This Series A Preferred Stock Purchase Agreement is an agreement between a company and a party wishing to purchase the Series A preferred stock of the company. The stock is issued to the purchasing party on certain terms and conditions and is the first round of stock offered for sale. This agreement contains many of the standard provisions commonly included in a preferred stock purchase agreement and may be customized to fit the specific needs of the parties. This document should be used by a company located in North Dakota selling Series A preferred stock and a purchaser of such stock.
Docstoc Legal Agreements This Series A Preferred Stock Purchase Agreement is an agreement between a company and a party wishing to purchase the Series A preferred stock of the company. The stock is issued to the purchasing party on certain terms and conditions and is the first round of stock offered for sale. This agreement contains many of the standard provisions commonly included in a preferred stock purchase agreement and may be customized to fit the specific needs of the parties. This document should be used by a company located in North Dakota selling Series A preferred stock and a purchaser of such stock. ® DISCLAIMERS: ALL INFORMATION AND FORMS ARE PROVIDED “AS IS” WITHOUT ANY WARRANTY OF ANY KIND, EXPRESS, IMPLIED, OR OTHERWISE, INCLUDING AS TO THEIR LEGAL EFFECT AND COMPLETENESS. They are for general guidance and should be modified by you o r your attorney to meet your specific needs and the laws of your state . Use at your own risk. 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All Rights Reserved SERIES A PREFERRED STOCK PURCHASE AGREEMENT THIS SERIES A PREFERRED STOCK PURCHASE AGREEMENT (hereinafter the “Agreement”) is made as of ____ [Month] ____ [Date], 20___ [Year], by and between _______________________________ [Instruction: Insert name of company] (hereinafter the “Company”), a North Dakota corporation, with its principal office at ___________________________ [Instruction: Insert the address of company], and _____________________ [Instruction: Insert name of purchaser] (hereinafter the “Purchaser”), with registered address at _____________________________________ [Instruction: Insert address of purchaser]. The Company and the Purchaser may individually be referred to as “Party”, or collectively as the “Parties”. WHEREAS, the Company has authorized the sale and issuance of up to an aggregate of ____________ [Instruction: Insert the number of shares the Company has authorized issuance and sale of] shares of its Series A Preferred Stock (hereinafter the “Shares”); and WHEREAS, the Company and the Purchaser desire to enter into an agreement regarding the purchase of the Shares on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the foregoing and the mutual promises, representations, warranties, and covenants hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows: 1. AGREEMENT TO SELL AND PURCHASE a. Authorization of Shares The Shares shall have the rights, preferences, privileges, and restrictions set forth in the amended and restated Articles of Incorporation of the Company, in the form attached hereto as Exhibit A (the “Restated Charter”). The Shares shall be sold at one or more closings (each, a “Closing”), provided that no Closing shall occur more than six months after the date of this Agreement. b. Sale and Purchase Subject to the terms and conditions hereof, at the initial Closing, the Company hereby agrees to issue and sell to the Purchaser, and the Purchaser agrees to purchase from the Company the Shares at a purchase price of $_________ [Instruction: Insert the purchase price of shares] per share. c. Warrants As further consideration for the purchase of the Shares, the Company shall issue to the Purchaser, at the Closing, a warrant, in the form attached hereto as Exhibit B (hereinafter “Warrant”), to purchase the same number of Shares the Purchaser is purchasing at the Closing. © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 2 2. CLOSING, DELIVERY, AND PAYMENT a. Closing i. The losing of the sale and purchase of the Shares under this Agreement (the “Initial Closing”) shall take place at the offices of the Company, or at such other time or place as the Company and the Purchaser may mutually agree (such date is hereinafter referred to as the “Initial Closing Date”). Subsequent Closings shall take place at such places and times as the Company and the Purchaser participating in such Closings shall mutually agree, provided that no Closing shall occur after ____ [Month] ____ [Date], 20___ [Year]. ii. Subsequent Closing: Any sale and issuance in a subsequent Closing shall be on the same terms and conditions as those contained herein, and the purchaser shall, upon execution and delivery of the relevant signature pages, be bound by this Agreement, without the need for an amendment to the Agreement and shall have the rights and obligations hereunder, in each case as of the date of the applicable Subsequent Closing. iii. Delivery: At the Initial Closing, subject to the terms and conditions hereof, the Company will deliver to the Purchaser a certificate representing the number of Shares to be purchased at the Initial Closing by the Purchaser, together with the Purchaser’s warrant against payment of the purchase price there for by check, wire transfer made payable to the order of the Company, cancellation of indebtedness, or any combination of the foregoing. 