SUBSCRIPTION AGREEMENT
THIS
SUBSCRIPTION AGREEMENT
(this
“Agreement”),
dated
as of October __, 2007, by and among 3DIcon Corporation, an Oklahoma corporation
(the “Company”),
and
the subscribers identified on the signature page hereto (each a “Subscriber”
and
collectively “Subscribers”).
WHEREAS,
the
Company and the Subscribers are executing and delivering this Agreement in
reliance upon an exemption from securities registration afforded by the
provisions of Section 4(2), Section 4(6) and/or Regulation D (“Regulation
D”)
as
promulgated by the United States Securities and Exchange Commission (the
“Commission”)
under
the Securities Act of 1933, as amended (the “1933
Act”).
WHEREAS,
the
parties desire that, upon the terms and subject to the conditions contained
herein, the Company shall issue and sell to the Subscribers, as provided herein,
and the Subscribers, in the aggregate, shall purchase for a minimum of $250,000
(the "Purchase
Price")
of
shares of the Company's common stock, $.0002 par value (the "Common
Stock")
at a
per share price equal to 75% of the average of the Average Closing Prices during
the five (5) days prior to the Signing Date as reported by Bloomberg, L.P.,
and
share purchase warrants (the “Warrants”)
in the
form attached hereto as Exhibit
A,
to
purchase shares of Common Stock (the “Warrant
Shares”).
The
shares of Common Stock (the “Shares”),
the
Warrants and the Warrant Shares are collectively referred to herein as the
"Securities";
and
NOW,
THEREFORE,
in
consideration of the mutual covenants and other agreements contained in this
Agreement the Company and the Subscribers hereby agree as follows:
1. Conditions
To Closing.
Subject
to the satisfaction or waiver of the terms and conditions of this Agreement,
on
the “Closing
Date”
(as
defined in Section 2 below), each Subscriber shall purchase and the Company
shall sell to each Subscriber the Shares and Warrants designated on the
signature page hereto for the portion of the Purchase Price set forth on the
signature page hereto. Each purchaser hereby acknowledges that he or she may
be
the sole Subscriber. On or before the Closing Date, each Subscriber shall
deliver to the Company such Subscriber’s portion of the Purchase Price, an
executed copy of this Agreement and a completed Investor Questionnaire. The
payment will be delivered pursuant to the following wire transfer
instructions:
Wire
to:
|
Arvest
Bank
|
|
Tulsa,
OK
|
Acount
Name:
|
3DIcon
Corporation
|
Account
#:
|
00000000
|
Routing
#:
|
000000000
|
2. Closing.
The
consummation of the transactions contemplated herein shall take place upon
the
satisfaction of all conditions to Closing set forth in this Agreement
(“Closing
Date”),
provided, however, that such Closing will occur on or before October 15,
2007.
3. Warrants.
On the
Closing Date, the Company will issue and deliver Warrants to the Subscribers.
One Class A Warrant will be issued for each two Shares issued on the Closing
Date. The
per
Warrant Share exercise price to acquire a Warrant Share upon exercise of a
Class
A Warrant shall be equal to $0.40 from September __, 2007 through September
__,
2008 and shall be equal to $0.50 from September __, 2008 through September
__,
2009.
4. Subscriber's
Representations and Warranties.
Each
Subscriber hereby represents and warrants to and agrees with the Company only
as
to such Subscriber that:
(a) Organization
and Standing of the Subscribers.
If the
Subscriber is an entity, such Subscriber is a corporation, partnership or other
entity duly incorporated or organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization and
has
the requisite corporate power to own its assets and to carry on its
business.
(b) Authorization
and Power.
Each
Subscriber has the requisite power and authority to enter into and perform
this
Agreement and to purchase the Shares and Warrants being sold to it hereunder.
The execution, delivery and performance of this Agreement by such Subscriber
and
the consummation by it of the transactions contemplated hereby and thereby
have
been duly authorized by all necessary corporate or partnership action, and
no
further consent or authorization of such Subscriber or its Board of Directors,
stockholders, partners, members, as the case may be, is required. This Agreement
has been duly authorized, executed and delivered by such Subscriber and
constitutes, or shall constitute when executed and delivered, a valid and
binding obligation of the Subscriber enforceable against the Subscriber in
accordance with the terms thereof.
(c) No
Conflicts.
