Form: Explanation:
Preferred Stock Purchase Agreement (pro-company oriented) This is a Preferred Stock Purchase Agreement between a start-up company and venture capital investors, with the following key points: (1) The form is relatively straight forward and more pro-company oriented than investor oriented (2) The stock being sold is Series A convertible preferred stock. (3) A Rights Agreement, containing registration and information rights, is attached. (4) This is for a Delaware corporation with an Amended and Restated Certificate of Incorporation attached containing the preferred stock terms.
Form 19.6
________[Name of Company]_________ PREFERRED STOCK PURCHASE AGREEMENT Dated as of ____________________
PREFERRED STOCK PURCHASE AGREEMENT
Preferred Stock Purchase Agreement (this “Agreement”), dated as of ________________, by and among __________________, a Delaware corporation (the “Company”), and the purchasers listed on Schedule 1.1 hereto (the “Purchasers”). PURCHASE AND SALE OF STOCK Delivery. Subject to the provisions of this Agreement, the Purchasers agree to purchase at the Closing (as defined below), and the Company agrees to sell and issue to the Purchasers at the Closing, shares of Series A Preferred Stock (the “Shares”) of the Company, for the purchase price of $_____ per share. The name and address of each Purchaser, and the number of Shares to be acquired by each Purchaser, are set forth in Schedule 1.1. The purchase and sale of Shares shall take place at the offices of the Company at 10:00 a.m. West Coast time, on ________________ or at such other time and place as the Company and a majority-in-interest of the Purchasers agree upon in writing (which time and place are designated as the “Closing” and which date is designated as the “Closing Date”). At the Closing the Company shall deliver to each Purchaser a certificate representing the Shares which such Purchaser is purchasing against delivery to the Company by such Purchaser by wire transfer, certified check or immediately available funds, or other manner of payment approved by the Company, in the amount of the purchase price therefor payable to the Company’s order. Subsequent Sales of Shares. At any time up to 180 days following the Closing, the Company may sell up to __________ shares of additional Series A Preferred Stock to such additional investors as may be approved by the Board of Directors of the Company. All such sales shall be made on the terms and conditions set forth in this Agreement. Any Shares sold pursuant to this Section 1.2 shall be deemed to be “Series A Preferred Stock” and shall be deemed to be “Shares” sold pursuant to this Agreement, any purchasers thereof shall be deemed to be “Purchasers” for all purposes under this Agreement, and any such subsequent sale shall be deemed to occur at a “Closing” and the date of any such Closing shall be deemed to be a “Closing Date.” The new purchasers shall become parties to this Agreement by signing a counterpart signature page hereto. REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants that, except as set forth in the Disclosure Schedule attached hereto: Organization, Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power and corporate authority to own, lease and operate its property and assets and to conduct its business as presently conducted and as proposed to be conducted by it. The Company has full corporate power and corporate authority to enter into and perform its obligations under this Agreement, the Rights Agreement in the form of Exhibit B hereto (the
“Rights Agreement”) and the Co-Sale Agreement (as defined below) (collectively, the “Transaction Documents”), and to carry out the transactions contemplated by the Transaction Documents. The nature of the Company’s business and its ownership or leasing of property do not require that the Company become qualified as a foreign corporation in any state or jurisdiction other than where the failure to so qualify will not have a material adverse impact on the Company. Complete and correct copies of the Amended and Restated Certificate of Incorporation (the “Restated Certificate”) and By-laws of the Company, as amended to date, have been delivered to counsel for the Purchasers. Capitalization. The capital stock of the Company consists of: ____________ shares of authorized preferred stock, par value $.001 per share (“Preferred Stock”), ____________ shares of which are designated Series A Preferred Stock, of which no shares are issued and outstanding prior to the Closing Date. ____________ shares of authorized common stock, par value $.001 per share (“Common Stock”), of which