[Date]
SUBSCRIPTION AGREEMENT
between
XXX
and
XXX
Dated as of [Date]
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TABLE OF CONTENTS
RECITALS ..........................................................................................................................1
ARTICLE I
DEFINITIONS AND TERMS
................................................................................................................................................
Section 1.1
Certain Definitions. ..................................................................................1
Section 1.2
Other Definitional Provisions. .................................................................2
ARTICLE II
SUBSCRIPTION AND PAYMENT; ISSUANCE OF SUBSCRIPTION SHARES
................................................................................................................................................
Section 2.1
Subscription..............................................................................................3
Section 2.2
Vesting Schedule. .....................................................................................3
Section 2.3
Issuance of Shares. ...................................................................................3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
................................................................................................................................................
Section 3.1
Existence of Company; Power to Conduct Business; No
Insolvency. .......................................................................................4
Section 3.2
Due Authorization, Execution and Delivery; Enforceability. ..................4
Section 3.3
No Conflicts. ............................................................................................4
Section 3.4
No Violation. ............................................................................................4
Section 3.5
Share Capital. ...........................................................................................4
Section 3.6
Intellectual Property. ...............................................................................5
Section 3.7
No Litigation. ...........................................................................................5
Section 3.8
Governmental authorizations.. .................................................................5
Section 3.9
Corporate filings and tax returns.. ............................................................5
Section 3.10
Shareholders Agreements. ........................................................................5
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE EMPLOYEE
................................................................................................................................................
Section 4.1
Due Authorization, Execution and Delivery; Enforceability. ..................6
Section 4.2
Copyright, Intellectual Property Rights. ..................................................6
ARTICLE V
MISCELLANEOUS
................................................................................................................................................
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Section 5.1
Section 5.2
Section 5.3
Section 5.4
Section 5.5
Section 5.6
Section 5.7
Section 5.8
Notices. .....................................................................................................6
No Assignment or Benefit to Third Parties. .............................................6
Entire Agreement.. ...................................................................................7
Severability...............................................................................................7
Governing Law; Submission to Jurisdiction; Selection of Forum. ..........7
Contracts (Rights of Third Parties) Act 1999...........................................7
Counterparts. ............................................................................................7
Headings. ..................................................................................................7
SCHEDULE A .....................................................................................................................9
SCHEDULE B ...................................................................................................................10
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SUBSCRIPTION AGREEMENT, dated as of [Date], between XXX., a company
registered under the laws of XXX with the registration number XXXX and currently
having its registered office at XXXX (the “Company”) and XXXX (the “Employee” and,
together with the Company, the “Parties”).
RECITALS
WHEREAS, the Company is a XXXX private limited company;
WHEREAS, the Company’s business is to develop and operate XXXX (the
“Business”);
WHEREAS, the Company is in the process of raising capital by issuing ordinary
shares to investors and, subject only to the Closing Conditions, wishes to issue to the
Employee, and the Employee wishes to subscribe for, the number of ordinary shares of
the Company set forth in Schedule A (the “Subscription Shares”) of which payment shall
be deemed satisfied through the employment of the Employee and the other covenants set
forth in this Agreement.
NOW, THEREFORE, in consideration of full and due performance of the
obligations contained herein and of mutual representations and warranties contained
herein, the Parties, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1
Certain Definitions. As used in this Agreement, the following
terms have the meanings set forth below:
“Agreement” means this Subscription Agreement.
“Bad Leaver Conditions” means any of the following: (1) the termination
of the Employee’s employment with the Company by the Company for cause; (2) the
termination of the Employee’s employment with the Company by the Employee without
cause; (3) the Employee not devoting substantially all of his efforts to the Business, as
determined by the Company; (4) the Employee engaging in an activity that could
reasonably be seen as competing with the Business, as determined by the Company; and
(5) the Employee breaching the terms and conditions of this Agreement or violating his
duty of loyalty to the Company.
“Business” shall have the meaning set forth in the Recitals.
“Business Related Intellectual Property Rights” shall have the meaning set
forth in Section 4.2.
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“Chosen Courts” shall have the meaning set forth in Section 5.5.
“Closing” means such date on or after the date on which the Closing
Conditions are satisfied as may be communicated by the Company to the Employee by
sending an email to the Employee at: XXXX@XX.com
“Closing Conditions” means: (a) the formation of the Company; (b) the
Company’s shareholder structure immediately after the Closing being as set forth in
Schedule B; [(c) the expiration of the Vesting Period; and (d) no Bad Leaver Condition
having occurred during the Vesting Period].
“Company” shall have the meaning set forth in the Recitals.
“Founders” means XXXX and XXXX
“Employee” shall have the meaning set forth in the Recitals.
“Parties” shall have the meaning set forth in the Recitals.
“Person” means an individual, a corporation, a partnership, an association,
a limited liability company, a trust or other entity or organization.
“Shareholder” shall have the meaning set forth in Schedule A to the
Shareholders Agreement.
“Shareholders Agreement” means the Shareholders Agreement, dated as
of March 8, 2012 among the Company and the parties set forth in Schedule A thereto.
“Shares” means ordinary shares of the Company.
“Subscription Shares” shall mean the number of Shares to be subscribed
for by the Employee, as set forth in Schedule A.
“Vesting Period” means a period of three (3) years calculated from the
date of this Agreement.
Section 1.2
otherwise requires:
(a)
Other Definitional Provisions. Unless the express context
Unless otherwise specifically indicate, the word “day” means “calendar
day”;
(b)
the words “hereof”, “herein”, “hereunder” and “hereby” and words of
similar import, when used in this Agreement, shall refer to this Agreement as a whole and
not to any particular provision of this Agreement;
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(c)
the terms defined in the singular have a comparable meaning when used in
the plural, and vice versa;
(d)
(e)
Agreement;
the term “€” means the euro;
references herein to a specific Section shall refer to Sections of this
(f)
wherever the word “include,” “includes,” or “including” is used in this
Agreement, it shall be deemed to be followed by the words “without limitation;” and
(g)
references herein to any gender include each other gender.
ARTICLE II
SUBSCRIPTION AND PAYMENT; ISSUANCE OF SUBSCRIPTION SHARES
Section 2.1
Subscription. Subject only to receipt from the Company of a
certificate confirming that the Closing Conditions are satisfied, the Employee agrees to
subscribe, as principal, for the Subscription Shares, payment for which shall be deemed
satisfied through the employment of the Employee and the other covenants set forth in
this Agreement.
Section 2.2
Vesting Schedule. Notwithstanding anything else in this
Agreement to the contrary, if the Employee's employment with the Company ends prior
to the expiration of the Vesting Period without a Bad Leaver Condition (other than the
conditions set forth in sub-clauses (2) and (3) of the definition of such term) having
occurred, then, provided that (i) a period of one (1) year or more but less than two (2)
years has passed since the date of this Agreement, the Closing Conditions shall be
deemed to be satisfied, and the Closing shall occur, with respect to one sixth of the
Subscription Shares; and (ii) a period of two (2) years or more but less than three (3)
years has passed since the date of this Agreement, the Closing Conditions shall be
deemed to be satisfied, and the Closing shall occur, with respect to one half of the
Subscription Shares.
Section 2.3
Issuance of Shares. Subject only to the Closing Conditions being
satisfied, at the Closing, the Company will allot and issue the Subscription Shares to the
Employee, on the terms and subject to the conditions of this Agreement, and, as promptly
as practicable after the Closing, will deliver to the Employee a copy certified as accurate
by its company secretary of a share certificate evidencing the Subscription Shares.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Employee, as of the date of this
Agreement and as of the Closing, as follows:
Section 3.1
Existence of Company; Power to Conduct Business; No
Insolvency. The Company is duly incorporated as a XXXX private limited company
registered under the laws of XXXX with the registration number XXXX and validly
existing under the laws of the XXXX with the power to conduct the Business as
described in the Recitals. The Company has not filed for insolvency nor have such
proceedings been commenced against the Company or its properties.
Section 3.2
Due Authorization, Execution and Delivery; Enforceability. The
Company has full power and authority to execute and deliver this Agreement and to
perform its obligations thereunder. This Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and legally binding agreement of
the Company, enforceable in accordance with its terms, subject, as to enforceability, to
bankruptcy, insolvency, reorganization and similar laws of general applicability relating
to or affecting creditors’ rights and to general equity principles.
