SUBSCRIPTION AGREEMENT THIS SUBSCRIPTION AGREEMENT (the Agreement) is made and entered into upon the [date e.g.

16th] day of [month and year]; BETWEEN: 1. [Name of company issuing the shares], a company incorporated in [country] with registration number [number]and registered office [registered office address] (the Issuer); and 2. [Name of company buying the shares], a company incorporated in [country] with registration number [number] and registered office [registered office address] (the Subscriber). [Note that to add an individual rather than a company, their full name and address should be entered] The above named shall collectively be known as Parties, and each a Party. WHEREAS: (A) The Issuer is a private company incorporated in [country] limited by shares and has at the date of this Agreement an issued and paid up share capital of [existing total share capital before this agreement e.g. 10,000] divided into [total number of shares in issue before this agreement] Shares (defined below). The Shareholders (defined below) of the Issuer as at the date hereof, and their respective shareholdings in the Issuer, are set out in Part A of Schedule 1. The Issuer is involved in the Business (defined below). (B) The Subscriber has agreed to subscribe for the New Shares (defined below) according to the terms and conditions of this Agreement. Following the subscription and allotment of the New Shares, the shareholding structure of the Issuer shall be as set out in Part B of Schedule 1. IT IS HEREBY AGREED as follows: 000000001. Definitions0000000000000000 1.1 In this Agreement (including the Recitals and the Schedules), except to the extent that the context otherwise requires, the following terms shall have the meanings set forth below: Accounts means the official financial accounts of the Issuer, including all notes and documents required by law, prepared according to the prevailing accounting principles, standards and practices generally accepted in [country]; Accounts Date means the date on which the most recent Accounts were prepared up to; Aggregate Price means the amount to be paid by the Subscriber to the Issuer for the relevant number of allotted New Shares on aggregate; Board or Board of Directors or Directors means the directors for the time being of the Issuer; Business means the principal activity of the Issuer, being [brief general description of what the company does].

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Control means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a corporation, whether through the ownership of voting securities, by contract, or otherwise and derivative terms thereof (including Controlling, Controlled by and under common Control with) shall also bear such meaning as aforesaid. For the purpose of this definition, the holding of an interest of more than fifty (50) per cent of the equity share capital of the relevant corporation shall be deemed to be Control of the corporation; Encumbrance includes any interest or equity of any person (including any right to acquire, option or right of pre-emption) or any mortgage, charge, pledge, lien, assignment, hypothecation, security interest, title retention or any other security or claim of whatever nature; Intellectual Property Rights includes the full benefit (subject to the obligations) of all patents, trade and other marks registered designs (and applications for all the same), copyrights, trade and business names, supply, distributorship, agency and other like agreements, inventions, discoveries, improvements, designs, techniques, computer programs and other confidential processes and information and know-how and any licenses in connection with any of the same and full right to all intellectual property and legal protection relating to the same and in every case (unless the context otherwise requires) of or belonging to the Issuer; Completion means the completion of the subscription of the New Shares according to Clause 4.1 by the Subscriber; Completion Date means the date upon which Completion occurs; Management Accounts means the accounts that the Issuer has produced for its own purposes, and where applicable prepared according to the prevailing accounting principles, standards and practices generally accepted in [country]; New Shares means [number of shares being issued] Shares to be issued by the Issuer to the Subscriber, which shall represent approximately [percent of total shares in company] percent of the enlarged issued share capital of the Issuer following the issue and allotment of such New Shares; Shareholders means all existing shareholders of the Issuer (prior to the accession of the Subscriber as a new shareholder at Completion); Shares means ordinary shares in the capital of the Issuer; Subscription Price means the price per share for the subscription of the New Shares by the Subscriber, being [price per share e.g. 1.50] for each New Share; Taxation includes: (a) all forms of taxation, duties, imposts, levies and rates whenever created or imposed and where the context so admits shall include income tax, property tax, capital duty, stamp duty, sales tax, payroll tax, withholding tax, rates, customs and excise duties, or any amount payable to the revenue customs or fiscal authorities of any and all relevant jurisdictions; all amounts equal to any deprivation of any relief, allowance, set-off

(b)

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or deduction in computing profits or right to repayment of taxation granted by or pursuant to taxation legislation; and (c) all costs, interest, penalties, charges and expenses incidental or relating to any of the above;

Warranties means the representations, warranties and undertakings found in this Agreement, including without limitation Clause 5 and Schedule 2. 1.2 In this Agreement, unless the context otherwise requires: (a) references to Recitals and Schedules are to be construed as references to the recitals and schedules to this Agreement and references to this Agreement include its Schedules; words importing the singular include the plural and vice versa, words importing a gender include every gender; references to a person shall be construed as including references to an individual, firm, issuer, corporation, unincorporated body of persons or any state or any agency thereof; any reference to a statutory provision shall include such provision and any regulations made in pursuance thereof as from time to time modified or re-enacted; headings are for convenience of reference only and shall not affect the interpretation of this Agreement.

