[EXHIBIT 10.18.1]
[To be reprinted on Company letterhead]
February 23, 2006
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Ladies and Gentlemen:
Med Gen, Inc., a Nevada corporation (the "Company"), and
certain investors (the "Investors") have entered into a Securities
Purchase Agreement dated as of February 23, 2006 (the "Agreement")
providing for the issuance of 8% Callable Secured Convertible Notes in
the aggregate principal amount of $600,000 (the "Notes") and warrants
to purchase an aggregate of 600,000 shares of the Company's Common
Stock (the "Warrants"), for the aggregate consideration of $600,000.
You are hereby irrevocably authorized and instructed to
reserve a sufficient number of shares of Common Stock (initially,
[ ] 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,
MED GEN, INC.
/s/Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Chairman and Chief Executive
Officer
Acknowledged:
/s/
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Transfer Agent
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