Several early stage companies are being impacted by the uncertainty associated with the latest developments regarding the receivership of Silicon Valley Bank.
On this page we are providing some tools and resources addressing common questions and issues that early stage companies are facing.
Q: We had to move funds out of our company account at SVB and temporarily place them in an account of one of our founders. What do we need to do?
A: That situation would normally require a temporary custody-type arrangement as well as the appropriate board consents and waivers to transfer the funds and open a new bank account. For your convenience we are linking the following forms:
1. Temporary Custody Agreement (short form)
2. Board Approval of TCA, new bank account opening and interested director waiver
Q: We had to secure emergency funding via an unsecured line of credit. How do we document that?
A: The company and the emergency lender would normally enter into an interim credit agreement and, to the extent a third party is guaranteeing the company obligations, a limited guaranty would normally be put in place. For your convenience, we are linking the following forms:
1. Interim Credit Agreement (unsecured)
2. Board Approval of ICA
3. Limited Guaranty
Q: We needed emergency funding from one of our investors to meet certain obligations and our investor is agreeable to waiving repayment. What do we need to do to evidence this?
A: A waiver would typically be appropriate under the circumstances. For your convenience we are linking the following forms:
1. Investor Waiver
IMPORTANT NOTE: THIS IS GENERAL GUIDANCE AND THESE ARE BASIC FORMS OF GENERAL APPLICABILITY THAT MAY NOT BE SUITABLE IN ALL CIRCUMSTANCES, DEPENDING ON YOUR PARTICULAR FACTS. YOU SHOULD ALWAYS CONSULT WITH YOUR COUNSEL TO EVALUATE YOUR LEGAL NEEDS AND USE AND TAILOR AGREEMENTS AND OTHER DOCUMENTS AS NECESSARY OR APPROPRIATE FOR YOUR PARTICULAR SITUATION. YOU SHOULD NOT CONSIDER THIS TO BE PARTICULARIZED INDIVIDUAL ADVICE AS IT IS NOT TAILORED TO ANY CLIENT NOR IS IT INTENDED TO CONSTITUTE ADVICE.
Please come back and visit this page for future updates, and feel free to contact us for any questions.
Paul De Bernier
|Salt Lake City||Mark Bonham
Governance Reminders for a Period of UncertaintyCorporate Secretary