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents and warrants to the Purchaser as of the date of this Agreement and as of each Closing as set forth below: a. Organization, Good Standing, and Qualification The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of North Dakota. The Company has all requisite corporate power and authority to own and operate its properties and assets, to carry on its business as presently conducted, to execute and deliver this Agreement, and to issue and sell the Shares and the shares of Common Stock issuable upon conversion of the Shares (the “Conversion Shares”). b. Subsidiaries The Company does not own or control, directly or indirectly, any interest in any corporation, partnership, limited liability company, association, or other business entity. © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 3 c. Capitalization; Voting Rights The authorized capital stock of the Company, immediately prior to the Initial Closing (and after the filing of the Restated Charter), consists of ____________ [Instruction: Insert the authorized capital stock of the Company prior to Initial Closing] shares, of which _______________ [Instruction: Insert the number of shares designated as shares of Common Stock, without par value] shares are designated as shares of Common Stock, without par value and ____________ [Instruction: Insert the number of shares designated as Series A Preferred Stock] shares are designated as Series A Preferred Stock. Except for the foregoing, and except as may be granted pursuant to, or as contemplated by, this Agreement, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. d. Authorization All corporate action on the part of the Company and its directors, officers, and shareholders necessary for the authorization, execution, and delivery of the Agreement by the Company, the authorization, sale, issuance, and delivery of the Shares and the Conversion Shares, and the performance of all of the Company’s obligations under the Agreement has been taken or will be taken prior to the Initial Closing. This Agreement, when executed and delivered by the Company, shall constitute the valid and binding obligation of the Company, enforceable in accordance with its terms, except (i) as limited by laws of general application relating to bankruptcy, insolvency, and the relief of debtors, and (ii) as limited by rules of law governing specific performance, injunctive relief, or other equitable remedies and by general principles of equity. e. Financial Condition The Company has furnished to the Purchaser an unaudited balance sheet of the Company dated ____ [Month] ____ [Date], 20___ [Year] (the "Financial Statements"). Subject to the information in this section, the Company warrants that the Company’s Financial Statements are correct in all material respects and present fairly the financial condition of the Company as of the date indicated therein. Except as shown on the Financial Statements, the Company has no material liabilities and, to the best of its knowledge, knows of no material contingent liabilities not disclosed in the Financial Statements, except current liabilities incurred in the ordinary course of business since the date of the Financial Statements, which have not been, either in any individual case or in the aggregate, material to the financial condition or operating results of the Company. Since the date of the Financial Statements, there has not been, to the Company’s knowledge, any change in the assets, liabilities, financial condition, prospects, or operations of the Company from that reflected in the Financial Statements, other than changes in the ordinary course of business, none of which individually or in the aggregate has had or is reasonably expected to have a material adverse effect on such assets, liabilities, financial condition, prospects, or operations of the Company; © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 4 f. Intellectual Property: i. The Company owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, and other proprietary rights and processes necessary for its business as now conducted and as presently proposed to be conducted, without any known conflict with, or infringement of, the rights of others. ii. The Company has not received any communications alleging that the Company has violated or, by conducting its business as presently proposed, would violate any of the patents, trademarks, service marks, trade names, copyrights, or trade secrets, or other proprietary rights of any other person or entity, nor is the Company aware of any basis there for. g. Compliance with Laws; Permits The Company is not in violation of any applicable statute, rule, regulation, order, or restriction of any domestic or foreign government or any instrumentality or agency thereof in respect of the conduct of its business or the ownership of its properties, which violation would materially and adversely affect the business, assets, liabilities, financial condition, operations, or prospects of the Company. No governmental orders, permissions, consents, approvals, or authorizations are required to be obtained and no registrations or declarations are required to be filed in connection with the execution and delivery of this Agreement and the issuance of the Shares or the Conversion Shares, except such as has been duly and validly obtained or filed, or with respect to any filings that must be made after the Closing, as will be filed in a timely manner. The Company has all franchises, permits, licenses, and any similar authority necessary for the conduct of its business as now being conducted by it, the lack of which could materially and adversely affect the business, properties, prospects, or financial condition of the Company and believes it can obtain, without undue burden or expense, any similar authority for the conduct of its business as planned to be conducted. h. Full Disclosure The Company has provided the Purchaser with all information requested by him or her in connection with his or her decision to purchase the Shares, including all information the Company believes is reasonably necessary to make such investment decision. Neither this Agreement nor any other document delivered by the Company to the Purchaser or his or her attorney or agent in connection herewith or therewith or with the transactions contemplated hereby or thereby, contain any untrue statement of a material fact nor omit any material fact necessary in order to make the statements contained herein or therein