IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
December ___, 2005
Mountain Share Transfer, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention:_________
RE: ROAMING MESSENGER, INC.
Ladies and Gentlemen:
Reference is made to that certain Securities Purchase Agreement (the
"Securities Purchase Agreement") of even date herewith by and between Roaming
Messenger, Inc., a Nevada corporation (the "Company"), and the Buyers set forth
on Schedule I attached thereto (collectively the "Buyers") and that certain
Pledge and Escrow Agreement (the "Pledge Agreement") of even date herewith among
the Company, the Buyers and Xxxxx Xxxxxxxx, as escrow agent (the "Escrow Agent")
and those certain Warrants of even date herewith between the Company and the
Buyers (the "Warrant"). Pursuant to the Securities Purchase Agreement, the
Company shall sell to the Buyers, an the Buyers shall purchase from the Company,
convertible debentures (collectively, the "Debentures") in the aggregate
principal amount of One Million Two Hundred Thousand Dollars ($1,200,000), plus
accrued interest, which are convertible into shares of the Company's common
stock, par value $0.001 per share (the "Common Stock"), at the Buyers
discretion. These instructions relate to the following stock or proposed stock
issuances or transfers:
1. The Company has agreed to issue to the Buyers up to 70,000,000
shares of the Company's Common Stock upon conversion of the
Debentures ("Conversion Shares") plus the shares of Common
Stock to be issued to the Buyers upon conversion of accrued
interest and liquidated damages into Common Stock (the
"Interest Shares")
2. The Company has agreed to issue to the Buyers up to 9,500,000
shares (the "Warrant Shares") of the Company's Common Stock
upon exercise of the Warrant.
3. The Company has prepared, or will promptly prepare, a stock
certificate representing 2,000,000 shares (the "Escrowed
Shares") of the Company's Common Stock, in the Company's name,
that have been or are being delivered to the Escrow Agent
pursuant to the Pledge Agreement.
This letter shall serve as our irrevocable authorization and direction to
Mountain Share Transfer, Inc. (the "Transfer Agent") to do the following:
1. Conversion Shares and Warrant Shares.
a. Instructions Applicable to Transfer Agent. With
respect to the Conversion Shares, Warrant Shares and
the Interest Shares, the Transfer Agent shall issue
the Conversion Shares, Warrant Shares and the
Interest Shares to the Buyers from time to time upon
delivery to the Transfer Agent of a properly
completed and duly executed Conversion Notice (the
"Conversion Notice"), in the form attached hereto as
Exhibit I, or a properly completed Exercise Notice in
the form attached to the Warrant as Exhibit A thereto
(the "Exercise Notice"), delivered on behalf of the
Company to the Transfer Agent by Xxxxx Xxxxxxxx, Esq.
(the "Escrow Agent"). Upon receipt of a Conversion
Notice or an Exercise Notice, the Transfer Agent
shall 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 Buyers or
their designees, for the number of shares of Common
Stock to which the Buyers shall be entitled as set
forth in the Conversion Notice or Exercise Notice or
(ii) provided Transfer Agent are 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 Buyers' or their designees' balance account with
DTC through its Deposit Withdrawal At Custodian
("DWAC") system provided the Buyers 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. The Company hereby confirms to the Transfer Agent and
the Buyers that certificates representing the
Conversion Shares and 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 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, Warrant Shares and the Interest Shares are
not registered for sale under the Securities Act of
1933, as amended, then the certificates for the
Conversion Shares, Warrant Shares and Interest Shares
shall bear the following legend:
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"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."
c. In the event that counsel to the Company fails or
refuses to render an opinion as required to issue the
Conversion Shares in accordance with the preceding
paragraph (either with or without restrictive
legends, as applicable), then the Company irrevocably
and expressly authorizes counsel to the Buyers to
render such opinion. The Transfer Agent shall accept
and be entitled to rely on such opinion for the
purposes of issuing the Conversion Shares.
d. Instructions Applicable to Escrow Agent. Upon the
Escrow Agent's receipt of a properly completed
conversion notice substantially in the form attached
as an exhibit to the Debentures or instructions to
exercise the Warrant, the Escrow Agent shall, within
one (1) Trading Day thereafter, send to the Transfer
Agent a Conversion Notice in the form attached hereto
as Exhibit I, or an Exercise Notice, which shall
constitute an irrevocable instruction to the Transfer
Agent to process such Conversion Notice or Exercise
Notice in accordance with the terms of these
instructions.
