Value Determination Clause Samples
The Value Determination clause establishes the method by which the value of certain assets, goods, or services will be assessed under the agreement. Typically, it outlines the criteria, timing, and process for valuation, such as using independent appraisers, referencing market prices, or applying agreed-upon formulas. This clause ensures both parties have a clear and objective basis for determining value, thereby reducing disputes and providing predictability in transactions where value may fluctuate or be uncertain.
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Value Determination. 12.4.1 Upon service of a Default Notice the Fair Value of the Defaulting Shareholder’s Shares shall be determined in accordance with this Clause 12. Having ascertained the Fair Value, the total amount to be received by the Defaulting Shareholder in respect of all its Shares (the “Adjusted Value”) shall be determined by reference to the Par Value and the Fair Value of the Defaulting Shareholder’s Shares, adjusted as follows by way of liquidated damages (which adjustment the Shareholders agree is an estimate in advance of the loss the Non-Defaulting Shareholder will suffer as a result of the occurrence of a Termination Event): Fair Value of all of Defaulting Shareholder’s Shares Adjusted Value Above Par Value 70% of Par Value Equal to Par Value 70% of Par Value Below Par Value 70% of Fair Value
12.4.2 The Shareholders shall use their reasonable endeavours to agree a fair value for the relevant Shares (the “Fair Value) provided always that, if the Shareholders have been unable to agree the Fair Value within thirty (30) days of the delivery of a Default Notice pursuant to this Clause 12, then the Non-Defaulting Shareholder shall forthwith instruct an independent third party valuer to determine the Fair Value of the Shares of the Defaulting Shareholder. In determining the Fair Value of the Shares, the valuer shall value the Shares as a whole and shall:
(i) be considered to be acting as an expert and not as an arbitrator and its decision (in the absence of fraud) shall be final and binding on the parties;
(ii) have regard to the following principles and assumptions in valuing the said Shares:
(a) that the consolidated net assets of the Company shall be valued on the basis of an arm’s length sale between a willing vendor and a willing purchaser;
(b) that if the Company is then carrying on business as a going concern, it shall be assumed that it will continue to do so but taking into account the event giving rise to the breach;
(c) that the said Shares shall be assumed to be capable of being transferred without restriction;
(d) that the said Shares shall have the same value as corresponds to its proportion of the value of all the Shares taken as whole;
(e) that no reduced or additional value shall be attached to any holding of Shares by virtue only of such holding comprising, or after purchase conferring, a majority or minority of the total issued share capital of the Company; and
(f) that in all other respects the principles and practices customarily applied in t...
Value Determination. The definitions of “Capital Account” and “Fair Market Value” are set forth in Section 1.1 of this Agreement. The Fair Market Value shall be determined with respect to a particular proposed Transfer in accordance with the following procedures:
Value Determination. If required pursuant to Section 4.1(f), the Current Market Value shall be deemed to be equal to the value determined by an Independent Financial Expert and set forth in a Value Report by such Independent Financial Expert. Such Independent Financial Expert shall be selected by the Board of Directors and retained on customary terms and conditions. In making any determination of Current Market Value, such Independent Financial Expert shall (A) use one or more valuation methods that, in its best professional judgment, it determines to be most appropriate and (B) take into account any lack of liquidity of the relevant security. The Company shall cause such Independent Financial Expert to deliver to the Company, with a copy to the Warrant Agent, within 25 days of the appointment of such Independent Financial Expert, the Value Report which shall state the Current Market Value of the Common Stock and/or any other securities being valued, as of the Valuation Date, and shall contain a brief statement as to the nature and scope of the examination or investigation upon which the determination of value was made. The Warrant Agent shall have no duty with respect to the Value Report of any Independent Financial Expert, except to keep it on file and available for inspection by Holders. Any determination of Current Market Value in accordance with the provisions of this Section 4.1(k) shall be conclusive as to all Persons.
Value Determination. If required pursuant to Section 4.1(f), the Current Market Value shall be deemed to be equal to the value determined by an Independent Financial Expert and set forth in a Value Report by such Independent Financial Expert. In making any determination of Current Market Value, such Independent Financial Expert shall (A) use one or more valuation methods that, in its best professional judgment, it determines to be most appropriate and (B) not take into account any discount for minority interests or lack of liquidity of the relevant security. The Company shall cause such Independent Financial Expert to deliver to the Company, within 25 days of the appointment of such Independent Financial Expert, the Value Report which shall state the Current Market Value of the Common Stock and/or any other securities being valued, as of the Valuation Date, and shall contain a brief statement as to the nature and scope of the examination or investigation upon which the determination of value was made. The Company shall make available such Value Report for inspection by the Holders. Any determination of Current Market Value in accordance with the provisions of this Section 4.1(k) shall be conclusive as to all Persons.