EXHIBIT 10.4
PRIVATE PLACEMENT PURCHASE AGREEMENT
AGREEMENT dated February 24, 1998 by and among USCI, INC., a Delaware
corporation having an office at 0000-X Xxxxx Xxxxxx Xxxx., Xxxxxxxx, XX
00000 (the "Company"), XXXXXX XXXXXXXXX, having an office at 0000 00 Xxxxxx,
Xxxxxxxx, Xxx Xxxx 00000 ("Xxxxxx"), XXXXXXX XXXXXXXXX, having an office at
0000 00 Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (Xxxxxxx), HUBERFELD XXXXXX FAMILY
FOUNDATION, INC., having an office at 000 X. 00 Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Foundation"), XXXXX XXXXXXXXX/XXXXX XXXXXX PARTNERSHIP, having an
office at 000 X. 00 Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Partnership"), and
ACE FOUNDATION, INC., having an office at 0000 00 Xxxxxx, Xxxxxxxx Xxx Xxxx
00000 ("Ace").
For good and valuable consideration the parties hereto hereby agree as
follows:
1. Purchase and Transfer of Securities.
(a) The Company hereby sells to each of Ace and Xxxxxx, and each of
Ace and Xxxxxx hereby purchases from the Company, a note in the form of
Exhibit A (the "New Notes") and in the principal amount of $750,000. The
New Notes provide for terms upon which the holders thereof may convert
the New Notes into shares of common stock of the Company ("common
stock"). The purchase price for the New Notes is the principal amount
thereof. Such purchase price is being paid to the Company in cash
concurrently herewith, except that Xxxxxx shall credit against the
purchase price payable by him all interest accrued to date under his
Prior Note referred to below.
(b) Xxxxxx and Xxxxxxx each own a promissory note of the Company dated
November 18, 1997 and in the principal amount of $2,000,000 (the "Prior
Notes"). The Prior Notes, as amended by a letter agreement dated January
30, 1998, provide among other things for the issuance of warrants (the
"Primary Warrants") which when exercised entitle the holder to acquire
shares of common stock of the Company and additional warrants
("Secondary Warrants"). The Primary Warrants and the Secondary Warrants
are collectively referred to as the "Warrants."
(c) The Company is concurrently herewith paying to Xxxxxx and Xxxxxxx
all interest accrued to date under the Prior Notes. Such payment to
Xxxxxx is being made in part by the credit referred to in Section (a).
(d) The Prior Notes are hereby amended and restated to read as set
forth in Exhibit B. The Prior Notes as amended and restated are referred
to herein as the "Restated Notes." Each Restated Note shall be in the
same principal amount as the Prior Note which was replaced by such
Restated Note. The Warrants are hereby restated to read as set forth in
the exhibits to the Restated Notes. All warrants heretofore issued under
the Prior Notes are rescinded as if such warrants were never issued. The
Restated Notes provide for terms upon which the holders thereof may
convert the Restated Notes into shares of common stock.
(e) Xxxxxx and Xxxxxxx each hereby sells $1 million principal amount
of the Restated Notes to the Partnership and the Foundation (allocated
$1,250,000 to the Partnership and $750,000 to the Foundation). Xxxxxx
and Xxxxxxx represent they own and are transferring the transferred
Restated Notes free and clear of all liens and claims. The purchase
price of for each Restated Note is the principal amount thereof, and is
concurrently herewith payable in cash by the respective buyers to the
respective sellers.
(f) The New Notes and the Restated Notes are collectively referred to
as the "Notes." The shares of common stock issuable on conversion of the
Notes and on exercise of the Warrants are referred to collectively
herein as the "Shares." The Notes, the Warrants and the Shares are
referred to collectively as the "Securities." The term "Subscriber"
means each of George, Michael, the Foundation, Ace and the Partnership.
2. Opinion of Counsel. Concurrently herewith, counsel to the Company
has rendered to Subscribers a favorable opinion (i) on the
validity and binding nature of this Agreement and the Securities,
(ii) that the execution and performance by the Company of its
obligations under this Agreement and the Securities shall not
conflict with any judgment or agreement applicable to the Company
or its properties, and (iii) that shares of common stock are duly
reserved for issuance on conversion of the Notes and on exercise
of the Warrants.
3. Registration.
(a) The Company will on or before April 30, 1998 file a registration
statement on Form S-3 (the "Registration Statement") for the public sale
by Subscribers of the Shares. The shares to be covered by the
Registration Statement are collectively referred to as the "registered
shares." The Company represents that it is eligible, and will at all
times through September 30, 1998, remain eligible to file registration
statements on Form S-3 for sales of shares by Company shareholders.
(b) The Company shall use its diligent efforts to cause the
Registration Statement to become effective not later than 60 days after
the date of filing, and to remain effective for four years. If required
under law, the registration shall be accompanied by blue sky clearances
in such five states as Subscribers may reasonably request.
(c) The Company shall pay all expenses of the registration hereunder,
other than Subscribers' underwriting discounts and counsel or other fees
incurred on a voluntary basis
(d) The Company shall supply to Subscribers a reasonable number of
copies of all registration materials and prospectuses. The Company and
Subscribers shall execute and deliver to each other indemnity agreements
which are conventional in registered offerings of this type. The
Subscribers shall reasonably cooperate with the Company in the
preparation and filing of the Registration Statement and appropriate
amendments thereto.
(e) Each Subscriber may transfer all or any proportionate part of its
registration rights to transferees of the Securities, provided that such
transferee (i) is an accredited investors, (ii) makes the
representations and warranties made by Subscribers in Section 4, and
(iii) agrees to be bound by this Agreement as a "Subscriber."
(f) Once the registration statement is effective, the Company will
issue UNLEGENDED shares of common stock (in form which can be
transmitted by DWAC if desired by the respective Subscribers) on
conversion of the Notes and exercise of the Warrants, whether or not
such shares are sold simultaneously with such conversion or exercise.
(g) Should any Subscriber from time to time or times give to the
Company notice that it has assigned the Warrants or any portion thereof
to a transferee and that the conditions in the proviso in Section 3(e)
have been satisfied by such transferee, the Company shall within three
business days file a supplement to the registration statement to reflect
the name(s) of the transferee(s) as a selling shareholder.
