Document:

EXHIBIT
10.1

    PURCHASE
PROMISSORY NOTE

    

    THIS
NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF (UNTIL SUCH TIME, IF
ANY, AS SUCH COMMON STOCK IS REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR UNDER THE
SECURITIES LAWS OF ANY STATE OR JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR
SALE OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION, IN
REASONABLY ACCEPTABLE FORM AND SCOPE, OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY, THAT REGISTRATION, QUALIFICATION OR OTHER SUCH ACTIONS ARE NOT REQUIRED
UNDER ANY SUCH LAWS.

     

    CONVERTIBLE PROMISSORY
NOTE

     

    
      
        	
                EUR
      1,662,500

              	
                October
      _____ , 2009

              

      

    

     

    FOR VALUE
RECEIVED, KIT digital, Inc., a Delaware corporation (the “Company”), hereby
promises to pay to the order of International Management Group GmbH, a company
organized under the laws of Germany, or registered assigns (the “Holder”), the
sum of One Million Six Hundred and Sixty Two
Thousand Five Hundred  Euros (EUR 1,662,500) (the “Principal”), with
interest thereon, on the terms and subject to the conditions set forth herein
and in the Share Purchase Agreement, dated as of the date hereof, between the
Company and the Holder (the “Purchase Agreement”).  Capitalized terms used
but not defined herein have the meanings ascribed to such terms in the Purchase
Agreement.

     

    
      The
Company is permitted to deduct from the Principal under this Note
certain amounts that may be owed by the Holder to the Company pursuant to
the Waiver and Agreement dated on the date hereof between the Company and the
Holder.  In the event the Company elects to make any such deduction in
accordance with said Waiver and Agreement, the Company shall issue and deliver a
new promissory note to the Holder reflecting, as appropriate (i) a reduced
Principal amount, (ii) reduced Principal payment amounts under Section 1(b) and
(iii) a reduced Prepayment Amount under Section 2.  Simultaneously
with the delivery by the Company to the Holder of a new convertible promissory
note substantially in the form of this Note and reflecting the foregoing, this
Note shall automatically, without any action by the Company or the Holder, be
cancelled and replaced by such new convertible promissory note, and all
obligations hereunder shall be extinguished.

       

    

    Payments
of principal of, interest on and any other amounts with respect to this
Convertible Promissory Note (this “Note”) are to be made in Euros.

     

    Notwithstanding
any provision of this Note, the Purchase Agreement or any other agreement to the
contrary, the Company shall not be required to pay, and the Holder shall not be
permitted to contract for, take, reserve, charge or receive, any compensation
that constitutes interest under applicable law in excess of the maximum amount
of interest permitted by applicable law.

     

    The
original Holder of this Note will be deemed, by its acceptance hereof, to have
agreed to the provisions and to have made the representations and warranties set
forth in clause 5 of the Purchase Agreement.

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

    1.           Interest;
Payments

     

    (a)         This
Note shall bear interest on Principal amounts outstanding from time to time
commencing on April 1, 2010 until the Maturity Date at the rate of six and
one-half percent (6.5%) per annum (“Interest”).  All Interest shall be
calculated on the basis of a 360-day year counting the actual days elapsed and
shall be calculated quarterly with an intra-period pro rata
calculation.

     

    (b)         On
each of the following dates (or if such date is not a business day, the business
day immediately following such date) (each, a “Payment Date”) there shall become
due and payable an aggregate Principal amount of EUR 277,083.33:

     

    
      
        	
                Payment
      Date

              
	 
      
	
                December
      31, 2009

              
	 
      
	
                March
      31, 2010

              
	 
      
	
                June
      30, 2010

              
	 
      
	
                September
      30, 2010

              
	 
      
	
                December
      31, 2010

              

      

    

    

    Each such
payment shall be without premium, but together with accrued Interest on such
Principal amount to the date of such payment, unless the Company shall elect to
add such accrued Interest to the Principal of the Note pursuant to Section
1(c).  On March 31, 2011 (the “Maturity Date”), there shall become due
and payable and the Company shall pay the entire unpaid Principal amount of the
Notes (including all Additional Principal (defined below)), together with all
Interest accrued thereon and all other amounts, if any, due and remaining unpaid
thereon.

