With regard to investments in life sciences companies, it is customary to make payment tranches, each of which is measured against the achievement of agreed milestones. Typically, these steps are measured, for example, by the different stages of development of one or more products, with the company agreeing to take over new developments or the results of preclinical or clinical trials. It is customary for investors to be able to waive milestones or other closing conditions if they are not met. The investment agreement stipulates that the proceeds of the investment (whether on the initial or subsequent tranches) must be used to reach the agreed steps and to achieve the agreed business plan or budget. On the other hand, an investment contract is specifically focused on a specific investment for which the investor can obtain equity in the company or if leverage agreements can be entered into (in fact, a loan to the company). The investor may already be a shareholder or a new third-party investor. As a general rule, investors will have a minority stake, i.e. together they will hold less than 50% of the company`s shares after the completion of an initial investment. Historically, however, it is not uncommon for investors to quickly hold a majority stake in life sciences companies, especially when the company needs more than one round of investment because of the size of each investment and the amount of money often required to develop a life sciences company`s products. Under English corporate law, many shareholders` business can be decided either by the majority of shareholders or by at least 75% of the shareholders. The terms of the investment depend on the type of financing the company needs (for example.B.

Is the investor required to proceed with multiple financing cycles? Should the investor provide immediate interim financing before the main investment round?) and the nature of the financing agreements will determine the negotiating power of the parties in negotiating the investment agreement. After an investment tranche, the company can provide an investment guarantee as an explicit guarantee that the guarantor`s statements on the completion date are accurate and correct. Representations and guarantees generally refer to the company`s terms and conditions, which are reviewed as part of due diligence. These may relate to the financial situation (accounting and tax representations), the company`s assets (ownership and valuation), the ownership structure, the operational characteristics and the legal situation of the company. An investment contract is a contract between a company and its shareholders and an investor that regulates an investment project in the company.