Common use of Valuation of Successor’s Interest Clause in Contracts

Valuation of Successor’s Interest. If an option described in Paragraph 15.1.3 is exercised, the Partnership shall determine the value of the Withdrawing Partner’s interest. The value shall be calculated as of the last day of the calendar month in which the Withdrawing Partner died or became incapacitated (the “Value Date”). The value shall be the amount that the Withdrawing Partner would receive upon a liquidation and sale of all of the Partnership assets, taking into consideration the costs of the sale and assuming the assets would be sold at their fair market value. If the Successor does not approve the value determined by the Partnership, or if the determination of value is not made within 90 days of the Value Date, then the Successor shall be entitled to require an appraisal by providing notice of the request for appraisal within ten business days after the determination of value or the expiration of the 90 day period. In such event, the value of the Successor’s Interest shall be determined by three independent appraisers, one selected by the Successor or such Successor’s legal representative, one selected by the General Partner, and one selected by the two appraisers so named. The fair market value of the Successor’s Interest shall be the average of the two appraisals closest in amount to each other. In the event the fair market value is determined to vary from the Capital Account balance by less than 10%, the party requesting such appraisal shall pay all expense of all the appraisals incurred by the party offering to enter into the transaction at the Capital Account valuation. In all other events, the party requesting the appraisal shall pay one-half of such expense and the other party shall pay one-half of such expense.