the obligations under the Subscription Application, (d)
has carried out thorough due diligence as to and established the identities of all Underlying
Beneficial Owners (and, if an Underlying Beneficial Owner is not a natural person, the identities
of such Underlying Beneficial Owner’s Related Persons (to the extent applicable)), holds the
evidence of such identities, will maintain all such evidence for at least five years from the date
of Purchaser’s resale or other disposition of all the Common Stock, and will make such information
available to the Company upon its request and (e) does not have the intention or obligation to
sell, pledge, distribute, assign or

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transfer all or a portion of the Common Stock to any person other than the Underlying
Beneficial Owner(s).

     (B) Purchaser hereby represents and warrants that the proposed investment in the Company that
is being made on its own behalf or, if applicable, on behalf of any Underlying Beneficial Owners
does not directly or indirectly contravene United States federal, state, local or international
laws or regulations applicable to Purchaser, including anti-money laundering laws (a “Prohibited
Investment”).

     (C) Federal regulations and Executive Orders administered by the U.S. Treasury Department’s
Office of Foreign Assets Control (“OFAC”) prohibit, among other things, the engagement in
transactions with, and the provision of services to, certain foreign countries, territories,
entities and individuals. The lists of OFAC prohibited countries, territories, persons and
entities can be found on the OFAC website at <www.treas.gov/ofac>. Purchaser hereby
represents and warrants that neither Purchaser nor, if applicable, any Underlying Beneficial Owner
or Related Person, is a country, territory, person or entity named on an OFAC list, nor is
Purchaser nor, if applicable, any Underlying Beneficial Owner or Related Person, a natural person
or entity with whom dealings are prohibited under any OFAC regulations.

     (D) Purchaser represents and warrants that neither Purchaser nor, if applicable, any
Underlying Beneficial Owner or Related Person, is a senior foreign political figure, or any
immediate family member or close associate of a senior foreign political figure within the meaning
of, and applicable guidance issued by the Department of the Treasury concerning, the U.S. Bank
Secrecy Act (31 U.S.C. §5311 et seq.), as amended, and any regulations promulgated thereunder.

     (E) Purchaser agrees promptly to notify the Company should Purchaser become aware of any
change in the information set forth in paragraphs (A) through (D).

     (F) Purchaser agrees to indemnify and hold harmless the Company, its affiliates, their
respective directors, officers, shareholders, employees, agents and representatives (each, an
“Indemnitee”) from and against any and all losses, liabilities, damages, penalties, costs, fees and
expenses (including legal fees and disbursements) (collectively, “Damages”) which may result,
directly or indirectly, from Purchaser’s misrepresentations or misstatements contained herein or
breaches hereof relating to paragraphs (A) through (D).

     (G) Purchaser understands and agrees that, notwithstanding anything to the contrary contained
in any document (including any side letters or similar agreements), if, following Purchaser’s
investment in the Company, it is discovered that the investment is or has become a Prohibited
Investment, such investment may immediately be redeemed by the Company or otherwise be subject to
the remedies required by law, and Purchaser shall have no claim against any Indemnitee for any form
of Damages as a result of such forced redemption or other action.

     (H) Upon the written request from the Company, Purchaser agrees to provide all information to
the Company to enable the Company to comply with all applicable anti-money laundering statutes,
rules, regulations and policies, including any policies applicable to a

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portfolio investment held or proposed to be held by the Company. Purchaser understands and
agrees that the Company may release confidential information about Purchaser and, if applicable,
any Underlying Beneficial Owner(s) or Related Person(s) to any person, if the Company, in its sole
discretion, determines that such disclosure is necessary to comply with applicable statutes, rules,
regulations and policies.

     4.5. Legal Counsel. Purchaser understands that the law firm of Richardson and Patel
LLP and its attorneys represent the Company and Purchaser has had the opportunity to retain its own
legal counsel in connection with transactions contemplated herewith.

     4.6. Risk Factors. Each Purchaser understands that its investment in the Shares
involves a high degree of risk.

     4.7. No Public Market. Each Purchaser acknowledges that there is not and may never
be a public market for the Shares. Thus, Purchaser realizes that it cannot expect to be able to
liquidate its investment in the Shares readily or at all.

     4.8. Restricted Stock. Purchaser understands and acknowledges that the Shares have
not been, and when issued will not be, registered with the Securities and Exchange Commission.
Further, the Purchaser understands and acknowledges that the certificates representing the Common
Stock, when issued, shall bear a restrictive legend as indicated in the Subscription Application.

     4.9. No Endorsement of Securities. The Buyer understands that no United States
Federal or state agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Shares.

     4.10. Due Diligence. Each Purchaser (i) has been provided with sufficient
information with respect to the business of the Company for the Purchaser to determine the
suitability of making an investment in the Company and such documents relating to the Company as
the Purchaser has requested and the Purchaser has carefully reviewed the same, (ii) has been
provided with such additional information with respect to the Company and its business and
financial condition as the Purchaser, or the Purchaser’s agent or attorney, has requested, and
(iii) has had access to management of the Company and the opportunity to discuss the information
provided by management of the Company and any questions that the Purchaser had with respect thereto
have been answered to the full satisfaction of the Purchaser.

     4.11. Investment Decision. Purchaser represents that, in connection with its
purchase of the Shares, it has conducted and concluded a due diligence investigation to its
satisfaction.

     4.12. Reliance on Representations and Warranties. Notwithstanding any contrary
provision in this Agreement including any exhibit hereto, no investigation or opportunity afforded
the Purchasers to conduct due diligence (nor any recital or provision of the NGTV Subscription
Application) shall in any way affect, or limit liability for, any representation, warranty or
covenant of the Company contained in this Agreement and Purchasers will be deemed to have relied
solely upon the representations, warranties and covenants contained in this Agreement (taking into
account paragraph 3.3. hereof), notwithstanding any contrary information that may have been
provided or made available to any Purchaser or any of

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Purchaser’s respective representatives or that any Purchaser discovered in the cause of any
such investigation either prior to or subsequent to the date of this Agreement.

     4.13. Assignment of Intellectual Property Rights. Purchaser agrees that he has no
right, title or interest of any kind in the trademarks, service marks or domain names “NG,” “NGTV”
and “No Good TV” or to any similar trademark, service mark or domain name relating to the business
of the Company.

5. Brokers and Finders. The Company shall not be obligated to pay any commission,
brokerage fee or finder’s fee based on any alleged agreement or understanding between Purchaser and
a third person in respect of the transactions contemplated hereby, except with respect to the
issuance of 3,648,971 shares of the Common Stock to Keith Stein. Purchaser hereby agrees to
indemnify the Company against any claim by any third person for any commission, brokerage or
finder’s fee or other payment with respect to this Agreement or the transactions contemplated
hereby based on any alleged agreement or understanding between Purchaser and such third person,
whether express or implied from the actions of Purchaser other than a claim by Mr. Stein for the
issuance of the aforementioned shares.

6. Indemnification. Each party to this Agreement hereby agrees to indemnify and defend
(with counsel acceptable to the Indemnitee) the other party and its officers, directors, employees
and agents and hold them harmless from and against any and all liability, loss, damage, cost or
expense, including costs and reasonable attorneys’ fees, incurred on account of or arising from any
breach of or inaccuracy in the indemnifying party’s representations, warranties or agreements
herein (taking into account 3.3. hereof).

7. Successors and Assigns. This Agreement shall bind and inure to the benefit of the
Company, Purchaser and their respective successors and assigns.

8. Entire Agreement. This Agreement and the other writings and agreements referred to in
this Agreement or delivered pursuant to this Agreement contain the entire understanding of the
parties with respect to the subject matter hereof and supersedes all prior agreements and
understandings, including but not limited to the LOU, among the parties with respect thereto.

9. Notices. All notices, demands and requests of any kind to be delivered to any party in
connection with this Agreement shall be in writing and shall be deemed to have been duly given if
personally delivered or if sent by internationally-recognized overnight courier or by registered or
certified mail, return receipt requested and postage prepaid, addressed to the Company at NGTV,
6310 San Vicente Boulevard, Suite 500, Los Angeles, CA 90048, Attention Jay Vir, with a copy to
Richardson & Patel LLP, 10900 Wilshire Blvd., Suite 500, Los Angeles, CA 90024, facsimile: (310)
208-1154, Attention: Addison Adams, Esq.; and if to Purchaser, to the address listed on
Schedule A, or to such other address as the party to whom notice is to be given may have
furnished to the other parties to this Agreement in writing in accordance with the provisions of
this Section. Any such notice or communication shall be deemed to have been received (i) in the
case of personal delivery, on the date of such delivery, (ii) in the case of
internationally-recognized overnight courier, on the next business day after the date when sent and
(iii) in the case of mailing, on the third business day following that on which the piece of mail
containing such communication is posted.

