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| | 0.9.1: The Contract: Purchase Agreement, Shareholders Agreement, And Rights Of First Refusal - Encyclopedia - Library - ... |
 | | In a structured venture financing, the contract between issuer and investor is, or should be, detailed, covering a number of issues which otherwise may be the subject of future disputes and misunderstandings. |
 | | First of all, the section is designed, although not explicitly, as a device to draw into a lawsuit, given a misrepresentation, the perennial "deep pockets" in the financing: the law firm, the accountants, and the investment bankers (if any) serving as placement agents. |
 | | In fact, if the investors want to make (as they usually should) their own investigations—an "acquisition audit" as it is sometimes called—they may be deterred by a fear that the issuer will attempt to defend a charge of misrepresentation by claiming the investor is stopped by its own inquiries. |
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