4. Securities Representations.
(a) Each Subscriber represents and warrants for itself that it is
purchasing and has purchased the Securities solely for investment solely
for its own account and not with a view to or for the resale or
distribution thereof except as permitted under the Registration
Statement.
(b) Each Subscriber understands that it may sell or otherwise transfer
the Securities or the shares issuable on conversion of the Notes or
exercise of the Warrants only if such transaction is duly registered
under the Securities Act of 1933, as amended, under the Registration
Statement or otherwise, or if the Company shall have received the
favorable opinion of counsel to the Subscriber, which opinion shall be
reasonably satisfactory to counsel to the Company, to the effect that
such sale or other transfer may be made in the absence of registration
under the Securities Act of 1933, as amended, and registration or
qualification in every applicable state. The certificates representing
the aforesaid securities will be legended to reflect these restrictions,
and stop transfer instructions will apply.
(c) Each Subscriber represents for itself that it realizes that the
Securities are not a liquid investment, that it is able to bear the
economic risk of losing its entire investment in the Securities, that an
investment in the Company involves substantial risks, that it has
invested in previous transactions involving restricted securities, that
it has received all information it considers necessary or appropriate
for the purpose of deciding whether to purchase the Securities, and that
it has had an opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the investment in the
Securities and the business, properties, prospects and financial
condition of the Company.
(d) No Subscriber has relied upon the advice of a "Purchaser
Representative" (as defined in Regulation D of the Securities Act) in
evaluating the risks and merits of this investment. Each Subscriber
represents for itself that it has the knowledge and experience to
evaluate the Company and the risks and merits relating thereto.
(e) Each Subscriber represents and warrants for itself that it is an
"accredited investor" as such term is defined in Rule 501 of Regulation
D promulgated pursuant to the Securities Act of 1933, as amended, and
shall be such on the date any Securities are issued to it; that it has
the power and authority to enter into this agreement, and that the
execution and delivery of, and performance under this Agreement shall
not conflict with any rule, regulation, judgment or agreement applicable
to the Subscriber.
(f) Each of the Foundation and Partnership represents and warrants
that it has not been organized, reorganized or recapitalized
specifically for the purposes of investing in the Securities.
5. Legal Fees. On closing of this offering, the Company will pay to
Xxxxx X. Xxxxxx, counsel to certain of the Purchasers, a fee equal
to $15,000, plus disbursements, plus the amount, if any, by which
such Counsel's hourly time charges shall exceed $5,000.
6. Miscellaneous.
This Agreement may not be changed or terminated except by written
agreement. It shall be binding on the parties and on their personal
representatives and permitted assigns. It sets forth all agreements of
the parties. It shall be enforceable by decrees of specific performance
(without posting bond or other security) as well as by other available
remedies. This Agreement shall be governed by, and construed in
accordance with, the laws of Delaware. The federal and state courts
sitting in the City of New York shall have exclusive jurisdiction over
all matters relating to this Agreement. Trial by jury is expressly
waived. The Company shall reimburse Subscriber for Subscriber's
reasonable legal fees and costs to enforce its right under this
Agreement.
All notices, requests, service of process, consents, and other
communications under this Agreement shall be in writing and shall be
deemed to have been delivered (i) on the date personally delivered or
(ii) one day after properly sent by Federal Express, addressed to the
respective parties at their address set forth in this Agreement or (iii)
on the day transmitted by facsimile so long as a confirmation copy is
simultaneously forwarded by Federal Express, in each case addressed to
the respective parties at their address set forth in this Agreement.
Either party hereto may designate a different address by providing
written notice of such new address to the other party hereto as provided
above. Service of process may be effected in the manner provided for
notices hereunder, and such service in such manner shall be deemed the
equivalent of personal service.
This Agreement and the Securities may be signed in counterparts, each of
which shall be considered an original. This Agreement may be signed by
facsimile.
Dated: ________________________
USCI, Inc.
By ___________________________
_______________________________
Xxxxxx Xxxxxxxxx
______________________________
Xxxxxxx Xxxxxxxxx
HUBERFELD XXXXXX FAMILY FOUNDATION, INC.
By ______________________
XXXXX XXXXXXXXX/XXXXX XXXXXX PARTNERSHIP
By ___________________________________
ACE FOUNDATION, INC.
By __________________________________
Exhibit A [New Notes]
THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED, DISPOSED OF OR OFFERED FOR SALE, IN
WHOLE OR IN PART, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THAT ACT COVERING THIS NOTE AND/OR THE COMMON STOCK ISSUABLE UPON CONVERSION
THEREOF, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO USCI, INC., THAT
AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
Principal Sum: $750,000
Holder: __________________
CONVERTIBLE NOTE
(the "Note")
USCI, INC.
USCI, INC., a Delaware corporation (hereinafter called the "Corporation"),
hereby promises to pay the Principal Sum to the order of Holder on or before
August 1, 1998. This Note shall accrue interest until maturity at the rate of
10% per annum, payable at maturity. The Note shall accrue interest after
maturity, payable on demand, at the rate of 15% per annum. Interest shall be
computed on the basis of a 360-day year. All payments and prepayments
hereunder shall be applied first to accrued interest and then to principal.
1. This Note is one of the "New Notes" being issued under a Private
Placement Purchase Agreement between the Company and the Holder (the
"Purchase Agreement"). The term "Registration Statement" shall have the
meaning attributed thereto in the Purchase Agreement, and the term
"Effective Date" means the date on which the Registration Statement shall
be declared to be effective.
2. Conversion Rights.
(a) In the event that the principal and all accrued interest on this
Note have not been paid in full by the close of business on August
1, 1998, then until such principal and all accrued interest are
thereafter paid in full, the principal and accrued interest on
this Note shall be convertible by Subscriber from time to time, in
whole or in part, into shares of common stock of the Company
("Common Stock") at the lesser (the "Conversion Price") of $5 per
share (the "Cap") or 80% of the average closing sales price of
the Common Stock during the last five trading days prior to
conversion. If on any such date there are no sales prices, the
closing bid price for such date shall be used instead. Holder's
conversion rights are in addition to, and not in limitation of,
Holder's other rights and remedies to enforce its rights under
this Note. After maturity, the Company shall give to the Holder
not less than 30 days' and not more than 45 days' prior written
notice before the Company may repay this Note without Holder's
prior written consent or demand. In addition, without Holder's
prior written consent, the Company may not repay this Note after
maturity prior to the Effective Date.
(b) In the event that the Holder elects to exercise its conversion
rights hereunder, such conversion shall be effective when Holder
shall give to the Company written notice of such election (which
may be effected by facsimile). The Company shall, within two
business days after receipt by the Company of notice of conversion
and the Note being converted, DWAC to Holder (or, at Holder's
option, deliver to Holder certificates for) the shares of Common
Stock issuable on such conversion.
(c) Certain Increases in Interest Rate.
(i) If the Effective Date has not occurred by June 30, 1998,
then, in addition to the Holder's other remedies the
interest rate under the Note shall be increased to 18% per
annum (or, if less, the highest rate permitted by law)
until the Effective Date.
(ii) If the Effective Date has not occurred by September 30,
1998, then, in addition to the Holder's other remedies, the
interest rate under the Note shall be further increased to
24% per annum (or, if less, the highest rate permitted by
law) until the Effective Date.
(d) The Company shall at all times reserve sufficient shares for
issuance on conversion and exercise of this Note and the Warrants
(as defined in the Purchase Agreement). The Company shall use its
best efforts promptly to list on NASDAQ all shares of Common Stock
which are issued upon conversion of this Note.
(e) The Note shall be convertible at any time only to the extent that
Holder would not as a result of such conversion (and after taking
into account any and all other Common Stock then beneficially
owned by Holder, whether pursuant to the Warrants or otherwise)
beneficially own more than 4.99% of the then outstanding Common
Stock. Beneficial ownership shall be defined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934. The opinion
of counsel to Holder shall prevail in the event of any dispute on
the calculation of Holder's beneficial ownership.
(f) If any capital reorganization or reclassification of the common
stock, or consolidation, or merger of the Company with or into
another corporation, or the sale or conveyance of all or
substantially all of its assets to another corporation shall be
effected, then, as a condition precedent of such reorganization or
sale, the Cap shall be appropriately adjusted and the following
additional provision shall be made: The Holder of the Note shall
from and after the date of such reorganization or sale have the
right to receive (in lieu of the shares of common stock of the
Company immediately theretofore receivable with respect to the
Note, upon the exercise of conversion rights), such shares of
stock, securities or assets as would have been issued or payable
with respect to or in exchange for the number of outstanding
shares of such common stock immediately theretofore receivable
with respect to the Note (assuming the Note were then
convertible). In any such case, appropriate provision shall be
made with respect to the rights and interests of the Holder to the
end that such conversion rights (including, without limitation,
provisions for appropriate adjustments) shall thereafter be
applicable, as nearly as may be practicable in relation to any
shares of stock, securities or assets thereafter deliverable upon
the exercise thereof.
(g) The Company shall take whatever action is required by NASDAQ
("NASDAQ Action") to approve the issuance of shares on conversion
of the Notes and exercise of the Warrants issued to the
Subscribers (as defined in the Purchase Agreement). The Company
represents and warrants, and Holder acknowledges, that without
taking any NASDAQ Action, the maximum number of shares which will
be issued on conversion of the Notes and exercise of the Warrants
is 2,000,000, issuable on a first converted-first exercised basis.
Should NASDAQ Action not be completed by May 31, 1998, then until
such NASDAQ Action is completed, the Company shall on demand by
Holder made at any time or times redeem any portion of the Note
which Holder proposes to convert but may not then convert because
NASDAQ Action has not been completed. The redemption price shall
be equal to 125% of the principal and/or interest proposed to be
converted. The redemption price shall be payable within five
business days after demand for redemption is made, and shall
accrue interest payable in demand at 11% per annum.
3. The Company covenants and agrees that all shares of Common Stock which
may be issued upon conversion of this Note will, upon issuance, be duly
and validly issued, fully paid and non-assessable and no personal
liability will attach to the holder thereof.
4. Purchase for Investment. The Holder, by acceptance hereof, acknowledges
that the Note (and the Common Stock into which the Note is convertible)
has not been registered under the Act, covenants and agrees with the
Company that such Holder is taking and holding this Note (and the Common
Stock into which the Note is convertible) for investment purposes and not
with a view to, or for sale in connection with, a distribution thereof and
that this Note (and the Common Stock into which the Note is convertible)
may not be assigned, hypothecated or otherwise disposed of in the absence
of an effective registration statement under the Act or an opinion of
counsel for the Holder, which counsel shall be reasonably satisfactory to
the Company, to the effect that such disposition is in compliance with the
Act, and represents and warrants that such Holder is an "accredited
investor" that such Holder has, or with its representative has, such
knowledge and experience in financial and business matters to be capable
of evaluating the merits and risks in respect of this Note (and the Common
Stock into which the Note is convertible) and is able to bear the economic
risk of such investment.
5. Certain Payments. In the event the Company fails to give irrevocable
instructions to its transfer agent to DWAC or deliver certificates for
securities as required under this Note within two days after conversion ,
or if the Company fails timely to make a redemption payment as required
hereunder, then, without limiting Holder's other rights and remedies
(including, without limitation, rights and remedies available to Holder
upon an event of default), the Company shall forthwith pay to the Holder
an amount accruing at the rate of $500 per day for each day of such breach
for each $100,000 principal amount of this Note, with pro rata payments
for principal amounts of less than $100,000.
6. Events of Default and Acceleration of the Note.
(a) An "event of default" with respect to this Note shall exist if any
of the following shall occur, if:
(i) The Company shall breach or fail to comply with any
provision of this Note and such breach or failure shall
continue for 15 days after written notice by any Holder of
any Note to the Company.
(ii) A receiver, liquidator or trustee of the Company or of a
substantial part of its properties shall be appointed by
court order and such order shall remain in effect for more
than 15 days; or the Company shall be adjudicated bankrupt
or insolvent; or a substantial part of the property of the
Company shall be sequestered by court order and such order
shall remain in effect for more than 15 days; or a petition
to reorganize the Company under any bankruptcy,
reorganization or insolvency law shall be filed against the
Company and shall not be dismissed within 45 days after such
filing.
