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EXHIBIT 10.18
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. IT MAY
NOT BE SOLD OR OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER
SAID ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL TO THE COMPANY
OR WARRANTHOLDER'S COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED TO EFFECTUATE SUCH TRANSACTION OR UNLESS PURSUANT
TO RULE 144.
Warrant Issue Date: May 13, 1999
YOUCENTRIC, INC.
WARRANT
THIS CERTIFIES that, subject to the terms and conditions of this
Warrant, ▇▇▇▇ FINANCIAL ADVISORS, INC. (the "Warrantholder"), for value
received, is entitled to subscribe for and purchase up to forty-one thousand
five hundred ninety-four (41,594) fully-paid and non-assessable shares (the
"Shares") of the Common Stock ("Stock") of YOUcentric, Inc. (formerly Sales
Vision, Inc.), a North Carolina corporation (the "Company"), at the exercise
price of Three Dollars and Sixty Cents ($3.60) per share (the "Initial Exercise
Price"), which number of Shares and Initial Exercise Price will be adjusted
pursuant to the provisions of Section 7 hereof (the "Exercise Price").
1. Term. Except as otherwise provided for herein, the term of this
Warrant and the right to purchase shares as granted herein will be exercisable,
at any time and from time to time, during the period commencing on May 13, 1999
and terminating at 5:00 p.m. May 13, 2004 (the "Termination Date").
2. Exercise of Purchase Rights.
(a) Exercise. The purchase rights represented by this Warrant are
exercisable by the Warrantholder, in whole or in part, at any time, or from time
to time during the period set forth in Section 1 above, by tendering the Company
at its principal office a notice of exercise in the form attached hereto as
Exhibit A (the "Notice of Exercise"), duly completed and executed. Upon receipt
of the Notice of Exercise and the payment of the Exercise Price in accordance
with the terms set forth below, the Company will issue to the Warrantholder a
certificate for the number of shares of Stock of the Company purchased and will
execute the Notice of Exercise indicating the number of shares of Stock which
remain subject to future purchases, if any. The person or persons in whose
name(s) any certificate(s) representing shares of Stock will be issued upon
exercise of this Warrant will be deemed to have become the holder(s) of record
of the Shares represented thereby (and such shares will be deemed to have been
issued) immediately prior to the close of business on the date or dates upon
which this Warrant is exercised. In the event of any exercise of the rights
represented by this Warrant, certificates for the Shares so purchased will be
delivered to the
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Warrantholder or its designee as soon as practical and in any event within
thirty (30) days after receipt of such notice and, unless this Warrant has been
fully exercised or expired, a new Warrant representing the remaining portion of
the Shares, if any, with respect to which this Warrant will not then have been
exercised will also be issued to the Warrantholder as soon as possible and in
any event within such thirty (30) day period.
(b) Method of Exercise. The purchase rights hereby represented may
be exercised, at the election of the Warrantholder, by the tender of the Notice
of Election and the surrender of this Warrant at the principal office of the
Company and by the payment to the Company, by check, cancellation of
indebtedness or other form of payment acceptable to the Company, of an amount
equal to the then applicable Exercise Price per share multiplied by the number
of Shares then being purchased. Alternatively, this Warrant may be exchanged for
Warrant Shares as described in Section 2(c) of this Warrant.
(c) Right to Convert Warrant into Stock.
(i) As an alternative to payment of the Exercise Price as set
forth in Section 2(b) of this Warrant, the Warrantholder shall have the right at
any time and from time to time to convert this Warrant into shares of Stock (the
"Conversion Right"). Upon exercise of the Conversion Right, the Company shall
deliver to the Warrantholder (without payment by the Warrantholder of any
Exercise Price or of any other cash or other consideration) that number of
Shares of Stock equal to the quotient obtained by dividing (x) the value of this
Warrant at the time the Conversion Right is exercised (determined by subtracting
the aggregate Exercise Price in effect immediately prior to the exercise of the
Conversion Right from the aggregate fair market value of the Shares of Stock
issuable upon exercise of this Warrant immediately prior to the exercise of the
Conversion Right) by (y) the fair market value of one Share of Stock immediately
prior to the exercise of the Conversion Right. For purposes hereof, the fair
market value of one Share of Stock shall be the greater of a price per Share of
Stock equal to the initial Exercise Price or the current market value of the
Stock.
