Document:

dalrymple110212.htm

  

  

  

Exhibit 10.85

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE SECURITIES OR BLUE SKY LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT PURSUANT TO (A) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER THE ACT OR (B) AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES AND BLUE SKY LAWS.

 

AURA SYSTEMS, INC.

CONVERTIBLE PROMISSORY NOTE DUE January 4, 2013

$350,000.00                                                                                                           November 2, 2012

FOR VALUE RECEIVED, AURA SYSTEMS, INC., a Delaware Corporation (the “Company”) hereby promises to pay to the order of ­­­­­­­­­­­Peter Dalrymple, an individual (the “Holder”) the principal sum of The Hundred and Fifty Thousand dollars ($350,000.00) (as reduced pursuant to the terms hereof pursuant to conversion or otherwise, the “Principal Amount”), together with accrued interest and other amounts owing from time to time hereunder, all as provided herein.

ARTICLE 1

DEFINITIONS

“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of Los Angeles are authorized or required by law to close or be closed.

 

“Conversion Rate” means the number of shares of Common Stock determined by dividing (x) the portion of the Principal Amount to be converted by (y) the Conversion Price.

 

“Conversion Price” means $0.76, subject to adjustment as provided herein.

 

“Conversion Shares” means the shares of Common Stock issuable upon conversion of this Note in accordance with its terms. The number and character of Conversion Shares are subject to adjustment as provided herein.

“Issuance Date” means November 2, 2012.

“Person” shall mean and include an individual, a partnership, a corporation (including a business trust), a joint stock company, a limited liability company, an unincorporated association, a joint venture or other entity or a governmental authority.

ARTICLE 2

TERMS OF PAYMENT

2.1 Interest Rate. The Company shall pay interest on the unpaid Principal Amount of this Note from the Issuance Date until the Principal Amount is fully repaid at a rate per annum equal to seven percent (7%) (the “Interest Rate”).

 

2.2 Interest Payment Dates. Interest on this Note shall be accrued and payable at the note due date.  Interest shall be computed on the basis of the actual number of days elapsed over a 360-day year, including the first and the last day.

 

2.3 Maturity Date.  The entire unpaid principal balance of this Note, together with all accrued and unpaid interest thereon and all other unpaid amounts owing under this Note shall be due and payable on January 4, 2013 (the “Maturity Date”). Upon payment in full of the outstanding principal balance of this Note and all accrued and unpaid interest thereon, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.

 

2.4 Optional Prepayments. The Company may at any time voluntarily prepay or redeem the principal balance of this Note, without premium or penalty, in whole but not in part, upon payment of the outstanding Principal Amount hereof together with accrued and unpaid interest through the date of prepayment.    If the Company elects to prepay this Note under this Article 2, the Company shall furnish written notice to the Holder with respect to such voluntary prepayment not less than ten (10) calendar days prior to the proposed date of prepayment (a “Notice of Prepayment”).  Such notice shall be irrevocable. Upon receipt of a Notice of Prepayment, Holder may elect to convert the principal balance then outstanding under this Note, in whole or in part, into shares of Common Stock, pursuant to Article 3 below, provided however, that any such election by the Holder (and Holder’s Conversion Notice with respect to such election) must be received by the Company on or before 8:00 a.m. Los Angeles time on the proposed date of prepayment.

 

2.5 Manner of Payment. Payment of the Principal Amount, all interest and all other amounts payable with respect to this Note shall be made by wire transfer of immediately available funds to the Holder, provided however, that if the Holder shall not have furnished wire instructions in writing to the Company on or prior to the fifth (5th) Business Day immediately prior to the date on which the Company is required to make such payment, such payment may be made by check drawn on a United States bank and mailed to the address of the Person entitled thereto as such address shall appear in the Company’s records. All payments shall be in lawful currency of the United States of America. Any payments due hereunder which are due on a day which is not a Business Day shall be payable on the immediately subsequent Business Day without increase to the payment amount due

 

2.6 Registration of Note; Persons Deemed Owners.  The Company shall maintain at its principal executive office a register in which it shall register this Note, any assignments of this Note or any other notes issued hereunder and any other notes issued upon surrender hereof and thereof.  The entries in the Company’s register shall be conclusive and binding for all purposes absent manifest error. At the option of the Holder, this Note may be exchanged for one or more new notes of like tenor in the principal denominations requested by the Holder, and the Company shall, as soon as practicable after the surrender of this Note at the Company's principal executive office, deliver to the Holder such new note or notes.  In addition, each assignment of this Note, in whole or in part, shall be registered on the register immediately following the surrender of this Note at the Company's principal executive office.  Prior to due presentment for registration of any assignment of this Note, the Company may treat the person or entity in whose name this Note is registered as the owner and the Holder hereof for all purposes whatsoever, and the Company shall not be affected by notice to the contrary.Any attempted assignment or transfer in contravention of the terms of this Note shall be void. 

 

ARTICLE 3

CONVERSION

3.1 Conversion. Subject to the terms and conditions of this Note, the Holder may, at any time and from time to time prior to the Maturity Date, upon giving written notice to the Company, elect to convert all or any portion of the outstanding Principal Amount of this Note into that number of whole Conversion Shares at the Conversion Rate as in effect on the date the notice of conversion is given. Any accrued and unpaid interest outstanding on the portion of this Note being converted at the time of such conversion will become immediately due and payable to the Holder in cash. Any accrued and unpaid interest on the principal portion of this Note that is not converted shall be due and payable in accordance with Article 2 above.

 

3.2 No Fractional Shares. The Company shall not issue any fraction of a share of Common Stock upon any conversion. In lieu of issuing fractional shares upon conversion of all or any portion of this Note, the Company shall pay cash in an amount equal to the product of the then applicable Conversion Price and the number of fractional shares that would otherwise be issuable hereunder.

 

3.3 Mechanism of Conversion. To convert all or any portion of the outstanding Principal Amount of this Note into shares of Common Stock on any date (a “Conversion Date”), the Holder shall deliver to the Company, for receipt prior to 5:00 p.m. Los Angeles time on the Business Day immediately prior to such Conversion Date, a copy of a fully completed and executed notice of conversion in the form attached hereto as Exhibit “A” (the “Conversion Notice”). Upon total or partial conversion of this Note, the Holder will surrender the original of this Note, duly endorsed, to the Company at its principal office. The Company will deliver a certificate or, if requested by the Holder, certificates for Conversion Shares issuable on conversion of this Note as soon as practicable after surrender of this Note for conversion (bearing such legends as may be required in the reasonable opinion of counsel to the Company), but the Person or Persons to whom such certificates are issuable will be considered the holder of record of the Conversion Shares from the time this Note is surrendered by the Holder. If less than all of the outstanding principal amount of this Note is converted pursuant to Paragraph 3.1 above, the Company will additionally deliver to the Holder an amended and restated Note, containing an original principal amount equal to that portion of the then-outstanding Principal Amount not converted containing the other terms and provisions of this Note and otherwise in form and substance reasonably satisfactory to the Holder. Upon the conversion of this Note, all rights of the Holder, except the right to receive the Conversion Shares in accordance with this Article 3, will cease as to that portion of the Note so converted and this Note will no longer be deemed to be outstanding as to that portion of the Note so converted.

