Document:

Unassociated Document

    Text
      marked by “*” has been omitted pursuant to a request for confidential treatment
      and was filed separately with the Securities and Exchange
      Commission.

    

    

    

    DISTRIBUTION
      AGREEMENT

     

    

    This
      DISTRIBUTION AGREEMENT (the “Agreement”) is
      entered into with an effective date of the 5th day of June, 2008 by and between
      PLAYERS NETWORK, INC., a Nevada corporation (“PNTV”) and MICROPLAY, INC., a
      Nevada corporation in formation, (the “Distributor”).
      PNTV and Distributor are collectively the “Parties”. 

     

    WHEREAS,
      PNTV
      owns the proprietary content, services and brand names more particularly
      described and set forth on Exhibit “A” hereto and referred to hereafter as the
“PNTV Content”; and 

     

    WHEREAS,
      Distributor desires to acquire from PNTV, and PNTV desires to grant to
      Distributor, the distribution rights for the PNTV Content on the specific terms
      set forth herein; 

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual agreements set forth herein, the Parties agree
      as
      follows:

     

    1. TERM.
      The
      initial term (the “Initial Term”) of this Agreement shall be for three years.
      Commencing in year two the Parties agree to enter into good faith negotiations
      to renew the Agreement under substantially the same terms and conditions
      described herein for one additional term (the “Renewal Term”). 

     

    2. CLOSING;
      COUNTERPARTS; FAXES.
      The
      consummation of this Agreement will take place by the execution of documents
      by
      the appropriate and designated signatories in two or more counterparts, each
      of
      which shall be deemed an original, but all of which together shall constitute
      one and the same instrument, and upon consummation of the $2,000,000 equity
      financing contemplated by Distributor herein (the “Financing”)(the “Closing”). This
      Agreement
      may also be executed via facsimile, which shall be deemed an
      original.

     

    3. GRANT
      OF DISTRIBUTORSHIP.
      PNTV
      hereby grants the Distributor the following distribution rights (the
“Distribution Rights”) as follows: 

     

    3.1
       Exclusive,
      worldwide distribution rights to PNTV’s proprietary content and brand name (the
“Content”) via all mobile devices including but not limited to all devices
      connected to any wireless network(s). The grant of right of right as described
      above via “any wireless network(s)” shall under no circumstances supersede the
      non-mobile exclusions defined in 3.2 below.

     

    3.2
       Exclusive,
      worldwide distribution rights to the Content on all non-English-speaking IP
      platforms, excluding only Content to be received on TV sets (“TV Delivery”),
      PNTV’s owned and operated websites, affiliates or subscribers carrying PNTV’s
      content and/or channel on platforms other than mobile, such mobile right shall
      remain exclusive to Distributor, and North American partners on websites such
      as
      Google Video and Blinkx now or in the future except as agreed herein. The
      Parties acknowledge that websites such as Google Video and Blinkx can be viewed
      worldwide and PNTV has no control over who views it in which countries around
      the world. Such viewing will not be considered a breach of this Agreement.
      It is
      expressly agreed and understood between the Parties hereto that PNTV is
      prohibited from entering into any agreement or arrangement with any other
      parties (besides the Distributor) regarding the distribution of the Content
      in
      the exclusive fields of use granted herein to Distributor, without the express,
      written permission of Distributor, or except as otherwise provided and agreed
      to
      by the Parties herein.

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    3.3
       Exclusive
      worldwide distribution rights to the Content on all MicroPlay’s English-speaking
      IP platforms.

     

    It
      is
      understood that PNTV retains all rights not specifically granted herein to
      all
      other Fields of Use. Nothing herein shall be construed to limit PNTV’s
      advertising or promotion of its own products and services. It is further
      understood that Distributor acquires no ownership rights in the PNTV Content
      or
      any portion thereof, whether now existing or later created, except as provided
      herein, but rather only the right to use and distribute the PNTV Content as
      specified herein. 

     

    The
      costs
      of repurposing and delivery of the Content shall be financed by Distributor
      and
      recouped by Distributor pursuant to the Revenue Share. All such costs to be
      approved in advance in writing by Distributor. Such costs shall be billed by
      PNTV to Distributor, 50% due upon approval of the specific project by
      Distributor and 50% in arrears within 30 days of billing. 

     

    With
      regard to the future production or acquisition of PNTV Content, Distributor
      shall have the right to distribute any such new PNTV Content pursuant to the
      terms of this Agreement, provided Distributor pays 30% of the final, verifiable
      production budget(s) (the “Budget”) or acquisition costs for all such content.
      In the event that Players Network functions as a production company as a work
      for hire, of if a third party, such as a sponsor or distributor, (the “Third
      Party”) elects to finance the production or acquisition of specific content
      (“Individual Content”), then PNTV shall offer Distributor the right of first
      refusal to finance 30% of the Budget of the Individual Content subject to the
      following: (i) If Distributor elects to exercise its right of first refusal
      to
      finance 30% of the Budget, Distributor acknowledges that it may be above and
      beyond the Budget if the Third Party finances more that 70% and/or up to 100%
      of
      the Budget. In that case PNTV shall retain any overages, and Distributor will
      retain its 30% ownership in perpetuity of PNTV’s share of the applicable
      Individual Content, and Distributor shall have the exclusive right to distribute
      such Individual Content as provided herein. PNTV shall use reasonable efforts
      to
      get the Third Party to grant Distributor distribution rights to the Individual
      Content. (ii) in this scenario, if  Distributor
      declines its right of first refusal and elects not to finance the Individual
      Content, Distributor will nevertheless retain its exclusive distribution rights
      as provided herein. PNTV shall use reasonable efforts to get the Third Party
      to
      grant Distributor distribution rights. If Distributor declines its right of
      first refusal and elects not to finance 30% of the Budget, Distributor shall
      have no ownership interests in that Individual Content. 

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

      Text
        marked by “*” has been omitted pursuant to a request for confidential treatment
        and was filed separately with the Securities and Exchange
        Commission.

       

    

    Only
      in
      the event a Third Party finances a project 100% in a work for hire project
      and
      is not subject to the rights granted to Distributor herein, then the
      distribution of that content may be subject to Third Party
      approval.

     

    Commencing
      from the date of Closing of this Agreement, all rights of first refusal granted
      herein by PNTV to Distributor shall have a seventeen (17) business day time
      limit (the “Time Limit”). If Distributor does not exercise its right of first
      refusal in writing within the Time Limit, then the opportunity shall be deemed
      refused. If the project being presented by PNTV to Distributor has a shorter
      time limit than 17 business days based on the verifiable requirements of a
      third
      party (i.e. a show is opening in 10 days and the producer wants PNTV to cover
      the opening) then the Time Limit shall be reduced to the actual time between
      offering Distributor the right of first refusal and the locked-in first day
      of
      if necessary execution. 

     

    Distributor
      shall provide a Production Fund (the “Fund”) (initial amount to be determined at
      the sole discretion of Distributor) that PNTV can draw down on to cover
      Distributor’s 30% share of the costs of such future PNTV Content. Distributor
      may elect to replenish the Fund at its sole determination. 

