diff --git a/.gitignore b/.gitignore new file mode 100644 index 0000000..9bea433 --- /dev/null +++ b/.gitignore @@ -0,0 +1,2 @@ + +.DS_Store diff --git a/CONTRIBUTING.md b/CONTRIBUTING.md new file mode 100644 index 0000000..44672ee --- /dev/null +++ b/CONTRIBUTING.md @@ -0,0 +1,14 @@ +Contributing to the Cooley Series Seed Fork +=========================================== + +Please feel free to post issues or make suggestions via pull requests. For more information about pull requests, the original Series Seed contributors made a handy [guide]. + +As with the original Series Seed equity financing documents, all documents contained in this fork, including the new Series Seed Notes documents, are licensed under the Creative Commons [CC0 open source license]. + +Please be sure to review the [README] file, which includes important legal disclaimers from both Cooley LLP and the original repository owners. + +[guide]: http://www.seriesseed.com/posts/2013/02/for-law-nerds-and-real-nerds.html + +[CC0 open source license]: https://creativecommons.org/publicdomain/zero/1.0/ + +[README]: https://github.com/CooleyLLP/seriesseed/blob/master/README.md \ No newline at end of file diff --git a/README.md b/README.md index ab00780..8460a9d 100644 --- a/README.md +++ b/README.md @@ -1,15 +1,69 @@ -## About +# Series Seed Equity & Series Seed Notes -Welcome to the GitHub repository for the Series Seed Documents, a standardized set of legal documents that can be quickly and easily deployed for a seed investment round. For more information on this release of the documents, please refer to the [Series Seed blog](http://www.seriesseed.com) or our [Release Notes](https://github.com/seriesseed/equity/blob/master/RELEASENOTES.md) here on GitHub. +## About Series Seed Documents -## Contributing +The original "Series Seed" equity financing document sets, released in 2010, was a collaborative effort among lawyers and investors, spearheaded by lawyer-turned-investor Ted Wang, to reduce the cost of fundraising for emerging companies by standardizing the core necessary legal documents, thereby reducing the amount of attorney-time required to get to a "first draft". While the original project did not create the concept of “Series Seed Preferred Stock,” it did provide a set of documents to the community under [CC0 open source license](https://creativecommons.org/publicdomain/zero/1.0/) via the [Series Seed blog](http://www.seriesseed.com) and in a [GitHub repository](https://github.com/seriesseed/equity) that have become one of the "go-to" sets of documents for many early-stage equity financings. In addition, convertible promissory notes remain popular for early-stage financings, although to our knowledge there is no publicly available and commonly accepted "form" of convertible promissory note documents. -We welcome contributions in the form of issues or pull requests. If you need help with this process, we've created a brief overview [here](http://www.seriesseed.com/posts/2013/02/for-law-nerds-and-real-nerds.html). +## About Cooley LLP's Series Seed Fork + +### Introducing "Series Seed Notes" + +Issuing convertible notes has become one of the most popular ways for startups to raise initial seed funding. Cooley uses these documents in hundreds of transactions each year for its startup clients and believes making these documents publicly available will add efficiency to the early-stage startup funding ecosystem and provide entrepreneurs and the community at large the opportunity to collaborate to ensure they evolve with the needs of entrepreneurs and investors. + +In the open source spirit of the Series Seed project, we have made available to the wider community a **Series Seed Notes** package, which includes a convertible promissory note, term sheet and supporting documentation, as an addition to our "fork" of the original Series Seed equity financing documents repository. The structure of the Cooley form of convertible notes was revamped several years ago to simplify the documentation process by removing the need for a separate Note Purchase Agreement, so there is no separate "purchase agreement" document. The Series Seed Notes package is available as a new **notes** directory in our [Series Seed repository] on GitHub. + +### Updating Series Seed Equity Documents + +At the same time, we wanted to contribute back to the original Series Seed equity documents a number of refinements and features, many of which address community comments made in the original GitHub repository, since the last-released version of Series Seed equity documents (v3.2, released February 25, 2014) as well as adding new supporting documents (namely Board and Stockholder Consents and an Accredited Investor Questionnaire). These changes and new documents may be found in the **equity** directory of our [Series Seed repository] fork on GitHub. + +Going forward we will review suggested updates to all of this documentation, and periodically release new versions when appropriate. + +Please see the "Original README.md Text", below, for the README text that was included in the original, master Series Seed Repository, which contains additional information and an important disclaimer. + +## Series Seed Document Generation via Cooley GO + +In addition to the Markdown versions included in this repository, we have added the Series Seed equity and notes documents as packages available for generation via our Cooley GO Docs document generator. This system enabled entrepreneurs, investors and other lawyers to create fully customized versions of these documents in a matter of minutes. We will endeavor to ensure that the documents available on Cooley GO Docs are kept in sync with those in this repository. + +You may access the Series Seed Notes generator via [https://www.cooleygo.com/documents/series-seed-notes-financing-package/](https://www.cooleygo.com/documents/series-seed-notes-financing-package/). + +You may access the Series Seed Equity generator via [https://www.cooleygo.com/documents/series-seed-equity-financing-package/](https://www.cooleygo.com/documents/series-seed-equity-financing-package/). + +## How to Contribute + +Please feel free to make suggestions via pull requests or post issues in our GitHub repository. For more about how to contribute, see [CONTRIBUTING.md](https://github.com/CooleyLLP/seriesseed/CONTRIBUTING.md). ## License -Series Seed is open sourced under [CC0] (http://creativecommons.org/publicdomain/zero/1.0/). +As with the original Series Seed documents, all documents in this repository are open sourced under the [CC0 1.0 Universal Public Domain Dedication](https://creativecommons.org/publicdomain/zero/1.0). +## Additional Disclaimer +The Cooley LLP Series Seed Fork Documents (as defined below) are provided for your reference only and have been developed for companies incorporated in Delaware. + +You acknowledge and agree that the making available of these documents (the "Cooley LLP Series Seed Fork Documents") to you by Cooley LLP shall not create any attorney-client or other confidential or special relationship between you and Cooley LLP and does not constitute the provision of legal advice or other professional advice by Cooley LLP. You should seek advice from an attorney licensed in the relevant jurisdiction(s), as well as a tax professional, before relying on the Cooley LLP Series Seed Fork Documents. These documents, including this README.md, the RELEASENOTES.md and CONTRIBUTING.md documentation, may be considered Attorney Advertising under the ethical rules of certain jurisdictions. + +Additionally, the information provided in the Cooley LLP Series Seed Fork Documents does not constitute tax advice. Any discussion of tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code (or equivalent in the relevant jurisdiction) or promoting, marketing or recommending to another party any transaction or matter. + +You further agree and acknowledge that the Cooley LLP Series Seed Fork Documents have not been prepared with your specific circumstances in mind, may not be suitable for use in your business, and do not constitute tax advice. Relying on these documents, you assume all risk and liability that may result. + +Review all documents carefully for accuracy before using them. There may be BRACKETED TEXT requiring your attention. + +COOLEY LLP PROVIDES THESE TERMS ON AN “AS IS” BASIS, AND SPECIFICALLY DISCLAIMS ALL WARRANTIES, TERMS, REPRESENTATIONS AND CONDITIONS WHETHER EXPRESS, IMPLIED, OR STATUTORY, AND INCLUDING ANY WARRANTIES, TERMS, REPRESENTATIONS AND CONDITIONS OF MERCHANTABILITY, SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR NONINFRINGEMENT. + +### Original README.md Text + +> ## About + +> Welcome to the GitHub repository for the Series Seed Documents, a standardized set of legal documents that can be quickly and easily deployed for a seed investment round. For more information on this release of the documents, please refer to the [Series Seed blog](http://www.seriesseed.com) or our [Release Notes](https://github.com/seriesseed/equity/blob/master/RELEASENOTES.md) here on GitHub. + +> ## Contributing +> +> We welcome contributions in the form of issues or pull requests. If you need help with this process, we've created a brief overview [here](http://www.seriesseed.com/posts/2013/02/for-law-nerds-and-real-nerds.html). + +> ## License + +> Series Seed is open sourced under [CC0](http://creativecommons.org/publicdomain/zero/1.0/). + +> #### Disclaimer -#### Disclaimer +> *Neither I nor Fenwick & West, LLP assumes any responsibility for any consequence of using these documents. These documents have been prepared for informational purposes and is not intended to (a) constitute legal advice (b) create an attorney-client relationship (c) be advertising or a solicitation of any type. Each situation is highly fact specific and requires a knowledge of both state and federal laws and therefore any party should seek legal advice from a licensed attorney in the relevant jurisdictions. Both I and Fenwick & West expressly disclaim any and all liability with respect to actions or omissions based on this website.* -*Neither I nor Fenwick & West, LLP assumes any responsibility for any consequence of using these documents. These documents have been prepared for informational purposes and is not intended to (a) constitute legal advice (b) create an attorney-client relationship (c) be advertising or a solicitation of any type. Each situation is highly fact specific and requires a knowledge of both state and federal laws and therefore any party should seek legal advice from a licensed attorney in the relevant jurisdictions. Both I and Fenwick & West expressly disclaim any and all liability with respect to actions or omissions based on this website.* +[Series Seed repository]: https://github.com/CooleyLLP/seriesseed \ No newline at end of file diff --git a/RELEASENOTES.md b/RELEASENOTES.md deleted file mode 100644 index ab22336..0000000 --- a/RELEASENOTES.md +++ /dev/null @@ -1,34 +0,0 @@ -## Version 3.2 - -When we launched Series Seed we committed to making them a crowd-sourced set of documents. With today’s release of version 3.2 we are taking our most significant step in this direction. The vast majority of the changes in this version are crowd-sourced optimizations to remove legalese. In particular, we’d like to thank the following commenters and contributors for their effort: @rickcolosimo @zekevermillion @thesmart @strikeroot @sblom @jackmaney @blueseed @commonaccord. - -Keep the comments coming! We are committed to continually improving and simplifying these documents. - -Also, we’ve been asked to address changes in the laws with regard to general solicitation. We will make an update in the next version and are happy to see any suggestions in the interim. - -As always, clean and redline versions of the updated documents in Word are also up on the [blog](http://www.seriesseed.com/). - - -## Version 3.1 - -Today we are launching Version 3.1 of the Series Seed documents. The changes in this version are minor clarifications in response to comments we received via GitHub and other optimizations that we found as we went back through the documents. Thanks to the GitHub commenters. Keep the feedback coming! - -Here is a summary of the updates: - -### Term Sheet -• Changed the description of Documentation to be identical to (rather than based on) the documents on seriesseed.com, except for the modifications set forth in the Term Sheet. The whole point of the Series Seed documents is to save on transaction costs by using a single standard document so we don't want folks agreeing to use Series Seed and then adding changes (unless they are agreed to in the term sheet). - -### Stock Investment Agreement -• Removed unnecessary reference to preemptive rights in Section 4.2. - -• Moved definition of “Stockholder” to earlier in document, from Section 7.1 to Section 5.3. - -• Added clarifying sentence in Section 8.1 that “no Stockholder may transfer Shares unless each transferee agrees to be bound by the terms of this Agreement.” - -• Added further clarification in Section 8.8 that “the addition of a party to this Agreement pursuant to a transfer of Shares in accordance with Section 8.1 shall not require any further consent.” - -• Added new language to Disclosure Schedule clarifying arrangement of sections and providing standard disclaimers. The previous version did not have any introductory language for the Disclosure Schedule. - -## Disclaimer - -*Neither I nor Fenwick & West, LLP assumes any responsibility for any consequence of using these documents. These documents have been prepared for informational purposes and is not intended to (a) constitute legal advice (b) create an attorney-client relationship (c) be advertising or a solicitation of any type. Each situation is highly fact specific and requires a knowledge of both state and federal laws and therefore any party should seek legal advice from a licensed attorney in the relevant jurisdictions. Both I and Fenwick & West expressly disclaim any and all liability with respect to actions or omissions based on this website.* diff --git a/Series Seed - Preferred Stock Investment Agreement.md b/Series Seed - Preferred Stock Investment Agreement.md deleted file mode 100644 index 5321697..0000000 --- a/Series Seed - Preferred Stock Investment Agreement.md +++ /dev/null @@ -1,456 +0,0 @@ -# SERIES SEED PREFERRED STOCK INVESTMENT AGREEMENT - -This Series Seed Preferred Stock Investment Agreement (this "Agreement") is dated as of the Agreement Date and is between the Company, the Purchasers and the Key Holders. - -The parties agree as follows: - -1. DEFINITIONS. Capitalized terms used and not otherwise defined in this Agreement or the Exhibit and Schedules thereto have the meanings set forth in Exhibit A. - -2. INVESTMENT. Subject to the terms and conditions of this Agreement, including the Agreement Terms set forth in Exhibit B, (i) each Purchaser shall purchase at the applicable Closing and the Company shall sell and issue to each Purchaser at such Closing that number of shares of Series Seed Preferred Stock set forth opposite such Purchaser's name on Schedule 1, at a price per share equal to the Purchase Price (subject to any applicable discounts when all or a portion of such Purchase Price is being paid by cancellation of indebtedness of the Company to such Purchaser) and (ii) each Purchaser, the Company, and each Key Holder agrees to be bound by the obligations set forth in this Agreement and to grant to the other parties hereto the rights set forth in this Agreement. - -3. ENTIRE AGREEMENT. This Agreement (including the Exhibits and Schedules hereto) together with the Restated Charter constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled. - -------------------------- -# EXHIBIT A -------------------------- - -## DEFINITIONS - -### 1. OVERVIEW DEFINITIONS. - -“Agreement Date” means *____________________________________________.* - -“Company” means *___________________________________________________.* - -“Governing Law” means the laws of the state of *____________________.* - -“Dispute Resolution Jurisdiction” means the federal or state courts located in *________________.* - -“State of Incorporation” means *____________________________________.* - -“Stock Plan” means *________________________________________________.* - -### 2. BOARD COMPOSITION DEFINITIONS. - -“Common Board Member Count” means *______.* - -“Mutual Consent Board Member Count” means *______.* - -“Series Seed Board Member Count” means *______.* - -“Common Control Holders” means the Key Holders *[who are then providing services to the company as employees]* [optional provision in italics]. - -### 3. TERM SHEET DEFINITIONS. - -“Major Purchaser Dollar Threshold” means *$____________.* - -“Purchase Price” means *$____________* per share (subject to any discounts applicable where all or a portion of such Purchase Price is being paid by cancellation of indebtedness of the Company to such Purchaser). - -“Total Series Seed Investment Amount” means *$____________.* - -“Unallocated Post-Money Option Pool Percent” means *____________*%. - -“Purchaser Counsel Reimbursement Amount” means *$____________.* - -#### 4. RESULTING CAP TABLE DEFINITIONS. - -“Common Shares Issued and Outstanding Pre-Money” means *____________.* - -“Total Post-Money Shares Reserved for Option Pool” means *____________.* - -“Number of Issued And Outstanding Options” means *____________.* - -“Unallocated Post-Money Option Pool Shares” means *____________.* -  -# SCHEDULE 1 - -# SCHEDULE OF PURCHASERS & KEY HOLDERS - -## PURCHASERS: - -Name, Address and E-Mail of Purchaser / Series Seed Preferred Stock Shares Purchased / Indebtedness Cancellation / Cash Payment / Total Purchase Amount - -1: - -2: - -3: - -4: - -5: - -6: - -7: - -8: - -9: - -10: - -11: - -12: - -13: - -14: - -15: - -16: - -17: - -18: - -19: - -20: - -KEY HOLDERS: -Name, Address and E-Mail of Key Holder / Shares of Common Stock Held - -1: - -2: - -3: - -4: - -5: - -6: - -7: - -8: - -9: - -10: - -------------------------- -# EXHIBIT B -------------------------- - -## AGREEMENT TERMS - -### 1. PURCHASE AND SALE OF SERIES SEED PREFERRED STOCK. - -#### 1.1 Sale and Issuance of Series Seed Preferred Stock. - -1.1.1 The Company shall adopt and file the Company's restated organizational documents, as applicable (e.g. certificate of incorporation), in substantially the form of Exhibit C attached to this Agreement (as the same may be amended, restated, supplemented or otherwise modified from time to time) (the "Restated Charter") with the Secretary of State of the State of Incorporation on or before the Initial Closing. - -1.1.2 Subject to the terms and conditions of this Agreement, each investor listed as a "Purchaser" on Schedule 1 (each, a "Purchaser") shall purchase at the applicable Closing and the Company agrees to sell and issue to each Purchaser at such Closing that number of shares of Series Seed Preferred Stock of the Company ("Series Seed Preferred Stock") set forth opposite such Purchaser's name on Schedule 1, at a purchase price per share equal to the Purchase Price. - -#### 1.2 Closing; Delivery. - -1.2.1 The initial purchase and sale of the shares of Series Seed Preferred Stock hereunder shall take place remotely via the exchange of documents and signatures on the Agreement Date or the subsequent date on which one or more Purchasers execute counterpart signature pages to this Agreement and deliver the Purchase Price to the Company (which date is referred to herein as the "Initial Closing"). - -1.2.2 At any time and from time to time during the ninety (90) day period immediately following the Initial Closing (the "Additional Closing Period"), the Company may, at one or more additional closings (each an "Additional Closing" and together with the Initial Closing, each, a "Closing"), without obtaining the signature, consent or permission of any of the Purchasers in the Initial Closing or any prior Additional Closing, offer and sell to other investors (the "New Purchasers"), at a per share purchase price equal to the Purchase Price, up to that number of shares of Series Seed Preferred Stock that is equal to that number of shares of Series Seed Preferred Stock equal to the quotient of (x) Total Series Seed Investment Amount divided by (y) the Purchase Price, rounded up to the next whole share (the "Total Shares Authorized for Sale") less the number of shares of Series Seed Preferred Stock actually issued and sold by the Company at the Initial Closing and any prior Additional Closings. New Purchasers may include persons or entities who are already Purchasers under this Agreement. The Company and each of the New Purchasers purchasing shares of Series Seed Preferred Stock at each Additional Closing will execute counterpart signature pages to this Agreement and each New Purchaser will, upon delivery by such New Purchaser and acceptance by the Company of such New Purchaser's signature page and delivery of the Purchase Price by such New Purchaser to the Company, become a party to, and bound by, this Agreement to the same extent as if such New Purchaser had been a Purchaser at the Initial Closing and each such New Purchaser shall be deemed to be a Purchaser for all purposes under this Agreement as of the date of the applicable Additional Closing. - -1.2.3 Promptly following each Closing, if required by the Company's governing documents, the Company shall deliver to each Purchaser participating in such Closing a certificate representing the shares of Series Seed Preferred Stock being purchased by such Purchaser at such Closing against payment of the Purchase Price therefor by check payable to the Company, by wire transfer to a bank account designated by the Company, by cancellation or conversion of indebtedness of the Company to Purchaser or by any combination of such methods. - -### 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. - -The Company hereby represents and warrants to each Purchaser that, except as set forth on the Disclosure Schedule attached as Exhibit D to this Agreement (the "Disclosure Schedule"), if any, which exceptions shall be deemed to be part of the representations and warranties made hereunder, the following representations are true and complete as of the date of the Agreement Date, except as otherwise indicated. - -#### 2.1 Organization, Good Standing, Corporate Power and Qualification. - -The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Incorporation and has all corporate power and corporate authority required (a) to carry on its business as presently conducted and as presently proposed to be conducted and (b) to execute, deliver and perform its obligations under this Agreement. The Company is duly qualified to transact business as a foreign corporation and is in good standing under the laws of each jurisdiction in which the failure to so qualify or be in good standing would have a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition, property, or results of operations of the Company. - -#### 2.2 Capitalization. - -2.2.1 The authorized capital of the Company consists, immediately prior to the Agreement Date (unless otherwise noted), of the following: - -(a) The common stock of the Company (the "Common Stock"), of which that number of shares of Common Stock equal to (a) the Common Shares Issued and Outstanding Pre-Money are issued and outstanding as of immediately prior to the Agreement Date, (b) the number of shares of Common Stock which are issuable on conversion of shares of the Series Seed Preferred Stock have been reserved for issuance upon conversion of the Series Seed Preferred Stock and (c) the Total Post-Money Shares Reserved for Option Pool have been reserved for issuance pursuant to the Stock Plan, and of such Total Post-Money Shares Reserved for Option Pool, that number of shares of Common Stock equal to the Number of Issued And Outstanding Options are currently subject to outstanding options and that number of shares of Common Stock equal to the Unallocated Post-Money Option Pool Shares remain available for future issuance to officers, directors, employees and consultants pursuant to the Stock Plan. The ratio determined by dividing (x) the Unallocated Post-Money Option Pool Shares by (y) the Fully-Diluted Share Number (as defined below) is equal to the Unallocated Post-Money Option Pool Percent. All of the outstanding shares of Common Stock are duly authorized, validly issued, fully paid and nonassessable and were issued in material compliance with all applicable federal and state securities laws. The Stock Plan has been duly adopted by the Board of Directors of the Company (the "Board") and approved by the Company's stockholders. For purposes of this Agreement, the term "Fully-Diluted Share Number" shall mean that number of shares of the Company's capital stock equal to the sum of (i) all shares of the Company's capital stock (on an as-converted basis) issued and outstanding, assuming exercise or conversion of all options, warrants and other convertible securities and (ii) all shares of the Company's capital stock reserved and available for future grant under any equity incentive or similar plan. - -(b) The shares of the preferred stock of the Company (the "Preferred Stock"), all of which is designated as Series Seed Preferred Stock, none of which is issued and outstanding immediately prior to the Agreement Date. - -2.2.2 There are no outstanding preemptive rights, options, warrants, conversion privileges or rights (including but not limited to rights of first refusal or similar rights), orally or in writing, to purchase or acquire any securities from the Company including, without limitation, any shares of Common Stock, or Preferred Stock, or any securities convertible into or exchangeable or exercisable for shares of Common Stock or Preferred Stock, except for (a) the conversion privileges of the Series Seed Preferred Stock pursuant to the terms of the Restated Charter and (b) the securities and rights described in this Agreement. - -2.2.3 The Key Holders set forth in Schedule 1 (each a "Key Holder") hold that number of shares of Common Stock set forth opposite each such Key Holder's name in Section 2.2.3 of the Disclosure Schedule (such shares, the "Key Holders' Shares") and such Key Holders' Shares are subject to vesting and/or the Company's repurchase right on the terms specified in Section 2.2.3 of the Disclosure Schedule (the "Key Holders' Vesting Schedules"). Except as specified in Section 2.2.3 of the Disclosure Schedule, the Key Holders do not own or have any other rights to any other securities of the Company. The Key Holders' Vesting Schedules set forth in Section 2.2.3 of the Disclosure Schedule specify for each Key Holder (i) the vesting commencement date for each issuance of shares to or options held by such Key Holder, (ii) the number of shares or options held by such Key Holder that are currently vested, (iii) the number of shares or options held by such Key Holder that remain subject to vesting and/or the Company's repurchase right and (iv) the terms and conditions, if any, under which the Key Holders' Vesting Schedules would be accelerated. Other than the Key Holders' Shares, which vest pursuant to the applicable Key Holders' Vesting Schedules, (x) all options granted and Common Stock outstanding vest as follows: twenty-five percent (25%) of the shares vest one (1) year following the vesting commencement date, with the remaining seventy-five percent (75%) vesting in equal installments over the next three (3) years and (y) no stock plan, stock purchase, stock option or other agreement or understanding between the Company and any holder of any equity securities or rights to purchase equity securities provides for acceleration or other changes in the vesting provisions or other terms of such agreement or understanding as the result of (i) termination of employment (whether actual or constructive), (ii) any merger, consolidated sale of stock or assets, change in control or any other transaction(s) by the Company, or (iii) the occurrence of any other event or combination of events. - -#### 2.3 Subsidiaries. - -The Company does not currently own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, limited liability company, association, or other business entity. The Company is not a participant in any joint venture, partnership or similar arrangement. - -#### 2.4 Authorization. - -All corporate action has been taken, or will be taken prior to the applicable Closing, on the part of the Board and stockholders that is necessary for the authorization, execution and delivery of this Agreement by the Company and the performance by the Company of the obligations to be performed by the Company as of the date hereof under this Agreement. This Agreement, when executed and delivered by the Company, shall constitute the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors' rights generally, or (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. - -#### 2.5 Valid Issuance of Shares. - -The shares of Series Seed Preferred Stock, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be duly authorized, validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement, applicable state and federal securities laws and liens or encumbrances created by or imposed by a Purchaser. Based in part on the accuracy of the representations of the Purchasers in Section 3 of this Agreement and subject to filings pursuant to Regulation D of the Securities Act of 1933, as amended (the "Securities Act"), and applicable state securities laws, the offer, sale and issuance of the shares of Series Seed Preferred Stock to be issued pursuant to and in conformity with the terms of this Agreement and the issuance of the Common Stock, if any, to be issued upon conversion thereof for no additional consideration and pursuant to the Restated Charter, will be issued in compliance with all applicable federal and state securities laws. The Common Stock issuable upon conversion of the shares of Series Seed Preferred Stock has been duly reserved for issuance, and upon issuance in accordance with the terms of the Restated Charter, will be duly authorized, validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement, applicable federal and state securities laws and liens or encumbrances created by or imposed by a Purchaser. Based in part upon the representations of the Purchasers in Section 3 of this Agreement, and subject to filings pursuant to Regulation D of the Securities Act and applicable state securities laws, the Common Stock issuable upon conversion of the shares of Series Seed Preferred Stock will be issued in compliance with all applicable federal and state securities laws. - -#### 2.6 Litigation. - -There is no pending action, suit, proceeding, arbitration, mediation, complaint, claim, charge or investigation before any court, arbitrator, mediator or governmental body or, to the Company's knowledge, currently threatened in writing (a) against the Company or (b) against any consultant, officer, director or key employee of the Company arising out of his or her consulting, employment or board relationship with the Company or that could otherwise materially impact the Company. - -#### 2.7 Intellectual Property. - -The Company owns or possesses sufficient legal rights to all Intellectual Property (as defined below) that is necessary to the conduct of the Company's business as now conducted and as presently proposed to be conducted (the "Company Intellectual Property") without any violation or infringement (or in the case of third-party patents, patent applications, trademarks, trademark applications, service marks, or service mark applications, without any violation or infringement known to the Company) of the rights of others. No product or service marketed or sold (or proposed to be marketed or sold) by the Company violates or will violate any license or infringes or will infringe any rights to any patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, trade secrets, licenses, domain names, mask works, information and proprietary rights and processes (collectively, "Intellectual Property") of any other party, except that with respect to third-party patents, patent applications, trademarks, trademark applications, service marks, or service mark applications the foregoing representation is made to the Company's knowledge only. Other than with respect to commercially available software products under standard end-user object code license agreements, there is no outstanding option, license, agreement, claim, encumbrance or shared ownership interest of any kind relating to the Company Intellectual Property, nor is the Company bound by or a party to any options, licenses or agreements of any kind with respect to the Intellectual Property of any other person. The Company has not received any written communications alleging that the Company has violated or, by conducting its business, would violate any of the Intellectual Property of any other person. - -#### 2.8 Employee and Consultant Matters. - -Each current and former employee, consultant and officer of the Company has executed an agreement with the Company regarding confidentiality and proprietary information substantially in the form or forms made available to the Purchasers or delivered to the counsel for the Purchasers. No current or former employee or consultant has excluded any work or invention from his or her assignment of inventions. To the Company's knowledge, no such employees or consultants is in violation thereof. To the Company's knowledge, none of its employees is obligated under any judgment, decree, contract, covenant or agreement that would materially interfere with such employee's ability to promote the interest of the Company or that would interfere with such employee's ability to promote the interests of the Company or that would conflict with the Company's business. To the Company's knowledge, all individuals who have purchased unvested shares of the Company's Common Stock have timely filed elections under Section 83(b) of the Internal Revenue Code of 1986, as amended. - -#### 2.9 Compliance with Other Instruments. - -The Company is not in violation or default (a) of any provisions of the Restated Charter or the Company's bylaws, (b) of any judgment, order, writ or decree of any court or governmental entity, (c) under any agreement, instrument, contract, lease, note, indenture, mortgage or purchase order to which it is a party that is required to be listed on the Disclosure Schedule, or, (d) to its knowledge, of any provision of federal or state statute, rule or regulation materially applicable to the Company. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in any such violation or default, or constitute, with or without the passage of time and giving of notice, either (i) a default under any such judgment, order, writ, decree, agreement, instrument, contract, lease, note, indenture, mortgage or purchase order or (ii) an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture, or nonrenewal of any material permit or license applicable to the Company. - -#### 2.10 Title to Property and Assets. - -The Company owns its properties and assets free and clear of all mortgages, deeds of trust, liens, encumbrances and security interests except for statutory liens for the payment of current taxes that are not yet delinquent and liens, encumbrances and security interests which arise in the ordinary course of business and which do not affect material properties and assets of the Company. With respect to the property and assets it leases, the Company is in material compliance with each such lease. - -#### 2.11 Agreements. - -Except for this Agreement, there are no agreements, understandings, instruments, contracts or proposed transactions to which the Company is a party that involve (a) obligations (contingent or otherwise) of, or payments to, the Company in excess of $50,000, (b) the license of any Intellectual Property to or from the Company other than licenses with respect to commercially available software products under standard end-user object code license agreements or standard customer terms of service and privacy policies for Internet sites, (c) the grant of rights to manufacture, produce, assemble, license, market, or sell its products to any other person, or that limit the Company's exclusive right to develop, manufacture, assemble, distribute, market or sell its products, or (d) indemnification by the Company with respect to infringements of proprietary rights other than standard customer or channel agreements (each, a "Material Agreement"). The Company is not in material breach of any Material Agreement. Each Material Agreement is in full force and effect and is enforceable by the Company in accordance with its respective terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or others laws of general application relating to or affecting the enforcement of creditors' rights generally, or (ii) the effect of rules of law governing the availability of equitable remedies. - -#### 2.12 Liabilities. - -The Company has no liabilities or obligations, contingent or otherwise, in excess of $25,000 individually or $100,000 in the aggregate. - -### 3. REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE PURCHASERS. - -Each Purchaser hereby represents and warrants to the Company, severally and not jointly, as follows. - -#### 3.1 Authorization. - -The Purchaser has full power and authority to enter into this Agreement. This Agreement, when executed and delivered by the Purchaser, will constitute a valid and legally binding obligation of the Purchaser, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application relating to or affecting the enforcement of creditors' rights generally, or (b) the effect of rules of law governing the availability of equitable remedies. - -#### 3.2 Purchase Entirely for Own Account. - -This Agreement is made with the Purchaser in reliance upon the Purchaser's representation to the Company, which by the Purchaser's execution of this Agreement, the Purchaser hereby confirms, that the shares of Series Seed Preferred Stock to be acquired by the Purchaser will be acquired for investment for the Purchaser's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, the Purchaser further represents that the Purchaser does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the shares of Series Seed Preferred Stock. The Purchaser has not been formed for the specific purpose of acquiring the shares of Series Seed Preferred Stock. - -#### 3.3 Disclosure of Information. - -The Purchaser has had an opportunity to discuss the Company's business, management, financial affairs and the terms and conditions of the offering of the shares of Series Seed Preferred Stock with the Company's management. Nothing in this Section 3, including the foregoing sentence, limits or modifies the representations and warranties of the Company in Section 2 of this Agreement or the right of the Purchasers to rely thereon. - -#### 3.4 Restricted Securities. - -The Purchaser understands that the shares of Series Seed Preferred Stock have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser's representations as expressed herein. The Purchaser understands that the shares of Series Seed Preferred Stock are "restricted securities" under applicable United States federal and state securities laws and that, pursuant to these laws, the Purchaser must hold the shares of Series Seed Preferred Stock 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. The Purchaser acknowledges that the Company has no obligation to register or qualify the shares of Series Seed Preferred Stock, or the Common Stock into which it may be converted, for resale. The 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 of Series Seed Preferred Stock, and on 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. - -#### 3.5 No Public Market. - -The Purchaser understands that no public market now exists for the shares of Series Seed Preferred Stock, and that the Company has made no assurances that a public market will ever exist for the shares of Series Seed Preferred Stock. - -#### 3.6 Legends. - -The Purchaser understands that the shares of Series Seed Preferred Stock and any securities issued in respect of or exchange for the shares of Series Seed Preferred Stock, may bear any one or more of the following legends: (a) any legend set forth in, or required by, this Agreement; (b) any legend required by the securities laws of any state to the extent such laws are applicable to the shares of Series Seed Preferred Stock represented by the certificate so legended; and (c) the following legend: - -“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.” - -#### 3.7 Accredited and Sophisticated Purchaser. - -The Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Purchaser is an investor in securities of companies in the development stage and acknowledges that Purchaser is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the shares of Series Seed Preferred Stock. If other than an individual, Purchaser also represents it has not been organized for the purpose of acquiring the shares of Series Seed Preferred Stock. - -#### 3.8 No General Solicitation. - -Neither the Purchaser nor any of its officers, directors, employees, agents, stockholders or partners has either directly or indirectly, including through a broker or finder (a) engaged in any general solicitation with respect to the offer and sale of the shares of Series Seed Preferred