Section 3.3
No Conflicts. The execution, delivery and performance by the
Company of this Agreement and the issuance by the Company of the Subscription Shares
to the Employee (a) do not result in any violation of the Company’s articles of
association or other governing documents or any provision of law, judgment or decree of
any governmental authority and (b) do not violate any law or agreement to which the
Company is subject.
Section 3.4
No Violation. The Company is not in violation of its articles of
association or other governing documents and is not in default on the performance or
observance of any obligation contained in any agreement or instrument to which it is a
party or by which it or any of its assets may be bound or in violation of any law,
ordinance, governmental rule, regulation or decree of any court, government or
governmental agency or body having jurisdiction over the Company or its properties.
Section 3.5
Share Capital. Immediately after the Closing, the Company will
have an authorized, issued and outstanding share capital as set forth in Schedule B. All
of the Company’s ordinary shares (other than the Subscription Shares) have been duly
authorized and validly issued and are fully paid up, freely transferable, non-assessable
and free of any third party rights. The Subscription Shares have been duly authorized
and, as of the Closing, will be validly issued, fully paid up, freely transferable, nonassessable and free of any third party rights, and will rank pari passu with all other
ordinary shares in all respects, including the right to participate in all dividends and other
distributions declared, paid or made on or in respect of such ordinary shares on or after
the date of this Agreement. Other than as set forth in Schedule B, the Company has not
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issued, and has not entered into any agreements for the issuance of, any additional
Shares, any preference shares, any other equity securities or any securities convertible
into or exchangeable for, or warrants, rights or options to purchase from the Company, or
obligations of the Company to issue, equity securities, and the Company has not entered
into any other agreement that evidences rights of any Person against the Company to
subscribe or to require the issue of equity securities or which could give rise to a liability
of the Company to issue any equity securities.
Section 3.6
Intellectual Property. The Company has sufficient interests in or
rights to use all patents, inventions, trademarks, service marks, trade names, copyrights,
domain names, trade secrets, know-how, information, proprietary rights and processes
(the “Intellectual Property”) material for the Business without any conflict with or
infringement of the interests of others. The Company has not received any
communications alleging that it has violated or infringed or, by conducting the Business,
would violate or infringe any Intellectual Property of any other Person. The Company’s
ability to use and exploit the Intellectual Property will not be affected by the subscription
for the Subscription Shares by the Employee in accordance with the terms of this
Agreement.
Section 3.7
No Litigation. There are no legal disputes, arbitration,
administrative or governmental proceedings or investigations or other out-of-court
proceedings pending to which the Company is a party or of which any asset of the
Company is the subject, and, to the best of the Company’s knowledge, no such
proceedings are threatened or contemplated.
Section 3.8
Governmental authorizations. The Company has obtained all the
licenses, permissions and consents it needs to carry on the Business and such licenses,
permissions and consents are in full force and effect and the Company is not aware of any
circumstances that would indicate that any of such licenses, permissions or consents are
likely to be revoked or not renewed in the ordinary course.
Section 3.9
Corporate filings and tax returns. The Company has filed at the
relevant dates all corporate filings and tax returns that are required to be filed or has
requested extensions thereof and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of the foregoing is due
and payable, except to the extent that the Company’s failure to do so would not result in a
material adverse effect on its Business, results of operations or financial condition or its
ability to perform its obligations under this Agreement.
Section 3.10 Shareholders Agreements. Upon the Closing, the Company will
not be party to any agreements with any of its shareholders other than (a) a subscription
agreement with each shareholder and (b) the Shareholders Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE EMPLOYEE
The Employee represents and warrants to the Company, as of the date of this
Agreement and as of the Closing, as follows:
Section 4.1
Due Authorization, Execution and Delivery; Enforceability. The
Employee has full power and authority to execute and deliver this Agreement and to
perform its obligations thereunder. This Agreement has been duly authorized, executed
and delivered by the Employee and constitutes a valid and legally binding agreement of
the Employee, enforceable in accordance with its terms, subject, as to enforceability, to
bankruptcy, insolvency, reorganization and similar laws of general applicability relating
to or affecting creditors’ rights and to general equity principles.
