The Founders Stock Purchase Agreement is a crucial document used during company formation or early-stage operations in Nigeria, establishing the legal framework for founders' equity ownership. This agreement is essential when founders are acquiring their initial shares or formalizing their equity stakes in the company. It must comply with Nigerian legislation, particularly the Companies and Allied Matters Act (CAMA) 2020 and relevant securities regulations. The document typically details share pricing, payment terms, vesting schedules, transfer restrictions, and founder obligations. It's particularly important for startups and new companies seeking to establish clear ownership structures and protect both the company's and founders' interests. The agreement often includes provisions for intellectual property assignment, non-competition, and other founder commitments specific to the Nigerian business environment.
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1. Parties: Identification of the selling company and the founding purchaser(s), including their full legal names and addresses
2. Background: Context of the agreement, including the company's formation and the founder's role
3. Definitions: Key terms used throughout the agreement, including specific Nigerian legal terminology
4. Agreement to Purchase and Sell: Core terms of the share purchase, including number of shares, price, and class of shares
5. Purchase Price and Payment: Details of consideration and payment terms, including any installment arrangements
6. Closing and Delivery: Timing and mechanics of the transaction closing, including document delivery requirements
7. Representations and Warranties of the Company: Company's assertions regarding its legal status, share capital, and compliance with Nigerian law
8. Representations and Warranties of the Purchaser: Founder's assertions regarding capacity, understanding, and compliance with applicable laws
9. Restrictions on Transfer: Limitations on the founder's ability to transfer shares, including right of first refusal provisions
10. Founder Commitments: Specific obligations of the founder, including time commitment and non-competition provisions
11. Compliance with Laws: Specific provisions ensuring compliance with Nigerian corporate and securities laws
12. Termination: Circumstances under which the agreement can be terminated and consequences
13. General Provisions: Standard contractual provisions including governing law, notices, and amendment procedures
1. Intellectual Property Assignment: Required when the founder is transferring pre-existing IP to the company
2. Vesting Provisions: Used when shares are subject to vesting schedules
3. Co-Sale Rights: Included when other founders or investors have rights to participate in future sales
4. Drag-Along Rights: Added when majority shareholders need the ability to force minority participation in a sale
5. Foreign Investment Provisions: Required when the founder is not a Nigerian citizen
6. Special Tax Provisions: Included when there are specific tax structuring requirements
7. Multiple Closing Provisions: Used when the purchase will occur in multiple tranches
1. Schedule A - Share Details: Detailed description of shares being purchased, including class, rights, and restrictions
2. Schedule B - Payment Terms: Detailed payment schedule if applicable
3. Schedule C - Disclosure Schedule: Company disclosures against representations and warranties
4. Schedule D - Consent Resolutions: Required corporate approvals and resolutions
5. Schedule E - Form of Share Certificate: Template for the share certificate to be issued
6. Appendix 1 - CAC Forms: Relevant Corporate Affairs Commission forms for share transfer
7. Appendix 2 - Deed of Adherence: If required by existing shareholders' agreement
8. Appendix 3 - Vesting Schedule: Detailed vesting terms if applicable
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