     

    If
      Distributor elects not to finance 30% of certain new content (“Nonfinanced
      Content”), then it will not have the right to distribute that new content as
      provided herein, unless otherwise agreed in writing between the Parties hereto
      or as previously provided for in this Section 3 regarding Third Party and
      Individual Content. 

     

    4. MARKETING.  PNTV
      and
      Distributor shall act in good faith to enter into a co-operative agreement
      to
      cross-market and cross-promote their respective brand(s) and business
      interest(s) on each company’s platforms, including any international television
      and mobile platforms each company controls now or in the future. 

     

    5.  CONSIDERATION.
      As
      consideration for PNTV
      being the exclusive content provider and/or aggregator of Las Vegas and Gaming
      Lifestyle programming to Distributor, and as partial consideration for the
      grant
      of the Distributorship herein, Distributor shall issue to PNTV * Shares of
      Common Stock of Distributor (the “PNTV Shares”) which, upon issuance, shall
      represent *% of the issued and outstanding Common Stock of Distributor on a
      fully diluted basis. Distributor agrees that it may, at its * * and at its
      * *,
      * any * of the PNTV Shares for * * with the * * * * * on a * *. Notwithstanding
      the foregoing, in the event that Distributor elects to * any of the * of
      Distributor owned by its founding shareholders, Distributor shall * that number
      of the * * equal on a *-* * as those * being * by the founding 
shareholders.
      In the event that MicroPlay is * *, up to a maximum of *% of the * * may be
      * by
      PNTV to PNTV’s shareholders as a * at Distributor’s * * and at Distributor’s *
      *. 

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      Text
        marked by “*” has been omitted pursuant to a request for confidential treatment
        and was filed separately with the Securities and Exchange
        Commission.

       

    

    PNTV
      shall receive 40% of the adjusted gross revenues received by Distributor in
      connection with the Distribution Rights granted in Section 3 herein, (the
“Revenue Share”). The Revenue Share is defined as gross revenues derived
      directly from the distribution of the Content, less third party fees including
      applicable taxes and revenue participations. Revenue participants shall be
      subject to mutual approvals of the Parties in advance, such approvals not to
      be
      unreasonably withheld. 

     

    Any
      deal
      involving packaging or bundling of the Content as
      part
      of a Premium Package including but not limited to Membership Clubs, Site
      Subscription fees, or other revenue generating packages of content and/or games
      and/or discounted services, etc. (a “Package”) on any of Distributor’s
      platforms, or subdistributed or sublicensed to third parties including YuuZoo,
      shall be subject, on a case by case basis, to PNTV’s pre-approval, if it is not
      within the terms of the Distribution Rights granted herein, such approval not
      to
      be unreasonably withheld. PNTV and Distributor shall also use reasonable efforts
      to negotiate an equitable Revenue Share on each Package consistent with the
      intent of this Agreement. 

     

    All
      promotions, sweepstakes, merchandising or other revenue-generated ancillary
      business opportunities (the “Ancillary Opportunities”) promoted by, marketed in,
      or attached to the Content, shall
      be
      subject, on a case by case basis, to PNTV’s pre-approval if it is not within the
      terms of the Distribution Rights granted herein, such approval not to be
      unreasonably withheld. PNTV and Distributor shall also use reasonable efforts
      to
      negotiate an equitable Revenue Share for such Ancillary Opportunities consistent
      with the intent of this Agreement. 

     

    All
      distribution, subdistribution, licensing or sublicensing of the Content, Package
      or Ancillary Opportunity to any third parties including YuuZoo, shall be
      subject, on a case by case basis, to PNTV’s pre-approval if it is not within the
      terms of Distribution Rights granted herein, such approval not to be
      unreasonable withheld. PNTV and Distributor shall also use reasonable efforts
      to
      negotiate an equitable Revenue Share for such distribution, subdistribution,
      licensing or sublicensing consistent with the intent of this Agreement.

     

    All
      approval rights granted herein by Distributor to PNTV shall have a twenty-one
      (21) day time limit (the “Time Limit”). If PNTV does not exercise its approval
      right in writing within the Time Limit, then the opportunity shall be deemed
      approved. Notwithstanding the aforesaid, if the project being presented to
      PNTV
      by Distributor for approval has a shorter time limit than 21 days based on
      the
      verifiable requirements of a third party, then the Time Limit shall be reduced
      to the actual time between offering PNTV its right of approval and the locked-in
      first day of necessary execution less two days. PNTV agrees and acknowledges
      that it is not entitled to share in any of Distributor’s revenues generated on
      any platform from the PlaySpace including Real Play. 

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    Text
      marked by “*” has been omitted pursuant to a request for confidential treatment
      and was filed separately with the Securities and Exchange
      Commission.

     

    Upon
      Request, Distributor shall supply games in the Play For Fun space only to PNTV
      for its owned and operated website only. In exchange, PNTV shall promote to
      its
      website visitors that if they want to play these games as Real Play, they should
      go to Distributor’s IP or mobile site, and when possible, provide a link to
      Distributor’s site, subject to legal restrictions.

     

    It
      is the
      intention between the Parties hereto that all calculations be calculated in
      accordance with General Accepted Accounting Principals (GAAP)

     

    In
      order
      to maintain its distribution rights, Distributor agrees that Distributor shall
      pay PNTV an Annual Minimum Guarantee as an advance against Players Network’s
      Revenue Share as set forth herein:

     

    
      	 	
              5.1

            	
              During
                the first year of the Agreement, the aggregate amount due pursuant
                to the
                Annual Minimum Guarantee shall be $425,000, payable as follows:
                

            

    

     

    
      	
            	a.	
              *
                within * days of: 

            

    

     

    
      	 	
              i)

            	
              Completion
                of investment into Distributor in the aggregate of *
                

            

    

     

    
      	 	
              ii)
                

            	
              90
                days after the date of Closing.

            

    

     

    
      	 	
              b.

            	
              *
                equal payments of * on the last day of each calendar quarter or 3-month
                period commencing 90 days from the date of
                Closing.

            

    

     

    
      	 	
              5.2

            	
              Thereafter,
                the Annual Minimum Guarantee shall be paid for the duration of the
                Initial
                Term. The Parties agree to negotiate in good faith the Annual Minimum
                Guarantee for the Renewal Term(s), if any, with *% of the annual
                amount to
                be payable upon the last day of each calendar
                quarter.

            

    

     

    
      	 	
              5.3

            	
              Within
                90 days after the end of each *-* (yearly) period, PNTV will receive
                an
                audited accounting of Distributor’s revenues and shall receive whatever
                amount, if any, of its Revenue Share that exceeds the Annual Minimum
                Guarantee.

            

    

     

    
      
        
          	
                	5.4	
                  PNTV
                    or
                    its designated auditor shall have the right, upon reasonable
                    written
                    notice, during normal business hours, to inspect the Distributor’s
                    books
                    and records and other documents and material in Distributor’s
                    possession
                    or control to determine the amount of the revenue payable under
                    this
                    Agreement. PNTV
                    shall
                    bear the expense of an audit with the exception of instances
                    where the
                    Distributor
                    is
                    found, through such an audit, to be in violation of this Agreement.
                    In
                    such instances, Distributor
                    will
                    be invoiced, and shall pay the invoiced amount to PNTV within
                    30 days, for
                    all time, travel and material costs associated with the audit.
                    Audits
                    shall be conducted during regular business hours at Distributor’s
                    facilities
                    and shall not unreasonably interfere with Distributor's
                    business. Audits shall be conducted no more than one time per
                    one year
                    period. Distributor
                    shall
                    within 30 days immediately pay any overdue adjustments to the
                    Revenue
                    Proceeds revealed by such audit. In the event that PNTV engages
                    a third
                    party to perform the audit, such auditor shall be from a nationally
                    recognized certified public accounting firm and such third party
                    auditor
                    shall be subject to reasonable restrictions regarding confidential
                    information.

