Master Services Agreement

I.Standard of Value

Unless the Order Form specifies otherwise, the standard of value applicable to each engagement is fair market value, defined by the International Glossary of Business Valuation Terms as:

The price, expressed in terms of cash equivalents, at which property would change hands between a hypothetical willing and able buyer and a hypothetical willing and able seller, acting at arm’s length in an open and unrestricted market, when neither is under compulsion to buy or sell and both have reasonable knowledge of the relevant facts.

This definition is consistent with Treasury Regulation §25.2512-1 for gift and estate tax purposes and with IRS Revenue Ruling 59-60. Analyses are conducted on a going-concern premise of value unless the Order Form expressly provides otherwise. The level of value (control vs. non-controlling; marketable vs. non-marketable) is selected deliberately in light of the subject interest and stated purpose, and governs the application of valuation discounts and premiums.

II.Scope of Analysis

A.Entities to Be Valued

The Order Form identifies the subject entity and any underlying or subsidiary entities that must also be valued in order to value the subject interest. If the underlying assets of the entity require separate independent appraisals (e.g., real estate, other closely-held interests), the Client is responsible for procuring those appraisals at the Client’s cost, with valuation dates consistent with the Valuation Date set forth in the Order Form.

B.Analysis and Research

The Firm will request interviews with appropriate entity personnel, owners, advisors, and consultants, and will request and analyze, to the extent available and relevant: financial statements, income tax returns, operating or partnership agreements, organizational documents, contracts, property schedules, K-1s, and such other records as deemed appropriate.

The Firm acknowledges that, in engagements involving minority or non-controlling interests, the subject interest holder may have limited access to the underlying entity’s books, records, personnel, and facilities. In such circumstances, the Firm may rely on publicly available data, tax returns, K-1s, partnership or operating agreements, and any other information the Client is reasonably able to obtain. Any material scope limitation arising from restricted information access will be disclosed in the report.

The Firm’s analysis will consider all three generally accepted valuation approaches and will document the selection or exclusion of each:

• Asset-Based (Cost) Approach — value based on net assets, including tangible and intangible items.
• Income-Based Approach — value derived by discounting or capitalizing expected earnings or cash flows at a market-derived rate of return.
• Market-Based Approach — value benchmarked against transactions involving comparable businesses or publicly traded guideline companies.

The Firm will utilize the most appropriate method or combination of methods given the facts and circumstances of the engagement. Consistent with IRS Revenue Ruling 59-60, the analysis will consider all relevant valuation factors, including: the nature and history of the enterprise; general economic and industry outlook; book value and financial condition; earnings capacity; dividend-paying capacity; goodwill and intangible value; prior sales of interests; and comparable market pricing.

Where appropriate to the subject interest and standard of value, the Firm will separately analyze and apply discounts for lack of control (“DLOC”) and discounts for lack of marketability (“DLOM”). The selection, quantification, and support for any such discounts will draw upon recognized empirical studies (including restricted stock and pre-IPO studies), quantitative models (such as the Quantitative Marketability Discount Model), and the qualitative factors articulated in Mandelbaum v. Commissioner and related authorities, as applicable.

C.Reporting Standards

The Firm’s analysis and conclusions will be communicated in a comprehensive written report conforming to the following professional standards:

• The American Society of Appraisers (“ASA”) Business Valuation Standards — Comprehensive Written Valuation Report (BVS-VIII).
• The American Institute of Certified Public Accountants (“AICPA”) Statement on Standards for Valuation Services No. 1 (“SSVS”).
• The Appraisal Foundation’s Uniform Standards of Professional Appraisal Practice (“USPAP”) Standards 9 (Development) and 10 (Reporting).
• The National Association of Certified Valuators and Analysts (“NACVA”) Professional Standards, where applicable.

The report is intended to satisfy the applicable requirements for a “qualified appraisal” prepared by a “qualified appraiser” for Federal tax purposes, including the adequate disclosure requirements of Treasury Regulation §301.6501(c)-1(f), and, where applicable, the qualified appraiser and qualified appraisal standards of IRC §170(f)(11), Treasury Regulation §1.170A-17, and IRS Notice 2006-96. The report will also include the additional statement required by IRS Notice 2006-96 regarding substantial or gross valuation misstatements under IRC §6662 and appraiser penalties under IRC §6695A.

