Common use of Valuation Dispute Clause in Contracts

Valuation Dispute. In the event that a Withdrawing Shareholder (as defined in Section 3.3) or such Withdrawing Shareholder’s estate or other legal representative (the “Disputing Party”) determines that the true fair market value of the Company (the “Fair Market Value”) is at least twenty percent (20%) more than the then-current Valuation, then such Disputing Party may give notice in writing thereof to the Company along with a calculation of such Fair Market Value (the “Dispute Notice”), as soon as possible but in any event prior to the effective Withdrawal Date (as defined in Section 3.2). The Company, the Remaining Shareholders and the Disputing Party shall work in good faith to for a period of thirty (30) days following delivery of the Dispute Notice to try and agree on a new Valuation. If such agreement cannot be reached, then the Disputing Party may, no later than forty-five (45) days after the Dispute Notice, demand binding arbitration to determine the Fair Market Value with a final decision to be rendered no later than sixty (60) days following the demand for arbitration. If the arbitrator determines that the Fair Market Value is in excess of the Valuation by at least twenty percent (20%), then such Fair Market Value shall be the new Valuation and the Company shall bear the costs of arbitration and the reasonable costs of the Disputing Party’s counsel and experts in such arbitration. If the arbitrator determines that the Fair Market Value does not exceed the Valuation by at least twenty percent (20%), then the Valuation shall remain as the Valuation and the Disputing Party shall bear the costs of arbitration and the Company’s and Remaining Shareholders’ reasonable costs of counsel and experts in such arbitration, which may be deducted from any payments to such Disputing Party. During the dispute process set forth in this Section 1.3, all other dates and timelines shall be suspended temporarily until final resolution of the Valuation dispute is reached as provided herein.