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Subscription Agreement Template

Prepared for:

[Client.FirstName][Client.LastName]
[Client.Company]

Created by:

[Sender.FirstName][Sender.LastName]
[Sender.Company]

1. This Subscription Agreement (the “Subscription Agreement”) is made and entered into this [date] (the “Effective Date”) by and between the undersigned, [Undersigned.FirstName][Undersigned.LastName] (the “Subscriber”) and [Company.Name], LLC, a Limited Liability Company (the “Company”) organized under the laws of the state of [State].

2. The Subscriber wishes to subscribe for [number] shares (the “Shares”) of the [class of stock, e.g. common stock, preferred stock] stock of the Company at the subscription price of $[amount in dollars] per share in return for the issuance and sale of Membership Interests (“Membership Interests”) from the Company. The Membership Interests (“Membership Interests”) are issued by [Company.Name] pursuant to the terms of the Private Placement Memorandum dated [Date] (the “Memorandum”). 

3. The Subscriber hereby delivers to the Company (i) two (2) duly signed copies of this Subscription Agreement, and (ii) a check made payable to Company Name, LLC in the aggregate amount of $[Dollar Amount]. Such payment by the Subscriber represents payment in full for the Membership Interests being offered by the Company and subscribed for by the undersigned, in accordance with the terms and conditions of the Memorandum and this Subscription Agreement.

4. The Subscriber certifies and acknowledges the Subscriber received and reviewed the Memorandum, dated [date], and all supplements attached to it. The Subscriber acknowledges that they are familiar with the terms and provisions of the Memorandum.

5. The Subscriber hereby acknowledges and agrees that no Membership Interests shall be sold or issued, or deemed sold or issued, by the Company to the Subscriber and that the Subscriber shall in no way be considered a Member of the Company until (i) the Subscriber has satisfied all requirements of section 1.1 above, and (ii) the Company has countersigned this Subscription Agreement and deposited any amounts delivered by the Subscriber in the Company’s bank account. If the offering of any Membership Interests is terminated by the Company (in its sole and absolute discretion) without accepting the Subscriber’s subscription, or if the Company rejects the amounts, in whole or in part, the Company will cause the amounts, or the unaccepted portion thereof, to be returned in full to the Subscriber.

2. Adoption of the Operating Agreement of the Company

1. The Subscriber has received and read in its entirety, the Company’s Operating Agreement dated [Date] (the “Operating Agreement”), and by execution hereof indicates Subscriber’s full and complete acceptance and adoption of the terms and conditions contained in such Operating Agreement and fully. For the avoidance of doubt, by execution of this Subscription Agreement, the Subscriber is assenting to all terms and conditions contained in the Operating Agreement and the Subscriber executes this Subscription Agreement as a counterpart signature page of the Operating Agreement.

3. Warranties and Representations

The Subscriber represents and warrants to the Company the following:

‌1. Subscriber has received one of a limited number of copies of the Memorandum, including the Operating Agreement and all other attachments and exhibits to the Memorandum, and has read and understands such documents and all terms and conditions contained in such documents in their entirety.

2‌. Subscriber has been provided the opportunity (i) to obtain additional information to validate the information contained in the Memorandum and all attachments and exhibits thereto, (ii) to evaluate the merits and risks of an investment in the Company, and (iii) to ask questions of the Company and receive answers and documentation from the Company concerning the terms and conditions of the Company’s offering, all to the satisfaction of Subscriber.

3. Subscriber understands that the financial data and projections contained in the Memorandum are estimates and projections of possible results made by the Company’s Management Team and there are no assurances that any such results will be achieved.

4. Subscriber understands that the Membership Interests have not been registered either with the Securities and Exchange Commission (the “SEC”) or with the securities commission of any state and are being offered and sold pursuant to private offering exemptions provided in Section 4(2) of the Securities Act of 1933, as amended (the “Act”), Regulation D promulgated by the SEC, and applicable state securities laws and that no governmental agency has recommended or endorsed the Membership Interests or made any finding or determination relating to the adequacy or accuracy of the Memorandum or the fairness for public investment of Membership Interests in the Company.

5. Subscriber is a citizen of the United States and resides at the principal address shown on the signature page of this Subscription Agreement. Subscriber will inform the Company of their intention to change this principal address in writing with [number] days’ notice.

