UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
December 9, 2013
3DICON CORPORATION
(Exact Name of Registrant
as Specified in Charter)
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Oklahoma
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73-1479206
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(State or other jurisdiction of
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(I.R.S. employer
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incorporation or organization)
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identification number)
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6804 South Canton Avenue, Suite 150, Tulsa, Oklahoma 74136
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(Address of principal executive offices and zip code)
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(918) 494-0505
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(Registrant’s telephone number, including area code)
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Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Private Placement
On December 9, 2013 and December 11, 2013, 3DIcon Corporation,
an Oklahoma corporation (the “Company”), closed on $195,000 in a private placement (the “Private Placement”)
contemplated by that certain Securities Purchase Agreement (the “Securities Purchase Agreement”), dated December 9,
2013, pursuant to which the Company sold 195,000 Units (as defined below) to accredited investors (each, an “Investor”
and collectively, the “Investors”), one of whom was Victor Keen, the Company’s Chief Executive Officer and a
member of the board of directors of the Company. Accordingly, at the closings, the Company issued (i) 195,000 shares of its newly
designated Series A Convertible Preferred Stock (the “Series A Preferred”), and (ii) warrants (“Warrants”)
to purchase an aggregate of 9,750,000 shares of Common Stock for gross proceed of $195,000.
Under the terms of the Securities Purchase Agreement, the Company
sold units (“Units”) consisting of: (i) one share of Series A Convertible Preferred Stock and (ii) Warrants to purchase
fifty (50) shares of Common Stock. The purchase price of each Unit was $1.00. The total purchase price of the securities sold in
the Private Placement was $195,000. The offer and sale of the foregoing securities under the Securities Purchase Agreement was
not a “public offering” as referred to in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and was intended meet the requirements to qualify for exemption under Rule 506(b) of Regulation D promulgated under
the Securities Act.
The terms of the Series A Convertible Preferred Stock and Warrants
are as follows:
Series A Convertible Preferred Stock
A total of 195,000 shares of Series A Convertible Preferred
Stock (the “Series A Preferred Stock”) have been authorized for issuance under the Certificate of Designation of Preferences,
Rights and Limitation of Series A Convertible Preferred Stock of 3DIcon Corporation (the “Certificate of Designation”),
included here as Exhibit 3.1, and is incorporated herein by reference, which Certificate of Designation was filed with the Secretary
of State of the State of Oklahoma on December 11, 2013. The shares of Series A Preferred Stock have a stated value of $1.00 per
share (the “Stated Value”), and shall receive a dividend of 6% of their Stated Value per annum. Under the Certificate
of Designation, the holders of the Series A Preferred Stock have the following rights, preferences and privileges:
The Series A Preferred Stock may, at the option of the Investor,
be converted at any time after the first anniversary of the issuance of the Series A Preferred Stock or from time to time thereafter
into 50,000,000 number of fully paid and non-assessable shares of Common Stock that Such Investor is entitled to in proportion
to the 500,000 shares of Series A Preferred so designated in the Certificate of Designation.
The Series A Preferred Stock will automatically be converted
into Common Stock anytime the 5 day average VWAP of the Company’s Common Stock prior to such conversion is equal to $0.05
or more. Such mandatory conversion would be converted by the same method described above for discretionary conversions.
Except as otherwise required by law, the holders of shares of
Series A Preferred Stock shall not have voting rights or powers.
In the event of any i) liquidation, dissolution or winding up
of the Company, whether voluntary or involuntary, or ii) sale, merger, consolidation, reorganization or other transaction that
results in a change of control of the Company, each holder of a share of Series A Preferred shall be entitled to receive, subject
to prior preferences and other rights of any class or series of stock of the Company senior to the Series A Preferred, but prior
and in preference to any distribution of any of the assets or surplus funds of the Company to holders of Common Stock, or any other
class or series of stock of the Company junior to the Series A Preferred, an amount equal to the Stated Value plus accrued and
unpaid dividends (as adjusted for any stock dividends, combinations or splits with respect to such shares) (the “Preference
Amount”). After such payment has been made to the holders of Series A Preferred of the full Preference Amount to which such
holders shall be entitled, the remaining net assets of the Company available for distribution, if any, shall be distributed pro
rata among the holders of Common Stock. In the event the funds or assets legally available for distribution to the holders of Series
A Preferred are insufficient to pay the Preference Amount, then all funds or assets available for distribution to the holders of
capital stock shall be paid to the holders of Series A Preferred pro rata based on the full Preference Amount to which they are
entitled.
The Company may not declare, pay or set aside any dividends
on shares of any class or series of capital stock of the Company (other than dividends on shares of Common Stock payable in shares
of Common Stock) unless the holders of the Series A Preferred Stock shall first receive, or simultaneously receive, a dividend
on each outstanding share of Series A Preferred in an amount equal to the dividend per share that such holders would have received
had they converted their shares of Series A Preferred into shares of Common Stock immediately prior to the record date for the
declaration of the Common Stock dividend in an amount equal to the average VWAP during the 5 trading days prior to the date such
dividend is due.
Warrants.
Each Unit consists of Warrants entitling the Investor to
purchase fifty (50) shares of Common Stock for each share of Series A Preferred purchased by such Investor in the
Private Placement, at an initial exercise price per share of $0.0055. The exercise price and number of shares of Common Stock
issuable under the Warrants are subject to adjustments for stock dividends, splits, combinations and similar events. On or
after the first anniversary of the issuance of the Warrants and prior to close of business on fourth anniversary of the
issuance of the Warrants and may be exercised at any time upon the election of the holder, provided however, that an Investor
may at any given time convert only up to that number of shares of Common Stock so that, upon conversion, the aggregate
beneficial ownership of the Company’s Common Stock (calculated pursuant to Rule 13d-3 of the Securities Exchange Act of
1934, as amended) of such Investor and all persons affiliated with such Investor, is not more than 4.99% of the
Company’s Common Stock then outstanding (subject to adjustment up to 9.99% at the Investor’s discretion upon 61
days’ prior notice).
Transaction Documents.
