Common use of Valuation of Non-Cash Asset Clause in Contracts

Valuation of Non-Cash Asset. In the event the Company proposes to distribute assets other than cash in connection with any liquidation, dissolution or winding up of the Company or any Liquidation Event, the value of the assets to be distributed to the Shareholders shall be that as determined in good faith by the liquidator or, in the case of any proposed distribution in connection with a transaction which is a deemed liquidation hereunder, by the shareholders’ meeting, which decision shall include the approval from the Preferred Majority. Any securities not subject to investment letter or similar restrictions on free marketability shall be valued as follows: (a) If traded on a securities exchange, the value shall be deemed to be the average of the security’s closing prices on such exchange over the thirty (30) day period ending one (1) day prior to the distribution; (b) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid prices over the thirty (30) day period ending three (3) days prior to the distribution; and (c) If there is no active public market, the value shall be the fair market value thereof as determined in good faith by the liquidator or, in the case of any proposed distribution in connection with a transaction which is a deemed liquidation hereunder, by the Board (with at least one affirmative vote from any Series C Director). The method of valuation of securities subject to restrictions on free marketability shall be adjusted to make an appropriate discount from the market value determined as above in clauses (a), (b), or (c) to reflect the fair market value thereof as determined in good faith by the liquidator or, in the case of any proposed distribution in connection with a transaction which is a deemed liquidation hereunder, by the shareholders’ meeting. The Preferred Majority shall have the right to challenge any determination by the liquidator or the shareholders’ meeting, as the case may be, of fair market value pursuant to Section 5, in which case the determination of fair market value shall be made by an independent appraiser selected jointly by the liquidator or the shareholders’ meeting, as the case may be, and the challenging parties, the cost of such appraisal to be borne equally by the Company and the challenging party.