IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
February ___, 2004
Continental Stock Transfer and Trust
Attention:
RE: MEDIA WORX INC
Ladies and Gentlemen:
Reference is made to that certain Standby Equity Distribution Agreement
(the "Standby Equity Distribution Agreement") dated as of February ___, 2004,
pursuant to which the Company shall issue to the Cornell Capital Partners, LP
(the "Holder") Two Hundred Forty Thousand Dollars ($240,000) of the Company's
convertible debenture, which shall be convertible into shares of the Company's
common stock, par value $.005 per share (the "Common Stock"). The shares of
Common Stock to be converted thereunder and the shares of the Company's Common
Stock, issuable to the Holder in the event that the Holder has elected to have
the interest of the Convertible Debenture, pursuant to Section 1.06 therein,
paid in common stock, are referred to herein as, the "Conversion Shares." This
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 or to the Holder 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 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 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 Holder or its designee, for the
number of shares of Common Stock to which the Holder 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 Holder shall be entitled to the Holder's or its designee's
balance account with DTC through its Deposit Withdrawal At Custodian ("DWAC")
system provided the Holder 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.)
The Company hereby confirms to you and the Holder 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 Continental Stock Transfer and Trust
("Continental Stock Transfer") acknowledges that in the event Counsel to the
Company does not issue an opinion of counsel as required to issue the Conversion
Shares and or the shares common stock issuable for the interest, free of legend
the Company authorizes and Signature Stock Transfer will accept an opinion of
Counsel from Xxxxxx Xxxxxxxx LLP.
The Company hereby confirms to you and the Holder 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 Holder.
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 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 Holder
is relying on the representations and covenants made by the Company hereunder
and are a material inducement to the Holder entering into the Standby Equity
Distribution Agreement. The Company and Continental Stock Transfer, further
2
acknowledge that without such representations and covenants of the Company and
Continental Stock Transfer, made hereunder, the Holder would not enter into the
Standby Equity Distribution Agreement.
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 Holder 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 Holder 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:
MEDIA WORX INC.
By:
Name: Xxxxx X. Xxxxxxxxxx
Title: Chief Executive Officer &
Chief Financial Officer
Xxxxx Xxxxxxxx, Esq.
ACKNOWLEDGED AND AGREED:
CONTINENTAL STOCK TRANSFER & TRUST
By:
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Name:
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Title:
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SCHEDULE I
SCHEDULE OF HOLDER
ADDRESS/FACSIMILE
NAME SIGNATURE NUMBER OF BUYER
Cornell Capital Partners, LP By: Yorkville Advisors, LLC 000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxx: Xxxxxxx Xxxxxxx Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
By:
Name: Xxxx X. Xxxxxx
Its: Portfolio Manager
SCHEDULE I-1
EXHIBIT I
TO TRANSFER AGENT INSTRUCTIONS
FORM OF CONVERSION NOTICE
Reference is made to the Standby Equity Distribution Agreement (the
"Standby Equity Distribution Agreement") between Media Worx Inc., (the
"Company"), and Cornell Capital Partners, LP, dated February ___, 2004. In
accordance with and pursuant to the Standby Equity Distribution Agreement, the
undersigned hereby elects to convert convertible debentures into shares of
common stock, par value $.005 per share (the "Common Stock"), of the Company for
the amount indicate below as of the date specified below.
Conversion Date:
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Amount to be converted: $
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Amount of Debenture unconverted: $
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Conversion Price per share: $
-------------------------------
Amount of Interest: $
-------------------------------
Conversion Price per share: $
-------------------------------
Shares of Common Stock Issuable:
--------------------------------
Please confirm the following information:
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:
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Authorized Signature:
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Name:
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Title:
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Phone #:
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Broker DTC Participant Code:
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Account Number*:
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* NOTE THAT RECEIVING BROKER MUST INITIATE TRANSACTION ON DWAC SYSTEM.
EXHIBIT I-1
EXHIBIT II
TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
February __, 2004
INSERT
Attention: _______________
RE: MEDIA WORX INC
Ladies and Gentlemen:
We are counsel to Media Worx Inc., a Wyoming corporation (the
"Company"), and have represented the Company in connection with that certain
Standby Equity Distribution Agreement, dated as of February ___, 2004 (the
"Standby Equity Distribution Agreement"), entered into by and among the Company
and the Investor as set forth therein pursuant to which the Company has agreed
to issue to the Investor Two Hundred Forty Thousand Dollars ($240,000) of
convertible debentures, which shall be convertible into shares (the "Conversion
Shares") of the Company's common stock, par value $.005 per share (the "Common
Stock"), in accordance with the terms of the Standby Equity Distribution
Agreement. Pursuant to the Standby Equity Distribution Agreement, the Company
also has entered into a Registration Rights Agreement, dated as of February ___,
2004, with the Investor (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 Standby Equity Distribution
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 5:00 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.
EXHIBIT II-1
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,
EXHIBIT II-2
EXHIBIT III
TO TRANSFER AGENT INSTRUCTIONS
FORM OF OPINION
____________ ___, 2003
VIA FACSIMILE AND REGULAR MAIL
INSERT
Attention:
RE: MEDIA WORX INC.
Ladies and Gentlemen:
We have acted as special counsel to Media Worx 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 __________ ___, 2003.
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.
EXHIBIT III-1
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 Signature Stock Transfer 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,
EXHIBIT III-2
EXHIBIT "A"
(LIST OF SELLING STOCKHOLDERS)
NAME: NO. OF SHARES:
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EXHIBIT A-1
