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. If the reserve currency is used, the shares must be purchased at face value. When a premium is paid, it must be made using distributable profits, unless the shares were initially sold with a premium, the premium can be paid with the proceeds of a new issue. 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. Note of Clause 10 (agreement survives completion) – This clause is used to confirm and clarify that certain obligations arising from an agreement that will not be met at the time of a particular transaction must be maintained and fulfilled once they have passed. This clause is primarily intended for clarity and security and is not an essential element of an agreement. If the survival of the final clause is not included in the construction provisions, it is not fatal to the existence of commitments in the agreement that have not yet been concluded.
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. 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. Clause 1 (Interpretation) paragraph 1.1 contains the definitions applicable throughout the share repurchase agreement. Clauses 1.2 – 1.8 are standard interpretation clauses used in most commercial contracts.