Equity Repurchase Agreement Template for Germany

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Key Requirements PROMPT example:

Equity Repurchase Agreement

"I need an Equity Repurchase Agreement under German law for our technology startup to repurchase 5,000 shares from a departing senior executive, with completion scheduled for March 2025 and payment to be made in two installments."

Document background
The Equity Repurchase Agreement is a crucial document used when a company decides to buy back its own shares from existing shareholders, a transaction that requires careful consideration of German corporate law requirements, particularly the Aktiengesetz (AktG). This document is typically employed in scenarios such as employee exits, corporate restructuring, capital management, or implementation of share buyback programs. The agreement must address the strict regulatory requirements under German law, including the 10% limitation on share capital repurchases under §71 AktG, proper corporate authorizations, and compliance with capital maintenance rules. It includes detailed provisions on valuation, payment terms, warranties, and tax implications, while ensuring adherence to both corporate law and regulatory requirements. For listed companies, additional considerations regarding market abuse regulations and stock exchange rules must be incorporated.
Suggested Sections

1. Parties: Identification of the company (purchaser) and the shareholder(s) (seller(s))

2. Background: Context of the agreement, including current shareholding structure and corporate approvals obtained

3. Definitions: Key terms used throughout the agreement, including Share definition, Completion Date, Purchase Price

4. Sale and Purchase: Core transaction terms including number of shares, price per share, and total consideration

5. Purchase Price and Payment: Detailed payment terms, payment mechanism, and any adjustments

6. Conditions Precedent: Required corporate approvals, regulatory clearances, and other conditions that must be met before completion

7. Completion: Timing, location, and mechanics of the transfer, including required actions and deliverables

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

9. Company's Warranties: Warranties regarding corporate authority, compliance with AktG requirements, and financial capacity

10. Tax Matters: Tax-related representations, indemnities, and compliance with German tax regulations

11. Confidentiality: Obligations regarding transaction confidentiality and public announcements

12. Notices: Process and requirements for formal communications between parties

13. Governing Law and Jurisdiction: Confirmation of German law governance and jurisdiction for disputes

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

Optional Sections

1. Market Abuse Regulation Compliance: Required for listed companies, detailing compliance with MAR requirements

2. Staged Completion: Used when the repurchase occurs in multiple tranches

3. Price Adjustment: Included when the purchase price may be adjusted based on specific triggers or conditions

4. Bank Guarantee: Required when payment security is needed or for large transactions

5. Tag-Along Rights: Relevant when only part of a shareholder's holding is being purchased

6. Regulatory Compliance: Additional section for regulated industries or when specific regulatory approvals are required

7. Employee Matters: Relevant when the seller is/was an employee or when repurchase is linked to employment termination

Suggested Schedules

1. Schedule 1 - Share Details: Detailed description of the shares being repurchased, including share certificates numbers and shareholder register details

2. Schedule 2 - Corporate Authorizations: Copies of board resolutions, shareholder resolutions, and other corporate approvals

3. Schedule 3 - Completion Requirements: Detailed list of documents and actions required at completion

4. Schedule 4 - Form of Transfer Instruments: Template share transfer forms and other required transfer documentation

5. Schedule 5 - Warranties: Detailed warranties and any specific limitations or qualifications

6. Appendix A - Calculation of Purchase Price: If applicable, detailed methodology for price calculation or adjustment

7. Appendix B - Payment Mechanics: Detailed payment instructions and bank account details

Authors

Alex Denne

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

Relevant legal definitions
Clauses
Relevant Industries

Financial Services

Technology

Manufacturing

Professional Services

Retail

Healthcare

Real Estate

Energy

Telecommunications

Media and Entertainment

Automotive

Consumer Goods

Industrial Services

Life Sciences

Infrastructure

Relevant Teams

Legal

Finance

Corporate Development

Treasury

Tax

Compliance

Human Resources

Board Secretariat

Investor Relations

Risk Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Corporate Secretary

Head of Legal

Finance Director

Corporate Treasurer

Head of Corporate Development

M&A Director

Tax Director

Compliance Officer

Board Member

Managing Director

Chief Operating Officer

Investment Relations Officer

HR Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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