Share Subscription and Shareholders' Agreement An agreement combining share subscription and shareholder rights, specifying subscription terms and shareholder rights and obligations.
1.1. Subscription
Subject to the terms and conditions of this Agreement, Subscriber agrees to subscribe for and purchase from the Company, and the Company agrees to issue, sell, and allot to Subscriber ____ shares (the "Shares") of the Company's common stock, with a par value of $____ per Share, at a purchase price per Share of $____ (the "Purchase Price"), for an aggregate purchase price of $____ (the "Aggregate Purchase Price").
2.1. Closing Date
The closing of the subscription for the Shares (the "Closing") shall take place on the ____ day of ____, 20__ (the "Closing Date"), or any other date as may be mutually agreed upon by the parties in writing. At the Closing, the Company shall issue the Shares to Subscriber, and Subscriber shall deliver the Aggregate Purchase Price as set forth in Section 1.1 to the Company.
Subscriber hereby represents and warrants to the Company as follows:
3.1. Authority
Subscriber is a limited liability company duly-organized, validly existing, and in good standing under the laws of the State of _______. Subscriber has the requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby.
3.2. Investment Intent
Subscriber is acquiring the Shares for investment purposes and not with a view to, or for resale in connection with, any distribution in violation of the United States securities laws.
Company hereby represents and warrants to Subscriber as follows:
4.1. Authority and Corporate Power
Company is a corporation duly-organized, validly existing, and in good standing under the laws of the State of _______. Company has the requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby.
4.2. Compliance with Law
Company is in compliance with all applicable federal, state, and local laws, regulations, and ordinances relating to its business operations and the issuance of Shares pursuant to this Agreement.
5.1. Preemptive Rights
Subject to the terms and conditions of this Agreement, each shareholder of the Company shall have a preemptive right to purchase its pro-rata share of any new securities offered by the Company to any third-party, on the same terms, conditions, and price as offered to such third-party.
5.2. Information Rights
Subscriber shall have the right to receive, upon written request, and the Company shall provide, such financial and other information concerning the Company and its business, operations, and plans as Subscriber may reasonably request.
6.1. Board of Directors
Subscriber shall have the right to appoint one director to the Company's Board of Directors (the "Board") as long as Subscriber holds at least ____ shares of the Company's common stock. The Board shall consist of not more than ____ directors. Each director shall be elected at the Company's annual meeting of shareholders for a term of one year and shall serve until his or her successor is elected and qualified or until his or her earlier resignation or removal.
6.2. Approval of Significant Decisions
Notwithstanding any other provision of this Agreement or the Company's governance documents, the affirmative vote of at least a majority of the shareholders of the Company shall be required to approve the following actions: (i) any amendment to the Company's Articles of Incorporation or Bylaws; (ii) any merger, consolidation, sale of all or substantially all of the Company's assets, or other similar transaction; or (iii) any bankruptcy, dissolution, or winding-up of the Company.
7.1. Termination Events
This Agreement may be terminated by either party upon the occurrence of any of the following events: (a) mutual consent of the parties; (b) a material breach of this Agreement by the other party, which breach is not cured within thirty (30) days after written notice thereof from the non-breaching party; or (c) the sale of all or substantially all of the Company's assets, or the merger, consolidation, or other combination of the Company with or into another entity.
8.1. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the United States and the internal laws of the State of _______, without giving effect to any choice or conflict of law provision or rule (whether of the State of _______ or any other jurisdiction).
8.2. Arbitration
Any controversy, claim, or dispute arising out of or related to this Agreement, or the interpretation or enforcement hereof, shall be settled by final and binding arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction over the parties.
9.1. Counterparts; Electronic Signatures
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, email, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
In this Share Subscription and Shareholders' Agreement, you will see the following sections:
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