This Investment Agreement is an agreement under which the investors invest money in
the company for it to conduct business. In consideration, the investor receives interest
for the money invested. This agreement functions as a written record of the complete
terms and requirements of performance between a company and its investors. This
document contains standard clauses commonly used in these types of agreements, as
well as optional language to allow for customization to ensure the specific terms of the
parties’ agreement are addressed. Use this form if one is an investor and wants to
invest money in a company, or if one is a company seeking funds from an investor.
THIS INVESTMENT AGREEMENT (the “Agreement”) made on this ___ day of
____________, 20__ (the “Effective Date”).
___________________, whose principal place of business is at ________________________
(the “Investor”); and
___________________, whose principal place of business is at ________________________
(the “Company”), hereinafter referred to collectively as (the “Parties”).
1.1 The term of this Agreement shall be from the Effective Date and shall continue until all
of Company’s obligations under this Agreement have been satisfied, including but not limited to
the reporting and payment provisions contained in Articles 4 and 7.
2.1 Subject to the further terms and conditions hereof, as determined by Investor in its sole
discretion, Investor shall invest a sum not to exceed _____________ Dollars ($_______). The
total aggregate amount paid by Investor to the Company shall hereinafter be referred to as the
3.1 The closing in connection with this Agreement (the “Closing”) shall take place on
____________, 20__, (the “Closing Date”) in the offices of Investor located at
______________________________________ or at some other place and time mutually agreed
upon. Alternatively, the Parties may, by mutual consent, forego a formal closing.
IV. RECORDS AND REPORTS
4.1 The Company shall submit to Investor the following:
(A) Quarterly financial reports beginning ________________, 20__ and quarterly
thereafter until any and all repayment due has been tendered, (“Quarterly Revenue Statement”).
Each Quarterly Revenue Statement shall be accompanied by full payment of any reimbursement
due and owing pursuant to Article 7 of this Agreement. Along with this Quarterly Revenue
Statement, the Company’s financial statements for the previous quarter, including a balance
sheet and income statement, should be provided;
(B) Project Activities Reports beginning ________________, 20__ for the period
beginning on the Closing Date and continuing monthly thereafter for the Term of this
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Agreement, the Company shall provide a monthly project report detailing its activities in that
particular month; and
(C) Company agrees to provide any such other reports or information which Investor may
reasonably request from time to time.
4.2 Investor acknowledges that it has received and reviewed all requested records and
documents and has completed its due diligence to its satisfaction.
5.1 Investor agrees to hold Company’s proprietary and confidential information, including all
financial records, business or marketing plans, methods and practices, any other idea and
information not generally known to the public that which relates to the Company and/or the
Company’s business practices (the “Confidential Information”), in confidence.
5.2 Investor agrees not to use the Confidential Information disclosed to it by Company for its
own use or for any purpose except to carry out the undertaking of its investor relationship with
the Company. Investor will not disclose such Confidential Information to anyone, including to
their employees; however, the Investor may disclose such information to certain employees who
are required to have such information to carry out the investment. Investor will have employees,
to whom Confidential Information is disclosed, sign a Non-Disclosure Agreement and will notify
the Company in writing of the names of the persons who have had access to the Confidential
Information. Investor agrees that it will take all reasonable steps to protect the secrecy of and
avoid disclosure or use of Confidential Information and to prevent it from falling into the public
domain or the possession of unauthorized persons. Investor agrees to notify the Company in
writing of any misuse or misappropriation of Confidential Information that may come to its
5.3 Notwithstanding any other provision of the Agreement, disclosure of Confidential
Information shall not be precluded if such disclosure:
(A) is in response to a valid order of a court or other governmental body of the United
States or any political subdivision thereof;
(B) is otherwise required by law; or,
(C) is otherwise necessary to establish rights or enforce obligations under this
Agreement, but only to the extent that any such disclosure is necessary.
5.4 In the event that Investor is requested in any proceedings before a court or any other
governmental body to disclose Confidential Information, it shall give Company prompt
notice of such request so that the Company may seek an appropriate protective order. If in
the absence of a protective order, Investor is nonetheless compelled to disclose Confidential
Information, Investor may disclose such information without liability hereunder; provided,
however, that such party gives the Company advance written notice of the information to be
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disclosed and upon the request and at the expense of the Company, uses its best efforts to
obtain assurances that confidential treatment will be accorded to such information.
VI. INSPECTION OF RECORDS
6.1 Company shall allow any authorized representative of Investor to inspect and audit, at
reasonable times, its financial, business and State and federal tax records. The Company shall
retain such records until three years after the termination of this Agreement. The Company
agrees to allow any authorized representative of Investor for the purpose of inspection and
auditing, to visit and inspect, with reasonable notice and at reasonable times, all property, offices
and production facilities owned, leased or otherwise controlled by Company.