 

ARTICLE 4

COVENANTS

4.1 Reservation of Shares Issuable Upon Conversion. The Company will at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of this Note into Conversion Shares, such number of shares of its duly authorized shares of Common Stock as will from time to time be sufficient to effect the conversion of this Note into Conversion Shares in full (taking into account any applicable adjustments pursuant to Article 5 below). If at any time the number of authorized but unissued shares of Common Stock is not sufficient to effect the conversion of this Note into Conversion Shares, the Company will take such action as may, in the reasonable opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number as is sufficient for such purpose, including engaging in commercially reasonable efforts to obtain the requisite stockholder approval of any necessary amendment to its certificate of incorporation. The shares of Common Stock that may be issued upon the conversion of the rights represented by this Note will be duly authorized and will be validly issued, fully paid and non-assessable.

 

4.2 Registration. Holder has been advised that this Note has not been registered under the Securities Act of 1933 (as amended) (the “Act”), or any state securities laws and, therefore, cannot be resold unless it is registered under the Act and applicable state securities laws or unless an exemption from such registration requirements is available. Holder is aware that the Company is under no obligation to effect any such registration or to file for or comply with any exemption from registration. The foregoing not withstanding, if, on or before the Maturity Date, the Company shall determine to prepare and file with the Securities and Exchange Commission a registration statement relating to an offering for its own account or the account of others under the Act of any of its equity securities (other than on Form S-4 or Form S-8 (each as promulgated under the Act) or its then equivalents relating to equity securities to be issued in a primary offering by the Company, solely in connection with any acquisition of any entity or business or issuable in connection with stock option or other employee benefit plans, respectively), then the Company shall include in such registration statement or otherwise file a registration statement relating to the Conversion Shares; provided however, that the Company shall not be required to register any Conversion Shares that are eligible for sale pursuant to Rule 144 of the Act.

 

4.3 Change in Nature of Business. While this Note remains outstanding, the Company shall not directly or indirectly engage in any material line of business substantially different from those lines of business conducted by the Company on the Issuance Date or any business substantially related or incidental thereto.  The Company shall not directly or indirectly modify its corporate structure or purpose.

 

4.4 Transfer Taxes.  The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided however, that the Company shall not be required to pay any tax that may be payable with respect to any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

 

ARTICLE 5

ADJUSTMENTS

	
5.1.  

	
The number of Conversion Shares issuable upon conversion of this Note or any portion thereof and the Conversion Price therefor are subject to adjustment upon the occurrence of any of the following events between the Issuance Date and the sooner of the date that (i) all obligations hereunder are repaid or (ii) this Note is converted into Conversion Shares:

 

	
5.2.  

	
Stock Dividends and Splits.  If the Company, at any time while this Note is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of this Note), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each such case the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii), (iii) or (iv) of this paragraph shall become effective immediately after the effective date of such subdivision, combination or reclassification.

 

	
5.3.  

	
Pro Rata Distributions.  If the Company, at any time while this Note remains outstanding, shall distribute to all holders of Common Stock (and not to Holder) evidences of its indebtedness or assets or rights or warrants to subscribe for or purchase any security, then in each such case the Conversion Price shall be determined by multiplying such Conversion Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution (“Distribution Record Date”) by a fraction of which the denominator shall be the closing bid price determined as of the Distribution Record Date, and of which the numerator shall be such closing bid price on such Distribution Record Date less the then fair market value at such Distribution Record Date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith. In either case the adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the Distribution Record Date mentioned above.

 

	
5.4.  

	
Subsequent Equity Sales.  If, at any time while this Note remains outstanding, the Company sells or grants any option to purchase any Common Stock entitling any Person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuance a “Dilutive Issuance”), then the Conversion Price of this Note and all other Notes outstanding then outstanding to Peter Dalrymple shall be adjusted to reflect such lower price. Such adjustment shall be made whenever such Common Stock bearing a Base Conversion Price is issued. The Company shall notify the Holder in writing, no later than three (3) Business Days following the issuance of any Common Stock subject to this Section 5.4, indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms.  For purposes of clarification, whether or not the Company provides notice pursuant to this Section 5.4, upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance.

 

	
5.5.  

	
Adjustment for Reorganization, Consolidation, Merger. In case of any reorganization, reclassification or similar event involving the Company (or of any other corporation the stock or other securities of which are at the time receivable on the conversion of this Note) while this Note remains outstanding, or in the events that the Company shall consolidate with or merge with another entity during such time as this Note remains outstanding, then, and in each such case, the Holder, upon the conversion of this Note at any time after the consummation of such reorganization, consolidation or merger, will be entitled to receive, in lieu of the stock or other securities and property receivable upon the conversion of this Note prior to such consummation, the stock or other securities or property to which the Holder would have been entitled upon the consummation of such reorganization, consolidation or merger if the Holder had converted this Note immediately prior thereto, subject to further adjustment as provided in this Note, and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors of the Company) will be made in the application of the provisions in this Article 5 with respect to the rights and interests thereafter of the Holder, to the end that the provisions set forth in this Article 5 will thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of this Note. The successor or purchasing corporation in any such reorganization, consolidation or merger (if other than the Company) will duly execute and deliver to the Holder a supplement hereto reasonably acceptable to the Holder acknowledging such entity's obligations under this Note and, in each such case, the terms of the Note will be applicable to the shares of stock or other securities or property receivable upon the conversion of this Note after the consummation of such reorganization, consolidation or merger.

 

	
5.6.  

	
Calculations.  All calculations under this Article 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.  For purposes of this Article 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding

 

	
5.7.  

	
Restriction on Transfer. This Note and the Common Stock issuable upon conversion of this Note have not been registered under the Securities Act, or the securities laws of any state or other jurisdiction. Neither this Note nor the Common Stock issuable upon conversion of this Note nor any interest or participation herein may be reoffered, sold, assigned, transferred, pledged, encumbered or otherwise disposed of in the absence of such registration or unless such transaction is exempt from, or not subject to, registration. Each certificate representing the shares of Common Stock issuable upon conversion of this Note, shall bear a legend substantially in the following form:

 

"The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be transferred, pledged or hypothecated unless and until such securities are registered under such Act or an opinion of counsel satisfactory to the Company is obtained to the effect that such registration is not required."

     

ARTICLE 6

EVENTS OF DEFAULT

6.1           Events of Default. Each of the following events, and only the following events, will constitute an Event of Default (each, an “Event of Default”):

 

	
i.  

	
the Company fails to pay (i) the principal of this Note or (ii) any interest payable under this Note or (iii) any other amount due hereunder within five (5) Business Days after such amount becomes due and payable; or

 

	
ii.  

	
the Company fails, for any reason (except pursuant to applicable law, judicial order, or by reason of Holder’s action or inaction) to issue and deliver the Conversion Shares upon conversion of this Note within ten (10) Business Days of the Company’s receipt of a valid and fully-completed Conversion Notice from Holder.