     

    (c)         Accrued
Interest on the Principal balance of this Note shall be payable on each Payment
Date and the Maturity Date, but, upon the election of the Company, may instead
be added to the Principal balance of this Note (such amount “Additional
Principal”) on each Payment Date (but not the Maturity Date).

     

    2.           Prepayment

     

    The
unpaid Principal balance of this Note, may, at the Company’s option, be prepaid
in whole, whether through a conversion in accordance with Section 6 or a payment
in cash, at any
time or from time to time on or before January 8, 2010, upon five (5) days’
prior written notice to the Holder; provided, however, that if the Company
elects to so prepay or convert the unpaid Principal
balance of this Note, for the purposes of this Section 2, the unpaid Principal
balance of this Note shall be discounted by 18% and the total amount of unpaid
Principal the Company shall be required to pay to the Holder hereunder shall equal
EUR 1,363,250 minus any amounts
paid by the Company to the Holder under Section 1 (the “Prepayment
Amount”).  Payment by the Company of the Prepayment Amount in
accordance with this Section 2 shall constitute full satisfaction of the
Company’s obligations hereunder.

     

    
      
        
           

        

         

      

      
        2

        
          

        

      

      
         

      

    

     

    3.           Time
of the Essence

     

           It
is agreed that time is of the essence on this Note.

     

    4.           Events
of Default

     

           Each
of the following shall be deemed an “Event of Default”:

     

    (a)         The
Company shall default in the payment when due of any Principal of or Interest on
this Note, whether at maturity, by acceleration or otherwise; or

     

    (b)         The
Company (i) shall admit in writing its inability to pay its debts as they
mature, or (ii) shall make a general assignment for the benefit of creditors, or
(iii) shall be adjudicated bankrupt or insolvent, or (iv) shall commence a
voluntary proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect; or

     

    (c)         An
involuntary proceeding shall be commenced against the Company seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect, or a receiver, liquidator, trustee, custodian, conservator or other such
person shall be appointed by any court to take charge of the Company’s affairs,
assets or business, and (i) the Company shall admit to the material allegations
of the petition or complaint in such proceeding, or (ii) such involuntary
proceeding or appointment shall remain undismissed and unstayed for a period of
sixty (60) days; or

     

    (d)         If
any representation or warranty made by the Company in the Purchase Agreement
shall be determined to have been false or misleading in any material respect as
of the date made; or

     

    (e)         Any
failure by the Company to perform or observe any of its covenants contained in
the Purchase Agreement; provided, however, that with respect to any such
non-compliance which is capable of being cured, such non-compliance shall not
constitute an Event of Default unless and until such non-compliance remains
uncured for a period of thirty (30) days after the occurrence of such
non-compliance; or

     

    (f)          If
a final judgment or judgments in an aggregate uninsured amount in excess of EUR
1,000,000 shall be
rendered against the Company which is not, within thirty (30) days after the
entry thereof, discharged or the execution thereof stayed pending appeal, or
within thirty (30) days after the expiration of any such stay, such judgment is
not discharged; or

     

    (g)         Any
default with respect to any other indebtedness or liabilities of the Company
Subsidiaries in any amount in excess of (i) EUR 1,000,000 individually or in the
aggregate, in each case if the effect of such default is to permit the holder(s)
to accelerate the maturity of such indebtedness or liabilities as the case may
be; or

     

    
      
        
           

        

         

      

      
        3

        
          

        

      

      
         

      

    

    (h)         The
occurrence of any levy upon or seizure or attachment of any property of the
Company having an aggregate fair market value in excess of EUR 1,000,000 which levy, seizure or
attachment shall not be set aside, bonded or discharged within thirty (30) days
after the date thereof; or

     

    (i)           The
suspension of all or any substantial portion of the normal business operations
of the Company and its Subsidiaries (taken as a whole) for any period in excess
of ten (10) consecutive days (provided that, if such suspension occurs by reason
of any force majeure, same shall not constitute an Event of Default so long as
the Company takes all reasonable steps to restore normal business operations as
promptly as reasonably practicable); or

     

    (j)           Any
liquidation, dissolution or winding up of the Company or its business;
or

     

    (k)         The
Company shall default in the payment when due of any principal of
or interest, whether at maturity, by acceleration or otherwise, on the
Indemnity Promissory Note.

