Term Sheet

Series Seed Preferred Stock Financing

1. Term Sheet Overview

Term Sheet Summary

Item Details
Company Buddy OS Platform Inc
Round Seed Round
Investment $2.0M
Pre-money Valuation $10M
Post-money Valuation $12M
Equity 16.7%
Security Type Series Seed Preferred Stock

Key Terms at a Glance

Term Value
Valuation $10M pre-money / $12M post-money
Investment $2.0M for 16.7% ownership
Liquidation Preference 1x non-participating
Board Seats 2 Founders, 1 Investor, 1 Independent
Anti-dilution Weighted average
Pro-rata Rights Yes for all investors

Term Sheet Status

Item Details
Status Non-Binding
Exclusivity Period 30-60 days
Expiration Date 30 days from issuance

Definitive Documents

  • Stock Purchase Agreement
  • Investors' Rights Agreement
  • Voting Agreement
  • Right of First Refusal Agreement

Parties

Party Details
Company Buddy OS Platform Inc [Delaware C-Corp]
Founders Founder A, Founder B
Lead Investor TBD Institutional Investor
Other Investors TBD Syndicate participants

2. Economic Terms

Valuation & Investment

Term Details
Pre-money Valuation $10M
Investment Amount $2.0M
Post-money Valuation $12M
Price per Share $1.00
Number of Shares 2,000,000

Liquidation Preference

Term Details
Preference Multiple 1x non-participating
Participation Non-participating
Seniority Pari passu with other Preferred Stock

Dividends

Type Rate Cumulative
Non-cumulative 8% per annum No

Anti-dilution Protection

Mechanism Exceptions
Weighted average Employee option pool, stock splits, dividends

3. Control Terms

Board Composition

Seat Type Number Appointed By
Founder Seats 2 Common Shareholders
Investor Seats 1 Preferred Shareholders
Independent Seats 1 Mutual Agreement

Protective Provisions

The following actions require approval of [Majority] of Preferred Stock:

  • Amendment of Certificate of Incorporation or Bylaws
  • Issuance of senior or pari passu securities
  • Sale, lease, or exclusive license of material assets
  • Declaration or payment of dividends
  • Redemption or repurchase of shares
  • Increase or decrease in authorized shares
  • Merger, consolidation, or sale of company
  • Incurrence of debt exceeding [$500,000]

Voting Rights

Share Class Votes per Share Special Rights
Preferred Stock 1 Protective Provisions
Common Stock 1 Standard Voting

4. Investor Rights

Information Rights

  • Annual audited financial statements within 120 days of fiscal year end
  • Quarterly unaudited financial statements within 45 days of quarter end
  • Monthly management reports within 15 days of month end
  • Annual operating budget 30 days before fiscal year
  • Access to company facilities and records upon reasonable notice

Registration Rights

Right Type Details
Demand Registration 2 demands after 5 years or IPO
Piggyback Registration Unlimited piggyback rights
S-3 Registration Unlimited S-3 rights
Lock-up Period 180 days post-IPO

Pro-rata Rights

Yes for all investors

Investor Class Pro-rata Participation
Major Investors Full pro-rata rights
All Investors Subject to minimum ownership threshold

Right of First Refusal

Company and investors have right of first refusal on founder share transfers

5. Other Terms

Vesting & Employee Pool

Item Details
Founder Vesting 4 years with 1 year cliff
Vesting Acceleration Single trigger on change of control
Employee Option Pool 15% post-money
Pool Timing Pre-money

Drag-along Rights

Majority of Preferred and Common can force sale approved by Board

Conversion Rights

Type Details
Voluntary Conversion At any time at 1:1 ratio
Automatic Conversion Upon IPO at $50M+ valuation or majority Preferred vote

Redemption Rights

None

6. Additional Provisions

Conditions Precedent

  • Satisfactory completion of legal, financial, and technical due diligence
  • Execution of definitive agreements acceptable to investors and counsel
  • Delivery of legal opinions from company counsel
  • Board and shareholder approval of transaction
  • No material adverse change in company condition
  • Key employee agreements in place

