Venture Capital Kit

ACTION BY UNANIMOUS WRITTEN CONSENT
OF BOARD OF DIRECTORS OF
[ NAME OF CORPORATION]

WHEREAS, it is deemed desirable and in the best interests of this corporation that the following actions be taken by the Directors of this corporation pursuant to this Unanimous Written Consent:

NOW, THEREFORE, BE IT RESOLVED that, pursuant to applicable law, the undersigned, constituting all of the directors of [company name] (the "Corporation"), hereby adopts the following resolutions:

Amendment and Restatement of Articles of Incorporation

WHEREAS, it is deemed to be advisable and in the best interests of the Corporation and its shareholders that the Corporation’s Articles of Incorporation be amended and restated in order to:

1. authorize series of Preferred Stock designated as Series A Preferred Stock, consisting of ________ authorized shares;
2. set forth the rights, preferences and privileges of such Preferred Stock; and
3. make certain other changes.

NOW, THEREFORE, BE IT RESOLVED, that the Corporation''s Articles of Incorporation be, and hereby is, amended and restated to read in its entirety as set forth in the form of Amended and Restated Articles (the “Restated Articles”) presented to the Board; provided, however, that the officers of the Corporation are authorized to make such final changes to the Restated Articles as they deem necessary or advisable; and

RESOLVED FURTHER, that the officers of the Corporation be, and each of them hereby is, authorized, empowered and directed, on behalf of the Corporation, to submit the Restated Articles to the shareholders of the Corporation for consideration thereof; and

RESOLVED FURTHER, that, following approval of the Restated Articles by the shareholders of the Corporation, the officers of the corporation be, and each of them hereby is, authorized, empowered and directed, on behalf of the Corporation, to execute the Restated Articles and to have the Restated Articles filed with the California Secretary of State. Series A Preferred Stock Financing

WHEREAS, there has been presented to this Board of Directors a Series A Preferred Stock Purchase Agreement (the "Purchase Agreement"), by and among the Corporation and the Purchasers listed on Exhibit A thereto (collectively, the “Purchasers”) pursuant to which the Purchasers agree to purchase from the Corporation an aggregate of _______________ shares of Series A Preferred Stock (the "Series A Stock") for $_____ per share; and

WHEREAS, there has been presented to this Board of Directors a Rights Agreement (the "Rights Agreement"), by and among the Corporation, the holders of Series A Preferred Stock and the Founder named therein (“Founder”) providing, among other things, for certain restrictions on the transfer and for certain registration rights with respect to the Series A Preferred Stock and certain shares of Common Stock;

WHEREAS, there has been presented to this Board of Directors a Voting Agreement (the "Voting Agreement"), by and among the Corporation, the Founder and the holders of Preferred Stock listed therein, a Right of First Refusal and Co-Sale Agreement (the “Right of First Refusal and Co-Sale Agreement”) by and among...

ACTION BY WRITTEN CONSENT OF THE SHAREHOLDERS OF
[COMPANY NAME]

In accordance with applicable law and the Bylaws of [company name], a [state of incorporation] corporation (the "Corporation"), the undersigned shareholders of the Corporation hereby adopts the following resolutions by written consent, effective for all purposes as of the date first set forth below:

Amendment and Restatement of Articles of Incorporation

WHEREAS, it is deemed to be advisable and in the best interests of the Corporation and its shareholder that the Corporation’s Articles of Incorporation be amended and restated in order to: (i) authorize series of Preferred Stock designated as Series A Preferred Stock, consisting of ________ authorized shares; (ii) set forth the rights, preferences and privileges of such Preferred Stock; and (iii) make certain other changes.

NOW, THEREFORE, BE IT RESOLVED, that the proposed amendments to the Articles of Incorporation of the Corporation set forth above are hereby authorized and approved and that the officers of the Corporation be, and each of them hereby is, authorized and empowered to execute all such instruments, documents and certificates and to take such other actions as they may deem necessary, advisable or proper to amend and restate the Articles of Incorporation of the Corporation as set forth herein.

Issuance and Sale of Series A Preferred Stock

WHEREAS, it is deemed to be advisable and in the best interests of the Corporation and its shareholder that the Corporation enter into a Series A Preferred Stock Purchase Agreement by and between the Corporation, and the Purchasers listed on Exhibit A thereto...

 ENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
[NAME OF COMPANY]

[_______________], a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:

FIRST: The name of the Corporation is [_______________]. The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on ____________________, ____.

SECOND: Pursuant to Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, this Amended and Restated Certificate of Incorporation restates and integrates and further amends the provisions of the Certificate of Incorporation of the Corporation.

THIRD: The text of the original Certificate of Incorporation and any amendment and restatement thereto is hereby amended and restated to read in its entirety as follows:

ARTICLE I

The name of the Corporation is ______________________________.

ARTICLE II

The address of the registered office of the corporation in the State of Delaware is _____________________, in the City of ______________, County of __________________, and the name of its registered agent at that address is ______________________.

ARTICLE III

The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware.

ARTICLE IV

1. The Corporation is authorized to issue __________ shares of its capital stock, which shall be divided into two classes known as Common Stock, $.001 par value, and Preferred Stock, $.001 par value, respectively. The total number of shares of Common Stock which the Corporation is authorized to issue is ______. The total number of shares of Preferred Stock which the Corporation is authorized to issue is ________.
   
