EXHIBIT 10.11
SECURED CONVERTIBLE NOTE
THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY AND ANY SECURITY
INTERESTS OR OTHER LIENS SECURING SUCH OBLIGATIONS ARE SUBORDINATE IN THE MANNER
AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AND INTERCREDITOR
AGREEMENT DATED AS OF MAY ___, 2012 (AS AMENDED, RESTATED OR OTHERWISE AMENDED
FROM TIME TO TIME, THE "SUBORDINATION AGREEMENT") AMONG HUDSON BAY MASTER FUND
LTD., AS COLLATERAL AGENT (THE "SENIOR AGENT"), COMVEST CAPITAL II, L.P., AND
THE COMPANY (AS DEFINED BELOW) TO THE INDEBTEDNESS (INCLUDING INTEREST) OWED BY
THE COMPANY, AND THE SECURITY INTERESTS AND LIENS SECURING SUCH INDEBTEDNESS,
PURSUANT TO THAT CERTAIN SECURITIES PURCHASE AGREEMENT DATED AS OF MAY __, 2012
AMONG THE COMPANY, SENIOR AGENT AND THE BUYERS FROM TIME TO TIME PARTY THERETO,
THAT CERTAIN SECURITY AND PLEDGE AGREEMENT DATED AS OF MAY ___ 2012 BY AND AMONG
THE COMPANY, SENIOR AGENT, AND THE GRANTORS PARTY THERETO, AND VARIOUS RELATED
DOCUMENTS, AND TO INDEBTEDNESS REFINANCING THE INDEBTEDNESS UNDER SUCH DOCUMENTS
AS CONTEMPLATED BY THE SUBORDINATION AGREEMENT.
EACH HOLDER OF THIS INSTRUMENT,
BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF
THE SUBORDINATION AGREEMENT.
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS NOTE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
(I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO
THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE
COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR
ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF
THIS NOTE, INCLUDING SECTIONS 3(c)(iii) AND 20(a) HEREOF.
THE PRINCIPAL AMOUNT
REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON
CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF
PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.
DIGITAL DOMAIN MEDIA GROUP, INC.
SECURED CONVERTIBLE NOTE
Issuance Date:
May
, 2012
Original Principal Amount:
U.S. $8,000,000
FOR VALUE RECEIVED, Digital Domain Media Group, Inc., a Florida corporation (the
"Company"), hereby promises to pay to the order of ComVest Capital II, L.P. or
its registered assigns ("Holder") the amount set out above as the Original
Principal Amount (as reduced pursuant to the terms hereof pursuant to
redemption, conversion or otherwise, and as increased pursuant to the terms
hereof by the accrual and payment in kind of Interest, Late Charges and other
Non-Principal Amounts, the "Principal") when due, whether upon the Maturity Date
or upon acceleration, redemption or otherwise