ITEM 27
EXHIBIT 10.13
TRANSFER AGENT INSTRUCTIONS
IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
May 14, 2004
PublicEase, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇
RE: ▇▇▇▇▇▇▇ ▇▇▇, INC.
Ladies and Gentlemen:
Reference is made to that certain Securities Purchase Agreement (the
"SECURITIES PURCHASE AGREEMENT") of even date herewith between ▇▇▇▇▇▇▇ ▇▇▇,
Inc., a Nevada corporation (the "COMPANY"), and the Buyers set forth on Schedule
I attached thereto (collectively the "BUYER"), pursuant to which the Company
shall sell to the Buyer up to One Million One Hundred Thousand Dollars
($1,100,000) of the Company's secured convertible debentures, which shall be
convertible into shares of the Company's common stock, par value $0.001 per
share (the "COMMON STOCK"). The shares of Common Stock to be converted
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
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
Buyer has elected to have Liquidated Damages (the "LIQUIDATED DAMAGES SHARES"),
pursuant to Section 2(c) of the Investor Registration Rights Agreement of even
date herewith 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 ▇▇▇▇▇
▇▇▇▇▇▇▇▇, Esq.
Specifically, upon receipt by the Company or ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq. of a
copy of a Conversion Notice, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, 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 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, 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") 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 open for
customary trading.)
2
The Company hereby confirms to you and the Buyer that certificates
representing the Conversion 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 attached hereto and (ii) an
opinion of counsel in the form set forth in EXHIBIT III attached hereto, and
that if the Conversion 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 PublicEase, Inc. acknowledges that in
the event Counsel to the Company does not issue an opinion of counsel as
required to issue the Conversion Shares free of legend the Company authorizes
and PublicEase, Inc. will accept an opinion of Counsel from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 PublicEase, Inc. 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 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 PublicEase, Inc. hereby acknowledge and confirm that
complying with the terms of this Agreement shall be deemed to comply with, and
shall not be deemed to violate, any fiduciary responsibilities and duties owed
by PublicEase, Inc. to the Company.
The Company and PublicEase, Inc. acknowledge that the Buyer is relying
on the representations and covenants made by the Company and PublicEase, Inc.
hereunder and are a material inducement to the Buyer purchasing convertible
debentures under the Securities Purchase Agreement. The Company and PublicEase,
Inc. further acknowledge that without such representations and covenants of the
Company and PublicEase, Inc. 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.
* * * * *
3
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:
▇▇▇▇▇▇▇ ▇▇▇, INC.
By: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
PUBLICEASE, INC.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: PRESIDENT
4
SCHEDULE I
SCHEDULE OF BUYERS
ADDRESS/FACSIMILE
NAME SIGNATURE NUMBER OF BUYER
---- --------- ---------------
Cornell Capital Partners, LP By: Yorkville Advisors, LLC ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Portfolio Manager
SCHEDULE I-1
EXHIBIT I
---------
TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
------------------------------------------
FORM OF CONVERSION NOTICE
-------------------------
Reference is made to the Securities Purchase Agreement (the "SECURITIES
PURCHASE AGREEMENT") between ▇▇▇▇▇▇▇ ▇▇▇, Inc. (the "COMPANY"), and Cornell
Capital Partners, LP, dated May ____ 2004. In accordance with and pursuant to
the Securities Purchase Agreement, the undersigned hereby elects to convert
convertible debentures into shares of common stock, par value $0.001 per share
(the "COMMON STOCK"), of the Company for the amount indicated below as of the
date specified below.
Conversion Date: _________________________
Amount to be converted: $________________________
Conversion Price: $________________________
Shares of Common Stock Issuable: _________________________
Amount of Debenture unconverted: $________________________
Amount of Interest Converted: $________________________
Conversion Price of Interest: $________________________
Shares of Common Stock Issuable: _________________________
Amount of Liquidated Damages: $________________________
Conversion Price of Liquidated Damages: $________________________
Shares of Common Stock Issuable: _________________________
Total Number of shares of Common Stock to be issued: _________________________
Please issue the shares of Common Stock in the following name and to the
following address:
Issue to: ________________________________
Authorized Signature: ________________________________
Name: ________________________________
Title: ________________________________
Phone #: ________________________________
Broker DTC Participant Code: ________________________________
Account Number*: ________________________________
* NOTE THAT RECEIVING BROKER MUST INITIATE TRANSACTION ON DWAC SYSTEM.
EXHIBIT I-1
EXHIBIT II
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TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
------------------------------------------
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
_________, 2004
________________________________
________________________________
________________________________
________________________________
RE: ▇▇▇▇▇▇▇ ▇▇▇, INC.
