IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
THIS
IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
(this
“Agreement”),
dated
as of March 28, 2008, by and among INTREPID
TECHNOLOGY AND RESOURCES, INC.,
an
Idaho corporation (the “Company”),
COLUMBIA
STOCK TRANSFER COMPANY
(the
“Transfer
Agent”)
and
YA
GLOBAL INVESTMENTS, L.P.
a
Cayman Island exempted limited partnership (individually, a “Buyer”
or
collectively, “Buyers”).
WITNESSETH
WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the Company
and the Buyer are executing and delivering a Securities Purchase Agreement,
dated the date hereof (the “Securities
Purchase Agreement”)
pursuant to which the Company has agreed to sell and the Buyer(s) have agreed
to
purchase convertible debentures (collectively, the “Debentures”)
in the
aggregate principal amount of Five Hundred Eighty-Five Thousand Dollars
($585,000) plus accrued interest, which are convertible into shares of the
Company’s common stock, par value $0.005 per share (the “Conversion
Shares”),
at
the Buyers discretion;
WHEREAS,
pursuant to the Securities Purchase Agreement the Company has issued to the
Buyer(s) warrants to purchase a minimum of 4,200,000 shares of Common Stock
at
the Buyer’s discretion (the “Warrant”
and
the
“Warrant
Shares”);
WHEREAS,
pursuant to the Convertible Debentures the Company shall be entitled to make
payment of interest outstanding there under in shares of the Company’s common
stock (the “Interest
Shares”);
WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the Company
and the Buyer are executing and delivering a Registration Rights Agreement
dated
the date hereof (the “Registration
Rights Agreement”)
pursuant to which the Buyer shall be entitled to payment of liquidated damages
in shares of the Company’s common stock upon the occurrence of the events
articulated therein (the “Liquidated
Damages Shares”);
NOW,
THEREFORE,
in
consideration of the mutual covenants and other agreements contained in this
Agreement the Company, the Buyer(s) and the Transfer Agent hereby agree as
follows:
|
1.
|
CONVERSION
SHARES, INTEREST SHARES, LIQUIDATED DAMAGES SHARES AND WARRANT
SHARES.
|
(a) Instructions
Applicable to Transfer Agent.
The
parties here to acknowledge that the Buyer(s) shall irrevocably be entitled
to
deliver to the Transfer Agent on behalf of the Company a Conversion Notice
(the
“Conversion
Notice”)
in the
form attached as Exhibit A to the Debentures, or an Exercise Notice (the
“Exercise
Notice”)
in the
form attached as Exhibit A to the Warrant. Upon
the
Transfer Agents receipt of a properly completed and duly executed Conversion
Notice or an Exercise Notice, the Transfer Agent shall without the confirmation
or instructions from the Company and
within three (3) Trading Days thereafter (i) issue and surrender to a common
carrier for overnight delivery to the address as specified in the Conversion
Notice or the Exercise Notice, a certificate, registered in the name of the
Buyer or its designees, for the number of shares of Common Stock to which the
Buyer shall be entitled as set forth in the Conversion Notice or Exercise Notice
or (ii) provided the Transfer Agent is participating in The Depository Trust
Company (“DTC”)
Fast
Automated Securities Transfer Program, upon the request of the Buyers, credit
such aggregate number of shares of Common Stock to which the Buyers shall be
entitled to the Buyer’s or their designees’ 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.
For purposes hereof “Trading
Day”
shall
mean any day on which the Nasdaq Market is open for customary
trading.
(b). No
Restrictive Legends. The
certificates representing the Conversion Shares and the Warrant Shares shall
not
bear any legend restricting transfer 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
counsel
to the Company delivers (i) the Notice of Effectiveness set forth in
Exhibit
I
attached
hereto and (ii) an opinion of counsel in the form set forth in Exhibit
II
attached
hereto.
