Exhibit 10.9.3
December 31, 2001
Continental Stock Transfer & Trust Company
00 Xxxxxxx Xxxxx/0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxxxxxx
Dear Xx. Xxxxxxxxxx:
DIGITAL DESCRIPTOR SYSTEMS, INC., a Delaware corporation (the
"Company"), and certain investors (the "Investors") have entered into a
Securities Purchase Agreement dated as of December 31, 2001 (the "Agreement")
providing for the issuance of 12% Convertible Debentures in the aggregate
principal amount of $800,000 (the "Debentures") and warrants to purchase
2,400,000 shares of the Company's Common Stock (the "Warrants"), for the
aggregate consideration of $800,000.
You are hereby irrevocably authorized and instructed to reserve a
sufficient number of shares of Common Stock (initially, 84,800,000 shares) of
the Company for issuance upon full conversion of the Debentures 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 an opinion from the Company's
council indicating 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,
DIGITAL DESCRIPTOR SYSTEMS, INC.
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Xxxxxxx X. Xxxx
President and Chief Executive Officer
Acknowledged:
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Transfer Agent