Stock, or (b) published any advertisement in connection with the offer and sale of the shares of Series Seed Preferred Stock. - -#### 3.9 Exculpation Among Purchasers. - -The Purchaser acknowledges that it is not relying upon any person, other than the Company and its officers and directors, in making its investment or decision to invest in the Company. The Purchaser agrees that neither any Purchaser nor the respective controlling persons, officers, directors, partners, agents, or employees of any Purchaser shall be liable to any other Purchaser for any action heretofore taken or omitted to be taken by any of them in connection with the purchase of the shares of Series Seed Preferred Stock. - -#### 3.10 Residence. - -If the Purchaser is an individual, then the Purchaser resides in the state identified in the address of the Purchaser set forth on the signature page hereto and/or on Schedule 1; if the Purchaser is a partnership, corporation, limited liability company or other entity, then the office or offices of the Purchaser in which its principal place of business is identified in the address or addresses of the Purchaser set forth on the signature page hereto and/or on Schedule 1. In the event that the Purchaser is not a resident of the United States, such Purchaser hereby agrees to make such additional representations and warranties relating to such Purchaser's status as a non-United States resident as reasonably may be requested by the Company and to execute and deliver such documents or agreements as reasonably may be requested by the Company relating thereto as a condition to the purchase and sale of any shares of Series Seed Preferred Stock by such Purchaser. - -### 4. COVENANTS OF THE COMPANY. - -#### 4.1 Information Rights. - -4.1.1 Basic Financial Information. The Company shall furnish to each Purchaser holding that number of shares equal to or in excess of the quotient determined by dividing (x) the Major Purchaser Dollar Threshold by (y) the Purchase Price, rounded up to the next whole share (a "Major Purchaser") and any entity that requires such information pursuant to its organizational documents when available (1) annual unaudited financial statements for each fiscal year of the Company, including an unaudited balance sheet as of the end of such fiscal year, an unaudited income statement, and an unaudited statement of cash flows, all prepared in accordance with generally accepted accounting principles and practices; and (2) quarterly unaudited financial statements for each fiscal quarter of the Company (except the last quarter of the Company's fiscal year), including an unaudited balance sheet as of the end of such fiscal quarter, an unaudited income statement, and an unaudited statement of cash flows, all prepared in accordance with generally accepted accounting principles and practices, subject to changes resulting from normal year-end audit adjustments. If the Company has audited records of any of the foregoing, it shall provide those in lieu of the unaudited versions. - -4.1.2 Confidentiality. Anything in this Agreement to the contrary notwithstanding, no Purchaser by reason of this Agreement shall have access to any trade secrets or confidential information of the Company. The Company shall not be required to comply with any information rights of any Purchaser whom the Company reasonably determines to be a competitor or an officer, employee, director, or holder of ten percent (10%) or more of a competitor. Each Purchaser shall keep confidential and shall not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement other than to any of the Purchaser's attorneys, accountants, consultants, and other professionals, to the extent necessary to obtain their services in connection with monitoring the Purchaser's investment in the Company. - -4.1.3 Inspection Rights. The Company shall permit each Major Purchaser to visit and inspect the Company's properties, to examine its books of account and records and to discuss the Company's affairs, finances and accounts with its officers, all at such reasonable times as may be requested by such Major Purchaser. - -#### 4.2 Additional Rights and Obligations. - -If the Company issues securities in its next equity financing after the date hereof (the "Next Financing") that (a) have rights, preferences or privileges that are more favorable than the terms of the shares of Series Seed Preferred Stock, such as price-based anti-dilution protection, or (b) provide all such future investors other contractual terms such as registration rights, the Company shall provide substantially equivalent rights to the Purchasers with respect to the shares of Series Seed Preferred Stock (with appropriate adjustment for economic terms or other contractual rights), subject to such Purchaser's execution of any documents, including, if applicable, investor rights, co-sale, voting, and other agreements, executed by the investors purchasing securities in the Next Financing (such documents, the "Next Financing Documents"). Any Major Purchaser will remain a Major Purchaser for all purposes in the Next Financing Documents to the extent such concept exists. The Company shall pay the reasonable fees and expenses, not to exceed $5,000 in the aggregate, of one counsel for the Purchasers in connection with the Purchasers' review, execution, and delivery of the Next Financing Documents. Notwithstanding anything herein to the contrary, subject to the provisions of Section 8.11, upon the execution and delivery of the Next Financing Documents by Purchasers holding a majority of the then-outstanding shares of Series Seed Preferred Stock held by all Purchasers, this Agreement (excluding any then-existing and outstanding obligations) shall be amended and restated by and into such Next Financing Documents and shall be terminated and of no further force or effect. - -#### 4.3 Assignment of Company’s Preemptive Rights. - -The Company shall obtain at or prior to the Initial Closing, and shall maintain, a right of first refusal with respect to transfers of shares of Common Stock by each holder thereof, subject to certain standard exceptions. If the Company elects not to exercise its right of first refusal with respect to a proposed transfer of the Company's outstanding securities by any Key Holder, the Company shall assign such right of first refusal to the Major Purchasers. In the event of such assignment, each Major Purchaser shall have a right to purchase that portion of the securities proposed to be transferred by such Key Holder equal to the ratio of (a) the number of shares of the Company's Common Stock issued or issuable upon conversion of the shares of Series Seed Preferred Stock owned by such Major Purchaser, to (b) the number of shares of the Company's Common Stock issued or issuable upon conversion of the shares of Series Seed Preferred Stock owned by all Major Purchasers. - -#### 4.4 Reservation of Common Stock. - -The Company shall at all times reserve and keep available, solely for issuance and delivery upon the conversion of the Series Seed Preferred Stock, all Common Stock issuable from time to time upon conversion of that number of shares of Series Seed Preferred Stock equal to the Total Shares Authorized for Sale, regardless of whether or not all such shares have been issued at such time. - -### 5. RESTRICTIONS ON TRANSFER; DRAG ALONG. - -#### 5.1 Limitations on Disposition. - -Each person owning of record shares of Common Stock of the Company issued or issuable pursuant to the conversion of the shares of Series Seed Preferred Stock and any shares of Common Stock of the Company issued as a dividend or other distribution with respect thereto or in exchange therefor or in replacement thereof (collectively, the "Securities") or any assignee of record of Securities (each such person, a "Holder") shall not make any disposition of all or any portion of any Securities unless: - -(a) there is then in effect a registration statement under the Securities Act, covering such proposed disposition and such disposition is made in accordance with such registration statement; or - -(b) such Holder has notified the Company of the proposed disposition and has furnished the Company with a statement of the circumstances surrounding the proposed disposition, and, at the expense of such Holder or its transferee, with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such securities under the Securities Act. - -Notwithstanding the provisions of Sections 5.1(a) and (b), no such registration statement or opinion of counsel will be required: (i) for any transfer of any Securities in compliance with the Securities and Exchange Commission's Rule 144 or Rule 144A, or (ii) for any transfer of any Securities by a Holder that is a partnership, limited liability company, a corporation, or a venture capital fund to (A) a partner of such partnership, a member of such limited liability company, or stockholder of such corporation, (B) an affiliate of such partnership, limited liability company or corporation (including, any affiliated investment fund of such Holder), (C) a retired partner of such partnership or a retired member of such limited liability company, (D) the estate of any such partner, member, or stockholder, or (iii) for the transfer without additional consideration or at no greater than cost by gift, will, or intestate succession by any Holder to the Holder's spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that, in the case of clauses (ii) and (iii), the transferee agrees in writing to be subject to the terms of this Agreement to the same extent as if the transferee were an original Purchaser under this Agreement. - -#### 5.2 “Market Stand-Off” Agreement. - -To the extent requested by the Company or an underwriter of securities of the Company, each Holder shall not sell or otherwise transfer or dispose of any Securities or other shares of stock of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly bound) for up to 180 days following the effective date of any registration statement of the Company filed under the Securities Act; provided however that, if during the last 17 days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or before the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, and if the Company's securities are listed on the Nasdaq Stock Market and Rule 2711 thereof applies, then the restrictions imposed by this Section 5.2 will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event; provided, further, that such automatic extension will not apply to the extent that the Financial Industry Regulatory Authority has amended or repealed NASD Rule 2711(f)(4), or has otherwise provided written interpretive guidance regarding such rule, in each case, so as to eliminate the prohibition of any broker, dealer, or member of a national securities association from publishing or distributing any research report, with respect to the securities of an "emerging growth company" (as defined in the Jumpstart Our Business Startups Act of 2012) before or after the expiration of any agreement between the broker, dealer, or member of a national securities association and the emerging growth company or its stockholders that restricts or prohibits the sale of securities held by the emerging growth company or its stockholders after the initial public offering date. In no event will the restricted period extend beyond 215 days after the effective date of the registration statement. For purposes of this Section 5.2, "Company" includes any wholly-owned subsidiary of the Company into which the Company merges or consolidates. The Company may place restrictive legends on the certificates representing the shares subject to this Section 5.2 and may impose stop transfer instructions with respect to the Securities and such other shares of stock of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. Each Holder shall enter into any agreement reasonably required by the underwriters to implement the foregoing within any reasonable timeframe so requested. - -#### 5.3 Drag Along Right. - -If a Deemed Liquidation Event (as defined in the Restated Charter) is approved by each of (i) the holders of a majority of the shares of Common Stock then-outstanding (other than those issued or issuable upon conversion of the shares of Series Seed Preferred Stock), (ii) the holders of a majority of the shares of Common Stock then issued or issuable upon conversion of the shares of Series Seed Preferred Stock then-outstanding and (iii) the Board, then each Stockholder shall vote (in person, by proxy or by action by written consent, as applicable) all shares of capital stock of the Company now or hereafter directly or indirectly owned of record or beneficially by such Stockholder (collectively, the "Shares") in favor of, and adopt, such Deemed Liquidation Event and to execute and deliver all related documentation and take such other action in support of the Deemed Liquidation Event as may reasonably be requested by the Company to carry out the terms and provision of this Section 5.3, including executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, indemnity agreement, escrow agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (free and clear of impermissible liens, claims and encumbrances) and any similar or related documents. The obligation of any party to take the actions required by this Section 5.3 will not apply to a Deemed Liquidation Event if the other party involved in such Deemed Liquidation Event is an affiliate or stockholder of the Company holding more than 10% of the voting power of the Company. "Stockholder" means each Holder and Key Holder, and any transferee thereof. - -#### 5.4 Exceptions to Drag Along Right. - -Notwithstanding the foregoing, a Stockholder need not comply with Section 5.3 above in connection with any proposed Sale of the Company (the "Proposed Sale") unless: - -(a) any representations and warranties to be made by the Stockholder in connection with the Proposed Sale are limited to representations and warranties related to authority, ownership and the ability to convey title to such Shares, including representations and warranties that (i) the Stockholder holds all right, title and interest in and to the Shares the Stockholder purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of the Stockholder in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by the Stockholder have been duly executed by the Stockholder and delivered to the acquirer and are enforceable against the Stockholder in accordance with their respective terms and, (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of the Stockholder's obligations thereunder, will cause a breach or violation of the terms of any agreement, law, or judgment, order, or decree of any court or governmental agency; - -(b) the Stockholder will not be liable for the inaccuracy of any representation or warranty made by any other Person in connection with the Proposed Sale, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties, and covenants of the Company as well as breach by any stockholder of any identical representations, warranties and covenants provided by all stockholders); - -(c) the liability for indemnification, if any, of the Stockholder in the Proposed Sale and for the inaccuracy of any representations and warranties made by the Company or its Stockholders in connection with such Proposed Sale, is several and not joint with any other Person (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any identical representations, warranties, and covenants provided by all stockholders), and except as required to satisfy the liquidation preference of the Series Seed Preferred Stock, if any, is pro rata in proportion to, and does not exceed, the amount of consideration paid to such Stockholder in connection with such Proposed Sale; - -(d) liability will be limited to the Stockholder's applicable share (determined based on the respective proceeds payable to each Stockholder in connection with the Proposed Sale in accordance with the provisions of the Restated Charter) of a negotiated aggregate indemnification amount that applies equally to all Stockholders but that in no event exceeds the amount of consideration otherwise payable to the Stockholder in connection with the Proposed Sale, except with respect to claims related to fraud by the Stockholder, the liability for which need not be limited as to the Stockholder; - -(e) upon the consummation of the Proposed Sale, (i) each holder of each class or series of the Company's stock will receive the same form of consideration for their shares of such class or series as is received by other holders in respect of their shares of such same class or series of stock unless the holders of at least a majority of Series Seed Preferred Stock elect otherwise, (ii) each holder of a series of Series Seed Preferred Stock will receive the same amount of consideration per share of such series of Series Seed Preferred Stock as is received by other holders in respect of their shares of such same series, (iii) each holder of Common Stock will receive the same amount of consideration per share of Common Stock as is received by other holders in respect of their shares of Common Stock, and (iv) unless the holders of at least a majority of the Series Seed Preferred Stock elect to receive a lesser amount, the aggregate consideration receivable by all holders of the Preferred Stock and Common Stock shall be allocated among the holders of Preferred Stock and Common Stock on the basis of the relative liquidation preferences to which the holders of each respective series of Preferred Stock and the holders of Common Stock are entitled in a Deemed Liquidation Event (assuming for this purpose that the Proposed Sale is a Deemed Liquidation Event) in accordance with the Company's Restated Charter in effect immediately prior to the Proposed Sale. - -### 6. PARTICIPATION RIGHT. - -#### 6.1 General. - -Each Major Purchaser has the right of first refusal to purchase the Major Purchaser's Pro Rata Share of any New Securities (as defined below) that the Company may from time to time issue after the date of this Agreement, provided, however, the Major Purchaser will have no right to purchase any such New Securities if the Major Purchaser cannot demonstrate to the Company's reasonable satisfaction that such Major Purchaser is at the time of the proposed issuance of such New Securities an "accredited investor" as such term is defined in Regulation D under the Securities Act. A Major Purchaser's "Pro Rata Share" for means the ratio of (a) the number of shares of the Company's Common Stock issued or issuable upon conversion of the shares of Series Seed Preferred Stock owned by such Major Purchaser, to (b) the Fully-Diluted Share Number. - -#### 6.2 New Securities. - -"New Securities" means any Common Stock or Preferred Stock, whether now authorized or not, and rights, options or warrants to purchase Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible or exchangeable into Common Stock or Preferred Stock; provided, however, that "New Securities" does not include: (a) shares of Common Stock issued or issuable upon conversion of any outstanding shares of Preferred Stock; (b) shares of Common Stock or Preferred Stock issuable upon exercise of any options, warrants, or rights to purchase any securities of the Company outstanding as of the Agreement Date and any securities issuable upon the conversion thereof; (c) shares of Common Stock or Preferred Stock issued in connection with any stock split or stock dividend or recapitalization; (d) shares of Common Stock (or options, warrants or rights therefor) granted or issued after the Agreement Date to employees, officers, directors, contractors, consultants or advisers to, the Company or any subsidiary of the Company pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements that are approved by the Board; (e) shares of the Company's Series Seed Preferred Stock issued pursuant to this Agreement; (f) any other shares of Common Stock or Preferred Stock (and/or options or warrants therefor) issued or issuable primarily for other than equity financing purposes and approved by the Board; and (g) shares of Common Stock issued or issuable by the Company to the public pursuant to a registration statement filed under the Securities Act. - -#### 6.3 Procedures. - -If the Company proposes to undertake an issuance of New Securities, it shall give notice to each Major Purchaser of its intention to issue New Securities (the "Notice"), describing the type of New Securities and the price and the general terms upon which the Company proposes to issue the New Securities. Each Major Purchaser will have (10) days from the date of notice, to agree in writing to purchase such Major Purchaser's Pro Rata Share of such New Securities for the price and upon the general terms specified in the Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased (not to exceed such Major Purchaser's Pro Rata Share). - -#### 6.4 Failure to Exercise. - -If the Major Purchasers fail to exercise in full the right of first refusal within the 10-day period, then the Company will have one hundred twenty (120) days thereafter to sell the New Securities with respect to which the Major Purchasers' rights of first refusal hereunder were not exercised, at a price and upon general terms not materially more favorable to the purchasers thereof than specified in the Company's Notice to the Major Purchasers. If the Company has not issued and sold the New Securities within the 120-day period, then the Company shall not thereafter issue or sell any New Securities without again first offering those New Securities to the Major Purchasers pursuant to this Section 6. - -### 7. ELECTION OF BOARD OF DIRECTORS. - -#### 7.1 Voting; Board Composition. - -Subject to the rights of the stockholders to remove a director for cause in accordance with applicable law, during the term of this Agreement, each Stockholder shall vote (or consent pursuant to an action by written consent of the stockholders) all shares of capital stock of the Company now or hereafter directly or indirectly owned of record or beneficially by the Stockholder (the "Voting Shares"), or to cause the Voting Shares to be voted, in such manner as may be necessary to elect (and maintain in office) as the members of the Board: - -(a) that number of individuals, if any, equal to the Common Board Member Count (collectively, the "Common Board Designees") designated from time to time in a writing delivered to the Company and signed by Common Control Holders who then hold shares of issued and outstanding Common Stock of the Company representing a majority of the voting power of all issued and outstanding shares of Common Stock then held by all Common Control Holders; - -(b) that number of individuals, if any, equal to the Series Seed Board Member Count (collectively, the "Series Seed Board Designees") designated from time to time in a writing delivered to the Company and signed by Purchasers who then hold a majority of the then-outstanding shares of Series Seed Preferred Stock issued pursuant to this Agreement; - -(c) that number of individuals, if any, equal to the Mutual Consent Board Member Count (collectively, the "Mutual Consent Board Designees" and, together with any Common Board Designee and any Seed Board Designee, each a "Board Designee") designated from time to time in a writing delivered to the Company and signed by (a) Purchasers who then hold a majority of the then-outstanding shares of Series Seed Preferred Stock issued pursuant to this Agreement and (b) Common Control Holders who then hold shares of issued and outstanding Common Stock of the Company representing a majority of the voting power of all issued and outstanding shares of Common Stock of the Company then held by all Common Control Holders. - -Subject to the rights of the stockholders of the Company to remove a director for cause in accordance with applicable law, during the term of this Agreement, a Stockholder shall not take any action to remove an incumbent Board Designee or to designate a new Board Designee unless such removal or designation of a Board Designee is approved in a writing signed by the parties entitled to designate the Board Designee. Each Stockholder hereby appoints, and shall appoint, the then-current Chief Executive Officer of the Company, as the Stockholder's true and lawful proxy and attorney, with the power to act alone and with full power of substitution, to vote all shares of the Company's capital stock held by the Stockholder as set forth in this Agreement and to execute all appropriate instruments consistent with this Agreement on behalf of the Stockholder if, and only if, the Stockholder (a) fails to vote or (b) attempts to vote (whether by proxy, in person or by written consent), in a manner which is inconsistent with the terms of this Agreement, all of the Stockholder's Voting Shares or execute such other instruments in accordance with the provisions of this Agreement within five days of the Company's or any other party's written request for the Stockholder's written consent or signature. The proxy and power granted by each Stockholder pursuant to this Section are coupled with an interest and are given to secure the performance of the Stockholder's duties under this Agreement. Each such proxy and power will be irrevocable for the term of this Agreement. The proxy and power, so long as any Stockholder is an individual, will survive the death, incompetency and disability of such Stockholder and, so long as any Stockholder is an entity, will survive the merger or reorganization of the Stockholder or any other entity holding Voting Shares. - -### 8. GENERAL PROVISIONS. - -#### 8.1 Successors and Assigns. - -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. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties to this Agreement 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. No Stockholder may transfer Shares unless each transferee agrees to be bound by the terms of this Agreement. - -#### 8.2 Governing Law. - -This Agreement is governed by the Governing Law, regardless of the laws that might otherwise govern under applicable principles of choice of law. - -#### 8.3 Counterparts; Facsimile or Electronic Signature. - -This Agreement may be executed and delivered by facsimile or electronic signature and in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. - -#### 8.4 Titles and Subtitles. - -The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. References to sections or subsections within this set of Agreement Terms shall be deemed to be references to the sections of this set of Agreement Terms contained in Exhibit B to the Agreement, unless otherwise specifically stated herein. - -#### 8.5 Notices. - -All notices and other communications given or made pursuant to this Agreement must be in writing and will be deemed to have been given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by facsimile or electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient's next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications must be sent to the respective parties at their address as set forth on the signature page or Schedule 1, or to such address, facsimile number or electronic mail address as subsequently modified by written notice given in accordance with this Section 8.5. - -#### 8.6 No Finder’s Fees. - -Each party severally represents to the other parties that it neither is nor will be obligated for any finder's fee or commission in connection with this transaction. Each Purchaser shall indemnify, defend, and hold harmless the Company from any liability for any commission or compensation in the nature of a finder's or broker's fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser or any of its officers, employees, or representatives is responsible. The Company shall indemnify, defend, and hold harmless each Purchaser from any liability for any commission or compensation in the nature of a finder's or broker's fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible. - -#### 8.7 Attorneys’ Fees. - -If any action at law or in equity (including arbitration) is necessary to enforce or interpret the terms of this Agreement, the prevailing party will be entitled to reasonable attorneys' fees, costs, and necessary disbursements in addition to any other relief to which the party may be entitled. Each party shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery, and performance of the Agreement; provided, however, that the Company shall, at the Closing, reimburse the fees and expenses of one counsel for Purchasers, for a flat fee equal to the Purchaser Counsel Reimbursement Amount. - -#### 8.8 Amendments and Waivers. - -Except as specified in Section 1.2.2, any term of this Agreement may be amended, terminated or waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Purchasers holding a majority of the then-outstanding shares of Series Seed Preferred Stock (or Common Stock issued on conversion thereof); provided, however, that any amendment to Section 7.1(a) or Section 7.1(c) will also require the additional written consent of the holders of a majority of the outstanding shares of the Company's Common Stock then held by all of the Common Control Holders. Notwithstanding the foregoing, the addition of a party to this Agreement pursuant to a transfer of Shares in accordance with Section 8.1 will not require any further consent. Any amendment or waiver effected in accordance with this Section 8.8 will be binding upon the Purchasers, the Key Holders, each transferee of the shares of Series Seed Preferred Stock (or the Common Stock issuable upon conversion thereof) or Common Stock from a Purchaser or Key Holders, as applicable, and each future holder of all such securities, and the Company. It is specifically intended that entering into the Next Financing Agreements in a form substantially similar to the form agreements set as forth as Model Legal Documents on http://www.nvca.org shall be considered an amendment to this Agreement provided that it is done in accordance with this Section 8.8. - -#### 8.9 Severability. - -The invalidity or unenforceability of any provision of this Agreement will in no way affect the validity or enforceability of any other provision. - -#### 8.10 Delays or Omissions. - -No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, will impair any such right, power or remedy of such non-breaching or non-defaulting party nor will it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor will any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, are cumulative and not alternative. - -#### 8.11 Termination. - -Unless terminated earlier pursuant to the terms of this Agreement, (x) the rights, duties and obligations under Sections 4, 6 and 7 will terminate immediately prior to the closing of the Company's initial public offering of Common Stock pursuant to an effective registration statement filed under the Securities Act, (y) notwithstanding anything to the contrary herein, this Agreement (excluding any then-existing obligations) will terminate upon the closing of a Deemed Liquidation Event as defined in the Company's Restated Charter, as amended from time to time and (z) notwithstanding anything to the contrary herein, Section 1, Section 2, Section 3, Section 4.1.2 and this Section 8 will survive any termination of this Agreement. - -#### 8.12 Dispute Resolution. - -Each party (a) hereby irrevocably and unconditionally submits to the personal jurisdiction of the Dispute Resolution Jurisdiction for the purpose of any suit, action, or other proceeding arising out of or based upon this Agreement; (b) shall not commence any suit, action or other proceeding arising out of or based upon this Agreement except in the Dispute Resolution Jurisdiction; and (c) hereby waives, and shall not assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject to the personal jurisdiction of the Dispute Resolution Jurisdiction, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement, or the subject matter hereof and thereof may not be enforced in or by the Dispute Resolution Jurisdiction. - -------------------------- -# SIGNATURE PAGES -------------------------- -IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first written above. - -## THE COMPANY: - -Name: *____________________________________________* - -By: *____________________________________________* - -Title: *____________________________________________* - - -## KEY HOLDERS: - -Name: *____________________________________________* - -By: *____________________________________________* - -Name: *____________________________________________* - -By: *____________________________________________* - -## PURCHASERS: - -[FOR ENTITY INVESTOR USE FOLLOWING SIGNATURE BLOCK:] - -Name: *____________________________________________* - -By: *____________________________________________* - -Title: *____________________________________________* - -[FOR INDIVIDUAL INVESTOR USE FOLLOWING SIGNATURE BLOCK:] - -Name: *____________________________________________* - -By: *____________________________________________* - -------------------------- -# EXHIBIT C -------------------------- - -FORM OF RESTATED CHARTER - -------------------------- -# EXHIBIT D -------------------------- - -DISCLOSURE SCHEDULE - -See next page – if no next page, then there are no disclosures. - -This Disclosure Schedule (this "Disclosure Schedule") is delivered by the Company in connection with the sale of shares of the Company's Series Seed Preferred Stock on or about the Agreement Date by the Company. This Disclosure Schedule is arranged in sections corresponding to the numbered and lettered sections contained in Exhibit B of the Agreement, and the disclosures in any section of this Disclosure Schedule qualify other sections in Exhibit B of the Agreement to the extent it is reasonably apparent from a reading of the disclosure that such disclosure is applicable to such other sections. Where any representation or warranty is limited or qualified by the materiality of the matters to which the representation or warranty are given, the inclusion of any matter in this Disclosure Schedule does not constitute an admission by the Company that such matter is material. Unless otherwise defined herein, any capitalized terms in this Disclosure Schedule have the same meanings assigned to those terms in the Agreement. Nothing in this Disclosure Schedule constitutes an admission of any liability or obligation of the Company to any third party, or an admission against the Company's interests. diff --git a/Series Seed - Restated Certificate of Incorporation.md b/Series Seed - Restated Certificate of Incorporation.md deleted file mode 100644 index 23b8835..0000000 --- a/Series Seed - Restated Certificate of Incorporation.md +++ /dev/null @@ -1,244 +0,0 @@ -[Corporation Name in All Caps] - -# RESTATED CERTIFICATE OF INCORPORATION - -(Pursuant to Sections 242 and 245 of the -General Corporation Law of the State of Delaware) - -[Corporation Name], a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “General Corporation Law”), does hereby certify as follows. - -1. The name of this corporation is [Corporation Name] and that this corporation was originally incorporated pursuant to the General Corporation Law on [Date] under the name [Corporation Name]. - -2. The Board of Directors of this corporation duly adopted resolutions proposing to amend and restate the Certificate of Incorporation of this corporation, declaring said amendment and restatement to be advisable and in the best interests of this corporation and its stockholders, and authorizing the appropriate officers of this corporation to solicit the consent of the stockholders therefor, which resolution setting forth the proposed amendment and restatement is as follows. - - RESOLVED, that the Certificate of Incorporation of this corporation be amended and restated in its entirety to read as set forth on Exhibit A attached hereto and incorporated herein by this reference. - -3. Exhibit A referred to above is attached hereto as Exhibit A and is hereby incorporated herein by this reference. This Restated Certificate of Incorporation was approved by the holders of the requisite number of shares of this corporation in accordance with Section 228 of the General Corporation Law. - -4. This Restated Certificate of Incorporation, which restates and integrates and further amends the provisions of this corporation’s Certificate of Incorporation, has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law. - -IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been executed by a duly authorized officer of this corporation on this [DAY day of MONTH, YEAR]. - - -By: *__________________________* - -[Officer Name], [Officer Title] - -------------------------- -# Exhibit A -------------------------- -[Corporation Name in All Caps] - -# RESTATED CERTIFICATE OF INCORPORATION - -## ARTICLE I: NAME. - -The name of this corporation is *[Corporation Name]* (the “Corporation”). - -## ARTICLE II: REGISTERED OFFICE. - -The address of the registered office of the Corporation in the State of Delaware is [Registered Office Address], in the City of [Registered Office City], County of [Registered Office County]. The name of its registered agent at such address is [Registered Agent Name]. - -## ARTICLE III: DEFINITIONS. - -As used in this Restated Certificate (the "Restated Certificate"), the following terms have the meanings set forth below: - -“Board Composition” means that for so long as at least 25% of the initially issued shares of Preferred Stock remain outstanding, the holders of record of the shares of Series Seed Preferred Stock exclusively and as a separate class, are entitled to elect [Preferred Directors] director(s) of the Corporation (the “Series Seed Director(s)”), the holders of record of the shares of Common Stock, exclusively and as a separate class, shall be entitled to elect [Common Directors] director(s) of the Corporation, and any additional directors will elected by the affirmative vote of a majority of the Preferred Stock and Common Stock, voting together as a single class on an as-converted basis. For administrative convenience, the initial Series Seed Director may also be appointed by the Board in connection with the approval of the initial issuance of Series Seed Preferred Stock without a separate action by the holders of a majority of Series Seed Preferred Stock. - -“Original Issue Price” means $[Price] per share for the Series Seed Preferred Stock. - -“Requisite Holders” means the holders of at least a majority of the outstanding shares of Preferred Stock (voting as a single class on an as-converted basis). - -## ARTICLE IV: PURPOSE. - -The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law. - -## ARTICLE V: AUTHORIZED SHARES. - -The total number of shares of all classes of stock that the Corporation has authority to issue is [total authorized shares], consisting of (a) [authorized common shares] shares of Common Stock, $[par value] per share and (b) [authorized preferred shares] shares of Preferred Stock, $[par value] per share. The Preferred Stock may be issued from time to time in one or more series, each of such series to consist of such number of shares and to have such terms, rights, powers and preferences, and the qualifications and limitations with respect thereto, as stated or expressed herein. As of the effective date of this Restated Certificate, all shares of the Preferred Stock of the Corporation are hereby designated “Series Seed Preferred Stock”. - -### A. COMMON STOCK - -The following rights, powers privileges and restrictions, qualifications, and limitations apply to the Common Stock. - -#### 1. General. - -The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and privileges of the holders of the Preferred Stock set forth in this Restated Certificate. - -#### 2. Voting. - -The holders of the Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings). Unless required by law, there shall be no cumulative voting. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be required by the terms of the Restated Certificate) the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law. - -### B. PREFERRED STOCK - -The following rights, powers and privileges, and restrictions, qualifications and limitations, shall apply to the Preferred Stock. Unless otherwise indicated, references to “Sections” in this Part B of this Article V refer to sections of this Part B. - -#### 1. Liquidation, Dissolution or Winding Up; Certain Mergers, Consolidations and Asset Sales. - -##### 1.1 Payments to Holders of Preferred Stock. -In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Corporation or any Deemed Liquidation Event (as defined below), before any payment shall be made to the holders of Common Stock by reason of their ownership thereof, the holders of shares of Preferred Stock then outstanding must be paid out of the funds and assets available for distribution to its stockholders, an amount per share equal to the greater of (a) the Original Issue Price for such share of Preferred Stock, plus any dividends declared but unpaid thereon, or (b) such amount per share as would have been payable had all shares of Preferred Stock been converted into Common Stock pursuant to Section 3 immediately prior to such liquidation, dissolution or winding up or Deemed Liquidation Event. If upon any such liquidation, dissolution, or winding up or Deemed Liquidation Event of the Corporation, the funds and assets available for distribution to the stockholders of the Corporation are insufficient to pay the holders of shares of Preferred Stock the full amount to which they are entitled under this Section 1.1, the holders of shares of Preferred Stock will share ratably in any distribution of the funds and assets available for distribution in proportion to the respective amounts that would otherwise be payable in respect of the shares of Preferred Stock held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. - -##### 1.2 Payments to Holders of Common Stock. -In the event of any voluntary or involuntary liquidation, dissolution, or winding up or Deemed Liquidation Event of the Corporation, after the payment of all preferential amounts required to be paid to the holders of shares of Preferred Stock as provided in Section 1.1, the remaining funds and assets available for distribution to the stockholders of the Corporation will be distributed among the holders of shares of Common Stock, pro rata based on the number of shares of Common Stock held by each such holder. - -##### 1.3 Deemed Liquidation Events. - -###### 1.3.1 Definition. -Each of the following events is a "Deemed Liquidation Event" unless the Requisite Holders elect otherwise by written notice recieved by the Corporation at least five (5) days prior to the effective date of any such event: - -(a) a merger or consolidation in which (i) the Corporation is a constituent party or (ii) a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for equity securities that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the equity securities of (1) the surviving or resulting party or (2) if the surviving or resulting party is a wholly owned subsidiary of another party immediately following such merger or consolidation, the parent of such surviving or resulting party; provided that, for the purpose of this Section 1.3.1, all shares of Common Stock issuable upon exercise of options outstanding immediately prior to such merger or consolidation or upon conversion of Convertible Securities (as defined below) outstanding immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation and, if applicable, deemed to be converted or exchanged in such merger or consolidation on the same terms as the actual outstanding shares of Common Stock are converted or exchanged; or - -(b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, or, if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Corporation, except where such sale, lease, transfer or other disposition is to the Corporation or one or more wholly owned subsidiaries of the Corporation. - -###### 1.3.2 Amount Deemed Paid or Distributed. -The funds and assets deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer or other disposition described in this Section 1.3 will be the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation or the acquiring person, firm or other entity. The value of such property, rights or securities shall be determined in good faith by the Board. - -#### 2. Voting. - -##### 2.1 General. -On any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Preferred Stock may cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Fractional votes shall not be permitted and any fractional voting rights available on an as-converted basis (after aggregating all shares into which shares of Preferred stock held by each holder could be converted) will be rounded to the nearest whole number (with one-half being rounded upward). Except as provided by law or by the other provisions of this Restated Certificate, holders of Preferred Stock shall vote together with the holders of Common Stock as a single class on an as-converted basis, shall have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and shall be entitled, notwithstanding any provision of this Restated Certificate, to notice of any stockholder meeting in accordance with the Bylaws of the Corporation. - -##### 2.2 Election of Directors. -The holders of record of the Company's capital stock are entitled to elect directors as described in the Board Composition. Any director elected as provided in the preceding sentence may be removed without cause by the affirmative vote of the holders of the shares of the class, classes, or series of capital stock entitled to elect the director or directors, given either at a special meeting of the stockholders duly called for that purpose or pursuant to a written consent of stockholders. At any meeting held for the purpose of electing a director, the presence in person or by proxy of the holders of a majority of the outstanding shares of the class, classes, or series entitled to elect the director constitutes a quorum for the purpose of electing the director. - -##### 2.3 Preferred Stock Protective Provisions. -At any time when at least 25% of the initially issued shares of Preferred Stock remain outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Restated Certificate) the written consent or affirmative vote of the Requisite Holders, given in writing or by vote at a meeting, consenting, or voting (as the case may be) separately as a single class: - -(a) alter the rights, powers or privileges of the Preferred Stock set forth in the Restated Certificate or Bylaws, as then in effect, in a way that adversely affects the Preferred Stock; - -(b) increase or decrease the authorized number of shares of Common Stock or Preferred Stock (or any series thereof); - -(c) authorize or create (by reclassification or otherwise) any new class or series of capital stock having rights, powers, or privileges set forth in the certificate of incorporation of the Corporation, as then in effect, that are senior to or on a parity with any series of Preferred Stock; - -(d) redeem or repurchase any shares of Common Stock or Preferred Stock (other than pursuant to employee or consultant agreements giving the Corporation the right to repurchase shares upon the termination of services pursuant to the terms of the applicable agreement); - -(e) declare or pay any dividend or otherwise make a distribution to holders of Preferred Stock or Common Stock; - -(f) increase or decrease the number of directors of the Corporation; - -(g) liquidate, dissolve, or wind-up the business and affairs of the Corporation, effect any Deemed Liquidation Event, or consent, agree or commit to do any of the foregoing without conditioning such consent, agreement or commitment upon obtaining the approval required by this Section 2.3. - -#### 3. Conversion. - -The holders of the Preferred Stock shall have conversion rights as follows (the “Conversion Rights”): - -##### 3.1 Right to Convert. - -###### 3.1.1 Conversion Ratio. -Each share of Preferred Stock is convertible, at the option of the holder thereof, at any time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the Original Issue Price for the series of Preferred Stock by the Conversion Price for that series of Preferred Stock in effect at the time of conversion. The "Conversion Price" for each series of Preferred Stock means the Original Issue Price for such series of Preferred Stock, which initial Conversion Price, and the rate at which shares of Preferred Stock may be converted into shares of Common Stock, is subject to adjustment as provided in this Restated Certificate. - -###### 3.1.2 Termination of Conversion Rights. -Subject to Section 3.3.1 in the case of a Contingency Event herein, in the event of a liquidation, dissolution, or winding up of the Corporation or a Deemed Liquidation Event, the Conversion Rights will terminate at the close of business on the last full day preceding the date fixed for the first payment of any funds and assets distributable on such event to the holders of Preferred Stock. - -##### 3.2 Fractional Shares. -No fractional shares of Common Stock will be issued upon conversion of the Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board. Whether or not fractional shares would be issuable upon such conversion will be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion. - -##### 3.3 Mechanics of Conversion. - -###### 3.3.1 Notice of Conversion. -To voluntarily convert shares of Preferred Stock into shares of Common Stock, a holder of Preferred Stock shall surrender the certificate or certificates for the shares of Preferred Stock (or, if such registered holder alleges that any such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent), together with written notice that the holder elects to convert all or any number of the shares of the Preferred Stock represented by the certificate or certificates and, if applicable, any event on which the conversion is contingent (a "Contingency Event"). The conversion notice must state the holder's name or the names of the nominees in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. If required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the registered holder or such holder's attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) of the certificates (or lost certificate affidavit and agreement) and notice (or, if later, the date on which all Contingency Events have occurred) will be the time of conversion (the "Conversion Time"), and the shares of Common Stock issuable upon conversion of the shares represented by such certificate shall be deemed to be outstanding of record as of such time. The Corporation shall, as soon as practicable after the Conversion Time, (a) issue and deliver to the holder, or to the holder's nominees, a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion in accordance with the provisions of this Restated Certificate and a certificate for the number (if any) of the shares of Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, (b) pay in cash such amount as provided in Section 3.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and (c) pay all declared but unpaid dividends on the shares of Preferred Stock converted. - -###### 3.3.2 Reservation of Shares. -For the purpose of effecting the conversion of the Preferred Stock, the Corporation shall at all times while any share of Preferred Stock is outstanding, reserve and keep available out of its authorized but unissued capital stock, , that number of its duly authorized shares of Common Stock as may from time to time be sufficient to effect the conversion of all outstanding Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock is not be sufficient to effect the conversion of all then-outstanding shares of the Preferred Stock, the Corporation shall use its best efforts to cause such corporate action to be taken as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Restated Certificate. Before taking any action that would cause an adjustment reducing the Conversion Price of a series of Preferred Stock below the then-par value of the shares of Common Stock issuable upon conversion of such series of Preferred Stock, the Corporation shall take any corporate action that may be necessary so that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock at such adjusted Conversion Price. - -###### 3.3.3 Effect of Conversion. -All shares of Preferred Stock that shall have been surrendered for conversion as provided in this Restated Certificate shall no longer be deemed to be outstanding and all rights with respect to such shares will immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Section 3.2, and to receive payment of any dividends declared but unpaid thereon. Any shares of Preferred Stock so converted shall be retired and cancelled and may not be reissued. - -###### 3.3.4 No Further Adjustment. -Upon any conversion of shares of Preferred Stock, no adjustment to the Conversion Price of the applicable series of Preferred Stock will be made with respect to the converted shares for any declared but unpaid dividends on such series of Preferred Stock or on the Common Stock delivered upon conversion. - -##### 3.4 Adjustment for Stock Splits and Combinations. -If the Corporation at any time or from time to time after the date on which the first share of a series of Preferred Stock is issued by the Corporation (such date referred to herein as the "Original Issue Date" for such series of Preferred Stock) effects a subdivision of the outstanding Common Stock, the Conversion Price for each series of Preferred Stock in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of that series will be increased in proportion to the increase in the aggregate number of shares of Common Stock outstanding. If the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock combines the outstanding shares of Common Stock, the Conversion Price for each series of Preferred Stock in effect immediately before the combination will be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this Section 3.4 becomes effective at the close of business on the date the subdivision or combination becomes effective. - -##### 3.5 Adjustment for Certain Dividends and Distributions. -If the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock makes or issues, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Conversion Price for such series of Preferred Stock in effect immediately before the event will be decreased as of the time of such issuance or, in the event a a record date has been fixed, as of the close of business on such record date, by multiplying such Conversion Price then in effect by a fraction: - -(a) the numerator of which is the total number of shares of Common Stock issued and outstanding immediately prior to the time of the issuance or the close of business on the record date, and - -(b) the denominator of which is the total number of shares of Common Stock issued and outstanding immediately before the time of such issuance or the close of business on the record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution. - -Notwithstanding the foregoing, (i) if such record date has have been fixed and the dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, such Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter such Conversion Price shall be adjusted pursuant to this Section 3.5 as of the time of actual payment of such dividends or distributions; and (ii) no such adjustment shall be made if the holders of such series of Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock that they would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of the event. - -##### 3.6 Adjustments for Other Dividends and Distributions. -If the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock shall makes or issues, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock), then and in each such event the Corporation shall make, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution to the holders of the series of Preferred Stock in an amount equal to the amount of securities as the holders would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of such event. - -##### 3.7 Adjustment for Reclassification, Exchange and Substitution. -If at any time or from time to time after the Original Issue Date for a series of Preferred Stock the Common Stock issuable upon the conversion of such series of Preferred Stock is changed into the same or a different number of shares of any class or classes of stock of the Corporation, whether by recapitalization, reclassification, or otherwise (other than by a stock split or combination, dividend, distribution, merger or consolidation covered by Sections 3.4, 3.5, 3.6 or 3.8 or by Section 1.3 regarding a Deemed Liquidation Event), then in any such event each holder of such series of Preferred Stock may thereafter convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Preferred Stock could have been converted immediately prior to such recapitalization, reclassification or change. - -##### 3.8 Adjustment for Merger or Consolidation. -Subject to the provisions of Section 1.3, if any consolidation or merger occurs involving the Corporation in which the Common Stock (but not a series of Preferred Stock) is converted into or exchanged for securities, cash, or other property (other than a transaction covered by Sections 3.5, 3.6 or 3.7), then, following any such consolidation or merger, the Corporation shall provide that each share of such series of Preferred Stock will thereafter be convertible, in lieu of the Common Stock into which it was convertible prior to the event, into the kind and amount of securities, cash, or other property which a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one share of such series of Preferred Stock immediately prior to the consolidation or merger would have been entitled to receive pursuant to the transaction; and, in such case, the Corporation shall make appropriate adjustment (as determined in good faith by the Board) in the application of the provisions in this Section 3 with respect to the rights and interests thereafter of the holders of such series of Preferred Stock, to the end that the provisions set forth in this Section 3 (including provisions with respect to changes in and other adjustments of the Conversion Price of such series of Preferred Stock) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of such series of Preferred Stock. - -##### 3.9 Certificate as to Adjustments. -Upon the occurrence of each adjustment or readjustment of the Conversion Price of a series of Preferred Stock pursuant to this Section 3, the Corporation at its expense shall, as promptly as reasonably practicable but in any event not later than 15 days thereafter, compute such adjustment or readjustment in accordance with the terms of this Restated Certificate and furnish to each holder of such series of Preferred Stock a certificate setting forth the adjustment or readjustment (including the kind and amount of securities, cash, or other property into which such series of Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, as promptly as reasonably practicable after the written request at any time of any holder of any series of Preferred Stock (but in any event not later than 10 days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (a) the Conversion Price of such series of Preferred Stock then in effect and (b) the number of shares of Common Stock and the amount, if any, of other securities, cash, or property which then would be received upon the conversion of such series of Preferred Stock. - -##### 3.10 Mandatory Conversion. -Upon either (a) the closing of the sale of shares of Common Stock to the public in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the Requisite Holders at the time of such vote or consent, voting as a single class on an as-converted basis (the time of such closing or the date and time specified or the time of the event specified in such vote or written consent,the "Mandatory Conversion Time"), (i) all outstanding shares of Preferred Stock will automatically convert into shares of Common Stock, at the applicable ratio described in Section 3.1.1 as the same may be adjusted from time to time in accordance with Section 3 and (ii) such shares may not be reissued by the Corporation. - -##### 3.11 Procedural Requirements. -The Corporation shall notify in writing all holders of record of shares of Preferred Stock of the Mandatory Conversion Time and the place designated for mandatory conversion of all such shares of Preferred Stock pursuant to Section 3.10. Unless otherwise provided in this Restated Certificate, the notice need not be sent in advance of the occurrence of the Mandatory Conversion Time. Upon receipt of the notice, each holder of shares of Preferred Stock shall surrender such holder's certificate or certificates for all such shares (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation at the place designated in such notice, and shall thereafter receive certificates for the number of shares of Common Stock to which such holder is entitled pursuant to this Section 3. If so required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the registered holder or such holder's attorney duly authorized in writing. All rights with respect to the Preferred Stock converted pursuant to Section 3.10, including the rights, if any, to receive notices and vote (other than as a holder of Common Stock), will terminate at the Mandatory Conversion Time (notwithstanding the failure of the holder or holders thereof to surrender the certificates at or prior to such time), except only the rights of the holders thereof, upon surrender of their certificate or certificates (or lost certificate affidavit and agreement) therefor, to receive the items provided for in the next sentence of this Section 3.11. As soon as practicable after the Mandatory Conversion Time and the surrender of the certificate or certificates (or lost certificate affidavit and agreement) for Preferred Stock, the Corporation shall issue and deliver to such holder, or to such holder's nominee(s), a certificate or certificates for the number of full shares of Common Stock issuable on such conversion in accordance with the provisions hereof, together with cash as provided in Section 3.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and the payment of any declared but unpaid dividends on the shares of Preferred Stock converted. Such converted Preferred Stock shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Preferred Stock (and the applicable series thereof) accordingly. - -#### 4. Dividends. - -The Corporation shall declare all dividends pro rata on the Common Stock and the Preferred Stock on a pari passu basis according to the number of shares of Common Stock held by such holders. For this purpose each holder of shares of Preferred Stock will be treated as holding the greatest whole number of shares of Common Stock then issuable upon conversion of all shares of Preferred Stock held by such holder pursuant to Section 3. - -#### 5. Redeemed or Otherwise Acquired Shares. - -Any shares of Preferred Stock that are redeemed or otherwise acquired by the Corporation or any of its subsidiaries will be automatically and immediately cancelled and retired and shall not be reissued, sold or transferred. Neither the Corporation nor any of its subsidiaries may exercise any voting or other rights granted to the holders of Preferred Stock following any such redemption. - -#### 6. Waiver. - -Any of the rights, powers, privileges and other terms of the Preferred Stock set forth herein may be waived prospectively or retrospectively on behalf of all holders of Preferred Stock by the affirmative written consent or vote of the holders of the Requisite Holders. - -#### 7. Notice of Record Date. - -In the event: - -(a) the Corporation takes a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of the Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or - -(b) of any capital reorganization of the Corporation, any reclassification of the Common Stock of the Corporation, or any Deemed Liquidation Event; or - -(c) of the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation, - -then, and in each such case, the Corporation shall send or cause to be sent to the holders of the Preferred Stock a written notice specifying, as the case may be, (i) the record date for such dividend, distribution, or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of the Preferred Stock) will be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Preferred Stock and the Common Stock. The Corporation shall send the notice at least 20 days before the earlier of the record date or effective date for the event specified in the notice. - -#### 8. Notices. - -Except as otherwise provided herein, any notice required or permitted by the provisions of this Article V to be given to a holder of shares of Preferred Stock must be mailed, postage prepaid, to the post office address last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the General Corporation Law, and will be deemed sent upon such mailing or electronic transmission. - -## ARTICLE VI: PREEMPTIVE RIGHTS. - -No stockholder of the Corporation has a right to purchase shares of capital stock of the Corporation sold or issued by the Corporation except to the extent that such a right may from time to time be set forth in a written agreement between the Corporation and the stockholder. - -## ARTICLE VII: STOCK REPURCHASES. - -In accordance with Section 500 of the California Corporations Code, a distribution can be made without regard to any preferential dividends arrears amount (as defined in Section 500 of the California Corporations Code) or any preferential rights amount (as defined in Section 500 of the California Corporations Code) in connection with (i) repurchases of Common Stock issued to or held by employees, officers, directors, or consultants of the Corporation or its subsidiaries upon termination of their employment or services pursuant to agreements providing for the right of said repurchase, (ii) repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries pursuant to rights of first refusal contained in agreements providing for such right, (iii) repurchases of Common Stock or Preferred Stock in connection with the settlement of disputes with any stockholder, or (iv) any other repurchase or redemption of Common Stock or Preferred Stock approved by the holders of Preferred Stock of the Corporation. - -## ARTICLE VIII: BYLAW PROVISIONS. - -### A. AMENDMENT OF BYLAWS. -Subject to any additional vote required by this Restated Certificate or bylaws of the Corporation (the "Bylaws"), in furtherance and not in limitation of the powers conferred by statute, the Board is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws. - -### B. NUMBER OF DIRECTORS. -Subject to any additional vote required by this Restated Certificate, the number of directors of the Corporation will be determined in the manner set forth in the Bylaws. - -### C. BALLOT. -Elections of directors need not be by written ballot unless the Bylaws so provide. - -### D. MEETINGS AND BOOKS. -Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws mayprovide. The books of the Corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the Board or in the Bylaws. - -## ARTICLE IX: DIRECTOR LIABILITY. - -### A. LIMITATION. -To the fullest extent permitted by law, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the General Corporation Law or any other law of the State of Delaware is amended after approval by the stockholders of this Article IX to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law as so amended. Any repeal or modification of the foregoing provisions of this Article IX by the stockholders will not adversely affect any right or protection of a director of the Corporation existing at the time of, or increase the liability of any director of the Corporation with respect to any acts or omissions of such director occurring prior to, such repeal or modification. - -### B. INDEMNIFICATION. -To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which General Corporation Law permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the General Corporation Law. - -### C. MODIFICATION. -Any amendment, repeal, or modification of the foregoing provisions of this Article IX will not adversely affect any right or protection of any director, officer or other agent of the Corporation existing at the time of such amendment, repeal or modification. - -## ARTICLE X: CORPORATE OPPORTUNITIES. - -The Corporation renounces any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, or in being informed about, an Excluded Opportunity. "Excluded Opportunity" means any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of, (i) any director of the Corporation who is not an employee of the Corporation or any of its subsidiaries, or (ii) any holder of Preferred Stock or any affiliate, partner, member, director, stockholder, employee, agent or other related person of any such holder, other than someone who is an employee of the Corporation or any of its subsidiaries (a "Covered Person"), unless such matter, transaction or interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, a Covered Person expressly and solely in such Covered Person's capacity as a director of the Corporation. - diff --git a/Series Seed - Term Sheet.md b/Series Seed - Term Sheet.md deleted file mode 100644 index c75fee1..0000000 --- a/Series Seed - Term Sheet.md +++ /dev/null @@ -1,89 +0,0 @@ -# TERMS FOR PRIVATE PLACEMENT OF SERIES SEED PREFERRED STOCK OF *[Insert Company Name]*, INC. - -*[Date]* - -The following is a summary of the principal terms with respect to the proposed Series Seed Preferred Stock financing of *[___________]*, Inc., a *[Delaware]* corporation (the “Company”). Except for the section entitled “Binding Terms,” this summary of terms does not constitute a legally binding obligation. The parties intend to enter into a legally binding obligation only pursuant to definitive agreements to be negotiated and executed by the parties. - -## Offering Terms - -### Securities to Issue: - -Shares of Series Seed Preferred Stock of the Company (the “Series Seed”). - -### Aggregate Proceeds: - -*$[_________]* in aggregate. - -### Purchasers: - -*[Accredited investors approved by the Company]* (the “Purchasers”). - -### Price Per Share: - -Price per share (the “Original Issue Price”), based on a pre-money valuation of *$[____]*, including an available option pool of *[___]*%. - -### Liquidation Preference: - -One times the Original Issue Price plus declared but unpaid dividends on each share of Series Seed, balance of proceeds paid to Common. A merger, reorganization or similar transaction will be treated as a liquidation. - -### Conversion: - -Convertible into one share of Common (subject to proportional adjustments for stock splits, stock dividends and the like) at any time at the option of the holder. - -### Voting Rights: - -Votes together with the Common Stock on all matters on an as converted basis. Approval of a majority of the Preferred Stock required to (i) adversely change rights of the Preferred Stock; (ii) change the authorized number of shares; (iii) authorize a new series of Preferred Stock having rights senior to or on parity with the Preferred Stock; (iv) redeem or repurchase any shares (other than pursuant to employee or consultant agreements); (v) declare or pay any dividend; (vi) change the number of directors; or (vii) liquidate or dissolve, including any change of control. - -### Documentation: - -Documents will be identical to the Series Seed Preferred Stock documents published at www.seriesseed.com, except for the modifications set forth in this Term Sheet. - -### Financial Information: - -Purchasers who have invested at least *[$________]* (“Major Purchasers”) will receive standard information and inspection rights and management rights letter. - -### Participation Right: - -Major Purchasers will have the right to participate on a pro rata basis in subsequent issuances of equity securities. - -### Board of Directors: - -*[___]* directors elected by holders of a majority of common stock, *[__]* elected by holders of a majority of Series Seed and *[___]* elected by mutual consent. - -### Expenses: - -Company to reimburse counsel to Purchasers for a flat fee of $10,000. - -### Future Rights: - -The Series Seed will be given the same rights as the next series of Preferred Stock (with appropriate adjustments for economic terms). - -### Key Holder Matters: - -Each Key Holder shall have four years vesting beginning *[_______]*. Full acceleration upon “Double Trigger.” Each Key Holder shall have assigned all relevant IP to the Company prior to closing. - -### Binding Terms: - -For a period of thirty days, the Company shall not solicit offers from other parties for any financing. Without the consent of Purchasers, the Company shall not disclose these terms to anyone other than officers, directors, key service providers, and other potential Purchasers in this financing. - - ------------- - -## COMPANY: - -*[__________, INC.]* - -Name: - -Title: - -Date: - -## PURCHASERS: - -Name: - -Title: - -Date: - diff --git a/equity/RELEASENOTES.md b/equity/RELEASENOTES.md new file mode 100644 index 0000000..12ba504 --- /dev/null +++ b/equity/RELEASENOTES.md @@ -0,0 +1,85 @@ +# Series Seed Equity Documents - Cooley Fork + +## Version 1.04 (September 3, 2024) +Updates to accredited investor questionnaire, addition of optional diversity rider to term sheet, and other various modifications and improvements. + +## Version 1.03 (September 3, 2022) +_Restated Certificate of Incorporation_: Removed broken reference in Section 3.9.1. + +## Version 1.02 (August 1, 2017) +_Stockholder Consent_: Updated lead-in language reflecting recent amendments to the Delaware General Corporation Law regarding effectiveness of stockholder signatures. + +## Version 1.01 (June 22, 2017) + +_Preferred Stock Investment Agreement_: Changed "Person" to "person" in Definitions (Exhibit A) to conform to use of "person" in the document (thanks to @HazardJ for posting the Issue.) + +_Term Sheet_: Updated Documentation URL to shortened URL. + +## Version 1.0 (June 20, 2017) + +### About Square Brackets: Optional or Alternative Language + +In the documents you will find many instances where provisions are surrounded by square brackets (\"\[ \]\"). These brackets indicate that the language contained within is either optional or, particularly where two sets of bracketed provisions appear next to each other, are alternative choices. **Please review these carefully**, and consult with an attorney about the consequences of the options. + +Please note that by providing these forms, we are not taking any position on whether a particular provision is "market" or not. In addition, by marking a provision as "optional" we are simply indicating that, in our experience, the inclusion or exclusion of the term is more often negotiated than not. It does not mean that we are taking any position about whether a term should or should not be included or how it should be phrased. The decision of whether to include any particular provision should be based on the mutual agreement of the parties, and any decision should be made by the user, in consultation with counsel. + +### New Documents + +- Stockholder Consent +- Director Consent +- Investor "Bad Actor" Questionnaire + +### Jurisdiction + +We have removed the optional brackets around "Delaware", when used, because certain changes, notably the addition of board and stockholder consents, were designed for Delaware corporations. + +### Other Changes + +- Added CONTRIBUTING.md file (as proposed by @kemitchell) +- Converted to standard ASCII characters (thanks again to @kemitchell for the [suggestion](https://github.com/seriesseed/equity/pull/38)). +- Removed Management Letter from Major Purchasers' rights. +- Added option for converting existing convertible debt and/or SAFEs and including them (or not) in the Price Per Share calculation. +- Added optional [broad-based, weighted average antidilution protection](https://www.cooleygo.com/glossary/broad-based-weighted-average-anti-dilution-protection/) language using NVCA standard language. +- Added "bad actor" provisions. +- Updated the "lock up" provision to reflect regulatory changes. +- Added language to support election of directors by (i) Series Seed and/or (ii) Series Seed and Common Stock holders, voting together. +- Various changes to make incremental progress on "plan English" drafting, including active versus passive voice, and many drafting and grammatical corrections. + +*** + +# RELEASENOTES.MD from original Series Seed Repository (Last Updated: March 1, 2014) + +## Version 3.2 + +When we launched Series Seed we committed to making them a crowd-sourced set of documents. With today’s release of version 3.2 we are taking our most significant step in this direction. The vast majority of the changes in this version are crowd-sourced optimizations to remove legalese. In particular, we’d like to thank the following commenters and contributors for their effort: @rickcolosimo @zekevermillion @thesmart @strikeroot @sblom @jackmaney @blueseed @commonaccord. + +Keep the comments coming! We are committed to continually improving and simplifying these documents. + +Also, we’ve been asked to address changes in the laws with regard to general solicitation. We will make an update in the next version and are happy to see any suggestions in the interim. + +As always, clean and redline versions of the updated documents in Word are also up on the [blog](http://www.seriesseed.com/). + + +## Version 3.1 + +Today we are launching Version 3.1 of the Series Seed documents. The changes in this version are minor clarifications in response to comments we received via GitHub and other optimizations that we found as we went back through the documents. Thanks to the GitHub commenters. Keep the feedback coming! + +Here is a summary of the updates: + +### Term Sheet +• Changed the description of Documentation to be identical to (rather than based on) the documents on seriesseed.com, except for the modifications set forth in the Term Sheet. The whole point of the Series Seed documents is to save on transaction costs by using a single standard document so we don't want folks agreeing to use Series Seed and then adding changes (unless they are agreed to in the term sheet). + +### Stock Investment Agreement +• Removed unnecessary reference to preemptive rights in Section 4.2. + +• Moved definition of “Stockholder” to earlier in document, from Section 7.1 to Section 5.3. + +• Added clarifying sentence in Section 8.1 that “no Stockholder may transfer Shares unless each transferee agrees to be bound by the terms of this Agreement.” + +• Added further clarification in Section 8.8 that “the addition of a party to this Agreement pursuant to a transfer of Shares in accordance with Section 8.1 shall not require any further consent.” + +• Added new language to Disclosure Schedule clarifying arrangement of sections and providing standard disclaimers. The previous version did not have any introductory language for the Disclosure Schedule. + +## Disclaimer + +*Neither I nor Fenwick & West, LLP assumes any responsibility for any consequence of using these documents. These documents have been prepared for informational purposes and is not intended to (a) constitute legal advice (b) create an attorney-client relationship (c) be advertising or a solicitation of any type. Each situation is highly fact specific and requires a knowledge of both state and federal laws and therefore any party should seek legal advice from a licensed attorney in the relevant jurisdictions. Both I and Fenwick & West expressly disclaim any and all liability with respect to actions or omissions based on this website.* \ No newline at end of file diff --git a/equity/Series Seed - Board Consent.md b/equity/Series Seed - Board Consent.md new file mode 100644 index 0000000..9c768e1 --- /dev/null +++ b/equity/Series Seed - Board Consent.md @@ -0,0 +1,77 @@ +**[Please note that the following resolutions do not cover all matters that may need to be addressed in connection with the financing. For example, if any changes to the Company's Board of Directors are contemplated, or the size of the option pool will be changed, additional resolutions will be needed in this Board Consent and/or the Stockholder Consent. Always consult with counsel prior to using the consents.]** + +# ACTION BY UNANIMOUS WRITTEN CONSENT OF THE BOARD OF DIRECTORS OF [COMPANY NAME] + +The undersigned, constituting all of the members of the Board of Directors (the "Board") of [Company Name], a Delaware corporation (the "Company"), pursuant to Sections 141(f), 242 and 245 of the Delaware General Corporation Law, hereby adopt the following resolutions by written consent: + +## Amendment and Restatement of Certificate of Incorporation + +WHEREAS, the Board hereby declares the advisability of the amendment and restatement of the Company's Certificate of Incorporation to read in its entirety in the form attached hereto as Exhibit A (the "Restated Certificate") that, among other things: + +(i) increases the number of authorized shares of the Company's common stock (the "Common Stock") and preferred stock (the "Preferred Stock"); +(ii) designates [________] shares of the Company's authorized but unissued Preferred Stock as "Series Seed Preferred Stock" (the "Series Seed Preferred"); and +(iii) sets forth rights, privileges and preferences of the Common Stock and the Series Seed Preferred. + +RESOLVED, that the Restated Certificate be, and it hereby is, subject to the approval by the Company's stockholders, amended and restated to read in the form of the Restated Certificate; + +RESOLVED FURTHER, that the Restated Certificate be submitted to the Company's stockholders and that the Board recommends that the Company's stockholders approve the adoption and filing of the Restated Certificate; + +RESOLVED FURTHER, that the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to take all action deemed necessary or appropriate to solicit the consent of the Company's stockholders with respect to the Restated Certificate, and that any and all such actions that may have been taken to date are hereby authorized, ratified, approved and confirmed in all respects; and + +RESOLVED FURTHER, that, upon receipt of such stockholders' consent, the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to make such filings with the Delaware Secretary of State as may be necessary or appropriate with respect to such amendment and restatement. + +## Approval of the Series Seed Preferred Stock Financing + +WHEREAS, the Board believes it is in the best interests of the Company to issue and sell up to [_________] shares of the Series Seed Preferred at a cash purchase price of $[_________] per share, which may be paid in cash, conversion of indebtedness or convertible securities, any other lawful form of consideration or any combination thereof. + +RESOLVED, that the Series Seed Preferred Stock Investment Agreement providing for, among other things, the issuance and sale by the Company of shares of the Series Seed Preferred at a cash purchase price of $[_________] per share in substantially the form attached hereto as Exhibit B (the "Purchase Agreement"), be, and it hereby is, approved in all respects; + +RESOLVED FURTHER, that the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to execute and deliver the Purchase Agreement and the Management Rights Letter (collectively, the "Agreements"), and any and all other agreements, certificates or documents required or contemplated by any of the Agreements or deemed necessary or appropriate in connection therewith, and to take all actions deemed necessary or appropriate to cause the Company's obligations thereunder to be performed; + +RESOLVED FURTHER, that the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to negotiate or otherwise cause such additions, modifications, amendments or deletions to be made to any of the Agreements, and such other agreements, certificates or documents, as any such officer may approve, and the execution and delivery thereof by such officer shall be deemed conclusive evidence of the approval of any such addition, modification, amendment or deletion; + +RESOLVED FURTHER, that up to [_________] shares of the Series Seed Preferred be, and they hereby are, reserved for issuance pursuant to the terms and conditions of the Purchase Agreement, and that the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to sell and issue the Series Seed Preferred for the consideration provided for in the Purchase Agreement and otherwise upon the terms and conditions described therein; + +RESOLVED FURTHER, that the issuance and delivery of the shares of the Common Stock issuable upon conversion of the Series Seed Preferred be, and it hereby is, authorized and approved in all respects and [_________] shares of the Common Stock (and any additional shares of the Common Stock issuable upon conversion of any shares of the Series Seed Preferred issued upon operation of any anti-dilution or other adjustment provisions provided for under the Restated Certificate) be, and they hereby are, reserved for issuance upon the conversion of the Series Seed Preferred; + +RESOLVED FURTHER, that when the consideration provided for in the Purchase Agreement has been received by the Company, the Series Seed Preferred shall be duly and validly issued, fully-paid and nonassessable, and the shares of the Common Stock issuable upon conversion of the Series Seed Preferred, when issued upon conversion of the Series Seed Preferred as provided for in the Restated Certificate, shall be duly and validly issued, fully paid and nonassessable; + +RESOLVED FURTHER, that the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to execute and deliver one or more certificates for the Series Seed Preferred and any shares of the Common Stock issued upon conversion of the Series Seed Preferred, in such form as may be approved by such officers; and + +RESOLVED FURTHER, that the Series Seed Preferred shall be offered, sold and issued in reliance on any applicable exemption from registration provided by the Securities Act of 1933, as amended, and any applicable exemption under applicable state blue sky laws, and that the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to execute and file any forms, certificates, notices or other documents that are necessary or appropriate pursuant to federal or state securities laws. + +## Additional Filings + +RESOLVED, that the appropriate officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to make such filings and applications, to execute and deliver such documents and instruments, and to do such acts and things as any such officer deems necessary or appropriate in order to implement the foregoing resolutions. + +## General Authorizing Resolution + +RESOLVED, that the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to take such further actions and execute such documents as may be necessary or appropriate in order to implement the foregoing resolutions. + +[Signature Page Follows] +*** + +This Action by Written Consent shall be filed with the minutes of the proceedings of the Board of Directors of the Company. + +The undersigned has executed this Action by Written Consent as of the date set forth under such signatory's name below. Any copy, facsimile, .PDF or other reliable reproduction of this Action by Written Consent may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile, .PDF or other reproduction be a complete reproduction of the entire original writing. + +__________________ | +--- | +[Director Name] | +Date: [_________] + +__________________ | +--- | +[Director Name] | +Date: [_________] + +*** +# Exhibit A + +## Restated Certificate + +*** + +# Exhibit B + +## Purchase Agreement diff --git a/equity/Series Seed - Investor Questionnaire.md b/equity/Series Seed - Investor Questionnaire.md new file mode 100644 index 0000000..b7cfdcb --- /dev/null +++ b/equity/Series Seed - Investor Questionnaire.md @@ -0,0 +1,63 @@ +# INVESTOR SUITABILITY QUESTIONNAIRE SERIES SEED PREFERRED FINANCING OF [COMPANY NAME] + +This Questionnaire is being distributed to certain individuals and entities which may be offered the opportunity to purchase Series Seed preferred stock (the "Securities") of **[Company Name]**, a Delaware corporation (the "Company"). The purpose of this Questionnaire is to assure the Company that all such offers and purchases will meet the standards imposed by the Securities Act of 1933, as amended (the "Act"), and applicable state securities laws. + +All answers will be kept confidential. However, by signing this Questionnaire, the undersigned agrees that this information may be provided by the Company to its legal and financial advisors, and the Company and such advisors may rely on the information set forth in this Questionnaire for purposes of complying with all applicable securities laws and may present this Questionnaire to such parties as it reasonably deems appropriate if called upon to establish its compliance with such securities laws. **The undersigned represents that the information contained herein is complete and accurate and will notify the Company of any material change in any of such information prior to the undersigned's investment in the Company.** + +## For Individual Investors + +**Accredited Investor Certification.** The undersigned makes one of the following representations regarding its income, net worth, status as a "family client" of a "family office," and/or certain professional certifications or designations and certain related matters **_and has checked the applicable representation:_** + +[_] The undersigned's income[FN 1] during each of the last two years exceeded $200,000 or, if the undersigned is married or has a spousal equivalent[FN 2], the joint income of the undersigned and the undersigned's spouse or spousal equivalent, as applicable, during each of the last two years exceed $300,000, and the undersigned reasonably expects the undersigned's income, from all sources during this year, will exceed $200,000 or, if the undersigned is married or has a spousal equivalent, the joint income of undersigned and the undersigned's spouse or spousal equivalent, as applicable, from all sources during this year will exceed $300,000. + +[_] The undersigned's net worth[FN 3], including the net worth of the undersigned's spouse or spousal equivalent, as applicable, is in excess of $1,000,000 (excluding the value of the undersigned's primary residence). + +[_] The undersigned is a holder in good standing of one or more of the following certifications or designations administered by the Financial Industry Regulatory Authority, Inc. (FINRA): the Licensed General Securities Representative (Series 7), Licensed Investment Adviser Representative (Series 65), or Licensed Private Securities Offerings Representative (Series 82). + +[_] The undersigned is a "family client," as defined in rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940, as amended (the "**_Advisers Act"), of a family office as defined in rule 202(a)(11)(G)-1 under the Advisers Act, (i) with assets under management in excess of $5,000,000, (ii) that is not formed for the specific purpose of acquiring the securities offered, and (iii) whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment, and whose prospective investment is directed by such family office pursuant to clause (iii) of this sentence. + +[_] The undersigned cannot make any of the representations set forth above. + +## For Entity Investors + +**Accredited Investor Certification.** The undersigned makes one of the following representations regarding its net worth and certain related matters **_and has checked the applicable representation: + +[_] The undersigned is a trust with total assets in excess of $5,000,000 whose purchase is directed by a person with such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of the prospective investment. + +[_] The undersigned is a bank, an investment adviser registered pursuant to Section 203 of the Advisers Act or registered pursuant to the laws of a state, any investment adviser relying on the exemption from registering with the SEC under Section 203(l) or (m) of the Advisers Act, an insurance company, an investment company registered under the United States Investment Company Act of 1940, as amended, a broker or dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934, as amended, a business development company, a Small Business Investment Company licensed by the United States Small Business Administration, a Rural Business Investment Company as defined in Section 384A of the Consolidated Farm and Rural Development Act, as amended, a plan with total assets in excess of $5,000,000 established and maintained by a state for the benefit of its employees, or a private business development company as defined in Section 202(a)(22) of the Advisers Act. + +[_] The undersigned is an employee benefit plan and _either_ all investment decisions are made by a bank, savings and loan association, insurance company, or registered investment advisor, _or_ the undersigned has total assets in excess of $5,000,000 _or_, if such plan is a self-directed plan, investment decisions are made solely by persons who are accredited investors. + +[_] The undersigned is a corporation, limited liability company, partnership, business trust, not formed for the purpose of acquiring the Securities, or an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "**_Code"), in each case with total assets in excess of $5,000,000. + +[_] The undersigned is an entity in which **all** of the equity owners (in the case of a revocable living trust, its grantor(s)) qualify under any of the above subparagraphs, or, if an individual, each such individual has a net worth[FN 3], either individually or upon a joint basis with such individual's spouse or spousal equivalent[FN 2], as applicable, in excess of $1,000,000 (within the meaning of such terms as used in the definition of "accredited investor" contained in Rule 501 under the Act), _or_ has had an individual income[FN 1] in excess of $200,000 for each of the two most recent years, or a joint income with such individual's spouse or spousal equivalent, as applicable, in excess of $300,000 in each of those years, and has a reasonable expectation of reaching the same income level in the current year. + +[_] The undersigned is an entity, of a type not listed in any of the paragraphs above, which was not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000. + +[_] The undersigned is a "family office," as defined in rule 202(a)(11)(G)-1 under the Advisers Act, (i) with assets under management in excess of $5,000,000, (ii) that is not formed for the specific purpose of acquiring the securities offered, and (iii) whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment. + +[_] The undersigned is a "family client," as defined in rule 202(a)(11)(G)-1 under the Advisers Act, of a family office meeting the requirements in the above paragraph and whose prospective investment is directed by such family office pursuant to clause (iii) of the above paragraph. + +[_] The undersigned cannot make any of the representations set forth above. + +[FN 1] For purposes of this Questionnaire, "income" means adjusted gross income, as reported for federal income tax purposes, increased by the following amounts: (a) the amount of any tax exempt interest income received, (b) the amount of losses claimed as a limited partner in a limited partnership, (c) any deduction claimed for depletion, (d) amounts contributed to an IRA or Keogh retirement plan, (e) alimony paid, and (f) any amounts by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section 1202 of the Code. + +[FN 2] For purposes of this Questionnaire, "spousal equivalent" means a cohabitant occupying a relationship generally equivalent to that of a spouse. + +[FN 3] For purposes of this Questionnaire, "net worth" means the excess of total assets, excluding your primary residence, at fair market value over total liabilities, including your mortgage or any other liability secured by your primary residence only if and to the extent that it exceeds the value of your primary residence. Net worth should include the value of any other shares of stock or options held by you and your spouse or spousal equivalent and any personal property owned by you or your spouse or spousal equivalent (_e.g._ furniture, jewelry, other valuables, etc.). For the purposes of calculating joint net worth: joint net worth can be the aggregate net worth of you and your spouse or spousal equivalent; assets need not be held jointly to be included in the calculation. + +*** + +IN WITNESS WHEREOF, the undersigned has executed this Investor Suitability Questionnaire as of the date written below. + +Name of Investor: *____________________________________________* + +Signature: *____________________________________________* + +Name of Investor: *____________________________________________* + +Name of Signing Party (Please Print): *____________________________________________* + +Title of Signing Party (Please Print): *____________________________________________* + +Date Signed: *____________________________________________* diff --git a/equity/Series Seed - Preferred Stock Investment Agreement.md b/equity/Series Seed - Preferred Stock Investment Agreement.md new file mode 100644 index 0000000..f70eaa3 --- /dev/null +++ b/equity/Series Seed - Preferred Stock Investment Agreement.md @@ -0,0 +1,486 @@ +[COMPANY NAME] +# SERIES SEED PREFERRED STOCK INVESTMENT AGREEMENT + +This Series Seed Preferred Stock Investment Agreement (this "Agreement") is dated as of the Agreement Date and is between the Company, the Purchasers and the Key Holders. + +The parties agree as follows: + +1. DEFINITIONS. Capitalized terms used and not otherwise defined in this Agreement or the Exhibits and Schedules to this Agreement have the meanings set forth in Exhibit A. + +2. INVESTMENT. Subject to the terms and conditions of this Agreement, including the Agreement Terms set forth in Exhibit B, (i) each Purchaser will purchase at the applicable Closing and the Company will sell and issue to such Purchaser at such Closing that number of shares of Series Seed Preferred Stock set forth opposite such Purchaser's name on Schedule 1, at a price per share equal to the Purchase Price [(subject to any applicable discounts where all or a portion of such Purchase Price is being paid by cancellation or conversion of indebtedness or other convertible securities of the Company issued primarily for capital raising purposes (e.g. simple agreements for future equity) to such Purchaser)] and (ii) each Purchaser, the Company and each Key Holder agrees to be bound by the obligations set forth in this Agreement and to grant to the other parties to this Agreement the rights set forth in this Agreement. + +3. ENTIRE AGREEMENT. This Agreement (including the Exhibits and Schedules to this Agreement) together with the Restated Certificate constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled. + +------------------------- +# EXHIBIT A +------------------------- + +## DEFINITIONS + +### 1. OVERVIEW DEFINITIONS. + +"Agreement Date" means *____________________________________________.* + +"Company" means *___________________________________________________.* + +"Dispute Resolution Jurisdiction" means the federal or state courts located in *________________.* + +"Governing Law" means the laws of the state of Delaware. + +"Person" means any individual, corporation, partnership, trust, limited liability company, association or other entity. + +"State of Incorporation" means *____________________________________.* + +"Stock Plan" means *________________________________________________.* + +### 2. BOARD COMPOSITION DEFINITIONS. + +"Board Designee" means any member of the Board designated pursuant to Section 7 of this Agreement. + +"Common Board Member Count" means *______.* + +"Mutual Consent Board Member Count" means *______.* + +"Series Seed Board Member Count" means *______.* + +"Common Control Holders" means the Key Holders [who are then providing services to the Company as employees]. + +### 3. TERM SHEET DEFINITIONS. + +"Major Purchaser Dollar Threshold" means *$____________.* + +"Purchase Price" means *$____________* per share [(subject to any applicable discounts where all or a portion of such Purchase Price is being paid by cancellation or conversion of indebtedness or other convertible securities of the Company issued primarily for capital raising purposes (e.g., simple agreements for future equity (SAFEs)) to such Purchaser)]. + +"Total Series Seed Investment Amount" means *$____________.* + +"Unallocated Post-Money Option Pool Percent" means *____________*%. + +"Purchaser Counsel Reimbursement Amount" means *$____________.* + +#### 4. RESULTING CAP TABLE DEFINITIONS. + +"Common Shares Issued and Outstanding Pre-Money" means *____________.* + +"Total Post-Money Shares Reserved for Option Pool" means *____________.* + +"Number of Issued And Outstanding Options" means *____________.* + +"Unallocated Post-Money Option Pool Shares" means *____________.* + +# SCHEDULE 1 + +# SCHEDULE OF PURCHASERS & KEY HOLDERS + +## PURCHASERS: + +Initial Closing: [Date] + +Name, Address and E-Mail of Purchaser / Series Seed Preferred Stock Shares Purchased [/ Indebtedness or Other Convertible Securities Cancellation or Conversion] / Cash Payment / Total Purchase Amount + +1: + +2: + +3: + +4: + +5: + +6: + +7: + +8: + +9: + +10: + +11: + +12: + +13: + +14: + +15: + +16: + +17: + +18: + +19: + +20: + +## KEY HOLDERS: + +Name, Address and E-Mail of Key Holder / Shares of Common Stock Held + +1: + +2: + +3: + +4: + +5: + +6: + +7: + +8: + +9: + +10: + +------------------------- +# EXHIBIT B +------------------------- + +## AGREEMENT TERMS + +### 1. PURCHASE AND SALE OF SERIES SEED PREFERRED STOCK. + +#### 1.1 Sale and Issuance of Series Seed Preferred Stock. + +1.1.1 The Company will adopt and file the Company's Amended and Restated Certificate of Incorporation, in substantially the form of Exhibit C attached to this Agreement (as the same may be amended, restated, supplemented or otherwise modified from time to time) (the "Restated Certificate"), with the Secretary of State of the State of Incorporation on or before the Initial Closing. + +1.1.2 Subject to the terms and conditions of this Agreement, each investor listed as a purchaser on Schedule 1 (each, a "Purchaser") will purchase at the applicable Closing and the Company agrees to sell and issue to such Purchaser at such Closing that number of shares of Series Seed Preferred Stock of the Company ("Series Seed Preferred Stock") set forth opposite such Purchaser's name on Schedule 1, at a purchase price per share equal to the Purchase Price. + +#### 1.2 Closing; Delivery. + +1.2.1 The initial purchase and sale of the shares of Series Seed Preferred Stock hereunder will take place remotely via the exchange of documents and signatures on the Agreement Date or any subsequent date on which one or more Purchasers execute counterpart signature pages to this Agreement and deliver the aggregate Purchase Price to the Company (such date, the "Initial Closing"). + +1.2.2 At any time and from time to time during the 90-day period immediately following the Initial Closing, the Company may, at one or more additional closings (each an "Additional Closing" and together with the Initial Closing, each, a "Closing"), without obtaining the signature, consent or permission of any of the Purchasers in the Initial Closing or any prior Additional Closing, offer and sell to investors (the "New Purchasers"), at a per share purchase price equal to the Purchase Price, up to that number of shares of Series Seed Preferred Stock that is equal to the quotient of (x) Total Series Seed Investment Amount divided by (y) the Purchase Price, rounded up to the next whole share (the "Total Shares Authorized for Sale"), less the number of shares of Series Seed Preferred Stock actually issued and sold by the Company at the Initial Closing and any prior Additional Closings. New Purchasers may include Persons who are already Purchasers under this Agreement. Each of the New Purchasers purchasing shares of Series Seed Preferred Stock at an Additional Closing will execute counterpart signature pages to this Agreement and each New Purchaser will, upon delivery by such New Purchaser and acceptance by the Company of such New Purchaser's signature page and delivery of the aggregate Purchase Price by such New Purchaser to the Company, become a party to, and bound by, this Agreement to the same extent as if such New Purchaser had been a Purchaser at the Initial Closing. Each New Purchaser will be deemed to be a Purchaser for all purposes under this Agreement as of the date of the applicable Additional Closing. + +1.2.3 Promptly following each Closing, if required by the Company's governing documents, the Company will deliver to each Purchaser participating in that Closing a certificate representing the shares of Series Seed Preferred Stock being purchased by that Purchaser at that Closing against payment of the aggregate Purchase Price therefor by check payable to the Company, by wire transfer to a bank account designated by the Company, by cancellation or conversion of indebtedness or other convertible securities of the Company issued primarily for capital raising purposes (e.g., simple agreements for future equity) to such Purchaser or by any combination of such methods. + +### 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. + +The Company represents and warrants to each Purchaser that, except as set forth on the Disclosure Schedule attached as Exhibit D to this Agreement (the "Disclosure Schedule"), if any, which exceptions are deemed to be part of the representations and warranties made in this Agreement, the following representations are true and complete as of the Agreement Date, except as otherwise indicated. + +#### 2.1 Organization, Good Standing, Corporate Power and Qualification. + +The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Incorporation and has all corporate power and corporate authority required (a) to carry on its business as presently conducted and as presently proposed to be conducted and (b) to execute, deliver and perform its obligations under this Agreement. The Company is duly qualified to transact business as a foreign corporation and is in good standing under the laws of each jurisdiction in which the failure to so qualify or be in good standing would have a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition, property, or results of operations of the Company. + +#### 2.2 Capitalization. + +2.2.1 The authorized capital of the Company consists, immediately prior to the Initial Closing (unless otherwise noted), of the following: + +(a) Common stock of the Company ("Common Stock"), of which (i) that number of shares of Common Stock equal to the Common Shares Issued and Outstanding Pre-Money are issued and outstanding as of immediately prior to the Initial Closing, (ii) the number of shares of Common Stock that are issuable upon conversion of shares of Series Seed Preferred Stock have been reserved for issuance upon conversion of Series Seed Preferred Stock and (iii) the Total Post-Money Shares Reserved for Option Pool have been reserved for issuance pursuant to the Stock Plan, and of such Total Post-Money Shares Reserved for Option Pool, that number of shares of Common Stock equal to the Number of Issued And Outstanding Options are currently subject to outstanding options and that number of shares of Common Stock equal to the Unallocated Post-Money Option Pool Shares remain available for future issuance to officers, directors, employees and consultants pursuant to the Stock Plan. The ratio determined by dividing (x) the Unallocated Post-Money Option Pool Shares by (y) the Fully Diluted Share Number (as defined below) is equal to the Unallocated Post-Money Option Pool Percent. All of the outstanding shares of Common Stock are duly authorized, validly issued, fully paid and nonassessable and were issued in material compliance with all applicable federal and state securities laws. The Stock Plan has been duly adopted by the Board of Directors of the Company (the "Board") and approved by the Company's stockholders. The term "Fully Diluted Share Number" means that number of shares of the Company's capital stock equal to the sum of (i) all shares of the Company's capital stock (on an as-converted basis) issued and outstanding, assuming exercise or conversion of all options, warrants and other convertible securities and (ii) all shares of the Company's capital stock reserved and available for future grant under any equity incentive or similar plan. + +(b) The shares of preferred stock of the Company ("Preferred Stock"), all of which are designated as Series Seed Preferred Stock, none of which is issued and outstanding immediately prior to the Initial Closing. + +2.2.2 There are no outstanding preemptive rights, options, warrants, conversion privileges or rights (including rights of first refusal or similar rights), orally or in writing, to purchase or acquire any securities from the Company including, without limitation, any shares of Common Stock, Preferred Stock or any securities convertible into or exchangeable or exercisable for shares of Common Stock or Preferred Stock, except for (a) the conversion privileges of Series Seed Preferred Stock pursuant to the terms of the Restated Certificate and (b) the securities and rights described in this Agreement. + +2.2.3 The Key Holders set forth on Schedule 1 (each a "Key Holder") hold that number of shares of Common Stock set forth opposite each Key Holder's name in Section 2.2.3 of the Disclosure Schedule (such shares, the "Key Holder Shares"). The Key Holder Shares are subject to vesting and/or the Company's repurchase right on the terms specified in Section 2.2.3 of the Disclosure Schedule (the "Key Holder Vesting Schedules"). Except as specified in Section 2.2.3 of the Disclosure Schedule, the Key Holders do not own or have any other rights to any other securities of the Company. The Key Holder Vesting Schedules set forth in Section 2.2.3 of the Disclosure Schedule specify for each Key Holder (i) the vesting commencement date for each issuance of shares to or options held by the Key Holder, (ii) the number of shares or options held by the Key Holder that are currently vested, (iii) the number of shares or options held by the Key Holder that remain subject to vesting and/or the Company's repurchase right and (iv) the terms and conditions, if any, under which the Key Holder Vesting Schedules would be accelerated. Other than the Key Holder Shares, which vest pursuant to the applicable Key Holder Vesting Schedules, (x) all options granted and Common Stock outstanding vest as follows: 25% of the shares vest one year following the vesting commencement date, with the remaining 75% vesting in equal installments over the next three years and (y) no stock plan, stock purchase, stock option or other agreement or understanding between the Company and any holder of any equity securities or rights to purchase equity securities provides for acceleration or other changes in the vesting provisions or other terms of such agreement or understanding as the result of (i) termination of employment (whether actual or constructive), (ii) any merger, consolidated sale of stock or assets, change in control, or any other transaction by the Company, or (iii) the occurrence of any other event or combination of events. + +#### 2.3 Subsidiaries. + +The Company does not own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, limited liability company, association, or other business entity. The Company is not a participant in any joint venture, partnership or similar arrangement. + +#### 2.4 Authorization. + +All corporate action has been taken, or will be taken before the applicable Closing, on the part of the Board and stockholders that is necessary for the authorization, execution and delivery of this Agreement by the Company and the performance by the Company of the obligations to be performed by the Company as of the Agreement Date. This Agreement, when executed and delivered by the Company, will constitute the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms and conditions except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors' rights generally, or (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. + +#### 2.5 Valid Issuance of Shares. + +2.5.1 The shares of Series Seed Preferred Stock, when issued, sold and delivered in accordance with the terms and conditions and for the consideration set forth in this Agreement, will be duly authorized, validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement, applicable state and federal securities laws and liens or encumbrances created by or imposed by a Purchaser. Based in part on the accuracy of the representations of the Purchasers in Section 3 and subject to filings pursuant to Regulation D of the Securities Act of 1933, as amended (the "Securities Act"), and applicable state securities laws, the offer, sale and issuance of the shares of Series Seed Preferred Stock to be issued pursuant to and in conformity with the terms and conditions of this Agreement and the issuance of Common Stock, if any, to be issued upon conversion thereof for no additional consideration and pursuant to the Restated Certificate, will comply with all applicable federal and state securities laws. Common Stock issuable upon conversion of the shares of Series Seed Preferred Stock has been duly reserved for issuance, and upon issuance in accordance with the terms of the Restated Certificate, will be duly authorized, validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement, applicable federal and state securities laws and liens or encumbrances created by or imposed by a Purchaser. Based in part upon the representations of the Purchasers in Section 3, and subject to filings pursuant to Regulation D of the Securities Act and applicable state securities laws, Common Stock issuable upon conversion of the shares of Series Seed Preferred Stock will be issued in compliance with all applicable federal and state securities laws. + +2.5.2 No "bad actor" disqualifying event described in Rule 506(d)(1)(i-viii) of the Securities Act (a "Disqualification Event") is applicable to the Company or, to the Company's knowledge, any Company Covered Person, except for a Disqualification Event as to which Rule 506(d)(2)(ii-iv) or (d)(3) of the Securities Act is applicable. "Company Covered Person" means, with respect to the Company as an "issuer" for purposes of Rule 506 of the Securities Act, any Person listed in the first paragraph of Rule 506(d)(1) of the Securities Act. + +#### 2.6 Litigation. + +There is no action, suit, proceeding, arbitration, mediation, complaint, claim, charge or investigation before any court, arbitrator, mediator or governmental body pending or, to the Company's knowledge, currently threatened in writing (a) against the Company or (b) against any consultant, officer, director or key employee of the Company arising out of such Person's consulting, employment or Board relationship with the Company or that could otherwise materially impact the Company. + +#### 2.7 Intellectual Property. + +The Company owns or possesses sufficient legal rights to all Intellectual Property (as defined below) that is necessary to the conduct of the Company's business as now conducted and as presently proposed to be conducted (the "Company Intellectual Property") without any violation or infringement (or in the case of third-party patents, patent applications, trademarks, trademark applications, service marks, or service mark applications, without any violation or infringement known to the Company) of the rights of others. No product or service marketed or sold (or proposed to be marketed or sold) by the Company violates or will violate any license or infringes or will infringe any rights to any patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, trade secrets, licenses, domain names, mask works, information and proprietary rights and processes (collectively, "Intellectual Property") of any other party, except that with respect to third-party patents, patent applications, trademarks, trademark applications, service marks, or service mark applications the foregoing representation is made to the Company's knowledge only. Other than with respect to commercially available software products under standard end-user object code license agreements, there is no outstanding option, license, agreement, claim, encumbrance or shared ownership interest of any kind relating to the Company Intellectual Property, nor is the Company bound by or a party to any options, licenses or agreements of any kind with respect to the Intellectual Property of any other Person. The Company has not received any written communications alleging that the Company has violated or, by conducting its business, would violate any of the Intellectual Property of any other Person. + +#### 2.8 Employee and Consultant Matters. + +Each current and former employee, consultant and officer of the Company has executed an agreement with the Company regarding confidentiality and proprietary information substantially in the form or forms made available to the Purchasers or delivered to the counsel for the Purchasers. No current or former employee or consultant has excluded any work or invention from such Person's assignment of inventions and, to the Company's knowledge, no such Person is in violation of such agreement. To the Company's knowledge, none of its employees is obligated under any judgment, decree, contract, covenant or agreement that would materially interfere with the employee's ability to promote the interest of the Company or that would interfere with such employee's ability to promote the interests of the Company or that would conflict with the Company's business. To the Company's knowledge, all individuals who have purchased unvested shares of Common Stock have timely filed elections under Section 83(b) of the Internal Revenue Code of 1986, as amended. + +#### 2.9 Compliance with Other Instruments. + +The Company is not in violation or default (a) of any provisions of the Restated Certificate or the Company's bylaws, (b) of any judgment, order, writ or decree of any court or governmental entity, (c) under any agreement, instrument, contract, lease, note, indenture, mortgage or purchase order to which it is a party that is required to be listed on the Disclosure Schedule, or (d) to its knowledge, of any provision of federal or state statute, rule or regulation materially applicable to the Company. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in any such violation or default, or constitute, with or without the passage of time or giving of notice, either (i) a default under any such judgment, order, writ, decree, agreement, instrument, contract, lease, note, indenture, mortgage or purchase order or (ii) an event that results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture, or nonrenewal of any material permit or license applicable to the Company. + +#### 2.10 Title to Property and Assets. + +The Company owns its properties and assets free and clear of all mortgages, deeds of trust, liens, encumbrances and security interests except for statutory liens for the payment of current taxes that are not yet delinquent and liens, encumbrances and security interests which arise in the ordinary course of business and that do not affect material properties and assets of the Company. With respect to any property and assets it leases, the Company is in material compliance with each such lease. + +#### 2.11 Agreements. + +Except for this Agreement, there are no agreements, understandings, instruments, contracts or proposed transactions to which the Company is a party that involve (a) obligations (contingent or otherwise) of, or payments to, the Company in excess of $25,000, (b) the license of any Intellectual Property to or from the Company other than licenses with respect to commercially available software products under standard end-user object code license agreements or standard customer terms of service and privacy policies for Internet sites, (c) the grant of rights to manufacture, produce, assemble, license, market, or sell its products to any other Person, or that limit the Company's exclusive right to develop, manufacture, assemble, distribute, market or sell its products, or (d) indemnification by the Company with respect to infringements of proprietary rights other than standard customer or channel agreements (each, a "Material Agreement"). The Company is not in material breach of any Material Agreement. Each Material Agreement is in full force and effect and is enforceable by the Company in accordance with its respective terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or others laws of general application relating to or affecting the enforcement of creditors' rights generally, or (ii) the effect of rules of law governing the availability of equitable remedies. + +#### 2.12 Liabilities. + +The Company has no liabilities or obligations, contingent or otherwise, in excess of $25,000 individually or $100,000 in the aggregate. + +### 3. REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE PURCHASERS. + +Each Purchaser hereby represents and warrants to the Company, severally and not jointly, as follows. + +#### 3.1 Authorization. + +The Purchaser has full power and authority to enter into this Agreement. This Agreement, when executed and delivered by the Purchaser, will constitute a valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms and conditions, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other laws of general application relating to or affecting the enforcement of creditors' rights generally or (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies. + +#### 3.2 Purchase Entirely for Own Account. + +The Purchaser is acquiring the shares of Series Seed Preferred Stock for investment for the Purchaser's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof. The Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. The Purchaser further represents that the Purchaser does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to any of the shares of Series Seed Preferred Stock. The Purchaser has not been formed for the specific purpose of acquiring the shares of Series Seed Preferred Stock. + +#### 3.3 Disclosure of Information. + +The Purchaser has had an opportunity to discuss the Company's business, management, financial affairs and the terms and conditions of the offering of the shares of Series Seed Preferred Stock with the Company's management. Nothing in this Section 3, including the foregoing sentence, limits or modifies the representations and warranties of the Company in Section 2 or the right of the Purchasers to rely thereon. + +#### 3.4 Restricted Securities. + +The Purchaser understands that the shares of Series Seed Preferred Stock have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act that depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser's representations as expressed in this Agreement. The Purchaser understands that the shares of Series Seed Preferred Stock are "restricted securities" under applicable United States federal and state securities laws and that, pursuant to these laws, the Purchaser must hold the shares of Series Seed Preferred Stock 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. The Purchaser acknowledges that the Company has no obligation to register or qualify the shares of Series Seed Preferred Stock, or Common Stock into which it may be converted, for resale. The 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 and the holding period for the shares of Series Seed Preferred Stock, and on requirements relating to the Company that are outside of the Purchaser's control, and that the Company is under no obligation and may not be able to satisfy. + +#### 3.5 No Public Market. + +The Purchaser understands that no public market now exists for the shares of Series Seed Preferred Stock. The Company has made no assurances that a public market will ever exist for the shares of Series Seed Preferred Stock. + +#### 3.6 Legends. + +The Purchaser understands that the shares of Series Seed Preferred Stock and any securities issued in respect of or exchange for the shares of Series Seed Preferred Stock, may bear any one or more of the following legends: (a) any legend set forth in, or required by, this Agreement; (b) any legend required by the securities laws of any state to the extent such laws are applicable to the shares of Series Seed Preferred Stock represented by the certificate so legended; and (c) the following legend: + +"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED." + +#### 3.7 Accredited and Sophisticated Purchaser. + +The Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D of the Securities Act. The Purchaser is an investor in securities of companies in the development stage. The Purchaser is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the shares of Series Seed Preferred Stock. If other than an individual, the Purchaser also represents it has not been organized for the purpose of acquiring the shares of Series Seed Preferred Stock. + +#### 3.8 No General Solicitation. + +Neither the Purchaser nor any of its officers, directors, employees, agents, stockholders or partners has either directly or indirectly, including through a broker or finder (a) engaged in any general solicitation with respect to the offer and sale of the shares of Series Seed Preferred Stock, or (b) published any advertisement in connection with the offer and sale of the shares of Series Seed Preferred Stock. + +#### 3.9 Exculpation among Purchasers. + +The Purchaser is not relying upon any Person, other than the Company and its officers and directors, in making its investment or decision to invest in the Company. The Purchaser agrees that neither any Purchaser nor the respective controlling Persons, officers, directors, partners, agents, or employees of any Purchaser be liable to any other Purchaser for any action heretofore taken or omitted to be taken by any of them in connection with the purchase of the shares of Series Seed Preferred Stock. + +#### 3.10 Residence. + +If the Purchaser is an individual, then the Purchaser resides in the state identified in the address of the Purchaser set forth on Schedule 1; if the Purchaser is other than an individual, then the office or offices of the Purchaser in which its principal place of business is identified in the address or addresses of the Purchaser set forth on Schedule 1. If the Purchaser is not a resident of the United States, the Purchaser will make such additional representations and warranties relating to such Purchaser's status as a non-United States resident as may reasonably be requested by the Company and will execute and deliver such documents or agreements as may reasonably be requested by the Company relating thereto as a condition to the purchase and sale of any shares of Series Seed Preferred Stock by such Purchaser. + +#### 3.11 No "Bad Actor" Designees. + +If the Purchaser has the right to designate or participate in the designation of a Board Designee, the Purchaser represents and warrants to the Company that, to the Purchaser's knowledge, no Disqualification Event is applicable to the Purchaser's initial designee named above except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii-iv) or (d)(3) of the Securities Act is applicable. Any Board Designee to whom any Disqualification Event is applicable, except for a Disqualification Event as to which Rule 506(d)(2)(ii-iv) or (d)(3) of the Securities Act is applicable, is hereinafter referred to as a "Disqualified Designee". The Purchaser with the right to designate or participate in the designation of a Board Designee covenants and agrees (A) not to designate or participate in the designation of any Board Designee who, to the Purchaser's knowledge, is a Disqualified Designee and (B) that in the event the Purchaser becomes aware that any individual previously designated by the Purchaser is or has become a Disqualified Designee, the Purchaser will as promptly as practicable take such actions as are necessary to remove such Disqualified Designee from the Board and designate a replacement Board Designee who is not a Disqualified Designee. + +#### [3.12 Consent to Conversion and Termination of Convertible Securities. + +3.12.1 By executing and delivering this Agreement, each Purchaser holding one or more convertible promissory notes or simple agreements for future equity issued by the Company prior to the date hereof (each, a "Convertible Security" and, collectively, the "Convertible Securities") hereby irrevocably agrees that: + +(a) all of such Purchaser's Convertible Securities will automatically and without any action on the part of such Purchaser convert into shares of Series Seed Preferred Stock at the Initial Closing in the amount for such Purchaser as set forth on Schedule 1, regardless of whether any such Convertible Securities or an affidavit of loss therefor is actually delivered in original or other form to the Company; + +(b) the shares of Series Seed Preferred Stock in the amount set forth opposite such Purchaser's name on Schedule 1 are issued in full and complete discharge and satisfaction of all obligations of the Company (including outstanding principal, interest or any other amounts) under such Purchaser's Convertible Securities, and such Convertible Securities will be terminated and of no further force or effect automatically immediately prior to the Initial Closing; and + +(c) such Purchaser's Convertible Securities hereby are and will be deemed for all purposes to have been amended and modified by virtue hereof to the full extent necessary to permit and facilitate their conversion into the shares of Series Seed Preferred Stock, and, immediately prior to the Initial Closing, such Convertible Securities shall be deemed terminated in full and null, void and of no further force or effect; provided that the foregoing will not impair the right of such Purchaser to receive the applicable number of shares of Series Seed Preferred Stock shown opposite such Purchaser's name on Schedule 1 as provided above; and, provided, further, that, in order to facilitate the Initial Closing, interest shall accrue on the outstanding principal balance of such Convertible Securities through and including _______ (the "Interest Accrual Date"), and any additional interest that accrues on such Convertible Securities after such date is hereby irrevocably waived (on behalf of such Purchaser and all other Purchasers) by the Purchasers. + +3.12.2 Such Purchaser hereby represents, warrants and confirms to the Company that: (i) such Purchaser is the sole owner of all right, title and interest in and to the Convertible Securities corresponding to the amounts shown on Schedule 1 opposite such Purchaser's name and converting into the shares of Series Seed Preferred Stock shown on Schedule 1; and (ii) such Purchaser has reviewed Schedule 1 and agrees that such Purchaser's ownership of shares of Series Seed Preferred Stock after giving effect to the Initial Closing is fully and accurately reflected on Schedule 1. + +3.12.3 Aside from such Purchaser's right to receive the shares of Series Seed Preferred Stock set forth opposite such Purchaser's name on Schedule 1 at the Initial Closing and to receive rights provided for in this Agreement and as a holder of shares of Series Seed Preferred Stock under the Restated Charter, such Purchaser hereby waives any and all demands, claims, suits, actions, causes of actions, proceedings, assessments and rights in respect of such Purchaser’s Convertible Securities, including, without limitation, (i) any principal or interest payments accrued beyond the Interest Accrual Date in excess of the amounts to be converted into the shares of Series Seed Preferred Stock as provided on Schedule 1, (ii) any right to formal notice of the conversion of the Convertible Securities and (iii) any rights arising from any past or present actual or alleged default or event of default under the Convertible Securities. The Purchasers further confirm and agree that any original Convertible Securities held by (or delivered to) the Company may be cancelled (and marked cancelled) by the Company upon or following the Initial Closing.] + +### 4. COVENANTS. + +#### 4.1 Information Rights. + +4.1.1 Basic Financial Information. The Company will furnish to each Purchaser holding that number of shares equal to or in excess of the quotient determined by dividing (x) the Major Purchaser Dollar Threshold by (y) the Purchase Price, rounded up to the next whole share (as adjusted for stock splits, stock dividends, combinations, recapitalizations or the like) (a "Major Purchaser"), when available (1) annual unaudited financial statements for each fiscal year of the Company, including an unaudited balance sheet as of the end of such fiscal year, an unaudited income statement and an unaudited statement of cash flows, all prepared in accordance with generally accepted accounting principles and practices; and (2) quarterly unaudited financial statements for each fiscal quarter of the Company (except the last quarter of the Company's fiscal year), including an unaudited balance sheet as of the end of such fiscal quarter, an unaudited income statement, and an unaudited statement of cash flows, all prepared in accordance with generally accepted accounting principles and practices, subject to changes resulting from normal year-end audit adjustments. If the Company has audited records of any of the foregoing, it will provide those in lieu of the unaudited versions. + +4.1.2 Confidentiality. Anything in this Agreement to the contrary notwithstanding, no Purchaser by reason of this Agreement will have access to any trade secrets or confidential information of the Company. The Company will not be required to comply with any information rights of any Purchaser whom the Company reasonably determines to be a competitor or an officer, employee, director or holder of 10% or more of a competitor. Each Purchaser will keep confidential and will not disclose, divulge or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms and conditions of this Agreement other than to any of the Purchaser's attorneys, accountants, consultants and other professionals, to the extent necessary to obtain their services in connection with monitoring the Purchaser's investment in the Company. + +4.1.3 Inspection Rights. The Company will permit each Major Purchaser to visit and inspect the Company's properties, to examine its books of account and records and to discuss the Company's affairs, finances and accounts with its officers, all at such reasonable times as may be requested by such Major Purchaser. + +#### 4.2 Additional Rights and Obligations. + +If the Company issues securities in its next equity financing after the date hereof (the "Next Financing") that (a) have rights, preferences or privileges that are more favorable than the terms of the shares of Series Seed Preferred Stock, such as price-based anti-dilution protection, or (b) provide all such future investors other contractual terms such as registration rights, the Company will provide substantially equivalent rights to the Purchasers with respect to the shares of Series Seed Preferred Stock (with appropriate adjustment for economic terms or other contractual rights), subject to such Purchaser's execution of any documents, including, if applicable, investor rights, co-sale, voting, and other agreements, executed by the investors purchasing securities in the Next Financing (such documents, the "Next Financing Documents"). Any Major Purchaser will remain a Major Purchaser for all purposes in the Next Financing Documents to the extent such concept exists. The Company will pay the reasonable fees and expenses, not to exceed $5,000 in the aggregate, of one counsel for the Purchasers in connection with the Purchasers' review, execution, and delivery of the Next Financing Documents. Notwithstanding anything in this Agreement to the contrary, subject to the provisions of Section 8.11, upon the execution and delivery of the Next Financing Documents by Purchasers holding a majority of the then-outstanding shares of Series Seed Preferred Stock held by all Purchasers, this Agreement (excluding any then-existing and outstanding obligations) will be amended and restated by and into such Next Financing Documents and will be terminated and of no further force or effect. + +#### 4.3 Assignment of Company's Preemptive Rights. + +The Company will obtain at or prior to the Initial Closing, and will maintain, a right of first refusal with respect to transfers of shares of Common Stock by each holder thereof, subject to certain standard exceptions. If the Company elects not to exercise its right of first refusal with respect to a proposed transfer of the Company's outstanding securities by any Key Holder, the Company will assign such right of first refusal to the Major Purchasers. In the event of such assignment, each Major Purchaser will have a right to purchase that portion of the securities proposed to be transferred by such Key Holder equal to the ratio of (a) the number of shares of Common Stock issued or issuable upon conversion of the shares of Series Seed Preferred Stock owned by such Major Purchaser, to (b) the number of shares of Common Stock issued or issuable upon conversion of the shares of Series Seed Preferred Stock owned by all Major Purchasers. + +#### 4.4 Reservation of Common Stock. + +The Company will at all times reserve and keep available, solely for issuance and delivery upon the conversion of Series Seed Preferred Stock, all Common Stock issuable from time to time upon conversion of that number of shares of Series Seed Preferred Stock equal to the Total Shares Authorized for Sale, regardless of whether or not all such shares have been issued at such time. + +### 5. RESTRICTIONS ON TRANSFER; DRAG ALONG. + +#### 5.1 Limitations on Disposition. + +Each Person owning of record shares of Common Stock issued or issuable pursuant to the conversion of the shares of Series Seed Preferred Stock and any shares of Common Stock issued as a dividend or other distribution with respect thereto or in exchange therefor or in replacement thereof (collectively, the "Securities") or any assignee of record of Securities (each such Person, a "Holder") will not make any disposition of all or any portion of any Securities unless: + +(a) there is then in effect a registration statement under the Securities Act, covering such proposed disposition and such disposition is made in accordance with such registration statement; or + +(b) such Holder has notified the Company of the proposed disposition and has furnished the Company with a statement of the circumstances surrounding the proposed disposition, and, at the expense of such Holder or its transferee, with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such securities under the Securities Act. + +Notwithstanding the provisions of Section 5.1(a) and Section 5.1(b), no such registration statement or opinion of counsel will be required: (i) for any transfer of any Securities in compliance with the Securities and Exchange Commission's Rule 144 or Rule 144A, or (ii) for any transfer of any Securities by a Holder that is a partnership, limited liability company, corporation or venture capital fund to (A) a partner of such partnership, member of such limited liability company or stockholder of such corporation, (B) an affiliate of such partnership, limited liability company or corporation (including, any affiliated investment fund of such Holder), (C) a retired partner of such partnership or a retired member of such limited liability company, or (D) the estate of any such partner, member, or stockholder, or (iii) for the transfer without additional consideration or at no greater than cost by gift, will, or intestate succession by any Holder to the Holder's spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that, in the case of clauses (ii) and (iii), the transferee agrees in writing to be subject to the terms and conditions of this Agreement to the same extent as if the transferee were an original Purchaser under this Agreement. + +#### 5.2 "Market Stand-Off" Agreement. + +To the extent requested by the Company or an underwriter of securities of the Company, each Holder and Key Holder, and any transferee thereof (each, a "Stockholder"), will not, without the prior written consent of the managing underwriters in the IPO (as defined below), offer, sell, make any short sale of, grant or sell any option for the purchase of, lend, pledge, otherwise transfer or dispose of (directly or indirectly), enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership (whether any such transaction is described above or is to be settled by delivery of Securities or other securities, in cash, or otherwise), any Securities or other shares of stock of the Company then owned by such Stockholder, or enter into an agreement to do any of the foregoing, for up to 180 days following the effective date of the registration statement of the initial public offering of the Company (the "IPO") filed under the Securities Act. For purposes of this Section 5.2, "Company" includes any wholly owned subsidiary of the Company into which the Company merges or consolidates. The Company may place restrictive legends on the certificates representing the shares subject to this Section 5.2 and may impose stop transfer instructions with respect to the Securities and such other shares of stock of each Stockholder (and the shares or securities of every other Person subject to the foregoing restriction) until the end of such period. Each Stockholder will enter into any agreement reasonably required by the underwriters to the IPO to implement the foregoing within any reasonable timeframe so requested. The underwriters for any IPO are intended third-party beneficiaries of this Section 5.2 and will have the right, power and authority to enforce the provisions of this Section 5.2 as though they were parties hereto. + +#### 5.3 Drag Along Right. + +If a Deemed Liquidation Event (as defined in the Restated Certificate) is approved by each of (i) the holders of a majority of the shares of Common Stock then-outstanding (other than those issued or issuable upon conversion of the shares of Series Seed Preferred Stock), (ii) the holders of a majority of the shares of Common Stock then issued or issuable upon conversion of the shares of Series Seed Preferred Stock then-outstanding and (iii) the Board, then each Stockholder will vote (in person, by proxy or by action by written consent, as applicable) all shares of capital stock of the Company now or hereafter directly or indirectly owned of record or beneficially by such Stockholder (collectively, the "Shares") in favor of, and adopt, such Deemed Liquidation Event and to execute and deliver all related documentation and take such other action in support of the Deemed Liquidation Event as may reasonably be requested by the Company to carry out the terms and provision of this Section 5.3, including executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, indemnity agreement, escrow agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (free and clear of impermissible liens, claims and encumbrances) and any similar or related documents. The obligation of any party to take the actions required by this Section 5.3 will not apply to a Deemed Liquidation Event if the other party involved in such Deemed Liquidation Event is an affiliate or stockholder of the Company holding more than 10% of the voting power of the Company. + +#### 5.4 Exceptions to Drag Along Right. + +Notwithstanding the foregoing, a Stockholder need not comply with Section 5.3 in connection with any proposed sale of the Company (the "Proposed Sale") unless: + +(a) any representations and warranties to be made by the Stockholder in connection with the Proposed Sale are limited to representations and warranties related to authority, ownership and the ability to convey title to such Shares, including representations and warranties that (i) the Stockholder holds all right, title and interest in and to the Shares the Stockholder purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of the Stockholder in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by the Stockholder have been duly executed by the Stockholder and delivered to the acquirer and are enforceable against the Stockholder in accordance with their respective terms and, (iv) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of the Stockholder's obligations thereunder, will cause a breach or violation of the terms of any agreement, law, or judgment, order, or decree of any court or governmental agency; + +(b) the Stockholder will not be liable for the inaccuracy of any representation or warranty made by any other Person in connection with the Proposed Sale, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties, and covenants of the Company as well as breach by any stockholder of any identical representations, warranties and covenants provided by all stockholders); + +(c) the liability for indemnification, if any, of the Stockholder in the Proposed Sale and for the inaccuracy of any representations and warranties made by the Company or its stockholders in connection with such Proposed Sale, is several and not joint with any other Person (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any identical representations, warranties, and covenants provided by all stockholders), and except as required to satisfy the liquidation preference of Series Seed Preferred Stock, if any, is pro rata in proportion to, and does not exceed, the amount of consideration paid to such Stockholder in connection with such Proposed Sale; + +(d) liability will be limited to the Stockholder's applicable share (determined based on the respective proceeds payable to each Stockholder in connection with the Proposed Sale in accordance with the provisions of the Restated Certificate) of a negotiated aggregate indemnification amount that applies equally to all Stockholders but that in no event exceeds the amount of consideration otherwise payable to the Stockholder in connection with the Proposed Sale, except with respect to claims related to fraud by the Stockholder, the liability for which need not be limited as to the Stockholder; + +(e) upon the consummation of the Proposed Sale, (i) each holder of each class or series of the Company's stock will receive the same form of consideration for such holder's shares of such class or series as is received by other holders in respect of their shares of such same class or series of stock unless the holders of a majority of the shares of Series Seed Preferred Stock then outstanding elect otherwise, (ii) each holder of a series of Series Seed Preferred Stock will receive the same amount of consideration per share of such series of Series Seed Preferred Stock as is received by other holders in respect of their shares of such same series, (iii) each holder of Common Stock will receive the same amount of consideration per share of Common Stock as is received by other holders in respect of their shares of Common Stock, and (iv) unless the holders of a majority of the shares of Series Seed Preferred Stock then outstanding elect to receive a lesser amount, the aggregate consideration receivable by all holders of Preferred Stock and Common Stock will be allocated among the holders of Preferred Stock and Common Stock on the basis of the relative liquidation preferences to which the holders of each respective series of Preferred Stock and the holders of Common Stock are entitled in a Deemed Liquidation Event (assuming for this purpose that the Proposed Sale is a Deemed Liquidation Event) in accordance with the Restated Certificate in effect immediately prior to the Proposed Sale. + +#### 5.5 Additional Stockholders. + +In the event that, after the Agreement Date, the Company enters into an agreement with any Person to issue shares of capital stock of the Company to such Person, following which such Person will hold shares of capital stock of the Company constituting 1% or more of the Company's then outstanding capital stock (treating for this purpose all shares of Common Stock issuable upon exercise of or conversion of outstanding options, warrants or convertible securities, as if exercised and/or converted or exchanged), then the Company will cause such Person, as a condition precedent to entering into such agreement, to become a party to this Agreement by executing a counterpart signature page to this Agreement or an adoption agreement in a form reasonably satisfactory to the Company, agreeing to be bound by and subject to the terms of this Agreement as a Stockholder and thereafter such Person will be deemed a Stockholder for all purposes under this Agreement. + +### 6. PARTICIPATION RIGHT. + +#### 6.1 General. + +Each Major Purchaser has the right of first refusal to purchase the Major Purchaser's Pro Rata Share of any New Securities (each as defined below) that the Company may from time to time issue after the Agreement Date; provided, however, the Major Purchaser will have no right to purchase any such New Securities if the Major Purchaser cannot demonstrate to the Company's reasonable satisfaction that such Major Purchaser is at the time of the proposed issuance of such New Securities an "accredited investor" as such term is defined in Regulation D of the Securities Act. A Major Purchaser's "Pro Rata Share" means the ratio of (a) the number of shares of Common Stock issued or issuable upon conversion of the shares of Series Seed Preferred Stock owned by such Major Purchaser, to (b) the Fully Diluted Share Number. + +#### 6.2 New Securities. + +"New Securities" means any Common Stock or Preferred Stock, whether now authorized or not, and rights, options or warrants to purchase Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible or exchangeable into Common Stock or Preferred Stock; provided, however, that "New Securities" does not include: (a) shares of Common Stock issued or issuable upon conversion of any outstanding shares of Preferred Stock; (b) shares of Common Stock or Preferred Stock issuable upon exercise of any options, warrants, or rights to purchase any securities of the Company outstanding as of the Agreement Date and any securities issuable upon the conversion thereof; (c) shares of Common Stock or Preferred Stock issued in connection with any stock split, stock dividend or recapitalization; (d) shares of Common Stock (or options, warrants or rights therefor) granted or issued after the Agreement Date to employees, officers, directors, contractors, consultants or advisers to, the Company or any subsidiary of the Company pursuant to incentive agreements, stock purchase or stock option plans, stock bonuses or awards, warrants, contracts or other arrangements that are approved by the Board; (e) shares of Series Seed Preferred Stock issued pursuant to this Agreement; (f) any other shares of Common Stock or Preferred Stock (and/or options or warrants therefor) issued or issuable primarily for other than equity financing purposes and approved by the Board; and (g) shares of Common Stock issued or issuable by the Company to the public pursuant to a registration statement filed under the Securities Act. + +#### 6.3 Procedures. + +If the Company proposes to undertake an issuance of New Securities, it will give notice to each Major Purchaser of its intention to issue New Securities (the "Notice"), describing the type of New Securities and the price and the general terms upon which the Company proposes to issue the New Securities. Each Major Purchaser will have 10 days from the date of the Notice, to agree in writing to purchase such Major Purchaser's Pro Rata Share of such New Securities for the price and upon the general terms specified in the Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased (not to exceed such Major Purchaser's Pro Rata Share). + +#### 6.4 Failure to Exercise. + +If the Major Purchasers fail to exercise in full the right of first refusal within the 10-day period, then the Company will have 120 days thereafter to sell the New Securities with respect to which the Major Purchasers' rights of first refusal hereunder were not exercised, at a price and upon general terms not materially more favorable to the purchasers thereof than specified in the Notice to the Major Purchasers. If the Company has not issued and sold the New Securities within the 120-day period, then the Company will not thereafter issue or sell any New Securities without again first offering those New Securities to the Major Purchasers pursuant to this Section 6. + +### 7. ELECTION OF BOARD OF DIRECTORS. + +#### 7.1 Voting; Board Composition. + +Subject to the rights of the stockholders to remove a director for cause in accordance with applicable law, during the term of this Agreement, each Stockholder will vote (or consent pursuant to an action by written consent of the stockholders) all shares of capital stock of the Company now or hereafter directly or indirectly owned of record or beneficially by the Stockholder (the "Voting Shares"), or cause the Voting Shares to be voted, in such manner as may be necessary to elect (and maintain in office) as the members of the Board[: + +(a)] that number of individuals[, if any,] equal to the Common Board Member Count designated from time to time in a writing delivered to the Company and signed by Common Control Holders who then hold [shares of issued and outstanding Common Stock of the Company representing a majority of the voting power of all issued and outstanding][a majority of the then-outstanding] shares of Common Stock held by all Common Control Holders[.][; and] + +[(b) that number of individuals equal to the Series Seed Board Member Count designated from time to time in a writing delivered to the Company and signed by Purchasers who then hold a majority of the then-outstanding shares of Series Seed Preferred Stock issued pursuant to this Agreement[.][; and]] + +[(c) that number of individuals equal to the Mutual Consent Board Member Count designated from time to time in a writing delivered to the Company and signed by (a) Purchasers who then hold a majority of the then-outstanding shares of Series Seed Preferred Stock issued pursuant to this Agreement and (b) Common Control Holders who then hold shares of issued and outstanding Common Stock of the Company representing a majority of the voting power of all issued and outstanding shares of Common Stock of the Company then held by all Common Control Holders.] + +Subject to the rights of the stockholders of the Company to remove a director for cause in accordance with applicable law, during the term of this Agreement, a Stockholder will not take any action to remove an incumbent Board Designee or to designate a new Board Designee unless such removal or designation of a Board Designee is approved in a writing signed by the parties entitled to designate the Board Designee. Each Stockholder hereby appoints, and will appoint, the then-current Chief Executive Officer of the Company as the Stockholder's true and lawful proxy and attorney, with the power to act alone and with full power of substitution, to vote all shares of the Company's capital stock held by the Stockholder as set forth in this Agreement and to execute all appropriate instruments consistent with this Agreement on behalf of the Stockholder if, and only if, the Stockholder (a) fails to vote or (b) attempts to vote (whether by proxy, in person or by written consent), in a manner that is inconsistent with the terms and conditions of this Agreement, all of the Stockholder's Voting Shares or execute such other instruments in accordance with the provisions of this Agreement within five days of the Company's or any other party's written request for the Stockholder's written consent or signature. The proxy and power granted by each Stockholder pursuant to this Section are coupled with an interest and are given to secure the performance of the Stockholder's duties under this Agreement. Each such proxy and power will be irrevocable for the term of this Agreement. The proxy and power, so long as any Stockholder is an individual, will survive the death, incompetency and disability of such Stockholder and, so long as any Stockholder is an entity, will survive the merger or reorganization of the Stockholder or any other entity holding Voting Shares. + +### 8. GENERAL PROVISIONS. + +#### 8.1 Successors and Assigns. + +The terms and conditions of this Agreement will inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties to this Agreement 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. A Stockholder will not transfer Shares unless each transferee has agreed, to the reasonable satisfaction of the Company, to be bound by the terms and conditions of this Agreement. + +#### 8.2 Governing Law. + +This Agreement is governed by the Governing Law, regardless of the laws that might otherwise govern under applicable principles of choice of law. + +#### 8.3 Counterparts; Manner of Delivery. + +This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for all purposes. + +#### 8.4 Titles and Subtitles. + +The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. References to sections or subsections within this Exhibit B will be deemed to be references to the sections contained in this Exhibit B, unless otherwise specifically stated in this Agreement. + +#### 8.5 Notices. + +All notices and other communications given or made pursuant to this Agreement must be in writing and will be deemed to have been given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by facsimile or electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient's next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications must be sent to the respective parties at their address as set forth on the signature page or Schedule 1, or to such address, facsimile number or electronic mail address as subsequently modified by written notice given in accordance with this Section 8.5. + +#### 8.6 No Finder's Fees. + +Each party severally represents to the other parties that it neither is nor will be obligated for any finder's fee or commission in connection with this transaction. Each Purchaser will indemnify, defend and hold harmless the Company from any liability for any commission or compensation in the nature of a finder's or broker's fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser or any of its officers, employees, or representatives is responsible. The Company will indemnify, defend, and hold harmless each Purchaser from any liability for any commission or compensation in the nature of a finder's or broker's fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible. + +#### 8.7 Attorneys' Fees. + +If any action at law or in equity (including arbitration) is necessary to enforce or interpret the terms of this Agreement, the prevailing party will be entitled to reasonable attorneys' fees, costs, and necessary disbursements in addition to any other relief to which the party may be entitled. Each party will pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery, and performance of this Agreement; provided, however, that the Company will, at the Closing, reimburse the fees and expenses of one counsel for Purchasers, for a flat fee equal to the Purchaser Counsel Reimbursement Amount. + +#### 8.8 Amendments and Waivers. + +Except as specified in Section 1.2.2, any term of this Agreement may be amended, terminated or waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Purchasers holding a majority of the then-outstanding shares of Series Seed Preferred Stock (or Common Stock issued on conversion thereof); provided, however, that any amendment to Section [[7.1][7.1(a)]] [or Section 7.1(c)] will also require the additional written consent of the holders of a majority of the outstanding shares of Common Stock then held by all of the Common Control Holders. Notwithstanding the foregoing, the addition of a party to this Agreement in accordance with Section 5.5 or Section 8.1 will not require any further consent. Any amendment or waiver effected in accordance with this Section 8.8 will be binding upon the Purchasers, the Key Holders, each transferee of the shares of Series Seed Preferred Stock (or Common Stock issuable upon conversion thereof) or Common Stock from a Purchaser or Key Holder, as applicable, and each future holder of all such securities, and the Company. It is specifically intended that entering into the Next Financing Documents in a form substantially similar to the form agreements set as forth as Model Legal Documents on http://www.nvca.org will be considered an amendment to this Agreement provided that it is done in accordance with this Section 8.8. + +#### 8.9 Severability. + +The invalidity or unenforceability of any provision of this Agreement will in no way affect the validity or enforceability of any other provision. + +#### 8.10 Delays or Omissions. + +No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, will impair any such right, power or remedy of such non-breaching or non-defaulting party nor will it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring. No waiver of any single breach or default will be deemed a waiver of any other breach or default regardless of whether the other breach or default occurred before or after the waiver. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any terms or conditions of this Agreement, must be in writing and will be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, are cumulative and not alternative. + +#### 8.11 Termination. + +Unless terminated earlier pursuant to the terms of this Agreement, (x) the rights, duties and obligations under Sections 4, Section 6 and Section 7 will terminate immediately prior to the closing of the IPO, (y) notwithstanding anything to the contrary in this Agreement, this Agreement (excluding any then-existing obligations) will terminate upon the closing of a Deemed Liquidation Event (as defined in the Restated Certificate) and (z) notwithstanding anything to the contrary in this Agreement, Section 1, Section 2, Section 3, Section 4.1.2 and this Section 8 will survive any termination of this Agreement. + +#### 8.12 Dispute Resolution. + +Each party (a) hereby irrevocably and unconditionally submits to the personal jurisdiction of the Dispute Resolution Jurisdiction for the purpose of any suit, action, or other proceeding arising out of or based upon this Agreement; (b) will not commence any suit, action or other proceeding arising out of or based upon this Agreement except in the Dispute Resolution Jurisdiction; and (c) hereby waives, and will not assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject to the personal jurisdiction of the Dispute Resolution Jurisdiction, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement, or the subject matter hereof and thereof may not be enforced in or by the Dispute Resolution Jurisdiction. + +------------------------- +# SIGNATURE PAGES +------------------------- +The parties to this Agreement have executed this Agreement as of the date and year first written above. + +## THE COMPANY: + +Name: ____________________________________________ + +By: ____________________________________________ + +Title: ____________________________________________ + + +## KEY HOLDERS: + +Name: ____________________________________________ + +By: ____________________________________________ + +Name: ____________________________________________ + +By: ____________________________________________ + +## PURCHASERS: + +[FOR ENTITY INVESTOR USE FOLLOWING SIGNATURE BLOCK:] + +Name: ____________________________________________ + +By: ____________________________________________ + +Title: ____________________________________________ + +[FOR INDIVIDUAL INVESTOR USE FOLLOWING SIGNATURE BLOCK:] + +Name: ____________________________________________ + +By: ____________________________________________ + +------------------------- +# EXHIBIT C +------------------------- + +## FORM OF RESTATED CERTIFICATE + +------------------------- +# EXHIBIT D +------------------------- + +## DISCLOSURE SCHEDULE + +This Disclosure Schedule (this "Disclosure Schedule") is delivered by the Company in connection with the sale of shares of Series Seed Preferred Stock on or about the Agreement Date by the Company. This Disclosure Schedule is arranged in sections corresponding to the numbered and lettered sections contained in Exhibit B of the Agreement, and the disclosures in any section of this Disclosure Schedule qualify other sections in Exhibit B of the Agreement to the extent it is reasonably apparent from a reading of the disclosure that such disclosure is applicable to such other sections. Where any representation or warranty is limited or qualified by the materiality of the matters to which the representation or warranty are given, the inclusion of any matter in this Disclosure Schedule does not constitute an admission by the Company that such matter is material. Unless otherwise defined in this Agreement, any capitalized terms in this Disclosure Schedule have the same meanings assigned to those terms in the Agreement. Nothing in this Disclosure Schedule constitutes an admission of any liability or obligation of the Company to any third party, or an admission against the Company's interests. diff --git a/equity/Series Seed - Restated Certificate of Incorporation.md b/equity/Series Seed - Restated Certificate of Incorporation.md new file mode 100644 index 0000000..bdf943d --- /dev/null +++ b/equity/Series Seed - Restated Certificate of Incorporation.md @@ -0,0 +1,353 @@ +[COMPANY NAME] + +# AMENDED AND RESTATED CERTIFICATE OF INCORPORATION + +(Pursuant to Sections 242 and 245 of the +General Corporation Law of the State of Delaware) + +[Company Name], a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the "General Corporation Law"), hereby certifies as follows. + +1. The name of this corporation is [Company Name]. This corporation was originally incorporated pursuant to the General Corporation Law on [Date] under the name [Company Name]. +2. The Board of Directors of this corporation duly adopted resolutions proposing to amend and restate the Certificate of Incorporation of this corporation, declaring said amendment and restatement to be advisable and in the best interests of this corporation and its stockholders, and authorizing the appropriate officers of this corporation to solicit the consent of the stockholders therefor, which resolution setting forth the proposed amendment and restatement is as follows. + +RESOLVED, that the Certificate of Incorporation of this corporation be amended and restated in its entirety to read as set forth on Exhibit A attached hereto and incorporated herein by this reference. + +3. Exhibit A referred to above is attached hereto as Exhibit A and is hereby incorporated herein by this reference. This Amended and Restated Certificate of Incorporation was approved by the holders of the requisite number of shares of this corporation in accordance with Section 228 of the General Corporation Law. + +4. This Amended and Restated Certificate of Incorporation, which restates and integrates and further amends the provisions of this corporation's Certificate of Incorporation, has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law. + +IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation has been executed by a duly authorized officer of this corporation on [Date]. + + +By: *__________________________* + +[Officer Name], [Officer Title] + +------------------------- +# Exhibit A +------------------------- +[Company Name in All Caps] + +# AMENDED AND RESTATED CERTIFICATE OF INCORPORATION + +## ARTICLE I: NAME. + +The name of this corporation is [Company Name] (the "Corporation"). + +## ARTICLE II: REGISTERED OFFICE. + +The address of the registered office of the Corporation in the State of Delaware is [Registered Office Address], in the City of [Registered Office City], County of [Registered Office County]. The name of its registered agent at such address is [Registered Agent Name]. + +## ARTICLE III: DEFINITIONS. + +As used in this Restated Certificate (this "Restated Certificate"), the following terms have the meanings set forth below: + +"Board" means the Board of Directors of the Corporation. + +"Board Composition" means that [for so long as at least 25% of the initially issued shares of Preferred Stock remain outstanding, the holders of record of the shares of Series Seed Preferred Stock exclusively and as a separate class, are entitled to elect [Number of Preferred Directors] director[s] of the Corporation (the "Series Seed Director[s]"),] the holders of record of the shares of Common Stock[, exclusively and as a separate class,] will be entitled to elect [Number of Common Directors] director[s] of the Corporation[, and any additional directors will be elected by the affirmative vote of a majority of the Preferred Stock and Common Stock, voting together as a single class on an as-converted basis.] [For administrative convenience, the initial Series Seed Director[s] may also be appointed by the Board in connection with the approval of the initial issuance of Series Seed Preferred Stock without a separate action by the holders of a majority of Series Seed Preferred Stock.] + +"Capitalization Change" means any stock splits, stock dividends, combinations, recapitalizations or the like with respect to capital stock. + +"Original Issue Price" means $[Price] per share for Series Seed Preferred Stock. + +"Requisite Holders" means the holders of a majority of the outstanding shares of Preferred Stock (voting as a single class on an as-converted basis). + +Any references in this Restated Certificate to any number will be deemed to be appropriately adjusted for any Capitalization Changes. + +## ARTICLE IV: PURPOSE. + +The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law. + +## ARTICLE V: AUTHORIZED SHARES. + +The total number of shares of all classes of stock that the Corporation has authority to issue is [total authorized shares], consisting of (a) [authorized common shares] shares of Common Stock of the Corporation, $[par value] per share ("Common Stock") and (b) [authorized preferred shares] shares of Preferred Stock of the Corporation, $[par value] per share ("Preferred Stock"). Preferred Stock may be issued from time to time in one or more series, each of such series to consist of such number of shares and to have such terms, rights, powers and preferences, and the qualifications and limitations with respect thereto, as stated or expressed herein. As of the effective date of this Restated Certificate, all shares of Preferred Stock are hereby designated "Series Seed Preferred Stock". + +### A. COMMON STOCK + +The following rights, powers privileges, restrictions, qualifications, and limitations apply to Common Stock. + +#### 1. General. + +The voting, dividend and liquidation rights of the holders of Common Stock are subject to and qualified by the rights, powers and privileges of the holders of Preferred Stock set forth in this Restated Certificate. + +#### 2. Voting. + +The holders of Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders (and written consents in lieu of meetings). Unless required by law, there is no cumulative voting. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be required by the terms of this Restated Certificate) the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law. + +### B. PREFERRED STOCK + +The following rights, powers, privileges, restrictions, qualifications and limitations apply to Preferred Stock. Unless otherwise indicated, references to "Sections" in this Part B of this Article V refer to sections of this Part B. + +#### 1. Liquidation, Dissolution or Winding Up; Certain Mergers, Consolidations and Asset Sales. + +##### 1.1 Payments to Holders of Preferred Stock. + +In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event (as defined below), before any payment is made to the holders of Common Stock by reason of their ownership thereof, the holders of shares of Preferred Stock then outstanding must be paid out of the funds and assets available for distribution to its stockholders, an amount per share equal to the greater of (a) the Original Issue Price for such share of Preferred Stock, plus any dividends declared but unpaid thereon, or (b) such amount per share as would have been payable had all shares of Preferred Stock been converted into Common Stock pursuant to Section 3 immediately before such liquidation, dissolution or winding up or Deemed Liquidation Event. If upon any such liquidation, dissolution or winding up or Deemed Liquidation Event, the funds and assets available for distribution to the stockholders of the Corporation are insufficient to pay the holders of shares of Preferred Stock the full amount to which they are entitled under this Section 1.1, the holders of shares of Preferred Stock will share ratably in any distribution of the funds and assets available for distribution in proportion to the respective amounts that would otherwise be payable in respect of the shares of Preferred Stock held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. + +##### 1.2 Payments to Holders of Common Stock. + +In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, after the payment of all preferential amounts required to be paid to the holders of shares of Preferred Stock as provided in Section 1.1, the remaining funds and assets available for distribution to the stockholders will be distributed among the holders of shares of Common Stock, pro rata based on the number of shares of Common Stock held by each such holder. + +##### 1.3 Deemed Liquidation Events. + +###### 1.3.1 Definition. + +Each of the following events is a "Deemed Liquidation Event" unless the Requisite Holders elect otherwise by written notice received by the Corporation not less than five days before the effective date of any such event: + +(a) a merger or consolidation in which (i) the Corporation is a constituent party or (ii) a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately before such merger or consolidation continue to represent, or are converted into or exchanged for equity securities that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the equity securities of (1) the surviving or resulting party or (2) if the surviving or resulting party is a wholly owned subsidiary of another party immediately following such merger or consolidation, the parent of such surviving or resulting party; _provided_ that, for the purpose of this Section 1.3.1, all shares of Common Stock issuable upon exercise of options outstanding immediately before such merger or consolidation or upon conversion of Convertible Securities (as defined below) outstanding immediately before such merger or consolidation are deemed to be outstanding immediately before such merger or consolidation and, if applicable, deemed to be converted or exchanged in such merger or consolidation on the same terms as the actual outstanding shares of Common Stock are converted or exchanged; or + +(b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all of the assets or intellectual property of the Corporation and its subsidiaries taken as a whole, or, if substantially all of the assets or intellectual property of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Corporation, except where such sale, lease, transfer, exclusive license or other disposition is to the Corporation or one or more wholly owned subsidiaries of the Corporation. + +###### 1.3.2 Amount Deemed Paid or Distributed. + +The funds and assets deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer or other disposition described in this Section 1.3 will be the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation or the acquiring person, firm or other entity. The value of such property, rights or securities will be determined in good faith by the Board. + +#### 2. Voting. + +##### 2.1 General. + +On any matter presented to the stockholders for their action or consideration at any meeting of stockholders (or by written consent of stockholders in lieu of a meeting), each holder of outstanding shares of Preferred Stock may cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Fractional votes will not be permitted and any fractional voting rights available on an as-converted basis (after aggregating all shares into which shares of Preferred Stock held by each holder could be converted) will be rounded to the nearest whole number (with one-half being rounded upward). Except as provided by law or by the other provisions of this Restated Certificate, holders of Preferred Stock will vote together with the holders of Common Stock as a single class on an as-converted basis, will have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and will be entitled, notwithstanding any provision of this Restated Certificate, to notice of any stockholder meeting in accordance with the bylaws of the Corporation (the "Bylaws"). + +##### 2.2 Election of Directors. + +The holders of record of the Corporation's capital stock are entitled to elect directors as described in the Board Composition. Any director elected as provided in the preceding sentence may be removed with or without cause by the affirmative vote of the holders of the shares of the class, classes, or series of capital stock entitled to elect the director or directors, given either at a special meeting of the stockholders duly called for that purpose or pursuant to a written consent of stockholders. At any meeting held for the purpose of electing a director, the presence in person or by proxy of the holders of a majority of the outstanding shares of the class, classes, or series entitled to elect the director constitutes a quorum for the purpose of electing the director. + +##### 2.3 Preferred Stock Protective Provisions. + +At any time when at least 25% of the initially issued shares of Preferred Stock remain outstanding, the Corporation will not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Restated Certificate) the written consent or affirmative vote of the Requisite Holders, given in writing or by vote at a meeting, consenting, or voting (as the case may be) separately as a single class: + +[(a) alter the rights, powers or privileges of the Preferred Stock set forth in the Restated Certificate or Bylaws, as then in effect, in a way that adversely affects the Preferred Stock;] + +[(b) increase or decrease the authorized number of shares of any class or series of capital stock[_______];] + +[(c) authorize or create (by reclassification or otherwise) any new class or series of capital stock having rights, powers, or privileges set forth in the certificate of incorporation of the Corporation, as then in effect, that are senior to or on a parity with any series of Preferred Stock;] + +[(d) redeem or repurchase any shares of Common Stock or Preferred Stock (other than pursuant to employee or consultant agreements giving the Corporation the right to repurchase shares upon the termination of services pursuant to the terms of the applicable agreement at no greater than original cost);] + +[(e) declare or pay any dividend or otherwise make a distribution to holders of Preferred Stock or Common Stock;] + +[(f) increase or decrease the number of directors of the Corporation;] + +[(g) liquidate, dissolve, or wind-up the business and affairs of the Corporation, effect any Deemed Liquidation Event, or consent, agree or commit to do any of the foregoing without conditioning such consent, agreement or commitment upon obtaining the approval required by this Section 2.3.] + +#### 3. Conversion. + +The holders of Preferred Stock have the following conversion rights (the "Conversion Rights"): + +##### 3.1 Right to Convert. + +###### 3.1.1 Conversion Ratio. + +Each share of Preferred Stock is convertible, at the option of the holder thereof, at any time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the Original Issue Price for the series of Preferred Stock by the Conversion Price of such series of Preferred Stock in effect at the time of conversion. The "Conversion Price" for each series of Preferred Stock means the Original Issue Price for such series of Preferred Stock, which initial Conversion Price, and the rate at which shares of Preferred Stock may be converted into shares of Common Stock, is subject to adjustment as provided in this Restated Certificate. + +###### 3.1.2 Termination of Conversion Rights. + +Subject to Section 3.3.1 in the case of a Contingency Event (as defined below), in the event of a liquidation, dissolution, or winding up of the Corporation or a Deemed Liquidation Event, the Conversion Rights will terminate at the close of business on the last full day preceding the date fixed for the first payment of any funds and assets distributable on such event to the holders of Preferred Stock. + +##### 3.2 Fractional Shares. + +No fractional shares of Common Stock will be issued upon conversion of Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation will pay cash equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board. Whether or not fractional shares would be issuable upon such conversion will be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion. + +##### 3.3 Mechanics of Conversion. + +###### 3.3.1 Notice of Conversion. + +To voluntarily convert shares of Preferred Stock into shares of Common Stock, a holder of Preferred Stock will surrender the certificate or certificates for the shares of Preferred Stock (or, if such registered holder alleges that any such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent), together with written notice that the holder elects to convert all or any number of the shares of Preferred Stock represented by the certificate or certificates and, if applicable, any event on which the conversion is contingent (a "Contingency Event"). The conversion notice must state the holder's name or the names of the nominees in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. If required by the Corporation, certificates surrendered for conversion will be endorsed or accompanied by a written instrument or instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the registered holder or such holder's attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) of the certificates (or lost certificate affidavit and agreement) and notice (or, if later, the date on which all Contingency Events have occurred) will be the time of conversion (the "Conversion Time"), and the shares of Common Stock issuable upon conversion of the shares represented by such certificate will be deemed to be outstanding of record as of such time. The Corporation will, as soon as practicable after the Conversion Time, (a) issue and deliver to the holder, or to the holder's nominees, a certificate or certificates for the number of whole shares of Common Stock issuable upon the conversion in accordance with the provisions of this Restated Certificate and a certificate for the number (if any) of the shares of Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, (b) pay in cash such amount as provided in Section 3.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and (c) pay all declared but unpaid dividends on the shares of Preferred Stock converted. + +###### 3.3.2 Reservation of Shares. + +For the purpose of effecting the conversion of Preferred Stock, the Corporation will at all times while any share of Preferred Stock is outstanding, reserve and keep available out of its authorized but unissued capital stock, , that number of its duly authorized shares of Common Stock as may from time to time be sufficient to effect the conversion of all outstanding shares of Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock is not be sufficient to effect the conversion of all then-outstanding shares of Preferred Stock, the Corporation will use its best efforts to cause such corporate action to be taken as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as will be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Restated Certificate. Before taking any action that would cause an adjustment reducing the Conversion Price of a series of Preferred Stock below the then-par value of the shares of Common Stock issuable upon conversion of such series of Preferred Stock, the Corporation will take any corporate action that may be necessary so that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock at such adjusted Conversion Price. + +###### 3.3.3 Effect of Conversion. + +All shares of Preferred Stock that have been surrendered for conversion as provided in this Restated Certificate will no longer be deemed to be outstanding and all rights with respect to such shares will immediately cease and terminate at the Conversion Time, except only the right of the holders of such shares to receive shares of Common Stock in exchange for such shares, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Section 3.2, and to receive payment of any dividends declared but unpaid on such shares. Any shares of Preferred Stock so converted will be retired and cancelled by the Corporation and may not be reissued. + +###### 3.3.4 No Further Adjustment. + +Upon any conversion of shares of Preferred Stock, no adjustment to the Conversion Price of the applicable series of Preferred Stock will be made with respect to the converted shares for any declared but unpaid dividends on such series of Preferred Stock or on Common Stock delivered upon conversion. + +##### 3.4 Adjustment for Stock Splits and Combinations. + +If the Corporation at any time or from time to time after the date on which the first share of a series of Preferred Stock is issued by the Corporation (such date referred to herein as the "Original Issue Date" for such series of Preferred Stock) effects a subdivision of the outstanding shares of Common Stock, the Conversion Price of each series of Preferred Stock in effect immediately before such subdivision will be proportionately decreased so that the number of shares of Common Stock issuable upon conversion of each share of such series will be increased in proportion to the increase in the aggregate number of shares of Common Stock outstanding. If the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock combines the outstanding shares of Common Stock, the Conversion Price of each series of Preferred Stock in effect immediately before such combination will be proportionately increased so that the number of shares of Common Stock issuable upon conversion of each share of such series will be decreased in proportion to the decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this Section 3.4 becomes effective at the close of business on the date the subdivision or combination becomes effective. + +##### 3.5 Adjustment for Certain Dividends and Distributions. + +If the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock makes or issues, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on Common Stock in additional shares of Common Stock, then and in each such event the Conversion Price of such series of Preferred Stock in effect immediately before the event will be decreased as of the time of such issuance or, if a record date has been fixed, as of the close of business on such record date, by multiplying such Conversion Price then in effect by a fraction: + +(a) the numerator of which is the total number of shares of Common Stock issued and outstanding immediately before the time of the issuance or the close of business on the record date, and + +(b) the denominator of which is the total number of shares of Common Stock issued and outstanding immediately before the time of such issuance or the close of business on the record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution. + +Notwithstanding the foregoing, (i) if such record date has been fixed and the dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, such Conversion Price will be recomputed accordingly as of the close of business on such record date and thereafter such Conversion Price will be adjusted pursuant to this Section 3.5 as of the time of actual payment of such dividends or distributions; and (ii) no such adjustment will be made if the holders of such series of Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock that they would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of the event. + +##### 3.6 Adjustments for Other Dividends and Distributions. + +If the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock makes or issues, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock), then and in each such event the Corporation will make, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution to the holders of the series of Preferred Stock in an amount equal to the amount of securities as the holders would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of such event. + +##### 3.7 Adjustment for Reclassification, Exchange and Substitution. + +If at any time or from time to time after the Original Issue Date for a series of Preferred Stock, Common Stock issuable upon the conversion of such series of Preferred Stock is changed into the same or a different number of shares of any class or classes of stock of the Corporation, whether by recapitalization, reclassification, or otherwise (other than by a stock split or combination, dividend, distribution, merger or consolidation covered by Sections 3.4, 3.5, 3.6 or 3.8 or by Section 1.3 regarding a Deemed Liquidation Event), then in any such event each holder of such series of Preferred Stock may thereafter convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Preferred Stock could have been converted immediately before such recapitalization, reclassification or change. + +##### 3.8 Adjustment for Merger or Consolidation. + +Subject to the provisions of Section 1.3, if any consolidation or merger occurs involving the Corporation in which Common Stock (but not a series of Preferred Stock) is converted into or exchanged for securities, cash or other property (other than a transaction covered by Sections 3.5, 3.6 or 3.7), then, following any such consolidation or merger, the Corporation will provide that each share of such series of Preferred Stock will thereafter be convertible, in lieu of Common Stock into which it was convertible before the event, into the kind and amount of securities, cash, or other property which a holder of the number of shares of Common Stock issuable upon conversion of one share of such series of Preferred Stock immediately before the consolidation or merger would have been entitled to receive pursuant to the transaction; and, in such case, the Corporation will make appropriate adjustment (as determined in good faith by the Board) in the application of the provisions in this Section 3 with respect to the rights and interests thereafter of the holders of such series of Preferred Stock, to the end that the provisions set forth in this Section 3 (including provisions with respect to changes in and other adjustments of the Conversion Price of such series of Preferred Stock) will thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of such series of Preferred Stock. + +##### [3.9 Adjustments for Diluting Issues. + +###### 3.9.1 Special Definitions. + +For purposes of this Section 3.9, the following definitions will apply: + +(a) "Option" means rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities. + +(b) "Convertible Securities" mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock, but excluding Options. + +(c) "Additional Shares of Common Stock" mean all shares of Common Stock issued (or, pursuant to Section 3.9.3, deemed to be issued) by the Corporation after the Original Issue Date for a series of Preferred Stock, other than (1) the following shares of Common Stock and (2) shares of Common Stock deemed issued pursuant to the following Options and Convertible Securities (clauses (1) and (2), collectively, "Exempted Securities"): + +(i) shares of Common Stock, Options or Convertible Securities issued as a dividend or distribution on Preferred Stock; + +(ii) shares of Common Stock, Options or Convertible Securities issued by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock that is covered by Section 3.4, Section 3.5, Section 3.6, Section 3.7 or Section 3.8; + +(iii) shares of Common Stock or Options issued to employees or directors of, or consultants or advisors to, the Corporation or any of its subsidiaries pursuant to a plan, agreement or arrangement approved by the Board; or + +(iv) shares of Common Stock or Convertible Securities actually issued upon the exercise of Options or shares of Common Stock actually issued upon the conversion or exchange of Convertible Securities, in each case provided such issuance is pursuant to the terms of such Option or Convertible Security. + +###### 3.9.2 No Adjustment of Conversion Price. + +No adjustment in the Conversion Price of a series of Preferred Stock will be made as the result of the issuance or deemed issuance of Additional Shares of Common Stock if the Corporation receives written notice from the Requisite Holders agreeing that no such adjustment will be made as the result of the issuance or deemed issuance of such Additional Shares of Common Stock. + +###### 3.9.3 Deemed Issue of Additional Shares of Common Stock. + +(a) If the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock will issue any Options or Convertible Securities (excluding Options or Convertible Securities that are themselves Exempted Securities) or will fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, will be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date will have been fixed, as of the close of business on such record date. + +(b) If the terms of any Option or Convertible Security, the issuance of which resulted in an adjustment to the Conversion Price of a series of Preferred Stock pursuant to the terms of Section 3.9.4, are revised as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (1) any increase or decrease in the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any such Option or Convertible Security or (2) any increase or decrease in the consideration payable to the Corporation upon such exercise, conversion and/or exchange, then, effective upon such increase or decrease becoming effective, the Conversion Price of such series of Preferred Stock computed upon the original issue of such Option or Convertible Security (or upon the occurrence of a record date with respect thereto) will be readjusted to such Conversion Price of such series of Preferred Stock as would have obtained had such revised terms been in effect upon the original date of issuance of such Option or Convertible Security. Notwithstanding the foregoing, no readjustment pursuant to this clause (b) will have the effect of increasing the Conversion Price of a series of Preferred Stock to an amount which exceeds the lower of (i) the Conversion Price of such series of Preferred Stock in effect immediately before the original adjustment made as a result of the issuance of such Option or Convertible Security, or (ii) the Conversion Price of such series of Preferred Stock that would have resulted from any issuances of Additional Shares of Common Stock (other than deemed issuances of Additional Shares of Common Stock as a result of the issuance of such Option or Convertible Security) between the original adjustment date and such readjustment date. + +(c) If the terms of any Option or Convertible Security (excluding Options or Convertible Securities that are themselves Exempted Securities), the issuance of which did not result in an adjustment to the Conversion Price of a series of Preferred Stock pursuant to the terms of Section 3.9.4 (either because the consideration per share (determined pursuant to Section 3.9.5) of the Additional Shares of Common Stock subject thereto was equal to or greater than the Conversion Price of such series of Preferred Stock then in effect, or because such Option or Convertible Security was issued before the Original Issue Date for such series of Preferred Stock), are revised after the Original Issue Date for such series of Preferred Stock as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (1) any increase in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any such Option or Convertible Security or (2) any decrease in the consideration payable to the Corporation upon such exercise, conversion or exchange, then such Option or Convertible Security, as so amended or adjusted, and the Additional Shares of Common Stock subject thereto (determined in the manner provided in Section 3.9.3(a) will be deemed to have been issued effective upon such increase or decrease becoming effective. + +(d) Upon the expiration or termination of any unexercised Option or unconverted or unexchanged Convertible Security (or portion thereof) that resulted (either upon its original issuance or upon a revision of its terms) in an adjustment to the Conversion Price of a series of Preferred Stock pursuant to the terms of Section 3.9.4, the Conversion Price of such series of Preferred Stock will be readjusted to such Conversion Price of such series of Preferred Stock as would have obtained had such Option or Convertible Security (or portion thereof) never been issued. + +(e) If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation upon such exercise, conversion and/or exchange, is calculable at the time such Option or Convertible Security is issued or amended but is subject to adjustment based upon subsequent events, any adjustment to the Conversion Price of a series of Preferred Stock provided for in this Section 3.9.3 will be effected at the time of such issuance or amendment based on such number of shares or amount of consideration without regard to any provisions for subsequent adjustments (and any subsequent adjustments will be treated as provided in clauses (b) and (c) of this Section 3.9.3). If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation upon such exercise, conversion and/or exchange, cannot be calculated at all at the time such Option or Convertible Security is issued or amended, any adjustment to the Conversion Price of a series of Preferred Stock that would result under the terms of this Section 3.9.3 at the time of such issuance or amendment will instead be effected at the time such number of shares and/or amount of consideration is first calculable (even if subject to subsequent adjustments), assuming for purposes of calculating such adjustment to the Conversion Price of such series of Preferred Stock that such issuance or amendment took place at the time such calculation can first be made. + +###### 3.9.4 Adjustment of Conversion Price upon Issuance of Additional Shares of Common Stock. + +In the event the Corporation will at any time after the Original Issue Date for a series of Preferred Stock issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Section 3.9.3), without consideration or for a consideration per share less than the Conversion Price of such series of Preferred Stock in effect immediately before such issue, then the Conversion Price of such series of Preferred Stock will be reduced, concurrently with such issue, to a price (calculated to the nearest one-hundredth of a cent) determined in accordance with the following formula: + + CP2 = CP1 * (A + B) � (A + C). + +For purposes of the foregoing formula, the following definitions will apply: + +(a) "CP2" means the Conversion Price of such series of Preferred Stock in effect immediately after such issue of Additional Shares of Common Stock; + +(b) "CP1" means the Conversion Price of such series of Preferred Stock in effect immediately before such issue of Additional Shares of Common Stock; + +(c) "A" means the number of shares of Common Stock outstanding immediately before such issue of Additional Shares of Common Stock (treating for this purpose as outstanding all shares of Common Stock issuable upon exercise of Options outstanding immediately before such issue or upon conversion or exchange of Convertible Securities (including Preferred Stock) outstanding (assuming exercise of any outstanding Options therefor) immediately before such issue); + +(d) "B" means the number of shares of Common Stock that would have been issued if such Additional Shares of Common Stock had been issued at a price per share equal to CP1 (determined by dividing the aggregate consideration received by the Corporation in respect of such issue by CP1); and + +(e) "C" means the number of such Additional Shares of Common Stock issued in such transaction. + +###### 3.9.5 Determination of Consideration. + +For purposes of this Section 3.9, the consideration received by the Corporation for the issue of any Additional Shares of Common Stock will be computed as follows: + +(a) Cash and Property: Such consideration will: + +(i) insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation, excluding amounts paid or payable for accrued interest; + +(ii) insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board; and + +(iii) if Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (i) and (ii) above, as determined in good faith by the Board. + +(b) Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common Stock deemed to have been issued pursuant to Section 3.9.3, relating to Options and Convertible Securities, will be determined by dividing: + +(i) The total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by + +(ii) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities. + +###### 3.9.6 Multiple Closing Dates. + +In the event the Corporation will issue on more than one date Additional Shares of Common Stock that are a part of one transaction or a series of related transactions and that would result in an adjustment to the Conversion Price of a series of Preferred Stock pursuant to the terms of Section 3.9.4, then, upon the final such issuance, the Conversion Price of such series of Preferred Stock will be readjusted to give effect to all such issuances as if they occurred on the date of the first such issuance (and without giving effect to any additional adjustments as a result of any such subsequent issuances within such period).] + +##### 3.10 Certificate as to Adjustments. + +Upon the occurrence of each adjustment or readjustment of the Conversion Price of a series of Preferred Stock pursuant to this Section 3, the Corporation at its expense will, as promptly as reasonably practicable but in any event not later than 15 days thereafter, compute such adjustment or readjustment in accordance with the terms of this Restated Certificate and furnish to each holder of such series of Preferred Stock a certificate setting forth the adjustment or readjustment (including the kind and amount of securities, cash, or other property into which such series of Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation will, as promptly as reasonably practicable after the written request at any time of any holder of any series of Preferred Stock (but in any event not later than 10 days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (a) the Conversion Price of such series of Preferred Stock then in effect and (b) the number of shares of Common Stock and the amount, if any, of other securities, cash, or property which then would be received upon the conversion of such series of Preferred Stock. + +##### 3.11 Mandatory Conversion. + +Upon either (a) the closing of the sale of shares of Common Stock to the public in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the Requisite Holders at the time of such vote or consent, voting as a single class on an as-converted basis (the time of such closing or the date and time specified or the time of the event specified in such vote or written consent, the "Mandatory Conversion Time"), (i) all outstanding shares of Preferred Stock will automatically convert into shares of Common Stock, at the applicable ratio described in Section 3.1.1 as the same may be adjusted from time to time in accordance with Section 3 and (ii) such shares may not be reissued by the Corporation. + +##### 3.12 Procedural Requirements. + +The Corporation will notify in writing all holders of record of shares of Preferred Stock of the Mandatory Conversion Time and the place designated for mandatory conversion of all such shares of Preferred Stock pursuant to Section 3.[11]. Unless otherwise provided in this Restated Certificate, the notice need not be sent in advance of the occurrence of the Mandatory Conversion Time. Upon receipt of the notice, each holder of shares of Preferred Stock will surrender such holder�s certificate or certificates for all such shares (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation at the place designated in such notice, and will thereafter receive certificates for the number of shares of Common Stock to which such holder is entitled pursuant to this Section 3. If so required by the Corporation, certificates surrendered for conversion will be endorsed or accompanied by written instrument or instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the registered holder or such holder�s attorney duly authorized in writing. All rights with respect to Preferred Stock converted pursuant to Section�3.[11], including the rights, if any, to receive notices and vote (other than as a holder of Common Stock), will terminate at the Mandatory Conversion Time (notwithstanding the failure of the holder or holders thereof to surrender the certificates at or before such time), except only the rights of the holders thereof, upon surrender of their certificate or certificates (or lost certificate affidavit and agreement) therefor, to receive the items provided for in the next sentence of this Section 3.[12]. As soon as practicable after the Mandatory Conversion Time and the surrender of the certificate or certificates (or lost certificate affidavit and agreement) for Preferred Stock, the Corporation will issue and deliver to such holder, or to such holder�s nominee(s), a certificate or certificates for the number of whole shares of Common Stock issuable upon such conversion in accordance with the provisions hereof, together with cash as provided in Section 3.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and the payment of any declared but unpaid dividends on the shares of Preferred Stock converted. Such converted shares of Preferred Stock will be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Preferred Stock (and the applicable series thereof) accordingly. + +#### 4. Dividends. + +The Corporation will declare all dividends pro rata on Common Stock and Preferred Stock on a pari passu basis according to the number of shares of Common Stock held by such holders. For this purpose each holder of shares of Preferred Stock will be treated as holding the greatest whole number of shares of Common Stock then issuable upon conversion of all shares of Preferred Stock held by such holder pursuant to Section 3. + +#### 5. Redeemed or Otherwise Acquired Shares. + +Any shares of Preferred Stock that are redeemed or otherwise acquired by the Corporation or any of its subsidiaries will be automatically and immediately cancelled and retired and will not be reissued, sold or transferred. Neither the Corporation nor any of its subsidiaries may exercise any voting or other rights granted to the holders of Preferred Stock following any such redemption. + +#### 6. Waiver. + +Any of the rights, powers, privileges and other terms of Preferred Stock set forth herein may be waived prospectively or retrospectively on behalf of all holders of Preferred Stock by the affirmative written consent or vote of the Requisite Holders. + +#### 7. Notice of Record Date. + +In the event: + +(a) the Corporation takes a record of the holders of Common Stock (or other capital stock or securities at the time issuable upon conversion of Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security + +(b) of any capital reorganization of the Corporation, any reclassification of Common Stock, or any Deemed Liquidation Event; or + +(c) of the voluntary or involuntary liquidation, dissolution or winding up of the Corporation, + +then, and in each such case, the Corporation will send or cause to be sent to the holders of Preferred Stock a written notice specifying, as the case may be, (i) the record date for such dividend, distribution, or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding up is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of Preferred Stock) will be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding up, and the amount per share and character of such exchange applicable to Preferred Stock and Common Stock. The Corporation will send the notice no less than 20 days before the earlier of the record date or effective date for the event specified in the notice. + +#### 8. Notices. + +Except as otherwise provided herein, any notice required or permitted by the provisions of this Article V to be given to a holder of shares of Preferred Stock must be mailed, postage prepaid, to the post office address last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the General Corporation Law, and will be deemed sent upon such mailing or electronic transmission. + +## ARTICLE VI: PREEMPTIVE RIGHTS. + +No stockholder has a right to purchase shares of capital stock of the Corporation sold or issued by the Corporation except to the extent that such a right may from time to time be set forth in a written agreement between the Corporation and the stockholder. + +## ARTICLE VII: STOCK REPURCHASES. + +In accordance with Section 500 of the California Corporations Code, a distribution can be made without regard to any preferential dividends arrears amount (as defined in Section 500 of the California Corporations Code) or any preferential rights amount (as defined in Section 500 of the California Corporations Code) in connection with (i) repurchases of Common Stock issued to or held by employees, officers, directors, or consultants of the Corporation or its subsidiaries upon termination of their employment or services pursuant to agreements providing for the right of said repurchase, (ii) repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries pursuant to rights of first refusal contained in agreements providing for such right, (iii) repurchases of Common Stock or Preferred Stock in connection with the settlement of disputes with any stockholder, or (iv) any other repurchase or redemption of Common Stock or Preferred Stock approved by the holders of Preferred Stock. + +## ARTICLE VIII: BYLAW PROVISIONS. + +### A. AMENDMENT OF BYLAWS. + +Subject to any additional vote required by this Restated Certificate or the Bylaws, in furtherance and not in limitation of the powers conferred by statute, the Board is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws. + +### B. NUMBER OF DIRECTORS. + +Subject to any additional vote required by this Restated Certificate, the number of directors of the Corporation will be determined in the manner set forth in the Bylaws. + +### C. BALLOT. + +Elections of directors need not be by written ballot unless the Bylaws so provide. + +### D. MEETINGS AND BOOKS. + +Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. The books of the Corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the Board or in the Bylaws. + +## ARTICLE IX: DIRECTOR LIABILITY. + +### A. LIMITATION. + +To the fullest extent permitted by law, a director of the Corporation will not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the General Corporation Law or any other law of the State of Delaware is amended after approval by the stockholders of this Article IX to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director will be eliminated or limited to the fullest extent permitted by the General Corporation Law as so amended. Any repeal or modification of the foregoing provisions of this Article IX by the stockholders will not adversely affect any right or protection of a director of the Corporation existing at the time of, or increase the liability of any director with respect to any acts or omissions of such director occurring before, such repeal or modification. + +### B. INDEMNIFICATION. + +To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which General Corporation Law permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the General Corporation Law. + +### C. MODIFICATION. + +Any amendment, repeal or modification of the foregoing provisions of this Article IX will not adversely affect any right or protection of any director, officer or other agent of the Corporation existing at the time of such amendment, repeal or modification. + +## ARTICLE X: CORPORATE OPPORTUNITIES. + +The Corporation renounces any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, or in being informed about, an Excluded Opportunity. An "Excluded Opportunity" means any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of, (i) any director of the Corporation who is not an employee of the Corporation or any of its subsidiaries, or (ii) any holder of Preferred Stock or any affiliate, partner, member, director, stockholder, employee, agent or other related person of any such holder, other than someone who is an employee of the Corporation or any of its subsidiaries (a "Covered Person"), unless such matter, transaction or interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, a Covered Person expressly and solely in such Covered Person's capacity as a director of the Corporation. \ No newline at end of file diff --git a/equity/Series Seed - Stockholder Consent.md b/equity/Series Seed - Stockholder Consent.md new file mode 100644 index 0000000..47ce1ed --- /dev/null +++ b/equity/Series Seed - Stockholder Consent.md @@ -0,0 +1,68 @@ +**[Please note that the following resolutions do not cover all matters that may need to be addressed in connection with the financing. For example, if any changes to the Company's Board of Directors are contemplated, or the size of the option pool will be changed, additional resolutions will be needed in this Board Consent and/or the Stockholder Consent. Always consult with counsel prior to using the consents.]** + +# ACTION BY WRITTEN CONSENT OF THE STOCKHOLDERS OF [COMPANY NAME] + +The undersigned stockholders of [Company Name], a Delaware corporation (the "Company"), pursuant to Section 228 of the Delaware General Corporation Law, hereby adopt and approve the following resolutions and the taking of the actions referred to in such resolutions, it being agreed that these resolutions will be effective only after such actions have been approved by the Company’s Board of Directors to the extent that such actions require the approval of the Company’s Board of Directors, provided that such later effectiveness shall not exceed 60 days from the earliest date of delivery of this Action by Written Consent: + +## Amendment and Restatement of Certificate of Incorporation + +WHEREAS, the Company's Board of Directors (the "Board") has approved the amendment and restatement of the Company's Certificate of Incorporation in the form attached hereto as Exhibit A (the "Restated Certificate") that, among other things: + +(i) increases the number of authorized shares of the Company's common stock (the "Common Stock") and preferred stock (the "Preferred Stock"); + +(ii) designates [________] shares of the Company's authorized but unissued Preferred Stock as "Series Seed Preferred Stock" (the "Series Seed Preferred"); and + +(iii) sets forth rights, privileges and preferences of the Common Stock and the Series Seed Preferred. + +WHEREAS, the undersigned stockholders agree with the Board that it is in the best interests of the Company to amend and restate the Company's Certificate of Incorporation, as contemplated by the Restated Certificate. + +RESOLVED, that the Restated Certificate be, and it hereby is, adopted and approved; + +RESOLVED FURTHER, that the officers of the Company be, and each of them hereby is, authorized and directed to execute the Restated Certificate on behalf of the Company and to file the Restated Certificate with the Delaware Secretary of State in the form and manner as required by the laws of the State of Delaware; and + +RESOLVED FURTHER, that the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to take such further actions and execute such documents as may be necessary or appropriate in order to implement the foregoing resolutions. + +## Approval of the Series Seed Preferred Stock Financing + +WHEREAS, the Board believes it is in the best interests of the Company to issue and sell shares of the Series Seed Preferred (the "Financing"); and + +WHEREAS, after careful consideration, the undersigned stockholders have determined that the terms and conditions of the Financing are just and equitable and fair as to the Company and that it is in the best interests of the Company and the stockholders of the Company to enter into the Financing subject to the terms and conditions agreed upon by the parties. + +RESOLVED, that the Series Seed Preferred Stock Investment Agreement by and among the Company and the Purchasers (as defined therein) in substantially the form attached hereto as Exhibit B (the "Purchase Agreement"), providing for, among other things, the issuance and sale by the Company of shares of the Series Seed Preferred at a cash purchase price of $[_________] per share, which may be paid in cash, conversion of indebtedness or convertible securities, any other lawful form of consideration or any combination thereof, be, and it hereby is, approved in all respects; + +RESOLVED FURTHER, that the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to execute and deliver the Purchase Agreement, and any and all other agreements, certificates or documents required or contemplated by the Purchase Agreement or deemed necessary or appropriate in connection therewith, and to take all actions deemed necessary or appropriate to cause the Company's obligations thereunder to be performed; and + +RESOLVED FURTHER, that the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to negotiate or otherwise cause such additions, modifications, amendments or deletions to be made to the Purchase Agreement, and such other agreements, certificates or documents, as any such officer may approve, and the execution and delivery thereof by such officer shall be deemed conclusive evidence of the approval of any such addition, modification, amendment or deletion. + +## General Authorizing Resolution + +RESOLVED, that the officers of the Company be, and each of them hereby is, authorized and directed, for and on behalf of the Company, to take such further actions and execute such documents as may be necessary or appropriate in order to implement the foregoing resolutions. + +[Signature Pages Follow] + +*** + +This Action by Written Consent shall be filed with the minutes of the proceedings of the Company's stockholders. + +The undersigned has executed this Action by Written Consent as of the date set forth under such signatory's name below. Any copy, facsimile, .PDF or other reliable reproduction of this Action by Written Consent may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile, .PDF or other reproduction be a complete reproduction of the entire original writing. + +__________________ | +--- | +[Stockholder Name] | +Date: [_________] + +__________________ | +--- | +[Stockholder Name] | +Date: [_________] + +*** +# Exhibit A + +## Restated Certificate + +* + +# Exhibit B + +## Purchase Agreement diff --git a/equity/Series Seed - Term Sheet.md b/equity/Series Seed - Term Sheet.md new file mode 100644 index 0000000..301e779 --- /dev/null +++ b/equity/Series Seed - Term Sheet.md @@ -0,0 +1,97 @@ +# TERMS FOR PRIVATE PLACEMENT OF SERIES SEED PREFERRED STOCK OF [COMPANY NAME] + +The following is a summary of the principal terms with respect to the proposed Series Seed Preferred Stock financing of [Company Name], a Delaware corporation (the "Company"). Except for the section entitled "Binding Terms," this summary of terms does not constitute a legally binding obligation. The parties intend to enter into a legally binding obligation only pursuant to definitive agreements to be negotiated and executed by the parties. + +## Offering Terms + +### Securities to Issue: + +Shares of a new series of preferred stock of the Company (the "Series Seed"). + +### Aggregate Proceeds: + +$[_________] in aggregate new capital. [In addition, the $[_________] of outstanding convertible securities (convertible promissory notes and/or SAFEs) (and all accrued but unpaid interest thereon) (the "Convertible Securities") will also convert on the same terms as stated herein.] + +### Purchasers: + +Accredited investors approved by the Company (the "Purchasers"). + +### Price Per Share: + +Price per share (the "Original Issue Price"), based on a pre-money valuation of $[_________], including an available option pool of [___]% of the post-money fully diluted capital of the Company. [The Convertible Securities will [not] be included in the pre-money shares for purposes of determining the Original Issue Price.] + +### Liquidation Preference: + +One times the Original Issue Price plus declared but unpaid dividends on each share of Series Seed, balance of proceeds paid to Common Stock. A merger, reorganization or similar transaction will be treated as a liquidation. + +### Conversion: + +Each shares of Series Seed is convertible into one share of Common Stock (subject to proportional adjustments for stock splits, stock dividends and the like) at any time at the option of the holder. [Conversion ratio will be subject to adjustment on a broad-based, weighted average basis in the event of subsequent issuances at a price less than the Original Issue Price (as adjusted) subject to customary exceptions.] + +### Voting Rights: + +Votes together with the Common Stock on all matters on an as-converted basis. Approval of a majority of the Preferred Stock required to (i) adversely change rights of the Preferred Stock; (ii) change the authorized number of shares; (iii) authorize a new series of Preferred Stock having rights senior to or on parity with the Preferred Stock; (iv) redeem or repurchase any shares (other than pursuant to employee or consultant agreements); (v) declare or pay any dividend; (vi) change the number of directors; or (vii) liquidate or dissolve, including any change of control. + +### Documentation: + +This Term Sheet, and the related investment documents, have been prepared using industry-curated documents made available via an automated document generator located at https://cooleygo.com/seedequity/. The final documents used will be identical to such documents, except for the modifications set forth in this Term Sheet. + +### Financial Information: + +Purchasers who have invested at least $[_________] ("Major Purchasers") will receive standard information and inspection rights. + +### Participation Right: + +Major Purchasers will have the right to participate on a pro rata basis in subsequent issuances of equity securities. + +### Board of Directors: + +The Board of Directors will consist of [___] members as follows: +* Holders of Common Stock will have the right to elect [___] member[s] of the Board of Directors, initially [insert name(s)]. +* [Holders of a majority of Series Seed will have the right to elect [___] member[s] of the Board of Directors, initially [insert name(s)][vacant].] +* [Holders of Common Stock and Series Seed, voting together as a single class, will have the right to elect [___] member[s] of the Board of Directors, initially [insert name(s)][vacant].] + +### Expenses: + +Company to reimburse counsel to Purchasers for a flat fee of $[10,000]. + +### Future Rights: + +The Series Seed will be given the same rights as the next series of Preferred Stock (with appropriate adjustments for economic terms). + +### Key Holders: + +[_______] + +### Key Holder Matters: + +Each Key Holder will have four years vesting beginning [_______]. Full acceleration upon "Double Trigger." Each Key Holder shall have assigned all relevant IP to the Company before closing. + +### [Diversity Rider: + +In order to advance diversity efforts in the venture capital industry, the Company and the lead investor, [_______], will make commercial best efforts to offer and make every attempt to include as a co-investor in the financing at least one Black[ or other underrepresented group including, but not limited to LatinX, women, LGBTQ+] check writer (DCWs), and to allocate a minimum of [___]% or $[_______] of the total round for such co-investor.] + +### Binding Terms: + +For a period of 30 days, the Company will not solicit offers from other parties for any financing. Without the consent of Purchasers, the Company will not disclose these terms to anyone other than officers, directors, key service providers, and other potential Purchasers in this financing. + + +------------ + Accepted and agreed as of the latest date set forth below: +## COMPANY: + +[Company Name] + +Name: + +Title: + +Date: + +## LEAD INVESTOR: + +Name: + +Title: + +Date: diff --git a/notes/RELEASENOTES.md b/notes/RELEASENOTES.md new file mode 100644 index 0000000..880129f --- /dev/null +++ b/notes/RELEASENOTES.md @@ -0,0 +1,35 @@ +# Series Seed Notes + +## Version 1.02 (October 30, 2017) +_Term Sheet_: Revising "Change of Control" to "acquisition" + +## Version 1.01 (June 22, 2017) + +_Term Sheet_: Updated Documentation language to reference Seed Notes documents on Cooley GO. + +## Version 1.0 (June 20, 2017) + +### Documents + +- Term Sheet +- Convertible Promissory Note +- Board Consent +- Investor Questionnaire + +### Markdown Formatting +Unlike the markdown versions of the Series Seed equity financing documents, for which we left the original formatting approach largely intact in this fork, we decided to format the Notes markdown documents to more closely approximate the "look and feel" of the Word versions. If you believe this enhanced formatting is unnecessary or undesirable in the markdown versions, please post your opinion as an Issue on [GitHub]. + +### About Square Brackets: Optional or Alternative Language + +In the documents you will find many instances where provisions are surrounded by square brackets (\"\[ \]\"). These brackets indicate that the language contained within is either optional or, particularly where two sets of bracketed provisions appear next to each other, are alternative choices. **Please review these carefully**, and consult with an attorney about the consequences of the options. + +### Jurisdiction + +These documents were designed for companies incorporated in the State of Delaware. + +### General +Please note that by providing these forms, we are not taking any position on whether a particular provision is "market" or not. In addition, by marking a provision as "optional" we are simply indicating that, in our experience, the inclusion or exclusion of the term is more often negotiated than not. It does not mean that we are taking any position about whether a term should or should not be included or how it should be phrased. The decision of whether to include any particular provision should be based on the mutual agreement of the parties, and any decision should be made by the user, in consultation with counsel. + +We look forward to receiving your comments and feedback on this first version of the Series Seed Notes convertible debt package of documents via [GitHub] in the form of Issues or Pull Requests. We intend to address all such feedback in a timely fashion. + +[GitHub]: https://www.github.com/CooleyLLP/seriesseed/ \ No newline at end of file diff --git a/notes/Series Seed Notes - Board Consent.md b/notes/Series Seed Notes - Board Consent.md new file mode 100644 index 0000000..5e490ee --- /dev/null +++ b/notes/Series Seed Notes - Board Consent.md @@ -0,0 +1,52 @@ +# ACTION BY UNANIMOUS WRITTEN CONSENT OF THE BOARD OF DIRECTORS OF [COMPANY NAME] + +The undersigned, constituting all the members of the Board of Directors (the +"***Board***") of [Company Name], a Delaware corporation (the "***Company***"), +pursuant to Section 141(f) of the Delaware General Corporation Law, adopt the +following resolutions by written consent: + +## Note Financing Approval + +**WHEREAS**, the Board has determined that it is in the best interests of the Company to raise up to $[_________] through the authorization, sale and issuance of convertible promissory notes, in substantially the form attached hereto as **Exhibit A** (the "***Notes***"); and + +**WHEREAS**, after careful consideration, the Board has determined that the terms and conditions of the Notes are just, equitable and fair as to the Company and that it is in the best interests of the Company to enter into the Notes subject to the terms and conditions agreed upon by the parties. + +**NOW, THEREFORE, BE IT RESOLVED**, that the Notes are approved in all respects; + +**RESOLVED FURTHER**, that the officers of the Company are authorized and directed, for and on behalf of the Company, to sell the Notes in accordance with their terms and conditions; + +**RESOLVED FURTHER**, that the officers of the Company are authorized and directed, for and on behalf of the Company, to execute and deliver the Notes, and any and all other agreements, certificates or documents required or contemplated by any of the Notes or deemed necessary or appropriate in connection therewith, and to take all actions deemed necessary or appropriate to cause the Company's obligations thereunder to be performed; + +**RESOLVED FURTHER**, in connection with and in furtherance of the transactions contemplated by the Notes, that the officers of the Company are authorized and directed, for and on behalf of the Company, to negotiate or otherwise cause such additions, modifications, amendments or deletions to be made to any of the Notes, and such other agreements, certificates or documents, as any such officer may approve, and the execution and delivery thereof by any officer of the Company shall be deemed conclusive evidence of the approval of any such addition, modification, amendment or deletion; + +**RESOLVED FURTHER**, that the Company is authorized and directed to reserve (i) for issuance upon conversion of the Notes, the maximum number of shares of the series of Preferred Stock that the Company issues in the Qualified Financing (as defined in the Notes) ("***Series Next Preferred Stock***") that may be acquired thereunder, (ii) for issuance upon conversion of the Notes, the maximum number of shares of Common Stock that may be acquired thereunder, and (iii) for issuance upon conversion of the shares of Series Next Preferred Stock, the maximum number of shares of Common Stock that may be acquired thereunder pursuant to the terms and conditions of the Notes; and + +**RESOLVED FURTHER**, that the Notes, the shares of Series Next Preferred Stock and Common Stock issuable upon conversion thereof, and the shares of Common Stock issuable upon conversion of the shares of Series Next Preferred Stock, shall be offered, sold and issued in reliance on any applicable exemption from registration provided by the Securities Act of 1933, as amended, and any applicable exemption under applicable state blue sky laws, and that the officers of the Company are authorized and directed, for and on behalf of the Company, to execute and file any forms, certificates, notices or other documents that are necessary or appropriate pursuant to federal or state securities laws. + +## Omnibus Resolutions + +**RESOLVED**, that the officers of the Company are authorized and directed, for and on behalf of the Company, to make such filings and applications, to execute and deliver such documents and instruments, and to do such acts and things as any such officer deems necessary or appropriate in order to implement the foregoing resolutions. + +**[Signature Page Follows]** + +*** + +This Action by Written Consent shall be filed with the minutes of the proceedings of the Board of Directors of the Company. + +The undersigned have executed this Action by Written Consent as of the date set forth under his or her name below. Any copy, facsimile, .PDF or other reliable reproduction of this Action by Written Consent may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile, .PDF or other reproduction be a complete reproduction of the entire original writing. + +__________________ | +--- | +[Director Name] | +Date: [_________] + +__________________ | +--- | +[Director Name] | +Date: [_________] + +*** + +# EXHIBIT A + +## FORM OF CONVERTIBLE PROMISSORY NOTE \ No newline at end of file diff --git a/notes/Series Seed Notes - Convertible Promissory Note.md b/notes/Series Seed Notes - Convertible Promissory Note.md new file mode 100644 index 0000000..a49f8b9 --- /dev/null +++ b/notes/Series Seed Notes - Convertible Promissory Note.md @@ -0,0 +1,235 @@ +THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "**_ACT_**"), OR UNDER THE SECURITIES LAWS OF ANY STATES IN THE UNITED STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. + +# CONVERTIBLE PROMISSORY NOTE + +**Note Series**: [*_________*] + +**Date of Note**: [*_________*] + +**Principal Amount of Note**: $[*_________*] + + +For value received [Company Name], a Delaware corporation (the "**_Company_**"), promises to pay to the undersigned holder or such party's assigns (the "**_Holder_**") the principal amount set forth above with [simple] interest on the outstanding principal amount at the rate of [___]%per annum[, compounded annually]. Interest shall commence with the date hereof and shall continue on the outstanding principal amount until paid in full or converted. Interest shall be computed on the basis of a year of 365 days for the actual number of days elapsed. All unpaid interest and principal shall be due and payable upon request of the Majority Holders on or after [*_________*] (the "**_Maturity Date_**"). + +## 1. BASIC TERMS. + +### 1.1 Series of Notes. + +This convertible promissory note (the "**_Note_**") is issued as part of a series of notes designated by the Note Series above (collectively, the "**_Notes_**")[, and having an aggregate principal amount not to exceed $[*_________*]] and issued in a series of multiple closings to certain persons and entities (collectively, the "**_Holders_**"). The Company shall maintain a ledger of all Holders. + +### 1.2 Payments. + +All payments of interest and principal shall be in lawful money of the United States of America and shall be made pro rata among all Holders. All payments shall be applied first to accrued interest, and thereafter to principal. + +### 1.3 Prepayment. + +The Company may not prepay this Note prior to the Maturity Date without the consent of the Holders of a majority of the outstanding principal amount of the Notes (the "**_Majority Holders_**"). + +### [1.4 Most Favored Nations. + +If, while this Note is outstanding, the Company issues other indebtedness of the Company convertible into equity securities of the Company, or amends any existing indebtedness convertible into equity securities of the Company, and such newly issued or amended indebtedness would have material terms that are more favorable, from the perspective of the Holder (the "**_Other Debt_**"), than the terms of this Note, then the Company will provide the Holder with written notice thereof, together with a copy of all documentation relating to the Other Debt and, upon request of the Holder, any additional information related to the Other Debt as may be reasonably requested by the Holder. The Company will provide such notice to the Holder promptly (and in any event within 30 days) following the issuance of the Other Debt. In the event the Holder determines that the terms of the Other Debt are preferable to the terms of this Note, the Holder will notify the Company in writing within five days following the Holder's receipt of such notice from the Company. Promptly after receipt of such written notice from the Holder, but in any event within 30 days, the Company will amend and restate this Note to be substantially identical to the promissory note evidencing the Other Debt, excluding the principal and unpaid accrued interest.] + +## 2. CONVERSION AND REPAYMENT. + +### 2.1 Conversion upon a Qualified Financing. + +In the event that the Company issues and sells shares of its equity securities ( "**_Equity Securities_**") to investors (the "**_Investors_**") [on or before the Maturity Date][while this Note remains outstanding] in an equity financing with total proceeds to the Company of not less than $[**_________**] (excluding the conversion of the Notes or other convertible securities issued for capital raising purposes (_e.g._, Simple Agreements for Future Equity)) (a "**_Qualified Financing_**"), then the outstanding principal amount of this Note and any unpaid accrued interest shall automatically convert in whole without any further action by the Holder into Equity Securities sold in the Qualified Financing at a conversion price equal to [the cash price paid per share for Equity Securities by the Investors in the Qualified Financing[ multiplied by 0.[*__*]].][the lesser of (i) the cash price paid per share for Equity Securities by the Investors in the Qualified Financing[ multiplied by 0.[*__*]], and (ii) the quotient resulting from dividing $[*_________*] by the number of outstanding shares of Common Stock of the Company [immediately prior to the Qualified Financing ][as of the date of the Note ](assuming conversion of all securities convertible into Common Stock and exercise of all outstanding options and warrants, [including all shares of Common Stock reserved and available for future grant under any equity incentive or similar plan of the Company, and/or any equity incentive or similar plan to be created or increased in connection with the Qualified Financing,] but excluding the shares of equity securities of the Company issuable upon the conversion of Notes or other convertible securities issued for capital raising purposes (_e.g._, Simple Agreements for Future Equity)).] The issuance of Equity Securities pursuant to the conversion of this Note shall be upon and subject to the same terms and conditions applicable to Equity Securities sold in the Qualified Financing.[Notwithstanding this paragraph, if the conversion price of the Notes as determined pursuant to this paragraph (the "**_Conversion Price_**") is less than the price per share at which Equity Securities are issued in the Qualified Financing, the Company may, solely at its option, elect to convert this Note into shares of a newly created series of preferred stock having the identical rights, privileges, preferences and restrictions as the Equity Securities issued in the Qualified Financing, and otherwise on the same terms and conditions, other than with respect to (if applicable): (i) the per share liquidation preference and the conversion price for purposes of price-based anti-dilution protection, which will equal the Conversion Price; and (ii) the per share dividend, which will be the same percentage of the Conversion Price as applied to determine the per share dividends of the Investors in the Qualified Financing relative to the purchase price paid by the Investors.] + +### 2.2 Optional Conversion at non-Qualified Financing. + +In the event the Company consummates, [on or before the Maturity Date][while this Note remains outstanding], an equity financing pursuant to which it sells shares of Preferred Stock in a transaction that does not constitute a Qualified Financing, then the [Majority Holders][Holder] shall have the option to treat such equity financing as a Qualified Financing on the same terms set forth herein. + +### 2.3 Maturity Date Conversion. + +In the event that this Note remains outstanding on the Maturity Date, then the outstanding principal balance of this Note and any unpaid accrued interest shall [automatically without any further action by the Holder][upon the election of the Majority Holders given prior to the Maturity Date,][upon the election of the Holder given prior to the Maturity Date,] convert as of the Maturity Date into shares of [the Company's Common Stock][a newly created series of the Company's preferred stock on the terms and conditions set forth on **Exhibit A**] at a conversion price equal to the quotient resulting from dividing $[*_________*] by the number of outstanding shares of Common Stock of the Company [as of the Maturity Date][as of the date of the Note] (assuming conversion of all securities convertible into Common Stock and exercise of all outstanding options and warrants, [including all shares of Common Stock reserved and available for future grant under any equity incentive or similar plan of the Company,] but excluding the shares of equity securities of the Company issuable upon the conversion of Notes or other convertible securities issued for capital raising purposes (_e.g._, Simple Agreements for Future Equity)). + +### 2.4 Change of Control. + +If the Company consummates a Change of Control (as defined below) while this Note remains outstanding, the Company shall repay the Holder in cash in an amount equal to [(i) ]the outstanding principal amount of this Note plus any unpaid accrued interest on the original principal[, plus (ii) a repayment premium equal to [*___*]% of the outstanding principal amount of this Note][; provided, however, that upon the written election of the Holder made not less than five days prior to the Change of Control, the Company shall convert the outstanding principal balance of this Note and any unpaid accrued interest into shares of the Company's Common Stock at a conversion price equal to the quotient resulting from dividing $[*_________*] by the number of outstanding shares of Common Stock of the Company [immediately prior to the Change of Control][as of the date of the Note] (assuming conversion of all securities convertible into Common Stock and exercise of all outstanding options and warrants, but excluding the shares of equity securities of the Company issuable upon the conversion of Notes or other convertible securities issued for capital raising purposes (_e.g._, Simple Agreements for Future Equity))]. For purposes of this Note, a "**_Change of Control_**" means (i) a consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the shares of capital stock of the Company immediately prior to such consolidation, merger or reorganization continue to represent a majority of the voting power of the surviving entity immediately after such consolidation, merger or reorganization; (ii) any transaction or series of related transactions to which the Company is a party in which in excess of 50% of the Company's voting power is transferred; or (iii) the sale or transfer of all or substantially all of the Company's assets, or the exclusive license of all or substantially all of the Company's material intellectual property; provided that a Change of Control shall not include any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or any successor, indebtedness of the Company is cancelled or converted or a combination thereof. The Company shall give the Holder notice of a Change of Control not less than 10 days prior to the anticipated date of consummation of the Change of Control. Any repayment pursuant to this paragraph in connection with a Change of Control shall be subject to any required tax withholdings, and may be made by the Company (or any party to such Change of Control or its agent) following the Change of Control in connection with payment procedures established in connection with such Change of Control. + +### 2.5 Procedure for Conversion. + +In connection with any conversion of this Note into capital stock, the Holder shall surrender this Note to the Company and deliver to the Company any documentation reasonably required by the Company (including, in the case of a Qualified Financing, all financing documents executed by the Investors in connection with such Qualified Financing). The Company shall not be required to issue or deliver the capital stock into which this Note may convert until the Holder has surrendered this Note to the Company and delivered to the Company any such documentation. Upon the conversion of this Note into capital stock pursuant to the terms hereof, in lieu of any fractional shares to which the Holder would otherwise be entitled, the Company shall pay the Holder cash equal to such fraction multiplied by the price at which this Note converts. + +### 2.6 Interest Accrual. + +If a Change of Control or Qualified Financing is consummated, all interest on this Note shall be deemed to have stopped accruing as of a date selected by the Company that is up to 10 days prior to the signing of the definitive agreement for the Change of Control or Qualified Financing. + +## 3. Representations and Warranties. + +### 3.1 Representations and Warranties of the Company. + +The Company hereby represents and warrants to the Holder as of the date the first Note was issued as follows: + +3.1.1 **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 Delaware. The Company has the requisite corporate power to own and operate its properties and assets and to carry on its business as now conducted and as proposed to be conducted. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business (a "**_Material Adverse Effect_**"). + +3.1.2 **Corporate Power.** The Company has all requisite corporate power to issue this Note and to carry out and perform its obligations under this Note. The Company's Board of Directors (the "**_Board_**") has approved the issuance of this Note based upon a reasonable belief that the issuance of this Note is appropriate for the Company after reasonable inquiry concerning the Company's financing objectives and financial situation. + +3.1.3 **Authorization.** All corporate action on the part of the Company, the Board and the Company's stockholders necessary for the issuance and delivery of this Note has been taken. This Note constitutes a valid and binding obligation of the Company enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors and, with respect to rights to indemnity, subject to federal and state securities laws. Any securities issued upon conversion of this Note (the "**_Conversion Securities_**"), when issued in compliance with the provisions of this Note, will be validly issued, fully paid, nonassessable, free of any liens or encumbrances and issued in compliance with all applicable federal and securities laws. + +3.1.4 **Governmental Consents.** All consents, approvals, orders or authorizations of, or registrations, qualifications, designations, declarations or filings with, any governmental authority required on the part of the Company in connection with issuance of this Note has been obtained. + +3.1.5 **Compliance with Laws.** To its knowledge, 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 of which would have a Material Adverse Effect. + +3.1.6 **Compliance with Other Instruments.** The Company is not in violation or default of any term of its certificate of incorporation or bylaws, or of any provision of any mortgage, indenture or contract to which it is a party and by which it is bound or of any judgment, decree, order or writ, other than such violation(s) that would not have a Material Adverse Effect. The execution, delivery and performance of this Note will not result in any such violation or be in conflict with, or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument, judgment, decree, order or writ or an event that results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture, or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations or any of its assets or properties. Without limiting the foregoing, the Company has obtained all waivers reasonably necessary with respect to any preemptive rights, rights of first refusal or similar rights, including any notice or offering periods provided for as part of any such rights, in order for the Company to consummate the transactions contemplated hereunder without any third party obtaining any rights to cause the Company to offer or issue any securities of the Company as a result of the consummation of the transactions contemplated hereunder. + +3.1.7 **No "Bad Actor" Disqualification.