(c)
Restrictive
Legends. In
the
event that the Conversion Shares, Interest Shares, Liquidated Damages Shares,
and Warrant Shares are not registered for sale under the Securities Act of
1933,
as amended, and the certificates for the Conversion Shares, Interest Shares,
Liquidated Damages Shares, and Warrant Shares shall bear the following legend,
or its equivalent:
“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.”
(d) Removal
of Restrictive Legends. In
the
event that the Buyer submits to the Transfer Agent the Conversion Shares,
Interest Shares, Liquidated Damages Shares, and Warrant Shares for the removal
of the restrictive legends whether in connection with a sale of such shares
pursuant to any
exemption to the registration requirements the Securities Act of 1933, as
amended, or otherwise the Transfer Agents shall without the confirmation or
instructions from the Company and within three (3) Trading Days of receipt
of
all required documentation from the Buyer, its agent or counsel, (i) issue
and
surrender to a common carrier for overnight delivery to the address as specified
by the Buyer(s), a certificate, registered in the name of the Buyer or its
designees, for the number of shares of Common Stock to which the Buyer shall
be
entitled as set forth pursuant to their submission or (ii) provided the Transfer
Agent is participating in The Depository Trust Company (“DTC”)
Fast
Automated Securities Transfer Program, upon the request of the Buyers, credit
such aggregate number of shares of Common Stock to which the Buyers shall be
entitled to the Buyer’s or their designees’ 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.
For purposes hereof “Trading
Day”
shall
mean any day on which the Nasdaq Market is open for customary
trading.
2
(e) Opinions
of Counsel. In
the
event that the Buyer submits to the Transfer Agent the Conversion Shares,
Interest Shares, Liquidated Damages Shares, and Warrant Shares for the removal
of the restrictive legends whether in connection with a sale of such shares
pursuant to any
exemption to the registration requirements the Securities Act of 1933, as
amended, or otherwise and the Company and or its counsels refuses or fails
for
any reason to render an opinion of counsel required for the removal of the
restrictive legends the Company hereby represents and warrants that the Buyer
is
hereby irrevocably and expressly authorized to have counsel to the Buyer to
render any and all opinions which may be required and relied upon by the
Transfer Agent.
In
the
event the Buyer submits an opinion of counsel as contemplated in the preceding
paragraph the Transfer Agent hereby acknowledges it will rely on and accept
such
opinion of counsel and all documentation submitted in connection therewith,
with
out the confirmation or instructions from the Company, and issue such Conversion
Shares, Interest Shares, Liquidated Damages Shares, and Warrant Shares without
restrictive legends as instructed by the Buyer as per Section 1 (d)
herein.
2. RESERVATION
OF SHARES OF THE COMPANY.
(a). The
Transfer Agent shall reserve for issuance to the Buyers a minimum of 60,000,000
Conversion Shares and 4,200,000 Warrant Shares, as may be increased under the
Warrant,. Under no circumstances, including but not limited to the exhaustion
of
the number of reserved shares articulated herein, increase of the number of
Warrant Shares pursuant to terms of the Warrant, the share reserve articulated
herein is not created or other wise, shall such reservation of Conversion Shares
and Warrant shares articulated herein be deemed to be a cap on the number of
Conversion Shares and Warrant Shares to be issued to the Buyer.
(b). All
such
shares shall remain in reserve with the Transfer Agent until the Buyers provides
the Transfer Agent instructions that the shares or any part of them shall be
taken out of reserve and shall no longer be subject to the terms of these
instructions.
(c) The
Company and the Transfer Agent acknowledge that as of the date hereof no share
reserve exists or will exist so long as the Convertible Debentures are
outstanding.
3
|
3.
|
AUTHORIZED
AGENT OF THE COMPANY.
|
(a) The
Company hereby irrevocably appoints the Buyer Escrow Agent as a duly authorized
agent of the Company for the purposes of authorizing the Transfer Agent to
process issuances and transfers specifically contemplated herein.
