Shareholder Agreement Valuation Clause

The right of severe pre-emption is generally preferable from the point of view of the person who has the right to refuse. Third-party buyers will rarely spend much time evaluating a possible share acquisition, given the predominance of the right of pre-emption. The flexible right of pre-emption is generally better from the supplier`s point of view. Although it obliges the potential seller to be disciplined in setting the initial price and the conditions offered to the shareholder who holds the right of first refusal, the seller is able, in the event of non-compliance with the offer, to exchange with third-party buyers who are not burdened by a right of pre-emption. Third-party valuations have clear advantages over structured negotiations. In order to reduce costs and limit the process, a third-party evaluation, whether binding or not, is often carried out by an expert acting on behalf of both parties. However, shareholders will often not be able to agree on the valuation expert that the individual valuation must provide. Therefore, the process of selecting an appraisal expert should be well structured and clearly defined, since it applies both to the selection method (e.g. .B. the designation of a specific company in the document, so that each party can choose an expert who, in turn, selects an expert from another company, etc.) and qualifications (e.g. B independence, e.g. minimal experience, etc.). Assuming shareholders choose an appraiser with the appropriate skills, a third-party valuation should provide accurate and well-founded value.

In non-binding situations, I hope that the conclusion of value (whether in the form of a report or a presentation) will prove convincing to all parties. A convincing conclusion is not only well-founded and supported by market-based evidence, but also the opportunity for each party to participate in the evaluation process through ideas, opinions and comments. In most shareholder agreements, there are several events that would trigger a buyback of your shares. These events often include a buyback in the event of death, in the event of permanent disability, in the event of bankruptcy if your shares are to be transferred as a result of adultery, in the event of serious disagreement between shareholders and possibly upon retirement.. . . .