   
2. The Preferred Stock may be divided into such number of series as the Board of Directors may determine. The Board of Directors is authorized to determine and alter the rights, preferences, privileges and restrictions granted to and imposed upon any wholly unissued series of Preferred Stock, and to fix the number of shares of any series of Preferred Stock and the designation of any such series of Preferred Stock. The Board of Directors, within the limits and restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series, may increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series. The first series of Preferred Stock shall be designated as Series A Preferred Stock (the “Series A Preferred Stock”), which shall consist of ____________________ shares, and shall have the rights, preferences, privileges and restrictions hereinafter provided. [Upon the filing of this __________ Amended and Restated Articles of Incorporation, each outstanding share of Common Stock shall be split and converted into ____ shares of Common Stock.]
   
   
3. The Corporation shall from time to time in accordance with the laws of the State of Delaware increase the authorized amount of its Common Stock if at any time the number of shares of Common Stock remaining unissued and available for issuance shall not be sufficient to permit conversion of the Preferred Stock in accordance with the applicable conversion provisions set forth herein.

ARTICLE V

The rights, preferences, privileges and restrictions granted to or imposed upon the respective classes of the Corporation’s shares of capital stock or the holders thereof are as follows:

1. Dividend Rights

a. The holders of the then outstanding Series A Preferred Stock shall be entitled to receive, out of any funds legally available therefor, when and as declared by the Board of Directors, cumulative dividends at an annual rate of __________ percent (__%) of the original Series A Preferred Stock purchase price of ______ dollar ($________) (the “Original Series A Issue Price”) on each then outstanding share of Series A Preferred Stock, payable in preference and priority to any payment of any dividend on any shares of Common Stock of the Corporation, when and as declared by the Board of Directors (the “Cumulative Dividends”). If declared by the Board, such Cumulative Dividends on the Series A Preferred Stock shall be payable annually on each ________ __, commencing on ___________, ____. [The right to such dividends on the Series A Preferred Stock shall not be cumulative, and no rights shall accrue to the holders of Series A Preferred Stock by reason of the fact that dividends on such shares are not declared or paid in any prior year] [or] [The right to such dividends on the Series A Preferred Stock shall be cumulative, and shall be declared and paid upon the occurrence of any of the following events:

1. on redemption of the Series A Preferred Stock;
   
   
2. on any event described in Article V.2 hereof;
   
   
3. on the public offering and close of the sale of any of the Corporation’s securities in a public offering which results in the automatic conversion of the Series A Preferred Stock pursuant to Article V.5.1(b) hereof; or
   
   
4. when and as declared by the Board.] Cumulative Dividends, if paid, or if declared and set apart for payment, must be paid on, or declared and set apart for payment on, all then outstanding shares of Series A Preferred Stock. After such Cumulative Dividends on the Series A Preferred Stock shall have been declared and paid or set apart for any one year, if the Board shall elect to declare additional dividends out of funds legally available therefor in excess of the Cumulative Dividends on the Series A Preferred Stock for the year in question, such additional dividends shall be declared in equal amounts per share on all then outstanding shares of the Series A Preferred Stock and the Common Stock; provided, however, that notwithstanding the foregoing, no dividends shall be paid or declared by the Corporation on the Common Stock without the prior written consent of the holders of at least a majority of the then outstanding Series A Preferred Stock to the payment of any such dividends.
   
   b. Subject to the rights of holders of all classes of stock at the time outstanding having prior rights as to dividends, the holders of the Common Stock shall be entitled to receive, when and as declared by the Board of Directors, out of any assets of the Corporation legally available therefor, such dividends as may be declared from time to time by the Board of Directors. No dividend shall be paid with respect to the Common Stock during any year until the Cumulative Dividends owed on the Series A Preferred Stock shall have been paid or declared and set apart during that year.
   
   c. Dividends shall be paid by forwarding a check, postage prepaid, to the address of each holder (or, in the case of joint holders, to the address of any such holder) of the Series A Preferred Stock and/or the Common Stock, as applicable, as shown on the books of the Corporation, or to such other address as such holder specifies for such purpose by written notice to the Corporation.
   

2. Liquidation Rights

In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the holders of each share of Series A Preferred Stock then outstanding shall be entitled to receive, out of the assets of the Corporation available for distribution to its stockholders, before any amount shall be paid to holders of Common Stock, the Original Series A Issue Price for each share of Series A Preferred Stock (appropriately adjusted for any stock splits, stock dividends, combinations and similar events), plus their Cumulative Dividends (the “Liquidation Preference”). If, upon the occurrence of the liquidation, dissolution or winding up of the Corporation, the assets and surplus funds distributed among the holders of Series A Preferred Stock shall be insufficient to permit the payment to such holders of their Liquidation Preference, then the entire assets and surplus funds of the Corporation legally available for distribution shall be distributed ratably among the holders of Series A Preferred Stock. If, upon the occurrence of the liquidation, dissolution or winding up of the Corporation, after the payment to the holders of Series A Preferred Stock of their Liquidation Preference, assets or surplus funds remain in the Corporation, the holders of Series A Preferred Stock and the Common Stock shall be entitled to share in all such remaining assets and surplus funds in the same manner as if all shares of Series A Preferred Stock had been converted into Common Stock at the then effective Conversion Price (as defined in Section 5 below) immediately prior to the liquidation, dissolution or winding up of the Corporation.

At the election of the holders of a majority of the outstanding shares of the Series A Preferred Stock, for purposes of this Section 2, a liquidation, dissolution or winding up of the Corporation shall be deemed to be occasioned by, and to include, the Corporation’s sale, conveyance or disposition of all or substantially all of its assets or the effectuation by the Corporation (or third party acquirors) of a transaction or series of related transactions in which more than 50% of the voting power of the Corporation is disposed of, excluding transfers by the holders of the Series A Preferred Stock not...