     

    5.           Consequences
of an Event of Default

     

    (a)         Non-Payment;
Bankruptcy. If there shall occur any Event of Default specified in subsections
(a), (b) or (c) of Section 4 hereof, the unpaid Principal balance of this Note
and all accrued Interest thereon shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are expressly
waived.

     

    (b)         Other
Defaults. If any other Event of Default shall occur, the Holder may, at its
option, by written notice to the Company, declare the entire unpaid Principal
balance of this Note and all accrued Interest thereon due and payable, and the
same shall thereupon become immediately due and payable without presentment,
demand, protest or (except as expressly required hereby) notice of any kind, all
of which are expressly waived.

     

    6.           Conversion

     

    (a)         Optional
Conversion.  The Company may, at its option, at any time prior to the
payment or prepayment of this Note, convert the Principal balance of this Note
in whole (and, at the Company’s option, all unpaid accrued Interest hereunder)
into shares of the Company’s common stock, par value $0.0001 (“Common Stock”),
at a price per share of Common Stock equal to the 20-day trailing volume
weighted average price of the Common Stock (the “Conversion Price”), calculated
as of the trading day immediately preceding the Conversion Date; provided, however, that in no event
shall the number of shares of Common Stock for which this Note is convertible
exceed 10% of the Company’s issued and outstanding shares of Common Stock (when
added to the number of shares of Common Stock owned by the Holder and any of its
affiliates immediately prior to the conversion of this Note), without
giving effect to any shares of Common Stock subject to or issued pursuant to the
conversion of this Note.  For the avoidance of doubt, if this
Note is converted before the expiration of the prepayment period set forth in
Section 2, the Company is still required to convert the full Principal balance
as opposed to the reduced Prepayment Amount.  In the event the
Conversion Shares would exceed 10.0%, the Company shall not have the option to
convert the shares hereunder.  The effective date of any voluntary
conversion hereunder is herein referred to as the “Conversion
Date.”

    
      
        
           

        

         

      

      
        4

        
          

        

      

      
         

      

    

    (b)         Mechanics
of Conversion.  Upon notice to the Holder of the Company’s conversion
election as provided in Section 6(a), the Company shall, in accordance with
Section 6(c), issue or cause to be transferred to the Holder (or to the Holder’s
designee(s)) the number of shares of Common Stock to which the Holder shall be
entitled upon such conversion, and shall deliver or cause to be delivered to the
Holder or such designee(s) the certificates representing such shares of Common
Stock.  All shares of Common Stock issued or delivered upon any
conversion hereunder shall, when issued or delivered, be duly authorized,
validly issued, fully paid and nonassessable.  In lieu of any
fractional shares to which the Holder would otherwise be entitled, the Company
shall pay cash equal to such fraction multiplied by the applicable per share
Conversion Price. Further, any accrued but unpaid Interest outstanding on
the Conversion Date, unless converted into Common Stock at the Company’s option,
shall be paid to the Holder in cash simultaneously with the delivery of
certificates for Common Stock.

     

    (c)         Issuance
of Common Stock Upon Conversion.  Within a reasonable time, not
exceeding ten (10) days after the Conversion Date, the Company shall deliver or
cause to be delivered, to or upon the written order of the Holder of this Note
so converted, certificates representing the number of fully paid and
nonassessable shares of Common Stock into which this Note has been converted in
accordance with the provisions of this Section 6.  If this Note has
been converted in full, then, within a reasonable time, not exceeding ten (10)
days after receipt by the Holder of such stock certificates, the Holder shall
surrender this Note to the Company for cancellation.  Subject to the
following provisions of this Section 6, such conversion shall be deemed to have
occurred on the Conversion Date, so that the Holder of this Note shall be
treated for all purposes as having become the record holder of such shares of
Common Stock at such time.