Ladies and Gentlemen:
We are counsel to ▇▇▇▇▇▇▇ ▇▇▇, Inc., a Nevada corporation (the
"COMPANY"), and have represented the Company in connection with that certain
Securities Purchase Agreement, dated as of May __, 2004 (the "SECURITIES
PURCHASE AGREEMENT"), entered into by and among the Company and the Buyers set
forth on Schedule I attached thereto (collectively the "BUYER") pursuant to
which the Company has agreed to sell to the Buyer up to One Million One Hundred
Thousand Dollars ($1,100,000) of secured convertible debentures, which shall be
convertible into shares (the "CONVERSION SHARES") of the Company's common stock,
par value $0.001 per share (the "COMMON STOCK"), in accordance with the terms of
the Securities Purchase Agreement. Pursuant to the Securities Purchase
Agreement, the Company also has entered into a Registration Rights Agreement,
dated as of May __, 2004, with the Buyer (the "INVESTOR REGISTRATION RIGHTS
AGREEMENT") pursuant to which the Company agreed, among other things, to
register the Conversion Shares under the Securities Act of 1933, as amended (the
"1933 ACT"). In connection with the Company's obligations under the Securities
Purchase Agreement and the Registration Rights Agreement, on _______, 2004, the
Company filed a Registration Statement (File No. ___-_________) (the
"REGISTRATION STATEMENT") with the Securities and Exchange Commission (the
"SEC") relating to the sale of the Conversion Shares.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at ____ P.M.
on __________, 2004 and we have no knowledge, after telephonic inquiry of a
member of the SEC's staff, that any stop order suspending its effectiveness has
been issued or that any proceedings for that purpose are pending before, or
threatened by, the SEC and the Conversion Shares are available for sale under
the 1933 Act pursuant to the Registration Statement.
The Buyer has confirmed it shall comply with all securities laws and
regulations applicable to it including applicable prospectus delivery
requirements upon sale of the Conversion Shares.
Very truly yours,
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
By:
---------------------------------
EXHIBIT II-1
EXHIBIT III
TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
------------------------------------------
FORM OF OPINION
________________ 2004
VIA FACSIMILE AND REGULAR MAIL
________________________________
________________________________
________________________________
________________________________
RE: ▇▇▇▇▇▇▇ ▇▇▇, INC.
Ladies and Gentlemen:
We have acted as special counsel to ▇▇▇▇▇▇▇ ▇▇▇, Inc. (the "COMPANY"),
in connection with the registration of ___________shares (the "SHARES") of its
common stock with the Securities and Exchange Commission (the "SEC"). We have
not acted as your counsel. This opinion is given at the request and with the
consent of the Company.
In rendering this opinion we have relied on the accuracy of the
Company's Registration Statement on Form SB-2, as amended (the "REGISTRATION
STATEMENT"), filed by the Company with the SEC on _________ ___, 2004. The
Company filed the Registration Statement on behalf of certain selling
stockholders (the "SELLING STOCKHOLDERS"). This opinion relates SOLELY to the
Selling Shareholders listed on EXHIBIT "A" hereto and number of Shares set forth
opposite such Selling Stockholders' names. The SEC declared the Registration
Statement effective on __________ ___, 2004.
We understand that the Selling Stockholders acquired the Shares in a
private offering exempt from registration under the Securities Act of 1933, as
amended. Information regarding the Shares to be sold by the Selling Shareholders
is contained under the heading "Selling Stockholders" in the Registration
Statement, which information is incorporated herein by reference. This opinion
does not relate to the issuance of the Shares to the Selling Stockholders. The
opinions set forth herein relate solely to the sale or transfer by the Selling
Stockholders pursuant to the Registration Statement under the Federal laws of
the United States of America. We do not express any opinion concerning any law
of any state or other jurisdiction.
In rendering this opinion we have relied upon the accuracy of the
foregoing statements.
Based on the foregoing, it is our opinion that the Shares have been
registered with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, and that Securities Transfer Corporation may remove the
restrictive legends contained on the Shares. This opinion relates SOLELY to the
number of Shares set forth opposite the Selling Stockholders listed on EXHIBIT
"A" hereto.
This opinion is furnished to you specifically in connection with the
issuance of the Shares, and solely for your information and benefit. This letter
may not be relied upon by you in any other connection, and it may not be relied
upon by any other person or entity for any purpose without our prior written
consent. This opinion may not be assigned, quoted or used without our prior
written consent. The opinions set forth herein are rendered as of the date
hereof and we will not supplement this opinion with respect to changes in the
law or factual matters subsequent to the date hereof.
Very truly yours,
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
EXHIBIT III-1
EXHIBIT "A"
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(LIST OF SELLING STOCKHOLDERS)
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NAME: ___________________________________________ NO. OF SHARES:______________
EXHIBIT A-1
