5) initial right of refusal and co-purchase contract: as the name suggests, this instrument generally consists of two primary rights: (i) the “right to first refusal”, which provides that shareholders (or part of them) must first offer to sell their shares to the company and/or to preferred shareholders before equity is offered to a third party; and (ii) the right to co-sale, which is the right to participate in proportion to the negotiated terms of the sale of shares of another shareholder. Guarantees for shareholders. Shareholder guarantees (in the NVCA Charter model) have been updated to include the eligibility requirements of preferred shareholders for: 2. “Charter” or “establishment certificate”: when a new class of shares is created or the number of shares authorized is increased, the company`s certificate of creation must be amended to provide for such a change. The Charter is a publicly presented document that defines, among other things, the rights, preferences and privileges associated with the preferred action. For example, a charter may include anti-dilution provisions (protection of investors against future issuance of shares at a lower price per share than they purchased) and preferred shareholders often expect “guarantees” to be introduced. Guarantees require a majority vote of preferred shareholders to allow the company to freely implement certain measures, such as approving/issuing additional shares or amending the Charter or statutes. Together, these provisions allow preferred shareholders to effectively secure their position and ensure that their investments will not be diluted without their consent. 4. Voting agreement: this agreement generally provides for: (i) the composition of the company`s board of directors after the funding cycle, including the electoral/distance process; and (ii) drag-along rights. The “Drag-Along Rights” provide that, for certain authorized authorizations, all voting parties vote in favour of the sale of the company, accept the terms of sale and refrain from exercising any “derogatory rights”. The Advisory Board for General Legal Assistance will continue to address the base approximately once a year to determine whether changes to the documents should be made, also taking into account the latest legal developments or actual experience of documents in stores.

Users of the documents are encouraged to send comments or suggestions via email to jfarrah@nvca.org to Jeff Farrah. 1. Share Purchase Contract (SPA): the instrument by which a shareholding is made available to the company by investors, usually in return for preferred shares. The BSG`s critical conditions include: (i) the purchase price of the preferred share; (ii) the number of preferred shares issued; (iii) representations and guarantees of the company and investors; and (iv) any commitments, commitments or closing conditions that continue to be made. The VA contains the director`s voting rights and drag-along, which requires shareholders to vote in favour of an acquisition if certain triggering events are respected. 3. Investor Rights Agreement (IRA): The IRA generally sets registration rights, information rights and pre-emption rights for preferred shareholders, among others. “registration rights”: a contractual right to participate in a public offering of the company`s securities or the right to tax them. “Information rights” give preferred shareholders the right to access details of the company`s financial health. “Preemptive Rights” has granted some investors the right to acquire shares in a future cycle in order to protect their current holdings from dilution.