On the other hand, the Tag Along clause does not govern the obligation of the minority shareholder, but a right. If the majority shareholder sells his shares, the minority shareholder has the right to « Tag-Along ». They therefore have the right to sell their stake on the same terms as the majority shareholder. Since an investor only wants to buy a certain number of shares, the minority shareholder can join the agreement on a pro rata basis, i.e. the percentage of the stake before the sale. Exemption clauses are hot negotiated, in particular the sub-ceiling of rights, period, purpose and procedure between the parties to deal with disputes, including tax disputes, that have an impact on rights. They also offer the process of refunding claims and often the most verified clause in the event of a dispute, so special attention should be paid to the fact that the buyer is properly covered in case of problems that affect the company before the transaction but arise after the transaction. This is also the reason why a buyer demands from the seller a material part as guarantor of compensation. This is often called the tax pact, tax indemnity or tax certificate, but its purpose is always the same, it offers the buyer protection for any tax liabilities that might not have been revealed by due diligence.

In essence, due diligence is the process in which the target stock buyer reviews the company`s activities, key people, documentation and assets. The process aims to draw the buyer`s attention to the inherent risks that may accompany the purchase of the target shares, but also to justify the value of the investment or purchase price. A third, equally important value of due diligence is to identify any consents needed to transfer the shares (e.g. B banks, lessors or commercial contracts). Details of any offsets provided by the buyer or seller are also mentioned, which covers any costs that may arise after the transaction due to conditions that pre-existed prior to the conclusion of the transaction. A particular tax treatment to which the buyer or seller may be entitled is also mentioned in the agreement. As a key element of an SPA, this section of the agreement generally sets out the number of shares to be acquired and determines the rights, securities and shares acquired by the purchaser in the shares. This section should also indicate the purchase price of the shares and how it is to be paid (cash, buyer`s securities, assumption of debts/liabilities, exchange of assets (real estate, personal property, intellectual property, etc.) or a combination of the above, as well as the time and place of the transaction. In this context, it should also be indicated whether the execution of the SPA and the closing take place simultaneously or whether there is a gap between the execution and the closure (a deferred closure). Deferred financial statements are common and may be necessary for a variety of reasons, including because the parties must obtain different authorizations and administrative authorizations from third parties and, in some cases, the buyer needs time to arrange third-party financing (as may be the case in a private equity scenario). . .

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