**EXHIBIT10.37**

 

[Jackson Hole Letterhead]

 

December 18, 2003

 

AXCESS Inc.

3208 Commander Drive

Dallas, Texas 75006

 

Re:                                     SeriesJ Preferred Stock

 

Ladies and Gentlemen:

 

Jackson Hole, hereby notifies and directs AxcessInternational Inc. (the “*Company*”) to convert Series J PreferredStock held by Jackson Hole at December 15, 2003 into Voting Common Shares ofthe Company.

 

1.             Issuanceof Common Shares.  Jackson Holedirects the Company to issue 68,208 shares of Common Stock in exchange for allshares of Series J Preferred Stock and all accrued dividends held by JacksonHole at December 15, 2003.

 

2.             SecuritiesAct Legend; Registration Rights.

 

2.1           TheShares will not be registered under the Securities Act of 1933, as amended (the“*SecuritiesAct*”).  Certificatesrepresenting the Shares shall bear a restrictive legend substantially to theeffect of the following:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEENREGISTERED UNDER THE SECURITIES ACT OF 1933, OR APPLICABLE STATE SECURITIESLAWS, OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION.  THEY MAY NOT BE SOLD OR TRANSFERRED IN THEABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THOSE SECURITIES LAWS ORPURSUANT TO AN EXEMPTION THEREFROM.

 

3.             Representations and Warrantiesof Jackson Hole.  Jackson Hole herebyrepresents and warrants to the Company as follows:

 

3.1           Jackson Hole is acquiring the Sharesfor its own account, for investment and not with a view to the distributionthereof within the meaning of the Securities Act.

 

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3.2           Jackson Hole understands that theShares have not been registered under the Securities Act, by reason of theirissuance by the Company in transactions exempt from the registrationrequirements of the Securities Act, and that Jackson Hole must hold the Sharesindefinitely unless a subsequent disposition thereof is registered under theSecurities Act or is exempt from such registration.

 

3.3           Jackson Hole further understands thatthe exemption from registration afforded by Rule 144 (the provisions of whichare known to it) promulgated under the Securities Act depends on thesatisfaction of various conditions, and that, if applicable, Rule 144 mayafford the basis for sales only in limited amounts, after compliance with theholding periods and other provisions thereof.

 

3.4           Jackson Hole understands that itsinvestment hereunder involves substantial risks and represents and warrantsthat it has made such independent examinations and investigations of theCompany as it has deemed necessary in making its investment decision, andJackson Hole further represents and warrants that it has had sufficient accessto the officers, directors, books and records of the Company as it has deemednecessary to conduct such examination and investigation and make suchinvestment decision.

 

3.5           Jackson Hole is able to bear theeconomic risk of the investment contemplated by this agreement and has suchknowledge and experience in financial and business matters that it is capableof evaluating the merits and risks of the investment contemplated by thisagreement.

 
|   | Very truly yours, |
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|   |              |
|   | JACKSON HOLE      |
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|   | By:               |   |   |
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|   |              |
|   | Title:            |   |   |
|        |                   |  |  |  |  |

 

 

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