NOTE CONVERSION AGREEMENT, WAIVER AND RELEASE
Exhibit 10.11.1
This Note Conversion Agreement, Waiver and Release (this “Agreement”) is executed on this ___
day of January 2006, by and between Immediatek, Inc., a Nevada corporation (“Immediatek”), and
(“Lender”).
RECITALS
WHEREAS, Immediatek has the opportunity to receive significant additional capital,
substantially increasing its resources, contingent upon the resolution of all outstanding
indebtedness and certain rights;
WHEREAS, Immediatek is indebted to Lender in the aggregate principal amount of
Dollars ($ ) (“Total Indebtedness”);
WHEREAS, Lender and Immediatek desire, and hereby agree, to convert
($ ) (“Convertible Indebtedness”) of the Total Indebtedness into shares of common stock
(“Common Stock”) of Immediatek at Closing (as hereinafter defined), and Immediatek will pay in cash
to Lender the difference between Total Indebtedness and Convertible Indebtedness, if any, each in
accordance with the terms hereof;
WHEREAS, Lender also is currently, or will be after giving effect to the conversion of the
Convertible Indebtedness, the beneficial or record owner of shares of Common Stock; and
WHEREAS, Lender and Immediatek wish to enter into this Agreement in order to waive certain
rights of Lender under the terms of Immediatek’s Articles of Incorporation (as amended, the
“Articles”) and to provide certain releases.
NOW, THEREFORE, in consideration of the above recitals, the promises herein contained and such
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto, intending to be legally bound, hereby agree as follows:
AGREEMENT
1. Convertible Indebtedness.
(a) Lender hereby agrees to convert the Convertible Indebtedness into shares of Common Stock
immediately prior to the closing (the “Closing”) of the purchase and sale of securities of
Immediatek pursuant to that certain Securities Purchase Agreement (“Purchase Agreement”) entered
into, or to be entered into, by and among Immediatek, Radical Holdings LP (or its affiliates) and
the other parties thereto. The number of shares of Common Stock issuable to Lender upon conversion
of the Convertible Indebtedness shall be equal to the amount of the principal balance of the
Convertible Indebtedness, divided by $1.25 per share of Common Stock (such conversion price is
post-reverse split occurring prior to the Closing) (“Conversion Price”).
(b) Immediatek will issue the shares of Common Stock issuable pursuant to Section 1(a) hereof
within five (5) business days from the date of the Closing.
(c) Immediatek shall not issue fractions of shares of Common Stock upon conversion of the
Convertible Indebtedness or scrip in lieu thereof. If any fraction of a share of Common Stock
would, except for the provisions of this Section 1(c), be issuable upon conversion of the
Convertible Indebtedness, Immediatek shall in lieu thereof pay to the person entitled thereto an
amount in cash equal to such fraction times the Conversion Price.
2. Indebtedness Paid in Cash. Upon the release of the proceeds of the
Purchase Agreement from escrow pursuant to that certain Escrow Agreement to be entered into by and
among Immediatek, Radical Holdings LP (or its affiliates) and the Escrow Agent, Immediatek will pay
Lender the difference between the Total Indebtedness and Convertible Indebtedness, if any, in cash.
3. Waiver and Release. Lender hereby agrees to release and waive, and does
hereby forever release and waive, all unpaid interest on the Total Indebtedness. Lender hereby
agrees to release all liens and security interests that secure the Total Indebtedness immediately
prior to the Closing. The consideration received by Lender set forth in this Agreement constitutes
full and final payment of any and all obligations Immediatek has to or with Lender.
4. Preemptive Rights Waiver. Lender hereby waives, now and forever, any and
all rights it may have, whether past, current or future, by law or pursuant to the terms of the
Articles as they may relate to the issuance of any shares of Common Stock or any other securities
of Immediatek.
