Repurchase clause: Copy, customize, and use instantly
Introduction
A repurchase clause outlines the conditions under which a company may buy back its shares or other assets from an investor, shareholder, or other parties. This clause typically addresses the price, terms, and triggers for such repurchase, providing clarity and security to both parties involved.
Below are templates for repurchase clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard repurchase clause
This version covers the basic repurchase provisions.
The [Company] shall have the option to repurchase the shares held by the [Investor] at a price equal to the fair market value, as determined by an independent appraiser, at any time during the term of this Agreement, subject to the terms and conditions outlined herein.
Repurchase clause with fixed price
This version includes a fixed repurchase price.
The [Company] agrees to repurchase the shares held by the [Investor] at a fixed price of [$X] per share, payable within [X] days of the [Investor]’s request to sell the shares back to the [Company].
Repurchase clause with repurchase trigger events
This version specifies trigger events for repurchase.
The [Company] shall have the right to repurchase the shares held by the [Investor] upon the occurrence of the following events: [list of events], at a price determined by the terms set forth herein.
Repurchase clause with optional buyback
This version includes an optional buyback for the company.
The [Company] shall have the right, but not the obligation, to repurchase the shares held by the [Investor] at a price equal to the fair market value, determined by an independent appraisal, within [X] months of receiving a written request from the [Investor].
Repurchase clause with installment payments
This version allows repurchase via installments.
The [Company] agrees to repurchase the shares from the [Investor] in [X] equal installments, with the first installment due within [X] days of the repurchase notice, and subsequent payments due [monthly/quarterly] thereafter.
Repurchase clause with repurchase at market value
This version ties the repurchase price to the market value.
The [Company] shall repurchase the shares from the [Investor] at the fair market value as of the date of the repurchase notice, as determined by the last closing price on the relevant exchange.
Repurchase clause with buyback in case of non-performance
This version allows buyback in case of non-performance.
If the [Investor] fails to meet the performance milestones outlined in this Agreement, the [Company] shall have the right to repurchase their shares at a price equal to the original purchase price.
Repurchase clause with buyback upon change of control
This version includes buyback rights in case of a change of control.
In the event of a change of control of the [Company], the [Company] shall have the right to repurchase all or part of the shares held by the [Investor] at the fair market value.
Repurchase clause with fixed timeline for repurchase
This version includes a fixed timeline for repurchase.
The [Company] shall repurchase the shares held by the [Investor] within [X] years from the date of issuance, at a price based on the fair market value of the shares.
Repurchase clause with repurchase after material breach
This version allows repurchase after a material breach.
In the event of a material breach of this Agreement by the [Investor], the [Company] shall have the right to repurchase the shares at the original purchase price, plus any accrued dividends or interest.
Repurchase clause with repurchase for regulatory compliance
This version includes buyback for regulatory reasons.
If required by regulatory authorities or applicable laws, the [Company] shall have the right to repurchase the shares held by the [Investor] to maintain compliance with such laws.
Repurchase clause with buyback due to tax implications
This version allows repurchase for tax reasons.
The [Company] may repurchase shares from the [Investor] to comply with applicable tax laws or to address potential tax consequences resulting from changes in the tax treatment of the [Company].
Repurchase clause with repurchase if key employee leaves
This version allows repurchase if a key employee leaves.
If the [Investor] is also a key employee of the [Company] and leaves the [Company] for any reason, the [Company] shall have the right to repurchase their shares at a price equal to the fair market value of the shares.
Repurchase clause with right of first refusal
This version includes a right of first refusal for the company.
In the event that the [Investor] desires to sell their shares to a third party, the [Company] shall have the right of first refusal to repurchase those shares on the same terms and conditions as offered by the third party.
Repurchase clause with repurchase for liquidity reasons
This version allows buyback for liquidity reasons.
The [Company] may repurchase shares from the [Investor] to raise capital or improve its liquidity position, subject to the approval of the Board of Directors.