6. Subscriber understands the risks involved in any investment in the Company, including those risks described in the Memorandum. Subscriber understands that any investment in the Company is a speculative investment which involves substantial risk of loss of Subscriber’s entire investment, that the Company has no operating or financial history, that no tax ruling has been requested and that there can be no assurances that any tax benefits will result from an investment in the Company. Subscriber has consulted with a tax advisor regarding the tax aspects of this investment and its suitability for the Subscriber. The amount invested by Subscriber is not excessive in consideration of Subscriber’s financial situation and Subscriber is able to bear the risks of this investment in the Company.

7. Subscriber agrees that this Agreement, or any term within it, may only be changed, modified, or waived by written amendment signed by both parties with [number] days’ notice.

8. Subscriber’s knowledge and experience in financial and business matters, and in speculative investments such as investments in the Company, are sufficient to allow Subscriber to fully assess the merits and risks of any investment in the Company.

9. Subscriber is a “Sophisticated Investor” as defined in “Investor Suitability Standards” in the Memorandum.

10. Subscriber has determined for themselves that the purchase of the Shares is a suitable investment and has the adequate means and net worth to make this investment.

11. Subscriber understands that there is and will be no public market for Subscriber’s Membership Interests and that the transferability of Subscriber’s Membership Interests is restricted under the terms of the Operating Agreement and is subject to the consent of the Managing Member identified therein.

12. Subscriber understands that the Operating Agreement will impose certain restrictions on the transferability of Subscriber’s Membership Interests.

13. Subscriber acknowledges and agrees that the Company nor any other person has represented, guaranteed, or warranted that any particular financial results will be achieved by the Company.

14. The Subscriber hereby agrees to indemnify and hold harmless the Company and any of its officers, directors, shareholders, employees, agents or affiliates (collectively the “Indemnified Parties” and individually an “Indemnified Party”) who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, against losses, liabilities and expenses of each Indemnified Party (including attorneys’ fees, judgments, fines and amounts paid in settlement, payable as incurred) incurred by such person or entity in connection with such action, arbitration, suit or proceeding, by reason of or arising from (i) any misrepresentation or misstatement of facts or omission to represent or state facts made by the Subscriber, including, without limitation, the information in this Subscription Agreement, or (ii) litigation or other proceeding brought by the Subscriber against one or more Indemnified Party in which the Indemnified Party is the prevailing party.

15. The representations and warranties made herein, including the indemnification clause in 3.13, are true and accurate as of the Effective Date hereof and shall be true and accurate as of the date of Subscriber’s delivery of payment to the Company through to Company’s acceptance of Subscriber’s subscription. If Subscriber’s representations and warranties are found by Subscriber not to be true or accurate prior to acceptance of this Subscription Agreement by the Company, Subscriber will immediately notify the Company in writing.

4. Revocation of Offer

The Subscriber agrees that the Company may cancel, terminate or revoke the offer to subscribe for shares or any agreement hereunder for a period of [number] days following the Effective Date. After [number] days, the Subscription Agreement will be deemed null and void.

5. Purchase By An Entity

The Subscriber is an entity (the “Entity”) and the person authorized to sign on behalf of such Entity is a duly appointed agent or representative of the Entity and hereby warrants, that:

  1. Such an Entity is an existing entity, and has not been organized or reorganized for the purpose of making this investment;
  2. The Entity is in good standing in the applicable jurisdiction and that the Subscriber has the authority to execute this Subscription Agreement and any other documents in connection with an investment in the Shares on the Entity’s behalf;
  3. The Entity has the power, right, and authority to invest in the Shares and enter into transactions contemplated herein, and the investment is suitable and appropriate for the Entity and its shareholders and beneficiaries;
  4. Any and all documents entered into and executed by the entity in connection with the Company are valid and binding documents of the Entity enforceable in accordance with their terms.

6. Miscellaneous

  1. This Subscription Agreement does not constitute an offer or solicitation in any jurisdiction in which such an offer or solicitor may not be lawfully made.
  2. This Subscription Agreement is binding on all permitted assigns and successors of either party.
  3. All notices or other communications given or made hereunder shall be in writing and shall be delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, to the Company at its registered head office address and to the Subscriber set forth on the signature page hereof.
  4. This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of [State].
  5. This Subscription Agreement constitutes the entire agreement between the Company and the Subscriber hereto with respect to the subject matter hereof and supersedes any prior or contemporaneous understanding, representations, warranties or agreements, whether oral or written.

AGREED TO AND ACCEPTED:

[Sender.Company]

Signature

MM/DD/YYYY

[Sender.FirstName][Sender.LastName]

[Client.Company]

Signature

MM/DD/YYYY

[Client.FirstName][Client.LastName]

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