Common use of Acquired Inventory Clause in Contracts

Acquired Inventory. a. At a mutually agreed upon time (but no sooner than 12:00 p.m. and no later than 3:00 p.m. local time) on the day preceding the Closing Date, Seller shall cause the applicable Leased Premises to close, so that the Parties can conduct physical inventories in accordance with this Section 4; provided, however, that a different commencement time may be used for any Leased Premises if Buyer and Seller mutually agree (each an “Inventory Date”). No store conversion activity can take place during the inventory verification. Seller, on the one hand, and Buyer, on the other hand, shall each designate one (1) qualified representative (each a “Qualified Representative”) to be present at, lead and sign-off on the inventory verification at each of the Leased Premises. b. At an agreed-upon date and time no later than two (2) days prior to the start of the Acquired Inventory verification at each Leased Premises, the Qualified Representatives shall tour the Leased Premises to agree upon items of Excluded Inventory and to ensure segregation of such items from the inventory to be counted in connection with the inventory verification. Buyer will have a reasonable opportunity to have its Qualified Representative (or his designated representatives) check the dates and condition of items to be considered Excluded Inventory, including tobacco products. The Qualified Representatives will cooperate in good faith to agree on the inclusion of any item of merchandise in the Acquired Inventory and/or the valuation of any such item of Acquired Inventory. In the event that a dispute is not resolved by the Qualified Representatives during the course of the inventory verification process, Buyer and Seller will each designate a more senior company employee (each a “Senior Representative”) to meet and confer with t he other to promptly resolve any such dispute during the inventory counting process. c. No merchandise will be accepted, moved into or moved out of any of the Leased Premises between the start and the conclusion of the physical inventory. Seller will be responsible for payment of invoices and claims for vendor credits associated with inventory and products received at the Leased Premises prior to the start of the inventory verification process. Except for the Excluded Inventory, all merchandise received at each Leased Premises prior to the commencement of the inventory taking at such Leased Premises must be included in the inventory taking process. d. The Inventory Service will use its established inventory policies and procedures (copies of which shall be furnished to the Qualified Representatives of Buyer and Seller prior to the Inventory Date) to complete the count of Acquired Inventory at each Leased Premises. The inventory count conducted by the Inventory Service will be final and binding (subject to any adjustments mutually agreed upon by Seller and Buyer) (the “Final Inventory Report”). The counted Acquired Inventory from the Final Inventory Report will be summarized for each Leased Premises using an Inventory Certificate Form attached hereto as Exhibit G. Final Acquired Inventory amounts and the Acquired Inventory Costs must be agreed upon and the Inventory Certificate Form must be signed before the Qualified Representatives or the Senior Representatives (as applicable) leave the Leased Premises. To the extent required by Legal Requirements as of the Closing, Seller shall provide a release to its wholesaler to permit Buyer to have access to all transaction information, transaction supplier, and transaction history data available. e. Upon execution of this Agreement, Seller may begin liquidating any Private Label Excluded Inventory or other Excluded Inventory.

Acquired Inventory. a. At a (a) Sellers agree to sell and Buyer agrees to purchase an amount not to exceed Four Hundred Thousand Dollars ($400,000) worth of mutually agreed upon time (but no sooner than 12:00 p.m. and no later than 3:00 p.m. local time) inventory at the Acquired Locations on the day preceding the Closing Date, Seller shall cause the applicable Leased Premises to close, so that the Parties can conduct physical inventories Date (valued at Sellers’ cost as determined from Sellers’ books and records maintained in accordance with GAAP) subject to the conditions of this Section 4; provided§2.12 and as set forth on Schedule 2.12 (such inventory, howeverthe “Acquired Inventory”). (b) In determining what shall constitute Acquired Inventory for purposes of this Agreement, the Parties agree that a different commencement time may be used for any Leased Premises if it shall consist only of such inventories and items of merchandise at the Acquired Locations that are saleable in the Ordinary Course of Business as mutually determined by Buyer and Seller mutually agree (each an “Inventory Date”). No store conversion activity can take place during the inventory verification. Seller, on the one hand, Buyer Parent and Buyer, on the other hand, shall each designate one (1) qualified representative (each a “Qualified Representative”) to be present at, lead Sellers and sign-off on the inventory verification at each of the Leased Premises. b. At an agreed-upon date and time no later than two (2) days prior conform to the start provisions of the Acquired Inventory verification at each Leased Premises, the Qualified Representatives shall tour the Leased Premises to agree upon items of Excluded Inventory and to ensure segregation of such items from the inventory to be counted in connection with the inventory verification. Buyer will have a reasonable