 

6.2           Remedies Upon an Event of Default. If any Event of Default has occurred and is continuing, then, and in any such event, the rate of interest will increase to 12%. The Holder may, by notice to the Company, declare the outstanding Principal Amount of this Note (and all then-accrued and unpaid interest thereon) to be forthwith due and payable, whereupon the outstanding Principal Amount of this Note, all such accrued and unpaid interest and all such other amounts will become and be forthwith due and payable, without presentment, demand, protest, notice of acceleration, notice of intent to accelerate, or further notice of any kind, at which time Aura will be responsible for all legal fees in securing rights and remedies.

 

ARTICLE 7

MISCELLANEOUS

7.1 Loss, Theft, Destruction or Mutilation.  Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Note and, in the case of such loss, theft or destruction, upon delivery to the Company of an indemnity undertaking reasonably satisfactory to the Company, or, in the case of any such mutilation, upon surrender of this Note to the Company, the Company will issue a new Note, of like tenor and principal amount, in lieu of or in exchange for such lost, stolen, destroyed or mutilated Note.  Upon the issuance of any substitute Note, the Company may require the payment to it of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses in connection therewith.

7.2 Voting Rights. The Holder shall have no voting rights as the holder of this Note, except as required by law (including, without limitation, the Delaware General Corporation Law) and as expressly provided in this Note.

7.3 Construction; Headings. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of, this Note.

7.4 Notices and Demands.  All notices, demands and other communications provided for in this Note or made under this Note shall be in writing and hand delivered or sent by email or facsimile (with a copy thereof deposited, postage prepaid, in the United States mail on the same day that the email or facsimile is dispatched), or sent by overnight delivery, to the applicable party as follows (or, as to each party, at such other address as may be designated by such party in a written notice to the other party):

          If to Holder, to it at the following address:

­­­­­­­­­­­Peter Dalrymple

_________________________

_________________________

Fax:

If to the Company, to it at the following address:

Aura Systems, Inc.

1310 East Grand Avenue

El Segundo, CA 90245

Fax:

Attn: _________________

with a copy (which will not constitute notice) to:   

The Law Offices of Tamara M. Kurtzman, P.C.

8383 Wilshire Blvd., Suite 919

Beverly Hills, California 90211

Fax: 323-782-8587

Attn: Tamara M. Kurtzman

All such notices and communications will be effective on the next Business Day after receipt.

7.5 Governing Law.  THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCOR­DANCE WITH, AND ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTIONS OTHER THAN THE STATE CALIFORNIA AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. ANY SUIT, LEGAL ACTION OR SIMILAR PROCEEDING WITH RESPECT TO THIS NOTE SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF CALIFORNIA SITTING IN THE COUNTY OF LOS ANGELES, OR, IF THE STATE COURTS OF CALIFORNIA DO NOT HAVE JURISDICTION, THEN IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

7.6 Severability. Any provision of this Note which is prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or thereof, and any such prohibition or unenforceability in any jurisdiction will not invalidate or render unenforceable such provision in any other jurisdiction.

7.7 Further Assurances. The Company from time to time after the Issuance Date at the request of the Holder and without further consideration will execute and deliver further instruments and take such other action as a party may reasonably require to fully implement the provisions of this Note. The Holder from time to time after the Issuance Date at the request of the Company and without further consideration will execute and deliver further instruments and take such other action as a party may reasonably require and as are customary to fully implement the provisions of this Note.

7.8 Amendments. No amendment, modification, supplement or waiver of any provision of or to this Note will in any event be effective unless the same is in writing and signed by the Holder and then such waiver or consent will be effective only in the specific instance and for the specific purpose for which given.

7.9 No Waiver; Remedies. The Holder may extend the time for payment of this Note, postpone the enforcement hereof, or grant any other indulgence without affecting or diminishing the Holder's right to full recourse against the Company hereunder, which right is expressly reserved.  No failure on the part of the Holder or Company to exercise, and no delay in exercising, any right hereunder will operate as a waiver thereof; nor will any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided at law, in equity or otherwise.

7.10 Successors and Assigns; Transfer. This Note is binding upon the successors and assigns of the Company and will inure to the benefit of the Holder and its respective successors and permitted assigns; provided however, that the Company will not assign, delegate or otherwise transfer any of its respective rights or obligations under this Note without the prior written consent of the Holder. The Holder may not assign, participate, pledge, grant a security interest in, or otherwise transfer all or any portion of its rights and obligations under this Note without the prior written consent of the Company. If the Company consents to any transfer, upon such transfer the Holder will notify the Company and the Company (at its expense) will execute and deliver a new promissory note, in substantially the form of this Note, to such Permitted Assign. The Company will maintain a registry to reflect any such Transfer on its registry or record books.

[signature page to follow]

–  –

CONVERTIBLE PROMISSORY NOTE

  

  

  

IN WITNESS WHEREOF, the Company has caused this Note to be executed and delivered by its duly authorized representative on the date first above written.

AURA SYSTEMS, INC.,

a Delaware corporation

By:                                                                   

Melvin Gagerman

Chief Executive Officer

Accepted and agreed by:

_________________________________

­­­­­­­­­­­Peter Dalrymple

–  –

CONVERTIBLE PROMISSORY NOTE

  

  

  

EXHIBIT “A”

NOTICE OF CONVERSION

The undersigned hereby elects to convert principal under the Convertible Promissory Note of AURA SYSTEMS, INC., a Delaware corporation (the “Company”), into shares of common stock (the “Common Stock”), of the Company according to the conditions hereof, as of the date written below.  If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith.  No fee will be charged to the Holder for any conversion, except for such transfer taxes, if any.

By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not equal or exceed the amounts specified in Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder regarding beneficial ownership.

The undersigned represents that it is an "accredited investor" within the meaning of the Securities Act. Holder has been advised that this Note has not been registered under the Securities Act, or any state securities laws and, therefore, cannot be resold unless it is registered under the Securities Act and applicable state securities laws or unless an exemption from such registration requirements is available. Holder is aware that the Company is under no obligation to effect any such registration or to file for or comply with any exemption from registration. The undersigned represents that it has not been formed solely for the purpose of making this investment and is acquiring the Security for its own account for investment, and not with a view to, or for resale in connection with, the distribution thereof. The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock pursuant to any prospectus.

Date to Effect Conversion:                                                                _____ Principal Amount of Note to be Converted: _ 

Interest Accrued on Account of Conversion at Issue:                                                                                                ____________ 

Number of shares of Common Stock to be issued:                                                                                                                                          ___

Signature:                                                                                     

Name:

Address for Delivery of Common Stock Certificates:

OR

DWAC Instructions:

Broker No:                                           

Account No:                                           

–  –

CONVERTIBLE PROMISSORY NOTEExhibit 10.1

 

November 1, 2005 (“Effective Date”)

 

Players Network

4620 Polaris Ave

Las Vegas, NV 89103

 

Attn: Mark Bradley

 

Dear Mr. Bradley:

 

This letter will constitute
the agreement (the “Agreement”) pursuant to which Network grants to Company rights to exhibit and promote the Channel
(as defined in Section 3(b)) on the following terms and conditions.

