Stockholder Redemption Clause Samples
The Stockholder Redemption clause establishes the right of stockholders to require the company to repurchase their shares under certain conditions. Typically, this clause outlines the procedures for redemption, such as the timing, price, and notice requirements, and may specify events that trigger the redemption right, like a change in control or after a set period. Its core practical function is to provide liquidity and an exit mechanism for stockholders, addressing the potential problem of investors being unable to sell their shares in a private company.
Stockholder Redemption. In the event a stockholder exercises his or her redemption right upon the Business Combination of the Company, the funds to repay said stockholder shall be distributed directly from the Escrow Account. As soon as practicable after the Company receives notice from a stockholder that the stockholder is exercising its redemption rights, the Company shall instruct the Escrow Agent to transfer, and (so long as the Escrow Agent has received an Internal Revenue Service Form W-8 or Form W-9) the Escrow Agent shall so transfer, the funds owed to the stockholder; such instructions to include the amount to be transferred and delivery instructions. These instructions shall comply with Section 6 of this Escrow Agreement.
Stockholder Redemption. In the event a stockholder exercises his or her redemption right upon the Business Combination of the Company, following the return of the funds to said stockholder from the Funds Escrow created of even date herewith between the Company and the Escrow Agent, the Shares which are the subject of the redemption shall be cancelled.