Subscription Agreement
(Private Placement, Common Stock) (Pro-Issuer)

Summary

This subscription agreement template may be used for a private placement of common stock. A subscription (or purchase) agreement is a document that formalizes the contractual obligation for an investor to buy securities in a securities offering. This template includes practical guidance, drafting notes, and alternate clauses. Traditional private placements are conducted in reliance on one of the following exemptions or safe harbors from the registration requirements of the Securities Act of 1933, as amended (Securities Act): • Section 4(a)(2) of the Securities Act (15 U.S.C. § 77d(a)(2)). Commonly referred to as the "private placement exemption," this section provides that the registration requirements of the Securities Act do not apply to "transactions by an issuer not involving any public offering." • Rule 506(b) of Regulation D under the Securities Act (17 C.F.R. § 230.506(b)). This rule is a nonexclusive safe harbor under Section 4(a)(2) that provides objective standards that a company can rely on to meet the requirements of the exemption. An unlimited number of accredited investors investors may participate in a Rule 506(b) offering, but non-accredited investors are limited to 35 in any 90-day period. General solicitation for the offering is not allowed. • Rule 506(c) of Regulation D (17 C.F.R. § 230.506(c)). This rule is a nonexclusive safe harbor from the registration requirements of the Securities Act that allows for unlimited participation by reasonably verified accredited investors investors and, unlike under Rule 506(b), general solicitation is allowed. For a detailed discussion of the requirements of each exemption or safe harbor, see Regulation D Offerings and Unregistered Offerings. For a full listing of key content covering Regulation D offerings, see Regulation D Resource Kit. This subscription agreement template is tailored for a Rule 506(b) offering made solely to accredited investors, but you may edit it for use with other exemptions (see the drafting notes). This template includes standard subscription agreement provisions, including payment and closing mechanics and investor representations and warranties. This template is pro-issuer (referred to as the "Company" in the agreement) because only the investor makes representations and warranties. This template also comes with an optional cover sheet with subscription instructions. For more resources on private placements, see Current Legal Forms with Tax Analysis §§ 19.25, 19.31; Business Organizations with Tax Planning §§ 86.01–86.06; Private Placements Resource Kit, Securities Offerings Agreements Video, Private Placement Process, and Top 10 Practice Tips: Private Placements. For a private placement memorandum template, see Private Placement Memorandum Form.