Parties

Who are the parties? More specifically, identify:

• the investor/s

• the managers, and

• the investee company (newco)

Conditions

Are there any conditions to completion of the investment?

What are the obligations of the parties to satisfy any such conditions? By what date?

Share subscription

What is the capital structure for the investee company?

What class and number of shares will each shareholder (ie the investor, the managers and any other shareholders) subscribe for?

Warranties

Who is to give the warranties? Is it just the managers?

Will the warranties be given jointly, jointly and severally, or severally?

How extensive will the warranties be? It is customary for investment agreement warranties to focus mainly on the business plan and the managers, as sufficient coverage on the company itself is gained for the investor under the acquisition agreement.

What limitations will apply to warranty claims? These include:

• time within which claims may be made

• caps on the warrantors' respective liability and on aggregate liability, and

• de minimis for individual claims and an aggregate threshold

Board of directors

How many directors will be on the board?

Which of the managers will be directors?