Attached files
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| 8-K - CORETEC GROUP INC. | v204860_8k.htm |
AGREEMENT
TO CONVERT DEBT TO STOCK,
AMEND
AGREEMENTS AND TAKE OTHER ACTIONS
This
Agreement (this “Agreement”) is entered to be
effective as of the 30 day of November, 2010, (the “Effective Date”) between the
Board of Regents of the University of Oklahoma, an agency of the State of
Oklahoma, (“OU”) and
3DICON CORPORATION, an Oklahoma corporation with principal offices in Tulsa,
Oklahoma (“3DIcon”).
RECITALS:
A. WHEREAS, 3DIcon sponsored
certain research by OU pursuant to a Sponsored Research Agreement dated July 15,
2005, which was amended by Modification No. 1, effective November 1, 2005,
Modification No. 2, effective November 2, 2006, Modification No. 3, effective
March 7, 2007, Modification No. 4, effective March 20, 2009, and by subsequent
agreements between OU and 3DIcon, including without limitation Sponsored
Research Agreements FY09-ORA3-38 and FY09-ORA3-39 (hereinafter,
collectively with all amendments and modifications thereto, the “SRA Agreement”); and
B. WHEREAS, OU granted 3DIcon an
exclusive license for all commercial exploitation of the intellectual property
discovered or developed by OU under the SRA Agreement, under an Exclusive Patent
License Agreement which became effective as of June 30, 2006, and which has been
amended by Amendment No. 1, effective February 13, 2007, Amendment No. 2,
effective April 21, 2008, and Amendment No. 3, effective in May, 2008,
(hereinafter, collectively with all amendments thereto, if any, the “License”); and
C. WHEREAS, 3DIcon and OU entered
a Facilities/Resources Use Agreement on or about September 29, 2006 which has
been amended by Modification 01, effective March 11, 2007. This
agreement was terminated March 31, 2009 and a new Facilities/Resources Use
Agreement was executed May 21, 2009 (hereinafter, collectively with all
amendments thereto, if any, and Repayment Agreements, the “FRU Agreement”);
and
D. WHEREAS, OU and 3DIcon entered
a Confidentiality Agreement dated November 1, 2005, which remains in effect (the
“Confidentiality
Agreement”); and
E. WHEREAS, OU and 3DIcon entered
a Repayment Plan Agreements, effective on or about May 7, 2009, and other
agreements during the course of their contractual relationship, which agreements
may have amended any of the other agreements between OU and 3DIcon (hereinafter,
collectively with all amendments thereto, the “Repayment Plan Agreement”);
and
F. WHEREAS, The SRA Agreement,
the License, the FRU Agreement, the Confidentiality Agreement, the Repayment
Agreement and all other agreements between OU and 3DIcon, whether or not
expressly identified in these Recitals, are collectively referenced in this
Agreement as the “OU-3DIcon
Agreements”; and
G. WHEREAS, OU asserts that
3DIcon owes OU money under the OU-3DIcon Agreements, including approximately
$485,000 as of August 27, 2010; and 3DIcon disputes this assertion;
and
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H. WHEREAS, OU and 3DIcon have
agreed that OU will convert all sums due under the OU-3DIcon Agreements as of
the Effective Date, including without limitation the disputed obligation,
(collectively, the “Indebtedness”) to 3DIcon
stock, amend the OU-3DIcon Agreements and take certain other actions, upon the
terms and conditions set forth in this Agreement.
NOW THEREFORE, for valuable
consideration, including the mutual covenants set forth in this Agreement, the
receipt and sufficiency of which are acknowledged by OU and 3DIcon (sometimes
referenced as the “parties”), the parties agree
as follows:
1. Conversion
of Indebtedness to 3DIcon Equity. Upon the
signing of this Agreement by the parties, OU will exchange the Indebtedness and
other consideration set forth herein for 59 million shares of 3DIcon stock
(“OU 3DIcon
Equity"). 3DIcon will issue the OU 3DIcon Equity to OU
within thirty days following the Effective Date, which issuance shall constitute
full satisfaction of the Indebtedness.
2. OU Put
Right. If, at any time during the
one-year period beginning on the second anniversary of the Effective Date (the
“OU Put 1 Period”), the
sum of: (a) the value [stock price times number of shares] of the OU
3DIcon Equity held by OU at such time, plus (b) the proceeds (if any) of prior
sales by OU of the OU 3DIcon Equity is less than $100,000, OU shall have the
right to put (require 3DIcon or, at 3DIcon’s option, another buyer, to redeem or
purchase) one tenth (1/10) of the shares described herein for $50,000 plus 7%
thereon annually from the Effective Date, less the amount (if any) of proceeds
from the sale by OU of OU 3DIcon Equity (the “OU Put 1 Right”). If at any
time during the one-year period beginning on the third anniversary of the
Effective Date (the “OU Put 2
Period”), the sum of: (a) the value [stock price times number
of shares] of the OU 3DIcon Equity held by OU at such time, plus (b) the
proceeds (if any) of prior sales by OU of the OU 3DIcon Equity, including those
put according to OU Put 1 Right and if such put occurred, is less than $970,000,
OU shall have the right to put (require 3DIcon or, at 3DIcon’s option, another
buyer, to redeem) the shares for $485,000 plus 7% thereon annually from the
Effective Date, less the amount (if any) of proceeds from the sale by OU of OU
3DIcon Equity (the “OU Put 2
Right”). The OU Put right will be exercisable at any time during the Put
Period in which the trading price for 3DIcon stock has remained at or less than
a trading price such that the sum of the amounts specified in clauses (a) and
(b) above is exceeded by $970,000 less the proceeds of sales (if any) by OU of
OU 3DIcon Equity for (i) ten consecutive trading days or (ii) twenty of thirty
consecutive trading days. If OU puts the stock to 3DIcon as outlined
above and OU does not receive the amount due within a 90-day period following a
notification period, 3DIcon would be in default under any and all of the
OU-3DIcon Agreements.
4. 3DIcon
Call Right. At any time during
the one-year period following the third anniversary of the Effective Date,
3DIcon shall have the right to call (require OU to sell to 3DIcon) the OU 3DIcon
Equity then held by OU for an amount equal to $970,000 less the amount (if any)
of the proceeds of prior sales by OU of the OU 3DIcon Equity (the “3DIcon Call Right”). Provided,
however, OU shall not be required to pay 3DIcon any amounts it receives as a
result of prior sales of the 3DIcon Equity. In the event that 3DIcon
elects to exercise the 3DIcon Call Right, 3DIcon will provide OU’s Norman Campus
Vice-President for Research, General Counsel, and Vice-President for Technology
Development with a one hundred twenty day written notice of such intent. Any
sales by OU of OU 3DIcon Equity shares during such one hundred twenty day period
will not be subject to the 3DIcon Call Right.
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5. Intellectual
Property Ownership. The OU-3DIcon
Agreements, as they relate to the ownership of intellectual property are hereby
amended retroactively to reflect that: (i) intellectual property,
including all inventions and/or discoveries, patentable or unpatentable,
developed before July 28, 2008, by OU under the original SRA is owned by OU;
(ii) intellectual property, including all inventions and/or discoveries,
patentable or unpatentable, developed jointly by OU and 3DIcon at any time is
jointly owned by 3DIcon and OU; and (iii) intellectual property, including all
inventions and/or discoveries, patentable or unpatentable, developed by 3DIcon
or any of its employees, including without limitation Dr. Hakki Refai, after
July 28, 2008, even if developed in the OU lab rented by 3DIcon, whether using
3DIcon equipment or OU equipment rented by 3DIcon, is owned by
3DIcon.
6. Lab and
Equipment. The rent for the OU laboratory space will be at a lowered rate
for the portion of the lab used in conjunction with the then-current SRA
activities; and the rent for the remaining portion of the lab will be at a
higher, “commercial”, rate. The rates will be negotiated by OU and
3DIcon within thirty days following the Effective Date. This concept
would apply as well to lease payments for the equipment owned by OU and needed
by 3DIcon to work 3DIcon’s technology.
7. Additional
Terms.
(a) Effect of Agreement;
Existing Agreements. The OU-3DIcon Agreements are hereby amended to
include the terms and conditions set forth in this Agreement and, except as
noted herein, the OU-3DIcon Agreements remain in full force and
effect. The Repayment Plan Agreement, and all amendments thereto, as
well as all agreements calling for the payment of money to OU by 3DIcon, with
the exception of the two SRAs dealing directly with the 3DIcon-OCAST contracts,
the License and the FRU Agreement rentals to be negotiated by the parties, are
hereby cancelled and neither party shall have any obligations to the other party
thereunder. The OU-3DIcon Agreements are each amended to require the
giving of a 90-day advance written notice and opportunity to cure any alleged
failure to perform or breach, and the failure to make the cure, before a default
may be declared by OU under any of the Agreements. In the
instance of a conflict between any provision in the OU-3DIcon Agreements and a
provision in this Agreement, the provision in this Agreement shall
govern. By entering this Agreement, OU waives any and all alleged
defaults under the OU-3DIcon Agreements by 3DIcon to the Effective
Date.
