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Stock Redemption Agreement Template for Ireland

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Key Requirements PROMPT example:

Stock Redemption Agreement

"Need a Stock Redemption Agreement under Irish law for our tech startup to buy back shares from a retiring founder by March 2025, with payment to be made in three installments over 18 months."

Document background
The Stock Redemption Agreement is a crucial document used when an Irish company wishes to buy back its own shares from existing shareholders. This arrangement is commonly implemented for various purposes, including succession planning, exit of retiring shareholders, corporate restructuring, or implementation of employee share schemes. The agreement must comply with Irish law, particularly the Companies Act 2014, which sets out specific requirements for share redemptions, including the necessity for adequate distributable reserves and proper corporate authorizations. The document typically includes detailed provisions on valuation, payment terms, tax considerations, and necessary warranties and representations from both the company and the selling shareholders. It serves as a comprehensive framework for ensuring the transaction is legally compliant while protecting the interests of all parties involved.
Suggested Sections

1. Parties: Identifies and defines the company and the selling shareholder(s) as parties to the agreement

2. Background: Provides context about the company, share ownership, and the reason for redemption

3. Definitions: Defines key terms used throughout the agreement

4. Agreement to Redeem: Details the fundamental agreement to redeem shares, including number and class of shares

5. Purchase Price: Specifies the redemption price per share and total consideration

6. Payment Terms: Outlines the method, timing, and structure of payment

7. Closing: Specifies the closing date and mechanics of the transaction

8. Representations and Warranties of Seller: Seller's confirmations regarding share ownership, authority to sell, and absence of encumbrances

9. Representations and Warranties of Company: Company's confirmations regarding authority, compliance with laws, and financial capacity

10. Conditions Precedent: Prerequisites that must be satisfied before closing

11. Tax Matters: Addresses tax implications and responsibilities

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

13. Notices: Specifies how formal communications between parties should be made

14. Governing Law and Jurisdiction: Confirms Irish law as governing law and specifies jurisdiction for disputes

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

Optional Sections

1. Employee Provisions: Required when the selling shareholder is/was an employee, addressing employment-related aspects

2. Non-Competition and Non-Solicitation: Included when the selling shareholder needs to be restricted from competing or soliciting customers/employees

3. Drag-Along Rights: Included when there are multiple shareholders and forced sale provisions are needed

4. Tag-Along Rights: Included when minority shareholders need protection in case of future sales

5. Board Approval: Required when specific board approval processes need to be documented

6. Shareholder Approval: Required when shareholder approval is needed under articles or law

7. Installment Payment Terms: Included when the redemption price is to be paid in installments

8. Security Arrangements: Required when payment is deferred and security is provided

9. Death/Disability Provisions: Included when redemption is triggered by death or disability

Suggested Schedules

1. Schedule 1 - Share Details: Detailed description of shares being redeemed, including share certificates numbers and dates

2. Schedule 2 - Calculation of Purchase Price: Details of how the redemption price was calculated, including any valuation methods

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

4. Schedule 4 - Form of Resignation: Template resignation letter if seller is also resigning from company positions

5. Schedule 5 - Company Resolutions: Required board and/or shareholder resolutions

6. Appendix A - Payment Schedule: If applicable, detailed schedule of installment payments

7. Appendix B - Tax Declarations: Required tax forms and declarations

8. Appendix C - Share Certificates: Copies of relevant share certificates

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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