[Letterhead]

Re: Board Observation Rights

Ladies and Gentlemen:
This letter will confirm our agreement that pursuant to your purchase of shares of Series __ Preferred Stock of _________________ (the “Company”), ______________________ (“Investor”) will be entitled to the following rights, in addition to the rights specifically provided in the documents between the Company and Investor of even date herewith.

1. Investor shall be entitled to consult with management of the Company on significant business issues, including management’s proposed annual operating plans, and management will meet with a representative(s) of Investor regularly during each year at mutually agreeable times for such consultation and to review progress in achieving said plans.
2. Investor may examine the books and records of the Company and inspect its facilities and may request information at reasonable times and intervals concerning the general status of the Company’s financial condition and operations provided that access to highly confidential proprietary information and facilities need not be provided.
3. The Company shall give a representative of Investor copies of all notices, minutes, consents, and other material that it provides to its directors at or about the same time as delivered to the directors; provided, however, that the Company reserves the right to exclude such representative from access to any material or portion thereof if the Company believes that such exclusion is reasonably necessary to preserve the attorney-client privilege or to protect highly confidential proprietary information. The representative of the Investor shall have the right to attend in a non-voting observer status all meetings of the Board of Directors of the Company and all meetings of any material nature of the committees of the Board. . .

Due Diligence Checklist

In connection with a potential transaction with venture investors, please provide us with the following materials or information relating to ______________________________, and any subsidiaries (together, the “Company”). Upon review, we may request additional documents. If compiling any of the requested items would be unduly burdensome, please let us know so that we may arrange a less burdensome alternative. If you have already delivered any of the information, please so indicate and you need not provide an additional copy.

A. Corporate Documents of the Company and Subsidiaries

1. Articles of Incorporation and all amendments thereto.
2. Bylaws and all amendments thereto.
3. Minutes of all Board of Directors, committee and shareholders meetings and all consents to actions without meeting.
4. List of states and jurisdictions in which qualified to do business and in which the Company has offices, holds property or conducts business.
5. Material information or documents furnished to shareholders and to directors during the last two years.
6. Most recently obtained good standing certificates for all states and jurisdictions where the Company is qualified to do business.

B. Previous Issuances of Securities

1. All applications and permits for issuance/transfer of securities.
2. Sample copy of stock certificates, warrants and options.
3. Stockholder information, indicating number of shares held, dates of issuance, and consideration paid.
4. All stock option, stock purchase and other employee benefit plans and forms of agreements.
5. List of any outstanding stock options and warrants.
6. Any voting trust agreements, buy/sell agreements, stockholder agreements, warrant agreements, proxies, or right of first refusal agreements.
7. Any registration rights or pre-emptive rights agreements.
8. Powers of attorney on any matter.
9. Convertible debt instruments.
10. Other contracts, arrangements, or public or private documents or commitments relating to the stock of the Company.
11. Any debt arrangements, guarantees or indemnification between officers, directors or the shareholder and the Company.

C. Material Contracts and Agreements<

1. List of banks or other lenders with whom Company has a financial relationship (briefly describe nature of relationship - lines of credit, equipment lessor, etc.).
2. Credit agreements, debt instruments, security agreements, mortgages, financial or performance guaranties, indemnifications, liens, equipment leases or other agreements evidencing outstanding loans to which the Company is a party or was a party within the past two years.
3. All material correspondence with lenders during the last three years, including all compliance reports submitted by the Company or its accountants.
4. List of major clients and their locations.
5. Any other material contracts.

D. Litigation

1. Copies of any pleadings or correspondence for pending or prior lawsuits involving the Company or the Founders.
2. Summary of disputes with suppliers, competitors, or customers.
3. Correspondence with auditor or accountant regarding threatened or pending litigation, assessment or claims.
4. Decrees, orders or judgments of courts or governmental agencies.
5. Settlement documentation.

E. Employees and Related Parties

1. A management organization chart and biographical information.
2. Summary of any labor disputes.
3. Correspondence, memoranda or notes concerning pending or threatened labor stoppage.
4. List of negotiations with any group seeking to become the bargaining unit for any employees.
5. All employment and consulting agreements, loan agreements and documents relating to other transactions with officers, directors, key employees and related parties.
6. Schedule of all compensation paid to officers, directors and key employees for most recent fiscal year showing separately salary, bonuses and non-cash compensation (i.e. use of cars, property, etc.).
7. Summary of....

DUE DILIGENCE QUESTIONNAIRE

This questionnaire is intended to help us obtain basic information about your business in connection with [describe potential transaction]. Please answer the questions listed below for _____________ and its subsidiaries in the spaces provided or use an attachment. Please return the completed questionnaire to __________________________ at________________________ (___)_____, with the other documents that we ask you to furnish. If you need clarification or have questions, please call ________________. Once we have reviewed your completed questionnaire and documents, we may need further information.

1. Capitalization

1. Who were the founders of the company?
2. How have you been capitalized?
3. Who are your major investors?
4. Please describe and attach a schedule showing by stockholder all outstanding common and preferred stock, options and warrants, and other rights to acquire equity securities, including where applicable exercise prices and vesting dates.
5. What vesting arrangements are in place for the founders’ shares?

2. Banks

1. With which banks do you have relationships?
2. Describe any existing lines of credit, term loans or other debt. Please attach copies of relevant documents. Please describe any security interests in your assets granted to any third party or parties.
3. What signature authority is required for checks over $50,000?

3. Employment Agreements

1. Please list any employment or similar agreements.
2. Have all of your past and existing employees, officers and consultants signed proprietary information and invention agreements? Y / N
3. If not, identify who has not by name, title, and dates or employment or consultancy.
4. Are all of your employees “at will” and terminable without liability? If not, please give details.
5. Please attach your form of proprietary information and invention agreement.

