This is an agreement between an investor and a corporation whereby the corporation
promises that it will sell the investor a certain number of shares at a set price. The
investor makes certain representations and warranties to the corporation and agrees to
indemnify the corporation if they should suffer any losses as a result of a material
misrepresentation made by the investor. This document contains numerous standard
provisions that are commonly included in these types of agreements, and may be
customized to fit the specific needs of the contracting parties. This agreement should
be used by investors or by small businesses that want to offer a certain number of
shares for subscription.
STOCK SUBSCRIPTION AGREEMENT
This Stock Subscription Agreement (this “Agreement”) is hereby made and
entered into on this ____ day of _____________, 2______ by and between
_________________ (“Company”) and ______________________ (“Subscriber”).
RECITALS
WHEREAS, Subscriber wishes to subscribe to __________ shares (the “Shares”)
of the capital stock of Company at the subscription price of _____________ dollars
($________) per share; and
WHEREAS, Subscriber hereby acknowledges that Company is relying upon the
accuracy and completeness of the representations in this Agreement in complying with its
obligations under applicable federal and state securities laws;
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
and covenants contained herein, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, Company and Subscriber hereto agree as
follows:
TERMS
1.00 REPRESENTATIONS AND WARRANTIES
1.01 Subscriber hereby represents and warrants to Company that:
a. Subscriber is aware of the degree of risk associated with the purchase of
the Shares of Company;
b. Subscriber is fully aware and understands that at any time Company may
operate at a loss rather than a profit, and may do so for an unforeseeable
amount of time;
c. Subscriber has the financial means to meet all of its obligations
contemplated herein;
d. Subscriber has read and fully understands the terms, conditions, and
effects of this Agreement, and all other documents in connection
therewith;
e. Subscriber hereby confirms that it has reviewed or has had the opportunity
to review, all documents, records, and books pertaining to the investment
in Company;
f. Subscriber is an “accredited investor” as that term is defined in the
Securities Act of 1933, as amended (the “Act”), and any relevant state
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statute or regulation, or is otherwise a sophisticated, knowledgeable
investor (either alone or with the aid of a purchaser representative) with
adequate net worth and income for this investment;
g. Subscriber has in-depth knowledge and experience in financial and
business matters pertaining to the subject matter contained in this
Agreement and is capable of evaluating the risks of any investment in
Company;
h. Subscriber has determined that the purchase of the Shares is a suitable
investment;
i. The Shares Subscriber wishes to acquire are for Subscriber’s own use for
investment purposes, and Subscriber will not sell, transfer, or assign the
Shares unless the Shares are registered under the Act and qualified under
applicable state securities laws or unless, an exemption from the
registration requirements of the Act and such laws is available; and
j. Subscriber has obtained independent legal advice from its own attorney
regarding Subscriber’s proposed investment in Company.
1.02 Subscriber acknowledges that any and all monetary projections or estimates made
are estimates only and may not be relied upon.
2.00 INDEMNIFICATION
2.01 Subscriber hereby agrees to indemnify and hold harmless Company and any of its
officers, directors, shareholders, employees, agents, or affiliates (collectively the
“Indemnified Parties” and individually an “Indemnified Party”) who were, are, or are
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 attorney 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 (a) any misrepresentation or misstatement of facts or omission to represent
or state facts made by Subscriber, including, without limitation, the information in this
Agreement or (b) any litigation or other proceeding brought by Subscriber against one or
more Indemnified Party in which the Indemnified Party is the prevailing party.
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3.00 PURCHASE BY AN ENTITY
3.01 Should Su