     

    (d)         Taxes
on Conversion.  The issuance of certificates for shares for Common
Stock upon the conversion of this Note shall be made without charge by the
Company to the converting Holder for any tax in respect of the issuance of such
certificates and such certificates shall be issued in the name of, or in such
names as may be directed by, the Holder of this Note; provided, however, that
the Company shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance or delivery of any such certificate 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.

     

    (e)         Common
Stock Reserved.  The Company shall reserve and keep available out of
its authorized but unissued Common Stock such number of shares of Common Stock
as shall from time to time be sufficient to effect conversion of this Note into
Common Stock.

    
      
        
           

        

         

      

      
        5

        
          

        

      

      
         

      

    

    (f)          Restricted
Securities.  The shares of Common Stock issuable to the Holder
hereunder (the “Shares”) may not, at the time of issuance, have been registered
under any federal or state securities laws, and will thus constitute “restricted
securities” within the meaning of federal and state securities
laws.  By its receipt of Shares, the Holder will be deemed to
acknowledge and confirm that it is receiving such Shares for its own account for
investment, and not with a view to the resale or distribution thereof in
violation of any federal or state securities laws.

     

    7.           Payment;
Delivery.  Any check, draft, money order or other instrument given in
payment of all or any portion hereof may be accepted by the Holder and handled
in collection in the customary manner, but the same shall not constitute payment
hereunder or diminish any rights of the Holder except to the extent that actual
cash proceeds of such instrument are unconditionally received by the
Holder.

     

    8.           Compliance
with Applicable Law

     

    It is
expressly stipulated and agreed to be the intent of Company and Holder at all
times to comply with the applicable law in connection with this
Note.  All sums paid or agreed to be paid to the Holder for the use,
forbearance or detention of the indebtedness evidenced hereby shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such indebtedness until payment in full so that the
rate or amount of interest on account of such indebtedness does not exceed the
applicable usury ceiling.

     

    9.           Severability

     

    Whenever
possible, each provision of this Note will be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Note
is held by a court of competent jurisdiction to be invalid, illegal or
unenforceable in any respect under any applicable law, such provision shall
thereupon be deemed modified to the extent necessary to render same valid, or
excised from this Note, as the situation may require, and this Note shall be
construed and enforced as if such provision had been included herein as so
modified in scope or application, or had not been included herein, as the case
may be.

     

    10.         Governing
Law; Jurisdiction; Waiver of Jury Trial

     

     The
provisions of this Note shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to any choice of law or
conflict of law rules or provisions. The Company hereby irrevocably consents to
the jurisdiction of all courts (state and federal) sitting in the State of New
York in connection with any claim, action or proceeding relating to or for
collection or enforcement of this Note, and hereby waives any defense of
inconvenient forum or other such claim or defense in respect of the lodging of
any such claim, action or proceeding in any such court. THE COMPANY HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY CLAIM, ACTION OR PROCEEDING
RELATING TO OR FOR THE COLLECTION OR ENFORCEMENT OF THIS NOTE.