(iii) The Company shall file a petition in voluntary bankruptcy or
request reorganization under any provision of any
bankruptcy, reorganization or insolvency law, or shall
consent to the filing of any petition against it under any
such law.
(iv) The Company shall make an assignment for the benefit of its
creditors, or admit in writing its inability to pay its
debts generally as they become due, or consent to the
appointment of a receiver, trustee or liquidator of the
Company, or of all or any substantial part of its
properties.
(b) If an event of default shall occur, the Holder may, in addition to
such Holder's other remedies, by written notice to the Company, declare
the principal amount of this Note, together with all interest accrued
thereon, to be due and payable immediately. Upon any such declaration,
such amount shall become immediately due and payable and the Holder
shall have all such rights and remedies provided for under the terms of
this Note and the Purchase Agreement.
7. Miscellaneous.
All notices and other communications required or permitted to be given
hereunder shall be in writing and shall be given (and shall be deemed to
have been duly given upon receipt) by delivery in person, by telegram,
by facsimile, recognized overnight mail carrier, telex or other standard
form of telecommunications, or by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows: (a) if to the
Holder, to such address as such Holder shall furnish to the Company in
accordance with this Section, or (b) if to the Company, to it at its
headquarters office, or to such other address as the Company shall
furnish to the Holder in accordance with this Section.
This Note shall be governed and construed in accordance with the laws of
the State of New York applicable to agreements made and to be
performed entirely within such state. The federal and state courts
sitting in the City of New York shall have exclusive jurisdiction over
all matters relating to this Agreement. Trial by jury is expressly
waived.
Service of process may be effected in the manner provided for notices
hereunder, and such service in such manner shall be deemed the
equivalent of personal service.
The Company waives protest, notice of protest, presentment, dishonor,
notice of dishonor and demand.
If any provision of this Note shall for any reason be held to be invalid
or unenforceable, such invalidity or unenforceability shall not affect
any other provision hereof, but this Note shall be construed as if such
invalid or unenforceable provision had never been contained herein.
The waiver of any event of default or the failure of the Holder to
exercise any right or remedy to which it may be entitled shall not be
deemed a waiver of any subsequent event of default or of the Holder's
right to exercise that or any other right or remedy to which the Holder
is entitled.
The Holder of this Note shall be entitled to recover its reasonable
legal and other costs of collecting on this Note, and such costs shall
be deemed added to the principal amount of this Note.
In addition to all other remedies to which the Holder may be entitled
hereunder, Holder shall also be entitled to decrees of specific
performance without posting bond or other security.
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed on
the date set forth below.
Dated: _____________________
USCI, INC.
By: ___________________________________
Exhibit B [Restated Notes]
THIS NOTE, THE WARRANTS ISSUABLE HEREUNDER AND THE COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS NOTE AND EXERCISE OF THE WARRANTS HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED,
OR OTHERWISE TRANSFERRED, DISPOSED OF OR OFFERED FOR SALE, IN WHOLE OR IN
PART, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THAT ACT
COVERING THIS NOTE AND/OR SUCH COMMON STOCK, OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO USCI, INC., THAT AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
Principal Sum:
Holder: __________________
CONVERTIBLE RESTATED NOTE
(the "Note")
USCI, INC.
USCI, INC., a Delaware corporation (hereinafter called the "Company"), hereby
promises to pay the Principal Sum to the order of Holder on or before August
1, 1998. This Note shall accrue interest until maturity at the rate of 8% per
annum, payable at maturity. The Note shall accrue interest after maturity,
payable on demand, at the rate of 15% per annum. Interest shall be computed
on the basis of a 360-day year. All payments and prepayments hereunder shall
be applied first to accrued interest and then to principal.
1. This Note is one of the "Restated Notes" being issued under a Private
Placement Purchase Agreement between the Company and the Holder (the
"Purchase Agreement") in replacement of the Prior Notes referred to in the
Purchase Agreement. The term "Registration Statement" shall have the
meaning attributed thereto in the Purchase Agreement, and the term
"Effective Date" means the date on which the Registration Statement shall
be declared to be effective.
2. Issuance of Warrants.
(a) For each month (or portion thereof) from and after November 1,
1997 until the principal of this Note and all accrued interest
thereon is paid in full, the Company shall on the written demand
of Holder issue to Holder warrants in the form of Exhibit 1 (the
"Warrants") to purchase a number of shares of common stock of the
Company equal to 100,000 for each $1,000,000 of the initial
principal amount hereof (whether or not any partial prepayments
have been made against such initial principal amount), with
appropriate pro ration for initial principal amounts of less than
$1,000,000. Holder may make one or more demands as aforesaid at
any time or times until the 60th day after the later to occur of
the Effective Date or the payment in full of the principal and
accrued interest of this Note.
(b) For example, if the initial principal amount of this Note is
$1,000,000, then notwithstanding that a $400,000 partial
prepayment is made by the Company on March 1, 1998, the Company
shall on Holder's demand made on or after March 1, 1998 issue to
Holder 500,000 Warrants. By way of further example, if any portion
of this Note thereafter remains outstanding on April 1, 1998, the
Company shall on demand of Holder made on or after such date issue
to Holder 100,000 additional Warrants.
3. Increase in Interest Rate.
(a) If the Effective Date has not occurred by June 30, 1998, then, in
addition to the Holder's other remedies the interest rate under
the Note shall be increased to 18% per annum (or, if less, the
highest rate permitted by law) until the Effective Date.
(b) If the Effective Date has not occurred by September 30, 1998,
then, in addition to the Holder's other remedies, the interest
rate under the Note shall be further increased to 24% per annum
(or, if less, the highest rate permitted by law) until the
Effective Date.