2. Escrowed Shares.
a. With respect to the Escrowed Shares, upon an event of
default as set forth in the Pledge Agreement, the
Escrow Agent shall send written notice to the
Transfer Agent ("Escrow Notice") to transfer such
number of Escrow Shares as set forth in the Escrow
Notice to the Buyers. Upon receipt of an Escrow
Notice, the Transfer Agent shall promptly transfer
such number of Escrow Shares to the Buyers as shall
be set forth in the Escrow Notice delivered to the
Transfer Agent by the Escrow Agent. Further, the
Transfer Agent shall promptly transfer such shares
from the Buyers to any subsequent transferee promptly
upon receipt of written notice from the Buyers or
their counsel. If the Escrow Shares are not
registered for sale under the Securities Act of 1933,
as amended, then the certificates for the Escrow
Shares shall bear the legend set forth in Section 1b.
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b. In the event that counsel to the Company fails or
refuses to render an opinion as may be required by
the Transfer Agent to affect a transfer of the Escrow
Shares (either with or without restrictive legends,
as applicable), then the Company irrevocably and
expressly authorizes counsel to the Buyers to render
such opinion. The Transfer Agent shall accept and be
entitles to rely on such opinion for the purpose of
transferring the Escrow Shares.
3. All Shares.
a. The Transfer Agent shall reserve for issuance to the
Buyers the Conversion Shares, the Escrowed Shares and
Warrant Shares. 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.
b. The Transfer Agent shall rely exclusively on the
Conversion Notice, the Escrow Notice or the Exercise
Notice and shall have no liability for relying on
such instructions. Any Conversion Notice, Escrow
Notice or Exercise Notice 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.
c. The Company hereby confirms to the Transfer Agent and
the Buyers that no instructions other than as
contemplated herein will be given to Transfer Agent
by the Company with respect to the matters referenced
herein. The Company hereby authorizes the Transfer
Agent, and the Transfer Agent shall be obligated, to
disregard any contrary instructions received by or on
behalf of the Company.
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.
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.
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.
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 its fair market value 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 such Common Stock's fair market value determined immediately
prior to its issuance, (iii) issue any S-8 shares of the Company's Common Stock.
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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.
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.
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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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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:
ROAMING MESSENGER, INC.
By:_________________________________
Name: Xxxxxxxx Xxx
Title: CEO
____________________________________
Xxxxx Xxxxxxxx, Esq.
MOUNTAIN SHARE TRANSFER, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
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6
SCHEDULE I
SCHEDULE OF BUYERS
Address/Facsimile
Name Signature Number of Buyers
---------------------------- -------------------------------- --------------------------------
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 Xxxxxx
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 Roaming Messenger, Inc., (the "Company"), and the
Buyers set forth on Schedule I attached thereto dated December ____ 2005. 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: __________________________
EXHIBIT I-1
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.
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EXHIBIT II
TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
_________, 2005
_________
Attention:
RE: ROAMING MESSENGER, INC.
Ladies and Gentlemen:
We are counsel to Roaming Messenger, Inc., (the "Company"), and have
represented the Company in connection with that certain Securities Purchase
Agreement, dated as of December __, 2005 (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 One Million Two Hundred Thousand Dollars
($1,200,000) 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 December ___,
2005, 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 _______, 2005, 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 __________, 2005 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 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 II-2
EXHIBIT III
TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
FORM OF OPINION
________________ 2005
VIA FACSIMILE AND REGULAR MAIL
________________
Attention:
RE: ROAMING MESSENGER, INC.
Ladies and Gentlemen:
We have acted as special counsel to Roaming Messenger, 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 _________ ___, 2005. 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 __________ ___, 2005.
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 III-1
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 issuance 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 III-2
EXHIBIT "A"
(LIST OF SELLING STOCKHOLDERS)
Name: No. of Shares:
------------------------------------------------- ----------------------------
EXHIBIT A-1
