Exhibit 10.6
IRREVOCABLE TRANSFER AGENT
INSTRUCTIONS
THIS IRREVOCABLE
TRANSFER AGENT INSTRUCTIONS (this “ Agreement
”), dated as of June 13, 2008, by and among ISONICS
CORPORATION , a California corporation (the “
Company ”), CONTINENTAL STOCK TRANSFER AND TRUST
COMPANY (the “ Transfer Agent ”) and YA
GLOBAL INVESTMENTS, L.P . a Cayman Island exempted limited
partnership (individually, a “ Buyer ” or
collectively “ Buyers ”).
WITNESSETH
WHEREAS ,
contemporaneously with the execution and delivery of this
Agreement, the Company and the Buyer are executing and delivering a
Securities Purchase Agreement dated the date hereof (the “
Securities Purchase Agreement ”) pursuant to which the
Company has agreed to sell and the Buyer(s) have agreed to
purchase notes (collectively, the “ Notes ”) in
the aggregate principal amount of One Million One Hundred
Seventy-Five Thousand Dollars ($1,175,000), plus accrued
interest;
WHEREAS , pursuant
to the Securities Purchase Agreement the Company has issued to the
Buyer(s) warrants to purchase up to 13,000,000 shares of the
Company’s common stock (“ Common Stock ”),
no par value per share (the “ Warrant Shares ”),
at the Buyer’s discretion (the “ Warrant ”
and the “ Warrant Shares ”);
NOW, THEREFORE , in
consideration of the mutual covenants and other agreements
contained in this Agreement the Company, the Buyer(s) and the
Transfer Agent hereby agree as follows:
1. WARRANT
SHARES .
(a)
Instructions Applicable to Transfer Agent . The
parties here to acknowledge that the Buyer(s) shall
irrevocably be entitled to deliver to the Transfer Agent on behalf
of the Company an Exercise Notice (the “ Exercise
Notice ”) in the form attached as Exhibit A to the
Warrant. Upon the Transfer Agents receipt of a properly
completed and duly executed Exercise Notice, the Transfer Agent,
provided they are acting as transfer agent at the time, shall
without the confirmation or instructions from the Company and
within three (3) Trading Days thereafter (i) issue and
surrender to a common carrier for overnight delivery to the address
as specified in the Exercise Notice, a certificate, registered in
the name of the Buyer or its designees, for the number of shares of
Common Stock to which the Buyer shall be entitled as set forth in
the Exercise Notice or (ii) provided the Transfer Agent is
participating in The Depository Trust Company (“ DTC
”) Fast Automated Securities Transfer Program, upon the
request of the Buyers, credit such aggregate number of shares of
Common Stock to which the Buyers shall be entitled to the
Buyer’s or their designees’ balance account with DTC
through its Deposit Withdrawal At Custodian (“
DWAC ”) system provided the Buyer causes its bank or
broker to initiate the DWAC
transaction. For purposes hereof “
Trading Day ” shall mean any day on which the Nasdaq
Market is open for customary trading.
(b).
No Restrictive Legends . The certificates
representing the Warrant Shares shall not bear any legend
restricting transfer and should not be subject to any stop-transfer
restrictions and shall otherwise be freely transferable on the
books and records of the Company; provided that counsel to
the Company delivers (i) the Notice of Effectiveness set forth
in Exhibit I attached hereto and (ii) an opinion
of counsel in the form set forth in Exhibit II attached
hereto.
(c)
Restrictive Legends . In the event that the
Warrant Shares are not registered for sale under the Securities Act
of 1933, as amended, and the request for issuance of the Warrant
Shares is accompanied by an opinion from the Company’s
counsel or Buyer’s counsel that the issuance of the Warrant
Shares is pursuant to an available exemption under the Securities
Act of 1933, as amended, the certificates for the Warrant Shares
shall bear the following legend, or its equivalent:
“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.”
(d)
Removal of Restrictive Legends .
In the event that the Buyer submits to the Transfer Agent the
Warrant Shares for the removal of the restrictive legends whether
in connection with a sale of such shares pursuant to any exemption to the registration
requirements the Securities Act of 1933, as amended, or otherwise
the Transfer Agents shall without the confirmation or instructions
from the Company and within three (3) Trading Days of receipt
of all required documentation from the Buyer, its agent or counsel,
(i) issue and surrender to a common carrier for overnight
delivery to the address as specified by the Buyer(s), a
certificate, registered in the name of the Buyer or its designees,
for the number of shares of Common Stock to which the Buyer shall
be entitled as set forth pursuant to their submission or
(ii) provided the Transfer Agent is participating in The
Depository Trust Company (“ DTC ”) Fast
Automated Securities Transfer Program, upon the request of the
Buyers, credit such aggregate number of shares of Common Stock to
which the Buyers shall be entitled to the Buyer’s or their
designees’ balance account with DTC through its Deposit
Withdrawal At Custodian (“ DWAC ”) system
provided the Buyer causes its bank or broker to initiate the DWAC
transaction. For purposes hereof “ Trading Day ”
shall mean any day on which the Nasdaq Market is open for customary
trading.
(e)
Opinions of Counsel .
In the event that the Buyer submits to the Transfer Agent a request
for the issuance of the Warrant Shares or the Warrant Shares for
the removal of the restrictive legends whether in connection with a
sale of such shares pursuant to any exemption to the registration
requirements the Securities Act of 1933, as amended, or otherwise
and the Company and or its counsels refuses or fails for any reason
to render an opinion of counsel required for the removal of the
restrictive legends the Company hereby represents and warrants that
the Buyer is hereby irrevocably and expressly authorized to have
counsel to the Buyer to render any and all opinions which may be
required and relied upon by the Transfer Agent.
In the event the Buyer
submits an opinion of counsel as contemplated in the preceding
paragraph the Transfer Agent hereby acknowledges it will rely on
and accept such opinion of counsel and all documentation submitted
in connection therewith, with out the confirmation or instructions
from the Company, and issue such Warrant Shares without restrictive
legends as instructed by the Buyer as per Section 1
(d) herein.
2. RESERVATION
OF SHARES OF THE COMPANY .
(a).
The Transfer Agent shall reserve for issuance to the Buyers a
minimum of 13,000,000 Warrant Shares, as may be increased under the
Warrant and upon advice from the Company. Under no
circumstances, including but not limited to the exhaustion of the
number of reserved shares articulated herein, increase of the
number of Warrant Shares pursuant to terms of the Warrant, the
share reserve articulated herein is not created or other wise,
shall such reservation of Warrant shares articulated herein be
deemed to be a cap on the number of Warrant Shares to be issued to
the Buyer.
(b).
All such shares shall remain in reserve with the Transfer Agent
until the Buyers provides the Transfer Agent instructions that the
shares or any part of them shall be taken out of reserve and shall
no longer be subject to the terms of these instructions.
(c)
The Company and the Transfer Agent acknowledge that as of the date
hereof other than as created in connection with existing option
plans and warrants and convertible debentures previously purchased
by the Buyer from the Company, no share reserve exists or will
exist so long as the Notes are outstanding.
3. AUTHORIZED
AGENT OF THE COMPANY .
(a)
The Company hereby irre
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