IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
EXHIBIT
10.7
December
28, 2007
First
American Stock Transfer, Inc.
000 X.
Xxxx Xxxx, Xxx 000
Phoenix,
AZ 85022
Attention: Xxxxx
Xxxxxxx
RE:
CMARK International, Inc.
Dear Xx.
Xxxxxxx:
Reference
is made to that certain Securities Purchase Agreement (the “Securities Purchase
Agreement”), dated the date hereof, by and between CMARK International,
Inc.., a South Carolina 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 Eight Hundred
Thousand Dollars ($5,300,000) of the Company’s secured convertible debentures,
which shall be convertible into shares of the Company’s common stock, par value
$.0001 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 1.05 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 of the Investor Registration Rights
Agreement dated the date hereof 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 The Law Office of Xxxxx X. Xxxxxxx XX,
P.A. (“Xxxxxxx”)
Specifically,
upon receipt by the Company or Xxxxxxx of a copy of a Conversion Notice,
Xxxxxxx, 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.)
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EXHIBIT
10.7 - continued
The
Company hereby confirms to you and the Buyer that certificates representing the
Conversion Shares, the Interest Shares, and/or the Liquidated Damages 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, the Interest Shares, and/or the
Liquidated Damages 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:
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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.”
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The
Company hereby confirms and First American 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 free of legend the Company authorizes
and [transfer agent] will accept an opinion of Counsel from The Law Office of
Xxxxx X. Xxxxxxx XX, P.A.
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 you as the Company’s transfer agent without the prior written consent of
the Buyer.
Upon any
decision by you to resign as transfer agent hereunder, you agree to give 30 days
written notice during which time the Company will provide 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 First American Stock Transfer hereby acknowledge and confirm that
complying with the terms of this Agreement does not and shall not prohibit First
American Stock Transfer from satisfying any and all fiduciary responsibilities
and duties it may owe to the Company.
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EXHIBIT
10.7 - continued
The
Company and First American Stock Transfer acknowledge that the Buyer is relying
on the representations and covenants made by the Company and First American
Stock Transfer hereunder.
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.
* * * * *
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.
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COMPANY:
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CMARK
INTERNATIONAL, INC.
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By: /s/
Xxxx Xxxxxxxxxxxxx
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Name:
Xxxx Xxxxxxxxxxxxx
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Title:
CFO / Secretary
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The
Law Office of Xxxxx X. Xxxxxxx XX, P.A.
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By: /s/ Xxxxx Xxxxxxx,
Esq., President
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First
American Stock Transfer
By:
Name:
Title:
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EXHIBIT
10.7 - continued
SCHEDULE
I
SCHEDULE
OF BUYERS
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Name
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Signature
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Address/Facsimile
Number
of Buyer
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0-00
Xxx Xxxxxxx Hardt
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Trafalgar
Capital Specialized
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By:
Trafalgar Capital Sarl
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BP
3023
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Investment
Fund,
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Its:
General Partner
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L-1030
Luxembourg
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Luxembourg
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Facsimile:
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011-44-207-405-0161
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By:
/s/ Xxxxxx Xxxxx
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and
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Name: Xxxxxx
Xxxxx
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000-000-000-0000
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Its:
Chairman of the Board
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SCHEDULE
I-1
EXHIBIT
10.7 - continued
EXHIBIT
I
FORM OF CONVERSION
NOTICE
Reference
is made to the Securities Purchase Agreement (the “Securities Purchase
Agreement”) between C-Mark International, Inc., (the “Company”), and and
the Buyers listed on Schedule I attached thereto. dated February __,
2007 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 $.0001 per share (the “Common Stock”), of
the Company for the amount indicated below as of the date specified
below.
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Conversion
Date:
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Amount
to be converted:
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$
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Conversion
Price:
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$
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Shares
of Common Stock Issuable:
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Amount
of Debenture unconverted:
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$
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Amount
of Interest Converted:
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$
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Conversion
Price of Interest:
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$
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Shares
of Common Stock Issuable:
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Amount
of Liquidated Damages:
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$
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Conversion
Price of Liquidated Damages:
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$
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Shares
of Common Stock Issuable:
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Total
Number of shares of Common Stock to be issued:
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EXHIBIT
I-1
EXHIBIT
10.7 - continued
Please
issue the shares of Common Stock in the following name and to the following
address:
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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-2
EXHIBIT
10.7 - continued
EXHIBIT
II
FORM OF NOTICE OF
EFFECTIVENESS
OF REGISTRATION
STATEMENT
_________,
2007
________
Attention:
RE:
CMARK INTERNATIONAL, INC.
Ladies
and Gentlemen:
We are
counsel to CMARK International, Inc., a South Carolina
corporation (the “Company”), and have
represented the Company in connection with that certain Securities Purchase
Agreement, dated as of February __, 2007 (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 Eight
Hundred Thousand Dollars ($5,300,000) of secured convertible debentures, which
shall be convertible into shares (the “Conversion Shares”)
of the Company’s common stock, par value $.0001 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 February
_28_, 2007, 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 February
28, 2007, 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 __________,
2007 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
EXHIBIT
10.7 - continued
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,
The
X’Xxxx Law Firm, P.C.
By:
EXHIBIT
II-2
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10.7 - continued
EXHIBIT
III
FORM OF
OPINION
VIA FACSIMILE AND REGULAR
MAIL
________
Attention:
RE:
C-MARK INTERNATIONAL, INC.
Ladies
and Gentlemen:
We have
acted as special counsel to C-Mark International, 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 _________ ___,
2007. 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
__________ ___, 2007.
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
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10.7 - continued
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 [Transfer Agent] 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,
The
X’Xxxx Law Firm, P.C.
EXHIBIT
III-2
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10.7 - continued
EXHIBIT
“A”
(LIST OF SELLING
STOCKHOLDERS)
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Name:
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No.
of Shares:
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EXHIBIT
A-1
