AGREEMENT to Tender 1,000,000
Class A Common Stock Purchase Warrants
in
Brown Disc Products Company, Inc.
In exchange for
50,000 shares of Common Stock, no par value
and
the exclusive use of "Channel Soft"(tm) a TRADE MARK name developed by and for
Brown Disc Products Company
TO: Brown Disc Products Company, Inc. March 17, 1997
0000 Xxxxx Xxxxxx Xxxx,
Xxxxx Xxx,
Xxxxxxxxxx 00000
Dear Sirs:
I, Xxxxxx X. Xxxx Xx, a resident of Southern California, with home
address 000 Xxxx Xxxx Xxx, # 00 Xxxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxxxx 00000
Being the record holder of 1,000,000 Class A common stock purchase warrants
issued by BROWN DISC PRODUCTS COMPANY, INC. a Colorado corporation (THE
"COMPANY"), evidenced by Warrant Certificate number ......... (THE "WARRANTS")
hereby tenders and offers all such Warrants to the Company in full payment and
consideration for the issuance of FIFTY THOUSAND (50,000) shares of the
Company's common stock, no par value and exclusive use of "Channel Soft"(trade
mark). In consideration for exclusive use of the "Channel Soft"(trade mark),
Xxxxxx X. Xxxx Xx. or any subsequent owner of the "Channel Soft"(trade mark)
will pay Brown Disc Products Company a royalty payment equal to one percent
(1%) of annual revenue, such royalty payment will be paid to Brown Disc
Products Company annually on the first day of March.
Brown Disc Products Co. Inc. further agrees to assign xxxxxxxxxxx.xxx
Internet URL (address) and transfer (register) Xxxxxx X. Xxxx Xx. as the sole
owner of xxxxxxxxxxx.xxx @ the Internet. Xxxxx Disc further agrees to assign
all software developed for Channelsoft to Xxxxxx X. Xxxx Xx.
The parties understand that the exercise price for the Warrants is $0.25
per share, and that the closing price for the Company's common stock in the
over-the-counter market on the date of this Agreement, 17th March 1997, was
$0.59. Based upon such closing price, the difference between the market value
at $0.59 Per share of 1,000,000 shares less the warrant exercise price of
$250,000, warrants to be exercised, would be $340,000. In comparison, the
market value at $0.59 Per share of 50,000 of the company's common stock would
be $29,500. Xxxxxx X. Xxxx Xx. has agreed to discount the value of the
underlying shares as a result of the size of the block and restrictions as to
resale under applicable securities laws. Should the fair value of the
Warrants surrendered exceed the fair value of 50,000 shares of Common Stock
issued in exchange therefore upon acceptance the Company of this Agreement,
Xxxxxx X. Xxxx Xx. agrees that any such excess shall be deemed a contribution
to the capital of the Company.
Offer to Tender Warrants in Exchange for Common Stock Page 1 of 2
The parties further agree to give Xx. Xxxxxx X Xxxx Xx. the Exclusive use of
"Channel Soft"(trade mark) it is understood by the parties that presently the
name "Channel Soft"(trade mark) does not produce any revenues and indeed may
never produce any revenues, however Xx. Xxxx believes that there is the
potential to do so, and so in the event of this occurrence he has agreed to
pay Brown Disc Products Company a royalty of one percent (1%) of any gross
proceeds derived from exclusive use of "Channel Soft"(trade mark), or any of
its future subsidiaries. Should the due royalty payments not be paid within
three (3) calendar months of the stated date above the ownership of the
"Channel Soft"(trade mark) shall revert back to Brown Disc Products Company,
Inc.
In order to verify the amount of royalty to be paid to Brown Disc Products
Company, Inc. by the user of "Channel Soft"(trade mark) Brown Disc Products
Company, Inc must be supplied with the yearly profit and loss statement of the
user company, on the first (1st) day of March whether or not a royalty payment
is due.
Upon acceptance of this Agreement, you are directed and instructed to issue,
register and deliver the 50,000 shares of Common Stock as follows:
XXXXXX X. XXXX XX.
000 Xxxx Xxxx Xxx
#00 Xxxxxxx Xxxxx
Xxxxxx Xxxxxx XX 00000
This offer shall be deemed to have been made and executed, and all
performance shall be deemed to take place, upon its acceptance within the
State of Colorado.
The offer contained in this Agreement will expire unless accepted in
accordance with its terms by the Company on or before the close of business
Friday March 21, 1997. Upon acceptance, a copy of this Agreement and the
original certificate with the number ........... evidencing the Warrants shall
be promptly transmitted to the Company's counsel for preparation of
appropriate instructions for issuance of the shares and for cancellation of
the Warrants.
Very truly yours,
Xxxxxx X. Xxxx Xx.
By: /s/ Xxxxxx X. Xxxx, Xx.
------------------------
Xxxxxx X. Xxxx, Xx.
SIGNED AND APPROVED
3/19 , 1997
---------
Brown Disc Products Company, Inc.
By: /s/ Xxxxx X. Xxxxx, President
-----------------------------
Xxxxx Xxxxx, President
Colorado Springs, Colorado
Offer to Tender Warrants in Exchange for Common Stock Page 2 of 2