D.Delivery and Timing

The estimated delivery window is set forth in the Order Form and runs from the Firm’s receipt of all requested information in acceptable form. The Firm may first issue a draft report for the Client’s review for the limited purpose of confirming factual accuracy. The Firm’s conclusion of value is not subject to Client direction or negotiation, and no draft shall be relied upon for any purpose. A final report will be issued following Client review. The Firm will use its best efforts to meet any reasonable deadlines mutually agreed upon. Delivery timelines are contingent upon the timely receipt of all documents and information required to complete the engagement.

E.Distribution and Use

The Firm’s analysis, conclusions, and reports are prepared solely for the Client and for the stated purpose. Distribution of the report is restricted to the Client, the Client’s legal, accounting, and financial advisors directly involved with the subject transaction, and the applicable governmental authority (e.g., the Internal Revenue Service). The report may not be distributed to any other party, used for any other purpose, or published in any form without the Firm’s prior written consent. Unauthorized use or distribution will render the report invalid.

III.Reliance on Information

The Firm will rely on the accuracy and completeness of all financial statements, forecasts, and other information provided by the Client, its owners, officers, agents, and advisors, and from third-party research sources, without independent verification. The Client represents and warrants that all information supplied to the Firm will be correct, complete, and accurate, including without limitation revenues, expenses, and all balance sheet items (including off-balance-sheet assets and liabilities). Any significant errors or omissions may have a material effect on the Firm’s analysis and conclusions.

The Firm will inform the Client of any matters that come to the Firm’s attention suggesting possible errors, irregularities, or illegal acts; however, this engagement is not designed to, and cannot be relied upon to, detect such matters.

At the conclusion of the engagement, the Firm will require the Client to execute a representation letter confirming the assumptions and information relied upon in the valuation.

IV.Professional Limitations

A.Not a CPA Engagement

While the Firm may employ or engage certified public accountants, this engagement does not constitute an audit, review, or compilation of financial statements under standards promulgated by the AICPA. The Firm’s work cannot be relied upon to discover errors, irregularities, or illegal acts, including fraud or defalcations.

B.Financial Projections and Forecasts

If projections or forecasts of future operating results are utilized in the analysis, such projections will be prepared by or at the direction of management and will represent management’s best estimate of future results. The Firm will not perform procedures required by the AICPA to compile or examine such forecasts, and will not express any form of assurance regarding the achievability of the projections or the reasonableness of the underlying assumptions.

C.Intangible Assets

While the contribution to value associated with goodwill and other intangible assets, if any, will be recognized in the Firm’s final opinion, this engagement does not include the separate valuation of individual intangible assets for regulatory or financial reporting purposes, unless specifically agreed in writing.

D.Independence, Non-Advocacy, and Non-Contingent Fees

The Firm has no present or contemplated financial interest in the entity being valued. Consistent with Treasury Department Circular 230 §10.27, the Firm’s fee is based upon customary billing rates and is in no way contingent upon the conclusions reached or upon the resolution of any tax matter. The Firm conducts its standard conflicts check process before accepting each engagement. The Firm’s obligation to serve the public interest requires that the integrity of its services be preserved; accordingly, the Firm may advocate only for its unbiased process and conclusions.

E.Engagement Through Counsel (Kovel)

If the Firm is engaged directly by the Client’s legal counsel pursuant to a Kovel-type arrangement for the purpose of assisting counsel in rendering legal advice, the Firm will treat counsel as its client for purposes of communication, billing, and confidentiality, and will cooperate with counsel’s efforts to preserve the attorney-client privilege and work-product protections, to the extent consistent with the Firm’s professional and ethical obligations.

F.Matter of Opinion

The parties acknowledge that valuations involving closely held entities are an imprecise science and that value is ultimately a question of fact upon which reasonable people may differ. The Firm’s opinions are good-faith professional judgments, not guarantees of value. The Firm does not purport to be a guarantor of value, nor does any report constitute a recommendation regarding the purchase or sale of any interest or asset.

V.Fees and Billing

A.Fees for Services

The total estimated fee, the personnel hourly rates, and the number of reports to be delivered are set forth in the Order Form. Fees are based upon standard hourly rates that vary by the skill level and responsibility of the personnel performing the services. The total fee estimate is contingent upon the Firm receiving all required data and information in a timely manner and in proper form. Changes in the scope, facts, or circumstances of the engagement may require additional professional time; any such changes will be discussed with the Client before additional work proceeds.

B.Nonrefundable Engagement Retainer

A nonrefundable engagement retainer in the amount specified in the Order Form is due upon execution of the Order Form. The Client acknowledges and agrees that this retainer is fully earned upon receipt in consideration of the Firm’s commitment to reserve capacity, decline conflicting engagements, and commence work on the Client’s behalf. The retainer will be credited against the final invoice but is not refundable in whole or in part, including in the event of termination by either party. Where multiple reports are to be delivered, upon completion of each interim draft report, a partial completion invoice will be issued and must be paid in full before the Firm communicates any results of its analysis, including the issuance of any draft of the final report. The outstanding balance will be collected at the time of delivery of the final report.

C.Out-of-Pocket Expenses

In addition to professional fees, the Client shall reimburse the Firm for reasonable out-of-pocket expenses, including: travel, lodging, and meals for authorized site visits; document and report reproduction; telephone and mail; computer and database charges; and related overhead. The Order Form specifies the third-party research cost authorization the Client grants the Firm without further approval. Invoices for out-of-pocket expenses are due upon receipt.

D.Payment Terms

Invoices are due within the period specified in the Order Form (typically 20 to 30 days) of the invoice date. A service charge of 1.5% per month will be applied to all delinquent accounts that are 30 or more days past due. The preferred method of payment is ACH transfer; wire transfer and check are also accepted. Payment instructions will be included on each invoice.

E.Collection

Should it be necessary to refer any invoice for collection or arbitration, the Client shall be responsible for all costs of collection, including reasonable attorney’s fees. The Client agrees to communicate any dispute regarding an invoice amount in writing within thirty (30) days of the invoice date; any claim not made within that period shall be deemed waived.

F.Termination

Either party may terminate an engagement upon written notice. In the event of termination prior to completion of the engagement, the Client shall pay the Firm for all professional time and out-of-pocket expenses incurred through the date of termination at the Firm’s then-standard billing rates. The nonrefundable engagement retainer shall be retained by the Firm in full; any fees earned in excess of the retainer shall remain due and payable.

VI.Other Services and Expert Testimony

If the Firm is called upon to provide expert testimony, respond to depositions or interrogatories, produce documents, or otherwise become involved in any administrative or judicial proceedings related to an engagement, the Client will pay, in addition to other fees set forth in the Order Form, for the time reasonably required by Firm personnel at their then-standard hourly rates, plus related out-of-pocket expenses. The Firm may require an advance deposit against estimated testimony fees and expenses prior to the commencement of any such work. All such services are governed by a separate written engagement agreement.

VII.Valuation Misstatement

The Pension Protection Act of 2006 authorizes the U.S. Treasury Department to impose civil and monetary penalties on appraisers for “substantial” or “gross” valuation misstatements. Under IRC §6662(g), a “substantial” estate or gift tax valuation understatement exists where the claimed value is 65% or less of the amount determined to be correct; under IRC §6662(h), a “gross” misstatement exists where the claimed value is 40% or less of the amount determined to be correct. Under IRC §6695A, an appraiser who knew or reasonably should have known that an appraisal would be used in connection with a return or claim for refund, and whose appraisal results in a substantial or gross valuation misstatement, may be subject to civil penalty. IRS Notice 2006-96 provides interim guidance regarding the qualified appraisal and qualified appraiser standards referenced above.

Unless otherwise agreed in writing, the Client warrants and agrees that neither the Client, nor any owner, officer, employee, or representative of the Client, shall accept any settlement with any governmental authority that may result in a substantial or gross valuation misstatement or other penalty imposed on the Firm, its owners, or officers, without first informing and consulting with the Firm.

