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Investment Agreement

This Investment Agreement template outlines the terms and conditions under which an investor will make an equity investment into a company. It is suitable for early-stage funding rounds for businesses in a generic Southern African context.

Updated 15d ago
investmentequityfundingstart-upagreementsouthern AfricaSME

Company Letterhead

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

Introduction and Parties

This Investment Agreement (the "Agreement") is made and entered into as of {{effective_date}} (the "Effective Date")

BETWEEN:

{{company_legal_name}}, a company duly incorporated and registered under the laws of {{company_jurisdiction}}, with its registered office at {{company_registered_address}} (hereinafter referred to as "The Company");

AND

{{investor_legal_name}}, an individual residing at {{investor_address}} / a company duly incorporated and registered under the laws of {{investor_jurisdiction}} with its registered office at {{investor_registered_address}} (hereinafter referred to as "The Investor").

The Company and the Investor are hereinafter collectively referred to as the “Parties” and individually as a “Party”.

Recitals

WHEREAS, The Company is engaged in the business of {{company_business_description}}.

WHEREAS, The Investor desires to invest in The Company, and The Company desires to accept such an investment, on the terms and conditions set forth in this Agreement.

Investment Amount and Share Allotment

The Investor agrees to invest the sum of {{investment_currency}} {{investment_amount}} ({{investment_amount_words}} only) (the "Investment") into The Company.

In consideration for the Investment, The Company agrees to allot and issue to The Investor {{number_of_shares}} ({{number_of_shares_words}}) ordinary shares of {{share_par_value_currency}} {{share_par_value}} each (the "Shares"), representing {{percentage_ownership}}% of the total issued share capital of The Company on a fully diluted basis.

The Shares shall be allotted and issued to The Investor on or before {{allotment_date}}.

Warranties and Representations

The Company hereby represents and warrants to the Investor that:

a) The Company is duly incorporated and validly existing under the laws of its jurisdiction of incorporation and has the corporate power and authority to enter into and perform its obligations under this Agreement.

b) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby do not violate any agreement, instrument, law, or regulation to which The Company is subject.

c) All necessary corporate approvals for the execution of this Agreement and the issuance of the Shares have been obtained.

The Investor hereby represents and warrants to The Company that:

a) The Investor has the full power and authority to enter into and perform its obligations under this Agreement.

b) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby do not violate any agreement, instrument, law, or regulation to which The Investor is subject.

Investor Rights

For so long as the Investor holds at least {{minimum_shareholding_for_rights}}% of the issued share capital of The Company, the Investor shall be entitled to:

a) Information Rights: Receive quarterly financial statements and an annual audited financial statement of The Company within {{days_for_financial_statements}} days of the end of each period.

b) Board Representation: Appoint one (1) director to the board of directors of The Company, subject to the Articles of Incorporation being amended to reflect such right.

c) Pre-emption Rights: Be offered the opportunity to subscribe for a pro-rata portion of any new shares issued by The Company before such shares are offered to third parties.

Confidentiality

Each Party undertakes to keep confidential all information concerning the business and affairs of the other Party which it may acquire during the course of the negotiations and the performance of this Agreement, except for information which is publicly available or required to be disclosed by law.

This confidentiality obligation shall survive the termination of this Agreement for a period of {{confidentiality_period_years}} years.

Governing Law and Dispute Resolution

This Agreement shall be governed by and construed in accordance with the laws of {{governing_law_jurisdiction}}.

Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the rules of the {{arbitration_institution}}.

The seat of the arbitration shall be {{arbitration_city}}, {{arbitration_country}}.

The language of the arbitration shall be English.

Termination

This Agreement may be terminated by mutual written consent of the Parties.

Either Party may terminate this Agreement immediately upon written notice if the other Party commits a material breach of this Agreement and fails to remedy such breach within {{cure_period_days}} days of receiving written notice thereof.

Miscellaneous

This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written.

No amendment or modification of this Agreement shall be valid unless made in writing and signed by both Parties.

This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Signature Block

IN WITNESS WHEREOF, the Parties have executed this Investment Agreement as of the Effective Date first written above.

FOR THE COMPANY:

_____________________________

Name: {{company_signatory_name}}

Title: {{company_signatory_title}}

Date: {{company_signature_date}}

FOR THE INVESTOR:

_____________________________

Name: {{investor_signatory_name}}

Title: {{investor_signatory_title}} (if applicable)

Date: {{investor_signature_date}}

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