opportunity to have its Qualified Representative (or his designated representativesSection 2.12(d) check the dates and condition of items to be considered Excluded Inventory, including tobacco products. The Qualified Representatives will cooperate in good faith to agree on the inclusion of any item of merchandise in the Acquired Inventory and/or the valuation of any such item of Acquired Inventorybelow. In the event that a dispute is not resolved such inventories and items of merchandise are valued at greater than $400,000 (measured by the Qualified Representatives during the course of the inventory verification process, Sellers’ cost and as verified with and accepted by Buyer and Seller will each designate Buyer Parent under this §2.12) (“Excess Inventory”), then Buyer may elect to purchase any or all of such Excess Inventory or exclude any thereof from the purchase hereunder. (c) In connection with the provisions of this §2.12, the Sellers and Buyer shall cause to be taken a more senior company employee physical inventory (each a units and costs) of all items of merchandise located at the Acquired Locations (the “Senior RepresentativeInventory Taking”), which Inventory Taking shall take place and be completed following the close of business at the Acquired Locations on January 2, 2008 and before the commencement of business on the Closing Date. In the event that the Parties mutually agree that inclement winter weather would impede or prevent the Inventory Taking to take place on such date, the Inventory Taking shall place on January 3, 2008. The Sellers and Buyer shall jointly employ WIS or another mutually acceptable independent inventory taking service (the “Inventory Taking Service”) to meet and confer with t he other to promptly resolve any such dispute during conduct the inventory counting process. c. No merchandise will be accepted, moved into or moved out of any of the Leased Premises between the start and the conclusion of the physical inventoryInventory Taking. Seller will be responsible for payment of invoices and claims for vendor credits associated with inventory and products received at the Leased Premises prior to the start of the inventory verification process. Except for the Excluded Inventory, all merchandise received at each Leased Premises prior to the commencement of the inventory taking at such Leased Premises must be included in the inventory taking process. d. The Inventory Service will use its established inventory policies and procedures (copies of which Taking shall be furnished to the Qualified Representatives of Buyer conducted in accordance with procedures and Seller prior to the Inventory Date) to complete the count of Acquired Inventory at each Leased Premises. The inventory count conducted by the Inventory Service will instructions as shall be final and binding (subject to any adjustments mutually agreed upon by Seller the parties, which will include producing electronic data files in a format capable of being readily inputted into Buyer’s electronic inventory and Buyer) merchandising system (the “Final Inventory ReportTaking Instructions”)). The counted Sellers and Buyer shall each be responsible for one-half (1/2) of the fees and expenses of the Inventory Taking Service. Except as provided in the immediately preceding sentence, the Sellers and Buyer shall each bear their respective costs and expenses relative to the Inventory Taking. The Sellers and Buyer shall each have the right to have such number of representatives present during the Inventory Taking as they reasonably deem necessary, and shall each have the right to review and verify the listing and tabulation of the Inventory Taking Service. The Sellers agree that during the conduct of the Inventory Taking, the retail stores at the Acquired Locations shall be closed to the public and no sales or other transactions shall be conducted. (d) In mutually agreeing to the items of merchandise that shall constitute Acquired Inventory, the Parties agree that Acquired Inventory from shall not include any (i) Defective Merchandise, (ii) Out-Of-Season Merchandise, (iii) Clearance Merchandise, (iv) Greeting Card Merchandise, (v) items or merchandise not located at the Final Inventory Report will be summarized for each Leased Premises using an Inventory Certificate Form attached hereto as Exhibit G. Final Acquired Locations, (vi) Obsolete Merchandise, (vii) Excess Seasonal Merchandise, and (viii) Special Order Merchandise which is not received at the Acquired Locations or picked up by customers prior to the Closing Date. Notwithstanding anything to the contrary in the foregoing, Acquired Inventory amounts also shall not include: (1) goods which belong to sublessees, licensees or concessionaires of the Sellers; (2) goods held by the Sellers on memo, on consignment, or as bailee; and (3) furnishings, trade fixtures, furniture and equipment and improvements to real property which are located at the Acquired Inventory Costs must be agreed upon and the Inventory Certificate Form must be signed before the Qualified Representatives or the Senior Representatives (as applicable) leave the Leased Premises. To the extent required by Legal Requirements as of the Closing, Seller shall provide a release to its wholesaler to permit Buyer to have access to all transaction information, transaction supplier, and transaction history data availableLocations. e. Upon execution of (e) As used in this Agreement§2.12 and elsewhere herein, Seller may begin liquidating any Private Label Excluded Inventory or other Excluded Inventory.the following terms shall have the respective meanings set forth below: