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
252,500 Common Stock Purchase Warrants at $0.01 per share
Due 2002
(REVISED)
TO: The Quartz Group, Inc. (F.K.A.) 15th July, 1997
Brown Disc Products Company, Inc.
0000 Xxxxx Xxxxxx Xxxx.
Santa Aa, CA 92704
I, Xxxxx Xxxxxxxxxxxx a resident of Southern California with a mailing
address, 0000 Xx Xxxxxxxx Xxxxxx, 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, INC., a Colorado
corporation (THE "COMPANY"), evidenced by Warrants Certificate number 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 FIFTY-TWO THOUSAND FIVE HUNDRED (252,500) warrants at $0.01 per share.
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 15th
July, 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
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 15th July, 1997, was $0.50 per
share. Based upon the closing price, the difference between the market value
at $0.50 per share and 500,000 shares, less the warrants 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.
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
therefore 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 252,500 Warrants at $0.01 as
follows:
Xxxxx Silversparre
0000 Xx Xxxxxxxx Xxxxxx
Xx Xxxxxxxxx, 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
22nd July, 1997. Upon acceptance, a copy of this Agreement and the original
certificate with the number (B-01 & A-01) evidencing the Warrants shall be
promptly transmitted to the Company's counsel for preparation of appropriate
instructions for issuance of new warrants and for cancellation of the original
warrants.
Very Truly Yours,
Xxxxx Xxxxxxxxxxxx
By: /s/ Xxxxx Xxxxxxxxxxxx
-----------------------
SIGNED AND APPROVED
15th July, 1997
----------------------
The Quartz Group, Inc. FKA
Brown Disc Products Company, Inc.
By: /s/ Xxxxx X. Xxxxx
--------------------------
Xxxxx X. Xxxxx, President
Santa Ana, California
