EXHIBIT 10.15
IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
May 19, 2004
Continental Stock Transfer & Trust Company
00 Xxxxxxx Xxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
RE: NS8 CORPORATION
Ladies and Gentlemen:
Reference is made to that certain Securities Purchase Agreement (the
"Securities Purchase Agreement"), dated the date hereof, by and between NS8
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Corporation, a Delaware corporation (the "Company"), and the Buyers set forth on
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Schedule I attached thereto (collectively the "Buyer"), pursuant to which the
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Company shall sell to the Buyer up to One Million Five Hundred Thousand Dollars
($1,500,000) of the Company's secured convertible debentures, which shall be
convertible into shares of the Company's common stock, par value $.0001 per
share (the "Common Stock"). The shares of Common Stock to be converted
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thereunder plus interest which may be converted into Common Stock and any
Liquidated Damages, which may be converted into Common Stock thereunder are
referred to herein as the "Conversion Shares." This letter shall serve as our
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irrevocable authorization and direction to you (provided that you are the
transfer agent of the Company at such time) to issue the Conversion Shares in
shares of the Company's Common Stock, in the event the Buyer has elected to have
the interest of the Convertible Debenture, pursuant to Section 1.06 of the
Convertible Debenture, paid in Common Stock (the "Interest Shares"), or the
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Buyer has elected to have Liquidated Damages (the "Liquidated Damages Shares"),
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pursuant to Section 2(c) of the Investor Registration Rights Agreement dated the
date hereof paid in Common Stock. to the Buyer from time to time upon surrender
to you of a properly completed and duly executed Conversion Notice, in the form
attached hereto as Exhibit I, delivered on behalf of the Company by Xxxxx
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Xxxxxxxx, Esq.
Specifically, upon receipt by the Company or Xxxxx Xxxxxxxx, Esq. of a copy of a
Conversion Notice, Xxxxx Xxxxxxxx, Esq., on behalf of the Company, shall as soon
as practicable, but in no event later than one (1) Trading Day (as defined
below) after receipt of such Conversion Notice, send, via facsimile, a
Conversion Notice, which shall constitute an irrevocable instruction to you to
process such Conversion Notice in accordance with the terms of these
instructions. Upon your receipt of a copy of the executed Conversion Notice,
you shall use your best efforts to, within three (3) Trading Days following the
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date of receipt of the Conversion Notice, (A) issue and surrender to a common
carrier for overnight delivery to the address as specified in the Conversion
Notice, a certificate, registered in the name of the Buyer or its designee, for
the number of shares of Common Stock to which the Buyer shall be entitled as set
forth in the Conversion Notice or (B) provided you are participating in The
Depository Trust Company ("DTC") Fast Automated Securities Transfer Program,
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upon the request of the Buyer, credit such aggregate number of shares of Common
Stock to which the Buyer shall be entitled to the Buyer's or its designee's
balance account with DTC through its Deposit Withdrawal At Custodian ("DWAC")
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system provided the Buyer causes its bank or broker to initiate the DWAC
transaction. ("Trading Day" shall mean any day on which the Nasdaq Market is
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open for customary trading.)
The Company hereby confirms to you and the Buyer that certificates representing
the Conversion Shares, the Interest Shares, and/or the Liquidated Damages Shares
shall not bear any legend restricting transfer of the Conversion Shares thereby
and should not be subject to any stop-transfer restrictions and shall otherwise
be freely transferable on the books and records of the Company provided that the
Company counsel delivers (i) the Notice of Effectiveness set forth in Exhibit II
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attached hereto and (ii) an opinion of counsel in the form set forth in Exhibit
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III attached hereto, and that if the Conversion Shares, the Interest Shares,
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and/or the Liquidated Damages Shares are not registered for sale under the
Securities Act of 1933, as amended, then the certificates for the Conversion
Shares shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT."
The Company hereby confirms and Continental Stock Transfer & Trust Company
("Continental Stock Transfer") acknowledges that in the event Counsel to the
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Company does not issue an opinion of counsel as required to issue the Conversion
Shares free of legend the Company authorizes and Continental Stock Transfer will
accept an opinion of Counsel from Xxxxxx Xxxxxxxx LLP.
The Company hereby confirms to you and the Buyer that no instructions other than
as contemplated herein will be given to you by the Company with respect to the
Conversion Shares. The Company hereby agrees that it shall not replace
Continental Stock Transfer as the Company's transfer agent without the prior
written consent of the Buyer.
Any attempt by you to resign as transfer agent hereunder shall not be effective
until such time as the Company provides to you written notice that a suitable
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replacement has agreed to serve as transfer agent and to be bound by the terms
and conditions of these Irrevocable Transfer Agent Instructions.
The Company and Continental Stock Transfer hereby acknowledge and confirm that
complying with the terms of this Agreement does not and shall not prohibit
Continental Stock Transfer from satisfying any and all fiduciary
responsibilities and duties it may owe to the Company.
The Company and Continental Stock Transfer acknowledge that the Buyer is relying
on the representations and covenants made by the Company and Continental Stock
Transfer hereunder and are a material inducement to the Buyer purchasing
convertible debentures under the Securities Purchase Agreement. The Company and
Continental Stock Transfer further acknowledge that without such representations
and covenants of the Company and Continental Stock Transfer made hereunder, the
Buyer would not enter into the Securities Purchase Agreement and purchase
convertible debentures pursuant thereto.
Each party hereto specifically acknowledges and agrees that in the event of a
breach or threatened breach by a party hereto of any provision hereof, the Buyer
will be irreparably damaged and that damages at law would be an inadequate
remedy if these Irrevocable Transfer Agent Instructions were not specifically
enforced. Therefore, in the event of a breach or threatened breach by a party
hereto, including, without limitation, the attempted termination of the agency
relationship created by this instrument, the Buyer shall be entitled, in
addition to all other rights or remedies, to an injunction restraining such
breach, without being required to show any actual damage or to post any bond or
other security, and/or to a decree for specific performance of the provisions of
these Irrevocable Transfer Agent Instructions.
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IN WITNESS WHEREOF, the parties have caused this letter agreement regarding
Irrevocable Transfer Agent Instructions to be duly executed and delivered as of
the date first written above.
COMPANY:
NS8 CORPORATION
By: /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: CEO
/s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx, Esq.
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By: /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
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Title: Vice President
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