not misleading. To the Company’s knowledge, there are no facts which (individually or in the aggregate) materially adversely affect the business, assets, liabilities, financial condition, prospects, or operations of the Company that have not been set forth in the Agreement or in other documents delivered to the Purchaser or his or her attorney in connection herewith. © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 5 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER The Purchaser hereby represents and warrants to the Company as follows (such representations and warranties do not lessen or obviate the representations and warranties of the Company set forth in this Agreement): a. Requisite Power and Authority The Purchaser has all necessary power and authority under all applicable provisions of law to execute and deliver this Agreement and to carry out its provisions. Upon its execution and delivery, this Agreement will be valid and binding obligation of the Purchaser, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or other laws of general application affecting enforcement of creditors’ rights, or (ii) as limited by general principles of equity that restrict the availability of equitable remedies. b. Investment Representations The Purchaser understands that neither the Shares nor the Conversion Shares have been registered under the Securities Act. The Purchaser also understands that the Shares are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon the Purchaser’s representations contained in the Agreement. The Purchaser hereby represents and warrants as follows: i. Purchaser Bears Economic Risk The Purchaser has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that he or she is capable of evaluating the merits and risks of his or her investment in the Company and has the capacity to protect his or her own interests. The Purchaser must bear the economic risk of this investment indefinitely unless the Shares (or the Conversion Shares) are registered pursuant to the Securities Act, or an exemption from registration is available. The Purchaser understands that the Company has no present intention of registering the Shares, the Conversion Shares, or any shares of its Common Stock. The Purchaser also understands that there is no assurance that any exemption from registration under the Securities Act will be available and that, even if available, such exemption may not allow the Purchaser to transfer all or any portion of the Shares or the Conversion Shares under the circumstances, in the amounts or at the times the Purchaser might propose. ii. Acquisition for Own Account The Purchaser is acquiring the Shares and the Conversion Shares for his own account for investment only, and not with a view towards their distribution. iii. Purchaser Can Protect His Interest © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 6 The Purchaser represents that by reason of his or her, or of his or her management’s business or financial experience, he or she has the capacity to protect his or her own interests in connection with the transactions contemplated in this Agreement. Further, the Purchaser is aware of no publication of any advertisement in connection with the transactions contemplated in the Agreement. iv. Accredited Investor The Purchaser represents that he or she is an accredited investor within the meaning of Regulation D under the Securities Act, in that he or she is a director or executive officer of the Company, or has a net worth of not less than $1,000,000. v. Company Information The Purchaser has had an opportunity to discuss the Company’s business, management, and financial affairs with directors, officers, and management of the Company and has had the opportunity to review the Company’s operations and facilities. The Purchaser has also had the opportunity to ask questions to and receive answers from, the Company and its management regarding the terms and conditions of this investment. vi. Rule 144 The Purchaser acknowledges and agrees that the Shares, and if issued, the Conversion Shares, must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. The Purchaser has been advised or is aware of the provisions of Rule 144 promulgated under the Securities Act as in effect from time to time, which permits limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions, including, among other things: the availability of certain current public information about the Company, the resale occurring following the required holding period under Rule 144, and the number of shares being sold during any three-month period not exceeding specified limitations. 5. CONDITIONS TO THE PURCHASER’S OBLIGATIONS TO CLOSE The Purchaser’s obligation to purchase the Shares at a Closing is subject to the fulfillment on or before the Closing of each of the following conditions, unless waived in writing by the Purchaser purchasing the Shares in such Closing: a. Representations and Warranties The representations and warranties made by the Company in Section 3 shall be true and correct as of the date of such Closing. b. Covenants © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 7 The Company shall have performed or complied with all covenants, agreements, and conditions contained in this Agreement to be performed or complied with by the Company on or prior to the Closing. c. Blue Sky The Company shall have obtained all necessary North Dakota Blue Sky law permits and qualifications, or have the availability of exemptions there from, required by any state for the offer and sale of the Shares and the Conversion Shares. d. Restated Charter The Restated Charter shall have been duly authorized, executed, and filed with and accepted by the Secretary of State of the State of North Dakota. 