Sample Share Purchase And Share Holder Agreement Page 75
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77SCHEDULE II
Principles of Valuation
(a)
Valuation procedure
Upon the provisions of this Schedule becoming applicable (but subject to paragraph (b)),
the non-defaulting party/ selling party (if not a Defaulting Party)/ Government (in case of
insolvency of Strategic Partner or Principal(s)) shall, unless otherwise agreed to between
the Parties, appoint an independent valuer of international repute from among the entities
mentioned in Paragraph (c) of this Schedule II to determine the Fair Value of the relevant
Equity Shares as of the Valuation Date. The appointment of the independent valuer shall
be made within 5 (five) days of the Valuation Date.
In determining the Fair Value of the relevant Equity Shares of the Company, the
independent valuer shall take into account various factors, including but not limited to the
following:
(i)
Discounted cash flow principles;
(ii)
Commonly used valuation multiples;
(iii)
If the Company is listed, the current price of the Equity Shares of the
Company as quoted on the stock exchange(s) where they are primarily traded;
(iv)
The Securities and Exchange Board of India's guidelines and principles of
valuation, if applicable
(v)
Whether such Equity Shares of the Company which are subject to the
transaction of purchase and sale constitute a minority block or a majority block of all the
issued and outstanding Equity Shares;
(vi)
Whether such Equity Shares have any contractual rights with respect to the
Company attached to them and appropriate discount or premium shall be applied to its
valuation on the basis thereof;
(vii)
Discounting principles if the selling party is insolvent for assuming any
restriction and obligations attached to the shares.
(viii)
Asset valuation.
(ix)
Value of entities in business similar to or associated with the business of the
Company.
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