(ii) The current market value of one Share of Stock shall be
determined as follows:
- If the Stock is listed on a national securities exchange or admitted
to unlisted trading privileges on such exchange or listed for
trading on the NASDAQ Stock Market (National Market), the current
market value shall be the last reported sale price of the Stock on
such exchange or system on the last business day prior to the date
of exercise of this Warrant or if no such sale is made on such day,
the average closing bid and asked prices for such day on such
exchange or system;
- If the Stock is not so listed or admitted to unlisted trading
privileges, the current market value shall be the mean of the last
reported bid and asked prices for the
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Stock reported by the National Quotation Bureau, Inc., on the last
business day prior to the date of the exercise of this Warrant; or
- If the Stock is not so listed or admitted to unlisted trading
privileges and bid and asked prices are not so reported, the current
market value shall be an amount reasonably determined by the Board
of Directors of the Company.
(iii) The Conversion Right may be exercised by the Warrantholder
by the surrender of this Warrant at the principal office of the Company together
with a written statement specifying that the Warrantholder thereby intends to
exercise the Conversion Right. Certificates for the Shares of Stock issuable
upon exercise of the Conversion Right shall be delivered to the Warrantholder
within thirty (30) days following the Company's receipt of this Warrant together
with the aforesaid written statement.
3. Reservation of Shares.
(a) Authorization and Reservation of Shares. The Company will at all
times have authorized and reserved a sufficient number of Shares to provide for
the exercise of the rights to purchase Stock as provided herein.
(b) Registration or Listing. If any shares of Stock required to be
reserved for purposes of exercise of this Warrant require registration with or
approval of any governmental authority under any Federal or State law (other
than any registration under the Securities Act of 1933, as then in effect, or
any similar Federal statute then enforced, or any state securities law, required
by reason of any transfer), or listing on any domestic securities exchange, or
if at the time of exercise the class of Stock into which this Warrant is then
exercisable is listed on any domestic securities exchange, the Company will, at
its expense and as expeditiously as possible, use its best efforts to cause such
shares to be duly registered, listed or approved for listing on such domestic
securities exchange, as the case may be.
4. No Fractional Shares. No fractional shares or scrip representing
fractional shares will be issued upon the exercise of the Warrantholder's rights
to purchase Stock, but in lieu of such fractional shares the Company will make a
cash payment therefor upon the basis of the fair market value of a share of that
stock at the time of exercise.
5. No Rights as Shareholder. This Warrant does not entitle the
Warrantholder to any voting rights or other rights as a shareholder of the
Company prior to the exercise of the Warrantholder's rights to purchase Stock as
provided for herein.
6. Warrantholder Registry. The Company will maintain a registry showing
the name and address of the registered holder of this Warrant.
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7. Adjustment Rights. The Exercise Price and the number of Shares of
Stock purchasable hereunder are subject to adjustment from time to time, as
follows:
(a) Reclassification or Merger. In case of any reclassification,
change or conversion of securities of the class issuable upon exercise of this
Warrant into the same or a different number of securities of any other class or
classes, or in case of any merger of the Company with or into another
corporation (other than a merger with another corporation in which the Company
is the acquiring and the surviving corporation and which does not result in any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant), or in case of any sale of all or substantially all of the assets
of the Company, the Company, or such successor or purchasing corporation, as the
case may be, will duly execute and deliver to the holder of this Warrant, so
that the holder of this Warrant will have the right to receive, at a total
purchase price not to exceed that payable upon the exercise of the unexercised
portion of this Warrant, and in lieu of the Shares of Stock theretofore issuable
upon exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification, change or
merger by a Warrantholder of the number of Shares of Stock then purchasable
under this Warrant. Such new Warrant will provide for adjustment that will be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 7. The provisions of this subsection (a) will similarly apply to
successive reclassifications, changes, mergers and transfers.
(b) Subdivision or Combination of Shares. If the Company at any time
will subdivide its Stock, the Exercise Price will be proportionately decreased
and the number of Shares issuable pursuant to this Warrant will be
proportionately increased. If the Company at any time will combine its Stock,
the Exercise Price will be proportionately increased and the number of Shares
issuable pursuant to this Warrant will be proportionately decreased.
