These offer the minority shareholder the possibility of joining a sale of shares by majority shareholders. The minority shareholder can benefit from the negotiated sale by transferring his shares to the buyer on the same terms. The Tag-Along right therefore protects the rights of the minority shareholder.

Tag-along rights can be linked to a minimum amount of the shares to be sold or can be triggered by the sale of only one share.  Further possibilities also arise with regard to the size of the share to be sold: In addition to a complete co-sale, a pro-rata sale of the shares is also possible and the proceeds from the sale are distributed pro-rata in proportion to the shares.  Alternatively, a combination of both can be chosen, and the pro-rata right becomes a full right of sale if

(1) the sale is made to a competitor,

(2) the shares are sold to a third party who owns the majority of the shares after the purchase,

(3) the investor’s interest would fall below e.g. 5% as a result of the pro-rata sale.

The Shareholders’ Agreement shall provide for a co-sale right to the benefit of all other Shareholders. In the event one or more Shareholders intends to sell or transfer their shares, including the Investors, the other Shareholder(s) may demand that their shares are sold to such third party pro rata under the same terms.

In the event the sale of shares results in a takeover of more than 50% of the Company by a third party or a competitor takes over shares, the Shareholders may require that all their shares are sold along under the same terms.