Expenses

Company pays reasonable legal fees up to $25,000

Exclusivity & Confidentiality

Term Details
Exclusivity Period 30-60 days
Confidentiality Binding for 2 years

Governing Law

State of Delaware

7. Retail & Platform Specific Terms

Retail Operations Terms

Term Details
Store Expansion Rights Board approval required for new locations exceeding $500K investment
Location Approval Investor consent for locations outside primary markets
Lease Obligations Maximum 10-year lease terms without investor approval
Inventory Management Monthly inventory reporting and quarterly physical counts
Supplier Agreements Exclusive supplier contracts require investor approval
Brand Standards Maintain brand guidelines across all locations

Platform & Technology Terms

Term Details
IP Ownership All platform IP owned by Company, licensed to investors
Platform Development Quarterly product roadmap reviews with Board
Data Rights Company retains all user data rights, GDPR compliant
API Access Investors receive read-only API access to analytics
Security Standards SOC 2 Type II certification within 18 months
SLA Requirements 99.9% uptime with monthly reporting

Revenue & Performance Metrics

Metric Target Measurement Period
Store Revenue per Location $500K annually Quarterly
Platform User Growth 50% YoY Quarterly
Customer Retention Rate 80% annual retention Monthly cohort analysis
Gross Margin 65% by Year 2 Quarterly

Operational Milestones

  • Launch [5] new store locations within 18 months
  • Achieve [100,000] active platform users
  • Complete platform integration with [3] third-party systems
  • Obtain necessary certifications: ISO 9001, HACCP, Organic certification
  • Establish supply chain partnerships in Southeast Asia, North America

Compliance & Regulatory

Requirement Details
Food Safety Compliance HACCP certified, FDA registered facilities
Data Privacy GDPR, CCPA, PDPA compliant
Labor Regulations Full compliance with local labor laws in all markets
Platform Licensing All necessary software licenses and certifications

8. Term Sheet Acceptance

This Term Sheet summarizes the principal terms of the proposed financing. Except for the sections titled "Exclusivity" and "Confidentiality," this Term Sheet is not intended to be legally binding, and no legally binding obligations will be created until definitive agreements are executed and delivered by all parties.

This Term Sheet expires on 30 days from issuance unless extended by mutual written agreement.

Signatures

Company
Buddy OS Platform Inc
By: _______________________
Date: _____________________
Lead Investor
TBD Institutional Investor
By: _______________________
Date: _____________________

Shareholders' Equity Statement

Account / Line Item Current Period Prior Period % of Total Variance %
I. CONTRIBUTED CAPITAL (VỐN GÓP)
1.1 Common Stock (Cổ Phiếu Thường)
Authorized Shares (Số cổ phiếu được phép phát hành)
Issued Shares (Số cổ phiếu đã phát hành)
Outstanding Shares (Số cổ phiếu đang lưu hành)
Par Value per Share (Mệnh giá mỗi cổ phiếu)
Total Common Stock at Par Value
1.2 Preferred Stock (Cổ Phiếu Ưu Đãi)
Authorized Shares
Issued Shares
Par Value per Share
Dividend Rate (%)
Total Preferred Stock at Par Value
1.3 Additional Paid-In Capital (Thặng Dư Vốn Cổ Phần)
APIC - Common Stock
APIC - Preferred Stock
APIC - Treasury Stock Transactions
Total Additional Paid-In Capital
1.4 Treasury Stock (Cổ Phiếu Quỹ)
Treasury Shares - Quantity
Treasury Stock at Cost
TOTAL CONTRIBUTED CAPITAL
II. RETAINED EARNINGS (LỢI NHUẬN GIỮ LẠI)
Beginning Balance - Retained Earnings
Add: Net Income (Loss) for the Period
Add/(Less): Prior Period Adjustments
Less: Cash Dividends Declared
Common Stock Dividends
Preferred Stock Dividends
Less: Stock Dividends Declared
Less: Appropriations to Reserves
Ending Balance - Retained Earnings
III. ACCUMULATED OTHER COMPREHENSIVE INCOME (AOCI)
Foreign Currency Translation Adjustments
Unrealized Gains/(Losses) on AFS Securities
Pension & Post-Retirement Benefit Adjustments
Cash Flow Hedge Adjustments
Revaluation Surplus (if applicable)
Total AOCI
IV. RESERVES (DỰ TRỮ)
Legal Reserve (Dự trữ theo luật định)
Statutory Reserve
Capital Reserve
General Reserve
Total Reserves
V. OTHER EQUITY COMPONENTS
Non-Controlling Interest (Minority Interest)
Stock-Based Compensation Reserve
Warrants & Options Outstanding
Total Other Equity Components
TOTAL SHAREHOLDERS' EQUITY

