STOCK PURCHASE AGREEMENT. This Stock Purchase Agreement is entered into as of by a Delaware corporation (the Company ), and (the Purchaser ).

Transcription

1 STOCK PURCHASE AGREEMENT. This Stock Purchase Agreement is entered into as of by a Delaware corporation (the Company ), and (the Purchaser ). SECTION 1. CONSTRUCTION OF AGREEMENT. (a) Interpretation. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware. Any reference in this Agreement to an Article, Section or Schedule refers to the corresponding Article, Section or Schedule of or to this Agreement, unless the context indicates otherwise. The headings of Articles and Sections are provided for convenience only and should not affect the construction or interpretation of this Agreement. All words used in this Agreement should be construed to be of such gender or number, as the circumstances require. Any reference to a statute refers to the statute, any amendments or successor legislation, and all decrees, regulations and orders promulgated under or implementing the statute, as in effect at the relevant time. Any reference to the Agreement refers to this Stock purchase Agreement, Any reference to a party includes his or its respective successors and permitted assigns. References to US$ or $ are references to United States dollars, the legal currency of the United States of America. Any other word that may be interpreted in several ways will be interpreted taking in consideration the scope of the agreement, intent of Parties and the venture capital industry standards. SECTION 2. REPRESENTATIONS. 2.1 Purchaser Representations. In connection with the issuance and acquisition of Shares under this Agreement, the Purchaser hereby represents and warrants to the Company that is aware of the Company s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares. Purchaser is purchasing the Shares for investment for his or her own account only and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act. Purchaser is an accredited investor as defined in the Securities Act and the regulation promulgated thereunder. The Purchaser has been furnished with, and has had access to, such information as he or she considers necessary or appropriate for deciding whether to invest in the Purchased Shares, and the Purchaser has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the issuance of the Purchased Shares. Purchaser understands that the Shares have not been registered under the Securities Act

2 by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser s investment intent as expressed herein. Purchaser understands that the Shares are restricted securities under applicable U.S. federal and state securities laws and that, pursuant to these laws, Purchaser must hold the Shares indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. Purchaser acknowledges that the Company has no obligation to register or qualify the Shares for resale. Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Shares, and requirements relating to the Company which are outside of the Purchaser s control, and which the Company is under no obligation and may not be able to satisfy. 2.2 Company Representations. In connection with the sale of the Shares, the Company represents to Purchaser that the Company is in good standing. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has formalized a Technology and Information Assignment Agreement with all its Founders. The Company has the 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. 2.3 Capitalization. As of the Effective Date, the authorized capital stock of the Company consists ( ) shares of Common Stock, of which ( ) shares are issued and outstanding and ( ) are reserved in a duly authorized stock option pool for issuance to employees, directors, advisors and consultants. The outstanding shares have been duly authorized and validly issued in compliance with applicable laws, and are fully paid and non-assessable. The Shares, when issued and delivered and paid for in compliance with the provisions of this Agreement, will be duly and validly issued, fully paid and non-assessable. Upon the purchase the Shares, the Company will issue ( ) Shares, transferring ( ). After purchase, the aggregate outstanding of shares will be ( ) and a reserve of ( ). The Purchaser s shares will represent ( )of the outstanding capital stock of the Company on a fully-diluted basis, including the stock option pool. 2.4 Authorization, No Liabilities and no Liens. All corporate action on the part of the Company and its directors, officers and stockholders necessary for the authorization, execution and delivery of the Agreement, the authorization, sale, issuance and delivery of the Shares has

3 been taken. The Agreement, when executed and delivered by the Company, will constitute a valid and binding obligation of the Company, enforceable in accordance with its terms. The Company does not have any liability or obligation of any nature, whether accrued, fixed, absolute, contingent or otherwise, asserted or unasserted, known or unknown. There is no action, suit, proceeding or investigation pending or, to the Company s knowledge, currently threatened against the Company. The Company is not a party to, or to the Company s knowledge named in, any order, writ, injunction, judgment or decree of any court, government agency or instrumentality. There is no action, suit or proceeding by the Company currently pending. SECTION 3. PURCHASE AND SALE OF STOCK (a) Purchase. Subject to the terms and conditions of this Agreement, on the Purchase Date (as defined below) the Company issues and sells to Purchaser, and Purchaser agrees to purchase from the Company, ( ) shares of the Company s Common Stock (the Shares ) at a purchase price of Thirty Thousand U.S. Dollars ($30,000) in total for a total purchase price of of US. Dollars ( ). The term Shares refers to the purchased Shares, and all securities received in replacement of or in connection with the Shares pursuant to stock dividends or splits, all securities received in replacement of the Shares in a recapitalization, merger, reorganization, exchange, and all new, substituted, or additional securities or other properties to which Purchaser is entitled by reason of Purchaser s ownership of the Shares. (b) Sale. The purchase and sale of the Shares under this Agreement shall occur in the place the Parties determine or at the principal office of the Company simultaneously with the execution of this Agreement by the parties or on such other date as the Company and Purchaser shall agree (the Purchase Date ). On the Purchase Date, the Company will deliver to Purchaser a certificate representing the Shares to be purchased by Purchaser (which shall be issued in Purchaser s name) against payment of the purchase price; Parties Agree, that payment of Shares will be made in two installments, (i) first payment will be made within 10 days after the formalization of this Agreement, (ii) second payment will be made within three months of formalization of this Agreement. All payments will be made by (a) check made payable to the Company, or (b) wire transfer to the Company s bank account. Parties agree that the Company will set forth a set of milestones to achieve in a period of three months after formalization of this Agreement (the Company s Milestones ) and if the Company fails to meet them, Purchaser will have no obligation to make additional payments. If the above happens, the Agreement will be amended to limit the purchase contained of this agreement to the equivalent amount of Shares

