AGREEMENT, SETTLEMENT AND RELEASE
EXHIBIT 10.9.1
AGREEMENT, SETTLEMENT AND RELEASE
This Agreement, Settlement and Release (this “Agreement”) is executed on this 23rd
day of January 2006, by and between Immediatek, Inc., a Nevada corporation (the “Company”), and
Xxxx Xxxxxx & Company, a California corporation (“Stockholder”).
RECITALS
WHEREAS, Stockholder currently owns 2,001,534 shares of Company common stock and also
currently holds a warrant, which currently provides, upon exercise in accordance with its terms,
for the issuance of up to 3,002,302 shares of Company common stock;
WHEREAS, Stockholder and the Company previously entered into an agreement titled “Proposal of
Terms” and a letter agreement regarding operational guidelines (collectively, the “Party
Agreements”), pursuant to which certain rights are granted to Stockholder and certain operational
guidelines are imposed upon the Company;
WHEREAS, an offer has been made to acquire 95% of the Company through the purchase of shares
of preferred stock of the Company (the “Proposed Investment”), which offer is contingent upon the
cancellation and termination of all outstanding rights and obligations and other matters;
WHEREAS, Stockholder and the Company desire to cancel and terminate the Party Agreements;
WHEREAS, Stockholder and the Company desire to enter into this Agreement in order to waive
certain rights of Stockholder and to provide certain releases in favor of the Company; and
WHEREAS, the Company intends to effect a ten-for-one reverse stock split of Company common
stock (the “Reverse Split”) prior to the closing of the Proposed Investment.
NOW, THEREFORE, in consideration of the above recitals, the mutual covenants and promises
herein contained and such other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the execution and delivery hereof, the parties hereto, intending
to be legally bound hereby, hereby agree as follows:
AGREEMENT
1. Stockholder Warrant. (a) Stockholder currently holds a warrant to purchase an
aggregate of 3,002,302 shares of Company common stock (the “Warrant Shares”) at an exercise price
of $0.20 per share, and such warrant is currently exercisable until the 22nd day of March 2007,
upon which date such warrant will expire. The terms of such warrant were memorialized in an
instrument issued to Stockholder by the Company titled “Warrant to Purchase Common Stock of
Immediatek, Inc.” (the “Warrant Agreement”).
(b) In consideration of Stockholder’s promises and covenants herein contained, it
is understood and agreed by the parties hereto that the Warrant Agreement shall not be cancelled,
but shall be, and it hereby is, amended to delete any provision within Section 3 of the Warrant
Agreement whereby the Company has a right to call or otherwise require the
purchase of the Warrant Shares by Stockholder upon the occurrence of a “Liquidity Event” or a
“Call Event” (as defined in the Warrant Agreement). Said warrant shall also be adjusted, pursuant
to it terms, as a result of the Reverse Split.
2. Waiver. Subject to the closing of the Proposed Investment and the delivery to
Stockholder of the Additional Shares (as defined in Section 3), Stockholder hereby waives, now and
forever, any and all rights, including, without limitation, pre-emptive rights, Stockholder may
have, whether past, current or future, by law or through the provisions of the Articles of
Incorporation of the Company (as amended or modified, the “Articles”) and any other right(s) or
claims, if any, that Stockholder may have that arise, directly or indirectly, from (i) agreements,
whether written or oral, between Stockholder and the Company, including, without limitation, the
Party Agreements, and (ii) as a result of Stockholder’s purchase of the Company securities.
Stockholder further hereby agrees that, subject to the closing of the Proposed Investment and the
delivery to Stockholder of the Additional Shares, excepting the Warrant Agreement, as modified in
Section 1 above, this Agreement supercedes and cancels any and all agreements, whether written or
oral, that Stockholder and the Company are both parties to, including, but not limited to, the
Party Agreements, and that no terms of any and all such agreements, whether written or oral, shall
survive and such agreements shall be void and of no further force or effect.
3. Consideration. Prior to the closing of the Proposed Investment and after giving
effect to the Reverse Split, the Company will issue to Stockholder 1,264,068 shares of Company
common stock, or such other amount as is necessary to result in Stockholder holding 25% of the
total outstanding equity held by all other current stockholders of Company immediately prior to the
closing of the Proposed Investment (but not including any equity shares issued as a result of the
Proposed Investment) (the “Additional Shares”).
4. Stockholder Representations and Warranties. Stockholder hereby represents and
warrants to the Company that:
(a) Stockholder 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 Stockholder, and this Agreement has been executed and delivered by, and constitutes a
valid, legal, binding and enforceable agreement of, Stockholder, 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) Stockholder is an “accredited investor” within the meaning of Rule 501 of Regulation D
under the Securities Act of 1933, as amended (the “Act”).
(d) Stockholder is aware that an investment in Company common stock is speculative and
involves a high degree of risk. Stockholder has carefully considered the risks of such investment.
(e) Stockholder has such knowledge and experience in financial and business matters and is
capable of evaluating the merits and risks of investing in Company common stock and of protecting
its interest in connection with such investment.
(f) Stockholder is investing in Company common stock for its own account, for investment
purposes only and not with a view to the resale or distribution thereof. Stockholder understands
that it must bear the economic risk of such investment for an indefinite period of time because the
issuance of the Company common stock by the Company to Stockholder has not been registered under
the Act, pursuant to an exemption from registration thereunder, nor under any applicable state
securities laws, and such Company common stock may
not be sold or transferred by Stockholder in the absence of evidence satisfactory to the
Company of compliance with applicable laws, which evidence may include an opinion of counsel
satisfactory to the Company that, among other things, the shares of Company common stock have been
registered for resale under the Act and all applicable state securities laws or that such
registrations are not required.
