Conditions to Closing

A series of items that must be completed before the Investor is obligated to purchase, and the Company is obligated to issue, the Preferred Stock and the transaction can close. Conditions to closing typically include:

Due diligence: An investigation into the Company’s legal and financial history

Blue Sky qualification: Registration or qualification of the shares under the relevant state security laws, known as “Blue Sky” laws

Amended Certificate of Incorporation: Amendment of the Certificate of Incorporation (also known as the Charter) to reflect the rights and preferences of this new class of stock

They may also include:

CFIUS clearance: Notifying the Committee on Foreign Investment in the United States (“CFIUS”) of the transaction. CFIUS review prior to closing is only necessary for certain foreign investment transactions

Opinion: Delivery of an opinion letter to the Investors by the Company’s lawyers, certifying the validity of legal matters such as the Company’s formation, power to conduct business, and issuance of stock