The Securities Purchase Agreement, the Warrants and Certificate
of Designation contain ordinary and customary provisions for agreements of this nature, such as representations, warranties, covenants,
and indemnification obligations, as applicable. The foregoing descriptions of the Securities Purchase Agreement and the Warrants
do not purport to describe all of the terms and provisions thereof and are qualified in their entirety by reference. The Securities
Purchase Agreement and the form of Warrant are filed as Exhibits 4.1 and 10.1, respectively, to this Current Report on Form 8-K
and are incorporated herein by reference.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
The disclosures set forth in Item 1.01 of this Current Report
on Form 8-K are hereby incorporated by reference into this Item 3.02.
The Investors in the Private Placement represented in writing
that they were accredited investors and acquired the securities for their own accounts for investment purposes. A legend will be
placed on the Common Stock certificates, the Warrants, and on the Common Stock issuable upon the exercise of the Warrants stating
that the securities have not been registered under the Securities Act and cannot be sold or otherwise transferred without registration
or an exemption therefrom.
ITEM 3.03 MATERIAL MODIFICATION TO RIGHTS OF SECURITY
HOLDERS.
The disclosures set forth in Item 1.01 of this Current Report
on Form 8-K are hereby incorporated by reference into this Item 3.03.
ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS;
CHANGE IN FISCAL YEAR.
The disclosures set forth in Item 1.01 of this Current Report
on Form 8-K are hereby incorporated by reference into this Item 5.03.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
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Exhibit No.
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Description
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3.1
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Certificate of Designation of Preferences, Rights and Limitation of Series A Convertible Preferred Stock of 3DIcon Corporation
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4.1
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Form of Warrant
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10.1
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Form of Securities Purchase Agreement by and among 3DIcon Corporation and the Investors thereunder
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SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned
hereunto duly authorized.
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3DICON CORPORATION
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Date: December 13, 2013
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By:
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/s/ Victor F. Keen
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Victor F. Keen, Chief Executive Officer
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CERTIFICATE OF DESIGNATION OF
PREFERENCES, RIGHTS AND LIMITATIONS OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
3DIcon
Corporation
(Pursuant to Section 1032 of the Oklahoma
General Corporation Act)
3DIcon Corporation, a corporation organized and existing under
the laws of the State of Oklahoma (the “
Corporation
”)
HEREBY CERTIFIES:
A. That pursuant to the authority conferred
upon the Board of Directors by the Certificate of Incorporation of the Corporation, the Board of Directors on November 5, 2013
adopted the following resolution establishing a new series of 500,000 shares of Preferred Stock of the Corporation to be designated
as Series A Convertible Preferred Stock:
RESOLVED, that, pursuant
to the authority vested in the Board of Directors of the Corporation in accordance with the provisions of its Certificate of Incorporation,
a series of Preferred Stock of the Corporation be, and it hereby is, authorized and created, and the designation and amount thereof
and the rights, preferences and limitations of such series are as follows:
1.
Designation of Shares
.
The designation of this series of Preferred Stock is “Series A Convertible Preferred Stock,” par value $0.0002 per
share (“
Series A Preferred
”).
2.
Number of Shares
. The
number of shares constituting the Series A Preferred shall be 500,000 shares.
3.
Stated Value.
Each
share of Series A Preferred shall have a stated value of $1.00 (“
Stated Value
”).
4.
Voting
. The holders
of shares of Series A Preferred shall have no voting rights and powers.
5.
Dividend Rights
. Holders
of Series A Preferred shall be entitled to receive, and the Corporation shall pay, a dividend of 6% of its Stated Value per annum,
which dividend shall be paid to holders of Series A Preferred in cash or, at the option of the Corporation, in shares of Common
Stock, at the Dividend Conversion Price, payable annually or upon conversion or redemption of Series A Preferred at the option
of the Corporation (each such date, a “
Dividend Payment Date
”). Dividends on Series A Preferred shall be calculated
on the basis of a 360-day year, consisting of twelve 30 calendar day periods, commencing on the original issue date on a simple
interest basis. The Corporation shall not declare, pay or set aside any dividends on shares of any class or series of capital stock
of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock) unless the holders of Series
A Preferred then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series A Preferred
in an amount equal to the dividend per share that such holders would have received had they converted their shares of Series A
Preferred into shares of Common Stock immediately prior to the record date for the declaration of the Common Stock dividend at
the Dividend Conversion Price. “
Common Stock
” means the common stock, par value $0.0002 per share, of the Corporation
and common stock that may hereinafter be authorized and issued by the Corporation and any share of successor or replacement stock.
“
Dividend Conversion Price
” shall be equal the average VWAP during the 5 trading days prior to the Dividend
Payment Date.
6.
Preference
.
a. In the
event of any Liquidity Event, distributions to stockholders of the Corporation shall be made in the following manner: Each holder
of a share of Series A Preferred shall be entitled to receive, subject to the prior preferences and other rights of any class or
series of stock of the Corporation ranking in the case of a Liquidity Event senior to the Series A Preferred, but prior and in
preference to any distribution of any of the assets or surplus funds of the Corporation to holders of Common Stock or any other
class or series of stock of the Corporation ranking in the case of a Liquidity Event junior to the Series A Preferred, as to the
distribution of assets upon any Liquidity Event, by reason of their ownership of such stock, an amount equal to the Stated Value
and accrued and unpaid dividends (as adjusted for any stock dividends, combinations or splits with respect to such shares) (the
“
Preference Amount
”). In the event the funds or assets legally available for distribution to the holders of
shares of Series A Preferred are insufficient to pay in full the Preference Amount as described above, then all funds or assets
available for distribution to the holders of capital stock shall be paid to the holders of Series A Preferred pro rata based on
the full Preference Amount to which they are entitled. After payment has been made to the holders of Series A Preferred of the
full Preference Amount to which such holders shall be entitled, the remaining net assets of the Corporation available for distribution,
if any, shall be distributed pro rata among the holders of Common Stock.
b. A “
Liquidity
Event
” means (i) any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary
(a “
Liquidation
”) or (ii) any sale, merger, consolidation, reorganization or other transaction which results
in a Change of Control. A “
Change of Control
” means a reorganization, consolidation or merger of the Corporation
with or into any other corporation or corporations (other than a wholly-owned subsidiary), or the sale, transfer, liquidation or
other disposition of all or substantially all of the assets of the Corporation, or the consummation of any transaction or series
of related transactions, in each case which results in the Corporation’s stockholders immediately prior to such transaction
or series of related transactions, holding less than fifty percent (50%) of the voting power of the entity surviving or continuing
(including the Corporation or the entity owning all or substantially all of the assets of the Corporation) following such transaction
or series of related transactions; provided a Change of Control shall not apply to a merger effected solely for the purposes of
changing the domicile of the Corporation and shall not apply to conversions into common stock of any debt or equity securities
of the Corporation outstanding prior to the date of issuance of such holder’s Series A Preferred.
