20 NEWSLETTER 2021 • All contracts to which the company is a party are in effect and enforceable, • The company possesses the ownership or license right of the intellectual and industrial property rights required for the activities of the company, • All taxes are duly paid within the scope of the applicable law, • Other than those that are disclosed, there are no guarantees, sureties or similar obligations given by the company, • Other than those that are disclosed, there are no lawsuits or arbitrations filed against the company that will adversely affect the activities of the company. Although representations and warranties on many issues are given by the founders, there may be some transactions in which the company violates these representations and warranties. In such a case, the founders prepare and present to the investor a disclosure letter containing all the actions and transactions in which the representations and warranties set out in the agreement have been violated. If the investor accepts the disclosure letter, they cannot claim compensation from the founders regarding the actions and transactions set forth in it by alleging that the relevant representations and warranties have been violated. There are also some representations and warranties given by the investor in the share subscription agreement. However, these representations and warranties are related to very limited issues such as the investor having the necessary authority to conclude the agreement and not being a party to any lawsuit or arbitration that would prevent them from fulfilling the obligations under the agreement. If a situation contrary to the representations and warranties set out in the agreement arises until the closing date, the investor may be given the right to refuse to complete the investment round. In the event that a situation contrary to the declarations and warranties occurs after the closing, the investor’s damages arising from this violation are compensated by the founders within the framework of the indemnification provisions and the founders may be obligated to remedy the violation in question.
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