Capitalization Table

Equity Ownership & Valuation Tracker

Managing Equity with Precision

Company Name As of Date Version Prepared By

Executive Summary

Authorized Shares
Issued Shares
Outstanding Shares
Fully Diluted Shares
Current Valuation
Price Per Share
Total Shareholders
Option Holders

1. Share Capital Structure

Share Class Authorized Issued Outstanding Reserved
0
Total Shares

2. Ownership Breakdown

Common Stock (Founders)

Founder Name Shares Ownership % Investment Vesting Status
Total Investment
$0
0
Total Shares
$0
Total Investment

Preferred Stock (Investors)

Investor Name Series Shares Ownership % Investment Amount
Total Investment
$0
0
Total Shares
$0
Total Investment

4. Valuation Analysis

Pre-Money Valuation
Post-Money Valuation
Fully Diluted Valuation

Valuation History

Round Date Pre-Money Post-Money Price Per Share

5. Funding Rounds

Round Date Lead Investor Amount Raised Valuation PPS
Total Raised
$0
$0
Total Raised

Summary Statistics

$0
Total Investment
$0
Total Raised
$0
Total Exit Proceeds

STATEMENT OF CHANGES IN EQUITY

Statement of Changes in Shareholders' Equity

Tracking Equity Movements and Transactions

Company Name
Period
Version
Prepared By

1. Statement of Changes in Equity

Equity Components Share Capital Additional Paid-in Capital Retained Earnings Treasury Stock AOCI Total Equity
A. BALANCE AT START DATE
Opening Balance
B. CHANGES DURING PERIOD
1. Comprehensive Income
Net Income — — — —
Other Comprehensive Income — — — —
2. Transactions with Owners
Issuance of Common Stock — — —
Issuance of Preferred Stock — — —
Stock Options Exercised — — —
Share-based Compensation — — — —
Dividends Declared - Common — — — —
Dividends Declared - Preferred — — — —
Purchase of Treasury Stock — — — —
Sale of Treasury Stock — — —
Stock Split — — — —
3. Other Changes
Prior Period Adjustments — — — —
Changes in Accounting Policy — — — —
Correction of Errors — — — —
C. BALANCE AT END DATE

2. Detailed Share Capital Movements

Description Shares Par Value Amount
A. COMMON STOCK
Balance at Beginning
Issued during period
Public Offering
Private Placement
Employee Stock Purchase Plan
Conversion of Debt/Preferred
Repurchased during period
Stock Split/Dividend
Stock Split
Stock Dividend
Balance at End — — —
B. PREFERRED STOCK
Balance at Beginning
Issued during period
Series A Preferred
Series B Preferred
Converted during period
Balance at End — — —
Notes and Disclosures

This statement complies with IFRS and GAAP standards. All amounts are presented in the reporting currency. Treasury stock is recorded at cost using the cost method.

SHAREHOLDER AGREEMENT

Shareholders' Rights & Obligations

Legal Agreement Among Company Shareholders

Agreement Number
Date
Version
Prepared By

I. Agreement Information

Field Details
Agreement Number
Date
Effective Date
Governing Law State of Delaware
Version
Status Active

II. Parties to the Agreement

The Company

Company Name
Registration Number
Registered Address
Jurisdiction

Shareholders

Shareholder Type Shares Ownership
John Doe Founder 500,000 50%
Jane Smith Founder 300,000 30%
ABC Ventures Investor 200,000 20%
Total Shareholding Summary
Total Shares Issued 1,000,000
Total Shareholders 3
Founders Ownership 80%
Investors Ownership 20%

III. Purpose & Recitals

WHEREAS clauses (A-E) and NOW, THEREFORE statement defining the purpose and context of this agreement.