6. MISCELLANEOUS a. Governing Law This Agreement shall be governed in all respects by the laws of the State of North Dakota as such laws are applied to agreements between _______________ [Instruction: Insert the State] residents entered into and performed entirely in _______________ [Instruction: Insert the State]. b. Survival The representations, warranties, covenants, and agreements made herein shall survive any investigation made by the Purchaser and the closing of each of the transactions contemplated hereby. All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in connection with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company hereunder solely as of the date of such certificate or instrument. c. Successors and Assigns Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the Parties hereto and shall inure to the benefit of and be enforceable by each person who shall be a holder of the Shares from time to time. d. Entire Agreement This Agreement and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the Parties with regard to the subjects hereof and no Party shall be liable or bound to any other in any manner by any representations, warranties, covenants, and agreements except as specifically set forth herein and therein. © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 8 e. Severability In case any provision of the Agreement shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. f. Amendment and Waiver: i. This Agreement may be amended or modified only upon the written consent of the Company and holders of at least sixty-six and two-thirds percent (66 2/3%) of the outstanding Shares (treated as if converted and including any Conversion Shares into which the Shares have been converted that have not been sold to the public). ii. The obligations of the Company and the rights of the holders of the Shares and the Conversion Shares under the Agreement may be waived only with the written consent of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the Shares (treated as if converted and including any Conversion Shares into which the Shares have been converted that have not been sold to the public). g. Delays or Omissions It is agreed that no delay or omission to exercise any right, power, or remedy accruing to any Party, upon any breach, default, or noncompliance by another Party under this Agreement or the Restated Charter, shall impair any such right, power, or remedy, nor shall it be construed to be a waiver of any such breach, default, or noncompliance, or any acquiescence therein, or of or in any similar breach, default, or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent, or approval of any kind or character on the Purchaser’s part of any breach, default, or noncompliance under this Agreement or under the Restated Charter or any waiver on such Party’s part of any provisions or conditions of the Agreement or the Restated Charter must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, the Restated Charter, by law, or otherwise afforded to any Party, shall be cumulative and not alternative. h. Notices All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the Party to be notified, (ii) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (ii) ___________ (___) [Instruction: Insert number of days, e.g., five (◊ 5)] days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) ___________ (___) [Instruction: Insert number of days, e.g., one (◊ 1)] day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company and the Purchaser at the address as set forth on the signature page hereof or at such other address as the Company or the © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 9 Purchaser may designate by ___________ (___) [Instruction: Insert number of days, e.g., ten (◊ 10)] days advance written notice to the other Party hereto. i. Expenses Each Party shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery, and performance of the Agreement. j. Attorneys’ Fees In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing Party in such dispute shall be entitled to recover from the losing Party all fees, costs, and expenses of enforcing any right of such prevailing Party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs, and expenses of appeals. k. Titles and Subtitles The titles of the sections and subsections of the Agreement are for convenience of reference only and are not to be considered in construing this Agreement. l. Counterparts This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. m. Confidentiality Each Party hereto agrees that, except with the prior written consent of the other Party, it shall at all times keep confidential and not divulge, furnish, or make accessible to anyone any confidential information, knowledge, or data concerning or relating to the business or financial affairs of the other Party to which such Party has been or shall become privy by reason of this Agreement, discussions or negotiations relating to this Agreement, the performance of its obligations hereunder, or the ownership of the Shares purchased hereunder. The provisions of this section shall be in addition to, and not in substitution for, the provisions of any separate nondisclosure agreement executed by the Parties hereto. n. Pronouns All pronouns contained herein, and any variations thereof shall be deemed to refer to the masculine, feminine, or neutral, singular or plural, as to the identity of the Parties hereto may require. © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 10 o. North Dakota Corporate Securities Law THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF North Dakota AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY [STATUTE]. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. IN WITNESS WHEREOF, the Parties hereto have executed the SERIES A PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof. COMPANY PURCHASER Signature: Signature: Print Name: Print Name: Title: Title: Address: Address: © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 11 EXHIBIT A RESTATED CHARTER © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 12 EXHIBIT B WARRANT FORM © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 13
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