THIS INVESTMENT AGREEMENT is entered into on [insert date]
Between
(1) XXX, LLC whose principal place of business is at [insert address of
the company] (the "Company")
(2) [insert name of the Investor], whose principal address is at [insert the address of the
Investor], (the "Investor") and
(3) the persons whose names and addresses are set out in Part 1 of Schedule 1 (together with
any person signing a Deed of Adherence as a "Founder", the "Founder" and each a "Founder").
Whereas
(A) XXX, LLC is a company limited by shares incorporated in the State
Indiana.
(B) The Founder are interested in the number of shares set out against their respective names
in column 3 of Part 1 of Schedule 1.
(C) The Investor has agreed to subscribe for shares in the capital of the Company on, and
subject to, the terms of this Agreement.
(D) This Agreement contains the terms upon which the Investor and Founder have agreed to
invest in the Company and contains provisions governing the future affairs of the Company that
the Investor and Founder have agreed to implement.
It Is Agreed as follows:
1. Interpretation
1.1 Words and expressions used in this Agreement shall have the meanings set out in Appendix
1, unless the context requires otherwise.
1.2 The Schedules comprise Schedules to this Agreement and form part of this Agreement.
2. Investment
2.1 Subject to clause 3, the Investor applies for the allotment and issue to it of 1.44% Investor
Shares, at a subscription price of United States Dollar $17,361.11 per Investor Share, payment
for which shall be made in accordance with clause 3.2.1.
2.2 Completion of the investment shall take place on the Completion Date.
2.3 The Company warrants to the Investor that, on the date of this agreement and on the
Completion Date, the Company shall be entitled to allot the Investor Shares to the Investor on
the terms of this agreement, without the consent of any other person.
2.4 Each Founder agrees to vote in favour of the Resolutions and hereby irrevocably waives or
will provide the waiver of all and any pre-emption rights that he or his nominees may have under
the Company’s articles of association or otherwise, so as to enable the issue of the Investor
Shares to proceed.
3. Completion
3.1 Completion of the investment by the Investor for the Investor Shares shall take place on the
Completion Date (or at such other time and place as the Company and the Investor shall agree)
when the events set out in clause 3.2 below shall take place in such order as the Investor may
require.
3.2 The following events shall occur on the Completion Date:
(a) the Investor shall pay the Company United States Dollar [$2,500.00] per Investor Share in
accordance with clause 2.1 by electronic transfer to the Company’s bank account at;
Bank [insert name of the bank]
SWIFT / Bank Code [insert Bank code]
Account Name [insert account name]
Account No. [insert account number]
Routing No. [insert routing number]
(b) the passing of resolutions of the Shareholders to:
(i) adopt the Articles
(ii) waive pre-emption rights in respect of the allotment and issue of the Investor Shares;
(iii) grant the directors of the Company authority to allot the Investor Shares; and
[please list the resolutions that will be passed in relation to this investment agreement]
(c) a meeting of the Board shall be held at which the Company shall:
(i) adopt the Articles;
(ii) subject to receipt of the payment referred to in clause 3.2.1, issue and allot the Investor
Shares credited as fully paid to the Investor (or such person as it shall direct) and enter the
Investor’s name in the register of members in respect of them;
(iii) execute and deliver to the Investor a share certificate for the Investor Shares;
(iv) pass any other resolutions required to carry out the Company’s obligations under this
agreement; and
(d) the Founder shall be instructed to file all appropriate resolutions and forms with the Registrar
of Companies within the time limits prescribed for filing each of them.
4. Warranties
4.1 Each party to the agreement warrants to each of the other parties that:
4.1.1 it has the power and authority to enter into and perform its obligations under this
agreement; when executed, its obligations under this agreement will be binding on it;
and execution and delivery of, and performance by it of its obligations under this agreement will
not result in any breach of applicable law.
4.2 The Warrantors jointly and severally warrant to the Investor that:
(a) the Company has been duly incorporated and validly exists under the laws of its jurisdiction;
(b) the information contained or referred to in Schedule 2 is true, complete and accurate and not
misleading.
