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This Preferred Shares Purchase Contract is an agreement between a company and an initial investor wishing to purchase preferred shares in the company. Typically, preferred shares are sold to investors early on in the startup phase under “Series A” funding. This agreement contains all of the essential clauses and provisions but can be customized to fit the needs of the parties. This contract can be used by individuals or small businesses that want to buy or sell preferred shares in a company.
Preferred Shares Purchase Contract This Preferred Shares Purchase Contract is an agreement between a company and an initial investor wishing to purchase preferred shares in the company. Typically, preferred shares are sold to investors early on in the startup phase under “Series A” funding. This agreement contains all of the essential clauses and provisions but can be customized to fit the needs of the parties. This contract can be used by individuals or small businesses that want to buy or sell preferred shares in a company. Preferred Shares Purchase Contract THIS PREFERRED SHARES PURCHASE CONTRACT (the “Agreement”), entered into this ____ day of _____________, ______ (the “Effective Date”) by and between __________________ (the “Company”) and _______________ (the “Purchaser”). WHEREAS the Purchaser is desirous to purchase from the Company and the Company is desirous to sell to the Purchaser Series A Preferred Shares of the Company on the terms and conditions set forth herein. NOW THEREFORE in consideration of the premises and mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Company and the Purchaser hereto, the Company and the Purchaser hereby agree with one another as follows 1.00 PURCHASE AND SALE OF STOCK 1.01 The Purchaser shall purchase from the Company _______ (___) shares of Series A Preferred Stock (the “Shares”) of the Company. 1.02 The Company shall authorize the sale of the Shares to the Purchaser by a resolution passed by the Board of Directors of the Company on or prior to the Effective Date of this Agreement. 2.00 PURCHASE PRICE 2.01 Upon and subject to the terms and conditions of this Agreement, the Company shall sell, transfer, assign and issuer to the Purchaser and the Purchaser shall purchase and acquire from the Company, at the closing date of this transaction, the Shares for the Purchase Price payable as provided in Section 2.3. 2.02 The purchase price (the "Purchase Price") payable by the Purchaser to the Company for the Shares shall be _______________ ($_________) Dollars. The Purchaser acknowledges that the Purchase Price does not include taxes payable, if any, as a result of the purchase and sale of the Shares. 2.04 The Purchaser shall pay and satisfy the Purchase Price by payment to the Company of the Purchase Price, by payment on the closing date of this transaction of the Purchase Price by way of certified check or bank draft, payable to the order of the Company. 3.00 CLOSING DATE 3.01 Time is of the essence of this Agreement. The closing of this transaction shall take place at _______________ on the _____ day of ___________, _______ (the “Closing Date”) at the offices of ____________________ or at such other place as may be approved in writing by the parties hereto. 4.00 CLOSING PROCEDURES 4.01 On or before the Closing Date, the Company and the Purchaser shall take or cause to be taken all actions, steps, and corporate proceedings necessary or desirable to validly and effectively approve or authorize the completion of the transaction herein provided for; and upon fulfillment of all the conditions contained herein that have not been waived in writing as therein provided, the Company shall deliver to the Purchaser the following: (a) a stock certificate representing the Shares purchased by the Purchaser; and (b) all deeds of conveyance, bills of sale, assurances, transfers, assignments, consents, elections (and supporting documents) and other documents as the Purchaser's considers reasonably necessary or desirable to validly and effectively complete the transfer of the Shares to the Purchaser. 5.00 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 5.01 The Company represent and warrant to the Purchaser as follows: (a) Good Standing. The Company is now and on the Closing Date will be a corporation, (i) duly incorporated and organized, validly subsisting, and in Good Standing under the laws of the /State of _______________; and (ii) duly authorized and licensed to own its properties and to carry on its business as presently owned and carried on by it. © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 3 (b) No Breach Caused by this Agreement. Neither the execution nor delivery of this Agreement nor the fulfillment or compliance with any of the terms hereof will conflict with, result in a breach of the terms, conditions, or provisions of, or constitute a default under, the articles and by-laws, as amended, of the Company or any material agreement or instrument to which the Company is subject, or will require any consent or other action by any administrative or governmental body. (c) Compliance. The Company is conducting its business in compliance in all material respects with all applicable laws, rules and regulations of each jurisdiction in which the business is carried on and is duly licensed, registered, or qualified in all jurisdictions in which it owns, leases or operates its property or carries on the business so as to enable the business to be carried on as now conducted and its property and assets to be owned, leased and operated and all such licenses, registrations and qualifications are valid and subsisting and in good standing. (d) Solvency. The Company is not insolvent, has not committed an act of bankruptcy, proposed a compromise or arrangement to its creditors generally, had any petition for a receiving order in bankruptcy filed against it, taken any proceedings with respect to a compromise or arrangement, taken any proceedings to have itself declared bankrupt or wound-up, taken any proceedings to have a receiver appointed over any or all of its assets, had any encumbrancer take possession of any of its property or had any execution or distress become enforceable or become levied upon any of its property. 