                

        

      

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    Text
      marked by “*” has been omitted pursuant to a request for confidential treatment
      and was filed separately with the Securities and Exchange
      Commission.

     

    
      	 	
              5.5

            	
              PNTV
                shall use its reasonable efforts to assist in developing and producing
                a
                VOD or otherwise Television Channel for YuuPlay or Distributor (the
“Non
                PNTV Content”), and to receive compensation for such development and
                producing services as negotiated in good faith between the Parties,
                or as
                agreed to in other signed documents, such as consulting agreements,
                between the Parties. Upon agreement to compensation for the above
                referenced services, PNTV shall facilitate introductions to its
                distribution partners. 

            

    

     

    
      	 	
              5.6

            	
              The
                Parties anticipate that they will cooperate on additional business
                development matters and Content development matters which may not
                be
                covered by this Agreement (“Non-Covered Opportunities”), and the Parties
                do agree hereby to act in good faith to enter into agreements covering
                such Non-Covered Opportunities as they may arise from time to time
                during
                the Initial or Renewal Term(s) (if any). PNTV will receive a minimum
                of *%
                of Revenue Share received by Distributor on such consummated Non-Covered
                Opportunities deals brought to Distributor by PNTV as defined in
                this
                paragraph 5.6. Reciprocally, Distributor will receive a minimum of
                *% of
                Revenue Share received by PNTV on such consummated Non-Covered
                Opportunities deals brought to PNTV by Distributor as defined in
                this
                paragraph 5.6.

            

    

     

    6. ADDITIONAL
      CONTEMPLATED SERVICES. PNTV
      or
      its individual principals or employees shall, subject to the execution of a
      separate definitive agreement to be negotiated in good faith within 6 weeks
      of
      the execution of this Agreement, perform services such as that of the
      programming department of Distributor including content management and
      aggregation, production, scheduling, encoding, metadata, thumbnails, delivery
      to
      Distributor’s head end, execution of rights agreements, and the creative
      direction of Distributor’s channels. Also subject to the execution of a separate
      definitive agreement to be negotiated in good faith within 6 weeks of the
      execution of this Agreement, PNTV shall provide Distributor office space and
      services that function as Distributor’s headquarters in Las Vegas, Nevada. PNTV
      shall have the right of first refusal to provide the programming department
      services contemplated in this paragraph 6 to Distributor. 

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    Text
      marked by “*” has been omitted pursuant to a request for confidential treatment
      and was filed separately with the Securities and Exchange
      Commission.

     

    7.
       BOARD
      OF DIRECTORS. PNTV
      will
      be granted one seat on Distributor’s Board of Directors based on a five-person
      (or less) Board, with Players Network receiving one additional Board seat on
      a
      six or seven-person Board and a third Board seat on an eight or nine person
      Board. Mark Bradley shall fill PNTV’s first Board seat. Any additional PNTV
      Board seat designees shall be subject to Distributor’s reasonable approval. PNTV
      shall make all reasonable efforts to see that * * fills the second PNTV Board
      seat subject to * * acceptance.

     

    8. RIGHTS
      OF FIRST REFUSAL. As
      set
      forth below, PNTV shall grant the right to Distributor to be PNTV’s exclusive
      partner in any activity in the fun and real play business space (“PlaySpace”).
      As such, PNTV shall be required to offer to Distributor the right of first
      refusal during the Initial Term and Renewal Term(s) (if any) of this Agreement
      in the following situations:

     

    
      	 	
              8.1.

            	
              If
                PNTV develops a business opportunity in the PlaySpace with a third
                party,
                and PNTV does not control the right to provide Distributor with an
                exclusive partnership in that specific PlaySpace, PNTV shall nevertheless
                honor Distributor’s right of first refusal and present the opportunity
                first to Distributor. Distributor shall accept or decline its right
                of
                first refusal, or enter into a negotiation with the third party within
                the
                Time Limit. 

            

    

     

    If
      Distributor declines, or is unable to successfully negotiate a deal with the
      third party, or exceeds the Time Limit without making a decision or initiating
      a
      negotiation, then PNTV shall be free to enter into an agreement directly with
      the third party. If, under these circumstances, PNTV enters into an agreement
      directly with a third party, PNTV will still use all reasonable efforts with
      the
      third party to provide Distributor with access to the goods, services or
      technology provided by the third party, subject to the third party’s sole
      determination. In any case, PNTV will exploit the goods, services or technology
      only on the excluded platforms defined in point 3.2. PNTV will not subdistribute
      or sublicense the goods, services or technology to any other third
      party

     

    If
      Distributor enters into a transaction with the third party brought to
      Distributor by PNTV or an individual, PNTV shall also be able to use the goods;
      services or technology provided by the third party on PNTV’s excluded platforms
      as defined in 3.2 on the same terms accepted by Distributor without any markup.
      

     

    If
      Distributor enters into a transaction with the third party brought to
      Distributor by PNTV or an individual, then PNTV and/or the individual who
      brought the deal to Distributor shall be entitled to a “Finder’s Fee” as defined
      in point 5.6 above or as otherwise agreed by the Parties hereto.

     

    
      	 	
              8.2

            	
              If
                PNTV desires to offer fun play or real play games on its excluded
                platforms as defined in 3.2, then PNTV must offer Distributor the
                right of
                first refusal to provide those games to PNTV. Distributor must act
                within
                the Time Limit to subdistribute or sublicense those games to PNTV
                subject
                to Distributor’s ability to provide such games on commercial terms and
                conditions which are as good as or better than those otherwise available
                in the market, such determination to be made mutually, acting reasonably
                and in good faith. If Distributor cannot provide PNTV with a requested
                game(s) on the commercial terms and conditions as stated above, PNTV
                may
                acquire those games from a third party. PNTV will not subdistribute
                or
                sublicense any games whether acquired from Distributor or a third
                party to
                any other third parties, and will only exploit the games on the excluded
                platforms defined in 3.2.

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	 	
              8.3.

            	
              To
                market and distribute, on a most favored nation basis, all PNTV generated
                mobile sweepstakes and merchandising programs which are gaming and
                or
                PlaySpace related, provided that Distributor acts jointly with PNTV
                to
                market such programs over Distributor’s network. In such instances, the
                Parties shall share all net profits from such programs 50/50 This
                right of
                first refusal is further subject to Distributor’s ability to deliver, as
                of the date of the joint project, current, state-of-the-art mobile
                marketing and distribution technology, all as determined mutually,
                acting
                reasonably and in good faith. 

            

    

     

     

    
      	
            	8.4	
              Distributor
                is hereby granted the right of first refusal on the following three
                programs PNTV currently has in development: “Celebrity Bingo On Demand”,
                “Playboy’s Women of Poker”, “Playboy’s School of Gaming”, subject to the
                Time Limit.

