Rollover Equity Agreement

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Several factors, including the rights and preferences of deployable equity versus the private equity sponsor`s shares and the sources of funding for the agreement, have a significant impact on the valuation. By nature, the partial acquisition of shares is more equity than an acquisition of assets. In many transactions, buyers tend to acquire assets for tax and business reasons. Except in limited cases where the principles of estate liability apply, the purchase of a target entity`s assets instead of its own funds avoids an entity being subject to its unknown and unwanted liabilities and obligations. The fact that a share purchase may be necessary for regulatory reasons (e.g.B. certain insurance and banking transactions), or the fact that a purchase of shares may enable the parties to avoid the need to obtain difficult consents from third parties, should also be taken into account when considering whether the transaction should be structured as a partial acquisition of equity. . . .

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