Share Buy Back Agreement Template

Note to Clause 12 (oppositions) – This clause provides that parties to the share repurchase agreement may perform separate copies (i.e. sign) instead of having to sign the same copy of the agreement. The use of a counter-party clause is recommended for security reasons and to avoid any argument that the agreement is not binding because it has not been executed properly. In other words, the company sells its marketable securities, such as shares or bonds, to a shareholder. As part of the agreement, the group agrees to buy back the tradable securities at a later date. Further down the page, you will find our tips on this model, which you will also get as a separate document when you buy the product. A copy of the agreement must be kept with shareholders for a period of at least ten years from the date of completion of the repurchase or the date of the contract. A company buys back its shares from the market because the company`s management believes that the shares currently on the market are undervalued. By buying back a portion of the shares, the company can increase the value of all remaining shares. The clauses of the boiler platform are often standard, and most are generally not heavily negotiated. However, they are important because many contractual disputes depend on the development of modular clauses such as whole contractual clauses. Trade records should be updated to reflect the cancellation of shares.

This agreement should be used in combination with documents allowing access to an action option system (for example. B a system of incentive to corporate governance), so that the company has the right, but not the obligation, to compel the employee to sell his shares when he is no longer employed. Clause 4 (Guarantees) Guarantees are indeed contractual promises that a given allegation is true. Clause 4.1 means that the seller contractually agrees to enter into this contract without the agreement of another person and is the sole owner of the shares. Clauses 8 to 14 (boilerplate clauses) Clauses 8-9 of the share repurchase agreement are called “boilerplate” clauses. This type of provision is repeated in all types of contracts and is responsible for regulating the expiry of contracts. You need to change paragraph 3.2 to add yellow the text relevant to your business. The wording depends on whether the shareholder agreement has not yet been obtained.

A share repurchase agreement is a contract between a company and one or more of its shareholders, under which the entity may repurchase a portion of its own common shares. The document identifies the parties involved and records the total price of the participation, the method of payment and the date of the transaction. The contract also includes assurances and guarantees on behalf of both parties, with the general effect that they are each legally able to continue the transaction. Our model contains the main conditions that govern the repurchase of shares, such as the name of the selling shareholders, the number and class of shares sold and the price to be paid for the shares. Note that it is possible for public and private companies to repurchase their shares, but our model has been established with a private company limited by shares. Clause 3 (sale and acquisition of shares) paragraph 3.1 confirms the amount of consideration per share, which the company will pay the seller for the shares, while paragraph 3.2 confirms when the sale and purchase of the shares take place and what must be done after the completion date. You own a business and you want to buy back shares from a shareholder.