4. Officers, Directors and Employees

1. Please identify your officers, directors and key employees.
2. Have any of them been subject to a bankruptcy proceeding or been an officer of a firm subject to bankruptcy proceedings? If the answer is “yes”, please identify each individual by name and position.
3. Have any of them been subject to any criminal proceeding (other than traffic violations or other minor offenses)? If the answer is “yes”, please identify each individual by name and position, and provide a description of the nature of the proceeding(s).
4. Have any....

INVESTORS RIGHTS AGREEMENT

This Agreement is made as of the ____ day of __________, 20__ by and among [Name of Company], a ____________________ corporation with a principal place of business at ____________________ (the “Company”) and each of the stockholders of the Company listed in Exhibit A attached hereto (collectively the “Stockholders”).

Background
The Company currently has issued and outstanding __________ shares of its Common Stock, and __________ options to purchase Common Shares. On the date of this Agreement, the Company is issuing and selling shares of its Series A Preferred Stock (“Series A Shares”) pursuant to the _____________ Series A Preferred Stock Purchase Agreement (the “Series A Stock Purchase Agreement”), and is issuing Series A Shares upon conversion of certain outstanding debt of the Company. The purchasers of the Series A Shares have required this Agreement as a condition to the closing of their investment under the Series A Stock Purchase Agreement. Certain defined terms are defined in Article IV.

AGREEMENT ARTICLE I

COVENANTS OF THE COMPANY

1.01

Affirmative Covenants of the Company. The Company covenants and agrees that until the consummation of a Qualified Public Offering, it will perform and observe the following covenants and provisions, and will cause each Subsidiary, if and when such Subsidiary exists, to perform and observe such of the following covenants and provisions as are applicable to such Subsidiary:

Financing. Promptly, fully and in detail, inform the Board of Directors of any discussions, offers or contracts relating to possible financing of any material nature for the Company, whether initiated by the Company or any other Person. New Developments. Cause all new technological developments, patentable or unpatentable inventions, discoveries or improvements by the Company’s or any Subsidiary’s employees or consultants to be documented in a reasonable manner and, where prudent and appropriate, to file and prosecute United States and foreign patent, copyright, trademark, mask work or other Intellectual Property Right applications relating to and protecting the Company’s inventions, discoveries or developments on behalf of the Company or any Subsidiary...

TERM SHEET FOR POTENTIAL INVESTMENT
IN
[NAME OF COMPANY]

Confidential

This term sheet summarizes the principal terms with respect to a potential private placement of equity securities of __________ (the "Company") by a group of investors led by __________.  This term sheet is intended solely as a basis for further discussion and is not intended to be and does not constitute a legally binding obligation except as provided under "Confidentiality," "Exclusivity" and "Expenses" below.  No other legally binding obligations will be created, implied, or inferred until a document in final form entitled "Stock Purchase Agreement," is executed and delivered by all parties.  Without limiting the generality of the foregoing, it is the parties intent that, until that event, no agreement shall exist among them and there shall be no obligations whatsoever based on such things as parol evidence, extended negotiations, "handshakes," oral understandings, or courses of conduct (including reliance and changes of position), except as provided under "Confidentiality," "Exclusivity" and "Expenses" below.

The Company and the investors are discussing a private placement of shares of Preferred Stock on the following terms:

Amount of Investment:	$
Valuation of the Company:	$              Pre-Money on a fully diluted basis $              Post-Money on a fully diluted basis
Type of Security:	Shares of the Company's Series __ Preferred Stock ("Preferred"), convertible into shares of the Company's Common Stock ("Common").
Price Per Share:	$              ("Original Purchase Price").
Capitalization of the Company:	The current capitalization of the Company is set forth in Exhibit 1, and the capitalization of the Company after this proposed financing is set forth in Exhibit 2.
Rights,Preferences Privileges and Restrictions of Preferred Stock:	(1) Dividend Provisions:[Starting on January 1, 20__,] [T]he holders of the Preferred will be entitled to receive dividends [at the rate of __% of the Original Purchase Price] whenever funds are legally available and when and as declared by the Board.  No dividend shall be paid on the Common at a rate greater than the rate at which dividends are paid on Preferred (based on the number of shares of Common into which the Preferred is convertible on the date the dividend is declared).  Dividends on Preferred will be in preference to dividends paid on the Common.  Dividends on the Preferred will be noncumulative.
	(2) Liquidation Preference:  In the event of any liquidation, dissolution or winding up of the Company, the holders of Preferred will be entitled to receive in preference to the holders of Common an amount ("Liquidation Preference") equal to the Original Purchase Price plus any dividends declared on the Preferred but not paid [and then to share with the holders of the Common in the remaining assets on an as-if-converted basis].  At the option of the holders of Preferred, the effectuation by the Company or third party acquirors of a transaction or series of transactions in which more than [50%] [80%] of the voting power of the Company is disposed of to a single person or group of affiliated persons or the consolidation or merger of the Company with or into any other corporation or corporations or the sale of all or substantially all of its assets shall be deemed to be a liquidation, dissolution or winding up for purposes of the liquidation preference.