The
execution, delivery and performance of this Agreement and the consummation
by
such Subscriber of the transactions contemplated hereby or relating hereto
do
not and will not (i) result in a violation of such Subscriber’s charter
documents or bylaws or other organizational documents or (ii) conflict with,
or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of any agreement, indenture or
instrument or obligation to which such Subscriber is a party or by which its
properties or assets are bound, or result in a violation of any law, rule,
or
regulation, or any order, judgment or decree of any court or governmental agency
applicable to such Subscriber or its properties (except for such conflicts,
defaults and violations as would not, individually or in the aggregate, have
a
material adverse effect on such Subscriber). Such Subscriber is not required
to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under this Agreement or to purchase
the Securities in accordance with the terms hereof, provided that for purposes
of the representation made in this sentence, such Subscriber is assuming and
relying upon the accuracy of the relevant representations and agreements of
the
Company herein.
(d) Information
on Company.
The
Subscriber has been furnished with or has had access at the XXXXX Website of
the
Commission to the Company's 424(b)(3) Prospectus, the Company’s Form 10-QSB for
the period ended June 30, 2007 as filed with the Commission and all periodic
reports with the Commission thereafter, but not later than five business days
before the Closing Date (hereinafter referred to as the "Reports").
In
addition, the Subscriber has received in writing from the Company such other
information concerning its operations, financial condition and other matters
as
the Subscriber has requested in writing (such other information is collectively,
the "Other
Written Information"),
and
considered all factors the Subscriber deems material in deciding on the
advisability of investing in the Securities.
(e) Information
on Subscriber.
The
Subscriber will be, on the Closing Date and upon exercise of the Warrants,
an
"accredited
investor",
as
such term is defined in Regulation D promulgated by the Commission under the
1933 Act, is experienced in investments and business matters, has made
investments of a speculative nature and has purchased securities of United
States publicly-owned companies in private placements in the past and, with
its
representatives, has such knowledge and experience
in financial, tax and other business matters as to enable the Subscriber to
utilize the information made available by the Company to evaluate the merits
and
risks of and to make an informed investment decision with respect to the
proposed purchase, which represents a speculative investment. The Subscriber
has
the authority and is duly and legally qualified to purchase and own the
Securities. The Subscriber is able to bear the risk of such investment for
an
indefinite period and to afford a complete loss thereof. The information set
forth on the signature page hereto regarding the Subscriber is
accurate.
The
Subscriber is not required to be registered as a broker-dealer under Section
15
of the Securities Exchange Act of 1934, as amended (the "1934 Act") and the
Subscriber is not a broker-dealer.
(f) Investment
Purpose.
As of
the date hereof, the Subscriber is purchasing the Securities for its own account
and not with a present view towards the public sale or distribution thereof,
except pursuant to sales registered or exempted from registration under the
1933
Act; provided,
however,
that by
making the representations herein, the Subscriber does not agree to hold any
of
the Securities for any minimum or other specific term and reserves the right
to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act.
(g) Reliance
on Exemptions.
The
Subscriber understands that the Securities are being offered and sold to it
in
reliance upon specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying upon
the truth and accuracy of, and the Subscriber’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings
of
the Subscriber set forth herein in order to determine the availability of such
exemptions and the eligibility of the Subscriber to acquire the
Securities.
(h) Purchase
of Shares and Warrants.
On the
Closing Date, the Subscriber will purchase the Shares and Warrants as principal
for its own account for investment only and not with a view toward, or for
resale in connection with, the public sale or any distribution
thereof.
"THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW
OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO 3DICON CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED."
(k) Warrants
Legend.
The
Warrants shall bear the following
or
similar legend:
"THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
AND
THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR ANY APPLICABLE
STATE
SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO 3DICON
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."
(l) Communication
of Offer.
The
offer to sell the Securities was directly communicated to the Subscriber by
the
Company. At no time was the Subscriber presented with or solicited by any
leaflet, newspaper or magazine article, radio or television advertisement,
or
any other form of general advertising or solicited or invited to attend a
promotional meeting.
(m) Authority;
Enforceability.
This
Agreement and other agreements delivered together with this Agreement or in
connection herewith have been duly authorized, executed and delivered by the
Subscriber and are valid and binding agreements enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to
or affecting creditors’ rights generally and to general principles of equity;
and Subscriber has full corporate power and authority necessary to enter into
this Agreement and such other agreements and to perform its obligations
hereunder and under all other agreements entered into by the Subscriber relating
hereto.
