                                 CODE OF VIRGINIA

SUBSCRIPTION FOR SHARES BEFORE INCORPORATION (§ 13.1-642)

A. A subscription for shares entered into before incorporation is irrevocable
for six months unless the subscription agreement provides a longer or shorter
period or all the subscribers agree to revocation.

B. The board of directors may determine the payment terms of subscriptions for
shares that were entered into before incorporation, unless the subscription
agreement specifies them. A call for payment by the board of directors must be
uniform so far as practicable as to all shares of the same class or series,
unless the subscription agreement specifies otherwise.

C. Shares issued pursuant to subscriptions entered into before incorporation are
fully paid and nonassessable when the corporation receives the consideration
specified in the subscription agreement.

D. If a subscriber defaults in payment of cash or property under a subscription
agreement entered into before incorporation, the corporation may collect the
amount owed as any other debt. The articles of incorporation, bylaws, or the
subscription agreement may prescribe other penalties for nonpayment but a
subscription and the installments already paid on it may not be forfeited unless
the corporation demands the amount due by written notice to the subscriber and
it remains unpaid for at least 20 days after the effective date of the notice.

E. If a subscription for unissued shares is forfeited for nonpayment under
subsection D, the corporation may sell the shares subscribed for. If the shares
are sold by reason of any forfeiture for more than the amount due on the
subscription, the corporation shall pay the excess, after deducting the expense
of sale, to the subscriber or the subscriber&#8217;s representative.

F. A subscription agreement entered into after incorporation is a contract
between the subscriber and the corporation subject to &#xA7; 13.1-643.

HISTORY: Code 1950, §§ 13-98, 13.1-15; 1956, c. 428; 1972, c. 580; 1975, c.
500; 1985, c. 522; 2005, c. 765; 2019, c. 734.