VII. QUARTERLY REVENUE PAYMENT
7.1 Company shall tender quarterly payments commencing on _______________ (“First
Payment Date”) and ending ____________ (___) years after the First Payment Date, in an
amount equal to __________ percent (___) % of the Company’s Quarterly Revenues and subject
to the following:
(A) For purposes of this Agreement, the term “Quarterly Revenues” shall mean the
Company’s gross sales or service revenues for each fiscal quarter.
(B) The total amount of all Quarterly Revenue Payments in a calendar year shall not
exceed a sum equal to ____________ (___) % of the Funds.
(C) The total amount of all Quarterly Revenue Payments shall not exceed a sum equal to
two hundred percent (200%) of the Funds.
8.1 The Company may at any time and from time to time prepay the Funds invested by the
Investor, in whole or in part, upon at least three business days' prior written notice to the
Investor. Investor shall not be subject to any penalties or additional fees for prepayments.
IX. COMPANY’S REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants to Investor that:
(A) Company is duly organized and in good standing in the State of _______________.
The Company has all requisite power and authority to own its properties and conduct its business
as currently being conducted. The Company’s principal place of business is located in the State
(B) Company has all requisite power and authority to execute and deliver this Agreement
and all other documents in connection with this Agreement, and to carry out the terms of this
Agreement, and has taken all action required on its part required for the execution, delivery and
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performance of this Agreement, including obtaining the agreement from the Company’s Board
of Directors and/or shareholders. This Agreement is the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms, except as its enforceability may be limited
by bankruptcy laws and general principles of equity;
(C) Neither this Agreement nor any other written information provided to Investor by the
Company in connection with the Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein or herein not misleading;
(D) Neither the Company nor any of its directors, officers, partners or members, as the
case may be, has been convicted of a felony;
(E) Company has filed all federal, State and local tax returns and reports as required by
law. These returns and reports are true and correct in all material respects. The Company has
paid all taxes, assessments and governmental charges due, except those contested in good faith.
No deficiency assessment with respect to or proposed adjustment of the Company’s federal,
state, county or local taxes is pending or, to the best of the Company’s knowledge, threatened.
There is no tax lien (other than for current taxes not yet due and payable), whether imposed by
any Federal, state, county, local taxing authority, outstanding against the assets, properties or
business of the Company;
(F) No third party has claimed or, to the best of the Company’s knowledge has reason to
claim, that any principal of the Company or other person employed by or affiliated with the
Company has: (i) violated or, may be violating any of the terms of his employment, non-
competition or nondisclosure agreement with such third party; (ii) disclosed or may be disclosing
or utilized or may be utilizing any trade secret or proprietary information of such third party; or
(iii) interfered or may be interfering in the employment relationship between such third party and
any of its present or former employees;
(G) There is no litigation or other governmental proceeding, including bankruptcy
proceedings, currently pending or, to the best of the Company’s knowledge threatened, against
(H) The execution, delivery and performance of this Agreement does not and will not
conflict with or constitute a material default under any contract, promissory note, mortgage or
other instrument; and
(I) The Company owns, or has a license for, all patents, copyrights, trademarks, trade
names, service marks, trade secrets and other intellectual and proprietary property (collectively,
“Intellectual Property”) which are necessary to conduct its business and commercially develop
and market its services or products. The Company owns, or will upon development own, all
Intellectual Property relating to its services or products.
[Instruction: Investor should consider limiting the Company’s ability to take on additional
debt as it could impair Company’s ability to make payments under this Agreement. Same
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would hold true for the sale of any assets. A solution is to not allow additional debt or the sale
of assets without notice to Investor and an opportunity to object.]
10.1 The Company shall be in default under this Agreement upon the occurrence of any of the
following; provided, however, that Investor shall first provide Company with written notice of
such default and an opportunity to cure such default within thirty (30) days after notice, unless
such default is not, in the sole determination of Investor, curable:
(A) The Company fails to submit any report to Investor due pursuant to Article 4 or any
other provision of this Agreement;
(B) The Company fails to make any payment to Investor due pursuant to Article 7 or any
other provision of this Agreement;
(C) Any representation or warranty under Article 9 of this Agreement is discovered to not
(D) The Company fails to perform, comply with or observe any of the conditions, terms
or covenants contained under this Agreement;
(E) Any document submitted or to be submitted in connection with this Agreement
contains any untrue statement of material fact or omits to state a material fact necessary to make
the statements therein not misleading; and
(F) The Company or any of its directors, officers, partners or members, as the case may
be, are convicted of a felony.
XI. RIGHTS AND REMEDIES
Upon the occurrence of a default, Investor may:
(A) Require full repayment of the Funds in cash or by certified check within 30 days of
written notice to Company of a default, and Company’s failure to cure the default;
(B) Require full payment of all other monies owed Investor pursuant to this Agreement in
cash or by certified check within 30 days of written notice to Company of a default, and
Company’s failure to cure the default;
(C) At any time or from time to time proceed to protect and enforce all rights and
remedies available to Investor under this Agreement by suit or by any other appropriate
proceedings, whether for specific performance of any covenant or agreement contained in the
Agreement, or damages permitted under applicable law or regulations;
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(D) All remedies provided for in this Agreement are cumulative and shall be in addition
to any and all other rights and remedies available to Investor at law or in equity. The exercise of
any right or remedy by Investor shall not in any way constitute a cure or waiver of any default,
nor invalidate any act done pursuant to any notice of default, nor prejudice Investor in the
exercise of those rights; and
(E) If Investor suspends or terminates this Agreement, the rights and remedies available
to Investor shall survive such suspension or termination.
12.1 Company shall indemnify, save harmless and defend Investor and their employees and
agents from any loss, damage, claim or other expense suffered or incurred by them or any of
them by reason of Company’s negligence or failure to perform any of the obligations required
herein including any reasonable costs, fees, and expenses in connection with Investor’s efforts to
collect any monies owed pursuant to, or enforce a provision of, this Agreement.
XIII. COMPLIANCE WITH APPLICABLE LAW [optional]
13.1 Company agrees to comply with all applicable federal, state and local law, including all
such laws that prohibit discrimination. Company covenants that it will not discriminate on the
basis of race, color, sex, sexual orientation, religion or national or ethnic origin in its hiring of
contractors, and shall prohibit its contractors from engaging in such discrimination in the hiring
13.2 Company certifies and covenants that it shall make a good faith effort to eliminate illegal
drug use and alcohol and drug abuse from its workplace during the term of this Agreement.
Specifically, Company shall: (i) prohibit the unlawful manufacture, distribution, dispensation,
possession, or use of drugs in its workplace; (ii) prohibit its employees from working under the
influence of alcohol or drugs; (iii) not hire or assign to work on an activity funded in whole or
part with State Funds, anyone whom it knows, or in the exercise of due diligence should know,
currently abuses alcohol or drugs and is not actively engaged in a bona fide rehabilitation
program; (iv) Promptly inform the appropriate law enforcement agency of every drug related
crime that occurs in its workplace if the Company or any of its employees has observed the
violation or otherwise has reliable information that a violation has occurred; and (v) Notify
employees that drugs and alcohol abuse are banned in the workplace, impose sanctions on
employees who abuse drugs and alcohol in the workplace, and institute steps to maintain a drug
and alcohol free workplace.
14.1 Entire Agreement. This Agreement represents the entire Agreement between Investor
and Company and supersedes any and all prior understandings or oral or written agreements
regarding the investment of the Funds by Investor in Company. This Agreement may be
amended from time to time at the direction of, or with the concurrence of Investor, and only in
writing executed by Company and Investor.
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14.2 Assignment. No right, benefit or advantage inuring to Company under this Agreement
may be assigned, and no burden imposed on Company hereunder may be delegated, without the
prior written approval of Investor.
Any notices which any party may be required, or may desire, to give shall, unless otherwise
specified, be in writing and shall be (i) hand delivered, effective upon receipt (ii) sent by United
States Express Mail or by private overnight courier, effective upon receipt, or (iii) served by
certified mail, postage prepaid, return receipt requested and addressed as follows:
In the case of Investor to:
In the case of Company to:
14.4 Successors and Assigns. This Agreement shall be binding upon the Company and its
successors and assigns, and shall inure to the benefit of Investor and its successors and assigns.
14.5 Governing Law and Jurisdiction. This Agreement will be governed by the laws of the
State of ___________. Company hereby expressly consents to the personal jurisdiction of the
state and federal courts located in _____________ for any lawsuit filed there against Company
by the Investor arising from or relating to this Agreement.
14.6 Dispute Resolution. All disputes shall be finally resolved by arbitration under the rules
of the American Arbitration Association. Arbitrators shall be appointed in accordance with said
Rules and any consistent provisions of the internal laws (except conflict of law rules) of the State
of ____________. The arbitrators so appointed shall have the authority to determine all issues of
fact. The Parties, their representatives, other participants and arbitrators shall hold the existence,
subject matter and result of arbitration in confidence. The prevailing Party in any legal
proceeding shall be entitled to recover its legal expenses, including, but not limited to, the costs
of any court or arbitration proceeding and reasonable attorneys’ fees.
14.7 Severability. The invalidity of any provision of this Agreement shall not affect the
validity of the remaining provisions hereof, except that any invalidity of the repayment
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obligations of the Company under this Agreement shall constitute an event constituting default
14.8 Waiver. The failure of Investor to insist upon performance of any term of this Agreement
at any time and from time to time shall not be deemed to be a waiver of any term of this
14.9 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one Agreement.
IN WITNESS WHEREOF, the Company and Investor have caused this Agreement to be
executed, delivered, and witnessed by their duly authorized officers effective the date first above
By______________________ (signature) By___________________ (signature)
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