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10. Amendments. This Agreement may not be modified or amended, or any of the provisions of
this Agreement waived, except by written agreement of the Company and Purchaser.

11, Governing Law; Waiver of Jury Trial. All questions concerning the construction,
interpretation and validity of this Agreement shall be governed by and construed and enforced in
accordance with the domestic laws of California without giving effect to any choice or conflict of
law provision or rule (whether in the State of California or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of California. In
furtherance of the foregoing, the internal law of the State of California will control the
interpretation and construction of this Agreement, even if under such jurisdiction’s choice of law
or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily or
necessarily apply.

     BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY
AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE LAWS
TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT
OR ANY DOCUMENTS RELATED HERETO.

12. Submission to Jurisdiction. Any legal action or proceeding with respect to this
Agreement or the other Financing Documents must be brought in the courts of the State of California
or the United States of America located in the City of Los Angeles, California and, by execution
and delivery of this Agreement, the parties hereby accept for themselves and in respect to their
property, generally and unconditionally, the jurisdiction of the aforesaid courts. The parties
hereby irrevocably waive, in connection with any such action or proceeding, any objection,
including, without limitation, any objection to the venue or based on the grounds of forum
non-conveniens, which it may now or hereafter have to the bringing of any such action or proceeding
in such respective jurisdictions. The parties hereby irrevocably consent to the service of process
of any of the aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at its address as set forth herein.

13. Severability. It is the desire and intent of the parties that the provisions of this
Agreement be enforced to the fullest extent permissible under the law and public policies applied
in each jurisdiction in which enforcement is sought. Accordingly, in the event that any provision
of this Agreement would be held in any jurisdiction to be invalid, prohibited or unenforceable for
any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the
remaining provisions of this Agreement or affecting the validity or enforceability of such
provision in any jurisdiction. Notwithstanding the foregoing, if such provision could be more
narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall,
as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of

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this Agreement or affecting the validity or enforceability of such provision in any other
jurisdiction.

14. Independence of Agreements, Covenants, Representations and Warranties. All agreements
and covenants hereunder shall be given independent effect so that if a certain action or condition
constitutes a default under a certain agreement or covenant, the fact that such action or condition
is permitted by another agreement or covenant shall not affect the occurrence of such default,
unless expressly permitted under an exception to such covenant. In addition, all representations
and warranties hereunder shall be given independent effect so that if a particular representation
or warranty proves to be incorrect or is breached, the fact that another representation or warranty
concerning the same or similar subject matter is correct or is not breached will not affect the
incorrectness of or a breach of a representation and warranty hereunder. The exhibits and any
schedules attached hereto are hereby made part of this Agreement in all respects.

15. Counterparts. This Agreement may be executed in any number of counterparts, and each
such counterpart of this Agreement shall be deemed to be an original instrument, but all such
counterparts together shall constitute one agreement. Facsimile counterpart signatures to this
Agreement shall be acceptable and binding in the same manner as an original thereof.

16. Headings. Section and paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

17. Expenses. Purchaser shall pay Purchaser’s own fees and expenses incurred in connection
with the preparation, negotiation, execution and delivery of the Financing Documents.

18. Preparation of Agreement. Each party to this Agreement acknowledges that: (i) the
party had the advice of, or sufficient opportunity to obtain the advice of, legal counsel separate
and independent of legal counsel for any other party hereto; (ii) the terms of the transactions
contemplated by this Agreement are fair and reasonable to such party; and (iii) such party has
voluntarily entered into the transactions contemplated by this Agreement without duress or
coercion. Each party further acknowledges that such party was not represented by the legal counsel
of any other party hereto in connection with the transactions contemplated by this Agreement, nor
was he or it under any belief or understanding that such legal counsel was representing his or its
interests. Each party agrees that no conflict, omission or ambiguity in this Agreement, or the
interpretation thereof, shall be presumed, implied or otherwise construed against any other party
to this Agreement on the basis that such party was responsible for drafting this Agreement.

