PREFERRED STOCK PURCHASE AGREEMENT

This Preferred Stock Purchase Agreement (the "Agreement") is entered into as of March ____, 2001 (the "Effective Date"), by and among PowerBrief, Inc., a Texas corporation (the "Company"), and the investors listed on Exhibit A attached hereto (each a "Purchaser" and together the "Purchasers").

SECTION 1

Purchase and Sale of Preferred Stock

1.1     Certificate of Designation.  The Company shall adopt and file with the Secretary of State of the State of Texas on or before the Closing (as defined below) the Certificate of Designations, Rights and Preferences of Senior Convertible Preferred Stock, Series A in the form attached hereto as Exhibit B (the "Certificate of Designation").

1.2     Sale of Stock.  Subject to the terms and conditions hereof, on the Closing Date, as defined below, each Purchaser agrees, severally and not jointly, to purchase at the Closing and the Company agrees to sell and issue to each Purchaser at the Closing that number of shares of Convertible Preferred Stock, Series A, set forth opposite each such Purchaser's name on Exhibit A attached hereto at a purchase price of $1.12 per share.  The shares of Convertible Preferred Stock, Series A issued to the Purchasers pursuant to this Agreement shall be hereinafter referred to as the "Stock ."  The Company's agreements with each of the Purchasers are separate agreements, and the sales of Stock to each of the Purchasers are separate sales.

1.3     Closing Date.  The closing (the "Closing") of the purchase and sale of the Stock shall be held at the offices of Venture Law Group, 2775 Sand Hill Road, Menlo Park, California at 10:00 a.m. on March __, 2001  or at such other date, time and place upon which the Company and the Purchasers acquiring more than half the Stock to be sold at the Closing mutually agree. (the date of the Closing is hereinafter referred to as the "Closing Date").

1.4     Delivery.  At the Closing, the Company will deliver to each Purchaser a certificate or certificates representing the shares of Stock purchased by such Purchaser, against payment of the purchase price therefor, by check or wire transfer.

1.5     Legend.  The certificate or certificates for the Stock shall be subject to a legend restricting transfer under the Securities Act of 1933, as amended (the "Securities Act") and referring to restrictions on transfer herein, such legend to be substantially as follows:

"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 DISPOSITION MAY BE EFFECTED WITHOUT (A) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (B) AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE " ACT"), OR (C) FULL COMPLIANCE WITH THE PROVISIONS OF RULE 144 UNDER THE ACT."

SECTION 2

Representations and Warranties of the Company

Specifically excluding any matters relating to or arising out of the assets, liabilities or conduct of the business of Integrated Orthopaedics, Inc. ("IOI") prior to the effective time of the Merger (the "Merger") between PowerBrief, Inc., a Delaware Corporation, and IOI currently known as PowerBrief, Inc., a Texas Corporation (referred to herein as the "Company"), the Company hereby represents and warrants to each Purchaser as of the Closing Date that, except as set forth on the Schedule of Exceptions attached hereto as Exhibit C, which exceptions shall be deemed representations and warranties as if made hereunder:

2.1     Organization.  The Company is a corporation duly organized and validly existing under the laws of the State of Texas and is in good standing under such laws.  The Company has requisite corporate power and authority to own, lease and operate its properties and assets, and to carry on its business as presently conducted and as proposed to be conducted.  The Company is qualified to do business as a foreign corporation in each jurisdiction in which the ownership of its property or the nature of its business requires such qualification, except where failure to so qualify would not have a materially adverse effect on the Company.


 

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