IV. Share Capital & Ownership

A. Authorized Share Capital

Share Class Authorized Shares Par Value
Common Stock 10,000,000 $0.001
Preferred Stock Series A 2,000,000 $0.001
Preferred Stock Series B 1,000,000 $0.001

B. Issued & Outstanding Shares

Share Class Issued Shares Outstanding Shares
Common Stock 800,000 800,000
Preferred Stock Series A 200,000 200,000
Preferred Stock Series B 0 0

V. Board of Directors

A. Board Composition

Total Board Seats 5
Founder Directors 2
Investor Directors 1
Independent Directors 2

B. Board Meetings

Frequency Quarterly
Quorum Majority of directors
Notice Period 7 days
Voting Requirement Majority vote

VI. Management & Operations

Officers, Reserved Matters, Information Rights, Inspection Rights

VII. Transfer Restrictions

General Transfer Restrictions, Permitted Transfers, Right of First Refusal, Co-Sale Rights, Drag-Along Rights

VIII. Anti-Dilution Protection

Anti-Dilution Rights, Exceptions, Preemptive Rights

IX. Vesting & Lock-Up

A. Founder Vesting

Shareholder Vesting Period Cliff Period Vesting Schedule
John Doe 4 years 1 year Monthly
Jane Smith 4 years 1 year Monthly

B. Lock-Up Period

Lock-Up Duration 12 months from closing
IPO Lock-Up 180 days post-IPO

X. Dividends & Distributions

Liquidation Preferences

Share Class Preference Multiple Participation
Preferred Stock Series A 1x Non-participating
Preferred Stock Series B 1x Non-participating
Common Stock Pro rata After preferred

XI. Representations & Warranties

Company Representations, Shareholder Representations

XII. Covenants

Affirmative Covenants, Negative Covenants, Shareholder Covenants

XIII. Termination Events

Termination of Agreement, Survival

XIV. Dispute Resolution

Negotiation, Mediation, Arbitration, Exceptions

XV. General Provisions

Amendments, Assignment, Notices, Governing Law, Jurisdiction, Severability, Entire Agreement, Counterparts, Waiver, Expenses, Confidentiality

XVI. Schedules & Exhibits

Schedule A-F, Exhibit 1-5

XVII. Execution

The Company

Authorized Signatory
Date

Shareholder 1

Signature
Date

Shareholder 2

Signature
Date

Shareholder 3

Signature
Date

Witnesses

Witness 1 Signature
Witness 2 Signature

ARTICLES OF INCORPORATION

Certificate of Incorporation

Legal Document Establishing a Corporation

Document Control

Filing Number
Date
Version
Prepared By

Filing Information

Filing Number
Filing Date
Effective Date
State/Jurisdiction
Entity Type
Status

Article I — Corporate Name

Corporation Legal Name
Alternative Names (DBA, Trade Name)
Name Reservation Number
Reservation Date
Expiration

Article II — Registered Office & Agent

A. Registered Office

Street Address
Mailing Address

B. Registered Agent

Name
Type Individual Entity
Contact Information
Consent to Serve Yes

Article III — Purpose & Powers

A. General Purpose

General Purpose

To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law.

B. Specific Purposes

Purpose 1 To conduct business operations
Purpose 2 To provide products and services
Purpose 3 To engage in commercial activities
Purpose 4 To pursue lawful business objectives

C. Corporate Powers

Power 1 To have perpetual existence
Power 2 To sue and be sued in the corporate name
Power 3 To have and use a corporate seal
Power 4 To acquire, own, hold, and dispose of property
Power 5 To make contracts and guarantees
Power 6 To borrow money and issue debt instruments
Power 7 To lend money and invest funds
Power 8 To be a promoter, partner, member, or manager
Power 9 To conduct business and carry on operations
Power 10 To elect or appoint officers and agents
Power 11 To make and amend bylaws
Power 12 To make donations for public welfare or charitable purposes
Power 13 To transact any lawful business
Power 14 To exercise all powers granted by law

Article IV — Authorized Capital Stock

A. Total Authorized Shares

Total Authorized Shares shares

B. Common Stock

Number Authorized
Par Value
Voting Rights One vote per share
Dividend Rights As declared by Board of Directors
Liquidation Rights Pro rata distribution after preferred
Conversion Rights None

C. Preferred Stock

Number Authorized
Par Value
Board Authorization Board may designate series, preferences, and rights
Dividend Preferences
Liquidation Preferences
Redemption Rights
Conversion Rights

