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Stock Redemption Agreement Template for Nigeria

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Key Requirements PROMPT example:

Stock Redemption Agreement

"I need a Stock Redemption Agreement for my Nigerian technology company to repurchase 25,000 ordinary shares from a retiring founder, with payment to be made in three installments over 2025, and including non-compete provisions."

Document background
The Stock Redemption Agreement is a crucial document used when a Nigerian company decides to repurchase its own shares from existing shareholders, whether for treasury purposes, exit arrangements, or corporate restructuring. This agreement, governed by Nigerian law, particularly the Companies and Allied Matters Act (CAMA) 2020, sets out the complete framework for the share redemption transaction, including pricing, payment terms, representations, warranties, and closing conditions. It's essential for maintaining proper corporate governance, ensuring regulatory compliance, and protecting all parties' interests. The document becomes particularly important in scenarios such as shareholder exits, succession planning, or strategic corporate restructuring, and must comply with Nigerian corporate, securities, and tax laws.
Suggested Sections

1. Parties: Identification of the company and the selling shareholder(s)

2. Background: Context of the agreement, including current shareholding structure and reason for redemption

3. Definitions: Key terms used throughout the agreement

4. Agreement to Redeem: Core terms of the redemption, including number of shares and price per share

5. Purchase Price and Payment Terms: Details of the redemption price, payment method, and timing

6. Closing: Conditions precedent, closing process, and deliverables

7. Representations and Warranties of the Selling Shareholder: Seller's confirmations regarding share ownership, authority to sell, and absence of encumbrances

8. Representations and Warranties of the Company: Company's confirmations regarding authority, financial condition, and compliance

9. Tax Matters: Allocation of tax responsibilities and obligations

10. Confidentiality: Provisions regarding confidential treatment of the transaction and company information

11. Governing Law and Jurisdiction: Specification of Nigerian law as governing law and jurisdiction for disputes

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

13. General Provisions: Standard boilerplate clauses including entire agreement, amendments, and severability

Optional Sections

1. Drag-Along Rights: Include when there are multiple selling shareholders to ensure all participate in the redemption

2. Installment Payments: Include when the redemption price will be paid in installments

3. Security Arrangements: Include when installment payments are involved and require security

4. Non-Competition and Non-Solicitation: Include when the selling shareholder has been involved in management

5. Corporate Governance Transition: Include when the selling shareholder holds board or management positions

6. Foreign Exchange Provisions: Include when the transaction involves foreign currency or international parties

7. Tax Indemnification: Include when complex tax implications require specific indemnification provisions

Suggested Schedules

1. Schedule 1: Share Details: Details of shares being redeemed, including share certificate numbers and class of shares

2. Schedule 2: Calculation of Redemption Price: Detailed breakdown of how the redemption price was determined

3. Schedule 3: Closing Deliverables: List of all documents and items to be delivered at closing

4. Schedule 4: Form of Share Transfer Instrument: Template for the share transfer documentation

5. Schedule 5: Corporate Authorizations: Copies of board and shareholder resolutions authorizing the redemption

6. Appendix A: Disclosure Schedule: Exceptions to representations and warranties

7. Appendix B: Payment Schedule: If applicable, schedule of installment payments

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓƵ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions




































Clauses
































Relevant Industries

Financial Services

Manufacturing

Technology

Real Estate

Energy

Telecommunications

Healthcare

Retail

Agriculture

Professional Services

Mining

Construction

Transportation

Education

Relevant Teams

Legal

Finance

Corporate Secretariat

Compliance

Tax

Treasury

Shareholder Relations

Corporate Governance

Board Secretariat

Risk Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Company Secretary

Legal Counsel

Corporate Lawyer

Finance Director

Board Director

Managing Director

Compliance Officer

Tax Manager

Investment Manager

Corporate Governance Officer

Shareholder Relations Manager

Treasury Manager

Financial Controller

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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