    
      
        
           

        

         

      

      
        6

        
          

        

      

      
         

      

    

    11.         Miscellaneous

     

    No delay
or failure by the Holder in exercising any right, power, privilege, or remedy
shall be deemed to be a waiver of the same or any part thereof; nor shall any
single or partial exercise thereof or any failure to exercise the same in any
instance preclude any future exercise thereof, or the exercise of any other
right, power, privilege or remedy, and the rights and remedies provided for
hereunder are cumulative and not exclusive of any other right or remedy
available at law or in equity. Except in accordance with Paragraph 2 above or as
otherwise permitted in writing by the Holder, the Company shall make all
payments hereunder, whether in cash or stock pursuant to Paragraph 6 above,
without deduction, whether by way of set-off, counterclaim, discount or
otherwise.  Neither any provision of this Note nor any performance
hereunder may be amended or waived except pursuant to an agreement in writing
signed by the party against whom enforcement thereof is sought. Except as
otherwise expressly provided in this Note, the Company hereby waives diligence,
demand, presentment for payment, protest, dishonor, nonpayment, default, and
notice of any and all of the foregoing. All amounts payable hereunder shall be
payable without relief under any applicable valuation and appraisement laws. The
Company hereby expressly agrees that this Note, and/or any payment hereunder,
may be extended, modified or subordinated (by forbearance or otherwise) from
time to time, without in any way affecting the liability of the Company
hereunder.

     

    12.         Collection
Costs

     

     In
the event that the Holder shall, after the occurrence of an Event of Default,
turn this Note over to an attorney for collection, the Company shall further be
liable for and shall pay to the Holder all collection costs and expenses
incurred by the Holder, including reasonable attorneys’ fees and expenses; and
the Holder may take judgment for all such amounts in addition to all other sums
payable hereunder.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  KIT DIGITAL, INC.

                                
	 
      
	
                                  By:

                                	 
      
	 	      
                                  Name:

                                
	 	      
                                  Title:

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
           

        

         

      

      
        7EXHIBIT
10.2

    INDEMNITY
PROMISSORY NOTE

    

    THIS NOTE
AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF (UNTIL SUCH TIME, IF ANY,
AS SUCH COMMON STOCK IS REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT) HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR UNDER THE SECURITIES LAWS
OF ANY STATE OR JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE
TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION, IN REASONABLY
ACCEPTABLE FORM AND SCOPE, OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY,
THAT REGISTRATION, QUALIFICATION OR OTHER SUCH ACTIONS ARE NOT REQUIRED UNDER
ANY SUCH LAWS.

     

    CONVERTIBLE
PROMISSORY NOTE

     

    
      
        	
                EUR
      584,250

              	
                October
      _____ , 2009

              

      

    

     

    FOR VALUE
RECEIVED, KIT digital, Inc., a Delaware corporation (the “Company”), hereby
promises to pay to the order of International Management Group GmbH, a company
organized under the laws of Germany, or registered assigns (the “Holder”), the
sum of Five Hundred Eighty Four Thousand Two Hundred Fifty Euros (EUR 584,250)
(the “Principal”), on the terms and subject to the conditions set forth herein
and in the Share Purchase Agreement, dated as of the date hereof, between the
Company and the Holder (the “Purchase Agreement”).  Capitalized terms
used but not defined herein have the meanings ascribed to such terms in the
Purchase Agreement.

     

    The
Company is permitted to deduct from the Principal under this Note
certain amounts owed by the Holder to the Company pursuant to clause 4(g)
and 7.7 of the Share Purchase Agreement and, in certain circumstances, under the
Waiver and Agreement dated on the date hereof between the Company and the
Holder.  In the event the Company elects to make any such deduction in
accordance with clause 4(g) or clause 7.7 of the Share Purchase Agreement or
under said Waiver and Agreement, the Company shall issue and deliver a new
promissory note to the Holder reflecting, as appropriate (i) a reduced Principal
amount, (ii) reduced Principal payment amounts under Section 1(b) and
(iii) a reduced Prepayment Amount under Section
2.  Simultaneously with the delivery by the Company to the Holder of a
new convertible promissory note substantially in the form of this Note and
reflecting the foregoing, this Note shall automatically, without any action by
the Company or the Holder, be cancelled and replaced by such new convertible
promissory note, and all obligations hereunder shall be
extinguished.

     

    Payments
of principal of and any other amounts with respect to this Convertible
Promissory Note (this “Note”) are to be made in Euros.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    The
original Holder of this Note will be deemed, by its acceptance hereof, to have
agreed to the provisions and to have made the representations and warranties set
forth in clause 5.22 to 5.27 inclusive of the Purchase Agreement.

     

    1.           Interest;
Payments

     

    (a)         This
Note shall not bear interest.

     

    (b)         On
the date that is the last day of the ninth month following the date of this Note
(or if such date is not a business day, the business day immediately following
such date)(the “Maturity Date”), there shall become due and payable and the
Company shall pay the entire unpaid Principal amount of the Note (including all
Additional Principal (defined below)), and all other amounts, if any, due and
remaining unpaid thereon.

     

    2.           Prepayment

     

    The
unpaid Principal balance of this Note, may, at the Company’s option, be prepaid
in whole, whether through a conversion in accordance with Section 6 or a payment
in cash, at any time or from time to time on or before January 8, 2010, upon
five (5) days’ prior written notice to the Holder; provided, however, that if
the Company elects to so prepay or convert the unpaid Principal balance of this
Note, for the purposes of this Section 2, the unpaid Principal balance of this
Note shall be discounted by 18% and the total amount of unpaid Principal the
Company shall be required to pay to the Holder hereunder shall be equal EUR
479,085 (the “Prepayment Amount”).  Payment by the Company of the
Prepayment Amount in accordance with this Section 2 shall constitute full
satisfaction of the Company’s obligations hereunder.

     

    3.           Time
of the Essence

     

    It is
agreed that time is of the essence on this Note.

     

    4.           Events
of Default

     

    Each of
the following shall be deemed an “Event of Default”:

     

    (a)         The
Company shall default in the payment when due of any Principal of this Note,
whether at maturity, by acceleration or otherwise; or

     

    (b)         The
Company (i) shall admit in writing its inability to pay its debts as they
mature, or (ii) shall make a general assignment for the benefit of creditors, or
(iii) shall be adjudicated bankrupt or insolvent, or (iv) shall commence a
voluntary proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect; or

     

    (c)         An
involuntary proceeding shall be commenced against the Company seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect, or a receiver, liquidator, trustee, custodian, conservator or other such
person shall be appointed by any court to take charge of the Company’s affairs,
assets or business, and (i) the Company shall admit to the material allegations
of the petition or complaint in such proceeding, or (ii) such involuntary
proceeding or appointment shall remain undismissed and unstayed for a period of
sixty (60) days; or

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (d)         If
any representation or warranty made by the Company in the Purchase Agreement
shall be determined to have been false or misleading in any material respect as
of the date made; or

     

    (e)         Any
failure by the Company to perform or observe any of its covenants contained in
the Purchase Agreement; provided, however, that with respect to any such
non-compliance which is capable of being cured, such non-compliance shall not
constitute an Event of Default unless and until such non-compliance remains
uncured for a period of thirty (30) days after the occurrence of such
non-compliance; or

     

    (f)          If
a final judgment or judgments in an aggregate uninsured amount in excess of EUR
1,000,000 shall be rendered against the Company which is not, within thirty (30)
days after the entry thereof, discharged or the execution thereof stayed pending
appeal, or within thirty (30) days after the expiration of any such stay, such
judgment is not discharged; or

     

    (g)         Any
default with respect to any other indebtedness or liabilities of the Company
Subsidiaries in any amount in excess of (i) EUR 1,000,000 individually or in the
aggregate, in each case if the effect of such default is to permit the holder(s)
to accelerate the maturity of such indebtedness or liabilities as the case may
be; or

     

    (h)         The
occurrence of any levy upon or seizure or attachment of any property of the
Company having an aggregate fair market value in excess of EUR 1,000,000 which
levy, seizure or attachment shall not be set aside, bonded or discharged within
thirty (30) days after the date thereof; or

     

    (i)          The
suspension of all or any substantial portion of the normal business operations
of the Company and its Subsidiaries (taken as a whole) for any period in excess
of ten (10) consecutive days (provided that, if such suspension occurs by reason
of any force majeure, same shall not constitute an Event of Default so long as
the Company takes all reasonable steps to restore normal business operations as
promptly as reasonably practicable); or

     

    (j)          Any
liquidation, dissolution or winding up of the Company or its business;
or

     

    (k)   
The Company shall default in the payment when due of any principal of
or interest, whether at maturity, by acceleration or otherwise, on the
Promissory Note.

