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A Share Buyback Contract is essential when a German company intends to repurchase its own shares from existing shareholders, whether for capital structure optimization, excess cash utilization, or stock price support. This document is primarily used in scenarios where companies need to execute share repurchases in compliance with German corporate law, particularly the Aktiengesetz, which sets specific limits and conditions for such transactions. The contract must address regulatory requirements, including shareholder approval thresholds, purchase price determination, maximum holding limits for treasury shares (generally 10% of share capital), and specific disclosure obligations. It's particularly relevant for both listed and private companies, though additional requirements apply for listed entities regarding market abuse regulations and stock exchange rules.

1. Parties: Identification of the company (buyer) and the selling shareholder(s)

2. Background: Context of the share buyback, including reference to shareholder resolutions and regulatory approvals

3. Definitions: Key terms used throughout the agreement, including technical and legal definitions

4. Subject Matter of Sale: Details of the shares being sold, including class, number, and nominal value

5. Purchase Price: Price determination mechanism, payment terms, and compliance with German law requirements on price fairness

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

7. Completion Mechanics: Process and timing for the transfer of shares and payment

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

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

10. Tax Provisions: Treatment of taxes arising from the transaction and related indemnities

11. Regulatory Compliance: Compliance with German corporate and securities laws, including Aktiengesetz limits

12. Confidentiality: Obligations regarding transaction confidentiality and permitted disclosures

13. Notices: Communication procedures between parties

14. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction for disputes