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ADDENDUM A <br /> Definitions <br /> The following terms, to the extent used in this Agreement, shall have the following meanings <br /> (unless otherwise expressly provided herein): <br /> "Act" means the North Carolina Limited Liability Company Act, as the same may be <br /> amended from time to time. <br /> "Adjusted Capital Account" means, with respect to an Interest Owner, the balance in <br /> such Interest Owner's Capital Account at the end of the relevant Fiscal Year, as determined in accordance <br /> with Treasury Regulation Section 1.704-1(b)(2)(iv). <br /> "Affiliate" of a specified Person or Interest Owner means (i) any Person directly or <br /> indirectly controlling, controlled by or under common control with the specified Person or Interest <br /> Owner, (ii) any Person or Interest Owner owning or controlling ten percent or more of the outstanding <br /> voting securities of the specified Person, (iii) any officer, director or partner of the specified Person, or <br /> (iv) if the specified Person is an officer, director or partner, any entity for which the specified Person acts <br /> in such capacity. <br /> "Appraised Value" means the fair market value of the Company as of the Valuation <br /> Date. The Appraised Value shall be determined as follows: <br /> (a) The Company shall select an independent business valuation firm with knowledge and <br /> experience specific to the Company's industry which is reasonably acceptable to the selling Interest <br /> Owner (or his estate), to perform a fair market valuation of the Company (herein the "First Valuation"). <br /> The cost of the First Valuation shall be paid for by the Company. <br /> (b) In the event either the selling or purchasing party objects, in writing, to the First <br /> Valuation, such objecting party (herein so defined) may notify the other party within twenty (20) days <br /> following the Objecting Party's receipt of the First Valuation, in which case the Objecting Party shall <br /> have the right to obtain, at the Objecting Party's expense, a second valuation of the Company(herein the <br /> "Second Valuation"), to be completed by a business valuation firm chosen by the Objecting Party and <br /> reasonably acceptable to the other party. Such Second Valuation must be completed, if at all, within <br /> thirty(30)days following the delivery of the First Valuation. <br /> (c) In the event the higher of the two valuations (herein the"Higher Value")is not more than <br /> 110% of the lower of the two valuations (herein the "Lower Value"), the valuation of the Company shall <br /> be determined by averaging the First and Second Valuations. <br /> (d) In the event the Higher Value is more than 110% of the Lower Value, the two valuation <br /> firms shall designate another firm to perform a third valuation of the Company (herein the "Third <br /> Valuation") and the final valuation of the Ownership Interest shall be determined by averaging the two <br /> closest of the First, Second and Third Valuations. In that event, the cost of the Third Valuation shall be <br /> borne by the Company. The parties will endeavor to have the Third Valuation completed within thirty <br /> (30)days following the delivery of the Second Valuation. <br /> (e) In determining the fair market value of the Company all insurance proceeds, if any, to be <br /> received by the Company as a result of the death of an Interest Owner, as applicable, shall be disregarded <br /> as an asset. <br /> A-1 <br />