 

		1.	Network: Players Network (“Network”)

 

		(a)	Players Network On Demand, Inc. is a wholly owned subsidiary of Network (the “Subsidiary”).
Network will completely fund all costs to develop a gaming-centric lifestyle VOD channel. Subject to the terms of this agreement,
Network will supply a VOD channel and VOD content to Company for its Select On Demand VOD platform.

 

		(b)	Network will aggregate existing programming, produce or co-produce original programming, and deliver
to Company such programming as needed to fill a monthly schedule as defined below.

 

		(c)	Network will perform day-to-day operations to run the channel, perform branding and marketing,
business development, management, staffing, advertising sales, sponsorship and merchandising services for the channel, provide
the technology necessary to operate the channel, except for VOD technology provided by Comcast and at Comcast’s expense,
and such other services as may be needed to operate the channel in order to fulfill the contractual obligations set forth herein
to operate the channel on such VOD platforms, Systems, or for Third Party Distributors (as defined in Section 7(a)(i)). 

 

		2.	Company: Comcast Programming Development, Inc., on behalf of its operating affiliates (“Comcast”
or “Company”)

 

		3.	Overview: 

 

		(a)	Company desires to create specialty interest programming networks for distribution via VOD (as
hereinafter defined), which networks may be distributed on and over the distribution systems, owned, operated or managed by Company
and/or any entity controlled by any entity controlling, controlled by, or under common control with Company (collectively the “Systems”)
on the programming service now known as “Select on Demand” or such other programming service as Comcast deems appropriate
(the “Service”) or through any other Third Party Distributors (as defined in Section 7(a)(i)), provided that the Service,
and Third Party Distributors do not enter agreement with terms less favorable to Network than as provided to Network in this agreement
with Company.

 

    	 

    	 

    

 

		(b)	Network desires to create an audio-visual program service designed to offer programming consisting
of gaming-centric entertainment, information lifestyle and commerce content (the “Channel”, which definition shall
include any portion thereof) to be distributed by Company as set forth herein and pursuant to the technical specifications set
forth on Schedule B.

 

		(c)	For purposes of this Agreement “VOD” shall mean a system that allows for the
exhibition of audio-visual programming chosen by a Subscriber (as defined herein) for display on that Subscriber’s video
display unit on an on-demand basis, such that a Subscriber is able, at his or her discretion, to select the time for commencement
of exhibition and thereafter control the playback of such programming (with functionalities such as rewind, fast-forward and brief
pause).

 

		(d)	A “Subscriber” shall mean any party authorized to receive and receiving audio-visual
services from any System or Authorized Third Party Distributor (as defined in Section 7(a)(i)).

 

		4.	Company Obligations: 

 

During the
Term of this Agreement, Company shall provide the following:

 

		(a)	Use commercially reasonable efforts to sub-license for distribution via VOD on any other third
party multi-channel video programming distributor including without limitation any cable operator, multi-channel multipoint distribution
service, or a television receive-only satellite program distributor (“MVPD”) (each such MVPD distributing the Channel
pursuant to a sub-license hereunder shall be an “Authorized MVPD”);

 

		(b)	Deliver and encode (utilizing such third party for delivery and encoding as selected by Company
in its sole discretion) the Channel as part of the Service to the Systems, and/or MVPDs;

 

		(c)	Pay the costs to the Company approved vendor of encoding and distributing the Channel for delivery
via VOD on such Systems or Authorized Third Party Distributors;

 

		(d)	On a monthly basis, Company shall provide to Network representative data gathered by Company from
all Systems actually distributing the Channel to Subscribers via VOD, as determined by Company (each such System a “VOD System”)
regarding usage by title, provided that such data shall not include personally identifiable information concerning any individual
Subscriber.

 

		(e)	Assist in developing Channel marketing material, including but not limited to Channel branding
elements, print material and the Channel’s on-air look and feel (“Marketing Materials”); provided Network delivers
any existing Promotional Materials (as defined in Section 9(c)) in accordance with the terms set forth in Section 9(c). It being
understood that the cost associated with the development and production of the Marketing Materials shall be incurred solely by
Network;

 

    	2

    	 

    

 

		(f)	Integrate the Marketing Materials into the Service’s internal marketing strategy, including
without limitation, delivering Marketing Materials on an on-going and regular basis for possible insertion on the promotional platforms
utilized by the Channel within the Service, Company or a Third Party Distributor to promote the Service such as a “barker”
channel, or website. It being understood that the failure of any Marketing Materials to be distributed on any of the aforementioned
platforms shall not be deemed a breach of this Agreement;

 

		(g)	Assist in discussions regarding major third party advertisers;

 

		(h)	Facilitate discussions with Comcast Spotlight; and

 

		(i)	Schedule and participate in quarterly strategy meetings to discuss on-going marketing strategy
and Channel status.

 

		5.	Advertising and Merchandising Revenue: The parties agree to allocate Advertising Revenue
and Merchandising Revenue as set forth in this Section 5. For purposes of this Section 5, the meanings of all capitalized terms
herein appear in Section 5(f).

	 	 	 

		(a)	Network shall retain all Advertising Revenue actually received from the insertion of Commercial
Spots from national advertisers (i.e., the same advertisement no matter in which geographic area Company Exhibits the Title) sold
by Network. All advertising sold by Network will be in compliance will the advertising rules and regulations as outlined by the
FCC, and, shall be inserted in such Titles by Network prior to delivery to Company.

 

		(b)	For a period of thirty six (36) months following the Effective Date, Network shall retain all Merchandising
Revenue; thereafter all Merchandising Revenue shall be allocated as follows: fifty percent (50%) of the Merchandising Adjusted
Gross Revenue to the Company and fifty percent (50%) of the Merchandising Adjusted Gross Revenue to the Network. Network will be
responsible for the cost to program and the reformatting of its content to communicate with company’s middleware provider.
Such reformatting cost will be amortized as part of the cost of the adjusted gross revenue.

 

		(c)	Network may Exhibit Commercial Spots at the beginning and the end of the Exhibition of each Title.
Such Commercial Spots shall not exceed ten percent (10%), in the aggregate, of the length of such Title; provided however, no more
than fifteen (15) seconds of Commercial Spots shall be at the beginning of any Title and no more than fifteen (15) seconds of Channel
branding and identification shall be at the beginning of any Title. For longer form programs, Network may insert thirty (30) second
Commercial Spots after five (5) consecutive minutes of run time of a Title provided that total Commercial Spots shall not exceed
ten percent (10%) in the aggregate of the length of such Title.

 

		(d)	Network will have the exclusive right for national advertising sales, merchants, sponsors and direct
response marketers in the category of gaming and gaming-related products and services; Company shall not sell nor allow other third
parties to sell gaming-related ads on the Network.