D. Restrictions & Rights

Restrictions on Transfer

Shares may be subject to restrictions on transfer as set forth in the bylaws or shareholder agreements.
Preemptive Rights Shareholders have preemptive rights
No preemptive rights

Article V — Incorporators

Item Incorporator 1 Incorporator 2 Incorporator 3
Name
Address
Signature

Article VI — Initial Directors

Number of Directors
Item Director 1 Director 2 Director 3
Name
Address
Term

Article VII — Board of Directors

Number of Directors Fixed number:
Range: to
Classification of Board Classified board (3 classes)
Not classified
Removal of Directors With cause only
With or without cause
Vacancies Vacancies may be filled by:
Director Liability Limitation Directors shall not be personally liable except for:
1. Breach of duty of loyalty
2. Acts or omissions not in good faith
3. Intentional misconduct or knowing violation of law
4. Unlawful distributions

Article VIII — Shareholders

Annual Meeting Date
Annual Meeting Time
Annual Meeting Location
Special Meetings May Be Called By Board of Directors
President
Shareholders holding % of shares
Other:
Quorum % of outstanding shares
Vote Required % of shares present
Cumulative Voting Permitted
Not permitted
Shareholder Action by Written Consent Permitted
Not permitted

Article IX — Indemnification

Mandatory Indemnification The corporation shall indemnify directors and officers to the fullest extent permitted by law.
Permissive Indemnification The corporation may indemnify employees and agents as determined by the Board.
Advancement of Expenses The corporation shall advance expenses upon:
1. Written affirmation of good faith belief
2. Written undertaking to repay if not entitled to indemnification
Insurance The corporation may purchase and maintain insurance on behalf of any person.
Non-Exclusivity These indemnification provisions are not exclusive of other rights.

Article X — Amendments

Amendment by Shareholders These Articles may be amended by:
1. Board approval
2. Shareholder vote of %
Amendment by Directors The Board may amend to:
1. Change corporate name
2. Change registered office or agent
3. Make other changes permitted by law
Supermajority Requirements The following provisions require % vote:
1. Business combination provisions
2. Board classification
3. Director removal provisions
4. Indemnification provisions

Article XI — Bylaws

Adoption of Bylaws The initial Board of Directors shall adopt bylaws.
Amendment of Bylaws Bylaws may be amended by:
1. Board of Directors
2. Shareholders
Shareholder Reserved Powers Shareholders reserve the right to amend or repeal bylaws adopted by the Board.

Article XII — Duration

Duration Perpetual existence
Limited duration until:

Article XIII — Dissolution

Voluntary Dissolution The corporation may be dissolved upon:
1. Board recommendation
2. Shareholder approval of %
Distribution of Assets Upon dissolution, assets shall be distributed:
1. First, to creditors
2. Second, to shareholders pro rata

Article XIV — Business Combinations

Supermajority Vote Requirement Business combinations with interested shareholders require % vote.
Business Combination Includes 1. Merger or consolidation
2. Sale of substantial assets
3. Issuance of securities
4. Reclassification of securities
Interested Shareholder
Continuing Director

Article XV — Control Share Acquisitions

Applicability
Requirements

Article XVI — Special Provisions

Close Corporation Election This corporation elects close corporation status
S Corporation Election This corporation intends to elect S corporation status
Professional Corporation This is a professional corporation
Licensed profession:
Benefit Corporation This is a benefit corporation
Public benefit purpose:
Series LLC This corporation may establish series

Article XVII — Miscellaneous Provisions

Fiscal Year Fiscal year ends:
Corporate Seal Corporation shall have a seal
No seal required
Stock Certificates Certificated shares
Uncertificated shares
Forum Selection Exclusive forum for the following matters:
1. Derivative actions
2. Breach of fiduciary duty claims
3. Internal affairs claims
4. Corporate law claims
Waiver of Corporate Opportunity

Directors and officers may pursue corporate opportunities subject to limitations in the bylaws.

Article XVIII — Effective Date

Effective Date Effective upon filing
Delayed effective date:

Execution

Item Incorporator 1 Incorporator 2 Incorporator 3
Signature
Name
Date

Acknowledgment (If Required)

State
County
Notary Public Signature
Commission Expires
NOTARY
SEAL

Filing Endorsement (Official Use)

Filed Date
Time
Filing Number
Secretary of State Signature
OFFICIAL
SEAL

Certificate of Incorporation

I hereby certify that the foregoing is a true and correct copy of the Articles of Incorporation filed in this office.