7.
Conversion or Redemption
.
The shares of Series A Preferred shall be subject to the following discretionary and mandatory conversion and redemption provisions:
a.
Discretionary
Conversion
. At any time after the first anniversary of its issuance the holder of such Series A Preferred, at its option, may
convert (“Discretionary Conversion”) all or part of its Series A Preferred into that number of Common Conversion Shares
that such holder is entitled in proportion to the 500,000 shares of Series A Preferred designated hereunder. For example, a holder
of 200,000 shares of Series A Preferred, representing 40% of the 500,000 shares of Series A Preferred designated hereunder, shall
be entitled to receive 40% of the 50,000,000 Common Conversion Shares, which is equal to 20,000,000 shares of Common Stock. Upon
any Discretionary Conversion under this Section 7(a) all accrued and unpaid dividends, with respect to the Series A Preferred shares
being converted, shall be paid to such holder in cash or, at the option of the Corporation, in shares of Common Stock, at the Dividend
Conversion Price.
b.
Mandatory
Conversion Event
.
(i) Unless
otherwise converted or redeemed, upon the Mandatory Conversion Event, all outstanding shares of Series A Preferred shall, at the
option of the Corporation, be converted automatically into such number of shares of Common Stock determined by the same method
as a Discretionary Conversion. Upon a conversion under this Section 7(b) all accrued and unpaid dividends shall be paid to the
holders of Series A Preferred in cash or, at the option of the Corporation, in shares of Common Stock, at the Dividend Conversion
Price.
(ii) “
Mandatory
Conversion Event
” means anytime the 5 day average VWAP of the Corporation’s Common Stock prior to the Mandatory
Conversion Event is equal to $0.05 or more.
(iii) “
Common
Conversion Shares
” means 50,000,000 shares of Common Stock available for conversion of all 500,000 shares of Series A
Preferred designated hereunder and dividends accrued thereon.
(iv) “
VWAP
”
means the volume weighted average price in the over-the-counter market on the electronic bulletin board for such security during
the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg.
c.
Mechanics
of Conversion
. The conversion of Series A Preferred shall be conducted in the following manner:
(i)
Holder’s
Delivery Requirements
. To convert Series A Preferred into full shares of securities of the Corporation on any date (the “
Conversion
Date
”), the holder thereof shall (A) transmit by facsimile (or otherwise deliver), for receipt on or prior to 5:00 p.m.,
New York time on such date, a copy of a fully executed notice of conversion (the “
Conversion Notice
”), to the
Corporation, and (B) with respect to the final conversion of shares of Series A Preferred held by any holder, such holder shall
surrender to a common carrier for delivery to the Corporation as soon as practicable following such Conversion Date but in no event
later than six (6) business days after such date the original certificates representing the shares of Series A Preferred being
converted (or an indemnification undertaking with respect to such shares in the case of their loss, theft or destruction) (the
“
Series A Preferred Certificates
”). Upon the Conversion Date, the rights of the holder as holder of the shares
of Series A Preferred shall cease and the person or persons in whose name or names any certificate or certificates for shares of
securities of the Corporation shall be issuable upon such conversion shall be deemed to have become the holder or holders of record
of the shares of such securities represented thereby. The Corporation shall not be obligated to issue certificates evidencing the
shares of securities issuable upon such conversion unless certificates evidencing such shares of Series A Preferred so converted
are either delivered to the Corporation or any such transfer agent.
(ii)
Corporation’s
Response
. Upon receipt by the Corporation of a facsimile copy of a Conversion Notice, the Corporation shall immediately send,
via facsimile, a confirmation of receipt of such Conversion Notice to such holder and the Corporation or its designated transfer
agent, as applicable, shall, within three (3) business days following the date of receipt by the Corporation of the executed Conversion
Notice, issue and deliver or cause to be delivered a certificate or certificates registered in the name of the holder or its designee,
for the number of shares of securities to which the holder shall be entitled.
(iii)
Record
Holder
. The person or persons entitled to receive the shares of securities of the Corporation issuable upon a conversion of
the Series A Preferred shall be treated for all purposes as the record holder or holders of such shares of securities on the Conversion
Date.
d.
Notices
.
All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by facsimile
or three (3) business days following being mailed by certified or registered mail, postage prepaid, return-receipt requested, addressed
to the holder of record at its address appearing on the books of the Corporation.
8.
No Fractional Shares
.
No fractional shares of Common Stock or other securities of the Corporation or scrip representing fractional shares shall be issued
upon any conversion of shares of Series A Preferred. In lieu of any fractional shares to which the holder would otherwise be entitled,
the Corporation shall pay cash equal to such fraction multiplied by the fair market value of a share of Common Stock or other securities
of the Corporation as determined in good faith by the Board of Directors, or round-up to the next whole number of shares, at the
Corporation’s option.
9.
Amendments
. None of
the terms of the Series _A Preferred set forth herein may be amended, modified or waived without the written consent or affirmative
vote of the holders of at least a majority of the then outstanding shares of Series A Preferred, voting together as a single class.
10.
Lost or Stolen Certificates
.
Upon receipt by the Corporation of evidence satisfactory to the Corporation of the loss, theft, destruction or mutilation of any
Series A Preferred Certificates representing the shares of Series A Preferred, and, in the case of loss, theft or destruction,
of any indemnification undertaking by the holder to the Corporation and, in the case of mutilation, upon surrender and cancellation
of the Series A Preferred Certificates, the Corporation shall execute and deliver new Series A Preferred Certificates of like tenor
and date; provided, however, that the Corporation shall not be obligated to re-issue Series A Preferred Certificates if the holder
contemporaneously requests the Corporation to convert such shares of Series A Preferred Certificates into Common Stock or other
securities of the Corporation.