(n) Restricted
Securities.
Subscriber understands that the Securities have not been registered under the
1933 Act and such Subscriber will not sell, offer to sell, assign, pledge,
hypothecate or otherwise transfer any of the Securities unless pursuant to
an
effective registration statement under the 1933 Act. Notwithstanding anything
to
the contrary contained in this Agreement, such Subscriber may transfer (without
restriction and without the need for an opinion of counsel) the Securities
to
its Affiliates (as defined below) provided that each such Affiliate is an
“accredited investor” under Regulation D and such Affiliate agrees to be bound
by the terms and conditions of this Agreement. For the purposes of this
Agreement, an “Affiliate”
of
any
person or entity means any other person or entity directly or indirectly
controlling, controlled by or under direct or indirect common control with
such
person or entity. For purposes of this definition, “control”
means
the power to direct the management and policies of such person or firm, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise.
(o) No
Governmental Review.
Each
Subscriber understands that no United States federal or state agency or any
other governmental or state agency has passed on or made recommendations
or endorsement of the Securities or the suitability of the investment in the
Securities nor have such authorities passed upon or endorsed the merits of
the
offering of the Securities.
(p) Correctness
of Representations.
Each
Subscriber represents as to such Subscriber that the foregoing representations
and warranties are true and correct as of the date hereof and, unless a
Subscriber otherwise notifies the Company prior to the Closing Date shall be
true and correct as of the Closing Date.
(q) Survival.
The
foregoing representations and warranties shall survive the Closing Date for
a
period of three years.
5. Company
Representations and Warranties.
The
Company represents and warrants to and agrees with each Subscriber
that:
(a) Due
Incorporation.
Except
as set forth on Schedule 5(a), the Company and each of its Subsidiaries is
a
corporation or other entity duly incorporated or organized, validly existing
and
in good standing under the laws of the jurisdiction of its incorporation or
organization and has the requisite corporate power to own its properties and
to
carry on its business as presently
conducted. The Company and each of its Subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in each jurisdiction
where the nature of the business conducted or property owned by it makes such
qualification necessary, other than those jurisdictions in which the failure
to
so qualify would not have a Material Adverse Effect. For purposes of this
Agreement, a “Material
Adverse Effect”
shall
mean a material adverse effect on the financial condition, results of
operations, properties or business of the Company and its Subsidiaries taken
as
a whole. For purposes of this Agreement, “Subsidiary”
means,
with respect to any entity at any date, any corporation, limited or general
partnership, limited liability company, trust, estate, association, joint
venture or other business entity of which more than 50% of (i) the
outstanding capital stock having (in the absence of contingencies) ordinary
voting power to elect a majority of the board of directors or other managing
body of such entity, (ii) in the case of a partnership or limited liability
company, the interest in the capital or profits of such partnership or limited
liability company or (iii) in the case of a trust, estate, association,
joint venture or other entity, the beneficial interest in such trust, estate,
association or other entity business is, at the time of determination, owned
or
controlled directly or indirectly through one or more intermediaries, by such
entity. All the Company’s Subsidiaries as of the Closing Date are set forth on
Schedule
5(a)
hereto.
(b) Outstanding
Stock.
All
issued and outstanding shares of capital stock of the Company has been duly
authorized and validly issued and are fully paid and nonassessable.
(c) Authority;
Enforceability.
This
Agreement, the Shares, the Warrants,, and any other agreements delivered
together with this Agreement or in connection herewith (collectively
“Transaction
Documents”)
have
been duly authorized, executed and delivered by the Company and are valid and
binding agreements enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
generally and to general principles of equity. The Company has full corporate
power and authority necessary to enter into and deliver the Transaction
Documents and to perform its obligations thereunder.
(d) Consents.
No
consent, approval, authorization or order of any court, governmental agency
or
body or arbitrator having jurisdiction over the Company, or any of its
Affiliates, the Bulletin Board nor the Company's shareholders is required for
the execution by the Company of the Transaction
Documents and compliance and performance by the Company of its obligations
under
the Transaction Documents, including, without limitation, the issuance and
sale
of the Securities.
(e) The
Securities.
