AGREEMENT to Tender 1,000,000
Class B Common Stock Purchase Warrants
and
500,000 Class A Warrants
in
Brown Disc Products Company, Inc.
In exchange for
250,000 shares of Common Stock, no par value
TO: Brown Disc Products Company, Inc. 17th March, 1997
0000 Xxxxx Xxxxxx Xxxx.
Santa Ana, CA 92704
Dear Sirs:
I, Xxxxx Xxxxxxxxxxxx a resident of Southern California with a mailing
address, 0000 Xx Xxxxxxxx, Xx Xxxxxxxxx XX 00000 Being the holder of 1,000,000
Class B common stock purchase warrants and 500,000 Class A common stock
purchase warrants issued by BROWN DISC PRODUCTS COMPANY, INC. a Colorado
corporation (THE "COMPANY"), evidenced by Warrant Certificate numbers B-01 and
A-01 respectfully (THE "WARRANTS") hereby tenders and offers all such Warrants
to the Company in full payment and consideration for the issuance of TWO
HUNDRED and FIFTY THOUSAND (250,000) shares of the Company's common stock, no
par value.
The parties understand that the exercise price for the 1,000,000 Class B
warrants is $0.10 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 $0.50. Based upon such closing price, the difference
between the market value at $0.50 Per share of 1,000,000 shares less the
warrant exercise price of $0.10 warrants to be exercised, would be $400,000.
In comparison, the market value at $0.50 Per share of 250,000 of the company's
common stock would be $100,000.
The parties also understand that the exercise price for the Class A warrants
is $0.25, and that the closing price for the common stock in the over-the-
counter market on the date of this Agreement 17th March, 1997, was $0.50 Per
share. Based upon the closing price, the difference between the market value
at $0.50 Per share of 500,000 shares less the warrant exercise price of $0.25
warrants to be exercised, would be $125,000. In comparison, the market value
at $0.50 Per share of 50,000 of the company's common stock would be $25,000.
Offer to Tender Warrants in Exchange for Common Stock Page 1 of 2
Xxxxx Xxxxxxxxxxxx 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 250,000 shares of Common Stock issued in exchange
therefor upon acceptance the Company of this Agreement, Xxxxx Xxxxxxxxxxxx
agrees that any such excess shall be deemed a contribution to the capital of
the Company. Upon acceptance of this Agreement, you are directed and
instructed to issue, register and deliver the 250,000 shares of Common Stock
as follows:
Xxxxx Silversparre
0000 Xx Xxxxxxxx, Xxx Xxxxxxxxx
Xxxxxxxxxx
00000
TEL 000-000-0000
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 21st, 1997. Upon acceptance, a copy of this Agreement and the
original certificate with the number (D-02) 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,
Xxxxx Xxxxxxxxxxxx
By: /s/ Xxxxx Xxxxxxxxxxxx
------------------------
Xxxxx Xxxxxxxxxxxx
SIGNED AND APPROVED
MARCH 19, 1997
---------
Brown Disc Products Company, Inc.
By: /s/ Xxxxx X. Xxxxx
-----------------------------
Xxxxx Xxxxx, President
Colorado Springs, Colorado
Offer to Tender Warrants in Exchange for Common Stock Page 2 of 2