5. General Release. Upon, for and in consideration of the repayment of the
Total Indebtedness, whether by shares of Common Stock or cash, or both, issued or paid to Lender by
Immediatek, and other good and valuable considerations, Lender hereby remises, releases and forever
discharges and by these presents does, for himself, herself or itself, his, her or its heirs,
executors, administrators and successors, remise, release, acquit, satisfy and forever discharge
Immediatek and its subsidiaries, their respective employees, agents and affiliates, successors and
assigns (“Releasees”), of and from all, and all manner of action and actions, cause and causes of
action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, controversies, agreements, promises, variances, trespasses, damages,
judgments, executions, claims and demands whatsoever in law or in equity, which against Releasees
Lender ever had, now has, or which his, her or its heirs, executors or administrators, hereafter
can, shall or may have, for, upon or by reason of any matter, cause or thing whatsoever, from the
beginning of the world to the day of the date of the Closing.
6. Lender Representations and Warranties. Lender hereby represents and
warrants to Immediatek that:
(a) Lender has all requisite power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement.
(b) The execution of this Agreement has been duly authorized by all necessary actions on the
part of Lender, and this Agreement has been executed and delivered, and constitutes a valid, legal,
binding and enforceable agreement of Lender, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws of general application relating to or
affecting the enforcement of creditor rights.
(c) Lender is aware that an investment in the Common Stock issuable upon the conversion of the
Convertible Indebtedness is speculative and involves a high degree of risk. Lender has carefully
considered the risks of such investment.
(d) Lender has such knowledge and experience in financial and business matters and is capable
of evaluating the merits and risks of investing in the Common Stock and of protecting its interest
in connection with such investment.
(e) Lender is purchasing the Common Stock for its own account, for investment purposes only
and not with a view to the resale or distribution of any of the Common Stock. Lender understands
that it must bear the economic risk of such investment for an indefinite period of time because the
issuance of the Common Stock by Immediatek to Lender has not been registered under the Securities
Act of 1933, as amended (the “Act”), pursuant to an exemption from registration thereunder, nor
under any
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applicable state securities laws, and the Common Stock may not be sold or transferred by
Lender in the absence of evidence satisfactory to Immediatek of compliance with applicable laws,
which evidence may include an opinion of counsel satisfactory to Immediatek that, among other
things, the shares of Common Stock have been registered for resale under the Act and all applicable
state securities laws or that such registrations are not required
7. Immediatek Representations and Warranties. Immediatek hereby represents
and warrants to the Lender that the following are true on the date hereof and will be true and
correct at the Closing, as if made on that date:
(a) Immediatek has all requisite power and authority to execute and deliver this Agreement and
to consummate the transactions contemplated by this Agreement.
(b) The execution of this Agreement has been duly authorized by all necessary actions on the
part of Immediatek, and this Agreement has been executed and delivered, and constitutes a valid,
legal, binding and enforceable agreement of Immediatek, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws of general application
relating to or affecting the enforcement of creditor rights.
(c) The shares of Common Stock issuable upon conversion of the Convertible Indebtedness, when
issued, will be duly authorized, validly issued, fully paid and non-assessable.
8. Acknowledgments and Understandings. Lender hereby acknowledges and
understands that (i) Immediatek is effecting a 10-for-1 reverse stock split of the outstanding
Common Stock prior to the Closing and the Conversion Price is after giving effect to such reverse
stock split, and (ii) that a special dividend will paid by Immediatek on its outstanding shares of
Common Stock other than the shares of Common Stock issuable upon conversion of the Convertible
Indebtedness.
9. Termination. This Agreement shall become null and void and of no further
force or effect in the event that the purchase of securities from Immediatek by Radical Holdings LP
or its affiliates does not occur on or prior to March 15, 2005.
10. Entire Agreement; Amendment. THIS AGREEMENT EMBODIES THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL OR
WRITTEN AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE
PARTIES HERETO. This Agreement may not be amended or modified without the written
consent of all parties hereto and Radical Holdings LP.
11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
12. Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may reasonably request in
order to carry out the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
13. Governing Law. This Agreement will be governed by, and construed in
accordance with, the laws of the State of Texas, without giving effect to any choice of law
principles.
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IN WITNESS WHEREOF, the parties have set their hands on the date first above written.
| IMMEDIATEK, INC.: | LENDER: | |||||
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Title:
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