(b) The
Transfer Agent shall accept and rely exclusively on the Conversion Notice,
the
Escrow Notice, the Exercise Notice or the Escrowed Shares submitted by the
Buyer(s) and shall not seek confirmation and/or instructions from the Company
to
process the Conversion Notice, the Escrow Notice, or the Exercise Notice or
the
issuance of the Escrowed Shares with or without Legends.
(c)
The
Transfer Agent shall accept and rely exclusively on the opinions of counsel
and
other documentation submitted by the Buyer(s) for the removal of the restrictive
legends as contemplated hereunder and shall not seek confirmation and/or
instructions from the Company to process such submission by the
Buyer(s).
(d) The
Transfer Agent shall have no liability for relying on such instructions. Any
Conversion Notice, Escrow Notice, Exercise Notice or request for removal of
restrictive legends and such supporting documentation delivered hereunder shall
constitute an irrevocable instruction to the Transfer Agent to process such
notice or notices in accordance with the terms thereof. Such notice or notices
may be transmitted to the Transfer Agent by facsimile or any commercially
reasonable method.
(e) The
Company hereby confirms to the Transfer Agent and the Buyers that it can
NOT
and will
NOT give instructions, including stop orders or otherwise, other than as
contemplated herein to Transfer Agent with regard to the issuances contemplated
herein.
(f) In
the
event that the Company provides instructions contrary to this Agreement to
the
Transfer Agent, including but not limited to stop orders, the Transfer Agent
will disregard any contrary instructions, including but not limited to stop
orders, submitted by or on behalf of the Company and act according to such
instructions provided by the Buyer and according the time requirements set
forth
herein.
(g) The
Company shall not be entitled to nor will the Transfer Agent grant a suspension
of the obligations hereunder for any time period in order for the Company to
obtain a court order or its equivalent in order to prevent the Transfer Agent
from acting hereunder.
(h) The
Company and the Transfer Agent hereby acknowledge and confirm that complying
with the terms of this Agreement does not and shall not prohibit the Transfer
Agent from satisfying any and all fiduciary responsibilities and duties it
may
owe to the Company.
(i) The
Transfer Agent, upon request of the Buyer(s) and with out instruction or
confirmation by the Company, will provide to the Buyer(s) the total number
of
authorized shares of the Company’s Common Stock as well as the current
outstanding shares of the Company’s Common Stock as of the date of the
request.
4
(j) Certain
Notice Regarding the Escrow Agent.
The
Company and the Transfer Agent hereby acknowledge that the Escrow Agent is
general counsel to the Buyers, a partner of the general partner of the Buyers
and counsel to the Buyers in connection with the transactions contemplated
and
referred herein. The Company and the Transfer Agent agree that in the event
of
any dispute arising in connection with this Agreement or otherwise in connection
with any transaction or agreement contemplated and referred herein, the Escrow
Agent shall be permitted to continue to represent the Buyers and neither the
Company nor the Transfer Agent will seek to disqualify such
counsel.
|
4.
|
REPLACEMENT
OF TRANSFER AGENT.
|
(a) The
Company hereby agrees that it shall not replace the Transfer Agent as the
Company’s transfer agent without the prior written consent of the
Buyers.
(b) Any
attempt by Transfer Agent to resign as the Company’s transfer agent hereunder
shall not be effective until such time as the Company provides to the Transfer
Agent 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.
5. ISSUANCE
OF CAPITAL STOCK.
The
Company herby confirms and the Transfer Agent acknowledges that while any
portion of the Debenture
remains unpaid and unconverted the Company and the
Transfer Agent
shall
not, without the prior consent of the Buyers, (i) issue any Common Stock or
Preferred Stock without consideration or for a consideration per share less
than
closing bid price determined immediately prior to its issuance, (ii) issue
any Preferred Stock, warrant, option, right, contract, call, or other security
or instrument granting the holder thereof the right to acquire Common Stock
without consideration or for a consideration per share less than the closing
bid
price of the Common Stock determined immediately prior to its issuance,
(iii)
issue any S-8
shares of the Company’s Common Stock.
|
6.
|
MISCELEANEOUS.
|
(a)
The
Company and the Transfer Agent acknowledge that the Buyers is relying on the
representations and covenants made by the Company and the Transfer Agent
hereunder and are a material inducement to the Buyers purchasing convertible
debentures under the Securities Purchase Agreement. The Company and the Transfer
Agent further acknowledge that without such representations and covenants of
the
Company and the Transfer Agent made hereunder, the Buyers would not purchase
the
Debentures.
(b) 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 Buyers
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 Buyers 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.
5
(c) Each
party hereto specifically acknowledges and agrees that in any action to enforce
this Agreement or any right hereunder the prevailing party will be entitled
to
recover its reasonable attorney’s fees and expenses from the other party or
parties.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
6
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: | ||
| Intrepid Technology and Resources, Inc. | ||
| By: |
/s/
Xxxxx X. Xxxxxx
|
|
| Name: Xxxxx X. Xxxxxx | ||
| Title: President | ||
|
/s/
Xxxxx Xxxxxxxx, Esq.
|
||
| Xxxxx Xxxxxxxx, Esq. | ||
Columbia
Stock Transfer Company
| By: |
/s/
Xxxxxxxx Xxxx
|
| Name: |
Xxxxxxxx
Xxxx
|
| Title: |
President
|
7
SCHEDULE
I
SCHEDULE
OF BUYERS
|
Name
|
Signature
|
Address/Facsimile
Number
of Buyers
|
|
|
|
|
|
|
|
YA
Global Investments, L.P.
|
By:
|
Yorkville
Advisors, LLC
|
000
Xxxxxx Xxxxxx - Xxxxx 0000
|
|
|
Xxx:
|
General
Partner
|
Xxxxxx
Xxxx, XX 00000
|
|
|
|
Facsimile: (000)
000-0000
|
|
|
|
|
|
|
|
|
By:
|
/s/
Xxxx Xxxxxx
|
|
|
|
Name:
|
Xxxx
Xxxxxx
|
|
|
|
Its:
|
Portfolio
Manager
|
|
|
|
|
|
|
SCHEDULE
I-1
EXHIBIT
I
FORM
OF NOTICE OF EFFECTIVENESS
OF
REGISTRATION STATEMENT
_________,
2008
________
Attention:
RE: INTREPID
TECHNOLOGY AND RESOURCES, INC.
Ladies
and Gentlemen:
We
are
counsel to Intrepid Technology and Resources, Inc. (the “Company”),
and
have represented the Company in connection with that certain Securities Purchase
Agreement, dated as of ________________ ____, 2008 (the “Securities
Purchase Agreement”),
entered into by and among the Company and the Buyers set forth on Schedule
I
attached thereto (collectively the “Buyers”)
pursuant to which the Company has agreed to sell to the Buyers up to $585,000
of
secured convertible debentures, which shall be convertible into shares (the
“Conversion
Shares”)
of the
Company’s common stock, par value $0.005 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 ______________ ___, 2008, with the Buyers (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 _______, 200_, 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 the Transfer Agent 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 __________, 200_ 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
I-1
The
Buyers 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, | |
| By: |
|
EXHIBIT
I-2
EXHIBIT
II
FORM
OF OPINION
VIA
FACSIMILE AND REGULAR MAIL
________
Attention:
RE: INTREPID
TECHNOLOGY AND RESOURCES, INC.
Ladies
and Gentlemen:
We
have
acted as special counsel to Intrepid Technology and Resources, 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 _________ ___, 200_. 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 __________ ___,
200_.
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.
EXHIBIT
II
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 ________ 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 Transfer Agent specifically in connection with the
sale
or transfer of the Shares, and solely for your information and benefit. This
letter may not be relied upon by Transfer Agent 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
II-2
EXHIBIT
A
(LIST
OF SELLING STOCKHOLDERS)
|
Name:
|
No.
of Shares:
|
EXHIBIT
A