            

    

     

     

    9.
      REPRESENTATIONS AND WARRANTIES BY PNTV.
      PNTV
      represents and warrants to Distributor as follows:

    

    
      	
            	9.1	
              ORGANIZATION,
                STANDING AND QUALIFICATION. PNTV is a corporation duly organized,
                validly
                existing and in good standing under the laws of the State of Nevada.
                PNTV
                has all requisite power and authority and is entitled to carry on
                its
                business as now being conducted and to own, lease or operate its
                properties as and in the places where such business is now
                conducted.

            

    

    

    
      	
            	9.2	
              EXECUTION
                AND PERFORMANCE OF AGREEMENT; AUTHORITY. The performance of this
                Agreement
                by PNTV will not result in a default or breach of any other agreement
                to
                which PNTV is a party. PNTV and the signatories for PNTV have the
                authority to enter into this
                Agreement.

            

    

    

    
      	
            	9.3	
              LITIGATION.
                To PNTV’s management’s actual knowledge, there is no claim, order,
                investigation or other proceeding against PNTV, its employees, its
                properties, or business or the transactions contemplated by this
                Agreement.

            

    

    

    
      	
            	9.4	
              COMPLIANCE
                WITH LAWS AND OTHER INSTRUMENTS. To PNTV's actual knowledge, PNTV
                has
                complied with all laws applicable to its business and the ownership
                and
                use of PNTV's Content and, to PNTV's actual knowledge, the conduct
                of its
                business does not conflict with the rights of any other person or
                entity,
                and does not cause a default under any agreement to which PNTV is
                a party.
                PNTV is not actually aware of any proposed laws, condemnations or
                other
                proceedings which would affect its business or the PNTV
                Content.

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
            	9.5	
              TITLE
                TO PROPERTIES. To PNTV’s actual knowledge, PNTV has good title to the PNTV
                Content. None of the PNTV Content is subject to any lien, lease,
                license,
                or adverse claim except (i) as expressly set forth in the schedules
                attached to this Agreement, or (ii) insubstantial imperfections of
                title
                which have arisen in the ordinary course of business. To PNTV's actual
                knowledge, except as set forth in the schedules attached to this
                Agreement, the PNTV Content is in good operating condition and repair,
                is
                suitable for the purposes used, and are adequate for all current
                operations of PNTV and for the uses as contemplated by MicroPlay
                Inc.
                herein.

            

    

    

    
      	
            	9.6	
              DISCLOSURE.
                All of PNTV's representations made in this Agreement and its related
                documents are true and contain no untrue statements and do not omit
                material facts. 

            

    

    

    10.
      REPRESENTATIONS AND WARRANTIES BY DISTRIBUTOR.
      Upon
      formation of MicroPlay, Inc., and prior to Closing, distributor will represent
      and warrant to PNTV the following:

    

    
      	
            	10.1	
              ORGANIZATION.
                Distributor is a corporation duly organized, validly existing and
                in good
                standing under the laws of the State of Nevada. Distributor has all
                requisite power and authority and is entitled to carry on its business
                as
                now being conducted and to own, lease or operate its properties as
                and in
                the places where such business is now
                conducted.

            

    

    

    
      	
            	10.2	
              AUTHORIZATION
                AND APPROVAL OF AGREEMENT. All actions required to be taken by Distributor
                relating to the signing of this Agreement shall have been taken at
                or
                prior to the Closing as described
                herein.

            

    

    

    
      	
            	10.3	
              EXECUTION
                AND PERFORMANCE OF AGREEMENT. The performance of this Agreement by
                Distributor will not result in a default or breach of any other agreement
                to which Distributor is a party. Distributor and the signatories
                for
                Distributor have the authority to enter into this
                Agreement.

            

    

    

    
      	
            	10.4	
              LITIGATION.
                There is no claim, order, investigation or other proceeding against
                Distributor, its employees, its properties, or business or the
                transactions contemplated by this Agreement, and Distributor has
                no
                knowledge of the same.

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    Text
      marked by “*” has been omitted pursuant to a request for confidential treatment
      and was filed separately with the Securities and Exchange
      Commission.

    

    
      	 	
              10.5
                

            	
              COMPLIANCE
                WITH LAWS AND OTHER INSTRUMENTS. Distributor has complied with all
                laws
                applicable to its business and the ownership and the conduct of its
                business does not conflict with the rights of any other person or
                entity,
                and does not cause a default under any agreement to which Distributor
                is a
                party. Distributor is not aware of any proposed laws, condemnations
                or
                other proceedings which would affect its business or
                Content.

            

    

    

    
      	
            	10.6	
              DISCLOSURE.
                All of Distributor’s representations made in this Agreement and its
                related documents are true and contain no untrue statements and do
                not
                omit material facts.

            

    

    

    
      	
            	10.7	
              During
                the last two years no officer or director: (i) has had a petition
                under
                the federal bankruptcy laws or any state insolvency law filed by
                or
                against him, or a receiver, fiscal agent or similar officer appointed
                by a
                court for his business or property, or for any partnership in which
                he was
                a general partner at (or within two years before the time of such
                filing),
                or for any corporation or business association of which he was an
                executive officer at (or within two years before the time of such
                filing);
                (ii) was convicted in a criminal proceeding or was a named subject
                of a
                pending criminal proceeding (excluding traffic violations and other
                minor
                offenses); (iii) was the subject of any order, judgment or decree,
                not
                subsequently reversed, suspended or vacated, of any court of competent
                jurisdiction permanently or temporarily enjoining it from, or otherwise
                limiting, his involvement in any type of business, securities or
                banking
                activities; or (iv) was found by a court of competent jurisdiction
                in a
                civil action or by the SEC or the Commodities Futures Trading Commission
                to have violated any federal or state securities law, and the judgment
                in
                such civil action or finding by the SEC or the Commodities Futures
                Trading
                Commission has not been subsequently reversed, suspended or
                vacated.

            

    

    

    
      	 	
              10.8
                

            	
              The
                authorized capital stock of Distributor consists of * shares of common
                stock, * * * * *, of which * shares are issued and outstanding and
                held
                beneficially and of record by the Shareholders in the amounts set
                forth on
                Exhibit “B” hereto and as of the date of Closing. The Shares constitute
                all of the issued and outstanding capital stock of Distributor, and
                all of
                the Shares are validly issued, fully paid, nonassessable, and have
                been so
                issued in full compliance with all applicable federal and state securities
                laws. Except as set forth on Exhibit “B” and as of the Closing, there are
                no outstanding subscriptions, options, rights, warrants, convertible
                securities or other agreements or commitments providing for the issuance,
                disposition or acquisition of any of Distributor capital stock (other
                than
                this Agreement). 