(g) except as expressly set forth herein, (i) Stockholder does not own, beneficially or of
record, any shares of the Company’s capital stock, (ii) Stockholder does not own, beneficially or
of record, or possess any subscription, warrant, option, convertible security or other right
(contingent or other) to purchase or otherwise acquire equity securities or equity related
securities of the Company, and (iii) there is no commitment by the Company to issue to Stockholder
any shares, subscriptions, warrants, options, convertible or exchangeable securities or other such
rights or to distribute to Stockholder any evidence of indebtedness or asset.
5. Company Representations and Warranties. The Company hereby represents and warrants
to Stockholder that the following are true on the date hereof and will be true and correct at the
closing of the Proposed Investment, as if made on that date:
(a) The Company 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 the Company, and this Agreement has been executed and delivered by, and constitutes a
valid, legal, binding and enforceable agreement of, the Company, 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 Additional Shares, when issued, will be duly authorized, validly issued, fully paid
and non-assessable.
(d) After issuance of the Additional Shares and immediately prior to the closing of the
Proposed Investment, Stockholder will own 25% of the outstanding equity interests in the Company.
6. Acknowledgments and Understandings. (a) Stockholder hereby acknowledges and
understands that (i) the Company is effecting a 10-for-1 reverse stock split of the outstanding
Company common stock prior to the closing of the Proposed Investment and the Additional Shares is
after giving effect to such reverse stock split, and (ii) that a special dividend will paid by the
Company on its outstanding shares of common stock other than the Additional Shares.
(b) Stockholder acknowledges and fully understands that holders of equity interests in the
Company immediately prior to the closing of the Proposed Investment (including after giving effect
to the issuance of the Additional Shares) will, following the closing of the Proposed Investment,
hold total equity interests in the Company representing 5% of the total outstanding equity
interests in the Company on a fully-diluted basis, and that the third party, through the purchase
of shares of preferred stock and rights attached to those shares, will own the other 95% of the
Company’s equity interests on a fully-diluted basis, thereby affecting a change of control of the
Company. This means that immediately upon the closing of the Proposed Investment, Stockholder will
own 25% of the resultant 5% owned by holders of equity interests in the Company immediately prior
the closing of the Proposed Investment.
(c) Stockholder specifically acknowledges and agrees all securities of the Company owned by
Stockholder shall not be entitled to any anti-dilution adjustment or other similar adjustment, and
Stockholder hereby waives, now and forever, any and all such adjustments, whether past, present or
future.
7. General Release. Subject to the closing of the Proposed Investment and delivery to
Stockholder of the Additional Shares, in consideration of the delivery of the Additional Shares and
the amendment of the Warrant Agreement provided in Section 1(b) hereof, Stockholder hereby remises,
releases and forever discharges and by these presents does, for himself, herself or itself, his,
her or its heirs, executors, administrators, assigns and successors, remise, release, acquit,
satisfy and forever discharge the Company 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, rights and demands whatsoever in law or in
equity or by contract, know or unknown, which against Releasees Stockholder ever had, now has, or
which his, her or its heirs, executors, administrators, successor or assigns, 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 of the Proposed Investment.
8. Indemnification. Stockholder hereby agrees to indemnify, defend and hold harmless
Company, including, but not limited to, its respective shareholders, officers, directors,
employees, agents, affiliates, successors and assigns, from and against any and all claims, losses,
liabilities, damages or expenses of any nature whatsoever, resulting from Stockholder’s breach or
failure to perform the terms of this Agreement.
The Company hereby agrees to indemnify, defend and hold harmless Stockholder, including but
not limited to its shareholders, officers, directors, employees, members, agents, affiliates,
successors and assigns, from and against any and all claims, losses, liabilities, damages or
expenses of any nature whatsoever, resulting from the Company’s breach or failure to perform the
terms of this Agreement.
The parties hereto, jointly and severally, expressly agree that this Agreement and its terms
do not constitute an admission of liability upon the part of any of the parties hereto for any
reason or for any purpose.
9. Termination. This Agreement shall become null and void and of no further force or
effect in the event that the closing of the Proposed Investment does not occur on or prior to March
15, 2006.
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, 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.
14. Attorney’s Fees. The Company hereby agrees to pay, on Stockholder’s behalf, up to
the aggregate sum of $5,000 for Stockholder’s attorney fees expended in the settlement process
resulting in this Agreement. Upon closing of the Proposed Investment, Stockholder’s counsel will
submit to the Company a copy of such attorney’s statement for services rendered, and the Company
shall pay said statement, up to the aggregate sum of $5,000, directly to Stockholder’s attorney.
SIGNATURE PAGE FOLLOWS
| IN WITNESS WHEREOF, the parties have set their hands on the date first above written. | ||||||||||
| COMPANY: | STOCKHOLDER: | |||||||||
| IMMEDIATEK, INC. | XXXX XXXXXX & COMPANY | |||||||||
| By: | /s/ XXXX XXXX | By: | /s/ XXXX XXXXXXXXXX | |||||||
| Name: Xxxx Xxxx | Name: Xxxx Xxxxxxxxxx | |||||||||
| Title: CEO | Title: President – Investment Division | |||||||||
