Inventory Liquidation Clause Samples
The Inventory Liquidation clause outlines the procedures and rights related to the sale or disposal of inventory, typically when a business is winding down operations or needs to quickly convert stock into cash. This clause may specify who is authorized to initiate liquidation, the methods for selling inventory (such as public auction or private sale), and how proceeds are distributed among stakeholders. Its core function is to provide a clear, orderly process for handling inventory in situations where rapid asset conversion is necessary, thereby minimizing disputes and ensuring fair treatment of all parties involved.
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Inventory Liquidation. (a) Upon the expiration or earlier termination of this Agreement, for any reason whatsoever, Distributor shall, within thirty (30) days thereof, deliver to ICI a complete and accurate schedule of Distributor's inventory of Products, labels and tags. Such schedule shall be prepared as of the close of business on the date of such termination. ICI shall thereupon have the option, exercisable by written notice delivered to Distributor within thirty (30) days of receipt of the schedule of inventory, to purchase any or all of the inventory for an amount equal to Distributor's actual cost, F.O.B. factory (if the work is in progress) or LDP with freight (if the Products are at the warehouse), as defined according to Generally Accepted Accounting Principles of the United States. Should ICI send such notice, Distributor will ship to ICI all of the inventory specified therein, within thirty (30) days of receipt thereof for inventory located in Distributor's facilities, or, for all other inventory, promptly thereafter but no more than forty-five (45) days thereafter. ICI shall pay Distributor for such inventory within thirty (30) days of receipt. The sale of inventory to ICI shall not be subject to the payment of Rights Holder's Royalties or Distributor's Fees, and such sales shall not count toward the minimum sales required for that year.
(b) In the event that ICI elects not to exercise its option to purchase the remaining inventory, Distributor shall have a period of 90 days from the effective date of termination to sell and deliver to other purchasers its remaining inventory under the Marks on a non-exclusive basis, provided that the termination of this Agreement has not been caused by Distributor's breach of this Agreement, Distributor's unauthorized use of the Marks, or an order enjoining use of the Marks in the Territory, in which case the inventory liquidation rights provided herein shall not apply. Distributor will make its reasonable efforts to sell only to the previous season's customers and to sell only at regular prices. Royalties and other payments on said sales shall be due on the 30th day following the sale thereof. All imprints, lettering, stationery, tags, labels, packaging, advertising materials, Fixtures, or other reproductions of or reference to the Marks shall be removed from all inventory remaining after such 60- day period and shall be immediately returned to ICI at no charge or shall be destroyed together with such remaining inventory which can...
Inventory Liquidation. Notwithstanding anything in this Agreement to the contrary, if SII is required or deems it advisable to liquidate certain Licensed Products at a price that results in a gross margin of less than 40%, SII will pay to Earnhardt a royalty equal to one-half of the gross margin of the Licensed ▇▇▇▇▇▇▇ ▇o liquidated.
Inventory Liquidation. In the event the Executive leaves the Company (for any reason, with or without Cause or for Good Reason) prior to a Change of Control and within 36 months after the Commencement Date, then the Company will have the option to require the Executive to extend his employment at his then current annual base salary for a period of up to three months or until such time prior to three months that the Executive liquidates and sells the inventory purchased in connection with the Huttig-Grip product line expansion at or above landed cost (the “Final Separation Date”), and Company will defer payment of any severance or payout hereunder until the Final Separation Date.
Inventory Liquidation