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Share Redemption Agreement template
Share Redemption Agreement sample

What is Share Redemption Agreement?

Share Redemption Agreement A Share Redemption Agreement outlines the terms for a company to redeem its own shares from shareholders, specifying redemption conditions and the purchase price per share.

Sample template:


This Share Redemption Agreement (the "Agreement") is entered into as of [Effective Date], by and between Summit Industries Inc., a [State] corporation, having its principal place of business at [Address] (the "Company"), and the undersigned shareholders listed on Exhibit A (individually, the "Shareholder" and collectively, the "Shareholders").


1.1. Redemption of Shares

Subject to the terms and conditions of this Agreement, the Company shall redeem, and the Shareholders shall cause to be redeemed, an aggregate of 10,000 shares of the Company's issued and outstanding common stock, par value $0.01 per share (the "Redeemed Shares"), as more particularly described in Exhibit A attached hereto.


2.1. Purchase Price

The purchase price for the Redeemed Shares shall be $[__] per share (the "Purchase Price"), for an aggregate amount of $[__] (the "Aggregate Purchase Price").

2.2. Payment

The Aggregate Purchase Price shall be payable to each Shareholder in accordance with the respective amounts specified on Exhibit A, by wire transfer of immediately available funds to a bank account designated by each Shareholder, or by such other method of payment as the Company and the Shareholder may agree in writing.


3.1. Share Certificate and Transfer

At the Closing (as defined below), each Shareholder shall deliver to the Company the original share certificates representing the Redeemed Shares, duly endorsed in blank for transfer, or accompanied by duly executed stock powers, or, if the shares are uncertificated, such other instruments of transfer as may be necessary or appropriate. The Company shall cancel the Redeemed Shares upon completion of the Closing and record them as treasury shares.

3.2. Closing

The closing of the redemption of the Redeemed Shares (the "Closing") shall take place remotely by the exchange of documents and payments by wire transfer, unless the Company and the Shareholders otherwise agree in writing, no later than [_] days from the Effective Date of this Agreement, or such other date as may be mutually agreed upon in writing by the parties (the "Closing Date").

3.3. Adjustments

Any and all dividends, distributions, or other equity-related participation or rights in respect of the Redeemed Shares declared, distributed, or issued, as applicable, on or after the Effective Date that may be payable or deliverable to the Shareholder shall be paid or delivered directly to the Company and shall not increase the Purchase Price.


4.1. Representations and Warranties of the Shareholders

Each Shareholder hereby represents and warrants to the Company that:

  • (a) He/she has the legal right, power, and authority to execute and deliver this Agreement and to perform his/her obligations hereunder.

  • (b) The execution, delivery, and performance by him/her of this Agreement has been duly authorized, and no additional action on his/her part is necessary to authorize this Agreement and the transactions contemplated hereby.

  • (c) The Redeemed Shares are validly issued, fully paid, and non-assessable, and are held by him/her free and clear of any and all liens, encumbrances, and rights of third parties whatsoever.

  • (d) He/she acknowledges that the Company has advised him/her to consult with an attorney and a tax advisor concerning the effect of the redemption of shares upon his/her individual tax and legal situation.

4.2. Representations and Warranties of the Company

The Company represents and warrants to the Shareholder that:

  • (a) The Company is duly organized, validly existing, and in good standing under the laws of the State of [State].

  • (b) The Company has all necessary corporate power and authority to execute and deliver this Agreements and to perform its obligations hereunder.

  • (c) The execution, delivery, and performance of this Agreement by the Company has been duly authorized by all necessary corporate action, and no additional action on the part of the Company is necessary to authorize this Agreement and the transactions contemplated hereby.

  • (d) All necessary corporate action has been taken to authorize the redemption of the Redeemed Shares.


5.1. Governing Law

This Agreement shall be governed by and construed in accordance with the internal laws of the United States and the State of [State], without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

5.2. Dispute Resolution

Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach thereof, shall be exclusively settled through arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, and judgment upon the award rendered may be entered in any court having jurisdiction thereof.


6.1. Entire Agreement

This Agreement, including any exhibit, constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior written or oral agreements made or entered into between the parties relating to the subject matter hereof.

6.2. Amendments

This Agreement may be amended or modified only by a written instrument executed by the parties hereto.

6.3. Binding Effect

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns.

6.4. Counterparts

This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have executed this Share Redemption Agreement as of the date first above written.

Summit Industries Inc.

By: ________________________
Name: [Name]
Title: [Title]


[Name of Shareholder]

[Name of Shareholder] (if applicable)


Redeemed Shares and Payment Details

[Number of shares and payment details to be provided by the Shareholder(s)]

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Sections of a Share Redemption Agreement

In this Share Redemption Agreement, you will see the following sections:

  1. Share Redemption
  2. Purchase Price and Payment
  3. Redemption Process and Closing
  4. Representations and Warranties
  5. Governing Law and Dispute Resolution
  6. Miscellaneous

Going indepth - Analysis of each section:

  1. Share Redemption : This section outlines the agreement between the company and the shareholders to redeem a specific number of shares. It's like the company is buying back a portion of its ownership from the shareholders.

  2. Purchase Price and Payment : This section specifies the price per share and the total amount to be paid for the redeemed shares. It also explains how the payment will be made, such as through wire transfer or another agreed-upon method.

  3. Redemption Process and Closing : This section describes the process of redeeming the shares, including the delivery of share certificates, the cancellation of redeemed shares, and the closing date. It also mentions any adjustments related to dividends or other equity-related rights.

  4. Representations and Warranties : This section contains statements made by both the shareholders and the company to assure each other of their legal rights, authority, and the validity of the shares being redeemed. It's like a mutual promise that everything is in order and as it should be.

  5. Governing Law and Dispute Resolution : This section states which laws will govern the agreement and how any disputes will be resolved, such as through arbitration. It helps to establish a framework for handling disagreements that may arise.

  6. Miscellaneous : This section covers various additional terms, such as the entire agreement, amendments, binding effect, and counterparts. These terms help to clarify and solidify the overall agreement between the parties.

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