(c) Stock Dividends. If the Company at any time will pay a dividend
payable in, or make any other distribution (except any distribution specifically
provided for in the foregoing subsections (a) or (b)) of Stock, then the
Exercise Price will be adjusted, from and after the date of determination of
stockholders entitled to receive such dividend or distribution of stockholders
to that price determined by multiplying the Exercise Price in effect immediately
prior to such date of determination by a fraction (i) the numerator of which
will be the total number of shares of Stock outstanding immediately prior to
such dividend or distribution, and (ii) the denominator of which will be the
total number of shares of Stock outstanding immediately after such dividend or
distribution. The Warrantholder will thereafter be entitled to purchase, at the
Exercise Price resulting form such adjustment, the number of Shares of Stock
(calculated to the nearest whole share) obtained by multiplying (i) the Exercise
Price in effect immediately prior to such adjustment by (ii) the number of
Shares of Stock issuable upon the exercise hereof immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.
(d) Reserved Shares Adjustment. The number of Shares reserved for
issuance pursuant to this Warrant will automatically be adjusted without further
action by the Company in the event of any adjustment of the number of Shares
issuable pursuant to this Warrant.
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(e) Registration and Listing. The Company will use its best efforts
to assure that all Shares of Stock issuable pursuant to this Warrant may be so
issued without violation of any applicable law or regulation or any requirements
of any domestic stock exchange (except for official notice of issuance, which
will be immediately transmitted by the Company upon issuance) upon which shares
of Stock or other shares of the same class may be listed.
8. Compliance with Securities Act; Disposition of Warrant or Shares of
Stock.
(a) Compliance with Securities Act. The Warrantholder, by acceptance
hereof, agrees that this Warrant, and the Shares of Stock to be issued upon
exercise hereof, are being acquired for investment and that such Warrantholder
will not offer, sell or otherwise dispose of this Warrant, or any Shares of
Stock to be issued upon exercise hereof except under circumstances which will
not result in a violation of the Securities Act of 1933, as amended (the
"Securities Act"), or any applicable state securities laws. At the time of
exercise, the Warrantholder will execute an Investment Letter in the form
attached hereto as Exhibit B stating (among other things) that the shares issued
pursuant to the Warrant have not been registered under federal or state
securities laws, and that such shares may not be transferred unless the shares
are so registered or unless the Company has received an opinion of the Company's
counsel or such Warrantholder's counsel reasonably acceptable to the Company
that such transfers are exempt from registration.
(b) This Warrant and all shares of Stock issued upon exercise of
this Warrant (unless registered under the Securities Act and any applicable
state securities laws) will be stamped or imprinted with a legend in
substantially the following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THEY MAY NOT BE SOLD OR OFFERED FOR SALE,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO UNDER SAID ACT OR
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED TO EFFECTUATE SUCH TRANSACTION OR
UNLESS PURSUANT TO RULE 144."
(c) Representations and Warranties of Warrantholder. In addition, in
connection with the issuance of this Warrant, the Warrantholder specifically
represents to the Company by acceptance of this Warrant as follows:
(i) The Warrantholder is aware of the Company's business affairs
and financial condition, and has acquired information about the Company
sufficient to reach an informed and knowledgeable decision to acquire this
Warrant. The Warrantholder is acquiring this
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Warrant for its own account for investment purposes only and not with a view to,
or for the resale in connection with, any "distribution" thereof in violation of
the Securities Act.
(ii) The Warrantholder understands that this Warrant has not
been registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of the Warrantholder's investment intent as expressed herein.
(iii) The Warrantholder further understands that this Warrant
and any shares of Stock to be issued upon exercise hereof must be held
indefinitely unless subsequently registered under the Securities Act and
qualified under any applicable state securities laws, or unless exemptions from
registration and qualification are otherwise available.
