Terms Of Investment Agreement

Some investors in life sciences companies may require that, as part of their investment, the company and the founders contract certain businesses or requirements, such as when they are not-for-profit organizations or have a specific social priority or objective. These must be carefully considered when negotiating the concept sheet and the final legal documents, in violation of them, can often have serious consequences for both an investor and the company. B, for example, the need for this investor to sell his shares or not to make additional funds available in the following investment tranches. All existing shareholders (and in particular the founders) and the company should be parties to the agreement, although it may be impossible for all minority shareholders to be non-partisan if there are many. Here are the steps to take after closing the first tranche of investment: some key positions included in a shareholder pact are: The nature of the investment agreement you need depends on the nature of the transaction. The table below shows different types of investment transactions and the investment agreement associated with them. The agreement will contain a provision to ensure that its parties remain confidential for all confidential information. As a general rule, an investor is expressly authorized to pass on information to employees, members, participants, etc. Guarantees are granted after the closing of a first tranche and sometimes after the closing of the following tranches. If, before the closing of a tranche, one of the guarantees provided by the guarantors is indeed false, it gives investors the right to sue the guarantors for breach of the guarantee.

The guarantors can qualify the guarantees by means of a disclosure letter and agree in the investment agreement any limitation of guarantees (. B for example, the time limits, meaning thresholds and financial limits of a right (which is usually associated with a multiple of its salary for a creator and for the company is usually the full value of the investment).) In the investment agreement, there may be a provision that indicates the intention of the parties to try to withdraw, for example. B a listing of the company on a recognized exchange or a sale of the company within a specified period (usually 3 to 5 years). This intention is generally related to the recognition that an investor will not provide any guarantee or compensation for the company`s operations and business in the event of an exit, along with other guarantees as to its ability to sell its shares.

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