April 24, 2000
Attn: Xxxxxxx Xxxxxxx
Pacific Stock Transfer
X.X. Xxx 00000
Xxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Dear Xxxxxxx Xxxxxxx:
Reference is made to that certain Investment Agreement (the "Investment
Agreement"), dated on or about April 24, 2000, by and among Guinness
Telli*Phone Corporation, a Nevada corporation (the "Company"), and the
other signatories thereto (the "Holders") pursuant to which the
Company, at times and amounts chosen by the Company, as further
described in the Investment Agreement, may issue to the Holder up to
Thirty Million Dollars ($30,000,000) in aggregate principal amount of
Common Stock of the Company (the "Put Shares"), and warrants (the
"Warrants") to purchase Common Stock (the "Warrant Shares") of the
Company's.
A. Issuance of Put Shares. This letter shall serve as our irrevocable
authorization and direction to you (provided that you are the transfer
agent of the Company at such time) to issue unlegended Put Shares in
the name of the Holder (or in the name of its nominee, at the Holder's
request) from time to time upon surrender to you of (i) a letter from
the Company, instructing you to issue a specified number of Put Shares
to the Holder, (ii) a properly completed and duly executed Put Notice,
in the form attached hereto as Exhibit 1, which has been properly
agreed and acknowledged by the Company as indicated by the signature of
a duly authorized officer of the Company thereon, (iii) Registration
Confirmation (as defined below) and (iv) an opinion of counsel ("Put
Opinion of Counsel") in substantially the form of the applicable
opinion in Composite Exhibit 2.
B. Issuance of Warrant Shares. This letter shall serve as our
irrevocable authorization and direction to you (provided that you are
the transfer agent of the Company at such time) to issue unlegended
Warrant Shares in the name of the Holder (or in the name of its
nominee, at the Holder's request) from time to time upon surrender to
you of (i) a letter from the Company, instructing you to issue a
specified number of Warrant Shares to the Holder, (ii) a properly
completed and duly executed Warrant Exercise Form, in the form attached
hereto as Exhibit 3, which has been properly agreed and acknowledged by
the Company as indicated by the signature of a duly authorized officer
of the Company thereon, (iii) Registration Confirmation (as defined
below) and (iv) an opinion of counsel ("Warrant Opinion of Counsel") in
substantially the form of Exhibit 4.
C. Legend Free Certificates. So long as you have previously received:
(i) written confirmation from counsel to the Company (which counsel may
be in-house legal counsel) that a registration statement covering
resales of the Put Shares and Warrant Shares has been declared
effective by the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and (ii) a copy of such
registration statement, ((i) and (ii) above are collectively referred
to as "Registration Confirmation"), certificates representing the Put
Shares and Warrant Shares shall not bear any legend restricting
transfer of the Put Shares or Warrant Shares and should not be subject
to any stop-transfer restriction.
If you have not previously received Registration Confirmation, then the
Put Shares shall not be issued, and the certificates representing the
Warrant Shares shall be issued, but shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, THE SECURITIES
REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED
UNDER AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THOSE LAWS."
109
provided, however, that the Company may from time to time notify you to
place stop-transfer restriction on the certificates for outstanding Put
Shares and Warrant Shares in the event a registration statement
covering resales of the Put Shares and the Warrant Shares is subject to
amendment for events then current.
Please be advised that the Holders are relying upon this letter as an
inducement to enter into the Investment Agreement.
[INTENTIONALLY LEFT BLANK]
Please execute this letter in the space indicated to acknowledge your
agreement to act in accordance with these instructions. Should you
have any questions concerning this matter, please contact me at
(000)000-0000.
Very truly yours,
GUINNESS TELLI*PHONE CORPORATION
By:
Xxxxxxxx X. Guinness, President & CEO
Agreed and Acknowledged:
TRANSFER AGENT
GUINNESS TELLI*PHONE CORPORATION
By:
Name:
Title:
Date: April 24, 2000
HOLDER
XXXXXX PRIVATE EQUITY, LLC
By:
Xxxx X. Xxxxxx, Manager
Date: April 24, 2000
Enclosures
ATTACHED EXHIBITS 1 - 4