            

    

    

    11.
      ACCESS TO INFORMATION AND DOCUMENTS.
      Upon
      either party’s request, the other party shall promptly provide the requesting
      party access to its personnel and all its properties, documents and records
      and
      shall furnish copies of documents requested by the requesting party.
      Notwithstanding the foregoing, neither party shall request documents which
      are
      otherwise available in the public domain and no party shall have an obligation
      to provide, or be deemed to be in breach of this Agreement for failing to
      provide, documents otherwise available in the public domain.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    12.
      CONDITIONS PRECEDENT TO EACH PARTY’S OBLIGATIONS.
      All
      obligations of each party under this Agreement are subject to, at such party’s
      option, each of the following conditions at or prior to the Closing, and the
      other party shall use its best efforts to cause each condition to be
      fulfilled:

    

    
      	
            	12.1	
              All
                representations of each party in this Agreement or the related documents
                shall be correct when made and shall be deemed to have been made
                again as
                of the Closing, and shall then be correct except for changes allowed
                under
                the terms of this Agreement.

            

    

    

    
      	
            	12.2	
              All
                duties required by this Agreement to be performed by a party at or
                before
                the Closing shall be performed.

            

    

    

    
      	
            	12.3	
              Since
                the date of this Agreement there shall be no material adverse change
                in
                the condition of the PNTV Content or its business or in the condition
                of
                Distributor’s business and
                operations.

            

    

    

    
      	
            	12.4	
              All
                documents required to be delivered at or prior to the Closing shall
                be
                delivered.

            

    

    

    13.
      FINANCING
      CONDITION

    

    The
      consummation of the Financing in a minimum aggregate amount of $2,000,000 on
      behalf of Distributor contemplated herein is a condition precedent to the
      Closing Furthermore it is agreed by the Parties hereto that in the event that
      the marketing and distribution commitment by YuuZoo to MicroPlay Inc is
      terminated, then this agreement shall be null and void.

     

    14.
       NATURE
      AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
      All
      representations and warranties contained in this Agreement shall survive the
      Closing.

    

    15.
       NOTICES.
      Any
      notices described under this Agreement shall be in writing and shall be deemed
      given when personally delivered or mailed by first class registered mail, return
      receipt requested, addressed to the Parties at the addresses set forth
      above.

    

    

    16. TERMINATION
      FOR BREACH 

    

    Either
      Party may terminate this Agreement upon a material breach by the other Party
      as specified
      in points A.
      through
I.
      below,
      if the breaching Party does not cure the breach within thirty (30) days of
      a
      written notice from the non-breaching Party below. The consequences of
      Termination are governed by the tenets provided in 15.1, 15.2, and 15.3
      below:

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    
      	 	
              A.

            	
              The
                other Party becomes insolvent;

            

    

    
      	 	
              B.

            	
              The
                other Party ceases to pay its debts in the ordinary course of
                business;

            

    

    
      	 	
              C.

            	
              The
                other Party is unable to pay its debts as they become
                due;

            

    

    
      	 	
              D.

            	
              The
                other Party makes an assignment for the benefit of creditors;
                

            

    

    
      	 	
              E.

            	
              A
                trustee or receiver is appointed for all or any of the assets of
                the other
                Party; 

            

    

    
      	 	
              F.

            	
              Any
                bankruptcy or insolvency proceedings are commenced by or against
                the other
                Party; 

            

    

    
      	 	
              G.

            	
              The
                other Party is involuntarily dissolved or liquidated;
                

            

    

    
      	 	
              H.

            	
              Distributor
                fails to pay PNTV within the specified time frame, and such failure
                to pay
                remains uncured for 30 days after PNTV provides written notice to
                Distributor of such failure; 

            

    

    
      	 	
              I.

            	
              PNTV
                fails to deliver the PNTV Content and such failure remains uncured
                for 30
                days after Distributor provides written notice to PNTV of such failure.
                

            

    

    

    
      	 	
              16.1

            	
              In
                the event of termination by PNTV due to an uncured Breach by Distributor,
                Distributor shall immediately cease and desist from any and all further
                use and distribution of the PNTV Content. In addition, termination
                by PNTV
                due to an uncured Breach by Distributor of point H.
                above, Distributor’s obligation to continue paying PNTV the Annual Minimum
                Guarantee shall remain in full force for the duration of the Initial
                Term,
                or if in a Renewal Term, for the duration of that Renewal Term, subject
                only to PNTV not also being in Breach as described in points A.
                through G.
                or
                Point I.
                For clarity, Distributor acknowledges that it cannot escape its
                contractual obligations to pay the Annual Minimum Guarantee and Revenue
                Share contained in this agreement by breaching and not curing point
                I.
                above.

            

    

    

    
      	 	
              16.2
                

            	
              In
                the event of termination by Distributor due to an uncured Breach
                by PNTV,
                Distributor shall retain the right to continue distributing all Content
                delivered by PNTV to Distributor prior to the date of the uncured
                Breach,
                and Distributor will no longer be obligated to continue paying the
                Annual
                Minimum Guarantee to PNTV, but will still be obligated to continue
                to pay
                the Revenue Share. If PNTV continues to produce new Content after
                the
                uncured Breach, and Distributor has met all its obligations as defined
                herein, then PNTV shall be required to continue providing such new
                content
                to Distributor under the same terms as provided for in this Agreement
                for
                the duration of the Initial Term, or if in a Renewal Term, for the
                duration of that Renewal Term, subject only to Distributor not being
                in
                Breach as described in points A.
                through H.
                For
                clarity, PNTV acknowledges that it cannot escape its contractual
                obligations contained in this agreement by breaching and not curing
                point
                I.
                above. 

            

    

     

    
      	
            	16.3	
              Regardless
                of the Termination cause, Distributor or its assign shall retain
                its 30%
                ownership in the New Content it may have invested in as described
                herein.
                Such ownership by Distributor in the Content shall be addressed in
                a
                separate agreement regarding all requisite rights, titles and interest
                including, but not limited to distribution
                rights.

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    
      	
            	16.4	
              No
                Liability for Termination or Expiration.
                Neither Party or its principals, officers, directors or shareholders
                shall
                be liable by reason of the expiration or termination of this Agreement
                as
                defined herein, for any compensation or damages, on account of any
                loss of
                prospective profits or anticipated sales or for expenditures, investments,
                leases, or commitment made by the other Party in connection with
                this
                Agreement or the anticipation of expected performance
                hereunder.

            

    

    
 

    17.
      GOVERNING LAW; VENUE.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York. In furtherance of the foregoing, the internal law of the
      State of New York will control the interpretation and construction of this
      Agreement, even if under such jurisdiction's choice of law or conflict of law
      or
      analysis, the substantive law of some other jurisdiction would ordinarily apply.
      By execution and delivery of this Agreement, the Parties agree and accept that
      any legal action or proceeding brought with respect to this Agreement shall
      be
      brought in the State or United States District Court of appropriate jurisdiction
      in and for the County of Nassau, State of New York, and the Parties expressly
      waive any objection to personal jurisdiction, venue or forum non conveniens.
      

     

    18. ENTIRE
      AGREEMENT.
      The
      Parties hereto acknowledge that they have read this entire Agreement and that
      this Agreement and the Exhibits hereto constitute the entire understanding
      and
      contract between the Parties and supersedes any and all prior or contemporaneous
      oral or written communications with respect to the subject matter hereof. This
      Agreement shall not be modified, amended or in any way altered except by an
      instrument in writing signed by the Parties.