(d) Disposition of Warrant or Shares. With respect to any offer,
sale or other disposition of this Warrant or any Shares of Stock acquired
pursuant to the exercise of this Warrant prior to registration of such Warrant
or Shares, the Warrantholder agrees to give written notice to the Company prior
thereto, describing briefly the manner thereof, together with an opinion of the
Company's counsel or such Warrantholder's counsel reasonably satisfactory to the
Company, or other evidence, if reasonably requested by the Company, to the
effect that such offer, sale or other disposition may be effected without
registration or qualification (under the Securities Act as then in effect or any
federal or state securities law then in effect) of this Warrant or such shares
of Stock and indicating whether or not under the Securities Act certificates for
this Warrant or such shares of Stock to be sold or otherwise disposed of require
any restrictive legend as to applicable restrictions on transferability in order
to ensure compliance with such law. Promptly upon receiving such written notice
and reasonably satisfactory opinion or other evidence, if so requested, the
Company, as promptly as practicable but no later than five (5) days after
receipt of the written notice, will notify such Warrantholder that such
Warrantholder may sell or otherwise dispose of this Warrant or such shares of
Stock, all in accordance with the terms of the notice delivered to the Company.
Notwithstanding the foregoing, this Warrant or such shares of Stock may, as to
such federal laws, be offered, sold or otherwise disposed of in accordance with
Rule 144 or 144A under the Securities act, provided that the Company will have
been furnished with such information as the Company may reasonably request to
provide a reasonable assurance that the provisions of Rule 144 or 144A have been
satisfied. Each certificate representing this Warrant or the shares of Stock
thus transferred (except a transfer pursuant to Rule 144 or 144A) will bear a
legend as to the applicable restrictions on transferability in order to ensure
compliance with such laws, unless in the aforesaid opinion of counsel for the
Company or the Warrantholder or pursuant to Rule 144 or 144A, such legend is not
required in order to ensure compliance with such laws. The Company may issue
stop transfer instruction to its transfer agent in connection with such
restrictions. Notwithstanding the foregoing, (i) until a public market develops
for the securities of the Company, neither the Warrantholder nor any subsequent
transferee may transfer the Warrant or any Warrant Shares to any competitor of
the Company; and (ii) any transferee of the Warrantholder and any subsequent
transferee will expressly agree in writing with the Company to be bound by and
to comply with all applicable provisions of this Warrant.
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(e) If in connection with the initial public offering of shares of
Stock of the Company registered pursuant to the Securities Act, the managing
underwriter for such registration will so request, the Warrantholder will not
sell, make any short sale of, grant any option for the purchase of, or otherwise
dispose of any Warrant Shares (other than those shares of Stock included in such
registration) without the prior written consent of the Company for a period
designated by the Company in writing to the Warrantholder, which period will
begin not more than ten (10) days prior to the effectiveness of the registration
statement pursuant to which such public offering will be made and will not last
more than one hundred eighty (180) days (or such other period as the officers
and directors of the Company and Warrantholder of greater than ten percent (10%)
of all securities registered pursuant to the registration statement mutually
agree) after the effective date of such registration statement. The
Warrantholder hereby agree to execute such form of agreement evidencing this
obligation as any underwriter requests.
9. Registration Rights of the Warrantholder. So long as this Warrant
shall be outstanding, the Warrantholder shall be entitled to registration rights
with respect to the Shares of Stock purchasable hereunder to the same extent as
those purchasers of shares of the Company's Series A Preferred Stock pursuant to
the Series A Stock Purchase Agreement.
10. Miscellaneous.
(d) Attorney's Fees. In any litigation, arbitration or court
proceeding between the Company and the Warrantholder relating hereto, the
prevailing party will be entitled to attorneys' fees and expenses and all costs
of proceedings incurred in enforcing this Warrant.
(e) Governing Law. This Warrant Agreement will be governed by and
construed for all purposes under and in accordance with the laws of the State of
North Carolina without respect to the principles of the choice of law or the
conflict of laws.
(f) Descriptive Headings. The descriptive headings of the sections
of this Warrant are inserted for convenience only and do not constitute a part
of this Warrant.
(g) Notices. Any notice required or permitted hereunder will be
given in writing and will be deemed effectively given upon personal delivery or
upon deposit in the United States mail, by registered or certified mail,
addressed (i) to the Warrantholder, at the address in the Warrant Register
maintained by the Company, and (ii) to the Company, at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, or at such
other address as any such party may subsequently designate by written notice to
the other party.
(h) Lost Warrants. The Company covenants to the Warrantholder, that
upon receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant or any stock certificate and,
in the case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of
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any such mutilation, upon surrender and cancellation of such Warrant or stock
certificate, the Company will make and deliver a new Warrant or stock
certificate of like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant or stock certificate.
