Exhibit 10.9.1
TRANSFER AGENT INSTRUCTIONS
Ladies and Gentlemen:
Reference is made to that certain Secured Convertible Debenture
Purchase Agreement (the "Purchase Agreement") among Digital Descriptor Systems,
Inc., a Delaware corporation (the "Company"), and the buyers named therein (the
"Holders") pursuant to which the Company is issuing to the Holders its 12%
Secured Convertible Debentures due December [ ], 2001 (the "Debentures"), and
certain Common Stock purchase warrants (the "Warrants") which shall be
convertible and exercisable, respectively, into shares of the Company's Common
Stock, $.001 par value per share (the "Common Stock"). The shares of Common
Stock issuable upon conversion of the Debentures and payment of interest thereon
and exercise of the Warrants, are collectively referred to herein as "Underlying
Shares. " The number of Underlying Shares to be reserved for this transaction
are approximately 7,500,000.
This letter shall serve as our irrevocable authorization and direction
to you (provided that you are the transfer agent for the Company with respect to
its Common Stock at such time) to issue Underlying Shares from time to time upon
notice from the Company to issue such Underlying Shares. Such notice shall be
signed by two officers of the Company. So long as you have previously received
(x) an opinion of the Company's outside counsel substantially in the form of
Exhibit I attached hereto (which the Company shall direct be delivered to you by
such outside counsel upon the effectiveness of the registration statement
covering resales of Underlying Shares) stating that a registration statement
covering resales of Underlying Shares has been declared effective by the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
and that Underlying Shares may be issued (or reissued if they have been issued
at a time when there was not such an effective registration statement) or resold
without any restrictive legend (the "Opinion") and (y) a copy of such
registration statement, then certificates representing Underlying Shares shall
not bear any legend restricting transfer of Underlying Shares thereby and should
not be subject to any stop-transfer restriction. Provided, however, that if you
have not previously received a copy of the Opinion and such registration
statement, then the certificates representing Underlying Shares shall bear the
following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.
and, provided, further, that the Company may, from time to time, notify you to
place stop-transfer restrictions on the certificates for Underlying Shares in
the event, but only in the event, a registration statement covering Underlying
Shares is subject to amendment for events then current.
Please be advised that the Holders have relied upon this instruction
letter as an inducement to enter into the Purchase Agreement and, accordingly,
the Holders are a third party beneficiary to these instructions.
Please execute this letter in the space indicated to acknowledge your
agreement to act in accordance with these instructions.
Very truly yours,
DIGITAL DESCRIPTOR SYSTEMS, INC.
/s/Xxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chief Financial Officer
ACKNOWLEDGED AND AGREED:
/s/ X. Xxxxxxxxxx
-----------------
Name: X. Xxxxxxxxxx
Title: Vice President
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