INDEMNITY PROMISSORY NOTE

EXHIBIT 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

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.

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

(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.

(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)     &