    

    19. ATTORNEYS’
      FEES AND COSTS.
      If any
      legal action or any arbitration or other proceeding is brought for the
      enforcement of this Agreement or by reason of an alleged dispute, breach,
      default or misrepresentation in connection with any of the provisions of this
      Agreement, the successful or prevailing party or parties shall be entitled
      to
      recover reasonable attorneys’ and experts’ fees and other costs incurred in that
      action or proceeding, in addition to any other relief to which it or they may
      be
      entitled.

    

    20. WAIVER.
      The
      waiver of any breach of any provision of this Agreement by either party hereto
      shall not constitute a continuing waiver or a waiver of any breach either of
      the
      same or another provision of this Agreement.

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    21. EFFECT
      OF HEADINGS.
      The
      subject headings of the Articles and Sections of this Agreement are included
      for
      purposes of convenience only, and shall not affect the construction or
      interpretation of any of the provisions hereof.

    

    22. TIME
      OF THE ESSENCE.
      Time is
      expressly made of essence of this Agreement and each event, condition, notice
      or
      demand provided herein to be made.

    

    23. RELATIONSHIP
      OF PARTIES.
      Neither
      party has the authority to bind the other, to incur any obligation on the
      other’s behalf or to represent itself as the other’s agent or in any other
      manner which might result in any confusion as to the fact that the Parties
      are
      separate and distinct entities. 

    

    24. CONFIDENTIALITY.
      Each
      party agrees to take the necessary precautions to maintain the confidentiality
      of confidential information pertaining to the products, services and business
      activities of the other party which are disclosed in connection with this
      Agreement or which were disclosed during the period prior to the execution
      of
      this Agreement (the “Confidential Information”) by using no less than reasonable
      care to maintain confidentiality. Each party shall only use such Confidential
      Information in connection with its performance of this Agreement and shall
      only
      disclose such Confidential Information to its employees and contractors having
      a
      need to know in order to accomplish the purposes of this Agreement who are
      bound
      by appropriate accomplish the purposes of this Agreement who are bound by
      appropriate nondisclosure obligations at least as protective as the provisions
      of this Section. “Confidential Information” does not include information which
      is: (i) generally available to the public on an unrestricted basis; (ii)
      previously known without obligation of confidentiality; (iii) independently
      developed outside this Agreement; (iv) rightfully received from a third party
      without restriction or obligation of confidentiality; or (v) approved by the
      disclosing party for disclosure. The obligations set forth in this Section
      shall
      continue for three years after the termination of this Agreement or any renewal
      thereof. Either party may have injunctive, preliminary or other equitable relief
      to remedy any actual or threatened unauthorized disclosure of Confidential
      Information or unauthorized use, copying, marketing, distribution or
      sublicensing of the PNTV Content except for MicroPlay’s rights to sublicense and
      subdistribute as provided herein. It is expressly agreed between the Parties
      hereto that there shall be no public announcement or press release and/or
      disclosure without the prior written consent of both Parties.

    

    25. AGREEMENT
      BINDING ON SUCCESSORS. The
      provisions of the agreement shall be binding upon and shall inure to the benefit
      of the Parties hereto, their heirs, administrators, successors and
      assigns.

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      Parties have caused this Agreement to be signed as of the date first written
      above.

    

    
      	 	 	 
	
              PLAYERS
                NETWORK, INC.: 

            	 
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Authorized
                Signatory

            

    

    
      	 	 	 
	
              MICROPLAY,
                INC.: 

            	 
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              On
                behalf of a Nevada Corporation in formation

            
	 	
            

    
      
        
        

      

      
        15Unassociated Document

    THIS
      NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE
      COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED
      FOR
      SALE, PLEDGED, HYPOTHECATED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT AS
      PERMITTED UNDER THE SECURITIES PURCHASE AGREEMENT (AS DEFINED).

    

    June
      __, 2008

    New
      York, New York

    N-___

    

    8%
      CONVERTIBLE PROMISSORY NOTE

    

    FOR
      VALUE
      RECEIVED, ARDMORE HOLDING CORPORATION, a Delaware corporation (the “Company”),
      hereby promises to pay to________________________________
      ____________________________________, or its permitted assigns (the
“Holder”),
      except to the extent previously converted as provided herein, on December __,
      2009 or as otherwise earlier provided herein (the “Maturity
      Date”),
      the
      sum of _____________________Dollars ($_________), together with simple interest
      at the rate of eight percent (8%) per annum. After the Maturity Date, interest
      on the outstanding principal amount shall be payable on the last day of each
      month at the rate of 15% per annum. Interest shall be calculated on the basis
      of
      a 365 day year on the number of days actually elapsed. All
      payments in cash hereunder shall be made in U.S. dollars and in immediately
      available funds, and payments shall be applied first to charges and expenses
      owed hereunder, next, to interest payable hereunder, and then to the principal
      amount outstanding hereunder. Nothing
      contained herein or in any document referred to herein or delivered in
      connection herewith shall be deemed to establish or require the payment of
      a
      rate of interest or other charges in excess of the maximum permitted by
      applicable law. 

    

    This
      Note
      has been issued pursuant to the Amended and Restated Securities Purchase
      Agreement dated as of May 12, 2008 between the Company and the original Holder,
      as amended (the “Securities
      Purchase Agreement”),
      and
      shall be governed by the terms thereof. Unless otherwise separately defined
      herein, all capitalized terms used in this Note shall have the same meaning
      as
      is set forth in the Securities Purchase Agreement. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
      I

    CONVERSION
      RIGHTS

    

    The
      Holder shall have the right to convert the principal amount due under this
      Note
      into shares of Common Stock, as set forth below.

    

    1.1
       Conversion
      into Common Stock.

    

    (a) The
      Holder shall have the right, from and after the date of the issuance of this
      Note and until such time as this Note is fully paid, to convert all or any
      portion of the outstanding unpaid principal amount of this Notes into the number
      of fully paid and non-assessable shares of Common Stock equal to the quotient
      obtained by dividing the (A) sum of (i) principal amount being converted and
      (ii) the unpaid interest that has accrued through the Conversion Date (as
      defined) on the principal amount to be converted, by (B) the Conversion Price
      (as defined). The Company shall issue and deliver to the Holder within five
      Business Days from the Conversion Date (such fifth business day being the
“Delivery
      Date”)
      certificates evidencing that number of shares of Common Stock into which of
      the
      Note (or any portion thereof) has been converted. The term “Conversion
      Date”
means
      the Business Day (or if such day is not a Business Day, then the next such
      day
      which is a Business Day) on which the Company receives (x) this Note duly
      endorsed for transfer and (y) the properly completed notice of conversion,
      substantially in the form annexed hereto.

    

    (b) Subject
      to adjustment as provided in Section 1.1(c) hereof, the conversion price per
      share shall be $ 1.08 (the “Conversion
      Price”).