Repurchase clause with fixed buyback amount
This version specifies a fixed amount for buyback.
The [Company] agrees to repurchase the shares held by the [Investor] for a fixed amount of [$X], payable within [X] days of the repurchase request.
Repurchase clause with buyback for business restructuring
This version includes buyback for business restructuring.
If the [Company] undergoes significant business restructuring or downsizing, it may repurchase shares from the [Investor] at a price determined by the Board of Directors, based on the business's new valuation.
Repurchase clause with repurchase following IPO
This version ties the buyback to an IPO.
Following the [Company]'s initial public offering (IPO), the [Company] shall have the right to repurchase the shares held by the [Investor] at the offering price, subject to any lock-up restrictions.
Repurchase clause with purchase price adjustment
This version adjusts the buyback price.
The repurchase price of the shares shall be adjusted based on the net assets of the [Company] as of the repurchase date, as determined by an independent valuation.
Repurchase clause with periodic repurchase options
This version includes periodic repurchase options.
The [Company] shall have the right to repurchase up to [X]% of the outstanding shares from the [Investor] on an annual basis, at a price equal to the fair market value at the time of repurchase.
Repurchase clause with buyback in case of default
This version allows buyback in case of default.
If the [Investor] defaults on any obligations under this Agreement, the [Company] shall have the right to repurchase their shares at the original purchase price, minus any damages incurred by the [Company].
Repurchase clause with minimum repurchase price
This version sets a minimum repurchase price.
The repurchase price for shares held by the [Investor] shall be no less than the price originally paid for the shares, adjusted for any dividends or interest accrued.
Repurchase clause with buyback after shareholder resignation
This version includes buyback after resignation.
If a shareholder holding common stock resigns from their role in the [Company], the [Company] shall have the option to repurchase their shares at the original purchase price, minus any accrued dividends.
Repurchase clause with repurchase in case of insolvency
This version includes buyback in case of insolvency.
In the event of the insolvency or bankruptcy of the [Investor], the [Company] shall have the right to repurchase the shares held by the [Investor] at the fair market value.
Repurchase clause with repurchase upon voluntary sale
This version includes buyback upon voluntary sale.
In the event that the [Investor] voluntarily decides to sell their shares, the [Company] shall have the right to repurchase the shares at the prevailing market value or a price agreed upon by both parties.
Repurchase clause with buyback for specific transaction triggers
This version allows buyback based on specific transactions.
If the [Company] engages in a major transaction, such as an acquisition or merger, the [Investor] shall have the right to sell their shares back to the [Company] at the agreed-upon price or a price determined by an independent appraisal.
Repurchase clause with buyback for compliance with securities laws
This version includes buyback for legal compliance.
The [Company] may repurchase shares to comply with securities laws or regulations, including restrictions on the number of shares held by any single shareholder.
Repurchase clause with buyback if company fails to meet growth targets
This version allows repurchase if growth targets are unmet.
If the [Company] fails to meet specified growth targets, the [Investor] shall have the right to request that the [Company] repurchase their shares at the original investment price.
Repurchase clause with buyback in case of misrepresentation
This version includes buyback for misrepresentation.
If the [Investor] learns that the [Company] made material misrepresentations in connection with the investment, the [Investor] shall have the right to sell their shares back to the [Company] at the price originally paid for the shares.
Repurchase clause with buyback in case of regulatory restrictions
This version allows buyback due to regulatory restrictions.
If any regulatory authority imposes restrictions that prevent the [Investor] from holding or transferring shares in the [Company], the [Company] shall have the right to repurchase the shares at the fair market value.
Repurchase clause with buyback tied to the achievement of strategic milestones
This version ties buyback to milestone achievement.
The [Investor] agrees to allow the [Company] to repurchase shares if certain strategic milestones are not achieved, including [list of milestones], within [X] years of the investment date.
Repurchase clause with price adjustment based on business performance
This version adjusts the buyback price based on performance.
