The Shareholders Agreement And Share Subscription Agreement is a fundamental document used when a company is either bringing in new investors or formalizing relationships between existing shareholders while issuing new shares. This combined agreement, governed by Nigerian law, particularly the Companies and Allied Matters Act 2020, serves dual purposes: it documents the terms of share subscription including payment and issuance mechanics, while also establishing the framework for ongoing shareholder relationships. The agreement is crucial for protecting both majority and minority shareholder interests, establishing clear corporate governance structures, and providing exit mechanisms. It's particularly relevant in the Nigerian business environment where clear documentation of shareholder rights and share subscription terms is essential for investment security and regulatory compliance. The document typically includes provisions for board composition, reserved matters, share transfer restrictions, and dispute resolution mechanisms, all tailored to comply with Nigerian corporate law requirements.

1. Parties: Identification of all parties including the Company, existing shareholders, and new subscribers

2. Background: Context of the transaction, current shareholding structure, and purpose of the agreement

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

4. Share Subscription: Details of new shares being issued, subscription price, and payment terms

5. Completion: Conditions precedent, completion obligations, and timing for the share subscription

6. Warranties and Representations: Standard warranties from the company and existing shareholders to subscribers

7. Share Capital and Further Issues: Structure of share capital and process for future share issues

8. Transfer of Shares: Restrictions on transfer, right of first refusal, tag-along and drag-along rights

9. Corporate Governance: Board composition, appointment rights, quorum requirements, and voting arrangements

10. Shareholders Meetings: Procedures for calling and conducting shareholders meetings, voting rights

11. Reserved Matters: Decisions requiring special majority or unanimous consent

12. Dividend Policy: Agreement on distribution of profits and dividend declarations

13. Information Rights: Shareholders' rights to company information and financial reports

14. Non-Competition and Confidentiality: Restrictions on competing activities and protection of confidential information

15. Default: Events of default and consequences

16. Termination: Circumstances under which the agreement can be terminated

17. Exit Provisions: Mechanisms for exit including IPO, buy-back, or third-party sale

18. Dispute Resolution: Process for resolving disputes including jurisdiction and governing law

19. General Provisions: Standard boilerplate clauses including notices, amendments, and entire agreement