Secretary of State Signature
Date
STATE
SEAL

Schedules & Exhibits

Schedule A Initial Shareholders
Schedule B Stock Purchase Agreements
Schedule C Organizational Resolutions
Schedule D Bylaws
Exhibit 1 Name Reservation Certificate
Exhibit 2 Registered Agent Consent
Exhibit 3 Director Consents
Exhibit 4 Filing Fee Receipt

STOCK PURCHASE AGREEMENT

Share Sale & Purchase Contract

Legal Agreement for Sale and Purchase of Company Stock

Document Control

Field Details
Agreement Number
Date
Effective Date
Closing Date
Version
Status
Governing Law
Prepared By

Parties to the Agreement

A. SELLER(S)

Seller Name Address Shares Being Sold Percentage
TOTAL SHARES BEING SOLD

B. BUYER(S)

Buyer Name Address Shares Being Purchased Percentage

C. THE COMPANY

Field Details
Company Name
Jurisdiction
Registration Number
Registered Address
Authorized Representative

Recitals

WHEREAS:

  • A. The Seller is the lawful owner of the Shares and desires to sell the Shares to the Buyer;
  • B. The Buyer desires to purchase the Shares from the Seller on the terms and conditions set forth in this Agreement;
  • C. The Company has consented to the transfer of the Shares from the Seller to the Buyer;
  • D. The parties wish to set forth the terms and conditions of the purchase and sale of the Shares.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

Article 1 - Purchase and Sale of Shares

1.1 SALE AND PURCHASE
  • (a) Subject to the terms and conditions of this Agreement, the Seller agrees to sell, transfer, and deliver to the Buyer, and the Buyer agrees to purchase from the Seller, the Shares.
  • (b) The sale and purchase of the Shares shall be completed on the Closing Date in accordance with Article 2.
1.2 SHARES
Description Number of Shares Percentage
Seller 1 Shares
Seller 2 Shares
Total Shares
1.3 PURCHASE PRICE
Component Amount
Total Purchase Price
Allocation to Seller 1
Allocation to Seller 2
Price Per Share
1.4 PAYMENT OF PURCHASE PRICE
  • (a) CASH PAYMENT AT CLOSING:
  • (b) PROMISSORY NOTE:
  • (c) EARNOUT:
  • (d) ESCROW:

Total Consideration:

Article 2 - Closing

2.1 CLOSING DATE
Date
Time
Location
2.2 CLOSING DELIVERIES BY SELLER
  • (a) Stock certificates duly endorsed for transfer
  • (b) Resignation letters from directors and officers
  • (c) Certificate of Good Standing
  • (d) Board resolutions approving the transaction
  • (e) Secretary's Certificate
  • (f) Legal opinion
  • (g) Representations and Warranties Certificate
  • (h) Non-compete agreements
  • (i) Release of liens and encumbrances
  • (j) Other documents as specified in Schedule A
2.3 CLOSING DELIVERIES BY BUYER
  • (a) Purchase Price payment as specified in Section 1.4
  • (b) Promissory Note (if applicable)
  • (c) Escrow Agreement (if applicable)
  • (d) Representations and Warranties Certificate
  • (e) Legal opinion
  • (f) Other documents as specified in Schedule B
2.4 CLOSING DELIVERIES BY COMPANY
  • (a) New stock certificates issued to Buyer
  • (b) Updated stock ledger and capitalization table
  • (c) Filed notices with regulatory authorities
  • (d) Updated shareholder list
  • (e) Corporate records and minute books

Article 3 - Representations & Warranties of Seller

3.1 AUTHORITY

The Seller has full power and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby.

3.2 OWNERSHIP OF SHARES

The Seller is the sole legal and beneficial owner of the Shares, free and clear of all liens, encumbrances, and adverse claims.

3.3 NO CONFLICTS

The execution and performance of this Agreement does not conflict with any agreement, instrument, or obligation to which the Seller is a party.

3.4 LITIGATION

There is no litigation, proceeding, or investigation pending or threatened against the Seller that would affect the transaction.

3.5 ACCREDITED INVESTOR

The Seller is an accredited investor as defined under applicable securities laws.

