THIS INVESTMENT AGREEMENT is entered into on [insert date]
Between
(1) The Ark whose principal place of business is at [insert address], [insert state],
United States of America, [insert zip code] (the "Company")
(2) [insert name of the investor] whose principal place of business is at [insert investor’s
address], [insert state], United States of America, [insert zip code] (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 "Founders"
and each a "Founder").
Whereas
(A) The Ark is a company limited by shares incorporated in [insert state], United States
of America.
(B) The Founders 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 Founders have
agreed to invest in the Company and contains provisions governing the future affairs of
the Company that the Investor and Founders 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 [insert
the number of shares to be allotted to investor] Investor Shares, at a subscription price
of United States Dollar [insert the amount per share] 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 [insert the amount per
share] per Investor Share in accordance with clause 2.1 by electronic transfer to the
Company’s bank account at;
Bank [Insert name of Company’s Bank]
SWIFT / Bank Code [insert Bank code]
Account Name [insert account name]
Account No. [insert account 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 Founders 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 Founders 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 Founders 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
Delaware applicable therein.
Each party irrevocably and unconditionally submits to the non-exclusive jurisdiction of
the courts of Delaware (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
The Ark
Address: [insert address]
[insert city]
[insert state]
United States of America
[insert zip code]
E-mail: [insert email address]
For the attention of: [insert your name]
Investor
[insert name of the investor]
Address: [insert investor’s address]
[investor’s address]
[insert investor’s city]
[insert state]
United States of America
[insert zip code]
E-mail: [insert investor’s email address]
For the attention of: [insert name of the investor]
Founders
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 The Ark )
__________________
SIGNED by )
for and on behalf of [insert name of the investor] )
__________________
[Signatures of Founders]
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 Delaware 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.
“Founders” 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 [insert the number] new Ordinary Shares at a price of United
States Dollar [insert the value in dollars] per Investor Share to be subscribed by the
Investor pursuant to clause 2.1 following the Investor’s aggregate investment. The
Investor Shares represent [insert the percentage] % 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.
“Ordinary Shares” the United States Dollar [insert amount] each in the capital of the
Company, which have the rights set out in the Articles.
“Permitted Transferee” has the meaning given in the Articles.
“Relevant Area” refers to [insert state].
“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 Founders 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 Founders.
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 Founderss
Name of Founders Address of
Founders
Number of Shares
Held
[insert your name] [insert your address] [insert the number of
shares you hold]
Part 2 – The Investor
Name of Investor Address of Investor
[insert name of the investor]
[insert investor’s address], [insert
investor’s city], [insert state], United States
of America, [insert zip code]
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 Founders 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 The Transferee/ Subscriber* hereby agrees to be bound by the terms of the
Investment Agreement in all respects as if the 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
Delaware.
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 The Ark )
__________________
___________________
Transferee/Subscriber*
*Delete where appropriate