EXHIBIT 10.3
IRREVOCABLE TRANSFER AGENT INSTRUCTIONS, DATED SEPTEMBER 30,
2005.
TRANSFER AGENT INSTRUCTIONS
INKSURE TECHNOLOGIES INC.
September 30, 2005
Pacific Stock Transfer Company
500 E. Warm Springs Road, Ste. 240
Las Vegas, Nevada 89119
Attention: Linda C. Payne
Ladies and Gentlemen:
Reference is
made to that certain Securities Purchase Agreement, dated as
of September 30, 2005 (the "AGREEMENT"), by
and among InkSure Technologies Inc.,
a Delaware corporation (the "COMPANY"), and
the investors named on the Schedule
of Buyers attached thereto (collectively,
the "HOLDERS"), pursuant to which the
Company is issuing to the Holders
convertible notes (the "NOTES"), which are
convertible into shares of the common stock
of the Company, $0.01 par value per
share (the "COMMON STOCK").
This letter
shall serve as our authorization and direction to you (provided
that you are the transfer agent of the
Company at such time) to issue shares of
Common Stock upon conversion of the Notes
(the "CONVERSION SHARES") to or upon
the order of a Holder from time to time
upon delivery to you of a properly
completed and duly executed Conversion
Notice, in the form attached hereto as
EXHIBIT I, which has been acknowledged by
the Company as indicated by the
signature of a duly authorized officer of
the Company thereon, and the transfer
agent shall have no liability for relying
on such instructions.
You acknowledge
and agree that so long as you have previously received (a)
written confirmation from the Company that
either (i) a registration statement
covering resales of the Conversion Shares
has been declared effective by the
Securities and Exchange Commission (the
"SEC") under the Securities Act of 1933,
as amended (the "1933 ACT"), or (ii) that
sales of the Conversion Shares may be
made in conformity with Rule 144 under the
1933 Act, and (b) if applicable, a
copy of such registration statement, then,
within three (3) business days after
your receipt of a notice of transfer or
Conversion Notice, you shall issue the
certificates representing the Conversion
Shares and such certificates shall not
bear any legend restricting transfer of the
Conversion Shares thereby and should
not be subject to any stop-transfer
restriction; PROVIDED, HOWEVER, that if such
Conversion Shares are not registered for
resale under the 1933 Act or able to be
sold under Rule 144, then the certificates
for such Conversion Shares shall bear
the following legend:
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 MAY NOT BE OFFERED FOR
SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN
EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OF
1933, AS AMENDED, OR (B) A WRITTEN CONFIRMATION FROM THE COMPANY
THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY
THE SECURITIES.
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The Company
hereby confirms that in the event that a stop order suspending
the effectiveness of a registration
statement covering the resale of the
Conversion Shares has been issued by the
SEC or any proceeding for that purpose
is threatened by the SEC, the Company will
notify you promptly, in light of the
circumstances, of such order or notice. In
addition, the Company shall promptly
inform you of any voluntary suspension of
the effectiveness of such registration
statement and confirm the continued
effectiveness of such registration statement
upon inquiry by you.
If for any
reason you desire to resign as transfer agent of the Company,
you shall first provide the Company and the
Holders with sixty (60) days prior
written notice (the "NOTICE PERIOD").
Notwithstanding the aforementioned, you
may resign as transfer agent to the Company
and will be under no obligation to
continue to provide any issuance or
transfer agent services as contemplated
