THE SECURITIES EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR CERTAIN STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND SUCH STATE LAWS AS MAY BE APPLICABLE, OR
DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED. ADDITIONAL RESTRICTIONS ON TRANSFER OF
THE SECURITIES ARE SET FORTH IN THIS AGREEMENT.
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT is dated as of November 29, 1999 (the
"Agreement") between C3D INC., a corporation organized under the laws of Florida
(the "Company"), and MBA-on-Demand, L.L.C., a limited liability company
organized under the laws of Texas ("MBA").
BACKGROUND
WHEREAS, pursuant to that certain Engagement Letter, dated as of May
23, 1999, by and between the Company and MBA and the Business Plan Development
Proposal attached thereto (collectively, the "Engagement Letter"), MBA performed
services for the Company related to the preparation of the Company's business
plan for which the Company agreed to compensate MBA $15,000 in cash and 2,500
shares (the "Shares") of common stock, par value $.001 per share (the "Common
Stock"), of the Company at a price of $11.50 per share; and
WHEREAS, as consideration for services rendered pursuant to the
Engagement Letter and in accordance with the terms and conditions herein, the
Company hereby grants to MBA the Shares.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and in the Engagement Letter and for the other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. SUBSCRIPTION FOR SHARES.
MBA hereby subscribes for and shall receive the Shares on the
terms and conditions set forth in this Subscription Agreement. The Company is a
Florida corporation and trades on the National Association of Securities Dealers
Over-the-Counter Bulletin Board under the Symbol "CDDD."
2. PURCHASE PRICE.
The aggregate purchase price for the Shares is $28,750 (the
"Purchase Price"), which MBA has tendered in the form of services rendered
pursuant to the Engagement Letter.
3. REPRESENTATIONS AND WARRANTIES AS TO SUITABILITY STANDARDS.
MBA hereby represents and warrants that:
(a) MBA has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of the
prospective investment in the Company;
(b) MBA is acquiring the Shares for its own account, not on
behalf of other persons, and for investment and not with a view to resale or
distribution;
(c) MBA can bear the economic risk of losing its entire
investment;
(d) MBA's overall commitment to investments which are not
readily marketable is not disproportionate to MBA's net worth, MBA's investment
in the Shares will not cause such overall commitment to become excessive, and
the investment is suitable for MBA when viewed in light of its other securities
holdings, financial situation and needs;
(e) MBA has adequate means of providing for its current needs
and personal contingencies;
(f) MBA has evaluated all the risks of investment in the
Company;
(g) MBA has experience in making investment decisions of this
type;
(h) MBA understands the business in which the Company is to be
engaged;
(i) MBA otherwise meets any special suitability standards
applicable to Texas, MBA's state of incorporation;
4. TRANSFER RESTRICTIONS.
(a) MBA represents that it understands that the sale or
transfer of the Shares are severely restricted and that:
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(i) The Shares have not been registered under the
Securities Act, or the laws of any other jurisdiction. The Shares cannot be sold
or transferred by it unless the Shares are subsequently registered under the
applicable law or an exemption from registration is available. The Company is
not required to register the Shares or to make any exemption from registration
available;
(ii) The right to sell or transfer any of the Shares
will be restricted as set forth in a legend on the certificate representing the
Shares which requires that MBA furnish an opinion of counsel that any proposed
sale or transfer by him will not violate applicable securities laws; and
(iii) There is presently no public market for the
Shares and MBA may not be able to sell the Shares. Accordingly, MBA must bear
the economic risk of his investment for an indefinite period of time.
(b) MBA agrees that it will not sell or offer to sell or
transfer the Shares or any part thereof or interest therein without registration
under the Securities Act and applicable state securities laws or an exemption
from such registration.