    

    (c) The
      Conversion Price and number and kind of shares of Common Stock or other
      securities to be issued upon conversion, shall be subject to adjustment from
      time to time upon the happening of certain events while this Note remains
      outstanding, as follows:

    

    (i) Reorganization,
      Consolidation, Merger, etc.
      In case
      at any time or from time to time, the Company shall (A) effect a reorganization,
      (B) consolidate with or merge into any other person or (C) transfer all or
      substantially all of its properties or assets to any other person under any
      plan
      or arrangement contemplating the dissolution of the Company, then, in each
      such
      case, as a condition to the consummation of such a transaction, proper and
      adequate provision shall be made by the Company whereby the Holder of this
      Note,
      on the conversion hereof as provided in this Article I, at any time after the
      consummation of such reorganization, consolidation or merger or the effective
      date of such dissolution, as the case may be, shall receive, in lieu of the
      Common Stock (or other securities) issuable on such conversion prior to such
      consummation or such effective date, the stock and other securities and
      property, including cash (collectively, the “Other
      Securities and Property”),
      to
      which such Holder would have been entitled upon such consummation or in
      connection with such dissolution, as the case may be, if such Holder had so
      converted this Note, immediately prior thereto, all subject to further
      adjustment thereafter as provided in Section 1.1(c)(iv).

    

    (ii) Dissolution.
      In the
      event of any dissolution of the Company following the transfer of all or
      substantially all of its properties or assets, the Company, prior to such
      dissolution, shall at its expense deliver or cause to be delivered the stock
      and
      Other Securities and Property by the Holder of this Note after the effective
      date of such dissolution to a bank or trust company (a “Trustee”)
      having
      its principal office in New York, New York, as trustee for the
      Holder.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (iii) Continuation
      of Terms.
      Upon
      any reorganization, consolidation, merger or transfer (and any dissolution
      following any transfer) referred to in this Article I, this Note shall continue
      in full force and effect and the terms hereof shall be applicable to the Other
      Securities and Property receivable on the conversion of this Note after the
      consummation of such reorganization, consolidation or merger or the effective
      date of dissolution following any such transfer, as the case may be, and shall
      be binding upon the issuer of any Other Securities and Property, including,
      in
      the case of any such transfer, the person acquiring all or substantially all
      of
      the properties or assets of the Company, whether or not such person shall have
      expressly assumed the terms of this Note. In the event this Note does not
      continue in full force and effect after the consummation of the transaction
      described in this Article I, then only in such event will the Company’s
      securities and property (including cash, where applicable) receivable by the
      Holder of the Notes be delivered to the Trustee as contemplated by Section
      1.1(c)(ii).

    

    (iv) Extraordinary
      Events Regarding Common Stock.
      In the
      event that the Company shall (A) issue additional shares of Common Stock as
      a
      dividend or other distribution on its outstanding Common Stock, (B) subdivide
      its outstanding shares of Common Stock, or (C) combine its outstanding shares
      of
      Common Stock into a smaller number of shares of Common Stock, then, in each
      such
      event, the Conversion Price shall, simultaneously with the happening of such
      event, be adjusted so that the Holder shall be entitled to receive the number
      of
      shares of Common Stock the Holder would have owned or been entitled to receive
      after the occurrence of any of the events described in this Section 1.1(c)(iv)
      had this Note been converted immediately prior to such event. The Conversion
      Price, as so adjusted, shall be readjusted in the same manner upon the happening
      of any successive event or events described herein. 

    

    (v) Certificate
      as to Adjustments.
      In each
      case of any adjustment or readjustment in the shares of Common Stock (or Other
      Securities and Property) issuable on the conversion of the Notes, the Company
      at
      its expense will promptly cause its Chief Financial Officer or other appropriate
      designee to compute such adjustment or readjustment in accordance with the
      terms
      of the Note and prepare a certificate setting forth such adjustment or
      readjustment and showing in detail the facts upon which such adjustment or
      readjustment is based, including a statement of (A) the consideration received
      or receivable by the Company for any additional shares of Common Stock (or
      Other
      Securities and Property) issued or sold or deemed to have been issued or sold,
      (B) the number of shares of Common Stock (or Other Securities and Property)
      outstanding or deemed to be outstanding, and (C) the Conversion Price and the
      number of shares of Common Stock to be received upon conversion of this Note,
      in
      effect immediately prior to such adjustment or readjustment and as adjusted
      or
      readjusted as provided in this Note. The Company will forthwith mail a copy
      of
      each such certificate to the Holder of the Note and the Company’s transfer
      agent.

    

    1.2 Partial
      Conversion.
      Upon
      partial conversion of this Note, a new Note containing the same provisions
      of
      this Note and dated the date of original issuance of the issuance of this Note
      shall be issued by the Company to the Holder for the remaining unconverted
      principal balance of this Note.

     

    1.3 Issuance
      of Common Stock Upon Conversion of Note. Upon
      the
      conversion of this Note or any portion thereof, the Company shall, at its own
      cost and expense, take all necessary action, including obtaining and delivering
      an opinion of counsel, to assure that the Company’s transfer agent shall issue
      stock certificates in the name of Holder in such denominations to be specified
      at conversion representing the number of shares of Common Stock issuable upon
      such conversion. The Company warrants that no instructions other than these
      instructions have been or will be given to the transfer agent of the Common
      Stock. The Holder, by its acceptance of this Note, acknowledges that such
      certificates, except as otherwise permitted by the Registration Rights Agreement
      or the Securities Purchase Agreement, will contain a legend restricting the
      resale or transferability of such shares, as more fully provided for
      therein.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    1.4 Reservation
      of Common Stock.
      During
      the period the conversion right exists, the Company will reserve from its
      authorized and unissued Common Stock a number of shares of Common Stock equal
      to
      the number of shares of Common Stock issuable upon the conversion of this Note
      in full. The Company represents that upon issuance, such shares will be duly
      and
      validly issued, fully paid and non-assessable. The Company agrees that its
      issuance of this Note shall constitute full authority to its officers, agents,
      and transfer agents who are charged with the duty of executing and issuing
      stock
      certificates to execute and issue the necessary certificates for shares of
      Common Stock upon the conversion of this Note.

    

    1.5 Beneficial
      Ownership Limitation.
      Notwithstanding
      anything to the contrary set forth in this Note, at no time may the Holder
      convert all or a portion of this Note if the number of shares of Common Stock
      to
      be issued pursuant to such conversion would exceed, when aggregated with all
      other shares of Common Stock owned by the Holder at such time (including
      pursuant to the Warrants), the number of shares of Common Stock which would
      result in the Holder beneficially owning (as determined in accordance with
      Section 13(d) of the Exchange Act and the rules thereunder) more than 4.99%
      of
      all of the Common Stock outstanding at such time.

     

    ARTICLE
      II

    EVENTS
      OF DEFAULT

    

    The
      entire unpaid principal amount of this Note, together with the interest thereon,
      shall, at the option of the Holder made by demand on the Company, become
      immediately due and payable, without presentment, dishonor or notice of
      dishonor, all of which hereby are expressly waived, upon the occurrence of
      any
      of the following events (each an “Event
      of Default”):

    

    2.1 Failure
      to Pay Principal or Interest.
      The
      Company fails to make any payment due under this Note, as and when due and
      payable.

    

    2.2 Receiver
      or Trustee.
      The
      Company shall make an assignment for the benefit of creditors, or apply for
      or
      consent to the appointment of a receiver or trustee for it or for a substantial
      part of its property or business; or such a receiver or trustee shall otherwise
      be appointed.

