Understanding Redemption Agreements: Key Elements and Legal Insights
What is a Redemption Agreement? A redemption agreement, sometimes called a buyout agreement, is part of a contract between co-owners, often shareholders or partners, that sets forth how an owner or owners may sell their equity ownership interest back to the company at a certain price and according to a particular formula. There are several different types of redemption agreements, including a cross purchase agreement, a stock redemption agreement and an asset redemption agreement. Oftentimes, these agreements are used by…