 

		(e)	Network shall reply to inquiries and fulfill orders received in response to a Commercial Spot promoting
Merchandise.

 

    	3

    	 

    

 

		(f)	Section 5 Definitions:

 

		(i)	“Advertising Revenue” shall mean gross commercial advertising revenue (less applicable
agency commissions) actually received from the insertion of Commercial Spots.

 

		(ii)	“Commercial Spot” shall mean third party commercial advertisements or sponsorships
or a promotional spot that promotes the availability of Merchandise. Channel ID’s and promotion consideration billboards
are not included in the ten percent (10%), aggregate, of the length of the Title allowed for advertising.

 

		(iii)	“Merchandise” shall mean a videocassette and/or DVD of any kind produced and/ or marketed
by the Company.

 

		(iv)	“Merchandising Adjusted Gross Revenue” shall mean all gross revenue (Retail plus shipping
and handling less manufacturing, packaging costs, shipping and handling) actually received from the sale of Merchandise.

 

		6.	Term:

 

		(a)	In
the event that Company does not distribute the Channel to a minimum of two (2) third party MVPDs within eighteen (18) months following
the Commencement Date (as defined in Section 6(c)), the rights granted hereunder shall no longer be exclusive to Company and Network
may license the Titles to third parties.

 

		(b)	If Company does not Exhibit (as defined in Section 7(a)) the Channel on a System on or before the
six (6) month anniversary of the Commencement Date, or at any time after the six (6) month anniversary of the Commencement Date
for a consecutive six (6) month period, and such non-Exhibition is not cured by Company within sixty (60) days following receipt
of written notice thereof, then Network may terminate this Agreement, as its sole remedy, upon thirty (30) days written notice
to Company.

 

		(c)	The Term shall commence on the Effective Date and end on the ten (10) year anniversary of the Effective
Date, unless sooner terminated as set forth above.

 

	

	 	7.	Rights Granted: The parties agree that the Channel will consist of all audio-visual programs now or hereafter owned, produced or licensed by Network (“Content Categories ”) listed on Schedule A attached hereto (as may be amended with the addition of new Content Categories from time to time by mutual agreement of Network and Company). It being understood that Schedule A shall be automatically amended to include any Title Exhibited as set forth herein.

		 	 

		(a)	Network hereby grants to Company the exclusive right and license to the following (collectively,
“Exhibit”, “Exhibited”, “Exhibiting”, “Exhibition” and the like as appropriate
in the context herein) with respect to the Channel as outlined below in (a)i:

 

    	4

    	 

    

 

		i.	License,
exhibit, distribute, transmit, perform, display, and otherwise make available the Channel and any trademarks, logos and services
marks associated with the Titles, the Channel or the Network (the “Marks”) during the Term throughout the US (“Territory”),
in any language, via VOD including on and over the Systems on the Service and to sublicense the Channel to MVPDs; and direct broadcast
satellite service providers (“DBS Providers”) (such MVPDs, and DBS Providers, shall collectively be referred to herein
as “Third Party Distributors” and each such Third Party Distributors distributing the Channel pursuant to a sub-license
hereunder shall be an “Authorized Third Party Distributor”);

 

		ii.	copy, cut, edit, dub, alter
and modify the Channel and authorize any person to do the foregoing, subject to prior written approval by Network, such approval
not to be unreasonably withheld, including the right to break a Title into segments, which may be Exhibited as interstitial programming
or incorporated into a larger formatted type program. Except with respect to contractually required credits of which Network provides
written notice at the time of delivery of a Title, Company may delete credits from a Title or move the credits and/or copyright
notice to another position (e.g. to a designed credits section or to the end of any larger formatted program into which segments
of a Title have been incorporated; and

 

		iii.	Promote
the Channel in any manner or media, throughout the US, including, without limitation, the right to use and license others to use
Network’s name, the title of, trailers created for and excerpts from the Channel (including but not limited to audio portions
only) and the name, voice and likeness of and any biographical material concerning all persons appearing in or connected with
the Channel only for the purpose of advertising, promoting and/or publicizing the Channel, Company and the Service on which the
Channel is Exhibited.

 

		(b)	Network
hereby grants to Company the non-exclusive right and license to:

 

		i.	Use streaming video from each Title on Company’s Internet site. Network reserves the right
to stream video from each Title on the internet or via wireless transmission and delivery.

 

		ii.	Use the Titles for (i) audience and marketing testing, (ii) sponsor/advertiser screening, and (iii)
reference and file purposes; and

 

		iii.	Include Company’s name, trademark and logo in the Titles (in a manner provided and approved
by Network) to identify Company as the exhibitor of the Titles. Network has reciprocal right to use Company’s name, trademark
and logo in its materials in a manner provided and approved by Company.

 

    	5

    	 

    

 

		(c)	With
respect to new titles owned, produced or licensed by Network or any entity controlling, controlled by or under common control with
Network which are not included on Schedule A, as amended from time to time of the same genre of programming as the Titles Exhibited
on the Channel, Network may license such titles for distribution to Third Party Distributors for distribution by any and all means
of exhibition; provided, however, in the event Network desires to exploit such new title solely by means of VOD, then Network shall
notify Company of such intention in writing and Company shall have an exclusive right of first negotiation for delivery of such
new titles via VOD. In the event that Company exercises its right of first negotiation, the parties shall negotiate in good faith
the terms and conditions, which shall be applicable to such new titles and shall govern the respective rights, duties and obligations
to the parties hereto with respect to such new titles. If Company does not exercise its right of first negotiation or the parties
are unable to reach an agreement with any such other Third Party Distributor, Network may negotiate with such other Third Party
Distributor regarding distribution of such new titles; provided, however, that prior to entering into an agreement with any such
other Third Party Distributor, Network shall first offer to Company the right to enter into an agreement with Network on the same
terms and conditions as the proposed agreement with such other Third Party Distributor. If Company fails to accept such offer within
ten (10) business days of Company’s receipt of such offer, Network shall have a ninety (90) day period to enter into an agreement
with such other Third Party Distributor on the same terms and conditions as those offered to Company. If Network does not consummate
such agreement with a Third Party Distributor within such time frame, then the Network shall again comply with the procedures of
this Section 7.

 

		(d)	Network shall be responsible for procuring and protecting any registration for the Marks.

 

		(e)	Network shall be responsible for any and all royalties and/or other fees payable for distribution
of content by VOD including, without limitation, residuals and clearances or other payments to guilds or unions, rights for music
clearances, such as performance rights, synchronization rights and mechanical rights, and all other fees, payments, or obligations
arising out of the activities contemplated by this Agreement, and Company shall have no responsibility or liability for any such
royalties or fees.

 

		(f)	There shall be no license fee, royalties or other fees or charges of any kind to Company or owed
by Company for the Titles except as set forth in Section 5.

 

		8.	Number
of Exhibitions:Unlimited

 

		9.	Delivery Requirements

 

		(a)	Network shall be responsible for supplying to Company a minimum of six (6) hours of high quality,
professionally produced Titles per month beginning on the commencement date; provided however that in each year of the Term the
number of hours of Titles available per month shall increase by twenty percent (20%). The Titles shall be refreshed at a mutually
agreeable rate. Notwithstanding the foregoing, the refreshed content may include Titles previously made available but which has
not been scheduled for Exhibition at any time over the immediately preceding six (6) months.

 

		(b)	Network will be required to deliver programming thirty (30) days prior to the start of each month
during the Term; provided, that if Company delivers written notice to Network stating that it has deployed technology to
speed up the delivery process (which notice shall be provided a reasonable time following such deployment), Network will be required
to deliver programming at the times specified in such notice. Network shall deliver to Company, in English language only, the materials
described on Schedule B attached hereto for each Title. Delivery shall be made to such address as specified by Company from
time to time, and once the content is initially aired, the masters shall be sent back to Network upon Network’s request.

 

    	6

    	 

    

 

		(c)	Thirty (30) days prior to the start of the Term, Network shall provide Company with available promotional
materials for each Title, which may include, for example, color or black-and-white slides, transparencies, captioned photographs,
brochures, a synopsis and description of such Title, a complete list of cast and credits, biographies of key performers, and any
electronic press kits, trailers or featurettes created for such title (collectively the “Promotional Materials”). Promotional
Materials should be delivered to such address as specified by Company from time to time.

		 	

		10.	Company Equity:

 

		(a)	The Network (on behalf of itself and its affiliates) hereby grants to Company an irrevocable option
(the “Option”) to acquire forty percent (40%) of the equity in the Channel Entity (as defined in Section 10(j) below),
determined on a fully-diluted basis. The Company shall be permitted to exercise the Option at any time during the period starting
on the 18-month anniversary of the Effective Date, and ending on the third (3rd) anniversary of the Effective Date (the “Option
Term”). Company may exercise the Option by delivering written notice (the “Option Notice”) to the Network at
any time during the Option Term.

 

		(b)	Promptly following delivery of the Option Notice, if 100% of the Channel Assets (as defined in
Section 10(j) below) are not then owned by a direct, wholly-owned subsidiary of the Network (including the Subsidiary), the Network
shall form a direct, wholly-owned subsidiary in the State of Nevada (or such other jurisdiction mutually agreed to by the Network
and the Company), and cause all of the Channel Assets to be transferred to such entity free and clear of all liens, security interests,
encumbrances and restrictions on transferability.

 

		(c)	During the Term of this Agreement, and at any time when Company Securities are outstanding, the
Network shall, and shall cause any Channel Entity to, account for results with financial statements prepared in accordance with
U.S. generally accepted accounting principles consistently applied (including an income statement, balance sheet and statement
of cash flow), and shall deliver such financial statements to the Company within 45 days following the end of each fiscal quarter
(unless such fiscal quarter also is the end of a fiscal year, in which case Network shall provide the Company with financial statements
for the then-completed fiscal quarter and fiscal year within 60 days following the end of such fiscal quarter); provided,
that any financial statements provided for any fiscal quarter that is not also the end of a fiscal year shall be subject to normal
year-end adjustments. Prior to the formation of a Channel Entity, the financial information provided by Network pursuant to this
Section 10(c) shall include separate, detailed financial information relating to the revenues, expenses, capital contributions,
assets and liabilities in relation to the Channel Assets, in form reasonably acceptable to the Company. In addition, the Network
shall, and shall cause the Channel Entity (if any), promptly to provide, following a written request by the Company, such other
materials as the Company reasonably deems necessary to make an informed investment decision with respect to its exercise of the
Option.

 

 

 

    	7

    	 

    

 

 

		(d)	The exercise price for the equity securities to be issued pursuant to the Option Notice shall equal
40% of the fair market value of the Channel Entity when the Option Notice was delivered (the “FMV”). The FMV shall
be mutually agreed upon by the Company and the Network, who agree to negotiate the FMV in good faith. If the Company and the Network
are unable to agree upon the FMV within 15 days, the FMV shall be determined on the basis of an appraisal by an individual or firm
qualified to perform appraisals of the type of business in question as selected by the mutual agreement of Company and the Network;
provided, however, if they cannot agree on an appraiser within 15 days, each shall be entitled to select one (1)
individual or firm qualified to perform appraisals of the type of business in question and such individuals or firms shall select
a third individual or firm qualified to perform appraisals of the type of business in question who shall determine the FMV, which
selection shall be binding upon the parties. Upon selection of the appraiser, the Company and the Network each shall submit to
the appraiser its own appraisal of the FMV, and the parties shall instruct the appraiser to select, within 30 days thereafter,
the appraisal that more accurately reflects the FMV. Both parties shall cooperate in providing such information as is reasonably
requested by the appraiser. All costs incurred in connection with determining the FMV shall be borne by the party whose appraisal
was not selected by the independent appraiser as the more accurate reflection of the FMV. The parties agree that the determination
of the independent appraiser in accordance with the foregoing will be conclusive and binding upon the parties. The sale of equity
securities to the Company pursuant to the Option Notice shall close on the 10th day following the determination of the FMV in accordance
with this Section 10(d) (the “Closing”), or on such other date agreed upon by the Company and the Network.

 

		(e)	At the Closing, the Network shall cause the Channel Entity to issue to the Company the number of
equity securities representing 40% of the Channel Entity’s equity securities, calculated on a fully-diluted basis (the “Company
Securities”). The Company Securities shall have a liquidation preference, distribution/dividend rights, put/call rights,
co-sale rights, preemptive rights and information rights that are as least as favorable as those held by any other holder of equity
securities of the Channel Entity on the date of the Closing; provided, that, regardless of whether any other equity securities
of the Channel Entity have such rights, the Company Securities shall have co-sale rights and preemptive rights with customary and
reasonable terms that permit the Company to sell (in the case of co-sale rights) or purchase (in the case of preemptive rights)
equity securities in the Channel Entity in proportion to the Company’s then-existing percentage ownership of the outstanding
equity in the Channel Entity with, in each case, the right to participate for a greater percentage to the extent other eligible
security holders decide not to exercise their co-sale or preemptive rights. The Company Securities issued pursuant to the Option
Notice shall have voting rights equal to 40% of the voting rights of all equity securities of the Channel Entity (determined on
a fully-diluted basis). Following the issuance of any Company Securities, without the prior written consent of the Company, the
Channel Entity shall not permit (1) the adoption, amendment, alteration or repeal of any provision of the Channel Entity’s
organizational documents or other agreements relating to the equity securities of the Channel Entity that adversely effects the
rights of the Company Securities, (2) the transfer of any of the Channel Assets or (3) any change to the line of business conducted
or engaged in by the Channel Entity.

 

 

 

    	8

    	 

    

 

 

		(f)	If the Option is not so exercised, the Option shall automatically expire and terminate. The Option
may be transferred to any affiliate of Company or any affiliate of Comcast Corporation; provided, that the Company or any
affiliate of Comcast Corporation shall not transfer the Option to any other entity whose primary business is to produce gaming-centric
programming.

