# SEED INVESTMENT AND SUBSCRIPTION AGREEMENT
## Important warning
This fictional document illustrates a private-company seed investment in England and Wales. It is not a prospectus, financial promotion, investment advice, tax advice or confirmation that any share issue is valid. The company must check authority to allot, statutory pre-emption rights, the articles, shareholder consent, Companies House filings, employment-related securities, valuation, investor classification, financial-promotion exemptions, VAT and any SEIS or EIS conditions. The warranties are negotiated assumptions, not due diligence. Names, dates, account numbers and amounts are fictional.
Date: 30 June 2027
Parties
(1) Lumen Orchard Technologies Limited, company number 11820476, of 11 Meridian Yard, Bristol BS2 0SP (Company);
(2) Harbour Angel Nominees Limited, company number 07401863, of 2 Queen Square, Bristol BS1 4JQ (Investor); and
(3) Maya Ellison and Tomás Reed, each of 11 Meridian Yard, Bristol BS2 0SP (Founders).
## 1. Investment and issue
Subject to this Agreement, the Investor will subscribe £250,000 for 250,000 Series A ordinary shares of £0.01 nominal value each at £1.00 per share (Subscription Shares). The issue implies a post-money valuation of £1,050,000, based on the 800,000 pre-Completion shares and the 250,000 Subscription Shares. The Company will use the proceeds for product development, two engineering hires, security certification and working capital, and not for a dividend or repayment of Founder loans.
Completion will occur on 7 July 2027 at the Company's registered office, or another date agreed in writing. At Completion, the Investor will transfer £250,000 to the Company's nominated account ending 4418, and the Company will allot and issue the Subscription Shares credited as fully paid. The Company will deliver a share certificate, updated register of members and board minutes. Within the statutory period it will file the allotment return and update its people-with-significant-control information where required.
The Founders will vote their shares and use reasonable endeavours to ensure that the Company adopts amended articles giving effect to this Agreement. If the articles conflict with this Agreement, the parties will promptly amend them; as between the parties, each will exercise rights to give effect to this Agreement, subject to mandatory law.
## 2. Conditions precedent
The Investor is not obliged to complete until it has received: (a) a board resolution approving the allotment; (b) a shareholder resolution disapplying or satisfying statutory pre-emption rights; (c) an executed deed of adherence from each existing shareholder; (d) evidence that the Company's intellectual property has been assigned by employees and contractors; (e) a current cap table; and (f) evidence of insurance with professional indemnity of £1,000,000 and cyber cover of £500,000.
The conditions must be satisfied or waived in writing by 5 July 2027. If a condition is not satisfied, the Investor may terminate without liability and any money already transferred must be returned within three Business Days. The Company must not issue the Subscription Shares to another person during the period between signing and Completion.
## 3. Capitalisation and rights
Immediately after Completion, the issued capital is 1,050,000 shares: Maya Ellison holds 450,000 ordinary shares, Tomás Reed holds 300,000 ordinary shares, Priya Nair holds 50,000 ordinary shares, and the Investor holds 250,000 Series A ordinary shares. The agreed pre-Completion register is 800,000 shares and the post-Completion register is 1,050,000 shares: Maya 450,000, Tomás 300,000, Priya 50,000 and Investor 250,000. Percentages are Maya 42.8571%, Tomás 28.5714%, Priya 4.7619% and Investor 23.8095%, rounded to four decimal places.
The Series A shares rank pari passu with ordinary shares for voting and dividends, one vote per share. On a winding up, the Investor receives the amount paid for its shares before any distribution of surplus to ordinary holders, but only to the extent permitted by the articles and law; it does not receive both that preference and a participating share of the same surplus unless the amended articles expressly provide it. No dividend is payable unless lawfully declared.
## 4. Investor protections
Until the Investor holds at least 10% of the issued shares, the Company must not, without Investor consent, issue shares or securities convertible into shares at a discount, vary the rights of the Series A shares, declare a dividend, sell substantially all its undertaking, borrow more than £100,000 outside the approved budget, grant security over material intellectual property, acquire a business for more than £75,000, or cease the Core Product.
The Company must provide quarterly management accounts within 30 days after each quarter, annual accounts within 90 days after year end, an annual budget by 15 December, and prompt notice of a material claim, insolvency risk, data breach or regulatory investigation. The Investor may inspect reasonable books on five Business Days' notice, not more than twice yearly, subject to confidentiality and data protection.
## 5. Pre-emption and future funding
Before issuing new securities for cash, the Company must offer them to shareholders pro rata to their holdings unless the Investor consents to disapplication. The offer must state price, class, amount and acceptance period of at least 15 Business Days. A shareholder may take less than its entitlement, but an unused entitlement may not be transferred without board consent.
For an approved financing, the Investor has a right to subscribe its pro rata entitlement on the same terms, subject to law and any employee option scheme approved by the Investor. The Company may create an option pool of up to 100,000 ordinary shares for employees during the first 12 months after Completion; any larger pool requires Investor consent.
## 6. Warranties
The Company warrants at signing and Completion that it is duly incorporated, has authority to enter and perform this Agreement, its accounts fairly present its position in all material respects, it owns or has valid rights to use material assets and intellectual property, it has no undisclosed material litigation or debt, it complies in all material respects with data protection and employment law, and no person has a right to acquire shares except as disclosed in Schedule 1.
Each Founder warrants that they have authority, have disclosed any conflicting interest, and have assigned to the Company all intellectual property created for its business. Warranties are qualified by the disclosure letter dated 27 June 2027. The Company must notify the Investor of a breach within 10 Business Days after becoming aware of it and must remedy any remediable breach within 30 days.
The Company's aggregate warranty liability is capped at £250,000, with a minimum individual claim of £2,500 and a £10,000 aggregate threshold. The cap and thresholds do not apply to fraud, deliberate concealment, title to shares, authority, or an intentional breach. A claim must be notified within 18 months, except tax claims notified within six years.
## 7. Founder undertakings
Each Founder will devote substantially all working time to the Company, keep business information confidential and not compete with the Core Product during employment and for six months afterwards, to the extent enforceable. Neither Founder may sell or transfer shares without first offering them to the other shareholders pro rata, except a permitted transfer to a family trust or wholly owned company that signs a deed of adherence.
If a Founder stops working for the Company, the board will classify the departure as good leaver or bad leaver in accordance with the articles. A good leaver may retain vested shares; a bad leaver may be required, subject to law and the articles, to transfer unvested shares for the lower of subscription price and market value. The Investor will not be required to transfer its shares under this provision.
## 8. Confidentiality and announcements
A party must keep confidential this Agreement, due diligence and non-public business information, except disclosure to advisers, investors, insurers, a regulator or as law requires. A public announcement naming the Investor requires its prior written consent, except a legally required filing.
## 9. General and governing law
No variation is effective unless signed by the Company, Investor and any party whose rights are adversely affected. Assignment is prohibited except with consent, and the Investor may assign to an affiliated nominee that executes a deed of adherence. This Agreement is the entire agreement concerning the investment, without excluding liability for fraud. English law governs it and the courts of England and Wales have exclusive jurisdiction.
## Schedule 1 — Completion checklist and cap table
Before Completion: Companies House search dated 26 June 2027; board and shareholder resolutions; disclosure letter; IP assignment confirmations from four contractors; insurance certificates; amended articles; and signed deeds of adherence. Cash proceeds are £250,000. Post-Completion shares are Maya Ellison 450,000, Tomás Reed 300,000, Priya Nair 50,000 and Harbour Angel Nominees Limited 250,000, totalling 1,050,000 shares. At £1.00 per Subscription Share, the Investor's payment is exactly 250,000 × £1.00 = £250,000.
## Signatures
Signed for Lumen Orchard Technologies Limited: ____________________ Name: Maya Ellison, Director Date: ____________________
Signed for Harbour Angel Nominees Limited: ____________________ Name: David Cole, Director Date: ____________________
Signed by Maya Ellison: ____________________ Date: ____________________
Signed by Tomás Reed: ____________________ Date: ____________________