Investment Agreement - Single Investor

The Investment Agreement - Single Investor is a legal document that outlines the terms and conditions of an investment between the Company, the Investor, and the Managers. The agreement is important as it sets out the rights and obligations of each party involved in the investment. It provides a detailed framework for the investment process and governs the future affairs of the Company. The document consists of several sections, each addressing specific aspects of the investment.

 

Section 1: Interpretation

This section defines the key terms used throughout the agreement and provides clarity on their meanings.

 

Section 2: Investment

This section outlines the process of the investment, including the application for shares by the Investor, the completion of the investment, and the warranties provided by the Company.

 

Section 3: Completion

This section details the events that will occur on the completion date, including the payment by the Investor, the passing of resolutions, and the actions to be taken by the Board.

 

Section 4: Warranties

This section contains the warranties made by each party to the agreement, including their power and authority to enter into the agreement and the accuracy of the information provided.

 

Section 5: Intellectual Property

This section addresses the assignment of intellectual property rights from the Managers to the Company.

 

Section 6: The Board

This section regulates the appointment, dismissal, and conduct of the Board, including the provision of notice and agenda for board meetings.

 

Section 7: Accounting and Information Rights

This section outlines the Company's obligations to maintain accurate financial records and provide business and financial information to the Investor.

 

Section 8: Matters Requiring Investor Consent

This section lists the actions that require the consent of the Investor, such as material changes in the nature of the business or amendments to the articles of the Company.

 

Section 9: Transfer of Shares and Future Funding

This section sets out the restrictions on the transfer of shares and the Company's undertaking not to carry out undervalue funding rounds. It also addresses the re-designation of shares in certain circumstances.

 

Section 10: Effect of Ceasing to Hold Shares

This section states that a party ceases to be a party to the agreement when they no longer hold any shares in the Company.

 

Section 11: Non-Competition

This section prohibits the Managers from engaging in any competing business while they are directors or employees of the Company.

 

Section 12: Confidentiality and Announcements

This section imposes obligations on the parties to keep certain information confidential, subject to certain exceptions.

 

Section 13: Assignment

This section restricts the assignment or transfer of rights and obligations under the agreement, except for the Investor's right to assign its rights to permitted transferees.

 

Section 14: Agreement Survives Completion

This section states that the agreement remains in full force after completion, except for obligations that have already been performed.

 

Section 15: Shareholders' Obligations and Status of this Agreement

This section requires the shareholders to exercise their voting rights and powers of control to ensure the provisions of the agreement are observed. It also clarifies that the agreement prevails over any conflicting provisions in the articles.

 

Section 16: Costs

This section states that each party is responsible for their own costs and expenses related to the agreement.

 

Section 17: Entire Agreement

This section confirms that the agreement, together with the referenced documents, constitutes the entire agreement between the parties and supersedes any prior representations or understandings.

 

Section 18: Amendments

This section allows for variations of the agreement with the approval of the Investor, subject to certain limitations.

 

Section 19: Severability

This section states that if any provision of the agreement is deemed void or unenforceable, the remaining provisions shall continue to be valid.

 

Section 20: No Rights of Third Parties

This section clarifies that only the parties to the agreement have the right to enforce its terms.

 

Section 21: Governing Law, Jurisdiction

This section specifies the governing law and jurisdiction for any disputes arising from the agreement.

 

Section 22: Notices and Service

This section outlines the requirements for giving notice under the agreement, including the methods of service and the addresses for each party.

 

Appendix 1: Interpretation

This appendix provides definitions for the key terms used in the agreement.

 

Schedule 1: The Managers

This schedule lists the names and addresses of the Managers involved in the investment.

 

Schedule 2: The Company and the Subsidiary

This schedule provides information about the Company and its subsidiary, including their date of incorporation, registered office, share capital, shareholders, directors, and auditors.

 

Schedule 3: Reserved Matters - Matters Requiring Investor Consent

This schedule lists the actions that require the consent of the Investor, such as material changes in the nature of the business or amendments to the articles of the Company.

 

Schedule 4: Deed of Adherence

This schedule contains a template deed of adherence to be executed by any transferee or subscriber of shares in the Company.

 

How to use this document?

To use the Investment Agreement - Single Investor, follow these steps:

1. Review the agreement: Familiarize yourself with the entire agreement, including the detailed description and each section.

2. Understand the interpretation: Refer to Appendix 1 for definitions of key terms used in the agreement.

3. Prepare for investment: Gather the necessary information and documents, including the names and addresses of the Managers and the Investor.

4. Complete the investment application: Follow the instructions in Section 2 to apply for the allotment and issue of shares at the specified subscription price.

5. Arrange completion: Agree on a completion date and ensure all parties are prepared to fulfill their obligations as outlined in Section 3.

6. Make payment: On the completion date, the Investor must pay the specified amount per share to the Company's bank account as stated in Section 3.2.1.

7. Pass resolutions: Ensure the necessary resolutions are passed by the shareholders and the Board as outlined in Section 3.2(b) and (c).

8. Issue and allot shares: Once payment is received and resolutions are passed, the Company will issue and allot the Investor shares, enter the Investor's name in the register of members, and provide a share certificate as stated in Section 3.2(c).

9. File appropriate documents: Instruct the Managers to file all required resolutions and forms with the registrar of companies within the prescribed time limits as stated in Section 3.2(d).

10. Comply with warranties: Each party must fulfill their warranties as stated in Section 4, ensuring they have the power and authority to enter into the agreement and that the information provided is accurate.

11. Assign intellectual property: If applicable, the Managers must assign all intellectual property rights to the Company as stated in Section 5.

12. Manage the Board: Follow the provisions in Section 6 to regulate the appointment, dismissal, and conduct of the Board.

13. Maintain accounting and information rights: The Company must maintain accurate financial records and provide requested business and financial information to the Investor as stated in Section 7.

14. Obtain Investor consent: Seek Investor consent for any actions listed in Schedule 3 that require consent.

15. Restrict transfer of shares: Adhere to the restrictions on transferring shares and ensure any future funding rounds reflect fair market value and are on arm's length terms as stated in Section 9.

16. Cease to hold shares: Understand that ceasing to hold shares in the Company will result in the party no longer being a party to the agreement, as stated in Section 10.

17. Maintain confidentiality: Keep all confidential information confidential, except as provided for in Section 12.

18. Seek legal advice: If needed, consult with legal professionals to ensure compliance with the agreement and applicable laws.

19. Monitor compliance: Regularly review the agreement and ensure all parties are fulfilling their obligations.

20. Resolve disputes: If any disputes arise, refer to the governing law and jurisdiction stated in Section 21.

Please note that this guidance is a summary and does not constitute legal advice. It is recommended to seek professional legal advice when using or entering into any legal agreement.