A Share Subscription Agreement is a legally enforceable contract between a company and an investor, governing the terms under which the investor subscribes to newly issued shares of the company. This agreement delineates the rights, obligations, and conditions precedent to the issuance and acquisition of shares, ensuring compliance with applicable corporate and securities laws.
Key Provisions
- Parties to the Agreement – Identifies the issuing company and the subscribing investor, including their legal status and relevant corporate details.
- Subscription Terms – Specifies the number, class, and price of shares subscribed, along with the total subscription amount.
- Consideration and Payment Mechanism – Outlines the purchase price, applicable taxes, and the timeline and method of payment.
- Conditions Precedent – Enumerates conditions that must be fulfilled before the agreement takes effect, including regulatory approvals and due diligence.
- Representations and Warranties – Sets forth assurances from both parties regarding their legal standing, financial condition, and compliance with applicable laws.
- Covenants – Imposes specific obligations on the company and the investor, such as restrictions on share transfers or the intended use of funds.
- Closing and Execution – Details the procedural aspects of share issuance, including board approvals, share register entries, and execution formalities.
- Termination Provisions – Specifies the grounds upon which the agreement may be terminated, including non-fulfillment of conditions precedent or breach of contractual obligations.
- Indemnification and Liability – Establishes mechanisms for compensating losses arising from misrepresentations, breaches, or regulatory non-compliance.
- Governing Law and Dispute Resolution – Determines the jurisdiction and legal framework governing the agreement, along with the forum for resolving disputes.