VIII.Confidentiality and Data Handling

The Firm agrees to hold in strict confidence all proprietary information provided by the Client in connection with each engagement. The Firm will not share confidential information with persons outside the Firm except: (a) with the Client’s legal counsel, accountants, and other advisors designated by the Client; (b) with professional colleagues from whom professional guidance is sought in connection with the engagement; (c) with subcontractors as described below; or (d) as required by valid subpoena or order of a court or governmental authority with competent jurisdiction. By signing the Order Form, the Client authorizes the Firm to discuss matters with such individuals.

Subcontractors.The Firm may engage subcontractors, including independent appraisers of underlying assets, research providers, database vendors, and administrative service providers, to assist in the performance of the Services. The Client authorizes the Firm to share Client information with such subcontractors as reasonably necessary for the engagement, provided that the Firm remains responsible for the subcontractors’ compliance with confidentiality obligations substantially consistent with those in this Agreement. The Firm may also retain anonymized, de-identified, and aggregated data derived from engagements for internal research, benchmarking, and quality-improvement purposes, in a form that does not identify the Client or any subject entity.

The Firm maintains administrative, technical, and physical safeguards designed to protect the security and confidentiality of Client information, including secure electronic transmission, access controls, and encrypted storage consistent with industry-standard practices. In the event of a confirmed security incident affecting Client information, the Firm will notify the Client without unreasonable delay and cooperate in any reasonable response.

The Firm’s working papers and all work product created during an engagement are confidential and are the property of the Firm. Working papers will be retained in the Firm’s files in accordance with the Firm’s document retention policies.

IX.Warranties; Limitation of Liability; Indemnification

A.No Warranties

To the fullest extent permitted by applicable law, the Services are provided on an “as is” basis. Except as expressly set forth in this Agreement, the Firm disclaims all warranties, express or implied, including without limitation any warranties of merchantability, fitness for a particular purpose, and non-infringement. The Firm makes no representation or warranty that any report or conclusion of value will be accepted by any governmental authority, court, or other third party, or that use of the Services will satisfy or ensure compliance with any legal obligations, laws, or regulations. The Firm’s opinions are good-faith professional judgments, not guarantees of value.

B.Limitation of Liability

The Firm’s maximum liability to the Client for damages relating to the Services provided under any engagement shall be limited to the fees actually paid to the Firm for the specific service or work product giving rise to the liability. In no event shall the Firm be liable for any consequential, incidental, indirect, punitive, or special damages, including lost profits or opportunity costs, even if the Firm has been advised of the possibility of such damages. This limitation shall not apply where damages are determined to have been caused by the Firm’s gross negligence or willful misconduct.

C.Indemnification

The Client agrees to indemnify, defend, and hold harmless the Firm and its members, managers, officers, employees, subcontractors, and agents (collectively, “Indemnitees”) from and against any and all claims, damages, losses, costs, and expenses (including reasonable attorney’s fees) arising out of or related to (i) any material misrepresentation, omission, or inaccuracy in information provided by the Client or on the Client’s behalf to the Firm; (ii) any use or distribution of a report by the Client or any third party acting on the Client’s behalf in a manner inconsistent with Section II.E or this Agreement; or (iii) any claim brought against an Indemnitee by a third party arising out of or relating to a report or the Services, except to the extent that such claims arise from the Firm’s gross negligence or willful misconduct. This indemnification shall survive the termination of the engagement.

D.Third-Party Beneficiaries

This Agreement and any Order Form are intended solely for the benefit of the Firm and the Client. Except as expressly stated herein, no other person or entity — including without limitation any beneficiary, co-owner, transferee, purchaser, lender, insurer, counterparty, or governmental authority that may come into possession of a report — shall be a third-party beneficiary of this Agreement or the Order Form, or shall be entitled to any rights, remedies, or causes of action under them. Possession or review of a report by any such person does not create an appraiser-client relationship with the Firm, and any reliance on the report by any such person is at that person’s sole risk.

X.Non-Solicitation

During each engagement and for a period of twenty-four (24) months following its termination or expiration, the Client shall not, directly or indirectly, solicit, recruit, hire, or engage as an employee, independent contractor, or consultant any person who is or was a member, manager, employee, or contractor of the Firm during the twelve (12) months preceding such solicitation or engagement. General solicitations not specifically directed at Firm personnel (such as public job postings and recruitment through publicly available channels) are not a breach of this Section.