	(3) Conversion:  A holder of Preferred will have the right to convert Preferred, at the option of the holder, at any time, into shares of Common.  The total number of shares of Common into which Preferred may be converted initially will be determined by dividing the Original Purchase Price by the conversion price.  The initial conversion price will be the Original Purchase Price.  The conversion price will be the subject of adjustment to reflect stock dividends, stock splits and similar events and as provided in paragraph (5) below.
	(4) Automatic Conversion:  The Preferred will be automatically converted into Common, at the then applicable conversion price, upon the closing of a sale of the Company's shares of Common Stock pursuant to a firm commitment underwritten public offering by the Company at a public offering price per share (prior to underwriter commissions and discounts) that is not less than $_____ in an offering greater than [$15 million].
	(5) Antidilution Provisions:  The conversion price of the Preferred will be subject to adjustment (i) for stock dividends, stock splits, or similar events, and (ii) on a weighted average basis to prevent dilution in the event that the Company issues additional shares at a purchase price less than the applicable conversion price.  No adjustment to the conversion price will occur for any issuance of additional shares at a purchase price in excess of the current conversion price.  Conversion prices will not be adjusted because of (a) conversion of Preferred Stock, (b) the issuance and sale of, or the grant of options to purchase, ________ shares of Common pursuant to the Company's employee stock purchase or option plans (the "Reserved Employee Shares"), or (c) options or stock issued to equipment lessors and bank lenders.
	(6) Voting Rights:  Except with respect to election of Directors, a holder of Preferred will have the right to that number of votes equal to the number of shares of Common issuable upon conversion of its Preferred at the time the shares are voted.  Election of Directors will be as described under "Board Representation" below.
	(7) Protective Provisions:  [So long as there are at least ____ shares of Preferred outstanding,] consent of the holders of at least a majority of the outstanding Preferred will be required for any action which would: (i) amend or repeal any provision of, or add any provision to, the Company's [Articles] [Certificate] or Bylaws to change the rights of the Preferred, or increase or decrease the number of authorized shares of the Preferred; (ii) create any new series or class or shares having a preference or priority as to dividends or assets superior to or on a parity with that of the Preferred; (iii) create any bonds, notes or other obligations convertible into, exchangeable for or having option rights to purchase shares of stock with any preference or priority as to dividends or assets superior to or on a parity with that of the Preferred; (iv) reclassify any class or series of Common into shares with a preference or priority as to dividends or assets superior to or on a parity with that of the Preferred; (v) apply any of its assets to the redemption or acquisition of any shares of Common, except from employees, advisors, officers, directors, consultants and serviceproviders of the Company on terms approved by the Board; or (vi) agree to a merger, sale or consolidation of the Company with another entity or the effectuation of any transaction or series of related transactions in which more than [50%] [80%] of the voting power of the Company is disposed.

Redemption:	The Company shall redeem the Preferred in [three] equal annual installments commencing [six] years from the date of purchase by paying in cash an amount equal to the Original Purchase Price plus any declared but unpaid dividends [plus __% for each year the Preferred Stock is outstanding].  To the extent that the Company may not at any such date legally redeem such Preferred, such redemption will take place as soon as legally permitted.
Information and Registration Rights	(1) Registration Rights Agreement:  The information and registration rights provisions between the Company and....

 

[Name of Company]

PREFERRED STOCK PURCHASE AGREEMENT

Dated as of ____________________

PREFERRED STOCK PURCHASE AGREEMENT

Preferred Stock Purchase Agreement (this "Agreement"), dated as of ________________, by and among __________________, a Delaware corporation (the "Company"), and the purchasers listed on Schedule 1.1 hereto (the "Purchasers").

ARTICLE 1

PURCHASE AND SALE OF STOCK

SECTION 1.1 Delivery. Subject to the provisions of this Agreement, the Purchasers agree to purchase at the Closing (as defined below), and the Company agrees to sell and issue to the Purchasers at the Closing, shares of Series A Preferred Stock (the "Shares") of the Company, for the purchase price of $_____ per share. The name and address of each Purchaser, and the number of Shares to be acquired by each Purchaser, are set forth in Schedule 1.1. The purchase and sale of Shares shall take place at the offices of the Company at 10:00 a.m. West Coast time, on ________________ or at such other time and place as the Company and a majority-in-interest of the Purchasers agree upon in writing (which time and place are designated as the "Closing" and which date is designated as the "Closing Date"). At the Closing the Company shall deliver to each Purchaser a certificate representing the Shares which such Purchaser is purchasing against delivery to the Company by such Purchaser by wire transfer, certified check or immediately available funds, or other manner of payment approved by the Company, in the amount of the purchase price therefor payable to the Company's order.

SECTION 1.2 Subsequent Sales of Shares. At any time up to 180 days following the Closing, the Company may sell up to __________ shares of additional Series A Preferred Stock to such additional investors as may be approved by the Board of Directors of the Company. All such sales shall be made on the terms and conditions set forth in this Agreement. Any Shares sold pursuant to this Section 1.2 shall be deemed to be "Series A Preferred Stock" and shall be deemed to be "Shares" sold pursuant to this Agreement, any purchasers thereof shall be deemed to be "Purchasers" for all purposes under this Agreement, and any such subsequent sale shall be deemed to occur at a "Closing" and the date of any such Closing shall be deemed to be a "Closing Date." The new purchasers shall become parties to this Agreement by signing a counterpart signature page hereto.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants that, except as set forth in the Disclosure Schedule attached hereto:

SECTION 2.1 Organization, Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power and corporate authority to own, lease and operate its property and assets and to conduct its business as presently conducted and as proposed to be conducted by it. The Company has full corporate power and corporate authority to enter into and perform its obligations under this Agreement, the Rights Agreement in the form of Exhibit B hereto (the "Rights Agreement") and the Co-Sale Agreement (as defined below) (collectively, the "Transaction Documents"), and to carry out the transactions contemplated by the Transaction Documents. The nature of the Company's business and its ownership or leasing of property do not require that the Company become qualified as a foreign corporation in any state or jurisdiction other than where the failure to so qualify will not have a material adverse impact on the Company. Complete and correct copies of the Amended and Restated Certificate of Incorporation (the "Restated Certificate") and By-laws of the Company, as amended to date, have been delivered to counsel for the Purchasers.

