Sample Business Contracts

Promissory Note - TASER International Inc. and Phil Purer

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                                [Taser(R) Logo]

                        [TASER INTERNATIONAL LETTERHEAD]

                                PROMISSORY NOTE

                                                                January 23, 2001
                                                             Scottsdale, Arizona

     FOR VALUE RECEIVED, the undersigned TASER International, Inc., a Delaware
corporation ("Maker"), promises to pay to Phil Purer or his order ("Payee") the
sum of FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00), together with
interest at the rate of one and one-half percent (1.50%) per month from the
date hereof through the earlier of (a) the closing of an underwritten initial
public offering of Maker's common stock or (b) July 1, 2002 (the applicable
date being the "Maturity Date").

     Payments: On or before the Maturity Date, Maker shall pay the sum of all
interest and principal due under this Note from the date of this Note through
the date of such payment. Maker shall not be required to make any payment of
interest or principal pursuant to this Note prior to the Maturity Date.

     Type and Place of Payments: Payments of principal and interest pursuant to
this Note shall be made in lawful money of the United states of America to Payee
at 1610 Loma Vista Drive, Beverly Hills, California 90210, or at such other
address as Payee shall direct.

     Advance Payment: Maker may prepay all or any portion of the amounts due
under this Note at any time without penalty or premium.

     Warrant Right: In consideration of the loan from Payee to Maker evidenced
by this Note, Maker shall issue to Payee on the date of this Note a warrant to
purchase up to 5,000 shares of Maker's common stock, which warrants shall be
exercisable at a price per share of $10.00 and which warrant shall be
substantially in the form of EXHIBIT A attached hereto.

     Default: Maker shall be in default under this note if it shall fail to
fully pay this Note within ten (10) business days after the Maturity Date.

     Successors and Assigns: This Note shall be binding upon Maker and upon its
successors and assigns, and shall inure to the benefit of Payee and his heirs,
devisees, personal representatives, successors and assigns. This Note shall be
fully assignable by Payee without Maker's consent.

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                                [Taser(R) LOGO]

                        [TASER INTERNATIONAL LETTERHEAD]

     Maximum Interest:  Nothing contained in this Note shall be deemed to
establish or require the payment of a rate of interest in excess of the maximum
rate permitted by law. If the rate of interest required to be paid under this
Note at any time exceeds the maximum rate permitted by law, the rate of
interest required to be paid pursuant to this Note shall be automatically
reduced to the maximum rate permitted by law.

     Address Changes:  Each party agrees to notify the other by registered or
certified mail of any change in the party's address.

     Arizona Law:  This Note shall be governed by and construed under the laws
of the state of Arizona without regard to the conflicts of laws provisions


                                   TASER International, Inc.

                                   By: /s/ Thomas P. Smith
                                  Its:     President

Accepted as of the above date:

/s/ Phil Purer
Phil Purer

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                                [TASER (R) LOGO]



                        WARRANT TO PURCHASE COMMON STOCK
                          OF TASER INTERNATIONAL, INC.

                         (void after January 23, 2006)

                  This certifies that Phil Purer or assigns (the "Holder"), for
value received and subject to the provisions hereinafter set forth, is entitled
to purchase from TASER International, Inc., a Delaware corporation (the
"Company"), Five Thousand (5,000) fully paid and nonassessable shares of the
Company's Common Stock, $0.00001 par value per share (such stock being
hereinafter referred to as the "Common Stock" and such Common Stock as may be
acquired upon exercise hereof being hereinafter referred to as the "Warrant
Stock"), at the price of Ten Dollars ($10.00) per share.

                  This Warrant is subject to the following provisions, terms and

         1.       Exercise and Issuance. This Warrant may be exercised in whole
or in part (but not as to any fractional share of Common Stock) at any time
commencing on the date hereof (the "Issue Date") until the fifth anniversary of
the Issue Date. The rights represented by this Warrant may be exercised by the
Holder by written notice of exercise substantially in the form attached hereto
as Exhibit A delivered to the Secretary of the Company at the principal office
of the Company accompanied by this Warrant (properly endorsed, if required) and
payment to the Company, by cash, certified check or bank draft, of the purchase
price of the shares of Warrant Stock being purchased. The Company agrees that
the Warrant Stock so purchased shall be and is deemed to be issued as of the
close of business on the date on which this Warrant shall have been surrendered
and payment made for such Warrant Stock. Certificates for the shares of Warrant
Stock so purchased shall be delivered to the Holder within a reasonable time,
not exceeding forty-five (45) days after the rights represented by this Warrant
shall have been so exercised, and, unless this Warrant has expired, a new
Warrant representing the number of shares of Warrant Stock, if any, with respect
to which this Warrant has not been exercised shall also be delivered to the
Holder within such time.
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                                [TASER (R) LOGO]


         2.       Covenants of Company. The Company covenants and agrees that
all shares of Warrant Stock that may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be duly authorized and issued,
fully paid and nonassessable and free from all liens and charge with respect to
the issuance thereof. The Company further covenants and agrees that until
expiration of this Warrant, the Company will at all times have authorized and
reserved for the purpose of issuance or transfer upon exercise of the rights
evidenced by this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of the rights represented by this Warrant.