11.
Exclusion of Other Rights
and Privileges
. Except as may otherwise be required by law, the Series A Preferred shall not have any preferences or relative,
participating, optional or other special rights, other than those specifically set forth in this Certificate of Designation (as
such resolution may be amended from time to time pursuant to Section 9 hereof).
B. That the above resolution was adopted
by all necessary action on the part of the Corporation.
IN WITNESS WHEREOF, the undersigned has
duly executed this Certificate in the name and on behalf of 3DIcon Corporation, on the 5
th
day of November, 2013, and
the statements contained herein are affirmed as true under penalty of perjury.
3DIcon Corporation
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By:
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/s/ Victor F. Keen
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Victor F. Keen
Chief Executive Officer
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COMMON STOCK PURCHASE WARRANT
3DICON CORPORATION
THE SECURITIES REPRESENTED BY THIS INSTRUMENT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS AND
HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THE
SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION AND QUALIFICATION WITHOUT, EXCEPT UNDER
CERTAIN SPECIFIC LIMITED CIRCUMSTANCES, AN OPINION OF COUNSEL FOR THE HOLDER, CONCURRED IN BY COUNSEL FOR THE COMPANY THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
Warrant Shares: [_________]
THIS COMMON STOCK PURCHASE
WARRANT (the “
Warrant
”) certifies that, for value received, [_____________________] (the “
Holder
”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on
or after November [__], 2014 the “
Initial Exercise Date
”) and on or prior to the close of business on November
[__], 2017 (the “
Termination Date
”) but not thereafter, to subscribe for and purchase from 3DICON Corporation,
an Oklahoma corporation (the “
Company
”), up to [_________] shares (the “
Warrant Shares
”)
of Common Stock.
Section
1
.
Definitions
. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “
Purchase Agreement
”),
dated November [__], 2013, among the Company and the purchaser signatory thereto.
Section 2
.
Exercise
.
a)
Exercise
of Warrant
. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or
agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing
on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto; and, within three
(3) Trading Days of the date said Notice of Exercise is delivered to the Company, the Company shall have received payment of the
aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank
or, if available, pursuant to the cashless exercise procedure specified in Section 2(c) below. Notwithstanding anything herein
to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased
all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered
to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available
hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to
the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant
Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within
1 Business Day of receipt of such notice.
The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number
of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b)
Exercise
Price
. The exercise price per share of the Common Stock under this Warrant shall be $0.0055, which exercise price is subject
to adjustment hereunder (the “
Exercise Price
”).
c)
Cashless
Exercise
. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained
therein is not available for the issuance of the Warrant Shares to the Holder and all of the Warrant Shares are not then registered
for resale by Holder into the market at market prices from time to time on an effective registration statement for use on a continuous
basis (or the prospectus contained therein is not available for use), then this Warrant shall be exercised, in whole or in part,
at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the
number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
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(A) =
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the VWAP on the Trading Day immediately preceding the
date on which Holder elects to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable
Notice of Exercise;
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(B) =
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the Exercise Price of this Warrant, as adjusted hereunder;
and
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(X) =
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the number of Warrant Shares that would be issuable upon
exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather
than a cashless exercise.
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“
VWAP
”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time), (b) if the OTC Bulletin Board is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board,
(c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are
then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other
cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the
Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company.
d)
Mechanics
of Exercise
.
i.
Delivery
of Certificates Upon Exercise
. Certificates for shares purchased hereunder shall be transmitted by the Transfer Agent to the
Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company through its Deposit or Withdrawal
at Custodian (“
DWAC
”) system if the Company is then a participant in such system and either (A) there is an
effective Registration Statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or
(B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery to the address specified by the Holder
in the Notice of Exercise by the date that is five (5) Trading Days after the latest of (A) the delivery to the Company of the
Notice of Exercise Form, (B) surrender of this Warrant (if required) and (C) payment of the aggregate Exercise Price as set forth
above (including by cashless exercise, if permitted) (such date, the “
Warrant Share Delivery Date
”). This Warrant
shall be deemed to have been exercised on the first date on which all of the foregoing have been delivered to the Company. The
Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed
to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment
to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if
any, pursuant to Section 2(d)(vi) prior to the issuance of such shares, having been paid.
ii.
Delivery
of New Warrants Upon Exercise
. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant
Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by
this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii.
Rescission
Rights
. If the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing
the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then, the Holder will have the right to rescind
such exercise.
iv.
No
Fractional Shares or Scrip
. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.
v.
Charges,
Taxes and Expenses
. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall
be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder;
provided
,
however
, that in the event certificates for Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto
duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
vi.
Closing
of Books
. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.
e)
Holder’s
Exercise Limitations
. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after
exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of
the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common
Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock
which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder
or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of
the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in
the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company
is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder
is solely responsible for any schedules required to be filed in accordance therewith. The submission of a Notice of Exercise shall
be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned
by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial
Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition,
a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding
shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s
most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the
Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock
outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing
to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock
shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by
the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “
Beneficial
Ownership Limitation
” shall be 4.9% of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon not less than 61 days’
prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided
that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions
of this Section 2(e) shall continue to apply. Any such increase or decrease will not be effective until the 61
st
day
after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which
may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.
Section 3
.