5. Intellectual Property
5.1 The Founder hereby unconditionally and irrevocably assign to the Company absolutely with
full title guarantee all its right, title and interest in and to the Intellectual Property used by or
material to the business of the Company, including the absolute entitlement to any registrations
granted pursuant to any patent, registered design or trademark applications.
6. The Board
6.1 The appointment, dismissal and conduct of the Board shall be regulated in accordance with
this agreement and the Articles.
6.2 The Company shall send to the Investor and any observers appointed under clause 6.2:
6.2.1 reasonable advance notice of each Board meeting and each committee of it; and
6.2.2 a written agenda for each Board meeting and each committee meeting, accompanied by
all relevant papers.
6.3 The parties shall use their respective reasonable endeavors to ensure that any Board
meeting (or meeting of a committee of the Board) and every general meeting of the Company
has the requisite quorum.
7. Accounting and Information Rights
7.1 The Company shall at all times maintain accurate and complete accounting and other
financial records.
7.2 The Company shall prepare such business and financial information in such format as the
Investor reasonably requests and shall send copies to the Investor within 30 days of the end of
each fiscal quarter.
7.3 The audited accounts of the Company in respect of each accounting period, together with
the related audit and management letters and all correspondence between the Company and
the auditors of the Company concerning the accounts, shall be completed and approved by the
Board and delivered to the Investor within three months after the end of the accounting period to
which such audited accounts relate.
7.4 The Company shall provide the Investor promptly with such other information concerning the
Company and its business as the Investor may reasonably require from time to time for tax,
legal or regulatory purposes or to enable the Investor to monitor their investment in the
Company.
8. Matters Requiring Investor Consent
The Company undertakes that, save with Investor Consent, the Company shall not take any of
the actions set out in Schedule 3.
9. Transfer of Shares and Future Funding
9.1 The Company undertakes to its Shareholders that it shall not carry out any funding round on
terms which either:
(i) do not reflect the fair market value of the business at the time; or
(ii) which are not on bona fide arm’s length terms; or
(iii) which are unfairly prejudicial to the existing Shareholders (an “Undervalue Funding Round”).
To the extent the Investor, acting reasonably, believes the Company is about to undertake an
Undervalue Funding Round, the Investor shall be entitled by serving a notice in writing on the
Company to exercise a right of veto to prohibit such funding round being implemented.
9.2 If the Company issues any shares or other securities (“New Securities”) that have rights in
respect of the receipt of income and capital that rank in preference to the Ordinary Shares or
other securities held by the Investor, each Party agrees to exercise all voting rights and powers
of control available to it to re-designate the Ordinary Shares and other securities held by the
Investor to rank pari passu with such New Securities.
9.3 No transfer of Ordinary Shares shall be registered by the Board unless the transferee of
such Ordinary Shares has executed and delivered a Deed of Adherence.
9.4 The Company shall not issue any Ordinary Shares or other equity securities to any person,
unless that person is a party to this agreement or has executed and delivered a Deed of
Adherence.
10. Effect of Ceasing to Hold Shares
A party shall cease to be a party to this agreement for the purpose of receiving benefits and
enforcing his rights from the date that he ceases to hold (or beneficially own) any shares in the
capital of the Company (but without prejudice to any benefits and rights enjoyed prior to such
cessation).
11. Non-Competition
Each Founder shall not without the prior written consent of the Company directly at any time
whilst he is a director or employee of, the Company and during the Restricted Period engage in
any capacity with any business concern which within the Relevant Area competes, or will
compete, or is likely to compete with the business of the Company.
