Exhibit 4.16
[To be reprinted on Company letterhead]
April 27, 2004
Olde Monmouth Stock Transfer Co., Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Redox Technology Corporation, a Delaware corporation (the
"Company"), and certain investors (the "Investors") have entered into a
Securities Purchase Agreement dated as of April 27, 2004 (the "Agreement")
providing for the issuance of 12% Secured Convertible Notes in the aggregate
principal amount of $750,000 (the "Notes") and warrants to purchase an aggregate
of 1,500,000 shares of the Company's Common Stock (the "Warrants"), for the
aggregate consideration of $750,000.
You are hereby irrevocably authorized and instructed to
reserve, subject to the Stockholder Approval (as defined in the Agreement), a
sufficient number of shares of Common Stock (initially, 86,333,333 shares) of
the Company for issuance upon full conversion of the Notes 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
Notes and Warrants, as applicable.
A copy of a Form of Note 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 Notes 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,
REDOX TECHNOLOGY CORPORATION
/s/ Xxxxx Xxxxxxx
-----------------
Xxxxx Xxxxxxx
Chief Executive Officer
Acknowledged:
/s/ Xxxxx Xxxxxxx
Transfer Agent