SECTION 2.2 Capitalization.

1. The capital stock of the Company consists of:
   1. ____________ shares of authorized preferred stock, par value $.001 per share ("Preferred Stock"), ____________ shares of which are designated Series A Preferred Stock, of which no shares are issued and outstanding prior to the Closing Date.
   2. ____________ shares of authorized common stock, par value $.001 per share ("Common Stock"), of which ____________ shares are issued and outstanding as of the date of this Agreement; ____________ shares are reserved for issuance pursuant to employee stock purchase and/or option ownership plans that have been adopted by the Company for officers, directors, employees and consultants; and ____________ shares are reserved for issuance upon conversion of the Shares.
      
      
2. Set forth in Schedule 2.2 hereto is a complete and correct list of all security holders of the Company, showing their holdings of issued and outstanding shares of Company securities (including options and warrants) as of the date of this Agreement. To the knowledge of the Company, each such holder is the sole beneficial owner of all of the shares as to which such holder is the record holder. The outstanding shares of Common Stock are duly authorized, validly issued, fully paid and non-assessable. Except as set forth in Schedule 2.2 or the Rights Agreement, holders of shares of the Company's Common Stock and Preferred Stock have no preemptive rights. Except for the transactions contemplated by this Agreement and its exhibits, and except as set forth in Schedule 2.2, there are

   1. no outstanding warrants, options, convertible securities or rights to subscribe for or purchase any capital stock or other securities from the Company,
   2. to the Company's knowledge, no voting trusts or voting agreements among, or irrevocable proxies executed by, stockholders of the Company,
   3. no existing rights of stockholders to require the Company to register any securities of the Company or to participate with the Company in any registration by the Company of its securities,
   4. to the Company's knowledge, no agreements among stockholders providing for the purchase or sale of the Company's capital stock and
   5. no obligations (contingent or otherwise) of the Company to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend or make any other distribution in respect thereof.

SECTION 2.3 Validity of Stock. The Shares to be sold pursuant to this Agreement, when issued, sold, and delivered in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and non-assessable. The shares of Common Stock issuable upon conversion of the Shares have been duly and validly reserved for issuance and, upon issuance in accordance with the terms of the Restated Certificate, will be duly and validly issued, fully paid and non-assessable.

SECTION 2.4 Subsidiaries. The Company does not own any capital stock, partnership interests or other equity interests of, or control, directly or indirectly, any other corporation, partnership, association or business entity.

SECTION 2.5 Financial Statements. The Company has furnished the Purchasers with its unaudited balance sheet as of ____________ (the "Current Balance Sheet") and its unaudited statement of operations and statement of cash flows for the ______ period ended _________, ____ (collectively, the "Financial Statements"). Except as set forth in Schedule 2.5, the Financial Statements are true and correct in all material respects, have been prepared in accordance with the books and records of the Company, and, except as set forth on Schedule 2.5, have been prepared in accordance with generally accepted accounting principles ("GAAP") consistently applied, and fairly present the financial position and cash flows of the Company as of such date and the results of its operations for the periods then ended.

The tangible assets designated on the Current Balance Sheet are shown thereon at actual cost, less depreciation and amortization, and, in the case of plant and equipment, are in good operating condition and state of repair in all material respects. All accounts receivable (if any) shown on the Current Balance Sheet constitute accounts receivable resulting from the sale of goods and services in the ordinary course of business, and, to the knowledge of the Company, such accounts receivable are subject to no conditions as to payment, offsets, counterclaims, defenses of any kind, returns, allowances, or credits other than to the extent of the allowance for doubtful accounts shown thereon.

SECTION 2.6 Insurance. Set forth on Schedule 2.6 is a true and complete list of all current insurance policies of the Company.

SECTION 2.7 Authorization; Approvals. All action on the part of the Company and its stockholders necessary for the authorization, execution, delivery, and performance of all its obligations under the Transaction Documents and for the authorization, issuance, and delivery of the Shares being sold under this Agreement, has been taken. Each of the Transaction Documents constitutes the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms. The Company has obtained or will obtain prior to the Closing all necessary consents, authorizations, approvals and orders, and has made all registrations, qualifications, designations, declarations or filings with all federal, state, or other relevant governmental authorities, required on the part of the Company in connection with the consummation of the transactions contemplated by the Transaction Documents.

SECTION 2.8 No Conflict with Other Instruments. The execution, delivery and performance of each of the Transaction Documents does not and will not result in any violation of, conflict with, or constitute a default under any term or provision of (i) the Restated Certificate or Bylaws; (ii) any judgment, decree or order to which the Company is a party or by which its property is bound; (iii) any agreement, contract, understanding, indenture or other instrument to which the Company is a party, the effect of which would give rise to a material adverse effect on the Company; or (iv) any statute, rule or governmental regulation applicable to the Company or any of its property.

SECTION 2.9 Absence of Undisclosed Liabilities; Changes.

1. Except as provided in documents referred to in Section 2.15 hereto or reflected in the Current Balance Sheet, the Company has no liability or obligation, which individually or in the aggregate exceeds $50,000, absolute or contingent, including, without limiting the generality of the foregoing, any tax liabilities due or to become due, except:

   1. obligations and liabilities incurred after the date of the Current Balance Sheet in the ordinary course of business that are not individually or in the aggregate material,
   2. obligations under contracts made in the ordinary course of business and
   3. obligations under this Agreement. Without limiting the generality of the foregoing, the Company does not know of, and has no reasonable ground to believe that there is any basis for the assertion against the Company of, any material liabilities of the Company not provided for in the documents described in Section 2.15 or reflected in the Current Balance Sheet.