The
Securities upon issuance:
(i) are,
or
will be, free and clear of any security interests, liens, claims or other
encumbrances, subject to restrictions upon transfer under the 1933 Act and
any
applicable state securities laws;
(ii) have
been, or will be, duly and validly authorized and on the date of issuance of
the
Shares and upon exercise of the Warrants, the Shares and Warrant Shares will
be
duly and validly issued, fully paid and nonassessable or if registered pursuant
to the 1933 Act, and resold pursuant to an effective registration statement
will
be free trading and unrestricted);
(iii) will
not
have been issued or sold in violation of any preemptive or other similar rights
of the holders of any securities of the Company;
(iv) will
not
subject the holders thereof to personal liability by reason of being such
holders; and
(v) will
not
result in a violation of Section 5 under the Act.
(f) Litigation.
There
is no pending or, to the best knowledge of the Company, threatened action,
suit,
proceeding or investigation before any court, governmental agency or body,
or
arbitrator having jurisdiction over the Company, or any of its Affiliates that
would affect the execution by the Company or the performance by the Company
of
its obligations under the Transaction Documents. Except as disclosed on the
Disclosure Schedule
or in
the Reports, there is no pending or, to the best knowledge of the Company,
basis
for or threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company,
or any of its Affiliates which litigation if adversely determined would have
a
Material Adverse Effect.
(g) No
Market Manipulation.
The
Company and its Affiliates have not taken, and will not take, directly or
indirectly, any action designed to, or that might reasonably be expected to,
cause or result in stabilization or manipulation of the price of the Common
Stock to
facilitate the sale or resale of the Securities or affect the price at which
the
Securities may be issued or resold.
(h) Information
Concerning Company.
Since
the date of the financial statements included in the Reports (“Latest
Financial Date”),
and
except as modified in the Other Written Information or in the Schedules hereto,
there has been no Material Adverse Event relating to the Company's business,
financial condition or affairs not disclosed in the Reports. The Reports,
including the financial statements contained therein, do not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances when made.
(j) Defaults.
The
Company is not in violation of its articles of incorporation or bylaws. The
Company is (i) not in default with respect to any order of any court, arbitrator
or governmental body or subject to or party to any order of any court or
governmental authority arising out of any action, suit or proceeding under
any
statute or other law respecting antitrust, monopoly, restraint of trade, unfair
competition or similar matters, or (ii) to the Company’s knowledge not in
violation of any statute, rule or regulation of any governmental authority
which
violation would have a Material Adverse Effect.
(k) Not
Integrated Offering.
Neither
the Company, nor any of its Affiliates, nor any person acting on its or their
behalf, has directly or indirectly made any offers or sales of any security
or
solicited any offers to buy any security under circumstances that would cause
the offer of the Securities pursuant to this Agreement to be integrated with
prior offerings by the Company for purposes of the 1933 Act or any applicable
stockholder approval provisions, including, without limitation, under the rules
and regulations of the OTC Bulletin Board (“Bulletin
Board”)
or any
Principal Market [as defined in Section 9(b)] which would impair the exemptions
relied upon in this Offering or the Company’s ability to timely comply with its
obligations hereunder. Nor will the Company or any of its Affiliates take any
action or steps that would cause the offer or issuance of the Securities to
be
integrated with other offerings which would impair the exemptions relied upon
in
this Offering or the Company’s ability to timely comply with its obligations
hereunder. The Company will not conduct any offering other than the transactions
contemplated hereby that will be integrated with the offer or issuance of the
Securities, which would impair the exemptions relied upon in this Offering
or
the Company’s ability to timely comply with its obligations
hereunder.
(l) No
General Solicitation.
Neither
the Company, nor any of its Affiliates, nor to its knowledge, any person acting
on its or their behalf, has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D under the 0000 Xxx)
in
connection with the offer or sale of the Securities.
(m) Listing.
The
Common Stock is quoted on the Bulletin Board under the symbol: TDCP.OB. The
Company has not received any oral or written notice that the Common Stock is
not
eligible nor will become ineligible for quotation on the Bulletin Board nor
that
the Common Stock does not meet all requirements for the continuation of such
quotation and the Company satisfies all the requirements for the continued
quotation of the Common Stock on the Bulletin Board.
(n) No
Undisclosed Liabilities.
The
Company has no liabilities or obligations which are material, individually
or in
the aggregate, which are not disclosed in the Reports and Other Written
Information, other than those incurred in the ordinary course of the Company’s
businesses since the Latest Financial Date and which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse
Effect,
except
as disclosed on Schedule
5(q).
(o) No
Undisclosed Events or Circumstances.
Since
the Latest Financial Date, no event or circumstance has occurred or exists
with
respect to the Company or its businesses, properties, operations or financial
condition, that, under applicable law, rule or regulation, requires public
disclosure or announcement prior to the date hereof by the Company but which
has
not been so publicly announced or disclosed in the Reports.
(p) Capitalization.
The
authorized and outstanding capital stock of the Company as of the date of this
Agreement and the Closing Date (not including the Securities) are set forth
on
Schedule
5(d).
Except
as set forth on Schedule
5(d),
there
are no options, warrants, or rights to subscribe
to, securities, rights or obligations convertible into or exchangeable for
or
giving any right to subscribe for any shares of capital stock of the Company
or
any of its Subsidiaries. All of the outstanding shares of Common Stock of the
Company have been duly and validly authorized and issued and are fully paid
and
nonassessable.
(q) Dilution.
The
Company's executive officers and directors understand the nature of the
Securities being sold hereby and recognize that the issuance of the Securities
will have a potential dilutive effect on the equity holdings of other holders
of
the Company’s equity or rights to receive equity of the Company. The board of
directors of the Company has concluded, in its good faith business judgment
that
the issuance of the Securities is in the best interests of the Company. The
Company specifically acknowledges that its obligation to issue the Warrant
Shares upon exercise of the Warrants is binding upon the Company and enforceable
regardless of the dilution such issuance may have on the ownership interests
of
other shareholders of the Company or parties entitled to receive equity of
the
Company.
(s) DTC
Status.
The
Company’s transfer agent is a participant in and the Common Stock is eligible
for transfer pursuant to the Depository Trust Company Automated Securities
Transfer Program. The name, address, telephone number, fax number, contact
person and email address of the Company transfer agent is set forth on
Schedule
5(v)
hereto.
(t) Investment
Company.
Neither
the Company nor any Affiliate is an “investment company” within the meaning of
the Investment Company Act of 1940, as amended.
(u) Subsidiary
Representations.
The
Company makes each of the representations contained in Sections 5(a), (b),
(d),
(f), (h), (k), (m), (q) through (s), (u) and (w) of this Agreement, as same
relate to each Subsidiary of the Company.
(v) Company
Predecessor.
All
representations made by or relating to the Company of a historical or
prospective nature and all undertaking described in Sections 9.1(g) through
9.1(l) shall relate and refer to the Company, its predecessors, and the
Subsidiaries.
(w) Correctness
of Representations.
The
Company represents that the foregoing representations and warranties are true
and correct as of the date hereof in all material respects, and, unless the
Company otherwise notifies the Subscribers prior to the Closing Date, shall
be
true and correct in all material respects as of the Closing Date.
(x) Survival.
The
foregoing representations and warranties shall survive the Closing Date for
a
period of three years.
6. Regulation
D Offering.
The
offer and issuance of the Securities to the Subscribers is being made pursuant
to the exemption from the registration provisions of the 1933 Act afforded
by
Section 4(2) or Section 4(6) of the 1933 Act and/or Rule 506 of Regulation
D
promulgated thereunder. On the Closing Date, the Company will provide an opinion
reasonably acceptable to Subscriber
from the Company's legal counsel opining on the availability of an exemption
from registration under the 1933 Act as it relates to the offer and issuance
of
the Securities and other matters reasonably requested by Subscribers. A form
of
the legal opinion is annexed hereto as Exhibit
B.
The
Company will provide, at the Company's expense, such other legal opinions in
the
future as are reasonably necessary for the issuance and/or resale of the Shares
and Warrant Shares pursuant to an effective registration statement, Rule 144
under the 1933 Act, or an exemption from registration.
9. Covenants
of the Company.
The
Company covenants and agrees with the Subscribers as follows:
(a) Stop
Orders.
The
Company will advise the Subscribers within two hours after it receives notice
of
issuance by the Commission, any state securities commission or any other
regulatory authority of any stop order or of any order preventing or suspending
any offering of any securities of the Company, or of the suspension of the
qualification of the Common Stock of the Company for offering or sale in any
jurisdiction, or the initiation of any proceeding for any such
purpose.
(b) Listing.
The
Company shall promptly secure the listing of the Shares and the Warrant Shares
upon each national securities exchange, or electronic or automated quotation
system upon which they are or become eligible for listing and shall maintain
such listing so long as any Shares or Warrants are outstanding. The Company
will
maintain the listing of its Common Stock on the American Stock Exchange, Nasdaq
SmallCap Market, Nasdaq National Market System, Bulletin Board, or New York
Stock Exchange (whichever of the foregoing is at the time the principal trading
exchange or market for the Common Stock (the “Principal
Market”)),
and
will comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the Principal Market, as applicable.
The Company will provide the Subscribers copies of all notices it receives
notifying the Company of the threatened and actual delisting of the Common
Stock
from any Principal Market. As of the date of this Agreement and the Closing
Date, the Bulletin Board is and will be the Principal Market.
(c) Market
Regulations.
The
Company shall notify the Commission, the Principal Market and applicable state
authorities, in accordance with their requirements, of the transactions
contemplated by this Agreement, and shall take all other necessary action and
proceedings as may be required and permitted by applicable law, rule and
regulation, for the legal and valid issuance of the Securities to the
Subscribers and promptly provide copies thereof to Subscriber.
(d) Filing
Requirements.
From
the date of this Agreement and until the sooner of (i) three (3) years after
the
Closing Date, or (ii) until all the Shares and Warrant Shares have been resold
or transferred by all the Subscribers pursuant to the Registration Statement
or
pursuant to Rule 144, the Company will (A) cause its Common Stock to continue
to
be subject to the reporting obligations of Section 15(d), 12(b) or 12(g) of
the
1934 Act, (B) comply in all respects with its reporting and filing obligations
under the 1934 Act, (C) comply with all reporting requirements that are
applicable to an issuer subject to Section 15(d) of the 1934 Act, or, if a
class
of its securities is registered under Section 12(b) or 12(g) of the 1934 Act,
to
all reporting requirements that are applicable to an issuer with a class of
shares registered pursuant to Section 12(b) or 12(g) of the 1934 Act, as
applicable, and (D) comply with all requirements related to any registration
statement filed pursuant to this Agreement. The Company will use its
best
efforts not to take any action or file any document (whether or not permitted
by
the 1933 Act or the 1934 Act or the rules thereunder) to terminate or suspend
such registration or to terminate or suspend its reporting and filing
obligations under said acts or until three (3) years after the Closing Date.
Until the earlier of the resale of the Common Stock and the Warrant Shares
by
each Subscriber or three (3) years after the Warrants have been exercised,
the
Company will use its best efforts to continue the listing or quotation of the
Common Stock on a Principal Market and will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules
of
the Principal Market. The Company agrees to timely file a Form D with respect
to
the Securities if required under Regulation D and to provide a copy thereof
to
each Subscriber promptly after such filing.
(Subscription
Agreement)
9
(e) Use
of
Proceeds.
The
proceeds of the Offering will be employed by the Company for the purposes set
forth on Schedule
9(e)
hereto.
(f) Reservation.
Prior
to the Closing Date, the Company undertakes to reserve, pro rata,
on
behalf of each holder of Shares or Warrants, from its authorized but unissued
common stock, a number of common shares equal to the Shares and Warrant Shares
issuable upon exercise of the Warrants. Failure to have sufficient shares
reserved pursuant to this Section 9(f) for three (3) consecutive business days
or ten (10) days in the aggregate shall be a material default of the Company’s
obligations under this Agreement.
(g) Non-Public
Information.
The
Company covenants and agrees that neither it nor any other person acting on
its
behalf will provide any Subscriber or its agents or counsel with any information
that the Company believes constitutes material non-public information, unless
prior thereto such Subscriber shall have agreed in writing to receive such
information. The Company understands and confirms that each Subscriber shall
be
relying on the foregoing representations in effecting transactions in securities
of the Company. The Company will offer to the Subscriber an opportunity to
review and comment on the Registration Statement thereto between three and
five
business days prior to the proposed filing date thereof.
(a) The
Company agrees to indemnify, hold harmless, reimburse and defend the
Subscribers, the Subscribers' officers, directors, agents, Affiliates, control
persons, and principal shareholders, against any claim, cost, expense,
liability, obligation, loss or damage (including reasonable legal fees) of
any
nature, incurred by or imposed upon the Subscriber or any such person which
results, arises out of or is based upon (i) any material misrepresentation
by
Company or breach of any warranty by Company in this Agreement or in any
Exhibits or Schedules attached hereto, or other agreement delivered pursuant
hereto; or (ii) after any applicable notice and/or cure periods, any breach
or
default in performance by the Company of any material covenant or undertaking
to
be performed by the Company hereunder, or any other agreement entered into
by
the Company and Subscriber relating hereto. Any or all of the foregoing are
deemed Events of Default.
(b) Each
Subscriber agrees to indemnify, hold harmless, reimburse and defend the Company
and each of the Company’s officers, directors, agents, Affiliates, control
persons against any claim, cost, expense, liability, obligation, loss or damage
(including reasonable legal fees) of any nature, incurred by or imposed upon
the
Company or any such person which results, arises out of or is based upon (i)
any
material misrepresentation by such Subscriber in this Agreement or in any
Exhibits or Schedules
attached hereto, or other agreement delivered pursuant hereto; or (ii) after
any
applicable notice and/or cure periods, any breach or default in performance
by
such Subscriber of any covenant or undertaking to be performed by such
Subscriber hereunder, or any other agreement entered into by the Company and
Subscribers, relating hereto.
(c) In
no
event shall the liability of any Subscriber or permitted successor hereunder
or
under any Transaction Document or other agreement delivered in connection
herewith be greater in amount than the dollar amount of the net proceeds
actually received by such Subscriber upon the sale of Registrable Securities
(as
defined herein).
(Subscription
Agreement)
10
(d) The
procedures set forth in Section 11.6 shall apply to the indemnification set
forth in Sections 10(a) and 10(b) above.
11. Reserved.
12. Reserved.
13. Miscellaneous.
(a) Notices.
All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted
to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery
by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to the Company, to: 3DIcon Corporation, 0000
X.
Xxxxxxxx, Xxxxx, XX, 00000, Attn: Xxxxxx Xxxxxxx, Chief Executive Officer,
telecopier: (000) 000-0000, with a copy by telecopier only to: Sichenzia Xxxx
Xxxxxxxx Xxxxxxx LLP, 00 Xxxxxxxx, Xxx Xxxx, XX 00000, Attn: Xxxxxxx Xxxxxxxxx,
Esq., telecopier: (000) 000-0000, (ii) if to the Subscribers, to: the one or
more addresses and telecopier numbers indicated on the signature pages
hereto.
(b) Nothing
contained herein or in any document referred to herein or delivered in
connection herewith shall be deemed to establish or require the payment of
a
rate of interest or other charges in excess of the maximum permitted by
applicable law. In the event that the rate of interest or dividends required
to
be paid or other charges hereunder exceed the maximum permitted by such law,
any
payments in excess of such maximum shall be credited against amounts owed by
the
Company to the Subscriber and thus refunded to the Company.
(c) Entire
Agreement; Assignment.
This
Agreement and other documents delivered in connection herewith represent the
entire agreement between the parties hereto with respect to the subject matter
hereof and may be amended only by a writing executed by both parties. Neither
the Company
nor the Subscribers have relied on any representations not contained or referred
to in this Agreement and the documents delivered herewith. No right or
obligation of the Company shall be assigned without prior notice to and the
written consent of the Subscribers.
(d)
Counterparts/Execution.
This
Agreement may be executed in any number of counterparts and by the different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but
one
and the same instrument. This Agreement may be executed by facsimile signature
and delivered by facsimile transmission.
(Subscription
Agreement)
11
(e) Law
Governing this Agreement.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York without regard to conflicts
of laws principles
that would result in the application of the substantive laws of another
jurisdiction. Any action brought by either party against the other concerning
the transactions contemplated by this Agreement shall be brought only in the
state courts of New York or in the federal courts located in the state of New
York. The
parties and the individuals executing this Agreement and other agreements
referred to herein or delivered in connection herewith on behalf of the Company
agree to submit to the jurisdiction of such courts and waive trial by
jury.
The
prevailing party shall be entitled to recover from the other party its
reasonable attorney's fees and costs. In the event that any provision of this
Agreement or any other agreement delivered in connection herewith is invalid
or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any
agreement.
(f) Specific
Enforcement, Consent to Jurisdiction.
The
Company and Subscriber acknowledge and agree that irreparable damage would
occur
in the event that any of the provisions of this Agreement were not performed
in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to one or more preliminary
and final injunctions to prevent or cure breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which any of them may be entitled
by
law or equity. Subject to Section 13(e) hereof, each of the Company, Subscriber
and any signator hereto in his personal capacity hereby waives, and agrees
not
to assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction in New York of such court, that the
suit,
action or proceeding is brought in an inconvenient forum or that the venue
of
the suit, action or proceeding is improper. Nothing in this Section shall affect
or limit any right to serve process in any other manner permitted by
law.
(g) Independent
Nature of Subscribers.
The
Company acknowledges that the obligations of each Subscriber under the
Transaction Documents are several and not joint with the obligations of any
other Subscriber, and no Subscriber shall be responsible in any way for the
performance of the obligations of any other Subscriber under the Transaction
Documents. The
Company acknowledges that each Subscriber has represented that the decision
of
each Subscriber to purchase Securities has been made by such Subscriber
independently of any other Subscriber and independently of any information,
materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial
or
otherwise) or prospects of the Company which may have been made or given by
any
other Subscriber or by any agent or employee of any other Subscriber, and no
Subscriber or any of its agents or employees shall have any liability to any
Subscriber (or any other person) relating to or arising from any such
information, materials, statements or opinions. The
Company acknowledges that nothing
contained in any Transaction Document, and no action taken by any Subscriber
pursuant hereto or thereto shall be deemed to constitute the Subscribers as
a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Subscribers are in any way acting in concert
or as
a group with respect to such obligations or the transactions contemplated by
the
Transaction Documents. The Company acknowledges that each Subscriber shall
be entitled to independently protect and enforce its rights, including without
limitation, the rights arising out of the Transaction Documents, and
it shall not be necessary for any other Subscriber to be joined as an additional
party in any proceeding for such purpose. The Company acknowledges that it
has elected to provide all Subscribers with the same terms and Transaction
Documents for the convenience of the Company and not because Company was
required or requested to do so by the Subscribers. The Company
acknowledges that such procedure with respect to the Transaction Documents
in no
way creates a presumption that the Subscribers are in any way acting in concert
or as a group with respect to the Transaction Documents or the transactions
contemplated thereby.
(Subscription
Agreement)
12
(g) Consent.
As used
in the Agreement and except as otherwise specifically stated, “consent of the
Subscribers” or similar language means the consent of holders of not less than
50.1% of the total of the Shares issued owned by Subscribers on the date consent
is requested.
(h) Equal
Treatment.
No
consideration shall be offered or paid to any person to amend or consent to
a
waiver or modification of any provision of the Transaction Documents unless
the
same consideration is also offered and paid to all the Subscribers and their
permitted successors and assigns.
[THIS
SPACE INTENTIONALLY LEFT BLANK]
(Subscription
Agreement)
13
SIGNATURE
PAGE TO SUBSCRIPTION AGREEMENT
Please
acknowledge your acceptance of the foregoing Subscription Agreement by signing
and returning a copy to the undersigned whereupon it shall become a binding
agreement between us.
3DIcon
Corporation
|
|
an
Oklahoma corporation
|
|
By:
|
|
Name:
|
Xxxxxx
Xxxxxxx
|
Title:
|
CEO
|
Dated:
September ___, 2007
|
SUBSCRIBER
|
PURCHASE
PRICE
|
SHARES
OF COMMON STOCK
|
CLASS
E
WARRANTS
|
CLASS
F
WARRANTS
|
||||
Name
of Subscriber: ________________________________
Address:
________________________________
________________________________
Fax
No.: ________________________________
________________________________
(Signature)
By:
|
LIST
OF EXHIBITS AND SCHEDULES
Disclosure
Schedule
|
|
Exhibit
A
|
Form
of Class A Warrants
|
Schedule
5(a)
|
Subsidiaries
|
Schedule
5(d)
|
Additional
Issuances / Capitalization
|
Schedule
5(q)
|
Undisclosed
Liabilities
|
Transfer
Agent
|
|
Schedule
9(e)
|
Use
of Proceeds
|