Obviously, the parties to the shareholders` agreement contain the shareholders of the company. In addition, holders of convertible bonds, options and similar securities that can be converted into shares of the company are also invited to enter into the contract. Guarantees are provided at the closing of a first tranche and sometimes at the closing of subsequent tranches. If, before the closing of a tranche, any of the guarantees given by the guarantors is indeed inaccurate, this gives investors the right to sue the guarantors for breach of the guarantee. Guarantors may qualify the guarantees by a letter of publication and agree, in the investment agreement, on limitations of the guarantees (e.B.g. limitations in time, materiality thresholds and financial limits of a claim (normally related to a multiple of his salary for a founder and, for the company, generally to the total value of the investment)). The shareholders` agreement is usually the most complex of investment documents. While it may be possible for both investors and founders to benefit from legal aid under the shareholders` agreement, I see that it is of the utmost importance that founders and investors understand their rights and obligations under the agreement. It is therefore ideal that the company should keep its articles of association in mind when drawing up a shareholders` agreement, in order to ensure safe and rigorous protection of how shareholders should react in the event of unforeseen circumstances that could give rise to possible bitter disputes between the parties to the company. The investment agreement provides that the proceeds of the investment (whether the first tranche or the next tranche) are to be used to achieve the agreed milestones and to achieve the agreed plan or budget. Some important points addressed in a shareholders` agreement are the following: while the shareholders` agreement regulates decision-making in key situations, some measures require shareholders to make more than just a decision. For example, in the event of an exit after the exit decision, shareholders must also execute other documents, for example. B the signing of the share purchase contract.
If a shareholder refuses to carry out these activities or remains passive and does not carry out the necessary activities, the exit could end. If the company wishes to obtain additional financing in the future, the shareholders` agreement may stipulate that the parties agree to make their best efforts to make the new investments. Since such financing may require the conclusion of new agreements, etc., the parties may agree to enter into any customary agreements that are reasonably necessary. The type of investment contract you need depends on the nature of the transaction. The table below shows different types of investment transactions and the associated investment contract. Any good agreement contains clear clauses about what happens in the event of a breach of contract. (And a great agreement contains rules so clear for everything that no one ever reads them.) As a general rule, there are clauses relating to the notification of an infringement, the cessation of infringement activities, the generalization of damages and the settlement of disputes. I hope you will never need it, but as soon as the agreement provides for it, the consequences of an infringement will be clearer and the likelihood of an infringement is lower.
An investment agreement and a shareholders` agreement are two often confused legal documents, often used by large and small companies. The distinction between the two allows you to seamlessly integrate the fundraising efforts of new shareholders and consolidate your company`s ownership rights. Investors specify that certain conditions must be met before the first tranche of the investment can be made. These conditions may include: an investment contract is a contract concluded between a company and an investor. This document sets out the terms of the investment transaction. . . .