4. Conversion Rights.
(a) In the event that the principal and all accrued interest on this
Note have not been paid in full by the close of business on August
1, 1998, then until such principal and all accrued interest are
thereafter paid in full, the principal and accrued interest on
this Note shall be convertible by Subscriber from time to time, in
whole or in part, into shares of common stock of the Company
("Common Stock") at the lesser (the "Conversion Price") of $5 per
share (the "Cap") or 80% of the average closing sales price of
the Common Stock during the last five trading days prior to
conversion. If on any such date there are no sales prices, the
closing bid price for such date shall be used instead. Holder's
conversion rights are in addition to, and not in limitation of,
Holder's other rights and remedies to enforce its rights under
this Note. After maturity, the Company shall give to the Holder
not less than 30 days' and not more than 45 days' prior written
notice before the Company may repay this Note without Holder's
prior written consent or demand. In addition, without Holder's
prior written consent, the Company may not repay this Note after
maturity prior to the Effective Date.
(b) In the event that the Holder elects to exercise its conversion
rights hereunder, such conversion shall be effective when Holder
shall give to the Company written notice of such election (which
may be effected by facsimile). The Company shall, within two
business days after receipt by the Company of notice of conversion
and the Note being converted, DWAC to Holder (or, at Holder's
option, deliver to Holder certificates for) the shares of Common
Stock issuable on such conversion.
(c) The Note shall be convertible at any time only to the extent that
Holder would not as a result of such conversion (and after taking
into account any and all other Common Stock then beneficially
owned by Holder, whether pursuant to the Warrants or otherwise)
beneficially own more than 4.99% of the then outstanding Common
Stock. Beneficial ownership shall be defined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934. The opinion
of counsel to Holder shall prevail in the event of any dispute on
the calculation of Holder's beneficial ownership.
(d) If any capital reorganization or reclassification of the common
stock, or consolidation, or merger of the Company with or into
another corporation, or the sale or conveyance of all or
substantially all of its assets to another corporation shall be
effected, then, as a condition precedent of such reorganization or
sale, the Cap shall be appropriately adjusted and the following
additional provision shall be made: The Holder of the Note shall
from and after the date of such reorganization or sale have the
right to receive (in lieu of the shares of common stock of the
Company immediately theretofore receivable with respect to the
Note, upon the exercise of conversion rights), such shares of
stock, securities or assets as would have been issued or payable
with respect to or in exchange for the number of outstanding
shares of such common stock immediately theretofore receivable
with respect to the Note (assuming the Note were then
convertible). In any such case, appropriate provision shall be
made with respect to the rights and interests of the Holder to the
end that such conversion rights (including, without limitation,
provisions for appropriate adjustments) shall thereafter be
applicable, as nearly as may be practicable in relation to any
shares of stock, securities or assets thereafter deliverable upon
the exercise thereof.
(e) The Company shall take whatever action is required by NASDAQ
("NASDAQ Action") to approve the issuance of shares on conversion
of the Notes and exercise of the Warrants issued to the
Subscribers (each such term as defined in the Purchase Agreement).
The Company represents and warrants, and Holder acknowledges, that
without taking any NASDAQ Action, the maximum number of shares
which will be issued on conversion of the Notes and exercise of
the Warrants is 2,000,000, issuable on a first converted-first
exercised basis. Should NASDAQ Action not be completed by May 31,
1998, then until such NASDAQ Action is completed, the Company
shall on demand by Holder made at any time or times redeem any
portion of the Note which Holder proposes to convert but may not
then convert because NASDAQ Action has not been completed. The
redemption price shall be equal to 125% of the principal and/or
interest proposed to be converted. The redemption price shall be
payable within five business days after demand for redemption is
made, and shall accrue interest payable in demand at 11% per
annum.
5. The Company covenants and agrees that all shares of Common Stock which
may be issued upon conversion of this Note will, upon issuance, be duly
and validly issued, fully paid and non-assessable and no personal liability
will attach to the holder thereof. The Company shall at all times reserve
sufficient shares for issuance on conversion and exercise of the Notes and
the Warrants (as defined in the Purchase Agreement). The Company shall use
its best efforts promptly to list on NASDAQ all shares of Common Stock
which are issued upon conversion of this Note.
6. Purchase for Investment. The Holder, by acceptance hereof, acknowledges
that the Note, the Warrants (and the Common Stock into which the Note is
convertible and into which the Warrants are exercisable) have not been
registered under the Act, covenants and agrees with the Company that such
Holder is taking and holding such securities for investment purposes and
not with a view to, or for sale in connection with, a distribution thereof
and that such securities may not be assigned, hypothecated or otherwise
disposed of in the absence of an effective registration statement under the
Act or an opinion of counsel for the Holder, which counsel shall be
reasonably satisfactory to the Company, to the effect that such disposition
is in compliance with the Act, and represents and warrants that such Holder
is an "accredited investor" that such Holder has, or with its
representative has, such knowledge and experience in financial and business
matters to be capable of evaluating the merits and risks in respect of such
securities and is able to bear the economic risk of such investment.
7. Certain Payments. In the event the Company fails to give irrevocable
instructions to its transfer agent to DWAC or deliver certificates for
securities as required under this Note within two days after conversion ,
or if the Company fails timely to make a redemption payment as required
hereunder, then, without limiting Holder's other rights and remedies
(including, without limitation, rights and remedies available to Holder
upon an event of default), the Company shall forthwith pay to the Holder an
amount accruing at the rate of $500 per day for each day of such breach for
each $100,000 principal amount of this Note, with pro rata payments for
principal amounts of less than $100,000.
8. Events of Default and Acceleration of the Note.
(a) An "event of default" with respect to this Note shall exist if any
of the following shall occur, if:
(i) The Company shall breach or fail to comply with any
provision of this Note and such breach or failure shall
continue for 15 days after written notice by any Holder of
any Note to the Company.
(ii) A receiver, liquidator or trustee of the Company or of a
substantial part of its properties shall be appointed by
court order and such order shall remain in effect for more
than 15 days; or the Company shall be adjudicated bankrupt
or insolvent; or a substantial part of the property of the
Company shall be sequestered by court order and such order
shall remain in effect for more than 15 days; or a petition
to reorganize the Company under any bankruptcy,
reorganization or insolvency law shall be filed against the
Company and shall not be dismissed within 45 days after such
filing.
(iii) The Company shall file a petition in voluntary bankruptcy or
request reorganization under any provision of any
bankruptcy, reorganization or insolvency law, or shall
consent to the filing of any petition against it under any
such law.
