Advance Subscription Agreement
Advance Subscription Agreement
Advance Subscription Agreement
This Agreement is made and entered into on ____[Date] ___by and between:
-and-
1. Definitions
1.1. Unless the context requires otherwise, terms defined in the articles
of association adopted by the Company as at the date of this
agreement shall have the same meaning in this agreement.
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i. where conversion takes place pursuant to clause 3(a)
below, a price per Conversion Share equal to the lower of (i)
a discount of (_______) per cent. (___%) of the Subscription
Price or (ii) a price per share based on a pre-money
valuation of (Php or USD_________) rounded down to the
nearest whole share; and
ii. where conversion takes place pursuant to clause 3(b),
(c) or (d) below, a price per Conversion Share equal to the
lower (i) of (Php or USD_________) [Last round price] or (ii) a
price per share based on a pre-money valuation of (Php or
USD_________), rounded down to the nearest whole share;
(g) “Longstop Date” means [12 months] from the date of this
Agreement;
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(i) “Subscription Price” means, in respect of a Financing Round, the
lowest price paid per Next Round Share issued pursuant to such
Financing Round.
2. Advance Subscription
2.2. Purpose
2.3. Payment
2.4. Waiver
3. Conversion
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The Advance Subscription Funds shall automatically convert into
Conversion Shares at the Conversion Price, and the Company shall
issue and allot to the Subscriber (or as the Subscriber shall direct)
the number of fully paid Conversion Shares to which it is entitled:
(a) in the event of a Financing Round, immediately prior to the
unconditional completion of such Financing Round; or
(b) in the event of a Sale or a Listing, immediately prior to the
unconditional completion of such Sale or Listing; or
(c) on the Longstop Date (if no Financing Round, Sale or Listing
has unconditionally completed on or prior to the Longstop
Date); or
(d) in the event of an Insolvency occurring before any of the
events set out in sub-clauses (a) to (c) above, immediately
prior to the occurrence of such Insolvency event,
4.1. In the event that the Advance Subscription Funds of the Subscriber,
together with its affiliates, amount in the aggregate to at least (Php
or USD_________) (a “Major Investor”), the Company shall provide
the Major Investor with the following rights:
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ii. Notwithstanding anything to the contrary in this
Section 4.1(a), the Company shall not be obligated
under this Section 4.1(a) to provide information that (i)
it deems in good faith to be a trade secret or highly
confidential information or (ii) the disclosure of which
would adversely affect the attorney-client privilege
between the Company and its counsel;
iii. the Major Investor agrees to maintain the
confidentiality of all of the information provided to the
Major Investor under this Section 4.1(a) and agrees
not to use such information other than for a purpose
reasonably related to the Major Investor’s investment
in the Company.
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with full corporate power and authority to enter into and perform
its obligations under this Agreement;
(b) The Company has full power and authority to consummate the
transactions contemplated hereunder;
(g) The Company has not received any communications alleging that
the Company has violated or, by conducting its business, would
violate any of the patents, trademarks, service marks, trade
names, copyrights, trade secrets, mask works or other proprietary
rights or processes of any other person;
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(i) There is no judgment or order against the Company, or, to the
knowledge of the Company, any of its directors or managers (in
their capacities as such), that could prevent, enjoin, or materially
alter or delay any of the transactions contemplated by this
agreement, or that could reasonably be expected to have a
material adverse effect on the Company;
(j) This Agreement is valid and binding upon the Company and
enforceable in accordance with its terms
(b) Subscriber is able financially to bear the risk of losing the entire
investment, has adequate means of providing for [its] current
needs and has no need for liquidity of this, investment;
(e) Subscriber understands that [it] must bear the economic risk of
the investment for an indefinite period of time because the
Conversion Shares will not be registered under the [Securities
Regulation Code], and therefore, must be held unless they are
subsequently registered under the [Securities Regulation Code] or
an exemption from such registration is available;
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In the event the Company proposes to offer either an advance
subscription for equity in the Company or a convertible note at any
time prior to a Financing Round, the Company shall provide the
Subscriber with written notice of such subscription or convertible
note no later than five (5) days after the closing date thereof,
including the price and terms of such subscription or note (the
“Subsequent Convertible Subscription”). In the event the
Subscriber determines, in its sole and absolute discretion, that any
Subsequent Convertible Subscription contains terms more
favorable to the subscribers thereof than the terms set forth in this
agreement, the Subscriber may elect to either exchange this
agreement for an agreement issued pursuant to the Subsequent
Convertible Subscription or to require the Company to amend the
terms of this agreement to reflect any such more favorable terms.
7. Communications
7.1. In writing
7.3. Delivery
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8. General Provisions
8.1. Funds
8.2. Costs
Each of the Parties agree to bear their own legal and other costs
and expenses in connection with the preparation, execution and
completion of this Agreement and of other related documentation.
8.3. Publicity
8.6. Separability
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remainder of this Agreement shall remain effective and enforceable
to the extent possible under the circumstances then existing.
8.7. Counterparts
Parties:
___________________ ________________
SUBSCRIBER [COMPANY]
Witnesses:
__________________ __________________
ACKNOWLEDGEMENT
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REPUBLIC OF THE PHILIPPINES}
____________________________} S.S.
WITNESS MY HAND AND SEAL on the date and in the place first above
written.
NOTARY PUBLIC
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