The repurchase price for shares shall be adjusted based on the [Company]'s performance, including revenue, profit margins, or market share, as measured over the prior [X] months.
Repurchase clause with buyback for breach of confidentiality
This version includes buyback for breach of confidentiality.
If the [Investor] breaches any confidentiality provisions set forth in this Agreement, the [Company] shall have the right to repurchase their shares at the original purchase price.
Repurchase clause with buyback in the event of a competitor's acquisition
This version allows buyback in case of a competitor's acquisition.
If the [Investor] is acquired by a competitor of the [Company], the [Company] shall have the right to repurchase the shares at a price determined by an independent valuation.
Repurchase clause with buyback for failure to deliver agreed capital
This version includes buyback for failure to deliver capital.
If the [Investor] fails to deliver the agreed-upon capital contribution as outlined in this Agreement, the [Company] shall have the right to repurchase their shares at the original investment price.
Repurchase clause with buyback based on change in business direction
This version includes buyback for change in business direction.
In the event that the [Company] changes its primary business direction, the [Investor] shall have the right to request the repurchase of their shares at a price determined by the fair market value, based on the new direction of the business.
Repurchase clause with buyback in case of conflict of interest
This version allows buyback in case of conflict of interest.
If the [Investor] is found to have a conflict of interest that materially affects the interests of the [Company], the [Company] shall have the right to repurchase their shares at the original purchase price, minus any damages incurred by the [Company].
Repurchase clause with buyback for personal bankruptcy
This version allows buyback in case of personal bankruptcy.
If the [Investor] files for personal bankruptcy, the [Company] shall have the right to repurchase the shares held by the [Investor] at the fair market value, as determined by an independent appraiser.
Repurchase clause with buyback following a failed public offering
This version allows buyback following a failed public offering.
In the event that the [Company]’s initial public offering (IPO) does not occur within [X] years from the date of this Agreement, the [Investor] shall have the right to request the [Company] to repurchase their shares at the original purchase price.
Repurchase clause with buyback during a liquidity event
This version includes buyback during a liquidity event.
The [Company] shall have the right to repurchase shares from the [Investor] during any liquidity event, such as a merger, acquisition, or IPO, at the fair market value of the shares, as determined by the Board of Directors.
Repurchase clause with buyback upon completion of investment term
This version allows buyback upon completion of the investment term.
The [Company] agrees to repurchase the shares held by the [Investor] at the end of the investment term, at a price equal to the market value of the shares as of the last day of the term.
Repurchase clause with buyback in case of regulatory changes
This version allows buyback due to regulatory changes.
If a change in government regulations requires the [Company] to buy back shares from its investors, the [Company] shall repurchase the shares from the [Investor] at a price determined by an independent valuation.
Repurchase clause with repurchase obligation if business underperforms
This version includes repurchase if the business underperforms.
If the [Company] fails to meet certain financial or operational milestones as outlined in this Agreement, the [Investor] shall have the right to require the [Company] to repurchase their shares at the original purchase price.
Repurchase clause with buyback after shareholder dispute
This version includes buyback after a shareholder dispute.
In the event of a dispute between the [Investor] and other shareholders that materially affects the operations or governance of the [Company], the [Company] shall have the right to repurchase the shares held by the disputing shareholders at the fair market value.
Repurchase clause with buyback if key management leaves
This version allows buyback if key management leaves.
If any key management or executive officers of the [Company] who are critical to the [Investor]'s decision to invest leave the [Company], the [Investor] shall have the right to require the [Company] to repurchase their shares.
Repurchase clause with buyback upon closure of business operations
This version allows buyback if business operations close.
In the event that the [Company] ceases its operations, the [Investor] shall have the right to require the [Company] to repurchase their shares at the original purchase price or a fair market value, whichever is higher.
Repurchase clause with buyback in case of loss of intellectual property
This version includes buyback in case of intellectual property loss.