6.00 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 6.01 The Purchaser has full power and authority to enter into this Agreement, and this Agreement constitutes a valid and legally binding obligation of Purchaser, enforceable against it/ in accordance with its terms and conditions, except as limited by applicable bankruptcy and other laws of general application affecting enforcement of creditors’ rights generally, as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies. 7.00 INDEMNIFICATION 7.01 In the event the transactions contemplated by this Agreement are consummated, the Company and the Purchaser agrees to indemnify and hold each other harmless against and in respect of any loss, damage, claim, cost or expense whatsoever, including any and all incremental out-of-pocket costs, including, without limitation, all reasonable legal and accounting fees, which the Company or the Purchaser may incur, suffer or be required to pay, pursuant to any Claim, that may be made or asserted against or affect the Company or the Purchaser, provided, however, that the subject matter of any such Claim relates to or arises out of or in connection with the following matters: (a) any misrepresentation or breach of any warranty, agreement, covenant or obligation of the Company or the Purchaser contained in this Agreement or in any agreement, © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 4 schedule certificate or other document required to be entered into or delivered by the Company or the Purchaser. 7.00 AUTHORIZED CAPITAL OF THE COMPANY 7.01 The authorized capital of the Company consists of, or will consist of at the Closing Date of the following: enter particulars of the authorized capital of the Company (eg. name of classes of shares and amount issued) 7.02 The issued and outstanding Shares of Preferred Stock are all duly and validly authorized and issued, fully paid and nonassessable, and were issued in accordance with the registration or qualification provisions of the Securities Act of 1933, as amended (the “Act”), and any relevant state securities laws, or pursuant to valid exemptions therefrom. 8.00 DUE AUTHORIZATION 8.01 Any and all required action by the Company, its officers, directors or shareholders necessary for the authorization, execution and delivery of this Agreement and the performance of the Company’s obligations contained herein, has occurred or will occur prior to the Closing Date. 8.02 This Agreement constitutes a valid and legally binding obligation of the Company, enforceable against it in accordance with the terms and conditions contained herein. 9.00 GENERAL PROVISIONS 9.01 To the best of the Company’s knowledge, there are currently no actions, suits, proceedings or investigations pending or threatened against the Company that questions the validity of this Agreement or the right of the Company to enter into this Agreement or to consummate the transaction contemplated hereby, nor is the Company aware of any basis for any of the forgoing. The Company is neither a party nor subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality that would affect the ability of the Company to enter into this Agreement or to consummate the transaction contemplated hereby. 9.02 Except for filings under federal and applicable state securities laws and except for Permits (as defined below), the absence of which either individually or in the aggregate would not have a material adverse effect on the Company, all permits, consents, approvals, orders, authorizations of, or declarations to (collectively, “Permits”) or filings with any federal, state, local or foreign court, governmental or regulatory authority, or other person (including third party consents) required on the part of the Company in connection with the execution, delivery or performance of this Agreement and the consummation of the transaction contemplated herein © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 5 have been obtained or will be obtained prior to the Closing Date, and will be effective as of the Closing Date. 9.03 The share certificate issued to the Purchaser by the Company in respect of the Shares purchased shall bear the following legend: “THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.” 9.04 Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 9.05 This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and such counterparts together shall constitute one agreement deemed to be dated as of the date hereof. 9.06 This Agreement constitutes the entire agreement between the Company and the Purchaser with respect to the specific subject matter hereof and supersedes all prior agreements or understandings of any kind with respect to the specific subject matter hereof. 9.07 Any notice or other communication under or for the purposes of this Agreement shall be given or made in writing, marked Private and Confidential, and shall be served personally or by courier or mailed by prepaid registered mail: (a) in the case of the Company, to: Attention: Fax: (___) (b) in the case of any Purchaser, to the last known address of the Purchaser as recorded in the records of the Company, © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 6 or to such other address as any of the parties shall have last notified in the manner provided herein. The date of receipt of any such notice or other communication shall be deemed to be the date of delivery of such notice or other communication if served personally or by courier (provided, however, that no notice or other communication shall be delivered by courier to a residential address), or if mailed as aforesaid, the fourth day of business following the date of mailing, provided that no day on which there is an interruption of postal service which would affect such mailing shall be a day for determining whether effective notice has been given. 9.08 This Agreement enures to the benefit of and is binding upon the parties hereto and their respective successors and assigns. 9.09 This Agreement is to be construed in accordance with and governed by the laws of the State of ____________________. IN WITNESS WHEREOF the Company and the Purchaser have duly executed this Agreement under their hands and seals as of the day and year first written above. (COMPANY) Name: Title: (PURCHASER) Name: Title: © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 7
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