Document background
The Equity Commitment Agreement is a crucial document in Canadian corporate finance transactions, used when an investor agrees to provide equity financing to a company. It serves as a binding commitment outlining the terms under which the investor will provide capital, typically in exchange for shares or other equity securities. The agreement is particularly important in complex transactions where funding may be contingent on certain conditions or where the actual investment may occur in stages. Subject to Canadian federal and provincial securities laws, it must comply with applicable regulatory requirements, including prospectus exemptions under National Instrument 45-106 and, where relevant, Investment Canada Act approvals for foreign investors. The document typically includes detailed provisions on the commitment amount, conditions precedent, closing mechanics, representations and warranties, and termination rights. It's commonly used in private equity investments, venture capital financing, strategic corporate investments, and other significant equity financing transactions.