(b) (c)

(d)

(e)

2. 2.1

0Conditions Precedent Notwithstanding any provisions herein, the obligation of Subscriber to subscribe for the New Shares on the Completion Date is conditional upon the following conditions being fulfilled to the satisfaction of Subscriber (if the same shall not already have been satisfied prior to the date hereof): (a) the Subscriber and the Shareholders of the Issuer shall have lawfully and validly entered in to an agreement between themselves, such as a Shareholders Agreement defining inter alia their mutual obligations, privileges, protections, and rights; all consents, approvals or authorisations (if necessary) from any relevant authorities for the lawful conduct of the Business by the Issuer having been obtained and continuing to be in force; all consents, approvals or authorisations including approvals from the Board and the Shareholders for the issue by the Issuer and the subscription by the Subscriber of the New Shares having been obtained and continuing to be in force; there have been no significant material adverse change to the business climate or financial conditions; and all Warranties of the Issuer under this Agreement being complied with, true, complete and accurate.

(b)

(c)

(d) (e)

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3. 3.1

Subscription of New Shares, Rights and Restrictions On the Completion Date, the Subscriber, relying on the representations, warranties, undertakings and indemnity by the Issuer shall subscribe in cash for, and the Issuer shall issue to the Subscriber, [number of shares to be issued] New Shares at the Aggregate Price of [total amount being invested]. The New Shares shall be issued by the Issuer free from all claims, charges, liens and other Encumbrances and shall rank pari passu in all respects with the then existing issued Shares. The Issuer shall ensure that the proceeds from the issue of the New Shares shall be used only for the conduct of the Business and its value-added activities, including employment of staff, plant and machinery or other necessary overhead or expenditure, strategic business planning and development, marketing and brand management, research, development and testing, procurement of licenses or other intellectual property, or any other activities deemed reasonable and appropriate by the Subscriber in its sole and absolute discretion. Without prejudice to the foregoing, the Issuer shall not use such proceeds to provide financial assistance for any subscription of shares in the Issuer by any person or to make any payment or loan to any Shareholder or to any related party. Completion and Post-Completion The Completion shall take place upon the issue and allotment to the Subscriber of all of the New Shares in exchange for full payment of the Aggregate Price by the Subscriber. The Issuer shall deliver to the Subscriber within [number e.g. 7] days from the Completion Date the definitive share certificate in respect of the New Shares issued and allotted to the Subscriber. The Issuer shall deliver to the Subscriber such waivers, consents and other documents as may be required to give good title to the New Shares and to enable the Subscriber to become the registered holders thereof. Representations, Warranties and Undertakings70 The Issuer represents and warrants to and undertakes with the Subscriber (a) Subject to: (i) any matter expressly disclosed in writing by the Issuer to the Subscriber prior to the date hereof;

3.2

3.3

3.4

4.0 4.1

4.2

4.3

5. 5.1 that:

(ii) any matter expressly provided for under the terms of this Agreement; and (iii) any matter done or omitted to be done by the Issuer with the prior written approval of the Subscriber,

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all information concerning the Issuer, all statements of fact and all Warranties are full, complete and accurate and will be fulfilled at all times from the date hereof, and will be true and correct as though repeated on each day hereafter, down to the Completion Date in all respects with reference to the facts and circumstances existing on each such day; (b) (c) The Issuer has full power to enter into, exercise its rights and perform its obligations under this Agreement; The shareholding in the Issuer as at the date hereof is as set out in Part A of Schedule 1 and all shareholdings in the Issuer as at the date hereof have been fully disclosed to the Subscriber and are fully accounted for; and The Issuer has honest and reasonable grounds for the assumptions made in any and all business plans or financial forecasts provided to the Subscriber.

(d)

5.2

The Subscriber shall be entitled by notice in writing to the Issuer to rescind this Agreement prior to the Completion Date (without prejudice to all the other rights and remedies available to it) in the event of any falsehood or material breach of any of the Warranties on the part of the Issuer under this Agreement.

This free sample download subscription agreement is an excerpt from our subscription agreement template, which you can download in full for just 2.99.

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