 

		(g)	So long as any Company Securities are outstanding, the Channel Entity’s Governing Body (as
defined in Section 10(j) below) shall include the number of members appointed by the Company so that the percentage of members
of the Governing Body appointed by the Company equals at least the percentage of the outstanding equity interests in the Channel
Entity that are owned by the Company. In addition, the Company shall be entitled to have a non-voting observer attend all meetings
of the Channel Entity’s Governing Body, which observer shall receive copies of all notices, minutes, consents and other material
that the Channel Entity provides to other participants of the meeting.

 

		(h)	The Network acknowledges on behalf of itself and its affiliates that the Company and its affiliates
may engage in business activities that compete with the Network and/or the Channel Entity or are not in the best interests of the
Network and/or the Channel Entity (the “Activities”), and that the Activities do not (1) constitute a breach of this
Agreement, (2) constitute a breach of any fiduciary or other duty owed to the Network and/or the Channel Entity or any of their
respective equity holders (and to the extent any such duty exists, it is hereby waived), (3) otherwise give rise to any liability
in law or equity or (4) otherwise give rise to any obligation of Comcast or its affiliates to disclose to the Network and/or the
Channel Entity any information known as a result of the Activities. The Network further acknowledges on behalf of itself and the
Channel Entity that the Company is not restricted from pursing any business opportunity offered to the Network and/or the Channel
Entity, and is not obligated to offer any business opportunity to the Network and/or the Channel Entity.

 

		(i)	So long as Company Securities are outstanding, the Network hereby grants to Company an irrevocable
right of first offer with respect to the sale, merger, liquidation or other disposition of the Channel Entity or all or substantially
all of the Channel Assets, other than any sale, merger, liquidation or other disposition that occurs in connection with a Network
Sale (as defined in Section 10(j) below) (collectively, a “Sale Transaction”). If the Network or the Channel Entity
decides to engage in a Sale Transaction, the Network or Channel Entity, as the case may be, shall, prior to offering to engage
in a Sale Transaction with any other party, make a written offer to sell the Channel Entity and/or the Channel Assets, as the case
may be, to the Company for an amount in cash that the Network’s or Channel Entity’s Governing Body has determined in
good faith is the fair market value of the Channel (the “Company Offer”). The Company shall have 30 days to accept
or reject such offer in writing. If the Company rejects such offer (the “Rejection Notice”) then, for a period of three
(3) months following the Network’s or Channel Entity’s receipt of the Rejection Notice (the “Open Sale Period”),
the Network or the Channel Entity, as the case may be, may consummate a Sale Transaction with an unaffiliated third party for an
amount which is equal to or which exceeds the amount of consideration requested in the Company Offer (a “Sale Agreement”).
If the Network or the Channel Entity does not enter into a Sale Agreement within the Open Sale Period, the Network or the Channel
Entity, as the case may be, must fully comply with the terms of this provision if it considers a Sale Transaction.

 

 

 

    	9

    	 

    

 

 

		(j)	For purposes of this Section 10,

 

		i.	“Channel Assets” shall include all right, title and interest in and to the assets and
properties of every kind, character and description owned by the Channel Entity or the Network at the time of the Option Notice
whether tangible, intangible, real, personal or mixed, and wherever located that are used in or for the benefit of the Channel,
including, but not limited to, all of Network’s rights (whether by ownership, license or otherwise) with respect to all Titles.

 

		ii.	“Channel Entity” shall refer to any entity created pursuant to Section 10(b), or any
entity (other than the Network) that owns all of the Channel Assets.

 

		iii.	“Governing Body” shall mean the Board of Directors or, if no Board of Directors exists,
such other equivalent governing body of such entity.

 

		iv.	“Network Sale” shall mean a sale, merger, liquidation or other disposition of the Network,
including a sale of all or substantially all of the assets of the Network so long as the Channel Assets account for less than 40%
of the fair market value of the total assets that are subject to the transaction.

 

		11.	Representations and Warranties:

 

Network represents and warrants
that:

 

		(a)	It has all rights and authority necessary to grant the rights granted herein and all rights in
and to the Titles in and to all literary, dramatic and musical material included therein required for the exercise of rights granted
in this Agreement without liability of any kind to any third party.

		 	

		(b)	There are no fees or royalties owed to any party other than as set forth in this Agreement for
the exercise of rights granted in this Agreement.

		 	

		(c)	No claim or litigation is pending or threatened with respect to any Title that would adversely
affect any of the rights granted hereunder.

		 	

		(d)	No part of any Title or the exercise of the rights granted herein will violate or infringe any
right whatsoever of any third party.

		 	

		(e)	To the extent that any Title makes any claims or renders any instruction or advice, such claim,
instruction or advice shall comply with all federal, state and other applicable laws and regulations and shall cause no harm to
any person or entity following or acting in accordance with such instruction or advice.

	 	 	 

    	10

    	 

    

 

		12.	Indemnification/Insurance:

 

		(a)	Network shall indemnify, defend (at Company’s election) and hold harmless Company, and each
of its officers, members, employees, agents, affiliates, customers, Companies and sublicenses, from any claim, liability, loss,
damage or expense, including reasonable attorneys’ fees and disbursements, caused by or arising out of (i) any breach or
alleged breach of any representation, warranty, covenant or agreement of Network or (ii) the Exhibition or promotion of the Channel
or Titles pursuant to this Agreement. Company shall notify Network in writing of any claim or litigation to which this indemnification
applies, and Network shall have the right to assume the defense of any such claim or litigation; provided that Company shall have
the right to participate in such defense at its own expense. Network shall have the right to approve or disapprove the settlement
or disposition of any such claim or litigation proposed by Company, which right shall expire 20 business days following Network’s
receipt of written notice with respect thereto. Notwithstanding the foregoing, Network shall have no obligation to Company with
respect to claims asserted as the result of Company's incorporating other audio-visual works into or with any of the Titles as
described in Paragraph 7(a)(ii) hereof. Network shall not be liable for special, incidental or consequential damages. The provisions
of this Paragraph 12 will survive termination of the Agreement.

 

		(b)	Company shall indemnify, defend (at Network's election) and hold harmless Network, and each of
its officers, directors, members, employees, agents and affiliates from any claim, liability, loss or damage, including reasonable
attorneys' fees and disbursements, related to, caused by or arising out of (i) any breach or alleged breach of any representation,
warranty, covenant or agreement of Company, or (ii) caused by Company's incorporating other audio-visual works into or with any
of the Titles as described in Section 7(a)(ii) hereof. Network shall notify Company in writing of any claim or litigation to which
this indemnification applies. Company shall have the right to assume the defense of any such claim or litigation, provided that,
Network shall have the right to participate in such defense at its own expense. Company shall have the right to approve or disapprove
the settlement or disposition of any such claim or litigation proposed by Network, which right shall expire 20 business days following
Company’s receipt of written notice with respect thereto. Company shall not be liable for special, incidental or consequential
damages. The provisions of this Paragraph 12 will survive termination of the Agreement.

 

		(c)	Network shall obtain and maintain such insurance as Company deems necessary, including insurance
policies which are customarily maintained by producers of motion pictures in the United States, including errors and omissions,
negative, general comprehensive and liability, third party property damage, cast insurance, miscellaneous equipment insurance,
workers compensation or equivalent employer’s liability, disability and transit insurance. All such insurance shall be placed
in such amounts or Company shall approve limits with such deductibles and in such form as approved by Company. Network shall furnish
Company with certificates of insurance stating and certifying the amounts and types of coverage and providing thirty (30) day notice
to the additional insured in the event of any change or modification to such policy. Company shall be named as an additional insured
on all such policies. Any recovery under said policies shall be paid to Company. The insurance requirements herein shall not be
a waiver or limitation of liability with respect to any of Network’s obligations herein.

 

    	11

    	 

    

 

		13.	Miscellaneous:

 

		(a)	THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
APPLICABLE TO CONTRACTS MADE AND WHOLLY PERFORMED THEREIN WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

		(b)	Company, in addition to being entitled to exercise all rights provided herein, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement. Network agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of breach by Network of the provisions of this Agreement and hereby
agrees to waive the defense in any action for specific performance that remedy at law would be adequate.

 

		(c)	This Agreement may not be amended nor any provision waived except in writing signed by the parties
hereto. This Agreement contains the full understanding of the parties and supersedes any and all previous agreements between the
parties with respect to the subject matter hereof. Each party acknowledges that is entering into this Agreement in reliance only
upon the provisions herein set forth, and not upon any representation, warranty, covenant, agreement, obligation or other consideration
not set forth herein.

 

		(d)	Any recourse of Network against Company shall extend only to Company and not to any of Company’s
affiliates.

 

		(e)	Network agrees that its rights and remedies in the event of any breach of this Agreement by Company
will be limited to the right, if any, to recover money damages in an action at law, and in no event will Network be entitled by
reason of any such breach to seek injunctive or the equitable relief.

 

		(f)	Company shall have the right to assign or sublicense any or all of its rights or obligations hereunder,
in whole or in part, to third parties exhibiting the Titles in the ordinary course of Company’s business, to affiliated parties,
to any entity controlling, controlled by or under common control with it or to any person or entity which acquires substantially
all of Company’s stock or assets.

 

		(g)	Facsimile signatures shall be deemed original for all purposes. This Agreement may be executed
in counterparts all of which when taken together shall be deemed to constitute one and the same instrument.

 

[Signatures appear on the following page.]

 

    	12

    	 

    

 

If you are in agreement with the foregoing, please sign this
letter in the space indicated below.

 

	 	
        Regards,

         

        COMCAST PROGRAMMING DEVLOPMENT, INC.

         

	 	 	 	 
	 	By:	/s/ Matthew Strauss	 
	 	 	Matthew Strauss	 
	 	 	Vice President	 
	 	 	 	 
	 	Date:	 	 

 

 

	
        AND AGREED TO:

 

        Players Network

 

	 	 	 
	By:	/s/ Mark Bradley	 
	 	Mark Bradley	 
	 	CEO & President	 
	 	 	 
	Date:	 	 

 

 

 

 

 

 

    	13

    	 

    

 

SCHEDULE A

 

TITLES

PLEASE ADD THE TITLES HERE!

 

 

Programming and advertising Categories

 

		a.	Casino Destinations

		b.	Bingo, Keno, Lotteries

		c.	Casino Games

		d.	Sport and Race wagering

		e.	Card Games

		f.	Gaming Lifestyle

		g.	Gaming Business

		h.	Gaming News

		i.	Sweepstakes

		j.	Gaming Entertainment

		k.	Gaming Cruises

 

 

 

 

    	14

    	 

    

 

 

SCHEDULE B

 

TECHNICAL SPECIFICATION/PREFRERENCE GUIDE

 

DELIVERY PREFRERENCES/TECHNICAL SPECIFICAITONS
FOR ACQUIRED PROGRAMMING

 

DELIVERY FORMAT / ELEMENT CONFIGURATION
PREFERENCES

 

		·	All produced material should be delivered on individual Digibeta videocassettes

		·	If Digibeta is not available then deliver on Beta SP Master

		o	Drop-frame time code preferred

		·	Versions / formats preferred

		o	DigiBeta master (Or Beta SP if necessary)

		o	Stereo Master Mixed to Channels 1& 2

		o	For content editing within program segments we need:

		§	Track 1: voiceover/dialogue

		§	Track 2: nat sound / background / fx/ ambience / room tone

		§	Track 3: music stereo left

		§	Track 4: music stereo right

 

LABEL/SLATE INFORMATION

 

		·	Required information

		o	Show title

		o	Master tape ID#

		o	TRT

		o	Program audio mix

		o	Date

		o	Name and phone number of production house

 

TRAFFIC

 

		·	DigiBeta (Or Beta SP) master should be sent to:

 

Center City Film & Video,

Attn: Comcast VOD Service,

1501 Walnut Street, 4th
Floor,

Philadelphia, PA 19102

 

    	15

    	 

    

 

TECHNICAL REQUIREMENTS

 

		·	Color bar video information (minimum 30 seconds) shall be accompanied by 1 kilohertz audio tone
at -20dB for all digital audio tracks, +4dBm for analog recordings. During the color black portions of the tape all audio tracks
shall be silent.

		·	Both color and monochrome programs shall meet SMPTE 259M standards for levels and timing of signal
components.

		·	SMPTE standard 80-bit, longitudinal drop frame time code shall be recorded on the time code track.
It shall be recorded continuously from the beginning of the reel to the end, with 1;00;00;00 appearing at the first frame of the
program preferably.

		·	Digital black shall be recorded at 0 IRE as specified in SMPTE 259M. When transferring NTSC material
to digital format videotape, VTR black level should be set to record at 0 IRE (see SMPTE 259M-C). Composite recording black level
should remain at 7.5 IRE. The minimum unweighted signal to noise ratio shall be 50 dB.

		·	Graphic Overlays should not exceed 100 IRE over the program video of 100 IRE.

 

PROMOS (Not Applicable)

 

ADDITIONAL DELIVERY REQUIREMENTS 

 

Full show/program transcript

 

		·	(If Available) Program run-down that includes segment lengths and slugs

		·	Delivered to:

 

Center City Film & Video,

Attn: Comcast VOD Service,

1501 Walnut Street, 4th
Floor,

Philadelphia, PA 19102

 

(IF REQUIRED BY COMPANY)

 

		·	Music cue sheets

		·	Credit list

		·	(If available) Complete detailed shot list by time code

		·	(If requested) Any and all releases (talent location, extras,)

		o	(1) One VHS copy

		§	(1) Copy with “burned-in” time code (preference center bottom 3rd)

Fully mixed audio

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00211-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00211-of-00352.parquet"}]]