(b) Renegotiation of SRA,
License, FRU Agreement. The parties agree to proceed in good faith
to enter into a new and mutually acceptable SRA, License, FRU Agreement not
inconsistent with the terms of this Agreement, but for the purpose of addressing
the future commercialization of the technology.
(c) Representations and
Warranties. OU and 3DIcon each represents and warrants to the
other party that the persons who execute this Agreement on behalf of the party
have full power and are duly authorized to bind the party to this Agreement and
to execute and perform this Agreement on behalf the party without obtaining the
consent or approval of any other person, entity or governmental
authority.
(d) Remedies. The
parties acknowledge that any violation of this Agreement may cause irreparable
harm to the other party and that monetary damages are not an adequate remedy for
such violations. The parties therefore agree that, in the event of
such a violation, the non-breaching party shall be entitled to seek an
injunction by the appropriate court in addition to any monetary damages which
might occur by reason of the violation. Nothing in this Agreement
shall restrict any additional remedies that either party may have at law or in
equity with respect to the matters covered by this Agreement.
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(e) Survival. The
representations and warranties in this Agreement and other provisions that by
their terms survive shall survive the execution and delivery hereof, the
issuance of the OU 3DIcon Equity, and the delivery of all of the documents
executed in connection herewith and shall continue in full force and effect
after the issuance thereof.
(f) Entireties and
Amendment. This Agreement and the OU-3DIcon Agreements which
are not hereby terminated constitute the entire agreement among the parties,
supersede all previous understandings regarding the subject matters hereof, and
may be amended, modified or supplemented only by a subsequent written agreement
of the parties hereto.
(g) Waiver of
Compliance. Except as otherwise provided in this Agreement,
any failure of any of the parties to comply with any obligation, covenant,
agreement or condition herein may be waived by the party entitled to the
benefits thereof only by a written instrument expressly waiving such failure,
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
(h) Binding Effect;
Assignability. This Agreement shall be binding on, and shall
inure to the benefit of, the parties and their respective successors and
permitted assigns. The obligations of any party to this Agreement
shall not be assignable by any party without the prior written consent of the
other party.
(i) Governing Law, Venue and
Enforcement. This Agreement shall be governed by the laws of
the State of Oklahoma and shall be enforced exclusively in the appropriate
courts situated in Oklahoma. The prevailing party in any action based
on this Agreement and the OU-3DIcon Agreements shall also be entitled to recover
such party’s reasonable attorneys’ fees and costs.
(j) Notices. All
notices, requests, demands and other communications hereunder shall be in
writing and will be deemed to have been duly given upon receipt, refusal, or as
of the first attempted date of delivery if unclaimed, when delivered in person
to the individual identified in this Subsection (i) or when sent by U.S.
registered or certified mail, return receipt requested, postage prepaid,
to:
If to
OU:
Kelvin K.
Droegemeier,
Vice
President for Research
The
University of Oklahoma
201 David
L. Boren Blvd, Suite 190
Norman,
OK 73019
With a
copy to:
James J.
Sluss, Jr.,
The
University of Oklahoma-Tulsa
4502 E.
41st
Street, Suite 4W 146
Tulsa, OK
74135; and
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And:
Anil
Gollahalli,
Vice
President and General Counsel
The
University of Oklahoma
660
Parrington Oval, Suite 213
Norman,
OK 73019; and
If to
3DIcon:
Martin
Keating, Chairman
3DIcon
Corporation
6804 S.
Canton Avenue, Suite 150
Tulsa,
Oklahoma 74136,
With a
copy to:
John M.
O’Connor, Esq.
15 W.
6th
Street, Suite 2700
Tulsa,
Oklahoma 74119.
Such
addresses may be changed from time to time by written notice to the other
parties.
(k) Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above
written.
| 3DICON CORPORATION |
THE
BOARD OF REGENTS OF THE
UNIVERSITY
OF OKLAHOMA
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BY:
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/s/
Martin Keating
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BY:
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/s/
Kelvin
K. Droegemeier
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Martin
Keating
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TITLE:
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Chairman
of the Board
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TITLE:
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Vice
President for Research
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DATE:
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12/1/10
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DATE:
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12/1/10
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APPROVED: /s/ James J. Sluss, Jr
12/1/10
James
J. Sluss,
Jr., Date
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