This Investment Agreement (the Agreement) is made and effective [DATE],
BETWEEN: [YOUR COMPANY NAME] a Company (the “COMPANY”) organized and existing under the laws of [STATE/PROVINCE], with its head office located at:
AND: [YOUR NAME] the principal members of the Company (the “Company Principals”) collectively referred to in this Agreement as the “Company Parties.” and existing under the laws of [STATE/PROVINCE], located at:
AND: [YOUR COMPANY NAME] a Company (the “COMPANY”) organized and existing under the laws of [STATE/PROVINCE], with its head office located at:
WHEREAS the Company was formed for the purpose of further developing, commercializing, and operating the business concept identified and includes any subsequent iteration of the business concept developed by the Company Parties (the “Business”);
WHEREAS the Investor is desirous of making an investment (the “Investment”) in the amount of [TOTAL INVESTMENT AMOUNT] into the Company to facilitate such Business.
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contains, the parties hereto intending to be legally bound agree as follows:
1.1 The Investor will make the Investment in the Company in consideration for the rights and privileges set forth in this Agreement.
FUTURE ISSUANCES OF SECURITIES
2.1 From and after the date of this Agreement, the parties agree to take such further action and to execute, acknowledge and deliver all such further documents as are reasonably requested by the other party for carrying out the purposes of this Agreement.
2.2 If at any time in the future, the Company proposes to sell and issue any debt or equity securities, or any other securities or instruments entitling the holder thereof to receive any profits, capital, assets or property of the Company (collectively, “Securities”), in a single transaction or series of related transactions that results in gross proceeds to the Company of at least [STATE AMOUNT] (a “Qualified Financing”), the Company shall deliver written notice to the Investor stating (i) its bona fide intention to offer such Securities, (ii) the amount and type of Securities to be offered and (iii) the price and terms upon which it proposes to offer such securities. Upon receipt of such notice, the Investor shall be entitled to exercise any of the rights specified in sections 3, 4 and 5.
RIGHT OF FIRST OFFER
3.1 The Investor shall have the first right to purchase all the Securities to be offered and sold in such Qualified Financing at the price and on the same terms and conditions specified in the notice.
RIGHT TO PARTICIPATE
4.1 The Investor shall have the right to participate in the Qualified Financing at the price and on the same terms and conditions specified in the notice in an amount equaling not less than 10% of the aggregate number of Securities to be offered and sold.
RIGHT TO CONVERT
5.1 The Investor shall have the right to convert the Investment Amount into that number of membership interests (or other securities) in the Company representing a [PERCENTAGE OF OWNERSHIP] ownership interest in the Company on a fully diluted basis, and the Investor shall be admitted as a member of the Company pursuant to the Company’s Operating Agreement.
5.2 The Investor may exercise any of its rights specified in sections 3, 4 and 5 within (30) days after receipt of the Company’s notice by giving written notice to the Company.
5.3 If the Company does not enter into an agreement for the sale of unsubscribed Securities within a forty-five (45) day period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the rights provided under sections 3, 4 and 5 shall be deemed to be revived and such Securities shall not be offered unless first reoffering the rights to the Investor under sections 3, 4 and 5.
TRANSFER OF BUSINESS OPPORTUNITIES
6.1 The Company Parties agree that they will not sell, assign, transfer or otherwise convey a business assets, interest or opportunity that is owned, held by, or owed to the Company which is necessary for the operation of the Business or material to the value of the Company, without the Investor’s prior written consent.
PUBLIC UPDATE MEETINGS
7.1 The Company Principals agree that they will attend one of the Investor’s monthly public update meetings within 60 to 90 days after the Investment is made to present about the Business and its activities and operations.
8.1 The Company Parties acknowledge (1) that the Investor is represented by legal counsel, (2) that the Investor’s legal counsel drafted this Agreement, and (3) that the Company Parties have been advised to seek independent legal advice with respect to the transactions described in this Agreement and have had an adequate opportunity to seek legal counsel with respect to this transaction.
INDEMNIFICATION; LIMITATION OF LIABILITY
9.1 The Company will indemnify and hold harmless the Investor and its members, managers, employees, agents, and affiliates (each, an “Indemnified Person”) from and against, and no Indemnified Person shall have any liability to the Company or its members, security holders or creditors for any damages, liabilities or expenses relating to or arising out of this Investment or otherwise.
10.1 This Agreement shall be governed by and construed in accordance with the Laws of [State/Province].
IN WITNESS WHEREOF, the parties have executed this agreement at [DESIGNATED PLACE OF EXECUTION] with full knowledge of its content and significance and intending to be legally bound by the terms hereof the day and year first above written.
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