[Letterhead of Amnis Systems Inc.]
December 28, 2001
Xxxxxx Xxxxxx
Interwest Transfer Company, Inc.
0000 Xxxx Xxxxxx Xxxxxxxx Xxxx
Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Ladies and Gentlemen:
AMNIS SYSTEMS INC., a Delaware corporation (the "Company"), and
certain investors (the "Investors") have entered into a Securities Purchase
Agreement dated as of December 28, 2001 (the "Agreement") providing for the
issuance of 12% Convertible Debentures in the aggregate principal amount of
$1,000,000 (the "Debentures") and warrants to purchase 1,000,000 shares of the
Company's Common Stock (the "Warrants"), for the aggregate consideration of
$1,000,000.
You are hereby irrevocably authorized and instructed to reserve a
sufficient number of shares of Common Stock (initially, 12,400,000 shares) of
the Company for issuance upon full conversion of the Debentures (including the
exercise of the Investment Options described therein) and exercise of the
Warrants in accordance with the respective terms thereof. You are hereby
further irrevocably authorized and directed to issue the shares of Common Stock
so reserved upon your receipt from the Company of a notice of conversion
("Notice of Conversion") or exercise agreement ("Exercise Agreement") duly
executed by an Investor in accordance with the terms of such notices and
agreements and the Debentures and Warrants, as applicable.
A copy of a Form of Debenture and Form of Warrant is attached hereto. You
should familiarize yourself with your issuance and delivery obligations, as
Transfer Agent, contained therein. The shares to be issued are to be registered
in the names of the registered holder of the securities submitted for conversion
or exercise.
So long as you have previously received confirmation from the Company that
the shares have been registered under the 1933 Act or otherwise may be sold
pursuant to Rule 144 without any restriction as to the number of securities as
of a particular date that can then be immediately sold, such shares should be
transferred, at the option of the holder of the Debentures or Warrants as
specified in the Notice of Conversion or Exercise Agreement, as applicable,
either (i) electronically by crediting the account of a Prime Broker with the
Depository Trust Company through its Deposit Withdrawal Agent Commission system
or (ii) in certificated form without any legend which would restrict the
transfer of the shares, and you should remove all stop-transfer instructions
relating to such shares. Until such time as you are advised by Company counsel
that the shares have been registered under the 1933 Act or otherwise may be sold
pursuant to Rule 144 without any restriction as to the number of securities as
of a particular date that can then be immediately sold, you are hereby
instructed to place the following legends on the certificates:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT,
OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR
OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS
NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
The legend set forth above shall be removed and you are instructed to issue a
certificate without such legend to the holder of any shares upon which it is
stamped, if, unless otherwise required by applicable state securities laws, (a)
such shares are registered for sale under an effective registration statement
filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 without
any restriction as to the number of securities as of a particular date that can
then be immediately sold, (b) such holder provides the Company with an opinion
of counsel, in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale or transfer of such
security may be made without registration under the 1933 Act and such sale or
transfer is effected or (c) such holder provides the Company with reasonable
assurances that such shares can be sold pursuant to Rule 144.
The Investors are intended to be and are third party beneficiaries hereof,
and no amendment or modification to the instructions set forth herein may be
made without the consent of such Investors.
Very truly yours,
AMNIS SYSTEMS INC.
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
Acknowledged:
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Transfer Agent
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