Preferred Stock Purchase Agreement (Pro-investor oriented)

[NAME OF COMPANY]

SERIES A PREFERRED STOCK PURCHASE AGREEMENT

This Series A Preferred Stock Purchase Agreement (this "Agreement"), is made as of __________, ____ by and among [Name of Company], a Delaware corporation (the "Company"), and the undersigned purchasers (the "Purchasers").

NOW, THEREFORE, the parties hereto hereby agree as follows:

1. Authorization and Sale of Preferred Shares.

1.1 Authorization. The Company has duly authorized the sale and issuance of up to __________ shares of its Series A Preferred Stock having the rights, privileges and preferences set forth in the Company's Amended and Restated Certificate of Incorporation (the "Amended Certificate") in the form attached hereto as Exhibit A.

1.2 Sale of Preferred. Subject to the terms and conditions hereof, the Company shall issue and sell to the Purchasers, and each Purchaser agrees, severally, to purchase at the Closing, from the Company, an aggregate of _______ shares of Series A Preferred Stock (collectively, the "Shares"), at a purchase price of $____ per share. The amount to be purchased by each Purchaser and the form of consideration therefor is set forth in the Schedule of Purchasers attached as Schedule 1.

2. Closing Date; Delivery.

2.1 Closing Date. The closing of the purchase and sale of the Shares hereunder (the "Closing") shall be held at the offices of ___________________, at______________________, _______________, ______________, at __:___ [a.m.] [p.m.], __________, 20__ or at such other time and place as is mutually agreed to by the parties hereto (the date of the Closing is hereinafter referred to as the "Closing Date").

2.2 Delivery. Subject to the terms of this Agreement, at the Closing, the Company will deliver to the Purchasers a certificate representing the number of Shares being purchased by the Purchasers, which certificate shall be registered in the name of the Purchasers, against payment in full by the purchasers of the purchase price therefor by check or such other form of payment as shall be mutually agreed upon by the Purchasers and the Company, payable to the order of the Company.

3. Representations and Warranties.

The Company hereby represents and warrants to the Purchasers that:

3.1 Organization and Standing. The Company is a corporation duly organized and validly existing under the laws of the State of Delaware, is in good standing under such laws and is qualified to do business in California. The Company has all requisite power and authority to own and operate its properties and assets and to conduct its business as presently conducted and as proposed to be conducted. The Company is qualified or licensed and in good standing as a foreign corporation in all jurisdictions where the nature of its business or property makes such qualification or licensing necessary and the failure to be so qualified or licensed could materially adversely affect the business, earnings, prospects, properties or condition (financial or other) of the Company. True, complete and accurate copies of the Company's Certificate of Incorporation, Bylaws and all amendments to each to date have been delivered to counsel for the Purchasers and the Company has provided such counsel with copies of the minutes of all meetings, and all consents in lieu of meetings, of the Board of Directors and stockholders of the Company. Prior to the Closing, the Company shall have properly filed the Amended Certificate with the Secretary of State of Delaware and the same shall be in full force and effect.

3.2 Capitalization.

1. The authorized capital stock of the Company at the Closing will be __________ shares of common stock ("Common Stock") and __________ shares of preferred stock ("Preferred Stock"), all of which shares of Preferred Stock will be designated Series A Preferred Stock; of such authorized shares of capital stock of the Company, __________ shares of Common Stock and __________ shares of Series A Preferred Stock will be issued and outstanding at the Closing. The Preferred Stock has the rights, preferences and privileges set forth in the Amended Certificate.
2. All issued and outstanding shares have been, and as of the Closing Date will be, duly authorized, validly issued, fully paid and nonassessable, are and were, and as of the Closing Date will have been, offered, issued, sold and delivered by the Company in compliance with all applicable state and federal laws concerning the issuance of securities.
3. There are no outstanding rights, subscriptions, calls, options, warrants, preemptive rights, conversion rights or agreements granted or issued by or binding upon the Company for the purchase or acquisition (contingent or otherwise) from the Company of any shares of its capital stock or any other securities, except in accordance with the terms of this Agreement. The Company is not subject to any obligation (contingent or otherwise) to purchase or otherwise acquire or retire any shares of its capital stock or any security convertible into or exchangeable for any shares of its capital stock. No holder of Common Stock or Preferred Stock or any other security of the Company or any other person or entity is entitled to any preemptive right, right of first refusal or similar right as a result of the issuance of the Shares or otherwise, except as set forth therein. There is no voting trust, agreement or arrangement among any of the beneficial holders of Common Stock or Preferred Stock of the Company affecting the exercise of the voting rights of such stock.

3.3 Corporate Power; Authorization. The Company has all requisite power and authority to enter into this Agreement and the other documents and agreements contemplated herein, to sell the Shares hereunder, and to carry out and perform its obligations under the terms of this Agreement and the other documents and agreements contemplated herein. All corporate action on the part of the Company and its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the other documents and agreements contemplated herein, for the performance of the Company's obligations hereunder, for the consummation of the transactions contemplated herein, and for the authorization, issuance and delivery of the Shares and the Common Stock issuable upon conversion thereof has been taken or will be taken prior to the Closing. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. As of the Closing Date, this Agreement and the other documents and agreements contemplated herein, will have been duly executed and delivered by the Company, and all parties thereto (other than the Purchasers), and will constitute legal, valid and binding obligations of the Company and such other parties, enforceable against each of them in accordance with their terms.

3.4 Subsidiaries. The Company does not presently own, of record or beneficially, or control, directly or indirectly, any capital stock or equity interest in any corporation, association or business entity. The Company is not, directly or indirectly, a participant in any joint venture or partnership.

3.5 Validity of Securities. The Shares, when issued, sold and delivered in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and nonassessable and will be free and clear of any preemptive rights, security interests, claims, liens or encumbrances created by the Company. The Common Stock issuable upon conversion of the Shares has been, or prior to the Closing will be, duly and validly reserved and, upon issuance in accordance with the terms of this Agreement and the Amended Certificate, will be duly and validly issued, fully paid and nonassessable and will be free and clear of any preemptive rights, security interests, restrictions on transfer, claims, liens or encumbrances other than restrictions under applicable and state securities laws.

3.6 Governmental Consents.

1. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, or notice to any federal, state or local governmental or public authority or agency on the part of the Company is or was required....