    

    2.3 Bankruptcy.
      Bankruptcy, insolvency, reorganization or liquidation proceedings or other
      proceedings or relief under any bankruptcy law or any law, or the issuance
      of
      any notice in relation to such event, for the relief of debtors shall be
      instituted by or against the Company and if instituted against the Company
      are
      not dismissed within fifteen (15) days of initiation.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    2.4 Delisting.
      The
      Common Stock is delisted from the OTC Bulletin Board or such other exchange
      or
      interdealer marketplace on which the Common Stock is listed for trading or
      quoted. 

    

    2.5 Failure
      to Deliver Common Stock or Replacement Note.
      The
      Company’s failure to deliver Common Stock to the Holder pursuant to this Note or
      a replacement Note a contemplated by Section 1.2, in each case more than ten
      Business Days after the Delivery Date.

    

    2.7 Reservation
      Default.
      The
      Company fails to reserve for issuance the number of shares of Common Stock
      issuable upon conversion of this Note.

    

    ARTICLE
      III

    MISCELLANEOUS

    

    3.1 Failure
      or Indulgence Not Waiver.
      No
      failure or delay on the part of Holder hereof 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. All
      rights and remedies existing hereunder are cumulative to, and not exclusive
      of,
      any rights or remedies otherwise available.

    

    3.2 Notices.
      (a) All
      notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (i) personally served, (ii) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (iii)
      delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. 

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (b)
      Any
      notice or other communication required or permitted to be given hereunder shall
      be deemed effective (i) upon hand delivery or delivery by facsimile, with
      accurate confirmation generated by the transmitting facsimile machine, at the
      address or number designated below (if delivered on a business day during normal
      business hours where such notice is to be received), or the first business
      day
      following such delivery (if delivered other than on a business day during normal
      business hours where such notice is to be received) or (ii) on the second
      business day following the date of mailing by express courier service, fully
      prepaid, addressed to such address, or upon actual receipt of such mailing,
      whichever shall first occur. The addresses for such communications shall be:
      

    

    (1)
      If to
      the Company:

    

     

    Ardmore
      Holding Corporation

    c/o
      Tianjin Yayi Industrial Co., Ltd.

    XingGuang
      Road No. 9 

    Northern
      Industrial Park of Zhongbei, 

    XiQing,
      District

    Tianjin
      City, China 300201

    Attn.:
      Chief Executive Officer

    Fax:
      022-27984358

    

    With
      a
      copy to:

     

    Hodgson
      Russ LLP

    1540
      Broadway, 24th Floor

    New
      York,
      NY 10036

    Attn:
      Jeffrey A. Rinde, Esq.

    Fax:
      (212) 751-0928

     

    (2)
      If to
      the Holder, to the one or more addresses and telecopier numbers appearing in
      the
      Company’s books and records as of the date this Note is issued or as indicated
      from time to time by notice delivered to the Company by or on behalf of the
      Holder by its duly authorized representative or counsel.

    

     3.3 Amendment
      Provision.
      The
      term “Note” and all reference thereto, as used throughout this instrument, shall
      mean this instrument as originally executed, or if later amended or
      supplemented, then as so amended or supplemented.

    

     3.4 Assignability.
      This
      Note shall be binding upon the Company and its successors and assigns, and
      shall
      inure to the benefit of the Holder and its permitted successors and
      assigns.

    

     3.5 Cost
      of Collection.
      If
      default is made in the payment of this Note, the Company shall pay the Holder
      hereof reasonable costs of collection, including reasonable attorneys’
fees.

    

     3.6 Governing
      Law.
      This
      Note shall be governed by, and construed in accordance with, the internal laws
      of the State of New York without regard to the choice of law principles thereof.
      Each of the parties hereto irrevocably submits to the exclusive jurisdiction
      of
      the courts of the State of New York located in New York County and the United
      States District Court for the Southern District of New York for the purpose
      of
      any suit, action, proceeding or judgment relating to or arising out of this
      Agreement and the transactions contemplated hereby. Service of process in
      connection with any such suit, action or proceeding may be served on each party
      hereto anywhere in the world by the same methods as are specified for the giving
      of notices under this Note. Each of the parties hereto irrevocably consents
      to
      the jurisdiction of any such court in any such suit, action or proceeding and
      to
      the laying of venue in such court. Each party hereto irrevocably waives any
      objection to the laying of venue of any such suit, action or proceeding brought
      in such courts and irrevocably waives any claim that any such suit, action
      or
      proceeding brought in any such court has been brought in an inconvenient forum.
      EACH
      OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
      LITIGATION WITH RESPECT TO THIS NOTE AND REPRESENTS THAT COUNSEL HAS BEEN
      CONSULTED SPECIFICALLY AS TO THIS WAIVER.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

     3.7 Pre-Payment;
      Redemption.
      Subject
      to the effectiveness of the Registration Statement (as defined in the Securities
      Purchase Agreement and the Registration Rights Agreement executed in connection
      therewith), the Company shall have the option to pre-pay the Notes at 110%
      of
      the principal amount then outstanding upon sixty (60) days prior written notice.
      During such notice period, the Holder shall have the right to convert any
      portion hereof. This Note may not be redeemed or paid without the consent of
      the
      Holder except as described in this Note or in the Securities Purchase
      Agreement.

    

     3.8 Stockholder
      Status.
      The
      Holder shall not have rights as a stockholder of the Company with respect to
      unconverted portions of this Note. However, the Holder will have all the rights
      of a stockholder of the Company with respect to the shares of Common Stock
      to be
      received by Holder after delivery by the Holder of a Conversion Notice to the
      Company.

    

    3.9 Entire
      Agreement.
      This
      Note, the Securities Purchase Agreement and the other Transaction Documents
      (including all schedules and exhibits thereto) constitute the entire agreement
      among the parties hereto with respect to the subject matter hereof and thereof.
      There are no restrictions, promises, warranties or undertakings, other than
      those set forth or referred to herein and therein. This Note and the Securities
      Purchase Agreement supersede all prior agreements and understandings among
      the
      parties hereto with respect to the subject matter hereof and thereof. In the
      event of a conflict between this Note and the Securities Purchase Agreement,
      the
      terms of the Securities Purchase Agreement shall be controlling.

    

    

    ***************************************************

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Note to be signed in its name by an authorized officer
      on the date set forth above.

     

    
      	 	 	 
	 	ARDMORE
              HOLDING CORPORATION
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Jeff
              D. Jenson, President

    

     

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    NOTICE
      OF CONVERSION

    

    (To
      be
      executed by the Registered Holder in order to convert the Note)

    

    The
      undersigned hereby elects to convert $_________ of the principal amount of
      this
      Note and the interest that has accrued with respect thereto into shares of
      Common Stock of ARDMORE HOLDING CORPORATION according to the conditions set
      forth in the Note.

    

    
      	
               

              Date
                of this Conversion Notice:

            	
               

              ______________________

            
	
               

              Conversion
                Price:

            	
               

              ______________________

            
	
               

              Common
                Stock To Be Delivered:

            	
               

              ______________________

            
	
               

              Signature:*

            	
               

              _________________________________

            
	
               

              Print
                Name:

            	
               

              _________________________________

            
	
               

              Address:

            	
               

              _________________________________

              _________________________________

              _________________________________

            

    

    

    

    *
      Signature should appear as the name of the payee appears on the face of the
      Note
      and such name should be printed underneath the signature.

     

    
      
         

      

      
        9

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