** The Company has exercised reasonable care to determine whether any Company Covered Person (as defined below) is subject to any of the "bad actor" disqualifications described in Rule 506(d)(1)(i) through (viii), as modified by Rules 506(d)(2) and (d)(3), under the Act ("**_Disqualification Events_**"). To the Company's knowledge, no Company Covered Person is subject to a Disqualification Event. The Company has complied, to the extent required, with any disclosure obligations under Rule 506(e) under the Act. For purposes of this Note, "**_Company Covered Persons_**" are those persons specified in Rule 506(d)(1) under the Act; provided, however, that Company Covered Persons do not include (a) any Holder, or (b) any person or entity that is deemed to be an affiliated issuer of the Company solely as a result of the relationship between the Company and any Holder. + +3.1.8 **Offering.** Assuming the accuracy of the representations and warranties of the Holder contained in Section 3.2 below, the offer, issue, and sale of this Note and the Conversion Securities (collectively, the "**_Securities_**") are and will be exempt from the registration and prospectus delivery requirements of the Act, and have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable state securities laws. + +3.1.9 **Use of Proceeds.** The Company shall use the proceeds of this Note solely for the operations of its business, and not for any personal, family or household purpose. + +### 3.2 Representations and Warranties of the Holder. + +The Holder hereby represents and warrants to the Company as of the date hereof as follows: + +3.2.1 **Purchase for Own Account.** + +The Holder is acquiring the Securities solely for the Holder's own account and beneficial interest for investment and not for sale or with a view to distribution of the Securities or any part thereof, has no present intention of selling (in connection with a distribution or otherwise), granting any participation in, or otherwise distributing the same, and does not presently have reason to anticipate a change in such intention. + +3.2.2 **Information and Sophistication.** Without lessening or obviating the representations and warranties of the Company set forth in Section 3.1 above, the Holder hereby: (A) acknowledges that the Holder has received all the information the Holder has requested from the Company and the Holder considers necessary or appropriate for deciding whether to acquire the Securities, (B) represents that the Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities and to obtain any additional information necessary to verify the accuracy of the information given the Holder and (C) further represents that the Holder has such knowledge and experience in financial and business matters that the Holder is capable of evaluating the merits and risk of this investment. + +3.2.3 **Ability to Bear Economic Risk.** The Holder acknowledges that investment in the Securities involves a high degree of risk, and represents that the Holder is able, without materially impairing the Holder's financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of the Holder's investment. + +3.2.4 **Further Limitations on Disposition.** Without in any way limiting the representations set forth above, the Holder further agrees not to make any disposition of all or any portion of the Securities unless and until: + +(a) There is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or + +(b) The Holder shall have notified the Company of the proposed disposition and furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and if reasonably requested by the Company, the Holder shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration under the Act or any applicable state securities laws; provided that no such opinion shall be required for dispositions in compliance with Rule 144 under the Act, except in unusual circumstances. + +(c) Notwithstanding the provisions of paragraphs (1) and (2) above, no such registration statement or opinion of counsel shall be necessary for a transfer by the Holder to a partner (or retired partner) or member (or retired member) of the Holder in accordance with partnership or limited liability company interests, or transfers by gift, will or intestate succession to any spouse or lineal descendants or ancestors, if all transferees agree in writing to be subject to the terms hereof to the same extent as if they were the Holders hereunder. + +3.2.5 **Accredited Investor Status.** The Holder is an "accredited investor" as such term is defined in Rule 501 under the Act. + +3.2.6 **No "Bad Actor" Disqualification.** The Holder represents and warrants that neither (A) the Holder nor (B) any entity that controls the Holder or is under the control of, or under common control with, the Holder, is subject to any Disqualification Event, except for Disqualification Events covered by Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Act and disclosed in writing in reasonable detail to the Company. The Holder represents that the Holder has exercised reasonable care to determine the accuracy of the representation made by the Holder in this paragraph, and agrees to notify the Company if the Holder becomes aware of any fact that makes the representation given by the Holder hereunder inaccurate. + +3.2.7 **Foreign Investors.** If the Holder is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended (the "**_Code_**")), the Holder hereby represents that he, she or it has satisfied itself as to the full observance of the laws of the Holder's jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Note, including (A) the legal requirements within the Holder's jurisdiction for the purchase of the Securities, (B) any foreign exchange restrictions applicable to such purchase, (C) any governmental or other consents that may need to be obtained, and (D) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Securities. The Holder's subscription, payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other laws of the Holder's jurisdiction. + +3.2.8 **Forward-Looking Statements.** With respect to any forecasts, projections of results and other forward-looking statements and information provided to the Holder, the Holder acknowledges that such statements were prepared based upon assumptions deemed reasonable by the Company at the time of preparation. There is no assurance that such statements will prove accurate, and the Company has no obligation to update such statements. + +## 4. Events of Default. + +4.1 If there shall be any Event of Default (as defined below) hereunder, at the option and upon the declaration of the Majority Holders and upon written notice to the Company (which election and notice shall not be required in the case of an Event of Default under Section 4.1.2 or 4.1.3 below), this Note shall accelerate and all principal and unpaid accrued interest shall become due and payable. The occurrence of any one or more of the following shall constitute an "**_Event of Default_**": + +4.1.1 The Company fails to pay timely any of the principal amount due under this Note on the date the same becomes due and payable or any unpaid accrued interest or other amounts due under this Note on the date the same becomes due and payable; + +4.1.2 The Company files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes any corporate action in furtherance of any of the foregoing; or + +4.1.3 An involuntary petition is filed against the Company (unless such petition is dismissed or discharged within 60 days under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee or assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of the Company). + +4.2 In the event of any Event of Default hereunder, the Company shall pay all reasonable attorneys' fees and court costs incurred by the Holder in enforcing and collecting this Note. + +## 5. Miscellaneous Provisions. + +5.1 **Waivers.** The Company hereby waives demand, notice, presentment, protest and notice of dishonor. + +5.2 **Further Assurances.** The Holder agrees and covenants that at any time and from time to time the Holder will promptly execute and deliver to the Company such further instruments and documents and take such further action as the Company may reasonably require in order to carry out the full intent and purpose of this Note and to comply with state or federal securities laws or other regulatory approvals. + +5.3 **Transfers of Notes.** This Note may be transferred only upon its surrender to the Company for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company. Thereupon, this Note shall be reissued to, and registered in the name of, the transferee, or a new Note for like principal amount and interest shall be issued to, and registered in the name of, the transferee. Interest and principal shall be paid solely to the registered holder of this Note. Such payment shall constitute full discharge of the Company's obligation to pay such interest and principal. + +5.4 **Market Standoff.** To the extent requested by the Company or an underwriter of securities of the Company, the Holder and any permitted transferee thereof shall not, without the prior written consent of the managing underwriters in the IPO (as hereafter defined), offer, sell, make any short sale of, grant or sell any option for the purchase of, lend, pledge, otherwise transfer or dispose of (directly or indirectly), enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership (whether any such transaction is described above or is to be settled by delivery of Securities or other securities, in cash, or otherwise), any Securities or other shares of stock of the Company then owned by the Holder or any transferee thereof, or enter into an agreement to do any of the foregoing, for up to 180 days following the effective date of the registration statement of the initial public offering of the Company (the "**_IPO_**") filed under the Securities Act. For purposes of this paragraph, "**_Company_**" includes any wholly owned subsidiary of the Company into which the Company merges or consolidates. The Company may place restrictive legends on the certificates representing the shares subject to this paragraph and may impose stop transfer instructions with respect to the Securities and such other shares of stock of the Holder and any transferee thereof (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. The Holder and any transferee thereof shall enter into any agreement reasonably required by the underwriters to the IPO to implement the foregoing within any reasonable timeframe so requested. The underwriters for any IPO are intended third party beneficiaries of this paragraph and shall have the right, power and authority to enforce the provisions of this paragraph as though they were parties hereto. + +5.5 **Amendment and Waiver.** Any term of this Note may be amended or waived with the written consent of the Company and the Holder. In addition, any term of this Note may be amended or waived with the written consent of the Company and the Majority Holders. Upon the effectuation of such waiver or amendment with the consent of the Majority Holders in conformance with this paragraph, such amendment or waiver shall be effective as to, and binding against the holders of, all of the Notes and the Company shall promptly give written notice thereof to the Holder if the Holder has not previously consented to such amendment or waiver in writing; provided that the failure to give such notice shall not affect the validity of such amendment or waiver. + +5.6 **Governing Law.** This Note shall be governed by and construed under the laws of the State of Delaware, as applied to agreements among Delaware residents, made and to be performed entirely within the State of Delaware, without giving effect to conflicts of laws principles. + +5.7 **Binding Agreement.** The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Note, expressed or implied, is intended to confer upon any third party any rights, remedies, obligations or liabilities under or by reason of this Note, except as expressly provided in this Note. + +5.8 **Counterparts; Manner of Delivery.** This Note may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. + +5.9 **Titles and Subtitles.** The titles and subtitles used in this Note are used for convenience only and are not to be considered in construing or interpreting this Note. + +5.10 **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 electronic mail or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications to a party shall be sent to the party's address set forth on the signature page hereto or at such other address(es) as such party may designate by 10 days' advance written notice to the other party hereto. + +5.11 **Expenses.** The Company and the Holder shall each bear its respective expenses and legal fees incurred with respect to the negotiation, execution and delivery of this Note and the transactions contemplated herein. + +5.12 **Delays or Omissions.** It is agreed that no delay or omission to exercise any right, power or remedy accruing to the Holder, upon any breach or default of the Company under this Note shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach or default, or any acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character by the Holder of any breach or default under this Note, or any waiver by the Holder of any provisions or conditions of this Note, must be in writing and shall be effective only to the extent specifically set forth in writing and that all remedies, either under this Note, or by law or otherwise afforded to the Holder, shall be cumulative and not alternative. This Note shall be void and of no force or effect in the event that the Holder fails to remit the full principal amount to the Company within five calendar days of the date of this Note. + +5.13 **Entire Agreement.** This Note constitutes 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 party in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein. + +5.14 **Exculpation among Holders.** The Holder acknowledges that the Holder is not relying on any person, firm or corporation, other than the Company and its officers and Board members, in making its investment or decision to invest in the Company. + +5.15 **Senior Indebtedness.** The indebtedness evidenced by this Note is subordinated in right of payment to the prior payment in full of any Senior Indebtedness in existence on the date of this Note or hereafter incurred. "**_Senior Indebtedness_**" shall mean, unless expressly subordinated to or made on a parity with the amounts due under this Note, all amounts due in connection with (i) indebtedness of the Company to banks or other lending institutions regularly engaged in the business of lending money (excluding venture capital, investment banking or similar institutions and their affiliates, which sometimes engage in lending activities but which are primarily engaged in investments in equity securities), and (ii) any such indebtedness or any debentures, notes or other evidence of indebtedness issued in exchange for such Senior Indebtedness, or any indebtedness arising from the satisfaction of such Senior Indebtedness by a guarantor. + +5.16 **Broker's Fees.** Each party hereto represents and warrants that no agent, broker, investment banker, person or firm acting on behalf of or under the authority of such party hereto is or will be entitled to any broker's or finder's fee or any other commission directly or indirectly in connection with the transactions contemplated herein. Each party hereto further agrees to indemnify each other party for any claims, losses or expenses incurred by such other party as a result of the representation in this subsection being untrue. + +5.17 **California Corporate Securities Law.** THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS NOTE HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH QUALIFICATION IS UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE COMPANY, THE RIGHTS OF ALL PARTIES TO THIS NOTE ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION FROM SUCH QUALIFICATION BEING AVAILABLE. + +**[Signature pages follow]** + + + +*** + +The parties have executed this **Convertible Promissory Note** as of the date first noted above. + +**COMPANY:** + + +[**Company Name**] + +By: *____________________________________________* + +Name: *____________________________________________* + +Title: Chief Executive Officer + +E-mail: *____________________________________________* + +Address: *____________________________________________* + + + +**HOLDER (if an entity):** + +Name of Holder: *____________________________________________* + +By: *____________________________________________* + +Title: *____________________________________________* + +E-mail: *____________________________________________* + +Address: *____________________________________________* + + + + +**HOLDER (if an individual):** + +Name of Holder: *____________________________________________* + +Signature: *____________________________________________* + + +E-mail: *____________________________________________* + +Address: *____________________________________________* + + + +*** +# Exhibit A + +## TERMS OF SERIES PREFERRED STOCK + +**_Securities:_** A newly created series of Preferred Stock (the "**Series** **Preferred**") + +**_Liquidation preference:_** In the event of a liquidation, dissolution or winding up of the Company, the Series Preferred will have the right to receive the original purchase price prior to any distribution to the Common Stock. The remaining assets will be distributed _pro rata_ to the holders of Common Stock. A sale of all or substantially all of the Company's assets or a merger or consolidation of the Company with any other company will be treated as a liquidation of the Company. + +**_Conversion:_** The Series Preferred may be converted at any time, at the option of the holder, into shares of Common Stock. The conversion rate will initially be 1:1, subject to customary adjustments. + +**_Automatic conversion:_** Each share of Series Preferred will automatically convert into Common Stock, at the then applicable conversion rate, upon (i) the closing of a firm commitment underwritten public offering of Common Stock, or (ii) the consent of the holders of at least a majority of the then outstanding shares of Series Preferred. + +**_General voting rights:_** Each share of Series Preferred will have the right to a number of votes equal to the number of shares of Common Stock issuable upon conversion of each such share of Series Preferred. The Series Preferred will vote with the Common Stock on all matters except as specifically provided herein or as otherwise required by law. + +**_Protective provisions:_** So long as any of the Series Preferred is outstanding, consent of the holders of at least a majority of the Series Preferred will be required for any action that: (i) alters any provision of the certificate of incorporation if it would adversely alter the rights, preferences, privileges or powers of the Series Preferred; or (ii) changes the authorized number of shares of Series Preferred. + +### [INVESTOR RIGHTS +[**_Right to maintain proportionate ownership:_** Each holder of Series Preferred (or one or more of its affiliates) will have a right to purchase its _pro rata_ share of any offering of new securities by the Company, subject to customary exceptions. The _pro rata_ share will be based on the ratio of (x) the number of shares of Common Stock held by such holder (on an as-converted basis) to (y) the Company's fully-diluted capitalization (on an as-converted and as-exercised basis). This right will terminate on the earlier of (i) immediately prior to the Company's initial public offering or (ii) seven years after the financing.] + +[**_Information rights:_** As soon as practicable, the Company will deliver to each holder of Series Preferred, (i) unaudited annual financial statements and (ii) unaudited quarterly financial statements. The information rights will terminate upon an initial public offering.] + +**_Other Matters:_** _Market stand-off_. Holders of Series Preferred will agree not to effect any transactions with respect to any of the Company's securities within 180 days following the Company's initial public offering, provided that all officers, directors and 1% stockholders of the Company are similarly bound. + +### ] diff --git a/notes/Series Seed Notes - Investor Questionnaire.md b/notes/Series Seed Notes - Investor Questionnaire.md new file mode 100644 index 0000000..972a2f1 --- /dev/null +++ b/notes/Series Seed Notes - Investor Questionnaire.md @@ -0,0 +1,52 @@ +# INVESTOR SUITABILITY QUESTIONNAIRE CONVERTIBLE PROMISSORY NOTE FINANCING OF [Company Name] + +This Questionnaire is being distributed to certain individuals and entities which may be offered the opportunity to purchase convertible promissory notes (the "*Securities*") of **[Company Name]**, a Delaware corporation (the "*Company*"). The purpose of this Questionnaire is to assure the Company that all such offers and purchases will meet the standards imposed by the Securities Act of 1933, as amended (the "*Act*"), and applicable state securities laws. + +All answers will be kept confidential. However, by signing this Questionnaire, the undersigned agrees that this information may be provided by the Company to its legal and financial advisors, and the Company and such advisors may rely on the information set forth in this Questionnaire for purposes of complying with all applicable securities laws and may present this Questionnaire to such parties as it reasonably deems appropriate if called upon to establish its compliance with such securities laws. **The undersigned represents that the information contained herein is complete and accurate and will notify the Company of any material change in any of such information prior to the undersigned's investment in the Company.** + +## For Individual Investors + +**Accredited Investor Certification.** The undersigned makes one of the following representations regarding its income or net worth and certain related matters **_and has checked the applicable representation:_** + +[_] The undersigned's income [FN 1] during each of the last two years exceeded $200,000 or, if the undersigned is married, the joint income of the undersigned and the undersigned's spouse during each of the last two years exceed $300,000, and the undersigned reasonably expects the undersigned's income, from all sources during this year, will exceed $200,000 or, if the undersigned is married, the joint income of undersigned and the undersigned's spouse from all sources during this year will exceed $300,000. + +[_] The undersigned's net worth [FN 2], including the net worth of the undersigned's spouse, is in excess of $1,000,000 (excluding the value of the undersigned's primary residence). + +[_] The undersigned cannot make any of the representations set forth above. + + +## For Entity Investors + +**Accredited Investor Certification.** The undersigned makes one of the following representations regarding its net worth and certain related matters **_and has checked the applicable representation:_** + +[_] The undersigned is a trust with total assets in excess of $5,000,000 whose purchase is directed by a person with such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of the prospective investment. + +[_] The undersigned is a bank, insurance company, investment company registered under the United States Investment Company Act of 1940, as amended (the "Companies Act"), a broker or dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934, as amended, a business development company, a Small Business Investment Company licensed by the United States Small Business Administration, a plan with total assets in excess of $5,000,000 established and maintained by a state for the benefit of its employees, or a private business development company as defined in Section 202(a)(22) of the United States Investment Advisers Act of 1940, as amended. + +[_] The undersigned is an employee benefit plan and *either* all investment decisions are made by a bank, savings and loan association, insurance company, or registered investment advisor, *or* the undersigned has total assets in excess of $5,000,000 *or*, if such plan is a self-directed plan, investment decisions are made solely by persons who are accredited investors. + +[_] The undersigned is a corporation, partnership, business trust, not formed for the purpose of acquiring the Securities, or an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), in each case with total assets in excess of $5,000,000. + +[_] The undersigned is an entity in which **all** of the equity owners (in the case of a revocable living trust, its grantor(s)) qualify under any of the above subparagraphs, or, if an individual, each such individual has a net worth [FN 2], either individually or upon a joint basis with such individual's spouse, in excess of $1,000,000 (within the meaning of such terms as used in the definition of "*accredited investor*" contained in Rule 501 under the Securities Act), *or* has had an individual income[FN 1] in excess of $200,000 for each of the two most recent years, or a joint income with such individual's spouse in excess of $300,000 in each of those years, and has a reasonable expectation of reaching the same income level in the current year. + +[__] The undersigned cannot make any of the representations set forth above. + +[FN 1] For purposes of this Questionnaire, "**_income_**" means adjusted gross income, as reported for federal income tax purposes, increased by the following amounts: (a) the amount of any tax exempt interest income received, (b) the amount of losses claimed as a limited partner in a limited partnership, (c) any deduction claimed for depletion, (d) amounts contributed to an IRA or Keogh retirement plan, (e) alimony paid, and (f) any amounts by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section 1202 of the Internal Revenue Code. + +[FN 2] For purposes of this Questionnaire, "**_net worth_**" means the excess of total assets, excluding your primary residence, at fair market value over total liabilities, including your mortgage or any other liability secured by your primary residence only if and to the extent that it exceeds the value of your primary residence. Net worth should include the value of any other shares of stock or options held by you and your spouse and any personal property owned by you or your spouse (*e.g.* furniture, jewelry, other valuables, etc.). + +*** + +The undersigned has executed this Investor Suitability Questionnaire as of the date written below. + +Name of Investor: *____________________________________________* + +Signature: *____________________________________________* + +Name of Investor: *____________________________________________* + +Name of Signing Party (Please Print): *____________________________________________* + +Title of Signing Party (Please Print): *____________________________________________* + +Date Signed: *____________________________________________* diff --git a/notes/Series Seed Notes - Term Sheet.md b/notes/Series Seed Notes - Term Sheet.md new file mode 100644 index 0000000..e2fc4e3 --- /dev/null +++ b/notes/Series Seed Notes - Term Sheet.md @@ -0,0 +1,94 @@ +# TERM SHEET FOR CONVERTIBLE PROMISSORY NOTE FINANCING OF [COMPANY NAME] + +This term sheet is an expression of intent only, does not express the agreement of the parties, is not meant to be binding on the parties and is meant to be used as a negotiation aid by the parties. The parties do not intend to be bound until they enter into a definitive agreement regarding the subject matter of this term sheet. +Issuer: [Company Name], a Delaware corporation (the "**_Company_**"). + +## [Financing Amount][Investors]: + +[Up to $[_________] from investors identified by the Company (the "**_Investors_**", each an "**_Investor_**"). Amounts may be funded in multiple closings.][Investors shall be identified by the Company (the "**_Investors_**", each an "Investor"). Amounts may be funded in multiple closings.] +## Promissory Notes: + +The Company shall issue promissory notes (the "**_Notes_**") in exchange for amounts invested by the Investors. The Notes will have the following principal provisions: + +_Maturity_: Unless earlier repaid or converted, outstanding principal and unpaid accrued interest on the Notes shall be due and payable upon request of the Majority Holders made on or after [date][the date which is [___] months from the initial closing] (the "**_Maturity Date_**"). + +_Interest_: [Simple i][I]nterest shall accrue on an annual basis at the rate of [___]% per annum[, compounded annually]. + +[_Future Notes_: If, while the Notes are outstanding, the Company issues other indebtedness of the Company convertible into equity securities of the Company with material terms that are more favorable tothe Investor (the "Other Debt"), than the terms of the Notes, then the Company will provide each Investor with written notice thereof, together with a copy of all documentation relating to the Other Debt and, upon request of such Investor, any additional information related to the Other Debt as may be reasonably requested by such Investor. The Company will provide such notice to the Investors promptly (and in any event within 30 days) following the issuance of the Other Debt. In the event an Investor determines that the terms of the Other Debt are preferable to the terms of the Notes, such Investor will notify the Company in writing within five days following such Investor's receipt of such notice from the Company. Promptly after receipt of such written notice from such Investor, but in any event within 30 days, the Company will amend and restate such Investor's Note to be substantially identical to the promissory note evidencing the Other Debt, excluding the principal and accrued interest.] + +[Conversion at Qualified Financing: In the event the Company consummates, [on or prior to the Maturity Date][while this Note is outstanding], an equity financing pursuant to which it sells shares of its equity securities (the "Next Round Securities"), with an aggregate sales price of not less than $________, excluding any and all indebtedness under the Notes that is converted into Next Round Securities, and with the principal purpose of raising capital (a "Qualified Financing"), then all principal, together with all unpaid accrued interest under the Notes, shall automatically convert into shares of the Next Round Securities at [___]% of ]the cash price per share paid by the other purchasers of Next Round Securities in the Qualified Financing.[ If the conversion price of the Notes is less than the cash price per share at which Next Round Securities is issued in the Qualified Financing, the Company may, solely at its option, elect to convert the Notes into shares of a newly created series of capital stock having the identical rights, privileges, preferences and restrictions as the Next Round Securities issued in the Qualified Financing, and otherwise on the same terms and conditions, other than with respect to (if applicable): (i) the per share liquidation preference and the conversion price for purposes of price-based anti-dilution protection, which will equal the conversion price; and (ii) the per share dividend, which will be the same percentage of the conversion price as applied to determine the per share dividends of new investors in the Qualified Financing relative to the purchase price paid by such investors.]] + +[Conversion at Qualified Financing: In the event the Company consummates, [on or prior to the Maturity Date][while this Note is outstanding], an equity financing pursuant to which it sells shares of its equity securities ("Next Round Securities"), with an aggregate sales price of not less than $________, excluding any and all indebtedness under the Notes that is converted into Next Round Securities, and with the principal purpose of raising capital (a "Qualified Financing"), then all principal, together with all unpaid accrued interest under the Notes, shall automatically convert into shares of Next Round Securities at the lesser of (i) [___]% of ]the cash price per share paid by the other purchasers of Next Round Securities in the Qualified Financing and (ii) the price obtained by dividing $________ by the number of outstanding shares of common stock of the Company [immediately prior to the Qualified Financing][as of the date of the Note] (assuming conversion of all securities convertible into common stock and exercise of all outstanding options and warrants, [including all shares of common stock reserved and available for future grant under any equity incentive or similar plan of the Company, and/or any equity incentive or similar plan to be created or increased in connection with the Qualified Financing,] but excluding the shares of equity securities of the Company issuable upon the conversion of the Notes or other indebtedness). [ If the conversion price of the Notes is less than the cash price per share at which Next Round Securities are issued in the Qualified Financing, the Company may, solely at its option, elect to convert the Notes into shares of a newly created series of capital stock having the identical rights, privileges, preferences and restrictions as the Preferred Stock issued in the Qualified Financing, and otherwise on the same terms and conditions, other than with respect to (if applicable): (i) the per share liquidation preference and the conversion price for purposes of price-based anti-dilution protection, which will equal the conversion price; and (ii) the per share dividend, which will be the same percentage of the conversion price as applied to determine the per share dividends of new investors in the Qualified Financing relative to the purchase price paid by such investors.]] + +[Optional Conversion at non-Qualified Financing. In the event the Company consummates, on or prior to the Maturity Date, an equity financing pursuant to which it sells shares of Next Round Securities in a transaction that does not constitute a Qualified Financing, then [the Majority Holders][each Investor] shall have the option to treat such equity financing as a Qualified Financing on the same terms set forth herein.] + +[Conversion at Maturity: In the event that the Note remains outstanding on the Maturity Date, then the outstanding principal balance of the Investor's Note and any unpaid accrued interest shall [automatically without any further action by such Investor][upon the election of the Majority Holders][upon the election of such Investor] convert into shares of [the Company's common stock][a newly created series of the Company's preferred stock on the terms and conditions set forth on Exhibit A] at a conversion price equal to the quotient resulting from dividing $________ by the number of outstanding shares of common stock of the Company [as of the Maturity Date][as of the date of the Note] (assuming conversion of all securities convertible into common stock and exercise of all outstanding options and warrants,[ including all shares of common stock reserved and available for future grant under any equity incentive or similar plan of the Company,] but excluding the shares of equity securities of the Company issuable upon the conversion of the Notes or other indebtedness).] + +Change of Control: If the Company is acquired prior to the Qualified Financing, [then at each Investor's option, either (i) such][each] Investor shall receive a cash repayment equal to the outstanding principal and unpaid accrued interest[, plus an additional payment equal to [___]% of the principal amount of such Investor's Note][, or (ii) such Investor's Note shall be converted into shares of common stock at a conversion price equal to the quotient resulting from dividing $________ by the number of outstanding shares of common stock of the Company [immediately prior to the acquisition][as of the date of such Investor's Note] (assuming conversion of all securities convertible into common stock and exercise of all outstanding options and warrants, but excluding the shares of equity securities of the Company issuable upon the conversion of the Notes or other indebtedness)]. + +Pre Payment: The principal and accrued interest may not be prepaid unless approved in writing by the Majority Holders. +Security: The Notes shall be unsecured obligations of the Company. + +## Documentation: + +The investments will be made pursuant to documentation prepared by the Company's legal counsel using forms substantially similar to those made available via an automated document generator located at [https://cooleygo.com/seednotes/](https://cooleygo.com/seednotes/). The Notes may be amended by the Company and the holders of a majority (by unpaid principal amount) of the Notes (the "Majority Holders"). + +## Expenses: +The Company and Investors will each bear their own legal and other expenses with respect to the Notes financing. + +[_Signatures on next page_] +*** +This term sheet is non-binding and is intended solely as a summary of the terms that are currently proposed by the parties. The parties acknowledge that they neither intend to enter, nor have they entered, into any agreement to negotiate a definitive agreement pursuant to this term sheet, and either party may, at any time prior to execution of such definitive agreement, propose different terms from those summarized herein or unilaterally terminate all negotiations pursuant to this term sheet without any liability whatsoever to the other party. Each party shall be solely liable for all of its own fees, costs and other expenses in conjunction with negotiation and preparation of a definitive agreement pursuant to this term sheet. +COMPANY: + +[COMPANYNAME] + +Signature: *____________________________________________* + +Name: *____________________________________________* + +Title: Chief Executive Officer + +[FOR ENTITY INVESTOR USE FOLLOWING SIGNATURE BLOCK:] + +Signature: *____________________________________________* +Name: *____________________________________________* +Title: *____________________________________________* +Subscription Amount: *$____________________________________________* + +[FOR INDIVIDUAL INVESTOR USE FOLLOWING SIGNATURE BLOCK:] + +INVESTOR: *____________________________________________* + +Signature: *____________________________________________* + +Subscription Amount: $*____________________________________________* + + +*** +# [EXHIBIT A + +## TERMS OF SERIES PREFERRED STOCK + +_Securities_: + +A newly created series of preferred stock (the "Series Preferred"). + +_Liquidation preference_: In the event of a liquidation, dissolution or winding up of the Company, Series Preferred will have the right to receive the original purchase price prior to any distribution to common stock. The remaining assets will be distributed pro rata to the holders of common stock. A sale of all or substantially all of the Company's assets or a merger or consolidation of the Company with any other company will be treated as a liquidation of the Company. + +_Conversion_: Series Preferred may be converted at any time, at the option of the holder, into shares of common stock. The conversion rate will initially be 1:1, subject to customary adjustments. + +_Automatic conversion_: Each share of Series Preferred will automatically convert into common stock, at the then applicable conversion rate, upon (i) the closing of a firm commitment underwritten public offering of common stock, or (ii) the consent of the holders of a majority of the then outstanding shares of Series Preferred. + +_General voting rights_: Each share of Series Preferred will have the right to a number of votes equal to the number of shares of common stock issuable upon conversion of each such share of Series Preferred. Series Preferred will vote with common stock on all matters except as specifically provided herein or as otherwise required by law. + +_Protective provisions_: So long as any Series Preferred is outstanding, consent of the holders of a majority of Series Preferred will be required for any action that: (i) alters any provision of the certificate of incorporation if it would adversely alter the rights, preferences, privileges or powers of Series Preferred; or (ii) changes the authorized number of shares of Series Preferred. + +_Market Stand Off_: Holders of Series Preferred will agree not to effect any transactions with respect to any of the Company's securities within 180 days following the Company's initial public offering, provided that all officers, directors and 1% stockholders of the Company are similarly bound. +## [INVESTOR RIGHTS +[_Right to maintain +proportionate ownership_: Each holder of Series Preferred (or one or more of its affiliates) will have a right to purchase its pro rata share of any offering of new securities by the Company, subject to customary exceptions. The pro rata share will be based on the ratio of (x) the number of shares of common stock held by such holder (on an as-converted basis) to (y) the Company's fully-diluted capitalization (on an as-converted and as-exercised basis). This right will terminate on the earlier of (i) immediately prior to the Company's initial public offering or (ii) seven years after the financing.] + +[_Information rights_: As soon as practicable, the Company will deliver to each holder of Series Preferred, (i) unaudited annual financial statements and (ii) unaudited quarterly financial statements. The information rights will terminate upon an initial public offering.] + +]