ADVANCE DISPLAY TECHNOLOGIES, INC. Series G Preferred Stock SUBSCRIPTION AGREEMENT
ADVANCE
DISPLAY TECHNOLOGIES, INC.
Series
G Preferred Stock
THIS
SUBSCRIPTION AGREEMENT (this “Agreement”) is executed and delivered, as of the
date set forth on the signature page hereof, by and between Advance Display
Technologies, Inc., a Colorado corporation (“Company”), and the undersigned
subscriber (“Subscriber”).
1. Subscription.
Subject
to the terms and conditions set forth in this Agreement, Subscriber hereby
agrees to subscribe for the number of shares of Series G Preferred Stock of
Company (the “Shares”) at the times and in the manner set forth in the
Subscription Schedule on the signature page of this Agreement (the “Total
Subscription”).
2. Acceptance.
Company, in consideration of and in reliance on Subscriber’s representations,
warranties, covenants in this Agreement, and Subscriber’s payment of the Total
Subscription Price set forth in the Subscription Schedule, hereby accepts the
subscription of Subscriber and agrees to issue the Shares to Subscriber, subject
to the terms and conditions of this Agreement.
3. Issuance
of shares.
Company
shall issue the Shares to Subscriber within ten (10) days of its receipt of
payment in full for all of the Shares, provided, however, that Company shall
have no obligation to issue any Shares to Subscriber unless and until Subscriber
has made to Company, and Company has accepted, full payment of Subscriber’s
Total Subscription.
4. Cancellation
of Subscription by Company.
At any
time prior to Company’s receipt and acceptance of full payment for the Total
Subscription, Company may elect to terminate its obligations to deliver any
of
the Shares to Subscriber under this Agreement by returning to the Subscriber
all
prior payments made by the Subscriber toward the Total Subscription, together
with interest at the prime rate as published by the Wall Street Journal from
the
date of Company’s receipt of such payments. In such an event, Company will be
relieved of any obligation to deliver the Shares and Subscriber shall have
no
further right or obligation to purchase the Shares.
5. Partial
Cancellation of Subscription by Company.
At any
time prior to Company’s receipt and acceptance of full payment for the Total
Subscription, Company may, in its sole discretion, elect to cancel any part
of
the Total Subscription, irrespective of whether Subscriber has previously paid
some or all of the Total Subscription to Company by delivering to Subscriber
a
written notice of partial cancellation of the amount of the Subscription
cancelled (the “Cancelled Subscription”) and returning to the Subscriber all
prior payments, if any, made by the Subscriber toward the Cancelled
Subscription, together with interest at the prime rate as published by the
Wall
Street Journal from the date of Company’s receipt of such payments. In such an
event, Company shall be obligated to sell, and Subscriber shall be obligated
to
buy, the shares attributable to the portion of the Total Subscription that
was
not cancelled (the “Accepted Shares”). No later than ten (10) days after
Company’s receipt of payment from Subscriber for the Accepted Shares, the
Company will issue the Accepted Shares to Subscriber. Upon such payment and
delivery, the Company will be relieved of any obligation to deliver additional
Shares to Subscriber and Subscriber will have no further right or obligation
to
purchase additional Shares under this Agreement.
6. Voting
of the Shares.
Subscriber shall have no right to vote the Shares prior to payment and
acceptance of the Total Subscription or the Accepted Subscription, as the case
may be, provided, however, that Company may, in its discretion, elect to grant
to Subscriber the voting rights to the Shares if and to the extent that payment
has been made for the Shares as of the record date for the vote, provided
further, however, that no such grant of voting rights may be made by Company
until the date that the vote is actually held and only if the Total Subscription
has been paid and accepted by Company by that date.
7. Restrictions
on Transfer.
7.1 The
certificates representing the Shares will bear a legend in substantially the
following form:
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
7.2 No
holder
of the Shares may sell, transfer or dispose of any Series G Preferred Stock
(except pursuant to an effective registration statement under the Securities
Act) without first delivering to Company an opinion of counsel (reasonably
acceptable in form and substance to Company) that neither registration nor
qualification under the Securities Act and applicable state securities laws
is
required in connection with such transfer.
8. Subscriber’s
Representations, Warranties, Covenants and Agreements.
Subscriber hereby represents and warrants to, and covenants and agrees with,
Company as follows:
8.1 Subscriber
has been given adequate access to all information about Company and Subscriber’s
investment in Company that was material to Subscriber’s decision to invest
therein. Subscriber has reviewed the Certificate of Incorporation of Company.
Subscriber acknowledges that it is fully informed and knowledgeable about
Company, its business (the “Business”), management and personnel; that it has
had discussions with Company concerning the Business and has obtained
information from Company; and that Company has answered all questions that
the
undersigned had concerning the Business. Subscriber has been furnished materials
relating to Company, the Business and the financial condition of Company and
the
offering of the Shares that it has requested and has been afforded the
opportunity to ask questions and receive answers concerning an investment in
Company. Subscriber acknowledges that it has had the opportunity to request
such
additional information from the President of Company.
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8.2 Subscriber
acknowledges that an investment in Company involves a substantial degree of
risk
and is suitable only for persons with adequate means who have no need for
liquidity in their investments.
8.3 Subscriber
acknowledges that no market for the Shares exists nor is anticipated to develop
and that, therefore, investment in Company will not be liquid.
8.4 Subscriber
has knowledge and experience in financial and business matters and is capable
of
evaluating the merits and risks of an investment in Company and the suitability
of the investment for Subscriber.
8.5 Subscriber
is making this capital contribution for investment purposes only and has no
present intention to sell or exchange the Shares; Subscriber has adequate means
for providing for Subscriber’s current needs in any foreseeable contingency; and
Subscriber has no need to sell the Shares in the foreseeable
future.
8.6 Subscriber,
if a corporation, partnership, trust or other entity, is duly organized, and
is
authorized and otherwise duly qualified to purchase and hold the Shares, and
such entity has its principal place of business at the address set forth on
the
signature page hereof.
8.7 Subscriber,
if an individual, is at least 21 years of age, has the legal capacity to
execute, deliver and perform this Agreement, and has Subscriber’s residence at
the address set forth on the signature page hereof.
8.8 Subscriber
is an “accredited investor” as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended.
8.9 All
information which Subscriber has provided to Company concerning Subscriber,
Subscriber’s financial position and knowledge of financial and business matters,
or, in the case of a corporation, partnership, trust or other entity, the
knowledge of financial and business matters of the person making the investment
decision on behalf of such entity, including all information contained herein,
is true and complete as of the date set forth at the end hereof, and if there
should be any adverse change in such information prior to this subscription
being accepted, Subscriber will immediately provide Company with accurate and
complete information concerning any such change.
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8.10 Subscriber
acknowledges that no federal or state agency has made any finding or
determination as to the fairness of this investment, nor any recommendation
or
endorsement, of the investment in the Shares.
8.11 Subscriber
acknowledges that the Series G Preferred Stock has not been registered under
the
Securities Act of 1933, as amended (the “Act”), or the blue sky laws of any
state.
8.12 Subscriber
understands that Company has relied upon an exemption from registration provided
in the Act and upon all of the foregoing representations and warranties of
Subscriber.
8.13 Subscriber
certifies, under penalties of perjury, (i) that the social security or Federal
taxpayer identification number shown on the signature page of this Agreement
is
true and complete and (ii) that Subscriber is not subject to backup withholding
either because Subscriber has not been notified that he or she is subject to
backup withholding as a result of a failure to report all interest or dividends,
or the Internal Revenue Service has notified Subscriber that he or she is no
longer subject to backup withholding.
9. Confidential
Information.
Subscriber acknowledges that the information, observations and data obtained
by
him or her during the course of Subscriber’s ownership of any interest in
Company concerning the business and affairs of Company are the property of
Company, including information concerning acquisition opportunities in or
reasonably related to the Business of which Subscriber becomes aware during
such
period. Therefore, Subscriber agrees that he or she will not disclose to any
unauthorized person or use for Subscriber’s own account any of such information,
observations or data without the written consent of the President of Company
unless and to the extent that the aforementioned matters become generally known
to and available for use by the public other than as a result of Subscriber’s
acts or omissions. Subscriber agrees to deliver to Company on the date of
disposition of the Shares, or at any other time Company may request in writing,
all memoranda, notes, plans, records, reports and other documents (and copies
thereof) relating to the Business (including, without limitation, all
acquisition prospects, lists and contact information) which he or she may then
possess or have under Subscriber’s control.