12. Confidentiality and Announcements
12.1 Except as provided elsewhere in this agreement, and excluding any information which is in
the public domain (other than through the wrongful disclosure of any party), or which any party
is required to disclose by law or by the rules of any regulatory body to which the Company is
subject, each party agrees to keep secret and confidential and not to use, disclose or divulge to
any third party (other than a party’s professional advisers) any:
12.1.1 confidential information relating to the Company (including any Intellectual Property,
customer lists, reports, notes, memoranda and all other documentary records pertaining to the
Company or its business affairs, finances, suppliers, customers or contractual or other
arrangements); or
12.1.2 information relating to the negotiation, provisions or subject matter of this agreement (or
any document referred to in it); or
12.1.3 information concerning the Investor, its shareholders or any member of their respective
groups.
13. Assignment
13.1 Subject to clause 13.3, this agreement is personal to the parties and no party shall:
(a) assign any of its rights under this agreement; or
(b) transfer any of its obligations under this agreement; or
(c) sub-contract or delegate any of its obligations under this agreement; or
(d) charge or deal in any other manner with this agreement or any of its rights or obligations.
13.2 Any purported assignment, transfer, sub-contracting, delegation, charging or dealing in
contravention of clause 13.1 shall be ineffective.
13.3 The Investor may assign the whole or part of any of its rights under this agreement to any
of its Permitted Transferees.
14. Agreement Survives Completion
This agreement (other than the obligations that have already been performed) remains in full
force after Completion.
15. Shareholders Obligations and Status of this Agreement
15.1 Each Shareholder shall exercise all voting rights and other powers of control available to it
in relation to the Company so as to procure (so far as is reasonably possible) that, at all times
during the term of this agreement, the provisions of this agreement are promptly observed and
given full force and effect according to its spirit and intention.
15.2 If, at any time, any provisions of the Articles conflict with any provision of this agreement,
the provisions of this agreement shall prevail as between the Shareholders. In such
circumstances the Shareholders shall procure that such modifications as are necessary are
made to the Articles.
16. Costs
All Costs and expenses in connection with the negotiation, preparation, execution and
performance of this agreement, and any documents referred to in it, shall be borne by the party
that incurred the Costs.
17. Entire Agreement
17.1 This Agreement and the documents and agreements referred to in it set out the entire
agreement and understanding between the parties with respect to the subject matter of it.
17.2 No party has relied or has been induced to enter into this Agreement in reliance on any
representation, warranty or undertaking which is not expressly set out or referred to in this
Agreement.
17.3 No provision of this Agreement excludes liability for fraud including without limitation,
fraudulent misrepresentation.
18. Amendments
18.1 Any variation of this Agreement (or of any of the documents referred to in it) shall be valid
and effective and binding upon all parties hereto (including any that have not explicitly agreed to
it) if it is in writing and it is approved by Investor Consent. Any variation which has been
approved as provided in this clause shall be binding upon each party whether or not that party
has agreed to it.
18.2 No variation of this Agreement shall take effect to the extent that the implementation of
such variation would render any of the parties hereto in breach of any of the Financing
Documents.
19. Severability
If any provision of this Agreement is held by any court or other competent authority to be void or
unenforceable in whole or part, the other provisions of this Agreement and the remainder of the
effective provisions shall continue to be valid.
20. No Rights of Third Parties
A person who is not a party to this Agreement shall have no right to enforce any of its terms.
21. Governing law, jurisdiction
This document is governed by and are to be construed in accordance with the laws of the State
of Indiana applicable therein.
Each party irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts
of the state of Indiana (and any court of appeal) and waives any right to object to an action
being brought in those courts, including on the basis of an inconvenient forum or those courts
not having jurisdiction.
22. Notices and service
22.1 Any notice to be given by one party to the other under, or in connection with, this
Agreement shall be in writing and signed by or on behalf of the party giving it. It shall be served
by sending it by email to the address set out in clause 22.2, or delivering it by hand, or sending
it by prepaid recorded delivery, special delivery or registered post, to the address set out in
clause 22.3 and in each case marked for the attention of the relevant party. Any notice so
served by hand, e-mail, fax or post shall be deemed to have been duly given:
in the case of delivery by hand, when delivered;
in the case of fax or electronic mail on a Business Day prior to 5.00 pm, at the time of
receipt;
in the case of prepaid recorded delivery, special delivery or registered post, at 10am on
the second Business Day following the date of posting provided that in each case where
delivery by hand or by fax occurs after 5pm on a Business Day or on a day which is not
a Business Day, service shall be deemed to occur at 9am on the next following Business
Day. References to time in this clause are to local time in the country of the addressee.