2. Since the date of the Current Balance Sheet, except as contemplated by this Agreement or as disclosed in the Schedules hereto, the Company has been operated in the ordinary and usual course of business, and there has not been:

   1. any material change in the (A) assets, liabilities, condition (financial or otherwise), business or prospects of the Company from that reflected in the Current Balance Sheet, or (B) operating results of the Company from that reflected in the Current Balance Sheet;
   2. any damage, destruction or loss, whether or not covered by insurance, affecting in any material way the assets, properties, condition (financial or otherwise), operating results, prospects or business of the Company (as such business is presently conducted and as it is proposed to be conducted);
   3. any waiver by the Company of a material right or of a material debt owed to it;
   4. any satisfaction or discharge....

[NAME OF COMPANY]

SERIES A PREFERRED STOCK PURCHASE AGREEMENT

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

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

1. Authorization and Sale of Preferred Shares.

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

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

2. Closing Date; Delivery.

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

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

3. Representations and Warranties.

The Company hereby represents and warrants to the Purchasers that:

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

3.2 Capitalization.

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

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

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

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

3.6 Governmental Consents.

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

RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT

THIS RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT is made this day of , ____, by and among , a __________ corporation (the "Company"), the Investors listed on the signature pages A hereto (collectively, the "Investors" and each individually, an "Investor") and the individuals identified on the signatures pages hereto as Key Shareholders who shall have executed a counterpart signature page hereto (collectively, the "Key Shareholders" and each individually, a "Key Shareholder") and their respective spouses, if any.

RECITALS:

1. The Investors are purchasing shares of the Company's Series A Preferred Stock (the "Series A Stock"), pursuant to that certain Series A Preferred Stock Purchase Agreement dated as of the date hereof (the "Series A Stock Purchase Agreement").

2. The execution of this Agreement by the parties hereto is a condition to the obligation of the Investors to purchase Series A Stock under the Series A Stock Purchase Agreement.

NOW THEREFORE, in consideration of the mutual promises and covenants contained herein the parties hereto agree as follows:

1. Right of First Refusal on Key Shareholder Stock.

a.  If at any time a Key Shareholder reaches agreement with any third party to sell or otherwise assign for consideration shares of the Company's common stock ("Common Stock"), or other securities of the Company convertible into or exchangeable for Common Stock (hereinafter, the "Common Equity Securities") to such third party, the Key Shareholder shall notify the Company and the Investors in writing (the "Sale Notice") prior to any such sale, of the terms of the proposed sale, assignment or transfer, and shall grant the Company, first, and then the Investors, second, the right to purchase all such securities on such terms as hereinafter set forth (the securities so offered being referred to herein as the "Offered Securities")....

STOCKHOLDER VOTING AGREEMENT

This Stockholder Voting Agreement is made by and among ________________________, a __________ corporation (the "Company"), the persons listed on the signature line hereof as the "Common Stockholders" (collectively, the "Common Stockholders") and, the persons listed in the signature line hereof as the "Series A Stockholders" (collectively, the "Series A Stockholders").

WHEREAS, the Common Stockholders are the holders of a majority of the Company's Common Stock and, the Series A Stockholders are acquiring shares of the Company's Series A Preferred Stock pursuant to a Series A Preferred Stock Purchase Agreement of even date herewith (the "Series A Purchase Agreement"); and

WHEREAS, the Bylaws of the Company have been amended on the date hereof to provide for a Board of Directors consisting of five (5) directors;

WHEREAS, the Common Stockholders and the Series A Stockholders desire that the Board of Directors of the Company be comprised of designated representatives as provided in this Agreement; and

NOW, THEREFORE, in consideration of the covenants set forth herein, the parties hereto agree as follows:

SECTION 1. Definitions. For purposes of this Agreement the following terms shall have the meanings set forth below:

"Common Stockholders' Shares." The shares of Common Stock issued and owned by the Common Stockholders as of the date hereof and any additional securities of the Company acquired by any of the Common Stockholders that are entitled to vote for the election of directors of the Company acquired during the term of this Agreement.

"Series A Stockholders' Shares." The shares of Series A Preferred Stock issued and owned by the Series A Preferred Stockholders as of the date hereof, any Common Stock acquired upon conversion thereof, and any additional securities of the Company acquired by the Series A Stockholders that are entitled to vote for the election of directors acquired during the term of this Agreement.

"Shares." The Common Stockholders' Shares and the Series A Stockholders' Shares, collectively.

SECTION 2. Agreement to Constitute Board.

1. Each of the parties hereby agrees and covenants to vote all of the Shares then held, as is necessary at a meeting of stockholders or by written consent in lieu of meeting, to cause to be elected or appointed to the Board of Directors of the Company:

   1. the Company's Chief Executive Officer, who on the date hereof is ___________________________;

   2. ___________________________, so long as he continues to hold at least __ shares of Common Stock and who also shall serve as Chairman of the Board;

   3. the ______________________ Representative, which shall consist of one (1) designee selected by ______________________ and its affiliates, which Representative on the date hereof is [______________________];

   4. the Series A Representative, which shall consist of one (1) designee selected by a majority in interest of the holders of Series A Shares, which Representative on the date hereof is ______________________; and

   5. a person with experience relevant to the Company's business, chosen by a majority-in-interest of the other directors, which person on the date hereof is ______________________.

