Private Equity Subscription Agreement

Private Equity Subscription Agreement Template for South Africa

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Key Requirements PROMPT example:

"I need a Private Equity Subscription Agreement for a Series B investment of R50 million into a South African technology company, with specific focus on minority shareholder protections and BEE compliance requirements."

Document background

The Private Equity Subscription Agreement is a crucial document used when a private equity investor seeks to invest in a target company through the subscription of newly issued shares. This agreement is particularly important in the South African context, where it must comply with specific regulatory requirements including the Companies Act 71 of 2008, Financial Markets Act, and potentially BEE legislation. The document typically includes detailed provisions on the subscription price, number and class of shares, conditions precedent, warranties and representations, and various rights attached to the investment. It is commonly used in growth capital investments, buyouts, and recapitalizations, providing a legally binding framework that protects both the investor's interests and the company's operational requirements. The agreement often forms part of a larger suite of investment documents and may reference or incorporate terms from a shareholders' agreement or investment agreement.

Suggested Sections

1. Parties: Identification of the company issuing shares and the subscriber(s)

2. Background: Context of the transaction, including company status and purpose of the investment

3. Definitions and Interpretation: Defined terms and interpretation rules used throughout the agreement

4. Subscription: Details of shares being subscribed for, including class, number, and price

5. Payment Terms: Timing and method of payment for the subscribed shares

6. Conditions Precedent: Conditions that must be satisfied before the subscription becomes effective

7. Completion: Process and requirements for closing the transaction

8. Representations and Warranties: Statements of fact and assurances from both the company and subscriber

9. Company Undertakings: Commitments and obligations of the company post-subscription

10. Subscriber Undertakings: Commitments and obligations of the subscriber post-subscription

11. Anti-dilution Provisions: Protection mechanisms against future share issuances

12. Confidentiality: Obligations regarding confidential information

13. Notices: Process for formal communications between parties

14. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and entire agreement

15. Signature: Execution blocks for all parties

Optional Sections

1. Tag-Along Rights: Optional provision giving minority shareholders the right to join in sale of majority stake

2. Drag-Along Rights: Optional provision allowing majority shareholders to force minority shareholders to join in sale

3. Management Provisions: Include when the investment includes rights regarding company management or board representation

4. Pre-emptive Rights: Include when existing shareholders are to have first right to purchase new share issuances

5. Exit Provisions: Include when specific exit mechanisms or timelines are agreed

6. Dividend Policy: Include when specific dividend rights or policies are agreed

7. BEE Compliance: Include specific provisions relating to Black Economic Empowerment requirements if applicable

8. Exchange Control: Include when foreign investors are involved requiring specific exchange control provisions

Suggested Schedules

1. Schedule 1: Share Capital: Detailed breakdown of company's share capital structure pre and post-subscription

2. Schedule 2: Warranties: Comprehensive list of company warranties

3. Schedule 3: Disclosure Schedule: Exceptions and qualifications to the warranties

4. Schedule 4: Conditions Precedent: Detailed list of all conditions precedent and supporting documents required

5. Schedule 5: Completion Requirements: Detailed closing checklist and required deliverables

6. Schedule 6: Key Terms: Summary of key commercial terms of the subscription

7. Schedule 7: Corporate Information: Company's corporate information including directors, shareholders, and regulatory registrations

8. Schedule 8: Deed of Adherence: Form of deed for subscriber to adhere to existing shareholders' agreement if applicable

9. Appendix A: Resolution Templates: Templates for required corporate resolutions

10. Appendix B: Share Certificate Template: Template for share certificates to be issued

Authors

Alex Denne

Head of Growth (Open Source Law) @ ��Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Technology

Manufacturing

Healthcare

Financial Services

Real Estate

Mining

Renewable Energy

Agriculture

Retail

Infrastructure

Telecommunications

Education

Professional Services

Relevant Teams

Legal

Finance

Corporate Development

Investment

Compliance

Risk Management

Executive Management

Corporate Secretariat

Corporate Finance

Due Diligence

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Investment Director

Private Equity Partner

Legal Counsel

Corporate Lawyer

Investment Manager

Deal Principal

Transaction Advisory Partner

Investment Analyst

Company Secretary

Compliance Officer

Finance Director

Managing Director

Portfolio Manager

Find the exact document you need

Equity Subscription Agreement

A South African law-governed agreement documenting the terms and conditions for an investor's subscription to shares in a company.

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Let's create your Private Equity Subscription Agreement

Authors

Alex Denne

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