Certain
Adjustments
.
a)
Stock
Dividends and Splits
. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including
by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding
immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b)
Subsequent
Rights Offerings
. If the Company, at any time while the Warrant is outstanding, shall issue rights, options or warrants to
all holders of Common Stock (and not to the Holders) entitling them to subscribe for or purchase shares of Common Stock at a price
per share less than the VWAP on the record date mentioned below, then the Exercise Price shall be multiplied by a fraction, of
which the denominator shall be the number of shares of the Common Stock outstanding on the date of issuance of such rights, options
or warrants plus the number of additional shares of Common Stock offered for subscription or purchase, and of which the numerator
shall be the number of shares of the Common Stock outstanding on the date of issuance of such rights, options or warrants plus
the number of shares which the aggregate offering price of the total number of shares so offered (assuming receipt by the Company
in full of all consideration payable upon exercise of such rights, options or warrants) would purchase at such VWAP. Such adjustment
shall be made whenever such rights, options or warrants are issued, and shall become effective immediately after the record date
for the determination of stockholders entitled to receive such rights, options or warrants.
c)
Pro
Rata Distributions
. If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common
Stock (and not to the Holders) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants
to subscribe for or purchase any security, then in each such case the Exercise Price shall be adjusted by multiplying the Exercise
Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution
by a fraction of which the denominator shall be the VWAP determined as of the record date mentioned above, and of which the numerator
shall be such VWAP on such record date less the then per share fair market value at such record date of the portion of such assets
or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the Board of
Directors in good faith. In either case the adjustments shall be described in a statement provided to the Holder of the portion
of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned
above
.
d)
Fundamental
Transaction
. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets
in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group
of Persons acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the
other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock
or share purchase agreement or other business combination) (each a “
Fundamental Transaction
”), then, upon any
subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable
upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard
to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “
Alternate Consideration
”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant
is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to
apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder
shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental
Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction that is (1) an all cash transaction,
(2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (3) a Fundamental Transaction involving
a person or entity not traded on a national securities exchange, including, but not limited to, the Nasdaq Global Select Market,
the Nasdaq Global Market, or the Nasdaq Capital Market, the Company or any Successor Entity (as defined below) shall, at the Holder’s
option, exercisable at any time within 30 days after the consummation of the Fundamental Transaction, purchase this Warrant from
the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this
Warrant on the date of the consummation of such Fundamental Transaction. “
Black Scholes Value
” means the value
of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P.
(“
Bloomberg
”) determined as of the day of consummation of the applicable Fundamental Transaction for pricing
purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility
equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately
following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation
shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being
offered in such Fundamental Transaction and (D) a remaining option time equal to the time between the date of the public announcement
of the applicable Fundamental Transaction and the Termination Date. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “
Successor Entity
”) to assume in writing all of the
obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section
3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without
unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Warrant, deliver to the
Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar
in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor
Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant
(without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise
price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of
the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number
of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately
prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder.
Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that
from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring
to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company
and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect
as if such Successor Entity had been named as the Company herein.
e)
Calculations
.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
f)
Notice
to Holder
.
i.
Adjustment
to Exercise Price
. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.
ii.
Notice
to Allow Exercise by Holder
. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last
address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the
date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale,
transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall
not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided
hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company
shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled
to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering
such notice except as may otherwise be expressly set forth herein.
Section 4
.
Transfer
of Warrant
.
a)
Transferability
.
This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in
part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment
of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company
shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion
of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The Warrant, if properly assigned in accordance
herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b)
New
Warrants
. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial
issuance date set forth on the first page of this Warrant and shall be identical with this Warrant except as to the number of Warrant
Shares issuable pursuant thereto.
c)
Warrant
Register
. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “
Warrant
Register
”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary.
Section 5
.
Miscellaneous
.
a)
No
Rights as Stockholder Until Exercise
. This Warrant does not entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).
b)
Loss,
Theft, Destruction or Mutilation of Warrant
. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of
the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.
c)
Saturdays,
Sundays, Holidays, etc
. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding
Business Day.
d)
Authorized
Shares
.
The Company
covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise
of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that
such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements
of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued
upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by
this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect
of any transfer occurring contemporaneously with such issue).
Except and
to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions
as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting
the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant
and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking
any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.
e)
Jurisdiction
.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.
f)
Restrictions
.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does
not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g)
Nonwaiver
and Expenses
. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies. Without limiting any other provision
of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant,
which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings,
incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
h)
Notices
.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered
in accordance with the notice provisions of the Purchase Agreement.
i)
Limitation
of Liability
. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for
the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
j)
Remedies
.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be adequate.
k)
Successors
and Assigns
. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder or holder of Warrant Shares.
l)
Amendment
.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
m)
Severability
.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions
of this Warrant.
n)
Headings
.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of
this Warrant.
********************
(Signature Pages Follow)
IN WITNESS WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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3DICON CORPORATION
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By:
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Name: Victor F. Keen
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Title: Chief Executive Officer
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NOTICE OF EXERCISE
TO: 3DICON CORPORATION
(1)
The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes,
if any.
(2)
Payment
shall take the form of (check applicable box):
[ ] in lawful
money of the United States; or
[ ] [if permitted]
the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c),
to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c).
(3)
Please
issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is
specified below:
The Warrant Shares shall be delivered to the following DWAC
Account Number or by physical delivery of a certificate to:
[SIGNATURE OF HOLDER]
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Name of Investing Entity:
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Signature of Authorized Signatory of Investing Entity
:
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Name of Authorized Signatory:
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Title of Authorized Signatory:
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Date: ________________________________
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, [____] all
of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to
_______________________________________________ whose address
is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________, _______
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Holder’s Signature:
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Holder’s Address:
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Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond
with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be
guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE
AGREEMENT (this “
Agreement
”) is entered into effective as of November __, 2013 (the “
Effective Date
”)
between 3DIcon Corporation, an Oklahoma corporation (the “
Company
”), and __________________________ (the “
Investor
”).
WHEREAS, the Company
is conducting a private placement offering of up to 500,000 shares of Series A Convertible Preferred Stock (as further described
herein below);
WHEREAS, the Company
intends to accept subscriptions from multiple investors without having to reach a minimum offering amount or a minimum investment
amount; and
WHEREAS, Investor desires
to purchase and receive from the Company and the Company desires to issue and sell to Investor, Series A Convertible Preferred
Stock (as further described herein below) in consideration of Investor’s payment of the Purchase Price to the Company pursuant
to the terms of this Agreement.
NOW, THEREFORE, based
upon the foregoing and the mutual promises in this Agreement, the parties agree as follows:
1.
Investment
.
