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Shotgun Clause

Shotgun Clause Definition

A type of exit provision in a shareholders' agreement, often referred to as a buy-sell agreement. Its goal is to provide security to the partners by ensuring a fair price. Within this clause a specific price per share is declared and the investor receives the right to offer his share to a partner. The partner must then either accept the offer or buy the offering shareholder’s shares at the declared price.

RELATED TERMS
Shareholders' agreement







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