This document can be used as a contractual agreement for a company based in the UK using its sections in shareholder agreements. The agreement outlines the roles and responsibilities of Parties and the general provisions to guide the management of the company and ownership of shares. It deals with shareholder rights, transfer of shares, intellectual property, funding obligations, enforcement of rights, and dispute resolution, ensuring compliance with local laws and regulations.
The document is an "Advance Subscription Agreement" (ASA), a legal agreement used by companies seeking investment. This document enables an investor to provide funds in advance to a company in expectation of receiving equity at a future date and under predetermined conditions. This way, the company can secure funding without immediately assigning a specific valuation. The agreement is applicable primarily when a company is not yet in a position to finalize a valuation. Therefore, the ASA outlines that the funds will convert into equity on the occurrence of a future capitalization event and contains conditions regarding how the conversion will take place. The conversion usually occurs at a discount or with a valuation cap.