10. Indemnification.
Subscriber agrees to indemnify and hold harmless Company, its directors,
officers, employees, stockholders and affiliates, and any person acting on
behalf of Company, from and against any and all damage, loss, liability, cost
and expense (including attorneys’ fees) which any of them may incur by reason of
the failure by Subscriber to fulfill any of the terms or conditions of this
Agreement, or by reason of any breach of the representations and warranties
made
by Subscriber herein, or in any other document provided by Subscriber to
Company. All representations, warranties and covenants contained in this
Agreement, and the indemnification contained in this paragraph, shall survive
the acceptance of this subscription.
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11. Headings.
The
headings throughout this Agreement are for convenience of reference only, and
shall in no way be deemed to define, limit, or add to the meaning of any of
the
provisions of this Agreement.
12. Counterparts.
This
Agreement may be executed in counterparts, both of which when taken together
shall be deemed one original.
13. No
Waiver.
Notwithstanding any of the representations, warranties, acknowledgments or
agreements made herein by Subscriber, Subscriber does not thereby or in any
other manner waive any of the rights granted to him or her under federal or
state securities laws.
14. Entire
Agreement; Modification.
This
Agreement constitutes the entire agreement among the parties hereto with respect
to the subject matter hereof, and neither this Agreement nor any of the
provisions hereof shall be waived, changed, discharged or terminated except
by
an instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.
15. Notice.
Notices
required or permitted to be given under this Agreement shall be in writing
and
shall be deemed to be sufficiently given when sent by registered or certified
mail, postage prepaid, addressed to the other party at the address of such
party
set forth on the signature page to this agreement, or to such other address
furnished by notice given in accordance with this paragraph.
16. Successors;
Binding Effect.
Except
as otherwise provided herein, this Agreement shall be irrevocable and binding
upon and inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors, legal representatives and assigns. If
Subscriber is more than one person, the obligations of Subscriber shall be
joint
and several and the agreements, representations, warranties and acknowledgments
herein contained shall be deemed to be made by and be binding upon each such
person and the person’s respective heirs, executors, administrators, successors,
legal representatives and assigns.
17. Assignability.
Subscriber agrees not to transfer or assign this Agreement, or any of
Subscriber’s interest herein without the written consent of Company, which
consent may be withheld in its sole discretion, and any such transfer or
assignment in violation of this Agreement shall be null and void ab initio.
Further, Subscriber agrees that the transfer or assignment of the Shares shall
be made only in accordance with this Agreement, Company’s Certificate of
Incorporation and applicable laws.
18. Applicable
Law.
This
Agreement and all rights and remedies hereunder shall be governed by and
construed in accordance with the laws of the State of Colorado, without regard
to the conflicts of laws thereof.
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IN
WITNESS WHEREOF, the undersigned Subscriber does represent and certify under
penalty of perjury that the foregoing statements are true and correct and that
it has, by the following signature, executed this Agreement as of December
1,
2006.
SUBSCRIBER:
Iplan
AR
LLC
|
By:
/s/ Xxxxxxxx X. XxXxxxxx
Name:
Xxxxxxxx X. XxXxxxxx
Title: General
Partner
|
Address
for Notices:
__________________________
__________________________
__________________________
|
|
Taxpayer
Identification or Social Security Number of Subscriber:
__________________________
|
Telephone:
__________________________
|
Subscription
Schedule
|
Number
of Shares subscribed for
|
Price
per share
|
Total
Subscription Price
|
||
|
10,714
|
$70.00
|
$750,000
|
Payments
of the Total Subscription Price shall be made by Subscriber in the amounts
requested by Company not less than ten (10) business days after Subscriber’s
receipt from Company of a written demand for payment. No such demand shall
be
for an amount greater than $100,000. No demand may be made during the ten (10)
business days after a prior demand was made. The Company may request amounts
larger than $100,000 or upon less than ten (10) business days notice but
Subscriber shall have no obligation to honor any such requests.
Subscription
accepted on
December
1, 2006.
ADVANCE
DISPLAY TECHNOLOGIES, INC.
0000
Xxxxx Xxxxx Xxx, Xxxxx X
Xxxxxxxxxx,
XX 00000
(000)
000-0000
By:
/s/ Xxxxxxx X. Shankle_____________________________
Xxxxxxx
X. Xxxxxxx, President
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