Share Subscription Agreement - Template, Sample Form Pro · NG-law

SHARE SUBSCRIPTION AGREEMENT

THIS SHARE SUBSCRIPTION AGREEMENT is made on ________.

BETWEEN

________, a private company limited by shares incorporated under the laws of the Federal Republic of Nigeria, with registration number ________ and having its registered office at:

________

(hereinafter referred to as the "Company", which expression shall, where the context so admits, include its successors-in-title and permitted assigns) of the first part.

AND

________, of the following address:

________

(hereinafter referred to as the "Investor", which expression shall, where the context so admits, include its successors-in-title and permitted assigns) of the second part.

The Company and the Investor are hereinafter referred to individually as a "Party" and collectively as the "Parties".

WHEREAS:

A. The Company is a duly incorporated private company limited by shares with an issued share capital of \u20a6________ (________) divided into ________ (________) shares, of which ________ (________) shares remain unissued.

B. The Company is desirous of allotting and issuing the Subscription Shares to the Investor, and the Investor is willing to subscribe for the Subscription Shares and pay the Consideration upon the terms and conditions set out in this Agreement.

C. This Agreement is entered into pursuant to and in accordance with the Companies and Allied Matters Act 2020 and the Articles of Association of the Company.

NOW THEREFORE, in consideration of the mutual covenants and undertakings contained herein, the Parties hereby agree as follows:

1. DEFINITIONS AND INTERPRETATION

1.1 In this Agreement, unless the context otherwise requires, the following expressions shall have the meanings set out below:

"Act" means the Companies and Allied Matters Act 2020 (as may be amended, supplemented or re-enacted from time to time) together with all regulations made thereunder.

"Agreement" means this Share Subscription Agreement, including its recitals and schedule.

"Authorization" means any consent, registration, filing, agreement, certificate, licence, approval, permit, authority or exemption from, by or with any competent authority, and all corporate, creditor and shareholder approvals or consents.

"Business" means the business of the Company as specified in the Company's Memorandum and Articles of Association.

"Business Day" means a day (other than a Saturday, Sunday or public holiday declared by the Federal Government of Nigeria) on which banks are generally open for business in Nigeria.

"CAC" means the Corporate Affairs Commission, established pursuant to the Act.

"Completion" means the completion of the subscription for, and allotment and issuance of, the Subscription Shares in accordance with this Agreement.

"Completion Date" means the date upon which all conditions for Completion have been fulfilled, being ________, or such other date as the Parties may agree in writing.

"Consideration" means the aggregate sum payable by the Investor in exchange for the Subscription Shares as set out in \u00a7 3.

"Encumbrance" means any mortgage, charge (whether fixed or floating), pledge, lien, option, right of retention of title or any other form of security interest, or any obligation (including any conditional obligation) to create any of the same.

"Full Title Guarantee" means the Company's right to allot and issue the Subscription Shares with good title and free from any Encumbrance.

"Material Adverse Change" means any change, event or circumstance that may adversely affect: (i) the assets, business, liabilities, financial condition or operations of the Company; (ii) the ability of the Company to perform its obligations under this Agreement; or (iii) the validity or enforceability of this Agreement.

"Subscription Shares" means the ________ (________) ordinary shares at \u20a6________ (________) each, to be allotted and issued to the Investor under this Agreement.

"Transaction" means the subscription for the Subscription Shares by the Investor and all matters contemplated by this Agreement.

1.2 In this Agreement, save where the context otherwise requires: (a) the singular includes the plural and vice versa; (b) references to \u00a7 are references to sections of this Agreement; (c) headings are for convenience only and shall not affect interpretation; and (d) references to any statute include any amendment or re-enactment thereof.

2. AGREEMENT FOR SUBSCRIPTION OF THE SUBSCRIPTION SHARES

2.1 Subject to the terms and conditions of this Agreement, the Company hereby agrees to allot and issue, and the Investor hereby agrees to subscribe for, ________ ordinary shares in the capital of the Company, being the Subscription Shares.

2.2 The Company, with Full Title Guarantee, agrees and undertakes to allot and issue the Subscription Shares free from all Encumbrances to the Investor; and with effect from the Completion Date, all rights, title and beneficial interest attaching to or accruing on the Subscription Shares, including any dividends and distributions, shall unconditionally become the property of the Investor.

3. CONSIDERATION

3.1 The total Consideration payable by the Investor for the Subscription Shares shall be \u20a6________ (________).

4. TERMS OF PAYMENT

4.1 The Consideration shall be paid in equal instalments.

4.2 The Investor shall pay the sum of \u20a6________ (________) every week for a period of ________ (________) weeks.

4.3 The first instalment shall be paid on ________.

4.4 All payments under this Agreement shall be made by the Investor to the Company by electronic transfer to the bank account designated in writing by the Company, the particulars of which are: Bank Name ________, Account Name ________, Account Number ________.

5. OWNERSHIP AND TITLE TO THE SUBSCRIPTION SHARES

5.1 The Company shall, on the Completion Date, transfer ownership of and title to the Subscription Shares to the Investor, provided that the Investor shall not be responsible for any liability incurred by the Company prior to the Completion Date.

5.2 The Investor shall not own or exercise any ownership rights or benefits over any portion of the Subscription Shares in respect of which the Company has not received payment.

6. CONDITIONS PRECEDENT

6.1 The obligation of the Investor to pay the Consideration and subscribe for the Subscription Shares is conditional upon the satisfaction (or waiver in writing by the Investor) of the following conditions:

(I) this Agreement and any other agreement entered into by the Parties in connection with the Transaction having been duly executed by all the Parties;

(II) where required, the authorised share capital of the Company having been duly increased in accordance with the Act;

(III) the shareholders of the Company having duly approved the allotment and issuance of the Subscription Shares by resolution;

(IV) the warranties given by the Company being true, correct and not misleading in any material respect as though made on and as at the Completion Date;

(V) each Party having complied with and performed all obligations and conditions contained in this Agreement required to be performed prior to Completion;

(VI) all required permits, consents and approvals for the Transaction, including all internal approvals of the shareholders and directors of the Company and all approvals from regulatory and administrative bodies, having been obtained to the satisfaction of the Investor;

(VII) the Investor having conducted due diligence on the Company, and all findings regarding the Company's financial, legal and other relevant affairs being satisfactory to the Investor;

(VIII) all relevant reports and documentation relating to the Company being satisfactory and acceptable to the Investor;

(IX) no Material Adverse Change having occurred in relation to the Company; and

(X) the Board of Directors of the Company having passed a resolution approving: (i) the execution of any Shareholders' Agreement; and (ii) the amendment of the Articles of Association of the Company to reflect the new shareholding structure.

7. COMPLETION

7.1 Completion of the Transaction shall take place on ________.

7.2 Completion shall take place at:

________

7.3 The subscription and allotment shall be completed when:

(I) the conditions precedent set out in \u00a7 6 have been satisfied in full or waived by mutual written agreement;

(II) the Investor has paid the full Consideration for the Subscription Shares; and

(III) a duly executed share certificate in respect of the Subscription Shares has been delivered to the Investor.

8. POST-COMPLETION OBLIGATIONS

8.1 Upon Completion, the Parties shall procure that:

(I) the Investor is duly entered as a shareholder of record in the register of members of the Company;

(II) the Company makes all necessary filings at the Corporate Affairs Commission to give effect to the changes in the shareholding structure of the Company, including the filing of the Return of Allotment (Form CAC 2A) and the Statement of Share Capital, together with any other filings required under the Act to give full effect to the Transaction; and

(III) the Company delivers to the Investor all documents of title, records, correspondence, files and other papers relating to the Transaction.

9. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

9.1 The Company hereby represents, warrants and covenants to the Investor as follows:

(I) that it has taken all corporate actions required by its constitutional documents to enter into and perform its obligations under this Agreement and any related Transaction documents;

(II) that it is a company duly incorporated and validly existing under the laws of the Federal Republic of Nigeria, has the legal capacity to enter into and perform this Agreement, is not in violation of any law, regulation or order to which it is subject, and that upon execution by the Parties this Agreement shall constitute valid, binding and enforceable obligations;

(III) that there are no pending or threatened legal proceedings against the Company, nor any order, writ or injunction of any court or regulatory authority, which could adversely affect the validity or enforceability of the allotment of the Subscription Shares to the Investor; and

(IV) that there is no Material Adverse Change which would adversely affect the Company's capacity to allot the Subscription Shares.

9.2 The Company covenants that, between the date of this Agreement and the Completion Date, it shall not:

(I) sell, lease, pledge, mortgage or otherwise dispose of the Subscription Shares; or

(II) enter into any contract, agreement, commitment or option involving the allotment of the Subscription Shares with any party other than the Investor.

10. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

10.1 The Investor represents and warrants to the Company as follows:

(I) that the Investor has full power and authority to enter into and perform this Agreement and any related agreement constituting binding obligations hereunder;

(II) that the Investor is not bankrupt or insolvent and is able to pay its debts as they fall due;

(III) that the Investor has the financial capability to pay the Consideration for the Subscription Shares; and

(IV) that the execution, delivery and performance of this Agreement is not impaired by any other valid agreement to which the Investor is a party.

