Equity Investment Agreement An Equity Investment Agreement details terms for investing in a company in exchange for equity, specifying investment amount, equity share, and investor rights.
1.1. Investment Amount and Securities
Subject to the terms and conditions of this Agreement, the Investor agrees to purchase, and the Company agrees to issue and sell to the Investor, [Number of Shares] shares of the Company's [Series] Preferred Stock (the "Shares") for a total purchase price of $[Investment Amount] (the "Investment Amount").
2.1. Closing Date
The closing of the purchase and sale of the Shares (the "Closing") shall take place remotely via the exchange of documents and signatures on a date and time to be mutually agreed between the parties (the "Closing Date").
3.1. Representations and Warranties of the Company
The Company represents and warrants to the Investor as follows:
(a) The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of [State] and has full corporate power and authority to own its properties and conduct its business as currently conducted.
(b) The Shares, when issued and delivered in accordance with this Agreement, will be duly authorized, validly issued, fully paid, and non-assessable.
(c) The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate any provision of the Company's articles of incorporation or bylaws, (ii) conflict with, result in a breach or default of, or cause the acceleration of any obligation under any agreement to which the Company is a party, or (iii) violate any law, rule, regulation, order, judgment, or decree applicable to the Company.
3.2. Representations and Warranties of the Investor
The Investor represents and warrants to the Company as follows:
(a) The Investor is a corporation duly organized, validly existing, and in good standing under the laws of the State of [State] and has full corporate power and authority to enter into this Agreement and perform its obligations hereunder.
(b) The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate any provision of the Investor's articles of incorporation or bylaws or (ii) conflict with, result in a breach or default of, or cause the acceleration of any obligation under any agreement to which the Investor is a party.
(c) The Investor is an "accredited investor" as defined in Regulation D under the Securities Act of 1933, as amended (the "Securities Act"), and is acquiring the Shares for its own account and not with a view to the resale or distribution thereof.
4.1. Board Representation
The Company agrees to appoint a designee of the Investor to the Company's Board of Directors (the "Board") within thirty (30) days of the Closing, and to use its best efforts to maintain such representation for as long as the Investor holds at least [Percentage] of the shares of the Company's capital stock issued to the Investor pursuant to this Agreement.
4.2. Information Rights
For as long as the Investor holds any shares of the Company's capital stock, the Company shall provide the Investor with (a) quarterly management reports, including unaudited financial statements, within forty-five (45) days after the end of each fiscal quarter, and (b) annual audited financial statements within ninety (90) days after the end of each fiscal year.
4.3. Preemptive Rights
For as long as the Investor holds any shares of the Company's capital stock, the Investor shall have a right of first refusal to purchase its pro rata share of any equity securities the Company proposes to issue in the future, subject to customary exceptions, as necessary to permit the Company to issue equity securities in connection with acquisitions, strategic partnerships, and equity incentive plans and arrangements.
5.1. Conditions Precedent to the Obligations of the Investor
The obligations of the Investor to purchase the Shares at the Closing are subject to the satisfaction of each of the following conditions:
(a) The representations and warranties of the Company set forth in Section 3.1 shall be true and correct in all material respects as of the Closing Date.
(b) The Company shall have performed in all material respects all obligations and covenants required to be performed by it under this Agreement at or prior to the Closing.
(c) No action, suit, or proceeding shall be pending or threatened before any court or governmental authority seeking to restrain or prohibit the transactions contemplated by this Agreement or to impose limitations on the ability of the Investor to acquire or hold or to exercise full rights of ownership of the Shares.
(d) The receipt by the Investor of such other documents and agreements as it may reasonably request for the purpose of evidencing the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.
5.2. Conditions Precedent to the Obligations of the Company
The obligations of the Company to sell the Shares to the Investor at the Closing are subject to the satisfaction of each of the following conditions:
(a) The representations and warranties of the Investor set forth in Section 3.2 shall be true and correct in all material respects as of the Closing Date.
(b) The Investor shall have performed in all material respects all obligations and covenants required to be performed by it under this Agreement at or prior to the Closing.
(c) No action, suit, or proceeding shall be pending or threatened before any court or governmental authority seeking to restrain or prohibit the transactions contemplated by this Agreement or to impose limitations on the ability of the Company to issue the Shares or to consummate the transactions contemplated by this Agreement.
(d) The receipt by the Company of such other documents and agreements as it may reasonably request for the purpose of evidencing the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.
6.1. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the United States and the State of [State], without giving effect to its principles of conflicts of law.
6.2. Entire Agreement
This Agreement constitutes the entire understanding of the parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings, whether written or oral, with respect to the same.
6.3. Amendments
This Agreement may be amended, modified, or supplemented only by a written instrument executed by all of the parties hereto.
6.4. Counterparts
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
In this Equity Investment Agreement, you will see the following sections:
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