EXHIBIT F
INSTRUCTIONS TO TRANSFER AGENT
Aquis Communications Group, Inc.
________________, 2000
Continental Stock Transfer
0 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
Reference is made to the Loan Agreement and all Exhibits thereto (the
"Loan Agreement") dated as of March 31, 2000, between the investors signatory
thereto (the "Investors") and Aquis Communications Group, Inc. (the "Company").
Pursuant to the Agreement, and subject to the terms and conditions set forth in
the Agreement, the Company has issued to the Investors (i) $2,000,000 principal
amount of 11% Convertible Debentures and (ii) Warrants to purchase
______________ shares of Common Stock (the "Warrants"). As a condition to the
effectiveness of the Loan Agreement, the Company has agreed to issue to you, as
the transfer agent for the Company's Common Stock (the "Transfer Agent"), these
instructions relating to the Common Stock ("Common Stock") to be issued to the
Lenders (or a permitted assignee) pursuant to the Loan Agreement upon conversion
of the Convertible Debentures or upon exercise of the Warrants. All capitalized
terms used herein and not otherwise defined shall have the meaning set forth in
the Loan Agreement.
1. ISSUANCE OF COMMON STOCK WITHOUT THE LEGEND
Pursuant to the Loan Agreement and the Registration Rights Agreement,
the Company is required to prepare and file with the SEC, and maintain the
effectiveness of, a registration statement or registration statements
registering the resale of the Common Stock to be acquired by the Lenders (i)
upon exercise of the Warrants and (ii) upon conversion of, or as payment of
interest on, the Convertible Debentures, all as provided in the Registration
Rights Agreement. The Company will advise the Transfer Agent in writing of the
effectiveness of any such registration statement promptly upon its being
declared effective, and shall deliver an opinion of its counsel to that effect.
The Transfer Agent shall be entitled to rely on such advice and such opinion and
shall assume that such registration statement remains in effect unless the
Transfer Agent is otherwise advised in writing by the Company or such counsel,
and the Transfer Agent shall not be required to independently confirm the
continued effectiveness of such registration statement. In the circumstances set
forth in the following three paragraphs, the Transfer Agent shall deliver to the
appropriate Lender certificates representing Common Stock not bearing the Legend
without requiring further advice or instruction or additional documentation from
the Company or its counsel or the Lender or its counsel or any other party
(other than as described in such paragraphs).
(a) At any time after the effective date of the registration statement
(provided that the Company has not informed the Transfer Agent in writing that
such registration statement is not effective) upon any surrender of one or more
certificates evidencing Common Stock which bear the Legend, to the extent
accompanied by a notice requesting the issuance of new certificates free of the
Legend to replace those surrendered, in such names and in such denominations as
the Lender may request, provided that in connection with any such event, the
Lender (or its permitted assignee) shall confirm in writing to the Transfer
Agent that (i) the Lender has sold, pledged or otherwise transferred or agreed
to sell, pledge or otherwise transfer such Common Stock in a bona fide
transaction to a third party that is not an affiliate of the Company; and (ii)
the Lender confirms to the transfer agent that the Lender has complied with the
prospectus delivery requirement.
(b) In the event a registration statement is not filed by the Company,
or for any reason the registration statement which is filed by the Company is
not declared effective by the SEC, the Lender, or its permitted assignee, or its
broker confirms to the Transfer Agent that (i) the Lender has beneficially owned
the shares of Common Stock for at least one year, (ii) counting the shares
surrendered as being sold upon the date the unlegended Certificates would be
delivered to the Lender (or the Trading Day immediately following if such date
is not a Trading Day), the Lender will not have sold more than the greater of
(a) one percent (1%) of the total number of outstanding shares of Common Stock
or (b) the average weekly trading volume of the Common Stock for the preceding
four weeks during the three months ending upon such delivery date (or the
Trading Day immediately following if such date is not a Trading Day), and (iii)
the Lender has complied with the manner of sale and notice requirements of Rule
144 under the Securities Act; or
(c) The Lender (or its permitted assignee) shall represent that it is
permitted to dispose of such shares of Common Stock without limitation as to
amount or manner of sale pursuant to Rule 144(k) under the Securities Act.
In the case of subparagraphs (b) or (c), the Transfer Agent shall be
entitled to require an opinion of counsel to the Company or from counsel to the
Lender (which opinion shall be from an attorney or law firm reasonably
acceptable to the Transfer Agent and be in form and substance reasonably
acceptable to the Transfer Agent). Any advice, notice, or instructions to the
Transfer Agent required or permitted to be given hereunder may be transmitted
via facsimile to the Transfer Agent's facsimile number of [____________1,
2. MECHANICS OF DELIVERY OF CERTIFICATES REPRESENTING COMMON STOCK
In connection with any exchange of the Convertible Debentures or
exercise of Warrants pursuant to which the Lender acquires Common Stock under
the Agreement, the Transfer Agent is hereby instructed to deliver to the Lender,
certificates representing Common Stock (with or without the Legend, as
appropriate) within two (2) Trading Days of receipt by the Transfer Agent of a
copy of the Notice of Conversion (in the case of the Preferred Stock) or Notice
of Exercise (in the case of the Warrant) from the Lender, and to deliver such
certificates to the Lender, in the case of original issuance, and in the case of
subsequent transfer, if the Transfer Agent is able to deliver such Common Stock
to the Lender's
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shall make delivery pursuant to such system and provide the Lender with
confirmation thereof in lieu of such Common Stock certificates.
3. FEES OF TRANSFER AGENT; INDEMNIFICATION
The Company agrees to pay the Transfer Agent for all fees incurred in
connection with these Irrevocable Instructions. The Company agrees to indemnify
the Transfer Agent and its officers, employees and agents, against any losses,
claims, damages or liabilities, joint or several, to which it or they become
subject based upon the performance by the Transfer Agent of its duties in
accordance with the Irrevocable Instructions, other than as a result of the
Transfer Agent's gross negligence or willful misconduct.
4. THIRD PARTY BENEFICIARY
The Company and the Transfer Agent acknowledge and agree that the
Investors are each an express third party beneficiary of these Irrevocable
Instructions and shall be entitled to rely upon, and enforce, the provisions
thereof.
Aquis Communications Group, Inc.
By: /s/ D. Xxxxx Xxxxxxxx
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X. Xxxxx Xxxxxxxx, Chief Financial Officer
AGREED:
By:
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Name:
Title:
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