When I first started in the field of business planning, I liked the elegance of the shoot-out provision in the shareholders' agreement/buy sell.  It seemed so fair.

A shoot out can go by other names such as a deadlock provision, Texas Shootout, or even "Armenian Handshake".  Don't ask me where that last one came from.  I like to call it the "Push Me/Pull You" provision.

Essentially, this provision says that if Owner A offers to buy Owner B's shares or LLC interest, Owner B has two options, either accept the offer or buy out Owner A on the same terms.  This seems attractive because it would appear to give Owner A the incentive to price his offer fairly.  After all, if he tries to lowball the value, Owner B can snatch up a bargain by turning the tables.

What I've seen in my practice, and many other attorneys share similar stories, is that this type of provision is only fair if both parties are relatively equal in their financial position, especially their access to cash.  If Owner A is far more cash-rich than Owner B, then Owner A doesn't need to price his offer fairly, he only needs to price it higher than Owner B can afford to pay. 

Keep this in mind when considering this type of provision in your company's buy/sell.