If the Client breaches this Section, the Client shall pay the Firm a conversion fee equal to one hundred percent (100%) of the solicited individual’s annualized cash compensation (including base salary, bonus, and other cash compensation) in effect at the time of the breach, payable in a lump sum within thirty (30) days of written demand. The parties acknowledge that the Firm’s actual damages from such a breach would be difficult to quantify and that this conversion fee is a reasonable estimate of such damages and not a penalty.

XI.Dispute Resolution

All claims, disputes, and other matters arising out of or relating to an engagement or its breach shall first be subject to good-faith negotiation between the parties. If the parties are unable to resolve the dispute through negotiation, the matter shall be decided by binding arbitration in Los Angeles, California, in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Each party shall appoint one neutral arbitrator within ten (10) days of a written demand for arbitration; the two appointed arbitrators shall together select a third independent arbitrator. The written, signed decision of a majority of the arbitrators shall be final and binding. The arbitrators shall award reasonable attorney’s fees and costs to the prevailing party. Judgment on the arbitrators’ decision may be entered by any court of competent jurisdiction. The parties knowingly and voluntarily waive any right to a jury trial with respect to any such dispute.

A.Individual Basis Only; Class Action Waiver

The parties agree to resolve any and all claims relating to this Agreement, an Order Form, or the Services on an individual basis only. Each party waives any right to bring or participate in any class, consolidated, collective, mass, or representative action or proceeding. The arbitrators shall have no authority to consolidate more than one party’s claims or to preside over any form of class or representative proceeding. If this class action waiver is found to be unenforceable as to any claim or remedy, that claim or remedy shall be severed and resolved in a court of competent jurisdiction located in Los Angeles, California, and all remaining claims shall continue to be resolved in arbitration.

B.Injunctive Relief Carve-Out

Notwithstanding the foregoing, either party may seek injunctive or other equitable relief in a court of competent jurisdiction located in Los Angeles, California to prevent or restrain the unauthorized use or disclosure of confidential information, infringement of intellectual property rights, or breach of Section X (Non-Solicitation), without first engaging in informal negotiation or arbitration.

XII.Governing Law

Each engagement shall be governed by and construed in accordance with the laws of the State of California, without regard to conflicts of law principles. To the fullest extent permitted by applicable law, any legal action or proceeding asserting a claim against the Firm arising out of an engagement shall be asserted within one (1) year of the termination of the Firm’s engagement.

XIII.Updates to Agreement

A.Nonmaterial Changes

The Firm may make nonmaterial changes to this Agreement at any time without prior notice, including changes that correct typographical errors, clarify existing provisions, reflect changes in professional standards or applicable law, or address administrative matters that do not materially diminish the Client’s rights.

B.Material Changes

For changes that materially affect the Client’s rights or obligations, the Firm will provide at least thirty (30) days’ written notice to the Client (email to the Client’s designated contact is sufficient). Material changes take effect on the later of (i) the effective date stated in the notice or (ii) thirty (30) days after the notice is given, and apply prospectively to any engagement then in effect as well as future engagements.

C.Client Objection

If a material change adversely affects the Client in a material way, the Client may object by written notice to the Firm at info@inherentvaluation.com within thirty (30) days of the Firm’s notice. A timely objection allows the Client to continue any engagement then in effect under the version of this Agreement in effect immediately before the change, through the completion of that engagement. Future engagements will be governed by the then-current version of this Agreement.

D.Legal or Regulatory Changes

Changes made for legal, regulatory, or professional-standards compliance reasons, or to address security or fraud risks, take effect immediately upon notice and are not subject to the objection right in subsection C.

E.Current Version

The current version of this Agreement is posted at inherentvaluation.com/service-agreement. The Client is responsible for reviewing the current version from time to time. Continued participation in an engagement after the effective date of a change constitutes acceptance of the change, subject to the objection right in subsection C.

