Exhibit 4(f)
LOAN AND WARRANT PURCHASE AGREEMENT
THIS LOAN AND WARRANT PURCHASE AGREEMENT (this "Agreement") is made
effective as of October 25, 1995, by and between TRACER Design, Inc., an Arizona
corporation ("TRACER"), and ____________________________________________________
__________________________________________________________________("Purchaser").
PREMISES: TRACER desires to borrow $_______ (the "Loan") from
Purchaser, and Purchaser is willing to make such Loan to TRACER in consideration
of TRACER issuing to Purchaser a warrant to purchase ______ shares of the Class
A Common Stock, $.001 par value of TRACER (the "Warrant Shares"), a form of
which is attached to this Agreement as Exhibit I (the "Warrant"), on the terms
and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, TRACER and Purchaser agree as follows:
1. Issuance, Sale and Delivery of Warrant. At the Closing (defined in
Section 2) TRACER agrees to issue and deliver to Purchaser and Purchaser agrees
to receive from TRACER the Warrant in consideration of Purchaser making the Loan
to TRACER.
2. Closing. The issuance and delivery of the Warrant shall take place
at the offices of TRACER on October 25, 1995 at 10 a.m. local time, or at such
other location, date and time as may be agreed upon between Purchaser and TRACER
(such transaction being the "Closing" and such date and time being the "Closing
Date"). At the Closing TRACER shall issue and deliver to Purchaser the Warrant
registered in the name of Purchaser, and a promissory note evidencing the Loan.
In exchange for such delivery, Purchaser shall deliver its check payable to the
order of "TRACER Design, Inc." in the amount of the Loan.
3. Representations and Warranties of TRACER. TRACER represents and
warrants to Purchaser as follows:
(a) Organization and Standing; Charter and Bylaws. TRACER is a
corporation duly organized and existing under and by virtue of the laws
of the State of Arizona and is in good standing under such laws. TRACER
has requisite corporate power and authority to own its property and to
carry on its business as presently conducted or as proposed to be
conducted.
(b) Corporate Power. TRACER has all requisite legal and
corporate power to sell and issue the Warrant to Purchaser and in all
other respects to carry out and perform its obligations under this
Agreement.
(c) Capitalization. The authorized capital stock of TRACER
consists of 400,000 shares of preferred stock, $.001 par value, of
which no shares are issued and outstanding; 500,000 shares of class A
common stock, $.001 par value, of which 10,000 shares are issued and
outstanding, and 100,000 shares of class B common stock, $.001 par
value, of which no shares are issued and outstanding. Prior to the
Closing TRACER will have no equity securities issued or outstanding
except those disclosed on Exhibit II attached hereto, which contains a
list of all holders of capital stock of TRACER and their respective
shareholdings. Except as disclosed on Exhibit II, there are no
outstanding warrants, options, agreements, convertible securities or
other commitments pursuant to which the Corporation is or may become
obligated to issue any shares of its capital stock or other securities
of the Corporation, except as contemplated by this Agreement. There
are, and immediately upon consummation at the Closing of the
transactions contemplated hereby there will be, no preemptive or
similar rights to purchase or otherwise acquire shares of capital stock
of TRACER pursuant to any provision of law, the Certificate of
Incorporation or Bylaws of TRACER, or any agreement to which TRACER is
a party, or otherwise, except as contemplated by this Agreement and in
that certain Amended and Restated Stockholders' Agreement dated as of
July 13, 1995 by and among TRACER and the Stockholders party thereto
(the "Stockholders' Agreement"), a copy of which is attached as Exhibit
III. All shares of common stock and other securities issued by TRACER
prior to the Closing have been issued in transactions exempt from
registration under the Securities Act of 1933, as amendment (the
"Securities Act") and in compliance with applicable state securities
laws ("Blue Sky Laws"). TRACER does not believe that it has violated
the Securities Act or Blue Sky Laws in connection with the issuance of
any shares of common stock or other securities prior to the Closing.
(d) Authorization. All corporate action on the part of TRACER
necessary for the authorization, execution, and delivery of this
Agreement, and performance of all of TRACER's obligations hereunder,
including issuance and delivery of the Warrant, shall have been taken
prior to the Closing.
(e) Corporate Law Status. When the Warrant has been issued,
delivered and paid for in accordance with this Agreement, it will be
validly issued, fully paid and non-assessable and will be free and
clear of all liens, charges, restrictions, claims and encumbrances
imposed by or through any act or omission on the part of TRACER. The
issuance, sale or delivery of the Warrant is not subject to any
preemptive right of stockholders of TRACER or to any right of first
refusal or other right in favor of any person.
(f) Validity. This Agreement has been duly executed and
delivered by TRACER and constitutes the legal, valid and binding
obligation of TRACER, enforceable in accordance with its terms, except
as enforceability may be limited by
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applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditor's rights generally,
and except as enforceability may be subject to general principles of
equity, whether applied in a court of equity or at law or by an
arbitration panel.
4. Representations and Warranties of Purchaser. Purchaser represents
and warrants to TRACER, and where so stated, promises as follows:
(a) Unregistered Securities. Purchaser understands that the
Warrant has not been registered under the Securities Act of 1933 or any
state securities laws (collectively, "Securities Laws") in reliance
upon an exemption from registration accorded for nonpublic offerings.
Purchaser further recognizes that the Warrant may not be sold unless it
and the transaction in which it is to be sold have been registered
under the Securities Laws or an exemption from registration is
available for such sale. Purchaser accepts that the Warrant will bear a
legend to that effect. Further, Purchaser recognizes that TRACER has
made no representations as to registration of the Warrant under the
Securities Laws and that no registration is anticipated ever to occur.