22.2 The addresses of the parties for the purpose of clause 22.1 are as follows:
Company
[insert contact details of the company]
Investor
[insert Investor’s details]
Founder
Please refer to the names and addresses under Part 1 of Schedule 1.
22.3 A party may notify the other party to this Agreement/ of a change to its name, relevant
addressee, address or fax number for the purposes of this clause, provided that, such notice
shall only be effective on:
1. the date specified in the notice as the date on which the change is to take place; or
2. if no date is specified or the date specified is less than five Business Days after the date
on which notice is given, the date following five Business Days after notice of any
change has been given.
22.4 All notices under or in connection with this Agreement shall be in the English language or,
if in any other language, accompanied by a translation into English. In the event of any conflict
between the English text and the text in any other language, the English text shall prevail.
22.5 Service of any legal proceedings concerning or arising out of this Agreement shall be
effected by causing the same to be delivered to the party to be served at its principal place of
business as specified in this Agreement, or to such other address as may from time to time be
notified in writing by the party concerned.
As witness this Agreement has been signed by the duly authorized representatives of the
parties the day and year above written.
SIGNED by )
for and on behalf of [insert name of the investor] )
__________________
SIGNED by )
for and on behalf of [insert name of the investor] )
__________________
[Signatures of Founder]
APPENDIX 1
Interpretation
1.1 In this Agreement, the following expressions shall have the following meanings:
“Articles” the new articles of association of the Company in the agreed form to be adopted by
the Company on or prior to Completion.
“Board” the board of directors of the Company as constituted from time to time.
“Business Day” a day (other than a Saturday, Sunday or public holiday) when clearing banks in
the Indiana are open for the transaction of normal banking business.
“Completion” completion by the parties of their respective obligations under clause 3.
“Completion Date” the date of Completion. “
Costs” any liabilities, losses, damages, awards, costs (including legal fees), claims and
expenses.
“Deed of Adherence” the deed of adherence in the form set out in Schedule 4.
“Employee Share Option Plan” any employee share option plan adopted by the Company.
“Encumbrance” any mortgage, charge, security interest, lien, pledge, assignment by way of
security, equity claim, right of preemption, option, covenant, restriction, reservation, lease, trust,
order, decree, judgment, title defect (including retention of title claim), conflicting claim of
ownership or any other encumbrance of any nature whatsoever (whether or not perfected) other
than liens arising by operation of law.
“Founder” the persons listed in column 1 of Part 1 of Schedule 1.
“Group” collectively the Company and the Subsidiary (and “Group Company” shall be construed
accordingly).
“Independent Expert” has the meaning given in the Articles.
“Intellectual Property” patents, rights to inventions, utility models, copyright, trademarks, service
marks, trade, business and domain names, rights in trade dress or get-up, rights in goodwill or
to sue for passing off, unfair competition rights, rights in designs, rights in computer software,
database rights, topography rights, moral rights, rights in confidential information (including
know-how and trade secrets) and any other intellectual property rights, in each case whether
registered or unregistered and including all applications for and renewals or extensions of such
rights, and all similar or equivalent rights or forms of protection in any part of the world.
“Investor Consent" the prior written consent of the Investor.
“Investor Shares” the 1.44% new Ordinary Shares at a price of United States Dollar 17,361.11
per Investor Share to be subscribed by the Investor pursuant to clause 2.1 following the
Investor’s aggregate investment. The Investor Shares represent 1.44% of the issued share
capital of the Company immediately following the investment.
“Investor” refers to those set out at Part 2 of Schedule 1.
“New Securities” has the meaning given in clause 9.2.
“Permitted Transferee” has the meaning given in the Articles.
“Relevant Area” refers to the State of Indiana.
“Resolutions” the resolutions, in the agreed form, to be passed by the Company by
shareholders’ written resolution.
“Restricted Period” means the period of 12 months immediately following the cessation of a
Founder working full-time in the business of the Company (whether or not he still remains as a
director or shareholder of the Company).
“Shareholders” a holder of shares in the Company from time to time, including any person who
is (or becomes) a party to this agreement by executing a Deed of Adherence.
“Subsidiary” The subsidiary of the Company named in Schedule 2 Part 2
“Undervalue Funding Round” has the meaning given in clause 9.2.
“Warrantors” the Company and the Founder.
1.1 The headings in this Agreement do not affect its interpretation.
1.2 A reference to a document in this Agreement in the agreed form is to a document agreed by
the initial parties and initialed by them or on their behalf for identification purposes.
1.3 References in this Agreement to statutory provisions shall (where the context so admits and
unless otherwise expressly provided) be construed as references to those provisions as
amended, consolidated, extended or re-enacted from time to time (whether before or after the
date of this Agreement).
1.4 In this Agreement:
(a) where a term is stated to have the meaning ascribed to it in the Articles, the reference shall
be to the Articles as amended from time to time in accordance with the terms of this
Agreement; words denoting the singular shall include the plural and vice versa;
(b) words denoting one gender shall include each gender and all genders;
(c) references to persons shall be deemed to include references to natural persons, to firms, to
partnerships, to bodies corporate, to associations, to organizations and to trusts (in each case
whether or not having separate legal personality), but references to individuals shall be deemed
to be references to natural persons only;
(d) references to clauses and schedules are references to clauses and schedules of this
Agreement;
(e) references to paragraphs are, unless otherwise expressly provided, references to
paragraphs of the schedule in which the references appear;
(f) references to the parties include their respective successors in title, permitted assignees,
estates and legal personal representatives;
(g) words defined in the Articles but not herein defined shall have the same meaning as in the
Articles;
(h) where the word including is used it shall be deemed to read "including without limitation".
1.5 The schedules shall be deemed to be incorporated in this Agreement.
1.6 Unless otherwise expressly provided, all representations, warranties, indemnities,
covenants, agreements, undertakings and obligations made or given or entered into by more
than one person in this Agreement are made or given or entered into severally and not jointly.
1.7 Expressions in this Agreement that are appropriate to companies shall be construed, in
relation to an undertaking that is not a company, as references to the corresponding persons,
officers, documents or organs, as the case may be, appropriate to undertakings of that nature.
Schedule 1
Part 1 – The Founders
Name of Founder Address of Founder Number of Shares
Held
[insert details] [insert details] 1.44%
Part 2 – The Investor
Name of Investor Address of Investor
[insert Investor’s name] [insert Investor’s name]
Schedule 2
Part 1 – The Company
Date of Incorporation: [insert details]
Registered Number: [insert details]
Registered Office: [insert details]
Authorized Share Capital: · Ordinary Shares of each
· Preference Shares of each
Issued Share Capital: · Ordinary Shares of each
· Preference Shares of each
Shareholders: [insert details]
Directors: [insert details]
Secretary: [insert details]
Auditors: [insert details]
Accounting Reference Date: [insert
details]
Details of any loans/indebtedness
Details of any charges
Part 2 – The Subsidiary
Date of Incorporation: [insert details]
Registered Number: [insert details]
Registered Office: [insert details]
Authorised Share Capital: · Ordinary Shares of each
· Preference Shares of each
Issued Share Capital: · Ordinary Shares of each
· Preference Shares of each
Shareholders: [insert details]
Directors: [insert details]
Secretary: [insert details]
Auditors: [insert details]
Accounting Reference Date: [insert
details]
Details of any loans/indebtedness
Details of any charges
Schedule 3
Reserved matters – matters requiring Investor Consent
Any material change in the nature of its business.
2. Any amendment to the Articles of the Company.
3. Any variation of class rights of any class of share in the issued share capital of the Company.
4. The issue of any Ordinary Shares or other securities to any person including, for the
avoidance of doubt pursuant to an Employee Share Option Plan.
5. The incorporation or establishment of any subsidiary or associated company.
6. Any expansion, development or evolution of its business otherwise than through the
Company.
7. The acquisition of the whole or any significant part of a business or undertaking or any
shares, debentures, loan stock or other securities or interest in any company, partnership or
other body.
8. The entry into any transaction, arrangement or agreement with or for the benefit of any
Shareholder or with a connected person of any of them, save for any matters required pursuant
to clause 10.
9. The commencement of any litigation or other legal proceedings (other than actions to recover
debts in the ordinary course of business).
10. Incurring of any indebtedness otherwise than in the ordinary course of business.
11. The recapitalization, reorganization, merger, sale or transfer of all or substantially all of the
Company’s assets or business.
12. The passing of any resolution to wind up the Company or enter into any arrangement with
its creditors.
Schedule 4
Deed of Adherence
THIS DEED is made on 10 May 2022 by the Transferee/Subscriber*.
This Deed Witnesses as follows:
The Transferor/Subscriber* transferred/subscribed* [.] Ordinary Shares (together, the
[Transferred]/[Subscribed] Shares).
2. This deed is entered into in compliance with the terms of clause 9 of an agreement dated 10
May 2022 made between (1) the Investor, (2) the Founder and (3) the Company (all such terms
as are defined therein) (which agreement is herein referred to as the Investment Agreement).
NOW THEREFORE IT IS HEREBY AGREED as follows:
3. The Transferee/ Subscriber* hereby agrees to assume the benefit of the rights of the
Transferor under the Investment Agreement in respect of the abovenamed Shares and hereby
agrees to assume and assumes the burden of the obligation under the Investment Agreement to
be performed after the date hereof in respect of the Shares.
4. The Transferee/ Subscriber* hereby agrees to be bound by the terms of the Investment
Agreement in all respects as if the Transferee/ Subscriber* were a party to the Investment
Agreement as an Investor (and will be deemed to be designated herein as such) and to perform:
(a) all the obligations of the Transferor in that capacity thereunder; and
(b) all the obligations expressed to be imposed on such a party by the Investment Agreement, to
be performed on or after the date hereof.
5. All obligations expressed to be imposed on such a party by the Investment Agreement, to be
performed on or after the date hereof.
6. This deed is made for the benefit of:
(a) the parties to the Investment Agreement; and
(b) any other person or persons who may after the date of the Investment Agreement (and
whether or not prior to the date hereof) have assumed any rights or obligations under the
Investment Agreement and be permitted to do so by the terms hereof; and this deed shall be
irrevocable without the consent of the Company acting on their behalf in each case only for so
long as they hold any shares in the capital of the Company.
7. For the avoidance of doubt, nothing in this deed shall release the Transferor from any liability
in respect of any obligations under the Investment Agreement due to be performed prior to the
date hereof.
8. None of the Shareholders:
(a) makes any representation or warranty or assumes any responsibility with respect to the
legality, effectiveness, adequacy or enforceability of any of the Investment Agreement (or any
agreement entered into pursuant thereto); or
(b) makes any representation or warranty or assumes any responsibility with respect to the
content of any information regarding the Company or any member of its group or otherwise
relating to the acquisition/ subscription* of shares in the Company; or
(c) assumes any responsibility for the financial condition of the Company or any member of its
group or any other party to the Investment Agreement or any other document or for the
performance and observance by the Company or any other party to the Investment Agreement
or any other document (save as expressly provided therein); and any and all conditions and
warranties, whether express or implied by law or otherwise, are excluded.
9. This deed shall be governed by and construed in accordance with the laws of the State of
Indiana
IN WITNESS HEREOF this deed of adherence is executed as a deed and delivered on the date
first written above.
SIGNED by )
for and on behalf of Carosh Media and Marketing, llc )
__________________
___________________
Transferee/Subscriber*
*Delete where appropriate
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