In exchange for Investor’s cash payment in the amount set forth on the signature page hereto (the “
Purchase Price
”),
the Company will issue, sell, transfer and assign to Investor the number of units (each a “
Unit
” and collectively
“
Units
”) set forth on the signature page hereto. Each Unit consist of (i) one (1) share of Series A Convertible
Preferred Stock , par value $0.0002 per share (“
Series A Preferred
”) to be issued hereunder having the rights,
preferences and limitations as set forth in the Certificate of Designation, in the form of
Exhibit A
hereto (
“Certificate
of Designation”
); and (ii) a warrant to purchase fifty (50) shares of the Company’s common stock, par value $0.0002
per share (the “
Common Stock
”) at an exercise price that this 150% of the average daily VWAP of the Common
Stock during the five (5) trading days prior to November 5, 2013.
As soon as practicable after receipt of the Purchase
Price, the Company shall deliver to the Investor the certificates evidencing the shares of Series A Preferred issued pursuant
to this Agreement and a Common Stock Purchase Warrant, in the form of
Exhibit B
hereto (the
“Warrant”
),
evidencing the warrant to purchase shares of Common Stock issued pursuant to this Agreement. For purposes of this Agreement the
Units; the shares of Series A Preferred; the shares of Common Stock into which the Series A Preferred may be converted; the Warrants;
and the shares of Common Stock that may be purchased upon exercise of the Warrants shall be collectively known as the “
Securities
”.
2.
Termination
.
In the event the sale of the Securities is not consummated for any reason, this Agreement and any other agreement entered into
between the Investor and the Company shall thereafter have no force or effect, and the Company shall promptly return or cause
to be returned to the Investor the Purchase Price remitted to the Company, without deduction therefrom.
3.
Representations
by Investor
. In consideration of the Company’s issuance of The Securities, Investor makes the following representations
and warranties to the Company and to its principals, which warranties and representations shall survive the issuance of The Securities
by the Company:
(a) Prior
to the time of purchase of any of The Securities, Investor has carefully reviewed this Agreement, and the Company’s filings
with the Securities and Exchange Commission (the foregoing materials, together with this Agreement and any documents which may
have been made available upon request as reflected therein, collectively referred to as the “
Public Information
”).
Investor has had the opportunity to ask questions and receive any additional information from persons acting on behalf of the Company
to verify Investor’s understanding of the terms thereof and of the Company’s business and status thereof.
(b) Investor
acknowledges that Investor has not seen, received, been presented with, or been solicited by any leaflet, public promotional meeting,
newspaper or magazine article or advertisement, radio or television advertisement, or any other form of advertising or general
solicitation with respect to the Securities.
(c) The
Securities are being purchased for Investor’s own account for long-term investment and not with a view to immediately re-sell
the Securities. No other person or entity will have any direct or indirect beneficial interest in, or right to, the Securities.
Investor or its agents or investment advisors have such knowledge and experience in financial and business matters that will enable
Investor to utilize the information made available to it in connection with the purchase of the Securities to evaluate the merits
and risks thereof and to make an informed investment decision.
(d) Investor
hereby acknowledges that the issuance of the Securities has not been reviewed by the United States Securities and Exchange Commission
(the “
SEC
”) nor any state regulatory authority since the issuance of the Securities is intended to be exempt
from the registration requirements of Section 5 of the Securities Act, pursuant to Regulation D. Investor acknowledges that the
Securities have not been registered under the Securities Act or qualified under the under the securities laws of any state or other
jurisdiction or any other regulatory authority, or any other applicable blue sky laws, in reliance, in part, on Investor’s
representations, warranties and agreements made herein.
(e) Investor
represents, warrants and agrees that the Company and the officers of the Company (the “
Company’s Officers
”)
are under no obligation to register or qualify the Securities under the Securities Act or under any state securities law, or to
assist the undersigned in complying with any exemption from registration and qualification.
(f) Investor
represents that Investor meets the criteria for participation because: (i) Investor has a preexisting personal or business relationship
with the Company or one or more of its partners, officers, directors or controlling persons; or (ii) by reason of Investor’s
business or financial experience, or by reason of the business or financial experience of its financial advisors who are unaffiliated
with, and are not compensated, directly or indirectly, by the Company or any affiliate or selling agent of the Company, Investor
is capable of evaluating the risk and merits of an investment in the Securities and of protecting its own interests.
(g) Investor
represents that Investor is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities
Act as indicated by the Investor’s responses to the questions contained in the Certificate of Accredited Investor Status
attached hereto as
Exhibit C
, and that the Investor is able to bear the economic risk of an investment in the Securities.
(h) Investor
understands that the Securities are illiquid, and until registered with the SEC, or an exemption from registration becomes available,
cannot be readily sold as there will not be a public market for them, and that Investor may not be able to sell or dispose of the
Securities, or to utilize the Securities as collateral for a loan. Investor must not purchase the Securities unless Investor has
liquid assets sufficient to assure Investor that such purchase will cause it no undue financial difficulties, and that Investor
can still provide for current and possible personal contingencies, and that the commitment herein for the Securities, combined
with other investments of Investor, is reasonable in relation to its net worth.
(i) Investor
understands that the right to transfer the Securities will be restricted unless the transfer is not in violation of the Securities
Act, and any other applicable state securities laws (including investment suitability standards), that the Company will not consent
to a transfer of any of The Securities unless the transferee represents that such transferee meets the financial suitability standards
required of an initial participant, and that the Company has the right, in its absolute discretion, to refuse to consent to such
transfer.
(j) Investor
has been advised to consult with its own attorney or attorneys regarding all legal matters concerning an investment in the Company
and the tax consequences of purchasing the Securities, and has done so, to the extent Investor considers necessary.
(k) Investor
acknowledges that the tax consequences of investing in the Company will depend on particular circumstances, and neither the Company,
the Company’s Officers, any other investors, nor the partners, shareholders, members, managers, agents, officers, directors,
employees, affiliates or consultants of any of them, will be responsible or liable for the tax consequences to Investor of an investment
in the Company. Investor will look solely to and rely upon its own advisers with respect to the tax consequences of this investment.