3.6 COMPANY REPRESENTATIONS
  • (a) ORGANIZATION: The Company is duly organized, validly existing, and in good standing.
  • (b) CAPITALIZATION: The capitalization of the Company is as set forth in Schedule C.
  • (c) FINANCIAL STATEMENTS: The financial statements are true, complete, and accurate.
  • (d) ASSETS: The Company has good title to all assets.
  • (e) CONTRACTS: All material contracts are listed in Schedule D.
  • (f) INTELLECTUAL PROPERTY: The Company owns or has rights to all intellectual property.
  • (g) COMPLIANCE: The Company is in compliance with all applicable laws.
  • (h) LITIGATION: There is no pending or threatened litigation.
  • (i) EMPLOYEES: Employee matters are as disclosed in Schedule E.
  • (j) TAXES: All taxes have been paid or adequately reserved.
  • (k) ENVIRONMENTAL: The Company is in compliance with environmental laws.
  • (l) INSURANCE: The Company maintains adequate insurance coverage.

Article 4 - Representations & Warranties of Buyer

4.1 AUTHORITY

The Buyer has full power and authority to execute, deliver, and perform this Agreement.

4.2 NO CONFLICTS

The execution and performance of this Agreement does not conflict with any agreement or obligation of the Buyer.

4.3 FINANCING

The Buyer has sufficient funds or financing commitments to pay the Purchase Price.

4.4 INVESTMENT INTENT

The Buyer is acquiring the Shares for investment purposes and not with a view to distribution.

4.5 ACCREDITED INVESTOR

The Buyer is an accredited investor as defined under applicable securities laws.

4.6 SECURITIES LAWS

The Buyer acknowledges that the Shares have not been registered and are subject to transfer restrictions.

Article 5 - Covenants

5.1 PRE-CLOSING COVENANTS
  • (a) CONDUCT OF BUSINESS: The Company shall conduct business in the ordinary course.
  • (b) ACCESS TO INFORMATION: The Seller shall provide the Buyer with access to books and records.
  • (c) NO SOLICITATION: The Seller shall not solicit other offers for the Shares.
  • (d) REGULATORY APPROVALS: The parties shall obtain all necessary regulatory approvals.
  • (e) NOTIFICATION: The Seller shall notify the Buyer of any material changes.
5.2 POST-CLOSING COVENANTS
  • (a) FURTHER ASSURANCES: The parties shall execute additional documents as necessary.
  • (b) CONFIDENTIALITY: The parties shall maintain confidentiality of proprietary information.
  • (c) NON-COMPETE: The Seller shall not compete with the Company for the period specified in Exhibit 1.
  • (d) NON-SOLICITATION: The Seller shall not solicit employees or customers.
  • (e) COOPERATION: The parties shall cooperate in transition matters.

Article 6 - Conditions to Closing

6.1 CONDITIONS TO BUYER'S OBLIGATIONS
  • (a) Representations and warranties of Seller are true and correct
  • (b) Seller has performed all covenants and obligations
  • (c) No material adverse change has occurred
  • (d) All required consents have been obtained
  • (e) Due diligence is satisfactorily complete
  • (f) All closing deliveries have been made
  • (g) No litigation is pending or threatened
  • (h) Employment agreements are executed
  • (i) Other conditions as specified in Schedule F
6.2 CONDITIONS TO SELLER'S OBLIGATIONS
  • (a) Representations and warranties of Buyer are true and correct
  • (b) Buyer has performed all covenants and obligations
  • (c) Purchase Price payment is ready for delivery
  • (d) All closing deliveries have been made
  • (e) All required consents have been obtained
  • (f) No litigation is pending or threatened
  • (g) Other conditions as specified in Schedule G
6.3 WAIVER OF CONDITIONS

Any condition may be waived by the party for whose benefit it exists by written notice to the other party.

