IRREVOCABLE TRANSFER AGENT INSTRUCTIONS April 5, 2006
Exhibit
10.7
April
5,
2006
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Equity
Transfer Services, Inc.
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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Toronto,
Ontario, M5H 4C3
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Attention:
▇▇▇▇ ▇▇▇▇▇▇
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RE: ASTRIS
ENERGI, INC.
Ladies
and Gentlemen:
Reference
is made to that certain Securities Purchase Agreement (the “Securities
Purchase Agreement”)
of
even date herewith by and between Astris Energi, Inc. a corporation organized
under the laws of the Province of Ontario, Canada (the “Company”),
and
the buyer set forth on Schedule I attached thereto (the “Buyer”)
and
that certain Share Escrow Agreement (the “Share
Escrow Agreement”)
of
even date herewith among the Company, the Buyer and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as escrow
agent (the “Escrow
Agent”).
Pursuant to the Securities Purchase Agreement, the Company shall sell to the
Buyer, and the Buyer shall purchase from the Company, convertible debentures
(collectively, the “Debentures”)
in the
aggregate principal amount of One Million Five Hundred Thousand Dollars
($1,500,000), plus accrued interest, which are convertible into shares of the
Company’s common stock, no par value (the “Common
Stock”),
at
the Buyer’s discretion. The Company has also issued to the Buyer warrants to
purchase up to 3,200,000 shares of Common Stock, at the Buyer’s discretion (the
“Warrants”).
These
instructions relate to the following stock or proposed stock issuances or
transfers:
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1.
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Shares
of Common Stock to be issued to the Buyer upon conversion of the
Debentures (“Conversion
Shares”)
plus the shares of Common Stock to be issued to the Buyers upon conversion
of accrued interest and liquidated damages into Common Stock (the
“Interest
Shares”).
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2.
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Up
to 3,200,000 shares of Common Stock to be issued to the Buyers upon
exercise of the Warrants (the “Warrant
Shares”).
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3.
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The
issuance and transfer of up to 34,500,000 shares of Common Stock
(the
“Escrow
Shares”)
that may be issued to the Buyer upon an event of default as set forth
in
the Share Escrow Agreement.
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The
Conversion Shares, Warrant Shares, Interest Shares and Escrow Shares are
hereinafter collectively referred to as the “Shares”.
This
letter shall serve as our irrevocable authorization and direction to Equity
Transfer Services, Inc. (the “Transfer
Agent”)
to
issue the Shares to the Buyer from time to time upon delivery to the Transfer
Agent of a properly completed and duly executed Treasury Direction (“Treasury
Direction”) substantially in the form attached hereto as Exhibit “A”, delivered
to the Transfer Agent by the Escrow Agent on behalf of the Company. Upon receipt
of a Treasury Direction, the Transfer Agent shall within five (5) Trading Days
thereafter issue and surrender to a common carrier for overnight delivery to
the
address as specified in the Treasury Direction, one or more certificates,
registered in the name of the Buyer or its designees, for the number of Shares
to which the Buyer shall be entitled as set forth in the Treasury Direction.
For
purposes hereof “Trading
Day”
shall
mean any day on which the Nasdaq Market is open for customary
trading.
The
Company hereby irrevocably appoints the Escrow Agent as a duly authorized agent
of the Company for the purposes of authorizing the Transfer Agent to process
issuances and transfers specifically contemplated herein.
The
Transfer Agent shall be entitled to rely exclusively on the Treasury Directions
and shall have no liability for relying on any Treasury Direction. Any Treasury
Direction shall constitute an irrevocable instruction to the Transfer Agent
to
process such notice or notices in accordance with the terms thereof and these
Irrevocable Transfer Agent Instructions shall be the Transfer Agent’s good and
sufficient authority for so doing. Such notice or notices may be transmitted
to
the Transfer Agent by facsimile, Federal Express overnight mail, or any other
commercially reasonable method acceptable to the Transfer Agent in its sole
discretion.
The
Company hereby confirms to the Transfer Agent that no instructions other than
as
contemplated herein will be given to Transfer Agent by the Company with respect
to the matters referenced herein. The Company hereby authorizes the Transfer
Agent to disregard any instructions in respect of the Shares received by it
from
any party other than the Escrow Agent, including, without limitation, the
Company.
These
Irrevocable Transfer Agent Instructions shall continue in full force and effect
until the Escrow Agent delivers a written notice to the Transfer Agent that:
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a.
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all
of the Shares issuable pursuant to the Debentures, Warrant and Escrow
Agreement, have been duly issued pursuant to Treasury Directions
received
by the Transfer Agent; or
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b.
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(i)
any Debentures not yet converted have been fully repaid and the Buyer
no
longer has any rights to acquire any Conversion Shares or Interest
Shares,
(ii) any Warrants not yet exercised have expired and the Buyer no
longer
has any rights to acquire any Warrant Shares, and (iii) (1) all the
conditions to the termination of the escrow period under the Share
Escrow
Agreement have been met, or (2) all the Escrow Shares have been issued
pursuant to a Treasury Direction.
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The
Transfer Agent shall be fully protected in acting and relying upon any written
notice, direction, instruction, order, certificate, confirmation, request,
waiver, consent, receipt, statutory declaration or other paper or document
(collectively referred to as “Documents”)
furnished to it and signed by any person required to or entitled to execute
and
deliver to the Transfer Agent any such Documents in connection herewith, not
only as to its due execution and the validity and effectiveness of its
provisions, but also as to the truth and accuracy of any information therein
contained, which they in good faith believe to be genuine. The Transfer Agent
will not have any responsibility for the genuineness or validity of any
security, document or other thing deposited with it.
1
In
the
event that counsel to the Company fails or refuses to render an opinion
regarding whether the Shares may be issued without a Rule 144 legend, then
the
Company irrevocably and expressly authorizes counsel to the Buyer to render
such
opinion. The Transfer Agent shall accept and be entitled to rely on such opinion
for the purposes of issuing the Shares.
The
Company hereby agrees to defend and indemnify and hold harmless the Transfer
Agent and its affiliates, and their respective directors, officers, employees,
partners, agents and shareholders (each such person being herein referred to
as
an “Indemnified
Person”),
to
the full extent lawful, from and against all losses, claims, damages,
liabilities, obligations, actions, suits or proceedings at law or in equity,
and
any other expenses, fees, or charges of any character or nature which an
Indemnified Person may incur or with which it may be threatened by reason of
its
complying with these Irrevocable Transfer Agent Instructions. In connection
therewith, the Company agrees to indemnify the Indemnified Persons against
any
and all expenses, including fees of legal counsel, and costs of defending any
action, suit, proceeding or resisting any claim. The Company acknowledges and
agrees that Transfer Agent holds the right and benefit of the indemnity
provisions hereunder in trust for and on behalf of the Indemnified
Persons.
[REMAINDER
OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
2
DATED
this
5th
day of
April, 2006
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Astris
Energi, Inc.
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By:
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
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Title: Chief
Financial Officer
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/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇
▇▇▇▇▇▇▇▇, Esq. as Escrow Agent
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EQUITY
TRANSFER SERVICES, INC.
By:
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
& Secretary
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3
Exhibit
“A”
TREASURY
DIRECTION
TO: EQUITY
TRANSFER SERVICES INC.
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Toronto,
Ontario M5H 4C3
Reference
is made to the Irrevocable Transfer Agent Instructions dated April ●, 2006
issued by Astris Energi, Inc. (the “Company”).
All
capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Irrevocable Transfer Agent Instructions.
The
Escrow Agent hereby directs you, as the registrar and transfer agent for the
shares of Common Stock of the Company (the “Common
Shares”),
as
follows:
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1.
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to
issue, countersign and register in accordance with the registration
instructions set out in below definitive share certificates (“Certificates”)
representing an aggregate of ● Common
Shares,
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NAME ADDRESS NO.
OF COMMON SHARES
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2.
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[to
cause such Certificates to be endorsed with 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.”]
3. and
to
deliver the Certificates to the attention of the undersigned at [address].
The
undersigned hereby certifies that these Common Shares have been validly allotted
to the parties named, that the Company has received full consideration therefor,
and that they are, therefore, fully paid and non-assessable.
A-1
This
Treasury Direction is irrevocable and shall constitute your good and sufficient
authority for so acting.
DATED
this __
day of ______, 20__
▇▇▇▇▇
▇▇▇▇▇▇▇▇, Esq, as Escrow Agent
A-2
SCHEDULE
I
BUYER
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Name
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Signature
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Address/Facsimile
Number
of Buyers
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Cornell
Capital Partners, LP
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By: Yorkville
Advisors, LLC
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▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
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Its: General
Partner
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Jersey
City, NJ 07303
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Facsimile:
(▇▇▇)
▇▇▇-▇▇▇▇
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By:
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Name: ▇▇▇▇
▇▇▇▇▇▇
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Its: Portfolio
Manager
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