         3.       Exercise Price and Share Adjustments. The initial number of
shares of Common Stock purchasable upon exercise of this Warrant and the
exercise price payable therefore shall be subject to adjustment from time to
time, as provided below:

                  (a)      In case the Company shall at any time hereafter
subdivide or combine the outstanding shares of Common Stock or declare a
dividend payable in Common Stock, the total number of shares of Common Stock
purchasable upon the exercise of this Warrant shall be adjusted so that the
Holder shall be entitled to receive the number of shares of Common Stock which
the Holder would have owned or have been entitled to receive immediately
following any of the events described above had this Warrant been exercised in
full immediately prior to any such event. An adjustment made pursuant to this
Section 3(a) shall, in the case of a subdivision or combination, be made as of
the effective date thereof, and in the case of a stock dividend, become
effective as of the record date therefore. In the event of any such adjustment
of the total number of shares of Common Stock purchasable upon the exercise of
this Warrant, the exercise price shall be adjusted to be the amount resulting
from dividing the number of shares of Common Stock covered by this Warrant
immediately after such adjustment into the total amount payable upon exercise of
this Warrant in full immediately prior to such adjustment.

                  (b)      If any capital reorganization or reclassification of
the capital stock of the Company (other than a subdivision or combination
referred to in Section 3(a) hereof), or consolidation or merger of the Company
with another corporation, or the sale of all or substantially all of its assets
to another corporation shall be effected in such a way that holders of Common
Stock shall be entitled to receive stock, securities or assets with respect to
or in exchange for such Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, the Holder
shall have the right to purchase and receive upon the basis and upon the terms
and conditions specified in this Warrant and in lieu of the Common Stock
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby, such shares of stock, securities or assets as would
have been issued or delivered to the Holder if he had exercised this Warrant and
had received upon exercise of this Warrant the Common Stock prior to such
reorganization, reclassification, consolidation, merger or sale, unless prior to
the consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger or the corporation purchasing such
assets shall assume by written instrument executed and mailed to the Holder at
the last address of the

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                                [TASER(R) LOGO]


Holder appearing on the books of the Company, the obligation to deliver to the
Holder such shares of stock, securities or assets as, in accordance with the
foregoing provisions, the Holder may be entitled to purchase.

                  (c)      If the Company takes any other action, or if any
other event occurs which does not come within the scope of the provisions of
Paragraphs 3(a) or 3(b) hereof, but which should result in an adjustment in the
exercise price and/or the number of the shares subject to the Warrant in order
to fairly protect the purchase rights of the Holder, an appropriate adjustment
in such purchase rights shall be made by the Company.

                  (d)      No fractional shares of Common Stock are to be issued
upon the exercise of this Warrant, but the Company shall pay a cash adjustment
in respect of any fraction of a share which would otherwise be issuable in an
amount equal to the same fraction of the market price per share of Common Stock
on the date of exercise.

                  (e)      Upon any adjustment of the exercise price or number
of shares purchasable hereunder, the Company shall give written notice thereof,
by first class mail, postage prepaid, addressed to the Holder at the address of
the Holder as shown on the books of the Company, which notice shall state the
Warrant exercise price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.

         4.       Holder Not Deemed a Stockholder. The Holder shall not be
entitled to vote on or be deemed the holder of Common Stock or any other
securities which may at any time be issuable on the exercise hereof for any
purpose, nor shall anything contained herein be construed to confer upon the
Holder any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any mater submitted to stockholders at any
meeting thereof, or give or withhold consent to any corporate action (whether
upon any recapitalization, issue of stock, reclassification of stock, change of
par value or change of stock to no par value, consolidation, merger, conveyance
or otherwise) or to receive notice of meetings or other actions affecting
stockholders, or to receive dividends or subscription rights or otherwise, until
the rights to purchase Warrant Stock hereunder shall have been exercised.

         5.       Transferability. Prior to making any disposition of the
Warrant or of any Warrant Stock, the Holder will give written notice to the
Company describing briefly the manner of such proposed disposition. The Holder
will not make any such disposition unless or until: (i) a registration statement
under the Securities Act of 1933, as amended (the "Securities Act") covering the
proposed distribution has been filed by the Company and has become effective,
(ii) the disposition is made in accordance with Rule 144 under the Securities
Act or (iii) the Company has received an opinion of counsel for the Holder
reasonably satisfactory to the

<PAGE>   6
                                [TASER(R) LOGO]


Company stating that registration under the Securities Act is not required with
respect to such disposition.