XIV.Survival

The following provisions, together with any other provisions that by their nature should survive, will survive the termination or expiration of any engagement: Section III (Reliance on Information) with respect to prior statements and representations; Section IV (Professional Limitations); Section V (Fees and Billing) with respect to amounts accrued through termination; Section VII (Valuation Misstatement); Section VIII (Confidentiality and Data Handling); Section IX (Warranties; Limitation of Liability; Indemnification); Section X (Non-Solicitation) as and to the extent expressly stated therein; Section XI (Dispute Resolution); Section XII (Governing Law); this Section XIV (Survival); and Section XV (General Provisions). No termination or expiration relieves either party of liability for breaches or obligations arising before such termination or expiration.

XV.General Provisions

A.Independent Contractor

The Firm performs the Services as an independent contractor. Nothing in this Agreement or any Order Form creates a partnership, joint venture, employment, agency, or fiduciary relationship between the parties. Neither party has authority to bind the other or to incur liabilities or obligations on the other’s behalf. Firm personnel are not employees of the Client for any purpose, including tax withholding or employee benefits.

B.No Personal Liability

The Firm’s obligations under this Agreement and any Order Form are solely the obligations of Inherent Valuation LLC. No member, manager, officer, employee, contractor, or agent of the Firm shall have any personal liability to the Client or any third party for any act, omission, or obligation arising out of or relating to the Services, this Agreement, or any Order Form. The Client’s recourse for any claim is limited exclusively to the Firm as a legal entity.

C.Notices

Any notice or communication required or permitted under this Agreement or an Order Form shall be in writing and shall be deemed duly given when sent by email to the address the receiving party has designated (and, for the Firm, to info@inherentvaluation.com) or when delivered by nationally recognized overnight courier to the receiving party’s business address. The Client is responsible for keeping its designated email address and contact information current.

D.Non-Waiver

The failure of either party to require performance of any provision of the Order Form or this Agreement shall not affect that party’s right to require such performance at any later time. The waiver of a breach by either party shall not be construed as a waiver of any subsequent breach or of the provision itself.

E.Entire Agreement

The Order Form, together with this Agreement and any appendices, constitutes the entire understanding between the parties with respect to the subject matter of the engagement and supersedes all prior representations, agreements, contracts, and understandings, whether oral or written. The Order Form may not be amended except by a written instrument signed by authorized representatives of both parties. This Agreement may be updated by the Firm in accordance with Section XIII (Updates to Agreement); the then-current version of this Agreement, as updated pursuant to Section XIII, governs the engagement.

F.Severability

If any provision of the Order Form or this Agreement is found to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.

G.Assignment

The Client may not assign the engagement or any rights or obligations hereunder without the prior written consent of the Firm, and any attempted assignment without such consent is void. The Firm may freely assign this Agreement or any Order Form, in whole or in part, to a successor entity in connection with a merger, reorganization, sale of substantially all of its business, or similar transaction.

H.Force Majeure

Neither party shall be liable for any delay or failure to perform hereunder (other than the obligation to pay amounts when due) caused by events beyond its reasonable control, including acts of God, natural disaster, war, terrorism, pandemic, governmental action, or significant disruption of communications or utility infrastructure. The affected party shall use reasonable efforts to resume performance as promptly as practicable.

I.Electronic Signatures and Counterparts

The Order Form may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures delivered by electronic means (including DocuSign, PDF, or similar electronic signature platforms) shall have the same force and effect as original ink signatures.

J.Authority

The signatories to the Order Form represent and warrant that they are lawfully authorized and empowered to execute the Order Form on behalf of the party for whom they are signing, and that upon execution the Order Form shall be binding upon such party without any further approval or ratification. If the Client is engaging the Firm on behalf of another individual or entity (including a trust, estate, beneficiary, counterparty, or counsel acting for a client), the Client represents and warrants that it has all authorizations and rights necessary to engage the Firm on behalf of that person or entity and to bind that person or entity to this Agreement and the Order Form.

K.Feedback

If the Client provides the Firm with comments, suggestions, feedback, or ideas concerning the Services, the Firm’s methodologies, or the Firm’s processes (“Feedback”), the Firm may use and incorporate such Feedback without any obligation to the Client, and the Client hereby irrevocably assigns to the Firm all right, title, and interest in and to such Feedback. This Section does not affect the Client’s rights in the Client’s own confidential or proprietary information.