5. MBA'S REPRESENTATIONS AND WARRANTIES.
MBA represents and warrants that:
(a) MBA has received a copy of the Company's registration
statement on Form 10 as filed with the SEC (as defined in Section 6(a)) on
November 12, 1999 (the "Form 10") and has been furnished with all documents and
information regarding the Company which it has requested;
(b) MBA has had the opportunity to ask questions of and has
received answers from the Company concerning the Company and the Shares and to
obtain any additional information necessary to verify the accuracy of the
information furnished;
(c) MBA has relied only on the foregoing information and
documents in determining to make this subscription;
(d) Any information furnished by the Company does not
constitute investment, accounting, legal or tax advice and MBA is relying on
professional advisers for such advice;
(e) All documents, records and books pertaining to MBA's
investment have been made available for inspection by MBA and by MBA's attorney,
and/or accountant and/or representative, and the books and records of the
Company will be available upon reasonable notice for inspection by investors
during reasonable business hours at the Company's principal place of business;
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(f) MBA and its advisors (which advisors do not include the
Company or its principals, representatives or counsel) have such knowledge and
experience in legal, financial and business matters as to be capable of
evaluating the merits and risks of investing in the Company and of making an
informed investment decision;
(g) MBA recognizes that any investment in the Company involves
substantial risk and has evaluated and fully understands such risks in its
decision to purchase the Shares hereunder; and
(h) MBA understands, acknowledges and agrees that the Company
is relying solely upon the representations and warranties made herein in
determining to grant MBA the Shares.
6. REGISTRATION RIGHTS.
(a) For purposes of this Section 6:
(i) The term "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Securities
Act, and the declaration or ordering of effectiveness of such registration
statement or document.
(ii) The term "Registrable Securities" means (i) the
Common Stock, and (ii) any Common Stock issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of the shares referenced in (i) and (ii) above, excluding in all
cases, however, any Registrable Securities sold by a person in a transaction in
which his or her rights under this Section 6 are not assigned.
(iii) The term "SEC" shall mean the Securities and
Exchange Commission.
(b) If at any time after the Form 10 has been declared
effective by the SEC the Company proposes to register any of the Common Stock or
other equity securities in connection with the public offering of such
securities solely for cash (other than a registration relating solely to
employee benefit plans, or a registration relating solely to an SEC Rule 145
transaction, or a registration on any registration form which does not permit
secondary sales), the Company shall, subject to the provisions of Section 6(d),
automatically and without the need for notice from MBA, cause to be registered
under the Securities Act all of the Registrable Securities held by MBA; provided
that, the Company shall cause the Registrable Securities held by MBA to be
registered on or before May 11, 2000 in connection with certain registration
rights granted to Wilbro Nominees Limited ("Wilbro") pursuant to that certain
Registration Rights Agreement by and between the Company and Wilbro dated
November 11, 1999.
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(c) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Section 6 with respect to the
Registrable Securities of MBA that MBA shall, within thirty (30) days of receipt
of written notice from the Company, furnish to the Company such information
regarding itself, the Registrable Securities held by it, and the intended method
of disposition of such securities as shall be required to effect the
registration of MBA's Registrable Securities.
(d) In connection with any offering involving an underwriting
of shares of the Company's capital stock, the Company shall not be required
under Section 6(b) to include any of MBA's securities in such underwriting
unless it accepts the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it, and then only in such quantity as
the underwriters determine in their sole discretion will not, jeopardize the
success of the offering by the Company. If the total amount of securities,
including Registrable Securities, requested by shareholders to be included in
such offering exceeds the amount of securities sold other than by the Company
that the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable Securities,
which the underwriters determine in their sole discretion will not jeopardize
the success of the offering (the securities so included to be apportioned pro
rata among the selling shareholders according to the total amount of securities
entitled to be included therein owned by each selling shareholder or in such
other proportions as shall mutually be agreed to by such selling shareholders).
(e) MBA shall not have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Section 6.
(f) MBA hereby agrees that, during the period of duration
specified by the Company and an underwriter of the Common Stock or other
securities of the Company, following the effective date of a registration
statement of the Company filed under the Securities Act, it shall not, to the
extent requested by the Company and such underwriter, directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any securities of the Company
held by it at any time during such period except Common Stock included in such
registration; provided, however, that:
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(i) such agreement shall be applicable only to the
first such registration statement effected by the Company which covers the
Common Stock or other securities of the Company to be sold on its behalf to the
public in an underwritten offering;
(ii) all officers and directors of the Company and
all other persons with registration rights (whether or not pursuant to this
Agreement) enter into similar agreements;
(iii) such market stand-off time period shall not
exceed one hundred eighty (180) days;
(iv) in order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to the Registrable
Securities of Investor (and the shares or securities of every other person
subject to the foregoing restriction) until the end of such period; and
(v) notwithstanding the foregoing, the obligations
described in this Section 6(f) shall not apply to a registration relating solely
to employee benefit plans on Form S-1 or Form S-8 or similar forms which may be
promulgated in the future, or a registration relating solely to a Commission
Rule 145 transaction on Form S-14 or Form S-15 or similar forms which may be
promulgated in the future.
(f) MBA shall not be entitled to exercise any right provided
for in this Section 6 (a) after one (1) year following the date on which the
Form 10 is declared effective by the SEC or (b) at such time following such
effective date and for so long as MBA may sell all of its Registrable Securities
in any single three (3) month period pursuant to Rule 144 (or such successor
rule as may be adopted).
7. INDEMNIFICATION AND HOLD HARMLESS.
MBA and the Company each agrees that if it breaches any
agreement, representation or warranty it has made in this Agreement, it agrees
to indemnify and hold harmless the other against any claim, liability, loss,
damage or expense (including attorneys' fees and other costs of investigating
and litigating claims) caused, directly or indirectly, by its breach.
8. GENERAL.
(a) Assignment. MBA's rights in this Agreement may not be
assigned, transferred, or otherwise hypothecated, pledged, borrowed upon, used
as security for a loan, alienated, or otherwise encumbered without the prior
written approval of the Company. Notwithstanding the foregoing, MBA's
obligations under this Agreement are binding upon MBA's heirs, representatives,
and administrators.
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(b) Governing Law. This Agreement, and its interpretation and
enforcement, shall be governed by the laws of the State of Florida, without
regard to the conflicts or choice of law provisions of such State.
(c) Notices. Notices given hereunder shall be deemed to have
been duly given on the date of personal delivery or on the date of postmark if
sent by certified or registered mail, return receipt requested or express
overnight courier service, to the party being notified at his or its address
specified on the signature page hereto or such other address as the addressee
may subsequently notify the other parties of in writing. Copies of all notices
shall also be sent simultaneously to Xxxx X. Xxxxxx, Esquire, Blank Rome Comisky
& XxXxxxxx LLP, Xxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, telecopy:
000-000-0000 and X.X. Xxxxxx, III, Esquire, Xxxxx, Tarrant & Xxxxx, Crescent
Center, 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxx 00000-0000, telecopy
number (000) 000-0000. Such copies shall not constitute sufficient notice
pursuant to this Paragraph 8.
(d) 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.
(e) Delivery by Facsimile. This Agreement and each other
agreement or instrument entered into in connection herewith or contemplated
hereby, and any amendments hereto, to the extent signed and delivered by means
of a facsimile machine, shall be treated in all manner and respects as an
original agreement or instrument and shall be considered to have the same
binding legal effect as if it were the original signed version thereof delivered
in person. At the request of any party hereto or to any such agreement or
instrument, each other party hereto or thereto shall reexecute original forms
thereof and deliver them to all other parties. No party hereto or to any such
agreement or instrument shall raise the use of a facsimile machine to deliver a
signature or the fact that any signature or agreement or instrument was
transmitted or communicated through the use of a facsimile machine as a defense
to the formation or enforceability of a contract and each such party forever
waives any such defense.
* * *
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the date first above written.
C3D INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------------
Xxxxxx Xxxxxx
President and Chief Executive Officer
Address: 000 Xxxx 00xx Xxxxxx, Xxxxx 0X
Xxx Xxxx, XX 00000
Telecopy: 000-000-0000
MBA-ON-DEMAND, L.L.C.
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Xxxxx X. Xxxxx
Principal
Address: 00000 Xxxxxx Xx. Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy: 000-000-0000
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