Section 4.2
Copyright, Intellectual Property Rights. To the extent the
Employee, as of the date of this Agreement, holds any copyright or other intellectual
property rights with respect to the source code or object code of the Company’s website
or any other software, design or ideas and methodologies used in or in connection with
the Business, or any related intellectual property rights (the “Business Related Intellectual
Property Rights”), the Employee hereby irrevocably and unconditionally transfers and
assigns such rights to the Company. Furthermore, the Employee hereby transfers and
assigns any future Business Related Intellectual Property Rights to the Company. In each
case, the transfer and assignment shall be deemed to be paid for by the Company through
the issuance of Shares pursuant to this agreement.
ARTICLE V
MISCELLANEOUS
Section 5.1
Notices. Any notice or other communication to be given under this
Agreement must be in writing and must be delivered by prepaid first class mail or email
to the Party to whom it is to be given at the address or email address appearing in the
Recitals. Any notice shall be deemed to have been given when delivered by first class
mail, one week after the date of delivery, and when delivered by email, on the date the
email is sent.
Section 5.2
No Assignment or Benefit to Third Parties. This Agreement shall
be binding upon and inure to the benefit of the Parties and their respective successors,
legal representatives and permitted assigns. No Party may assign any of its rights or
delegate any of its obligations under this Agreement, by operation of law or otherwise,
without the prior written consent of the other Party. Nothing in this Agreement, express
or implied, is intended to confer upon any Person other than the Company, the Employee
and their respective successors, legal representatives and permitted assigns, any rights or
remedies under or by reason of this Agreement.
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Section 5.3
Entire Agreement. This Agreement contains the entire agreement
between the Parties with respect to the subject matter hereof and thereof and supersedes
all prior agreements and understandings, oral or written, between some or all of the
Parties with respect to such matters.
Section 5.4
Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any Person or any circumstance, is invalid or
unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order
to carry out, so far as may be valid and enforceable, the intent and purpose of such
invalid or unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to other Persons or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any other
jurisdiction.
Section 5.5
Governing Law; Submission to Jurisdiction; Selection of Forum.
THE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF ENGLAND AND WALES WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Each Party agrees that it shall
bring any action or proceeding in respect of any claim arising out of or related to this
Agreement or the transactions contained in or contemplated by this Agreement,
exclusively in the competent English courts (the “Chosen Courts”), and solely in
connection with claims arising under this Agreement or the transactions that are the
subject of this Agreement (a) irrevocably submits to the exclusive jurisdiction of the
Chosen Courts, (b) waives any objection to laying venue in any such action or proceeding
in the Chosen Courts, (c) waives any objection that the Chosen Courts are an
inconvenient forum or do not have jurisdiction over any Party and (d) agrees that service
of process upon such Party in any such action or proceeding shall be effective if notice is
given.
Section 5.6
Contracts (Rights of Third Parties) Act 1999. The Parties do not
intend that any term of this Agreement should be enforceable, by virtue of the Contracts
(Rights of Third Parties) Act 1999, by any Person who is not a Party.
Section 5.7
Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which shall constitute
one and the same Agreement.
Section 5.8
Headings. The heading references herein and the table of contents
hereof are for convenience purposes only, and shall not be deemed to limit or affect any
of the provisions hereof.
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IN WITNESS WHEREOF, the parties have executed or caused this Agreement to
be executed as of the date first written above.
XXXX
By:
________________________
XXXX (Director)
XXXX
By:
XXXX
Subscription Agreement
Schedule A
Employee
XXXX
Number of Subscription
Shares
1XXXX
Schedule B
On a non-diluted / unvested basis (i.e., assuming the closing of the current financing
round):
Ordinary shares – total: XXXX
Shareholder
Number of shares
Percentage
On a fully diluted basis (i.e., assuming the closing of the current financing round
and the vesting of all unvested shares):
Ordinary shares – total: XXXX
Shareholder*
Number of shares
Preference shares – total: 0
Other equity securities – total: 0
Percentage