A.Appendix A — Statement of Assumptions and Limiting Conditions

The Firm’s valuation report is subject to the following assumptions and limiting conditions:

1. Information Reliance. Information, estimates, and opinions contained in any report have been obtained from sources considered reliable. However, the Firm has not independently verified all such information and assumes no liability for the accuracy of such sources. The Client, its management, and its advisors have warranted that the information supplied is complete and accurate to the best of their knowledge, and that all facts and circumstances that would significantly affect the valuation results have been disclosed.
2. Title and Encumbrances. No investigation has been made of, and no responsibility is assumed for, legal title or encumbrances. Title to all property is assumed to be good and marketable, and all assets are assumed to be free and clear of any liens or encumbrances unless otherwise stated.
3. Going Concern. Each valuation assumes that the entity will continue to operate as a going concern and that the character of its present business will remain intact. The entity would have a materially different value in liquidation; no estimate of liquidation value is included unless expressly stated.
4. Scope Limitation. The estimates presented in a report apply to that appraisal only and may not be used out of the context presented therein. Any other use of the report may lead the user to an incorrect conclusion for which the Firm assumes no responsibility.
5. Limited Information Access. For appraisals of non-controlling interests, the Firm may rely on information that is less complete than that available to a controlling owner. Any material scope limitation will be disclosed in the report. The Firm assumes no responsibility for inaccuracies arising from information that was not reasonably available to the Client or the Firm.
6. No Guarantee of Value. The appraisal of fair market value reached in a report is necessarily an estimate. An actual transaction may be concluded at a higher or lower value, depending on the circumstances surrounding the entity, the nature of the interest, and the motivations and knowledge of the parties. The Firm makes no guarantees as to what values individual buyers and sellers may reach in an actual transaction.
7. Management Effectiveness. Unless specifically stated otherwise, each valuation assumes that the entity will be competently managed and maintained by financially sound owners over the expected period of ownership. This engagement does not entail an evaluation of management effectiveness, nor is the Firm responsible for future management or ownership actions.
8. Legal and Regulatory Compliance. The Firm has assumed, for valuation purposes, that the entity is in good standing and is not in violation of any applicable laws, regulations, codes, ordinances, or statutes. This has not been independently verified. No opinion is intended for matters requiring legal or other specialized expertise beyond that customarily employed in business valuation.
9. Environmental Matters. The Firm is not an environmental consultant, engineer, or auditor and assumes no responsibility for any actual or potential liability arising from environmental contamination or hazardous substances. No such liabilities have been considered except as reported to the Firm in an actual or estimated dollar amount.
10. No Hidden Conditions. The Firm assumes that there are no hidden or unexpected conditions of the entity that would adversely affect value, other than as disclosed in the report.
11. Prospective Financial Information.Reports may contain prospective financial information representing the Firm’s view of reasonable expectations at a particular point in time; such information is not offered as a prediction or assurance that any particular level of income or profit will be achieved, or that any specific events will occur.
12. Confidentiality. The Firm covenants to keep all valuation and other entity financial information confidential and will not disclose such information to any third party without the express written consent of the Client, except as required by law or valid legal process.
13. No Investment Recommendation.A report is not to be construed, directly or indirectly, as a recommendation to invest, divest, or lend. It is strictly the Firm’s independent opinion of value for the purpose described therein.
14. Publication Restriction. Possession of a report does not carry with it the right of publication. Neither the report nor any portion thereof shall be disseminated to third parties by any means without the prior written consent of the Firm, except as required by a valid subpoena or order of a court or governmental authority with competent jurisdiction.
15. Valuation Date. The opinion of value expressed in a report is valid only as of the stated Valuation Date and only for the stated purpose. The actual value realized at any subsequent date may vary from the value set forth in the report, and such variation may be material. The Firm has no obligation to update a report for events or circumstances occurring after the Valuation Date.
16. No Change by Others. No change of any item in a report shall be made by anyone other than the Firm, and the Firm shall have no responsibility for any unauthorized change.