(iv) The Company shall make an assignment for the benefit of its
creditors, or admit in writing its inability to pay its
debts generally as they become due, or consent to the
appointment of a receiver, trustee or liquidator of the
Company, or of all or any substantial part of its
properties.
(b) If an event of default shall occur, the Holder may, in addition to
such Holder's other remedies, by written notice to the Company,
declare the principal amount of this Note, together with all
interest accrued thereon, to be due and payable immediately. Upon
any such declaration, such amount shall become immediately due and
payable and the Holder shall have all such rights and remedies
provided for under the terms of this Note and the Purchase
Agreement.
Miscellaneous. All notices, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person,
by telegram, by facsimile, recognized overnight mail carrier, telex or other
standard form of telecommunications, or by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows: (a) if to the
Holder, to such address as such Holder shall furnish to the Company in
accordance with this Section, or (b) if to the Company, to it at its
headquarters office, or to such other address as the Company shall furnish to
the Holder in accordance with this Section. This Note shall be governed and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such state. The federal
and state courts sitting in the City of New York shall have exclusive
jurisdiction over all matters relating to this Agreement. Trial by jury is
expressly waived.
Service of process may be effected in the manner provided for notices
hereunder, and such service in such manner shall be deemed the equivalent of
personal service.
The Company waives protest, notice of protest, presentment, dishonor, notice
of dishonor and demand. If any provision of this Note shall for any reason be
held to be invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provision hereof, but this Note shall be construed as if
such invalid or unenforceable provision had never been contained herein.
The waiver of any event of default or the failure of the Holder to exercise
any right or remedy to which it may be entitled shall not be deemed a waiver
of any subsequent event of default or of the Holder's right to exercise that
or any other right or remedy to which the Holder is entitled.
The Holder of this Note shall be entitled to recover its reasonable legal and
other costs of collecting on this Note, and such costs shall be deemed added
to the principal amount of this Note.
In addition to all other remedies to which the Holder may be entitled
hereunder, Holder shall also be entitled to decrees of specific performance
without posting bond or other security.
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed on
the date set forth below.
Dated: _____________________
USCI, INC.
By: ___________________________________
Exhibit 1
Neither this Warrant nor the shares of Common Stock issuable on exercise of
this Warrant have been registered under the Securities Act of 1933. None of
such securities may be transferred in the absence of registration under such
Act or an opinion of counsel to the effect that such registration is not
required.
USCI, INC.
WARRANT [PRIMARY]
DATED:
Number of Shares:
Holder:
Address:
_______________________________
1. THIS CERTIFIES THAT the Holder is entitled to purchase from USCI, INC.,
a Delaware corporation (hereinafter called the "Company"), the number of
shares of the Company's common stock ("Common Stock") set forth above,
at an exercise price equal to $5.00 per share. This Warrant may be
exercised in whole or in part at any time prior to expiration.
2. All rights granted under this Warrant shall expire on the fifth
anniversary of the date of issuance of this Warrant.
3. Upon each exercise of this Warrant (the "Primary Warrant") as to any
number shares, the Company shall also within two days after such exercise
issue to Holder a Warrant in the form of the Secondary Warrant attached
as an exhibit hereto (a "Secondary Warrant") to purchase the same number
of shares.
4. Notwithstanding anything to the contrary contained herein, Holder shall
have the right at any time to exercise this Warrant only so long as and
to the extent that, after taking into account any shares of Common Stock
otherwise beneficially owned by Holder (whether under any convertible
notes owned by Holder or otherwise) , such exercise would not cause the
Holder then to be the "beneficial owner" of more than 4.99% of the
Company's then outstanding Common Stock. For purposes hereof, the term
"beneficial owner" shall have the meaning ascribed to it in Section 13(d)
of the Securities Exchange Act of 1934. The opinion of legal counsel to
Holder, in form and substance satisfactory to the Company and the
Company's counsel, shall prevail in all matters relating to the amount of
Holder's beneficial ownership.
5. This Warrant and the Common Stock issuable on exercise of this Warrant
(the "Underlying Shares") may be transferred, sold, assigned or
hypothecated, only if registered by the Company under the Securities Act
of 1933 (the "Act") or if the Company has received from counsel to the
Company a written opinion to the effect that registration of the Warrant
or the Underlying Shares is not necessary in connection with such
transfer, sale, assignment or hypothecation. The Warrant and the
Underlying Shares shall be appropriately legended to reflect this
restriction and stop transfer instructions shall apply. The Holder shall
through its counsel provide such information as is reasonably necessary
in connection with such opinion.
6. The holder of this warrant is entitled to certain registration rights
under an Agreement dated of even date herewith (the "Purchase
Agreement"). Upon each permitted transfer of this Warrant after the
registration statement has been declared effective, the Company will
within two business days after receipt of notice thereof supplement the
registration statement to reflect the name of the transferee as a selling
shareholder thereunder.
7. The Company shall take whatever action is required by NASDAQ ("NASDAQ
Action") to approve the issuance of shares on conversion and exercise of
the Notes and the Warrants (as defined in the Purchase Agreement). The
Company represents and warrants, and Holder acknowledges, that without
taking any NASDAQ Action, the maximum number of shares which will be
issued on conversion of the Notes and exercise of the Warrants is
2,000,000, issuable on a first converted-first exercised basis. Should
NASDAQ Action not be completed by May 31, 1998, then until such NASDAQ
Action is completed, the Company shall on demand by Holder made at any
time or times redeem any portion of the Warrant designated for redemption
(the "Redeemed Portion") at a redemption price equal to the pre-tax
profit Holder would have earned had Holder, at the close of business on
the date of its demand for redemption, exercised the Redeemed Portion and
simultaneously sold the shares received on such exercise at the closing
NASDAQ sales price on such date. The redemption price shall be payable
within five business days after demand for redemption is made, and shall
accrue interest payable on demand at 11% per annum.