         6.       Investment Representations. The Holder acknowledges and agrees
that: (i) this Warrant and any shares of Warrant Stock which may be acquired
upon exercise hereof are being or will be acquired for investment purposes and
not with a view toward the distribution or sale thereof, (ii) this Warrant and
the Warrant Stock will not be registered under either federal or applicable
state securities laws and must be held indefinitely unless subsequently
registered under the Securities Act or an exemption from such registration is
available, (iii) investment in the Company is highly speculative, (iv) he has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of his investment and has the ability to bear
the economic risks (including the risk of a total loss) of his investment, (v)
he has had the opportunity to ask questions of the Company concerning the
Company's business and assets and to obtain any additional information which he
considered necessary to verify the accuracy or to amplify the Company's
disclosures with respect to his investment and has had all such questions
answered to his satisfaction and (vi) the Company will be relying upon the
foregoing investment representations in agreeing to issue this Warrant and the
Warrant Stock to the Holder. The Holder acknowledges that the transferability of
the Warrant and of any Warrant Stock will be subject to restrictions imposed by
all applicable federal and state securities laws and agrees that the
certificates evidencing the Warrant Stock may be imprinted with an appropriate
legend setting forth these restrictions on transferability.

         7.       Amendment. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by means of an instrument in writing
signed by the party against which enforcement of the charge, waiver, discharge
or termination is sought.

         8.       Termination. This Warrant shall terminate and no longer be
exercisable at 5:00 p.m., Arizona time on January 23, 2006.

Dated:  January 23, 2001            TASER INTERNATIONAL, INC.

                                    By: /s/ [Illegible]
                                    Its:    President

Accepted as of the above date:

Phil Purer

<PAGE>   7

                                   EXHIBIT A

                                WARRANT EXERCISE

                  (To be signed only upon exercise of Warrant)

TO:  TASER International, Inc., 7339 E. Evans Road, Scottsdale, AZ 85260

      The undersigned, the holder of the foregoing Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder,        shares of Common Stock of TASER International,
Inc., and herewith encloses $       in full payment therefore. Please issue a
certificate for such shares in the name of the undersigned and deliver it to
the undersigned at the address stated below. If such number of shares shall not
be all of the share purchasable under the Warrant, unless the Warrant has
expired, please issue a new Warrant Certificate of like tenor for the balance
of the shares purchasable thereunder to be delivered to the undersigned at the
address stated below.

                                                  (Please Print)



Dated                               Signature
      ---------------------                  ------------------------------


<PAGE>   8

Reference is hereby made to a loan between, Phil Purer (Payee), and Taser
International. an Arizona Corporation (Debtor) dated January 23, 2001 in the
amount of $500,000.00 plus interest.

In consideration of Payee's having executed said Laon at the request of the
undersigned, the undersigned (Guarantors) hereby jointly and severally
unconditionally guarantee to Payee and Payee's successors and assigns, the
payment of the principal, interest and other sums provided for in said Loan and
the performance and observance of all agreements and conditions contained in
said Loan on the part of Debtor to be performed or observed.

Guarantors hereby waive presentment for payment, demand for payment, notice of
nonpayment or dishonor, protest and notice of protest, diligence in collection,
and any and all formalities that may be legally required to charge them or
either or any of them with liability; and the Guarantors, and each of them, for
further agree that their liability as Guarantors shall in no way be impaired or
affected by any renewals, waivers, or extensions that may be made from time to
time, with or without the knowledge and consent of any one or more of them, of
any default or the time of payment or performance required under said Loan, or
by any forbearance or delay in enforcing any obligation thereof, or by
assignment of said Loan, or by any modifications of the terms or provisions of
the Loan.

The Guarantors further jointly and severally covenant and agree to pay all
expenses and fees, including attorney fees that may be incurred by the Payee or
its successors or assigns enforcing any of the terms or provisions of this

This Guarantee shall be binding upon the heirs, legal representatives,
successors, and assigns of the Guarantors, and each of them, shall not be
discharged or affected, in whole or in part by the death, bankruptcy,
insolvency of the Guarantors, or anyone or more of them.

This Guarantee is absolute, unconditional, and continuing, and payment of the
sums for which the undersigned becomes liable shall be made at the office of
Payee or its successors or assigns from time to time on demand as the same
become or are declared due.

Guarantors hereby waives any and all benefits under Arizona Revised Statutes
("A.R.S.") Sections 12-1641 -12.1646 and Rule 17(f) of the Arizona Rules of
Civil Procedure.

IN WITNESS THEREOF, Guarantor has hereunto set his hands and seal this
Agreement the 25th day of January, 2001.

Guarantor:  Patrick W. Smith                 Thomas P. Smith

By:  /s/ Patrick W. Smith               By:  /s/ Thomas P. Smith
     --------------------                    -------------------

Date:  January 25, 2001                 Date:  January 25, 2001

         Deanna M. Smith

By:  /s/ Deanna M. Smith

Date:  January 25, 2001