     

    5.           Consequences
of an Event of Default

     

    (a)         Non-Payment;
Bankruptcy. If there shall occur any Event of Default specified in subsections
(a), (b) or (c) of Section 4 hereof, the unpaid Principal balance of this Note
shall be immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which are expressly waived.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)         Other
Defaults. If any other Event of Default shall occur, the Holder may, at its
option, by written notice to the Company, declare the entire unpaid Principal
balance of this Note due and payable, and the same shall thereupon become
immediately due and payable without presentment, demand, protest or (except as
expressly required hereby) notice of any kind, all of which are expressly
waived.

     

    6.           Conversion

     

    (a)          Optional
Conversion.  The Company may, at its option, at any time prior to the
payment or prepayment of this Note, convert the Principal balance of this Note
in whole into shares of the Company’s common stock, par value $0.0001 (“Common
Stock”), at a price per share of Common Stock equal to the 20-day trailing
volume weighted average price of the Common Stock (the “Conversion Price”),
calculated as of the trading day immediately preceding the Conversion Date;
provided, however, that in no event shall the number of shares of Common Stock
for which this Note is convertible exceed 10% of the Company’s issued and
outstanding shares of Common Stock (when added to the number of shares of Common
Stock owned by the Holder and any of its affiliates immediately prior to the
conversion of this Note), without giving effect to any shares of Common Stock
subject to or issued pursuant to the conversion of this Note.  For the
avoidance of doubt, if this Note is converted before the expiration of the
prepayment period set forth in Section 2, the Company is still required to
convert the full Principal balance as opposed to the reduced Prepayment
Amount.  In the event the Conversion Shares would exceed 10.0%, the
Company shall not have the option to convert the shares
hereunder.  The effective date of any voluntary conversion hereunder
is herein referred to as the “Conversion Date.”

     

    (b)         Mechanics
of Conversion.  Upon notice to the Holder of the Company’s conversion
election as provided in Section 6(a), the Company shall, in accordance with
Section 6(c), issue or cause to be transferred to the Holder (or to the Holder’s
designee(s)) the number of shares of Common Stock to which the Holder shall be
entitled upon such conversion, and shall deliver or cause to be delivered to the
Holder or such designee(s) the certificates representing such shares of Common
Stock.  All shares of Common Stock issued or delivered upon any
conversion hereunder shall, when issued or delivered, be duly authorized,
validly issued, fully paid and nonassessable.  In lieu of any
fractional shares to which the Holder would otherwise be entitled, the Company
shall pay cash equal to such fraction multiplied by the applicable per share
Conversion Price.

     

    (c)         Issuance
of Common Stock Upon Conversion.  Within a reasonable time, not
exceeding ten (10) days after the Conversion Date, the Company shall deliver or
cause to be delivered, to or upon the written order of the Holder of this Note
so converted, certificates representing the number of fully paid and
nonassessable shares of Common Stock into which this Note has been converted in
accordance with the provisions of this Section 6.  If this Note has
been converted in full, then, within a reasonable time, not exceeding ten (10)
days after receipt by the Holder of such stock certificates, the Holder shall
surrender this Note to the Company for cancellation.  Subject to the
following provisions of this Section 6, such conversion shall be deemed to have
occurred on the Conversion Date, so that the Holder of this Note shall be
treated for all purposes as having become the record holder of such shares of
Common Stock at such time.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (d)         Taxes
on Conversion.  The issuance of certificates for shares for Common
Stock upon the conversion of this Note shall be made without charge by the
Company to the converting Holder for any tax in respect of the issuance of such
certificates and such certificates shall be issued in the name of, or in such
names as may be directed by, the Holder of this Note; provided, however, that
the Company shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance or delivery of any such certificate 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.