8. Any permitted assignment of this Warrant shall be effected by the Holder
by (i) executing a standard form of assignment, (ii) surrendering the
Warrant for cancellation at the office of the Company, accompanied by the
opinion of counsel to the Company referred to above; and (iii) unless in
connection with an effective registration statement which covers the sale
of this Warrant and or the shares underlying the Warrant, delivery to the
Company of a statement by the transferee (in a form acceptable to the
Company and its counsel) that such Warrant is being acquired by the
Holder for investment and not with a view to its distribution or resale;
whereupon the Company shall issue, in the name or names specified by the
Holder (including the Holder) new Warrants representing in the aggregate
rights to purchase the same number of Shares as are purchasable under the
Warrant surrendered. Such Warrants shall be exercisable immediately upon
any such assignment of the number of Warrants assigned. The transferor
will pay all relevant transfer taxes. Replacement warrants shall bear the
same legend as is borne by this Warrant.
9. The term "Holder" should be deemed to include any permitted record
transferee of this Warrant.
10. The Company covenants and agrees that all shares of Common Stock and all
Secondary Warrants which may be issued upon exercise hereof will, upon
issuance, be duly and validly issued, fully paid and non-assessable and
no personal liability will attach to the holder thereof. The Company
further covenants and agrees that, during the periods within which this
Warrant may be exercised, the Company will at all times have authorized
and reserved a sufficient number of shares of Common Stock for issuance
upon exercise of this Warrant and all other Warrants.
11. This Warrant shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company.
12. In the event that as a result of reorganization, merger, consolidation,
liquidation, recapitalization, stock split, combination of shares or
stock dividends payable with respect to such Common Stock, the
outstanding shares of Common Stock of the Company are at any time
increased or decreased or changed into or exchanged for a different
number or kind of share or other security of the Company or of another
corporation, then appropriate adjustments in the number and kind of such
securities then subject to this Warrant and in the exercise price
hereunder shall be made effective as of the date of such occurrence so
that the position of the Holder upon exercise will be the same as it
would have been had it owned immediately prior to the occurrence of such
events the Common Stock subject to this Warrant. Such adjustment shall
be made successively whenever any event listed above shall occur and the
Company will notify the Holder of the Warrant of each such adjustment.
Any fraction of a share resulting from any adjustment shall be eliminated
and the price per share of the remaining shares subject to this Warrant
adjusted accordingly.
13. The rights represented by this Warrant may be exercised at any time
within the period above specified by (i) surrender of this Warrant (with
a standard purchase form properly executed) at the principal executive
office of the Company (or such other office or agency of the Company as
it may designate by notice in writing to the Holder at the address of the
Holder appearing on the books of the Company); (ii) payment to the
Company of the exercise price for the number of Shares specified in the
above-mentioned purchase form together with applicable stock transfer
taxes, if any; and (iii) unless in connection with an effective
registration statement which covers the sale of the shares underlying the
Warrant, the delivery to the Company of a statement by the Holder (in a
form acceptable to the Company and its counsel) that such Shares are
being acquired by the Holder for investment and not with a view to their
distribution or resale.
14. Within two business days following each receipt by the Company of the
documents required to exercise all any part of this Warrant as provided
herein, the Company shall DWAC or deliver certificates of the shares of
common stock so purchased as directed by Holder, and shall also deliver
to Holder a warrant certificate for the Secondary Warrants issuable as a
result of such exercise. Such certificates shall bear appropriate
restrictive legends in accordance with applicable securities laws, but
shall be unrestricted and bear no legends once the registration statement
referred to above has been declared effective.
15. In the event the Company breaches its obligation to DWAC or to deliver
certificates for shares of common stock or Secondary Warrants as required
hereunder, or timely to make any payment required under this Warrant,
then, without limiting Holder's other rights and remedies, the Company
shall forthwith pay to the Holder an amount accruing at the rate of
$1,000 per day for each day of such breach for each 20,000 shares of
common stock subject to this Warrant, with pro rata payments for shares
in an amount less than 20,000.
16. This Warrant shall be governed by and construed in accordance with the
laws of the State of New York. The federal and state courts in the city
of New York shall have exclusive jurisdiction over this instrument and
the enforcement thereof. Service of process shall be effective if by
certified mail, return receipt requested. All notices shall be in
writing and shall be deemed given upon receipt by the party to whom
addressed. This instrument shall be enforceable by decrees of specific
performances well as other remedies. The Holder shall be entitled to
recover its reasonable legal fees and costs in enforcing its rights
hereunder.
IN WITNESS WHEREOF, USCI, INC. has caused this Warrant to be signed by
its duly authorized officers under Its corporate seal, and to be dated as of
the date set forth above.
USCI, INC.
By__________________________
Exhibit to Primary Warrant
Neither this Warrant nor the shares of Common Stock issuable on exercise of
this Warrant have been registered under the Securities Act of 1933. None of
such securities may be transferred in the absence of registration under such
Act or an opinion of counsel to the effect that such registration is not
required.
USCI, INC.
WARRANT [SECONDARY]
DATED:
Number of Shares:
Holder:
Address:
_______________________________
1. THIS CERTIFIES THAT the Holder is entitled to purchase from USCI, INC.,
a Delaware corporation (hereinafter called the "Company"), the number of
shares of the Company's common stock ("Common Stock") set forth above, at an
exercise price equal to $5.00 per share. This Warrant may be exercised in
whole or in part at any time prior to expiration.
2. All rights granted under this Warrant shall expire on the fifth
anniversary of the date of issuance of this Warrant.
3. [omitted]
4. Notwithstanding anything to the contrary contained herein, Holder shall
have the right to exercise this Warrant at any time only so long as and to the
extent that, after taking into account any shares of Common Stock otherwise
beneficially owned by Holder (whether under any convertible notes owned by
Holder or otherwise) , such exercise would not cause the Holder then to be the
"beneficial owner" of more than 4.99% of the Company's then outstanding
Common Stock. For purposes hereof, the term "beneficial owner" shall have the
meaning ascribed to it in Section 13(d) of the Securities Exchange Act of
1934. The opinion of legal counsel to Holder, in form and substance
satisfactory to the Company and the Company's counsel, shall prevail in all
matters relating to the amount of Holder's beneficial ownership.
5. This Warrant and the Common Stock issuable on exercise of this Warrant
(the "Underlying Shares") may be transferred, sold, assigned or hypothecated,
only if registered by the Company under the Securities Act of 1933 (the "Act")
or if the Company has received from counsel to the Company a written opinion
to the effect that registration of the Warrant or the Underlying Shares is not
necessary in connection with such transfer, sale, assignment or hypothecation.
The Warrant and the Underlying Shares shall be appropriately legended to
reflect this restriction and stop transfer instructions shall apply. The
Holder shall through its counsel provide such information as is reasonably
necessary in connection with such opinion.
6. The holder of this warrant is entitled to certain registration rights
under an Agreement dated of even date herewith (the "Purchase Agreement").
Upon each permitted transfer of this Warrant after the registration statement
has been declared effective, the Company will within two business days after
receipt of notice thereof supplement the registration statement to reflect the
name of the transferee as a selling shareholder thereunder.
7. The Company shall take whatever action is required by NASDAQ ("NASDAQ
Action") to approve the issuance of shares on conversion and exercise of the
Notes and the Warrants (as defined in the Purchase Agreement). The Company
represents and warrants, and Holder acknowledges, that without taking any
NASDAQ Action, the maximum number of shares which will be issued on conversion
of the Notes and exercise of the Warrants is 2,000,000, issuable on a first
converted-first exercised basis. Should NASDAQ Action not be completed by May
31, 1998, then until such NASDAQ Action is completed, the Company shall on
demand by Holder made at any time or times redeem any portion of the Warrant
designated for redemption (the "Redeemed Portion") at a redemption price equal
to the pre-tax profit Holder would have earned had Holder, at the close of
business on the date of its demand for redemption, exercised the Redeemed
Portion and simultaneously sold the shares received on such exercise at the
closing NASDAQ sales price on such date. The redemption price shall be
payable within five business days after demand for redemption is made, and
shall accrue interest payable on demand at 11% per annum.
8. Any permitted assignment of this Warrant shall be effected by the Holder
by (i) executing a standard form of assignment, (ii) surrendering the Warrant
for cancellation at the office of the Company, accompanied by the opinion of
counsel to the Company referred to above; and (iii) unless in connection with
an effective registration statement which covers the sale of this Warrant and
or the shares underlying the Warrant, delivery to the Company of a statement
by the transferee (in a form acceptable to the Company and its counsel) that
such Warrant is being acquired by the Holder for investment and not with a
view to its distribution or resale; whereupon the Company shall issue, in the
name or names specified by the Holder (including the Holder) new Warrants
representing in the aggregate rights to purchase the same number of Shares as
are purchasable under the Warrant surrendered. Such Warrants shall be
exercisable immediately upon any such assignment of the number of Warrants
assigned. The transferor will pay all relevant transfer taxes. Replacement
warrants shall bear the same legend as is borne by this Warrant.
9. The term "Holder" should be deemed to include any permitted record
transferee of this Warrant.
10. The Company covenants and agrees that all shares of Common Stock which
may be issued upon exercise hereof will, upon issuance, be duly and validly
issued, fully paid and non-assessable and no personal liability will attach to
the holder thereof. The Company further covenants and agrees that, during the
periods within which this Warrant may be exercised, the Company will at all
times have authorized and reserved a sufficient number of shares of Common
Stock for issuance upon exercise of this Warrant and all other Warrants.
11. This Warrant shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company.
12. In the event that as a result of reorganization, merger, consolidation,
liquidation, recapitalization, stock split, combination of shares or stock
dividends payable with respect to such Common Stock, the outstanding shares of
Common Stock of the Company are at any time increased or decreased or changed
into or exchanged for a different number or kind of share or other security of
the Company or of another corporation, then appropriate adjustments in the
number and kind of such securities then subject to this Warrant and in the
exercise price hereunder shall be made effective as of the date of such
occurrence so that the position of the Holder upon exercise will be the same
as it would have been had it owned immediately prior to the occurrence of such
events the Common Stock subject to this Warrant. Such adjustment shall be
made successively whenever any event listed above shall occur and the Company
will notify the Holder of the Warrant of each such adjustment. Any fraction
of a share resulting from any adjustment shall be eliminated and the price per
share of the remaining shares subject to this Warrant adjusted accordingly.
13. The rights represented by this Warrant may be exercised at any time
within the period above specified by (i) surrender of this Warrant (with a
standard purchase form properly executed) at the principal executive office of
the Company (or such other office or agency of the Company as it may designate
by notice in writing to the Holder at the address of the Holder appearing on
the books of the Company); (ii) payment to the Company of the exercise price
for the number of Shares specified in the above-mentioned purchase form
together with applicable stock transfer taxes, if any; and (iii) unless in
connection with an effective registration statement which covers the sale of
the shares underlying the Warrant, the delivery to the Company of a statement
by the Holder (in a form acceptable to the Company and its counsel) that such
Shares are being acquired by the Holder for investment and not with a view to
their distribution or resale.
14. Within two business days following each receipt by the Company of the
documents required to exercise all any part of this Warrant as provided
herein, the Company shall DWAC or deliver certificates of the shares of common
stock so purchased as directed by Holder. Such certificates shall bear
appropriate restrictive legends in accordance with applicable securities laws,
but shall be unrestricted and bear no legends once the registration statement
referred to above has been declared effective.
15. In the event the Company breaches its obligation to DWAC or to deliver
certificates for shares of common stock or Secondary Warrants as required
hereunder, or timely to make any payment required under this Warrant, then,
without limiting Holder's other rights and remedies, the Company shall
forthwith pay to the Holder an amount accruing at the rate of $1,000 per day
for each day of such breach for each 20,000 shares of common stock subject to
this Warrant, with pro rata payments for shares in an amount less than 20,000.
16. This Warrant shall be governed by and construed in accordance with the
laws of the State of New York. The federal and state courts in the city of New
York shall have exclusive jurisdiction over this instrument and the
enforcement thereof. Service of process shall be effective if by certified
mail, return receipt requested. All notices shall be in writing and shall be
deemed given upon receipt by the party to whom addressed. This instrument
shall be enforceable by decrees of specific performances well as other
remedies. The Holder shall be entitled to recover its reasonable legal fees
and costs in enforcing its rights hereunder.
IN WITNESS WHEREOF, USCI, INC. has caused this Warrant to be signed by
its duly authorized officers under Its corporate seal, and to be dated as of
the date set forth above.
USCI, INC.
By__________________________