4 applicable to the first payment. Milestones must be informed in writing to Purchaser within 10 business days after the formalization of this Agreement. SECTION 4. COMPANY COVENANTS. 4.1 Capitalization. Prior to the date of this Agreement the Founders hold in the aggregate ( ) of the Company's total outstanding capital stock on a fully-diluted basis (the "Founders' Percentage Ownership"), and the Company has a ( ) Employee Option Pool. After the execution of this Agreement, and upon issuance of the Purchased Shares, purchaser will percent ( ) ( the "Purchaser's Percentage Ownership") of the Company's total outstanding capital stock and Founders will hold ( ), and the option pool ( ). 4.2 Right of First Offer. The Company hereby grants to Purchaser the right of first offer to purchase New Securities (as defined below) only on the following sale offer or round of investment with a negotiable discount starting at 25% discount and no less than 5%. Notwithstanding the above, Purchaser will continue with Right of First Offer for the following two years after the formalization of this Agreement, but the discount will not be applicable. New Securities shall mean any capital stock (including Common Stock and/or preferred stock) of the Company whether now authorized or not, and rights, convertible securities, options, or warrants to purchase such capital stock, and securities of any type whatsoever that are, or may become, exercisable or convertible into capital stock; provided, however, that the term New Securities does not include splits, stocks from the Option Pool or any other stock issued or issuable as part of an incentive plan or is not part of a financing round. In the event the Company proposes to undertake an issuance of New Securities, it shall give Purchaser written notice of its intention, describing the type of New Securities, the identity of the proposed offeree of such New Securities and their price and the general terms upon which the Company proposes to issue the same. 4.3 Most Favorable Nation. Unless approved by the Purchaser, no party will receive a more favorable treatment or offer than that made to the Purchaser; The Company, covenants that no additional party, or purchaser will have a more favorable deal. SECTION 5. LIMITATIONS OF TRANSFER. 5.1 In addition to any other limitation on transfer created by applicable securities laws,

5 Purchaser shall not assign, or dispose of any interest in the Shares except in compliance with the provisions below and applicable securities laws. 5.2 Right of First Refusal. Before any Shares held by Purchaser or any transferee of Purchaser (either being sometimes referred to herein as the Holder ) may be sold or otherwise transferred (including transfer by gift or operation of law), except with respect to an assignment or transfer to an affiliate of Purchaser, the Company or its assignee(s) shall have a right of first refusal to purchase the Shares. Said right of first refusal will be notified by written notices subject to the following: (a) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the Company a written notice (the Notice ) stating: (A) the Holder s good faith intention to sell or otherwise transfer such Shares; (B) the name of each proposed purchaser or other transferee ( Proposed Transferee ); (C) the number of Shares to be transferred to each Proposed Transferee; and (D) the terms and conditions of each proposed sale or transfer. The Holder shall offer the Shares at the same price (the Offered Price ) and upon the same terms (or terms as similar as reasonably possible) to the Company or its assignee(s). (b) Exercise of Right of First Refusal. At any time within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (iii) below. (c) Purchase Price. The purchase price ( Purchase Price ) for the Shares purchased by the Company or its assignee(s) (a) shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash purchased by the Company and/or its assignee(s) as provided in this Section, then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within sixty (60) days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any applicable securities laws and the Proposed Transferee agrees in writing that the provisions of this Section shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, or if the Holder proposes to change the price or other terms to make them more favorable to the Proposed Transferee, a new Notice shall be given to the Company, and the Company and/or its

6 assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred. (d) Additional or Exchanged Securities and Property. In the event of a merger or consolidation of the Company with or into another entity, any other corporate reorganization, a stock split, the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company s outstanding securities, any securities or other property (including cash or cash equivalents) that are by reason of such transaction exchanged for, or distributed with respect to, any Purchased Shares subject to this Section shall immediately be subject to the Right of First Refusal. Appropriate adjustments to reflect the exchange or distribution of such securities or property shall be made to the number and/or class of the Purchased Shares subject to this Section. (e) Termination of Right of First Refusal. Any other provision of this Section notwithstanding, in the event that the Stock is readily tradable on an established securities market when the Purchaser desires to transfer Purchased Shares, the Company shall have no Right of First Refusal, and the Purchaser shall have no obligation to comply with the procedures prescribed by Subsections above 5.3 Permitted Transfers. This Section shall not apply to (i) a transfer by beneficiary designation, will or intestate succession or (ii) a transfer to one or more members of the Family (Family members are limited to: any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law and shall include adoptive relationships), or to a trust established by the Purchaser for the benefit of the Purchaser and/or one or more members of the Purchaser s Family, provided in either case that the Transferee agrees in writing on a form prescribed by the Company to be bound by all provisions of this Agreement. If the Purchaser transfers any Purchased Shares, either under this Subsection (e) or after the Company has failed to exercise the Right of First Refusal, then this Agreement shall apply to the Transferee to the same extent as to the Purchaser 5.4 Market Stand-Off. In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company s initial public offering, the Purchaser or a Transferee shall not directly or indirectly sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell any option or other contract for the purchase of, purchase any option or other contract for the sale of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing

7 transactions with respect to, any Purchased Shares without the prior written consent of the Company or its managing underwriter. Such restriction (the Market Stand-Off ) shall be in effect for such period of time following the date of the final prospectus for the offering as may be requested by the Company or such underwriter. In no event, however, shall such period exceed 180 days plus such additional period as may reasonably be requested by the Company or such underwriter to accommodate regulatory restrictions. The Market Stand-Off shall in any event terminate two years after the date of the Company s initial public offering. In the event of the declaration of a stock dividend, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company s outstanding securities without receipt of consideration, any new, substituted or additional securities which are by reason of such transaction distributed with respect to any Shares subject to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off. In order to enforce the Market Stand-Off, the Company may impose stop-transfer instructions with respect to the Purchased Shares until the end of the applicable standoff period. The Company s underwriters shall be beneficiaries of the agreement set forth in this Subsection. This Subsection shall not apply to Shares registered in the public offering under the Securities Act. 5.5 Securities Law Restrictions. Regardless of whether the offering and sale of Shares under this Agreement have been registered under the Securities Act or have been registered or qualified under the securities laws of any State, the Company at its discretion may impose restrictions upon the sale, pledge or other transfer of the Purchased Shares (including the placement of appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are necessary or desirable in order to achieve compliance with the Securities Act, the securities laws of any State or any other law 5.6 Rights of the Company. The Company shall not be required to (i) transfer on its books any Purchased Shares that have been sold or transferred in contravention of this Agreement or (ii) treat as the owner of Purchased Shares, or otherwise to accord voting, dividend or liquidation rights to, any transferee to whom Purchased Shares have been transferred in contravention of this Agreement 5.7 Restrictions Binding on Transferees. All transferees of Shares or any interest therein will receive and hold such Shares or interest subject to the provisions of this Agreement. In the event of any purchase by the Company hereunder where the Shares or interest are held by a transferee, the transferee shall be obligated, if requested by the Company, to transfer the Shares or

8 interest to the Purchaser for consideration equal to the amount to be paid by the Company hereunder. Any sale or transfer of the Shares shall be void unless the provisions of this Agreement are satisfied SECTION 6. TAXES 6.1 The Purchaser acknowledges that the acquisition of the Purchased Shares may result in adverse tax consequences that may be avoided or mitigated and will consult with his or her tax advisor to determine the tax consequences of acquiring the Purchased Shares The Purchaser acknowledges that it is his or her sole responsibility, and not the Company s, to determine tax implications. SECTION 7. LEGENDS 7.1 All certificates evidencing Purchased Shares shall bear the following legends: THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SHARES AND CERTAIN REPURCHASE RIGHTS UPON TERMINATION OF SERVICE WITH THE COMPANY. THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE. THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED. If required by the authorities of any State in connection with the issuance of the Purchased Shares, the legend or legends required by such State authorities shall also be endorsed on all such certificates.

9 SECTION 8. NOTICES 8.1 Any notice required by the terms of this Agreement shall be given in writing. It shall be deemed effective upon (i) personal delivery, (ii) deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid or (iii) deposit with Federal Express Corporation, with shipping charges prepaid. Notice shall be addressed to the Company at its principal executive office and to the Purchaser at the address that he or she most recently provided to the Company in accordance with this Section This Agreement constitutes the entire contract between the parties hereto with regard to the subject matter hereof. It supersedes any other agreements, representations or understandings (whether oral or written and whether express or implied) that relate to the subject matter hereof. 8.3 In witness of thereof each of the parties has executed this Agreement as of the day and year first above written. SECTION 9. CHOICE OF LAW 9.1 This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware. By the Purchaser ORION STARTUPS LP Address: Phone Number: By the Company Represented by: Title: Address: Phone Number: