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The Subscription Agreement is a document that outlines the terms and conditions for subscribing to participating shares of a company. It is an important document as it establishes the agreement between the subscriber and the company, detailing the investment amount, the class of shares being purchased, and the provisions of the memorandum and articles of association of the company.
The document begins with a title, 'Subscription Agreement,' which clearly identifies its purpose. It then includes the names and addresses of both parties involved, as well as the current date. The introduction addresses the subscriber directly, acknowledging their receipt, review, and understanding of the term sheet, which is the basis for the offering of participating shares. It states that the subscriber agrees to invest the specified amount in the company and subscribe for as many shares as outlined in the term sheet and subject to the provisions of the articles.
The agreement incorporates the term sheet by reference and establishes the order of priority of the documents in case of any conflicts. The subscription information section requires the subscriber to provide their name, address, and email. Corporate subscribers are also required to provide additional documents, such as incorporation documents and a list of authorized signatories. The authorized signatories section lists the names and addresses of the persons authorized to give and receive instructions on behalf of the subscriber.
The document also includes a section for standing wire instructions, which specifies how funds may be wired to the subscriber. A disclosure authorization section authorizes the administrator to provide information regarding the subscriber's account to the investment manager and the company's legal counsel. The subscriber acknowledgements section highlights important points that the subscriber should understand, such as the non-binding nature of the agreement until accepted by the company, the subscription price and minimum investment amount, and the restrictions on transferability of the shares.
The subscriber representations and warranties section includes various representations made by the subscriber, such as the absence of any restricted persons as beneficiaries of the shares, compliance with legal requirements, possession of requisite knowledge and experience, and authorization for the company and the administrator to accept instructions by facsimile. The section also clarifies that no performance guarantees have been made and that the subscriber's net worth exceeds a certain amount.
The document concludes with provisions related to amendments, rejection of subscription, corporate authorization, compulsory redemptions, and general terms. It includes a signature block for both parties and specifies the type of ownership for the shares being subscribed.
In summary, the Subscription Agreement is a detailed document that establishes the terms and conditions for subscribing to participating shares. It covers various aspects, including the agreement between the subscriber and the company, subscription information, authorized signatories, wire instructions, disclosure authorization, subscriber acknowledgements, representations and warranties, and general provisions.
1. Review the entire document to understand the purpose and importance of the Subscription Agreement.
2. Provide the necessary information in the subscription information section, including your name, address, and email.
3. If you are a corporate subscriber, submit the required incorporation documents and a list of authorized signatories.
4. Familiarize yourself with the standing wire instructions section in case funds need to be wired to you.
5. Consider the disclosure authorization section and decide whether you want the administrator to provide information regarding your account to the investment manager and the company's legal counsel.
6. Read and understand the subscriber acknowledgements section, which highlights important points such as the non-binding nature of the agreement until accepted by the company, the subscription price, and the minimum investment amount.
7. Carefully review the subscriber representations and warranties section and ensure that you meet all the requirements and representations mentioned.
8. Sign the document in the designated signature block, ensuring that it is dated correctly.
9. If you are signing under a power of attorney, make sure to include the power of attorney or a duly certified copy.
10. Determine the type of ownership for the shares being subscribed and indicate it in the appropriate section.
11. Keep a copy of the signed Subscription Agreement for your records.
12. Be aware that the Subscription Agreement may be subject to amendments with the written consent of both parties and the company's board of directors.
13. Understand that the company has the right to reduce or reject your subscription, as stated in the rejection of subscription provision.
14. If you have any questions or concerns, consult with your attorney, accountant, or investment adviser before signing the Subscription Agreement.