(l) Investor
acknowledges that some of the information provided by the Company in connection with the purchase of the Securities constitutes
“material non-public information” within the meaning of Rule 10b-5 of the Exchange Act. Investor acknowledges and agrees
that Investor is prohibited from any buying or selling of the Company’s securities on the basis of this material non-public
information until after the information either becomes publicly available by the Company (such as in a Current Report on Form 8-K
or in the Company’s Form 10-K or Form 10-Q) or ceases to be material, and in no event for at least thirty (30) days from
the date hereof. Investor acknowledges that it is aware of the restrictions of applicable securities laws, including Regulation
FD and Sections 9 and 10 of the Exchange Act and Rule 10b-5 under the Exchange Act, relating to the trading in securities of an
issuer, including while in possession of material non public information regarding that issuer.
(m) All
information which Investor has provided to the Company concerning Investor, including but not limited to, its financial position
and its knowledge of financial and business matters, is truthful, accurate, correct, and complete as of the date set forth herein.
(n) Each
certificate or instrument representing securities issuable pursuant to this Agreement will be endorsed with the following legend:
THE SECURITIES
EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE TRANSFER
IS MADE IN COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF
THESE SECURITIES WHICH IS REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION
IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
(o) The
Investor hereby represents that the address of the Investor furnished by Investor on the signature page hereof is the Investor’s
principal residence if Investor is an individual or its principal business address if it is a corporation or other entity.
(p) The
Investor represents that the Investor has full power and authority (corporate, statutory and otherwise) to execute and deliver
this Agreement and to purchase the Securities. This Agreement constitutes the legal, valid and binding obligation of the Investor,
enforceable against the Investor in accordance with its terms.
(q) If
the Investor is a corporation, partnership, limited liability company, trust, employee benefit plan, individual retirement account,
Keogh Plan, or other tax-exempt entity, it is authorized and qualified to invest in the Company and the person signing this Agreement
on behalf of such entity has been duly authorized by such entity to do so.
(r) Investor
acknowledges that if he or she is a Registered Representative of a FINRA member firm, he or she must give such firm the notice
required by the FINRA’s Rules of Fair Practice, receipt of which must be acknowledged by such firm.
(s) Investor
acknowledges that at such time, if ever, as any of the Securities is registered with the SEC, sales of such Securities will be
subject to state securities laws.
(t) Investor
agrees not to issue any public statement with respect to the Investor’s investment or proposed investment in the Company
or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except
such disclosures as may be required under applicable law or under any applicable order, rule or regulation.
4.
Representations
by the Company
. The Company hereby represents and warrants to the Investor as follows:
(a) The
Company is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization. The Company
has all requisite power and authority to own and operate its properties and assets and to carry on its business as presently conducted
and as proposed to be conducted.
(b) The
Company has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This
Agreement has been duly authorized, executed and delivered by the Company and is valid, binding and enforceable against the Company
in accordance with its terms.
(c) The
Company’s Securities to be issued to the Investor pursuant to this Agreement, when issued and delivered in accordance with
the terms of this Agreement, will be duly and validly issued and will be fully paid and nonassessable.
(d) The
Company’s common stock issuable to the Investor upon conversion of the Series A Preferred and the exercise of the Warrants,
when issued and delivered in accordance with this Agreement and the Certificate of Designation, will be duly and validly issued
and fully paid and nonassessable.
(e) The
Company need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government
or governmental agency in order to consummate the transactions contemplated by this Agreement.
(f) Neither
the execution and delivery nor the performance of this Agreement by the Company will conflict with the Company’s Certificate
of Formation, as amended, or Bylaws, or result in a breach of any terms or provisions of, or constitute a default under, any material
contract, agreement or instrument to which the Company is a party or by which the Company is bound.
5.
Agreement
to Indemnify
.
(a) Investor
hereby agrees to indemnify and hold the Company, its principals, the Company’s officers, directors, attorneys, employees,
affiliates, controlling persons and agents and their respective heirs, representatives, successors and assigns, harmless from any
and all liabilities, damages, costs and expenses (including actual and reasonable attorneys’ fees) (collectively, “
Losses
”)
which they may incur by reason of Investor’s breach of any of Investor’s representations, warranties or agreements
contained in this Agreement, the Certificate of Accredited Investor Status, or any other document in connection with the purchase
and sale of the Securities.
(b) The
Company hereby agrees to indemnify and hold the Investor, its principals, the Investor’s officers, directors, attorneys,
employees, affiliates, controlling persons and agents and their respective heirs, representatives, successors and assigns, harmless
from any and all Losses which they may incur arising from the Company’s breach of any of the Company’s representations,
warranties or agreements contained in this Agreement or any other document in connection with the purchase and sale of the Securities.
6.
Any
notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail,
return receipt requested, or delivered by hand against written receipt therefor, addressed as follows:
(a) if
to the Company, to:
3DIcon Corporation
6804 South Canton Avenue, Suite
150
Tulsa, Oklahoma 74136
Telephone: (918) 494-0505
With a copy
to (which shall not constitute notice):
Sichenzia Ross Friedman Ference
LLP
61 Broadway, 32
nd
Floor
New York, NY 10006
Attn: Gregory Sichenzia
(b) if
to the Investor, to the Investor’s address indicated on the signature page of this Agreement.
Notices shall be deemed
to have been given or delivered on the date of mailing, except notices of change of address, which shall be deemed to have been
given or delivered when received.
7.
Investment
Representation Binding on Heirs, etc
. This Agreement shall be binding upon the heirs, executors, administrators, successors
and assigns of the Investor. If the undersigned is more than one person, the obligations of the undersigned shall be joint and
several and the representations and warranties shall be deemed to be made by and be binding on each such person and his or her
heirs, executors, administrators, successors, and assigns.
8.
Execution
Authorized
. If this Agreement is executed on behalf of a corporation, partnership, trust or other entity, the undersigned
has been duly authorized and empowered to legally represent such entity and to execute this Agreement and all other instruments
in connection with the Securities and the signature of the person is binding upon such entity.
9.
Adoption
of Terms and Provisions
. The Investor hereby adopts, accepts and agrees to be bound by all the terms and provisions hereof.
10.
