The Investment And Shareholders Agreement is a crucial document used when a company is receiving new investment while establishing or updating the rights and obligations of all shareholders. This agreement is particularly important in the Pakistani business context, where it must comply with local corporate law while potentially accommodating international investment standards. It typically follows term sheet negotiations and precedes the actual investment, serving as the primary document governing the relationship between the company, its existing shareholders, and new investors. The agreement covers essential elements such as investment terms, valuation, share transfer restrictions, board composition, and minority protection rights, while ensuring compliance with Pakistani regulatory requirements including those from the Securities and Exchange Commission of Pakistan (SECP) and other relevant authorities.

1. Parties: Identifies all parties to the agreement including the company, existing shareholders, and investors

2. Background: Provides context about the company, purpose of investment, and current shareholding structure

3. Definitions and Interpretation: Defines key terms used throughout the agreement and sets interpretation rules

4. Investment Terms: Details the investment amount, valuation, and number of shares to be issued

5. Completion Mechanics: Specifies the conditions precedent, completion process, and timing of the investment

6. Warranties and Representations: Contains warranties given by the company, existing shareholders, and investors

7. Board Composition and Governance: Sets out board structure, appointment rights, and corporate governance rules

8. Reserved Matters: Lists decisions requiring special approval from investors or specific shareholder groups

9. Share Transfer Restrictions: Details restrictions on transfer of shares and right of first refusal provisions

10. Tag and Drag Rights: Establishes co-sale rights and forced sale provisions

11. Anti-dilution and Pre-emption Rights: Protects investors from dilution and gives rights for future funding rounds

12. Information and Inspection Rights: Specifies financial and operational information to be provided to shareholders

13. Confidentiality: Sets obligations regarding confidential information

14. Term and Termination: Specifies duration and circumstances for termination

15. Dispute Resolution: Details procedure for resolving disputes including jurisdiction and governing law