AGREEMENT to Tender 1,000,000
Class A Common Stock Purchase Warrants
in
▇▇▇▇▇ Disc Products Company, Inc.
in exchange for
250,000 shares of Common Stock, no par value
September 27, 1996
TO: ▇▇▇▇▇ Disc Products Company, Inc.
▇▇▇▇-▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sirs:
RCML Partners, a California general partnership and the record holder of
1,000,000 Class A common stock purchase warrants issued by ▇▇▇▇▇ DISC PRODUCTS
COMPANY, INC., a Colorado corporation (the "Company"), evidenced by Warrant
Certificate number A-04 (the "Warrants") hereby tenders and offers all such
Warrants to the Company in full payment and consideration for the issuance of
TWO HUNDRED FIFTY THOUSAND (250,000) shares of the Company's common stock, no
par value. RCML Partners further represents and warrants that the Warrants
are held by such general partnership for the beneficial account of ▇▇▇▇▇
▇▇▇▇▇▇, the party designated below as the person to receive Common Stock under
this Agreement.
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, September 27, 1996, was
$1.625 per share. Based upon such closing price, the difference between the
market value at $1.625 per share of 1,000,000 shares less the warrant exercise
price of $250,000, were the Warrants to be exercised, would be $1,375,000. In
comparison, the market value at $1.625 per share of 250,000 shares of the
Company's common stock would be $406,250. RCML Partners has agreed to
discount the value of the Warrants in making the offer herein to reflect a
lack of liquidity for the Warrants and 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 by the Company of this Agreement, RCML Partners 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:
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
RCML Partners further represents and warrants that the transferee of the
shares of Common Stock to be issued hereunder is not a U.S. Person as such
term is defined in Rule 902 under Regulation S under the Securities Act of
1933, as amended ("Securities Act") and said transferee has been advised such
shares of Common Stock have not been registered under the Securities Act and
will bear a restrictive legend.
If applicable to Regulation S, the transferee has been further advised
as follows: Any interest in the securities of ▇▇▇▇▇ Disc Products Company,
Inc. subscribed to hereunder may be resold within the jurisdiction of the
United States or to U.S. Persons [as defined in Rule 902(o) of Regulation S
under the United States Securities Act of 1933 ("Securities Act")] by or for
the account of a foreign investor only: (i) pursuant to a registration
statement under the Securities Act; or (ii) pursuant to an applicable
exemption, if any, from such registration.
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 on
Monday, October 1, 1996. Upon acceptance, a copy of this Agreement and the
original certificate number A-03 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,
RCML Partners
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇, General Partner
By: /s/ ▇▇▇▇ ▇▇▇▇
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▇▇▇▇ ▇▇▇▇, General Partner
ACCEPTED AND APPROVED:
Date: September 28 , 1996
▇▇▇▇▇ DISC PRODUCTS COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, President
Colorado Springs, Colorado