* * * * *

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     IN WITNESS WHEREOF, each of the undersigned has duly executed this Common Stock Purchase
Agreement as of the date first written above.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	“Company”	 	 
	 

	 	 	 	 	 	NGTV	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By: 
      /s/ Janak Vibhakar
 

	 	 
	 

	 	 	 	 	 	Name: 
Janak Vibhakar

	 	 
	 

	 	 	 	 	 	Title:   
President	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By: 
      /s/Kourosh Taj
 

	 	 
	 

	 	 	 	 	 	Name: 
Kourosh Taj

	 	 
	 

	 	 	 	 	 	Title: 
	 	 Chief Executive Officer	 	 
	“PURCHASERS”:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	RICHARD ABRAMSON LLC	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/  Richard Abramson	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	     Richard Abramson	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	GENE SIMMONS LLC	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Gene Simmons	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	     Gene Simmons	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Allan Brown	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	     Allan Brown	 	 	 	 	 	 	 	 

 

 

Schedule A

List of Purchasers

	 	 	 	 	 	 	 
	1.

	 	Richard Abramson LLC
	 	 	 	5,623,977 shares of Common Stock
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	2.

	 	Allan Brown
	 	 	 	5,623,977 shares of Common Stock
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	3.

	 	Gene Simmons LLC
	 	 	 	5,623,977 shares of Common Stock
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 
	 

	 	TOTAL:
	 	16,871,932 shares of Common Stock

 

 

EXHIBIT 1

EXECUTED SUBSCRIPTION APPLICATION – GENE SIMMONS, LLC

(see attached)

 

 

EXHIBIT 2

EXECUTED SUBSCRIPTION APPLICATION – RICHARD ABRAMSON, LLC

(see attached)

 

 

EXHIBIT 3

EXECUTED SUBSCRIPTION APPLICATION – ALLAN BROWN

(see attached)exv4w21

 

Exhibit 4.21

10% Convertible Promissory Note

			
	$«Amount»
	 	«Date»

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

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

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

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

 

 

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

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

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

 

 

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

     4. Events of Default.

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

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

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

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

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

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

 

 

Holder shall be required, and the Post-Maturity Warrant shall be forthwith issued to the
Holder. The Holder need not provide and Company hereby waives any presentment, demand, protest or
other notice of any kind, and the Holder may immediately and without expiration of any grace period
enforce any and all of its rights and remedies hereunder and all other remedies available to it
under applicable law, provided, however, that any default susceptible of being cured, other than a
default under Section 4(a)(i), above, must first be given written notice to Company of the specific
nature of the default and the manner in which the default may be cured, in which case the Company
shall have a 30 day period to cure the default (except for a default under Section 4(a)(ii), above,
for which the cure period shall be five days). Such default notice may be rescinded and annulled by
Holder at any time prior to payment hereunder. No such rescission or annulment shall affect any
subsequent Event of Default or impair any right consequent thereon.

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

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

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

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

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

 

 

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

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

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

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

     13. Governing Law. The Company, and by acceptance of this Note the Holder, hereby:
(a) agree that all questions concerning the construction, validity, enforcement and interpretation
of this Note shall be governed by and construed and enforced in accordance with the internal laws
of the State of Florida, without regard to the principles of conflicts of law thereof; (b) agree
that all legal proceedings concerning the interpretations, enforcement and defense of this Note
shall be commenced in the Courts of the State of Florida or the courts of the United States of
America for the State of Florida, in each case located in Palm Beach County, Florida, and appellate
courts from any thereof (the “Florida Courts”); (c) irrevocably submit to the exclusive
jurisdiction of the Florida Courts for the adjudication of any dispute hereunder (including with
respect to the enforcement of this Note); (d) irrevocably waive and agree not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any
of such Florida Courts, or that such suit, action or proceeding is improper; (e) irrevocably waive
personal service of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to the other at the address in effect for notices to it under this Note and
agrees that such service shall constitute good and sufficient service of process and notice thereof
(nothing contained herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law); and (f) irrevocably waive, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Note or the transactions contemplated hereby.

 

 

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

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

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

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

	 	 	 	 	 
	Dated: «Date»
	 	 	 	 
	 
	 	 	 	 
	 	 	NGTV
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Jay Vir, Co-President and Secretary

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