Article 7 - Indemnification

7.1 INDEMNIFICATION BY SELLER
  • (a) Breach of representations and warranties
  • (b) Breach of covenants and agreements
  • (c) Undisclosed liabilities
  • (d) Third-party ownership claims
  • (e) Pre-Closing taxes and obligations
  • (f) Other matters as specified in Schedule H
7.2 INDEMNIFICATION BY BUYER
  • (a) Breach of representations and warranties
  • (b) Breach of covenants and agreements
  • (c) Post-Closing liabilities and obligations
  • (d) Other matters as mutually agreed
7.3 LIMITATIONS ON INDEMNIFICATION
Limitation Type Amount/Period
(a) SURVIVAL PERIOD
(b) DEDUCTIBLE (BASKET)
(c) CAP
(d) EXCLUSIVE REMEDY Indemnification is the exclusive remedy except for fraud
7.4 INDEMNIFICATION PROCEDURES
  • (a) NOTICE: Prompt written notice of claims
  • (b) DEFENSE: Right to defend and settle claims
  • (c) PAYMENT: Payment within 30 days of final determination
7.5 ESCROW

A portion of the Purchase Price shall be held in escrow as security for indemnification obligations as set forth in Exhibit 2.

Article 8 - Termination

8.1 TERMINATION EVENTS
  • (a) By mutual written consent of the parties
  • (b) If Closing has not occurred by the outside date
  • (c) By Buyer if conditions to Buyer's obligations are not satisfied
  • (d) By Seller if conditions to Seller's obligations are not satisfied
  • (e) By either party upon material breach by the other party
  • (f) By either party if governmental prohibition is issued
8.2 EFFECT OF TERMINATION
  • (a) All obligations cease except as otherwise provided
  • (b) Confidentiality obligations survive termination
  • (c) Each party bears its own expenses
  • (d) All confidential information shall be returned
8.3 REMEDIES FOR BREACH
  • (a) Damages for actual losses incurred
  • (b) Specific performance may be sought
  • (c) Other remedies available at law or equity

Article 9 - General Provisions

9.1 EXPENSES

Each party shall bear its own expenses incurred in connection with this Agreement.

9.2 NOTICES

All notices shall be in writing and delivered to the addresses set forth in the preamble or as otherwise specified.

9.3 GOVERNING LAW

This Agreement shall be governed by the laws of:

9.4 DISPUTE RESOLUTION
  • (a) Negotiation: Good faith negotiations for 30 days
  • (b) Mediation: Non-binding mediation if negotiation fails
  • (c) Arbitration: Binding arbitration as set forth in Exhibit 3
9.5 ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements.

9.6 AMENDMENTS

This Agreement may be amended only by written instrument signed by all parties.

9.7 ASSIGNMENT

This Agreement may not be assigned without the prior written consent of all parties.

9.8 SEVERABILITY

If any provision is invalid, the remainder of the Agreement shall remain in full force and effect.

9.9 COUNTERPARTS

This Agreement may be executed in counterparts, each of which shall be deemed an original.

9.10 WAIVER

No waiver of any provision shall be effective unless in writing and signed by the waiving party.

9.11 THIRD PARTY BENEFICIARIES

This Agreement is for the sole benefit of the parties and their successors and assigns.

9.12 PUBLICITY

No party shall issue any press release or public announcement without prior written consent.

9.13 SPECIFIC PERFORMANCE

The parties acknowledge that monetary damages may be inadequate and specific performance may be sought.

Schedules & Exhibits

SCHEDULES

  • Schedule A: Seller Closing Deliveries
  • Schedule B: Buyer Closing Deliveries
  • Schedule C: Capitalization Table
  • Schedule D: Material Contracts
  • Schedule E: Employee Matters
  • Schedule F: Buyer Closing Conditions
  • Schedule G: Seller Closing Conditions
  • Schedule H: Seller Indemnification Matters

EXHIBITS

  • Exhibit 1: Non-Compete Agreement
  • Exhibit 2: Escrow Agreement
  • Exhibit 3: Arbitration Procedures
  • Exhibit 4: Form of Promissory Note
  • Exhibit 5: Employment Agreements
  • Exhibit 6: Earnout Calculation Methodology

Execution

IN WITNESS WHEREOF, the parties have executed this Stock Purchase Agreement as of the date first written above.

SELLER 1

Signature
Name:
Date:

SELLER 2

Signature
Name:
Date:

BUYER 1

Signature
Name:
Title:
Date:

BUYER 2

Signature
Name:
Title:
Date:

THE COMPANY

Authorized Signature
Name:
Title:
Date:
Corporate Seal

WITNESSES

Witness 1 Signature
Name:
Date:
Witness 2 Signature
Name:
Date: