An Allocation Contract holds the date, after which the portion of directors’ referral amount will be credited to his or her account. The amount will be paid to the participant, and after that, it will be transferred to their account. The date in the allocation contracts holds significant value, and it is taken seriously.
This allocation agreement is made up of 25th March 2008 between two parties. All the capitalized terms in the agreement, not otherwise defined, will have their respective meanings, as mentioned in section 5.
With the implementation of this agreement, individual investors including the company are making an equity purchase agreement, in which all the Series D the investors are going to buy shares in the company to its Series D-1 Preferred Stock, Series D-2 Preferred Stock, Series D-3 Preferred Stock and together with the Series D-1 Stock and the Series D-2 Stock, from time to time after the request from the company.
Who Takes the Allocation Contract?
The allotment contracts in a different industry are taken by different groups of people. In the case of the travel industry, the organizer will negotiate the number of seats and hotel rooms in the contract. So the hotel and the travel agent will be the one who will take part in the agreement. The number of seats and hotel rooms will be given in the contract.
What Is the Allocation Contract?
The investors have agreed to act as a lead investor, as per the terms defined in the Series D Agreement. They have decided to assume specific responsibilities as mentioned and further agreed to be obligated to buy a majority of shares of Series D Stock, which the company decided to sell under the agreement.
When Do You Need an Allocation Contract?
Initial public offering refers to the process for offering shares of a private company to the public as a new stock allowance. It helps the company to raise capital from the public investors for the business. These shares are sold to the institutional investors and usually also the retail investors. The IPO shares are generally underwritten by one or more investment banks, which arrange for the shares to list them as one or more stock exchanges.
- Notice of Initial Offering
- Preliminary Indication of Interest
- Final Indication of Interest
- HSR Act Clearance
Inclusions in Allocation Contract
In the tax allocation agreement, the company will mention all the terms and rules regarding the issuance of shares to its existing shareholders, which is known as a rights issue. The private placement is when a company issues shares to select a group of investors. Instead of giving the shares to the public at large, it is given to individual investors, which is the reason it is known as a private placement of shares.
How to Draft Allocation Contract?
If you check the allocation agreement sample, you will find various terms used in the agreement. Most of the terms mean the same, but there are some specific terms. You can search for the meaning of these particular terms. You have to use all these terms in a proper way to draft an allocation agreement.
- Allocation Shares
- Form S-3
- HSR Act
- Initial Offering
- Investor Rights Agreement
- 1934 Act
- Rule 144
- Securities Laws
Benefits of Allocation Contract
A Lock-Up Agreement for contractual provision, which prevents a personal or individual to sell their shares for a specific amount of time. It is commonly used for the initial public offering process. The Lock-up Agreement might only be applicable to the Allocation shares which are quite significant in the total number
Types of Allocation Contract
There are various types of terms and allocations you can find the allocation agreement. So, these are some of the information you can see in the contract.
- Allocation of Initial Public Offering Shares
- Rights Issue & Private Placement
- Lock-Up Agreement
- Registration Rights
Key Terms/Clauses in the Allocation Contract
You can look for the allocation agreement definition to understand all the details about it. The registration right entitles an investor who has some restricted stock in the company as they get the ability to require the company to list them the shares to the public so that they can complete selling them. If the registration rights are followed, then it can be used to force a privately held company to become a publicly-traded company.
- Obligations of the Company
- Information from Investor
- Expenses of Registration
- Delay of Registration
- Reports Under the 1934 Act
- Assignment of Registration Rights
- Termination of Registration Rights
So these are all the details that you must know about the share allocation agreement. There are some Miscellaneous terms or acts in the agreement, and they are exercised carefully. You can also find details about expenses and termination in the allocation agreement. It also contains details about the Entire Agreement, Waivers, and Amendments.
Sample for Allocation Agreement
A sample of the agreement can be downloaded from below.
Download this USA Attorney made Original Agreement for only $9.99
This agreement is made between the Company Trustee and the Third Party Trustee on the effective date of 09th November, 2011.
Company Trustee represented by
Mr. Jacob Stew
Address: 3950 Austin Peay Hwy, Memphis, TN 38128
Contact number: (901) 385-8588
Third Party Trustee represented by:
Mr. David Statham
Address: 7525 Winchester Rd, Memphis, TN 38125
Contact number: (901) 302-9853
Duration of contract: 1 year
Terms and Conditions:
- Expenses attributable to the salaries of Third Party personnel performing services in accordance to the Allocation Agreement shall be paid for by the Company Trustee to the Third Party Trustee based on the time such personnel spent on providing the services as mentioned in the Allocation Agreement.
- Expenses attributable to travel, use of vehicle, gas, and repairs of vehicle used by personnel of the Third Party Trustee shall be paid for by the Company Trustee to the Third Party Trustee based on the time such personnel spent on providing the services as mentioned in the Allocation Agreement.
- This Allocation Agreement may be terminated, in part or in whole, on no less than 30 days notice in writing by any of the parties.
This Allocation Agreement shall be effective for a term of one year, beginning 09 November 2011 It shall automatically renew for successive one year terms unless terminated.
SIGNED BY COMPANY TRUSTEE:
SIGNED BY THIRD PARTY TRUSTEE: