Convertible Note Subscription Agreement Template for Nigeria

The Convertible Note Subscription Agreement is a crucial financing instrument in the Nigerian business landscape, particularly utilized by startups and growth-stage companies seeking to raise capital while deferring company valuation. This document type is designed to comply with Nigerian corporate and securities laws, including CAMA 2020 and relevant SEC regulations. It provides a structured framework for converting debt to equity upon specified triggering events, offering investors potential upside while giving companies immediate access to capital. The agreement typically includes detailed provisions on conversion mechanics, interest calculations, maturity dates, default scenarios, and investor rights, making it suitable for bridge financing rounds or as part of larger funding strategies.

1. Parties: Identification of the issuing company and the note subscriber(s)

2. Background: Context of the convertible note issuance and general purpose of the investment

3. Definitions and Interpretation: Key terms used throughout the agreement, including financial terms, conversion mechanisms, and technical definitions

4. Subscription and Issue: Terms of the note subscription, including amount, closing conditions, and subscription mechanics

5. Note Terms: Core terms including principal amount, interest rate, maturity date, and repayment provisions

6. Conversion Rights: Detailed provisions regarding conversion mechanism, timing, price calculations, and triggering events

7. Company Representations and Warranties: Standard and specific warranties about the company's status, authority, and business

8. Subscriber Representations and Warranties: Warranties from the subscriber regarding investment capacity and compliance

9. Company Covenants: Ongoing obligations of the company during the note term

10. Events of Default: Circumstances constituting default and consequences thereof

11. Confidentiality: Provisions regarding the treatment of confidential information

12. Notices: Process and requirements for formal communications between parties

13. General Provisions: Standard boilerplate clauses including governing law, assignment, and amendments