Except
as otherwise provided herein, this Agreement shall not be changed, modified or amended except by a writing signed by the parties
to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed
by the party to be charged.
11.
Governing
Law
. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE
THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAW. IN THE EVENT THAT A JUDICIAL PROCEEDING IS NECESSARY, THE
SOLE FORUM FOR RESOLVING DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT IS THE COURTS LOCATED IN THE STATE OF NEW YORK
IN AND FOR THE COUNTY OF MANHATTAN OR THE FEDERAL COURTS FOR SUCH STATE AND COUNTY, AND ALL RELATED APPELLATE COURTS, THE PARTIES
HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH COURTS AND AGREE TO SAID VENUE.
12.
In
order to discourage frivolous claims the parties agree that unless a claimant in any proceeding arising out of this Agreement
succeeds in establishing his claim and recovering a judgment against another party (regardless of whether such claimant succeeds
against one of the other parties to the action), then the other party shall be entitled to recover from such claimant all of its/their
reasonable legal costs and expenses relating to such proceeding and/or incurred in preparation therefor.
13.
The
holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement shall be
declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such
provision shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and
the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable
to the extent they are valid, legal and enforceable, and no provisions shall be deemed dependent upon any other covenant or provision
unless so expressed herein.
14.
It
is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as
a waiver of any subsequent breach by that same party.
15.
The
parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action
as may be necessary or appropriate to carry out the purposes and intent of this Agreement.
16.
This
Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument.
17.
Nothing
in this Agreement shall create or be deemed to create any rights in any person or entity not a party to this Agreement.
18.
Investor’s
Information
. (This must be consistent with the form of ownership selected below and the information provided in the Certificate
of Accredited Investor Status (
Exhibit C
hereto)).
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Name (please print):
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If entity named above,
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By:
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Its:
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Social Security or Taxpayer I.D. Number:
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Business Address (including zip code):
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Business Phone:
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Residence Address (including zip code):
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Residence Phone:
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All communications to be sent to:
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Business:
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or
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Residence Address:
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Please indicate below
the form in which you will hold title to your interest in the Securities. PLEASE CONSIDER CAREFULLY. ONCE YOU HAVE BEEN ISSUED
THE SECURITIES, A CHANGE IN THE FORM OF TITLE CONSTITUTES A TRANSFER OF THE INTEREST IN THE SECURITIES AND MAY THEREFORE BE RESTRICTED
BY THE TERMS OF THIS AGREEMENT, AND MAY RESULT IN ADDITIONAL COSTS TO YOU. Investor should seek the advice of its attorney in deciding
in which of the forms they should take ownership of the interest in the Securities, because different forms of ownership can have
varying gift tax, estate tax, income tax, and other consequences, depending on the state of the investor’s domicile and his
or her particular personal circumstances.
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INDIVIDUAL OWNERSHIP (one signature required)
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JOINT TENANTS WITH RIGHT OF SURVIVORSHIP AND NOT AS TENANTS IN COMMON (both or all parties must
sign)
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COMMUNITY PROPERTY (one signature required if interest held in one name, i.e., managing spouse;
two signatures required if interest held in both names)
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TENANTS IN COMMON (both or all parties must sign)
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GENERAL PARTNERSHIP (fill out all documents in the name of the PARTNERSHIP, by a PARTNER authorized
to sign)
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LIMITED PARTNERSHIP (fill out all documents in the name of the LIMITED PARTNERSHIP, by a GENERAL
PARTNER authorized to sign)
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LIMITED LIABILITY COMPANY (fill out all documents in the name of the LIMITED LIABILITY COMPANY,
by a member authorized to sign)
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CORPORATION (fill out all documents in the name of the CORPORATION, by the President or other officer
authorized to sign)
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TRUST (fill out all documents in the name of the TRUST, by the Trustee, and include a copy of the
instrument creating the trust and any other documents necessary to show the investment by the Trustee is authorized. The date of
the trust must appear on the Notarial where indicated.)
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(Signature page follows)
IN WITNESS WHEREOF
, the parties
hereto have caused this Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.
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“INVESTOR”
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(Signature)
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By:
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Its:
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Number of Units Purchased Hereunder
: _________________
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Purchase Price Paid Hereunder
: $_________________
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“COMPANY”
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3DICON CORPORATION
, an Oklahoma corporation
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By:
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Victor F. Keen
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Chief Executive Officer
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[Signature Page]
EXHIBIT A
Certificate of Designation
EXHIBIT B
Form of Common Stock Purchase Warrant
EXHIBIT C
3DICON CORPORATION
CERTIFICATE OF ACCREDITED INVESTOR
STATUS
Except as may be indicated
by the undersigned below, the undersigned is an “accredited investor,” as that term is defined in Regulation D under
the Securities Act of 1933, as amended (the “Securities Act”). The undersigned has initialed the box below indicating
the basis on which he is representing his status as an “accredited investor”:
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a
bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined
in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; a broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”); an insurance
company as defined in Section 2(13) of the Securities Act; an investment company registered under the Investment Company Act of
1940 or a business development company as defined in Section 2(a)(48) of that Act; a small business investment company licensed
by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan established
and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions,
for the benefit of its employees, and such plan has total assets in excess of $5,000,000; an employee benefit plan within the
meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined
in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment
adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment
decisions made solely by persons that are “accredited investors”;
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a
private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;
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an
organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust,
or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;
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a
natural person whose individual net worth, or joint net worth with the undersigned’s spouse, at the time of this purchase
exceeds $1,000,000 (excluding the value of the undersigned’s primary residence);
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a
natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with the
undersigned’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same
income level in the current year;
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a
trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose
purchase is directed by a person who has such knowledge and experience in financial and business matters that he is capable of
evaluating the merits and risks of the prospective investment;
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an
entity in which all of the equity holders are “accredited investors” by virtue of their meeting one or more of the
above standards; or
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an
individual who is a director or executive officer of 3DIcon Corporation
IN WITNESS WHEREOF,
the undersigned has executed this Certificate of Accredited Investor Status effective as of this _______ day of ________, 201__.
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INVESTOR
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(Signature)
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By:
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Its:
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[Signature Page of Investor
Questionnaire]