Subscription Agreement Representations And Warranties

Representations and guarantees of the companyOur investor will probably make concrete demands on what they wish to represent, none of which should surprise after the negotiation and timing phase of the investment. The guarantees contained in an equity subscription contract can be broad, for example. B a guarantee that the company has the authority to conclude the contract, that all relevant information has been made available to the investor and that the directors or founders do not know of any additional information that could influence the investment. Guarantees can also be very specific, for example. B a guarantee that the company has the necessary licenses and/or intellectual property for its activities. Previous ConditionsThe terms of the precedent will establish all the conditions that one of the parties must meet before the agreement comes into force. This may include directors of the company who make the appropriate decisions or, possibly, deeds on behalf of the buyer that are necessary to become a member of the company. ConfidentialityThis clause speaks for itself. Both parties will generally agree to a reciprocal confidentiality clause. SlicesThe slice clause will contain the details of the agreement that normally appear in the account sheet: a share subscription contract defines who, how, what and when a share issue, but more importantly, that it exposes all guarantees and insurance to an investor. Representations and guarantees from the buyer/investorThe share subscription contract often contains different insurances and guarantees from the investor.

While the document contains clauses that benefit both parties, a subscription-sharing agreement is ultimately a document for the benefit of the purchaser. If your investor has not requested it, it is not necessary to do so voluntarily. However, you may find that experienced venture capitalists will expect one. Your legal counsel is in the best position to ensure that your agreement contains the safeguards and guarantees necessary for your individual agreement, but the following examples of some of the most common clauses are: Learn more about FindLaw newsletters, including our terms of use and privacy policies. This site is protected by reCAPTCHA and Google`s privacy rules and terms of use apply. The email address cannot be subscribed. Please, do it again. Share subscription agreements vary greatly depending on the terms and types of shares. If your investor is applying for a subscription-sharing contract, your lawyer can help you negotiate the terms and navigate.

What do I do? Contact us if you would like more information about establishing a sharing agreement. Our lawyers at You Legal are happy to help you in every way possible. Legal advice should be sought before taking action on specific issues.