If the [Company] loses any significant intellectual property that was critical to the business model, the [Investor] shall have the right to sell their shares back to the [Company] at the fair market value of the shares.
Repurchase clause with fixed buyback at agreed valuation
This version includes a fixed buyback price.
The [Company] agrees to repurchase the shares held by the [Investor] at an agreed valuation of [$X] per share, regardless of any changes in the market value of the shares at the time of repurchase.
Repurchase clause with mandatory buyback for certain class of shares
This version includes a mandatory buyback for certain shares.
In the event that the [Company] issues new classes of shares, the holders of the existing class of shares shall have the right to require the [Company] to repurchase their shares at a price determined by the fair market value, at the time of issuance.
Repurchase clause with buyback upon insolvency
This version allows buyback if the company becomes insolvent.
If the [Company] becomes insolvent or is unable to meet its financial obligations, the [Investor] may require the [Company] to repurchase their shares at the fair market value, as determined by an independent appraiser.
Repurchase clause with repurchase for business closure
This version allows repurchase if the business is closed.
In the event that the [Company] ceases to do business or liquidates, the [Investor] shall have the right to require the [Company] to repurchase their shares at the fair market value of the shares, determined by an independent valuation.
Repurchase clause with buyback in case of third-party acquisition
This version includes buyback in case of third-party acquisition.
If the [Company] is acquired by a third party, the [Investor] shall have the right to sell their shares to the acquiring party, or to require the [Company] to repurchase their shares at the price paid by the acquiring party.
Repurchase clause with repurchase upon breach of fiduciary duty
This version allows repurchase for breach of fiduciary duty.
If the [Investor] breaches any fiduciary duty owed to the [Company], the [Company] shall have the right to repurchase the shares held by the [Investor] at the original purchase price, or at fair market value, as determined by an independent appraiser.
Repurchase clause with fixed buyback price after IPO
This version includes a fixed buyback price after an IPO.
After the [Company]'s initial public offering (IPO), the [Investor] may require the [Company] to repurchase their shares at the offering price or at a price determined by an independent valuation.
Repurchase clause with repurchase due to major market fluctuations
This version allows buyback due to market fluctuations.
If there is a major fluctuation in the market value of the [Company]'s shares, either upward or downward, the [Investor] may request the [Company] to repurchase their shares at a price equal to the fair market value at the time of repurchase.
Repurchase clause with buyback due to failure to meet fundraising targets
This version includes buyback if fundraising targets are missed.
If the [Company] fails to meet its fundraising targets as outlined in this Agreement, the [Investor] shall have the right to require the [Company] to repurchase their shares at the original purchase price.
Repurchase clause with buyback following default by affiliated investor
This version allows buyback if an affiliated investor defaults.
If any investor affiliated with the [Investor] defaults on their obligations under this Agreement, the [Company] may repurchase the shares held by the [Investor] at the original purchase price, or at a price determined by an independent appraisal.
Repurchase clause with repurchase upon change in business structure
This version allows repurchase for a change in structure.
If the [Company] undergoes a significant change in its business structure, such as a change in business model, location, or industry, the [Investor] may request the [Company] to repurchase their shares at fair market value.
Repurchase clause with buyback upon expiration of the agreement term
This version includes buyback upon expiration of the term.
Upon the expiration of this Agreement, the [Company] shall have the option to repurchase the shares held by the [Investor] at a price equal to the fair market value of the shares, as determined by an independent appraiser.
Repurchase clause with buyback if key assets are sold
This version allows buyback if key assets are sold.
If the [Company] sells any key assets that were critical to the [Investor]'s decision to invest, the [Investor] shall have the right to request that the [Company] repurchase their shares at the fair market value.
Repurchase clause with fixed buyback price for early exit
This version sets a fixed price for early exit.
The [Investor] shall have the right to request a repurchase of their shares at a fixed buyback price of [$X] per share if they choose to exit the investment before the expiration of [X] years.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.