2. In the event of any vacancy on the Board of Directors, the Stockholders will vote their Shares to fill such vacancy with a nominee designated in the same manner as the person who held the directorship so vacated. The Stockholders agree that no director may be removed from office without the approval of the party(ies) who have the right to designate such director....

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

CONVERTIBLE PROMISSORY NOTE

[Principal Amount]

For value received, ___________, a [State] corporation (the “Company”), promises to pay to ___________ (the “Holder”), the principal sum of __________________________ Dollars ($_________). Interest shall accrue from the date of this Note on the unpaid principal amount at a rate equal to ______ % per annum, compounded annually. This Note is subject to the following terms and conditions.

1. Maturity. Subject to Section 2, principal and any accrued but unpaid interest under this Note shall be due and payable upon demand by the Holder at any time after __________ (the “Maturity Date”). Notwithstanding the foregoing, the entire unpaid principal sum of this Note, together with accrued and unpaid interest thereon, shall become immediately due and payable upon the insolvency of the Company, the commission of any act of bankruptcy by the Company, the execution by the Company of a general assignment for the benefit of creditors, the filing by or against the Company of a petition in bankruptcy or any petition for relief under the federal bankruptcy act or the continuation of such petition without dismissal for a period of 90 days or more, or the appointment of a receiver or trustee to take possession of the property or assets of the Company.
   
   
2. Conversion.
   1. Investment by the Holder. The entire principal amount of and accrued interest on this Note shall be converted into shares of the Company’s equity securities (the “Equity Securities”) issued and sold at the close of the Company’s next equity financing in a single transaction or a series of related transactions yielding gross proceeds to the Company of at least $_________ in the aggregate the conversion of the Notes with a fully diluted pre-money valuation of the Company being at least $____ (the “Next Equity Financing”). The number of shares of Equity Securities to be issued upon such conversion shall be equal to the quotient obtained by dividing (i) the entire principal amount of this Note plus accrued interest by (ii) the price per share of the Equity Securities...

[ABC, Inc.]

Summary of Principal Terms for an Offering of Series B Preferred Stock

Company:	[ABC, Inc.] (the "Company")
Amonut:	[$5,000,000]
Type of Security:	Series B Convertible Preferred Stock
Number of Shares:	[1,000,000]
Price per Share:	[$5.00] (the "Original Purchase Price"). The Original Purchase Price represents a fully-diluted pre-money valuation of [$50] million.
Investors:	[SD Venture Fund] and its affiliated funds (collectively referred to as the "Investors")
Anticipated Closing Date:	____________________
Pari Passu:	Except as set forth below, the Series B Preferred Stock (the "Preferred") will be treated as pari passu with the Series A Preferred of the Company (the "Prior Preferred" with the Preferred and Prior Preferred collectively referred to as the "Series Preferred").
Dividends:	The holders of the Preferred shall be entitled to receive out of legally available funds, dividends at a rate of [8%] of the Original Purchase Price per annum, payable when, as and if declared by the Board of Directors. Dividends shall not be cumulative.
Liquidation Preference:	In the event of any liquidation, dissolution or winding up of the Company, the holders of the Series Preferred shall be entitled to receive in preference to the Common Stock (the "Common") an amount payable in cash equal to the Original Purchase Price for the Preferred and the original purchase price for the Prior Preferred plus declared and unpaid dividends (the "Liquidation Preference"). After the payment of the Liquidation Preference to the holders of the Series Preferred, the remaining assets shall be distributed ratably to the holders of the Common and the Series Preferred (assuming the conversion of all Preferred Stock).A merger, reorganization or other acquisition type transaction in which control of the Company or all or substantially all of its assets is transferred will be treated by holders of the Series Preferred as a liquidation....

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

Warrant No.:
Number of Shares:
Date of Issuance:
(subject to adjustment)

[Name of Company]
WARRANT TO PURCHASE SHARES OF COMMON STOCK

THIS CERTIFIES THAT, for value received, ________________ and its permitted assignees are entitled to subscribe for and purchase ________ shares of the fully paid and nonassessable Common Stock (as adjusted from time to time pursuant to the provisions of this Warrant), the “Shares”) of [Name of Company] (the “Company”), at the price and terms set forth below. As used herein, the term “Date of Grant” shall mean the Date of Grant listed on the signature page hereof.

1. Amount of Shares, Exercise Price and Term:
   (a) This Warrant is exercisable for the following amounts, exercise price and terms:
   
   Number of Shares __________
   Exercise Price per Share $_______
   Last Day to Exercise with Respect to these Shares (Midnight, West Coast Time) _____________________
   
   
2. Warrant Price.
   The price at which this Warrant may be exercised shall be as set forth in Section 1, and such other price as shall result, from time to time, from the adjustments specified in Section 5 hereof is herein referred to as the “Warrant Price” or “Warrant Price”.
   
   
3. Method of Exercise; Payment; Issuance of New Warrant.
   Subject to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the holder hereof, in whole or in part and from time to time, at the election of the holder hereof, by (a) the surrender of this Warrant (with the notice of exercise substantially in the form attached hereto as Exhibit 1 duly completed and executed) at the principal office of the Company and by the payment to the Company, by certified or bank check, by wire transfer to an account designated by the Company (a “Wire Transfer”), or by the cancellation by the holder hereof of indebtedness or other obligations of the Company to such holder of an amount equal to the then applicable Warrant Price multiplied by the number of Shares then being purchased, or (b) if in connection with a registered public offering of the Company’s securities, the surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit 1 duly completed and executed) at the principal office of the Company together with notice of arrangements reasonably satisfactory to the Company for payment to the Company either by certified or bank check....