(i) Severability. In the event any one or more of the provisions of
this Warrant will for any reason be held invalid, illegal or unenforceable, the
remaining provisions of this Warrant will be unimpaired, and the invalid,
illegal or unenforceable provision will be replaced by a mutually acceptable
valid, legal and enforceable provision, which comes closest to the intention of
the parties underlying the invalid, illegal or unenforceable provision.
(j) Modification and Waiver. This Warrant and any provision hereof
may be amended, waived, discharged or terminated only by an instrument in
writing signed by the party against whom enforcement of the same is sought.
(k) Entire Agreement. This Warrant constitutes the entire agreement
between the parties pertaining to the subject matter contained in it and
supersedes all prior and contemporaneous agreements, representations and
undertakings of the parties, whether oral or written, with respect to such
subject matter.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.
YOUCENTRIC, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
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EXHIBIT A
NOTICE OF EXERCISE FOR CASH
To: YOUcentric, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
1. The undersigned, hereby elects to purchase shares
of the Common Stock of YOUcentric, Inc. pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price of such shares in
full.
2. Please issue a certificate or certificates representing
said shares in the name of the undersigned or in such other name or names as are
specified below:
Name Address
---- -------
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(SIGNATURE)
Date:
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EXHIBIT B
FORM OF
INVESTMENT LETTER
___________, 19___
YOUcentric, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Gentlemen:
The undersigned, ________________________ ("Purchaser") intends to
acquire up to _________ shares (the "Shares") of the Common Stock of YOUcentric,
Inc. (the "Company") from the Company pursuant to the exercise of certain
Warrant held by Purchaser. The Shares will be issued to Purchaser in a
transaction not involving a public offering and pursuant to an exemption from
registration under the Securities Act of 1933, as amended (the "1933 Act"). In
connection with such purchase and in order to comply with the exemption from
registration relied upon by the Company, Purchaser represents, warrants and
agrees as follows:
1. Purchaser is acquiring the Shares for Purchaser's own account, to
hold for investment, and Purchaser will not make any sale, transfer or other
disposition of the Shares in violation of the 1933 Act or the rules and
regulations promulgated thereunder by the Securities and Exchange Commission or
in violation of any applicable state securities law.
2. Purchaser has been advised that the issuance of the Shares is not
being registered under the 1933 Act on the ground that this transaction is
exempt from registration under Section 3(b) or 4(2) of the 1933 Act, as not
involving any public offering, and that reliance by the Company on such
exemptions is predicated in part on Purchaser's representations set forth in
this letter. Purchaser also has been advised that neither the Shares nor the
issuance thereof are being registered under the securities laws of any state.
3. Purchaser has been informed that the Shares must be held
indefinitely unless subsequently registered under the 1933 Act and applicable
state securities laws, or unless exemptions from such registration are available
with respect to any proposed transfer or disposition by Purchaser of the Shares.
Purchaser understands and agrees that the Company, as a condition to the
transfer of any of the Shares, may require that the request for transfer be
accompanied by an opinion of counsel satisfactory to the Company, in form and
substance satisfactory to the Company, to the effect that the proposed transfer
is exempt from registration
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under 1933 Act and applicable state securities laws, unless such transfer is
covered by an effective registration statement under the 1933 Act and all
applicable state securities laws.
4. Purchaser understands and agrees that there will be placed on the
certificates for the Shares, or any substitutions therefor, a legend stating in
substance:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THEY MAY NOT BE SOLD OR OFFERED FOR SALE,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO UNDER SAID ACT OR
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED TO EFFECTUATE SUCH TRANSACTION OR
UNLESS PURSUANT TO RULE 144."
5. Purchaser has been furnished with or has had access to the
information it has requested from the Company in connection with the investment
represented by the Shares and has had an opportunity to discuss with the
officers and management of the Company the Company's business and financial
affairs. Purchaser has such knowledge and experience in business and financial
matters and with respect to investments in securities or in privately held
companies so as to enable it to understand and evaluate the risks of such
investment and form an investment decision with respect thereto.
Very truly yours,
By:
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Name:
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Title:
-----------------------------------
Accepted as of the day of , 19 .
YOUCENTRIC, INC.
By:
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Name:
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Title:
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