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Subscription Agreement

A Subscription Agreement in means of a Delaware Statutory Trust (DST) refers to a legal document that is used to formalize an investor’s commitment to participate in a DST investment offering. The DST is a legally recognized trust that holds title to various assets, most commonly real estate, allowing multiple investors to have fractional ownership interests in the assets. The DST industry in Delaware is prevalent due to the state’s investor-friendly laws and well-established legal precedents regarding trusts and business entities.

Here’s a breakdown of what the Subscription Agreement entails:

  1. Investor Details: The agreement includes the personal and financial details of the investor, ensuring that the investor meets certain eligibility and suitability standards.
  2. Investment Terms: It outlines the terms and conditions, including the amount being invested, the ownership interest being received, and any representations or warranties made by the investor.
  3. Regulatory Compliance: The agreement ensures that the investment complies with applicable securities laws, including federal and state regulations.
  4. Obligations and Rights: Details the obligations and rights of the investor, such as voting rights, distribution rights, and obligations to comply with the DST’s governing documents and policies.
  5. Risk Acknowledgment: Investors must acknowledge the risks associated with the investment, ensuring they understand the nature of the investment and the potential for loss.
  6. Miscellaneous Provisions: Includes other legal provisions such as dispute resolution, governing law, and confidentiality clauses.

In essence, the Subscription Agreement acts as a contract between the investor and the DST, ensuring that all parties are in clear agreement regarding the terms and conditions of the investment and that the investment process unfolds smoothly and in accordance with legal and regulatory requirements.