     

    (e)         Common
Stock Reserved.  The Company shall reserve and keep available out of
its authorized but unissued Common Stock such number of shares of Common Stock
as shall from time to time be sufficient to effect conversion of this Note into
Common Stock.

     

    (f)         
Restricted Securities.  The shares of Common Stock issuable to the
Holder hereunder (the “Shares”) may not, at the time of issuance, have been
registered under any federal or state securities laws, and will thus constitute
“restricted securities” within the meaning of federal and state securities
laws.  By its receipt of Shares, the Holder will be deemed to
acknowledge and confirm that it is receiving such Shares for its own account for
investment, and not with a view to the resale or distribution thereof in
violation of any federal or state securities laws.

     

    7.           Payment;
Delivery.  Any check, draft, money order or other instrument given in
payment of all or any portion hereof may be accepted by the Holder and handled
in collection in the customary manner, but the same shall not constitute payment
hereunder or diminish any rights of the Holder except to the extent that actual
cash proceeds of such instrument are unconditionally received by the
Holder.

     

    8.           Compliance
with Applicable Law

     

    It is
expressly stipulated and agreed to be the intent of Company and Holder at all
times to comply with the applicable law in connection with this
Note.

     

    9.           Severability

     

    Whenever
possible, each provision of this Note will be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Note
is held by a court of competent jurisdiction to be invalid, illegal or
unenforceable in any respect under any applicable law, such provision shall
thereupon be deemed modified to the extent necessary to render same valid, or
excised from this Note, as the situation may require, and this Note shall be
construed and enforced as if such provision had been included herein as so
modified in scope or application, or had not been included herein, as the case
may be.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    10.         Governing
Law; Jurisdiction; Waiver of Jury Trial

     

     The
provisions of this Note shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to any choice of law or
conflict of law rules or provisions. The Company hereby irrevocably consents to
the jurisdiction of all courts (state and federal) sitting in the State of New
York in connection with any claim, action or proceeding relating to or for
collection or enforcement of this Note, and hereby waives any defense of
inconvenient forum or other such claim or defense in respect of the lodging of
any such claim, action or proceeding in any such court. THE COMPANY HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY CLAIM, ACTION OR PROCEEDING
RELATING TO OR FOR THE COLLECTION OR ENFORCEMENT OF THIS NOTE.

     

    11.         Miscellaneous

     

    No delay
or failure by the Holder in exercising any right, power, privilege, or remedy
shall be deemed to be a waiver of the same or any part thereof; nor shall any
single or partial exercise thereof or any failure to exercise the same in any
instance preclude any future exercise thereof, or the exercise of any other
right, power, privilege or remedy, and the rights and remedies provided for
hereunder are cumulative and not exclusive of any other right or remedy
available at law or in equity. Neither any provision of this Note nor any
performance hereunder may be amended or waived except pursuant to an agreement
in writing signed by the party against whom enforcement thereof is sought.
Except as otherwise expressly provided in this Note, the Company hereby waives
diligence, demand, presentment for payment, protest, dishonor, nonpayment,
default, and notice of any and all of the foregoing. All amounts payable
hereunder shall be payable without relief under any applicable valuation and
appraisement laws. The Company hereby expressly agrees that this Note, and/or
any payment hereunder, may be extended, modified or subordinated (by forbearance
or otherwise) from time to time, without in any way affecting the liability of
the Company hereunder.

     

    12.         Collection
Costs

     

    In the
event that the Holder shall, after the occurrence of an Event of Default, turn
this Note over to an attorney for collection, the Company shall further be
liable for and shall pay to the Holder all collection costs and expenses
incurred by the Holder, including reasonable attorneys’ fees and expenses; and
the Holder may take judgment for all such amounts in addition to all other sums
payable hereunder.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    KIT DIGITAL, INC.

                                  
	 
	
                                    By:

                                  	 
      
	 	

                                    Name:

                                  
	 	

                                    Title:

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