(b) Investment Intent. Purchaser is acquiring the Warrant for
its own account for investment and not with a view to resale or
distribution. The Purchaser promises that it will not sell,
hypothecate, transfer or otherwise dispose of the Warrant, or attempt
so to do, unless it has been registered under the Securities Laws or,
in the opinion of counsel reasonably acceptable to TRACER and its
counsel, an exemption from registration is available.
(c) Negotiation; Access to Information. The terms of
Purchaser's purchase of the Warrant were established by negotiations
between Purchaser and TRACER's representative, and in connection
therewith, Purchaser was given access to the relevant information it
requested concerning TRACER's condition and operations, and the
opportunity to ask questions of and receive answers from TRACER's
representatives. Purchaser is knowledgeable and experienced in
financial and business matters and, on the basis of the information it
received concerning TRACER's condition and operations, Purchaser is in
a position to make an informed investment decision concerning its
investment in the Warrant and the risks attending such investment.
Further, in light of its financial position, Purchaser is able to bear
the economic risks of investment in the Warrant.
(d) Legends; Stop Transfer Orders. Purchaser hereby consents
and agrees that TRACER may imprint on any certificate evidencing the
Warrant or any of the Warrant Shares an appropriate legend or
notification to the effect that such shares are not freely transferable
and may be transferred only in compliance with applicable securities
laws. Purchaser further consents and agrees that TRACER may
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give appropriate "stop order" instructions in this regard to any
transfer agent for the Warrant or the Warrant Shares.
(e) Compliance; Indemnity. Purchaser hereby expressly promises
not to offer for sale or sell the Warrant or any of the Warrant Shares,
or any interest therein, except in compliance with the Securities Act
of 1933, as amended, and other applicable securities laws and
regulations, including those of the State of Arizona. Purchaser hereby
promises to indemnify TRACER, together with its officers and directors,
against any and all liabilities, losses, damages and expenses
(including reasonable attorney fees) arising (directly or indirectly)
from or in connection with any disposition of the Warrant or the
Warrant Shares, or any interest therein, in violation of (or allegedly
in violation of) applicable securities laws or regulations, including
all such expenses incurred in connection with the defense against any
such claim.
(f) No Transfer; Stockholder's Agreement. Purchaser promises
not to transfer the Warrant or any interest therein without the prior
written consent of TRACER. In addition, Purchaser acknowledges that in
connection with the exercise of the Warrant, any holder will be
required as a condition to such exercise to become bound by and
obligated under the Stockholder Agreement for so long as it shall be in
effect.
(g) Delivery of Investment Letter upon Exercise of Warrant. At
the request of TRACER, Purchaser shall deliver upon exercise of the
Warrant an investment letter in form and substance substantially to the
effect of Sections 4(a)-(e) above.
5. Conditions to the Obligations of Purchaser. The obligation of
Purchaser to make the Loan and receive the Warrant on the Closing Date is, at
Purchaser's sole option, subject to satisfaction on or before the Closing Date
of the following conditions:
(a) Representations and Warranties to Be True. The
representations and warranties contained in Section 3 shall be true,
complete and correct on and as of the Closing Date with the same effect
as though such representations and warranties had been made on and as
of such date.
(b) Performance. TRACER shall have performed and complied with
all agreements contained herein and required to be performed or
complied with by it prior to or at the Closing Date.
(c) Proceedings. All corporate and other proceedings to be
taken by TRACER in connection with the transactions contemplated hereby
and all documents incident thereto shall be satisfactory in form and
substance to Purchaser and its counsel.
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(d) Survival. All covenants, representations and warranties
made in this agreement shall survive until the expiration of the term
of the Warrant.
6. Entire Agreement. This Agreement constitutes the sole and entire
agreement of the parties with respect to the subject matter hereof. This
Agreement may not be amended or modified, and no provisions may be waived,
without the written agreement of TRACER and Purchaser.
IN WITNESS WHEREOF, TRACER and the Purchaser have executed this
Agreement as of the day and year first above written.
TRACER:
TRACER Design, Inc.
By: ___________________________________
Xxxx Xxxxxx
Its President
PURCHASER:
_________________________________________
By: ___________________________________
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EXHIBIT I
[attach Warrant]
EXHIBIT II
Stockholders:
Xxxx Xxxxxx 127,500 shares of Class A Common Stock
Xxxxxx Xxxxxxxxxxx 61,250
Xxx Xxxxx 61,250
Xxxxx Xxxxx 5,102
Stock Option Holders:
Xxxx Xxxxxx 8,697
Xxxx Xxxx 8,697
Xxxxxx Xxxxxx 11,596
Xxxxxx Xxxxxxx 5,797
Warrant Holders:
Pickwick Group LLC 5,100 shares
Potential Warrant/Stock Grant to Xxxxx Xxxxxxx and/or Xxx Xxxxxxxx (32,909
shares; to be determined)
Potential increase in shares to Xxxxx Xxxxx of 5,102 shares in connection with
offering
Potential Warrants to bridge lenders for $40,000 aggregate bridge loans (6,800
shares)
EXHIBIT III
[attach Stockholders' Agreement]
Schedule to Exhibit 4(f) - Form of Loan and Warrant Purchase Agreement
List of Purchasers:
Xxxxxx Xxxxxxxx
Xxxxxxxx Xxxxxx
Xxxxxxx and Xxxxx Xxxxxxxxx
Pickwick Group LLC
Xxxxxxxx Xxxxxx