11. INDEMNITY

11.1 Each Party hereby undertakes to indemnify and hold the other Party harmless against any costs, losses, claims, damages, expenses, liabilities (joint or several) or actions which the other Party may incur in the event that any representation or warranty contained in this Agreement turns out to be inaccurate, or in the event that the indemnifying Party is in breach of any covenant contained in this Agreement.

12. TERMINATION

12.1 This Agreement may be terminated:

(a) by mutual written agreement of the Parties;

(b) by the Company where the Investor fails to pay for the Subscription Shares on the Completion Date or breaches any fundamental term of this Agreement; or

(c) by the Investor if: (I) the Company is unable to satisfy the conditions precedent; or (II) prior to the Completion Date, any Material Adverse Change occurs or the Investor becomes aware of any breach by the Company of any fundamental term of this Agreement.

12.2 Where the Investor exercises its right to terminate under \u00a7 12.1(c), the Company shall have no claim against the Investor for damages arising from such termination.

12.3 Where the Company exercises its right to terminate under \u00a7 12.1(b), the Company shall, in addition to any damages payable, be entitled to injunctive and other equitable reliefs.

12.4 Any Party wishing to terminate this Agreement shall deliver written notice of its intention to the other Party.

13. REMEDIES

13.1 In the event of non-performance by the Investor of any of its obligations under this Agreement, the Company may:

(I) rescind this Agreement, in which event ownership of the Subscription Shares shall not be transferred to the Investor and any Consideration paid shall be refunded to the Investor;

(II) recover liquidated damages in the sum of ________% of the Consideration as damages for breach of contract, in addition to all reasonable costs and expenses incurred by the Company; and

(III) in addition to any damages payable, be entitled to injunctive and other equitable reliefs.

13.2 The Company may seek recovery of liquidated damages, all reasonable costs and expenses and other injunctive and equitable reliefs notwithstanding that it has rescinded this Agreement.

14. COSTS AND EXPENSES

14.1 Each Party shall bear its own costs in relation to the preparation, negotiation and execution of this Agreement and the Transaction documents, and shall be responsible for the costs and expenses of its own solicitors and advisers.

15. CONFIDENTIALITY OBLIGATIONS

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15.2 Confidential Information includes all information or materials of whatever nature relating to the Transaction disclosed in writing, orally or otherwise, including documents, techniques, practices, tools, specifications, inventions, patents, trademarks, software, drawings and programmes, but shall not include information which:

(I) can be established by written records to be already known to the Receiving Party or the public at the time of disclosure;

(II) enters the public domain through no fault of the Receiving Party;

(III) is given by the Disclosing Party to third parties without restriction;

(IV) is given to the Receiving Party by a third party lawfully in possession of such information and entitled to disclose it; or

(V) is required by law or regulation to be disclosed.

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15.4 The Parties acknowledge their obligations under the Nigeria Data Protection Act 2023 in respect of any personal data processed in connection with this Agreement, and undertake to process such personal data only in accordance with the said Act.

15.5 This \u00a7 15 shall survive the termination or expiration of this Agreement.

16. FORCE MAJEURE

16.1 Neither Party shall, before the Completion Date, be liable for any failure to fulfil any term of this Agreement where such fulfilment has been delayed, hindered, interfered with or prevented by force majeure, being any circumstance which: (I) is beyond the Party's control; (II) such Party could not reasonably have avoided or overcome; and (III) is not attributable to the other Party.

16.2 Without prejudice to the generality of the foregoing, force majeure shall include: (I) war, hostilities or invasion; (II) rebellion, terrorism, revolution, insurrection, military or usurped power; and (III) riot, civil disorder, epidemic, pandemic, or any act of God which may reasonably affect the ability of a Party to fulfil its obligations under this Agreement.

17. GOVERNING LAW

17.1 This Agreement shall be governed by and construed in accordance with the laws of the Federal Republic of Nigeria.

18. JURISDICTION

18.1 Subject to \u00a7 25, the Parties agree that the courts of the Federal Republic of Nigeria shall have jurisdiction to settle any dispute or claim arising in connection with this Agreement.

19. ASSIGNMENT

19.1 Neither Party may assign or transfer any of its rights, benefits or obligations under this Agreement without the prior written consent of the other Party.

20. ENTIRE AGREEMENT

20.1 This Agreement, together with any document referred to herein, constitutes the entire agreement between the Parties and supersedes any prior written or oral agreements made between them.

21. WAIVER

21.1 Any term or provision of this Agreement may be waived in writing at any time by the Party entitled to such benefit. No delay or omission in exercising any right shall be construed as a waiver thereof.

22. SEVERABILITY

22.1 If any provision of this Agreement is held to be invalid, illegal or unenforceable by any court or competent authority, such provision shall be severed and the remaining provisions shall continue to be valid, binding and enforceable to the fullest extent permitted by law.

23. VARIATION

23.1 No variation, amendment or modification of this Agreement shall be valid or effective unless made in writing and duly executed by or on behalf of each of the Parties.

24. COUNTERPARTS

24.1 This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute an original, but all the counterparts shall together constitute one and the same instrument.

25. DISPUTE RESOLUTION

25.1 In the event of any dispute, controversy or claim arising out of or in connection with this Agreement, the Parties shall first endeavour to resolve the same amicably through mutual negotiation. Where the dispute is not resolved within thirty (30) days, the Parties shall refer the dispute to mediation, and failing resolution, the dispute shall be referred to and finally resolved by the courts in accordance with the laws of the Federal Republic of Nigeria.

26. NOTICES

26.1 All notices or communications under this Agreement shall be in writing.

26.2 Any such notice shall be deemed to have been duly given if: (I) delivered personally, upon delivery at the address of the relevant Party; (II) sent by courier service, upon receipt of confirmation of delivery; or (III) sent by electronic mail, upon receipt of confirmation of transmission.

26.3 The addresses for service of notices are as follows:

In the case of the Company to:

________

Address: ________

Attention: ________

Email: ________

In the case of the Investor to:

________

Address: ________

Email: ________

IN WITNESS WHEREOF the Parties have executed this Agreement the day and year first above written.

THE COMMON SEAL of the within named ________ is hereunto affixed in the presence of:

____________________________
DIRECTOR

Name: ________

____________________________
DIRECTOR/SECRETARY

Name: ________

SIGNED by the within named Investor:

_________________________

________

in the presence of:

Name: ________

Address: ________

Occupation: ________

Signature: ____________________________

SCHEDULE

WARRANTIES

1. Incorporation and Power of the Company

The Company is a private company limited by shares, duly incorporated and validly existing under the laws of the Federal Republic of Nigeria, and has the corporate power and authorisation to conduct its business as presently conducted and to enter into and comply with its obligations under this Agreement and any related agreement referred to herein.

2. Memorandum and Articles of Association of the Company

The business and affairs of the Company are conducted in accordance with its Memorandum and Articles of Association. The Memorandum and Articles delivered to the Investor are true, up to date and correct copies.

3. Books and Records

The books and records of the Company, including without limitation its register of members, register of directors and secretary, and minute books, are complete and correct in all material respects and accurately and fairly reflect all meetings and corporate actions of the Company's shareholders, Board of Directors and company secretary, and the nature of the transactions of the Company, in accordance with the Act.

4. Due Authorisation

a. The Company has full power, capacity, authority and legal right to carry on its business as now conducted and to perform its obligations under this Agreement.

b. The execution, delivery and performance of this Agreement and any related agreement, and the consummation of the Transaction, are within the Company's corporate powers, have been duly authorised by all requisite corporate actions, and the persons executing this Agreement have been duly authorised to do so.

c. The Company has obtained all Authorizations required to execute, perform and comply with its obligations under this Agreement, and upon Completion the Subscription Shares shall be allotted to the Investor free from Encumbrances.

5. Title to Shares

The Subscription Shares are free and clear of any Encumbrance and are not subject to any outstanding option, warrant, call, pre-emptive right or similar right of any party, except as imposed by applicable law. Upon Completion, title to the Subscription Shares shall be validly transferred to the Investor.

6. No Conflict

The Company's execution and performance of its obligations under this Agreement does not:

(I) conflict with any term or condition of any agreement to which the Company is a party or by which it is bound;

(II) violate the provisions of the Memorandum or Articles of Association of the Company;

(III) violate any Authorization, judgement, order, statute or regulation applicable to the Company; or

(IV) result in the creation or imposition of any Encumbrance upon the shares of the Company.

7. Material Adverse Change

No event or condition that could give rise to a Material Adverse Change in respect of the Company has occurred.

8. Litigation

a. The Company is not engaged in any litigation, arbitration or administrative proceedings the outcome of which may give rise to a Material Adverse Change in respect of the Transaction.

b. No judgement or order has been issued by any court, tribunal or administrative body which may give rise to a Material Adverse Change in respect of the Transaction.

9. Compliance with Law

The Company is in compliance with all applicable laws and has not received any notice of non-compliance with any law or administrative order.

10. Disclosures

This Agreement and each certificate or document delivered in connection with the Transaction contains true statements of material fact, and no material fact has been omitted that would render any such statement misleading.