Common use of Inventory True-Up Clause in Contracts

Inventory True-Up. (a) Beginning ten days prior to the scheduled Closing Date, representatives of Purchaser and Sellers, supervised or observed, if requested by either Purchaser or Sellers (and at the requesting party’s sole expense), by Xxxxx Xxxxxxxx LLP, shall conduct a physical count of the Inventory at the Real Property and the Distribution Center such physical count to be brought forward and adjusted (utilizing perpetual inventory records) through the close of business immediately prior to the Effective Time, using methodology consistent with past practices and GAAP principles (“Inventory Count”). It is acknowledged and agreed that all expenses incurred by and all sales made by the Business on and after the Effective Time shall be for the account and benefit of Purchaser. The value of the Inventory (the “Closing Inventory Value”) shall be determined based on Sellers’ cost for such Inventory as reflected on Sellers’ books and records (including freight in and freight out, excluding reserves). In connection with the calculation of the Closing Inventory Value, Purchaser and its independent accountants, if requested by Purchaser, will have reasonable access to all requisite accounting and other records of Sellers and to the Real Property and the Distribution Center, if necessary. The parties will use their respective reasonable best efforts to complete an estimate of said count by no later than one day prior to Closing. The Inventory Count shall be completed no later than three days after the Closing. If the parties cannot agree upon the Closing Inventory Value based upon the Inventory Count three days after the Closing, the parties shall submit such matter to a mutually agreed upon third party for review and resolution, with the fees and expenses thereof to be shared equally by the parties; and any determination by such party shall be final and binding upon the parties. (b) Immediately following the determination of the Closing Inventory Value, but in no event later than three Business Days after the Closing Date, Purchaser or Sellers, as the case may be, shall pay (or in the event that Purchaser shall be obligated to pay, Finlay shall cause Purchaser to pay) by wire transfer to the other party immediately available U.S. funds in an amount equal to the excess or shortfall, as the case may be, of the Closing Inventory Value as compared to $189,000,000, subject to a maximum payment by Purchaser of $26,000,000. Notwithstanding the foregoing, to the extent that all or a portion of the Closing Inventory Value is being disputed in good faith, the disputed portion shall not be payable at the time specified in the preceding sentence but instead shall become due and shall be paid within three (3) Business Days following the resolution of such dispute. If not paid when due, interest shall accrue on the amount due at a rate equal to the lesser of (a) 12% per annum or (b) the maximum rate permitted by law.

Inventory True-Up. (a) Beginning ten eighteen days prior to the scheduled Closing Date, representatives of Purchaser and Sellers, supervised or observed, if requested by either Purchaser or Sellers (and at the requesting party’s sole expense), by Xxxxx Xxxxxxxx Xxxxxx LLP, shall conduct a physical count of the Inventory at the Real Property and the Distribution Center such physical count to be brought forward and adjusted (utilizing perpetual inventory records) through the close of business immediately prior to the Effective Time, using methodology consistent with past practices and GAAP principles (“Inventory Count”). It Without by implication limiting the generality of the other provisions of this Agreement, it is acknowledged and agreed that all expenses incurred by by, and all sales made by by, the Business on and after the Effective Time shall be for the account and benefit of Purchaser. The value of the Inventory (the “Closing Inventory Value”) shall be determined based on Sellers’ cost for such Inventory as reflected on Sellers’ books and records (including freight in and freight out, excluding reserves). In connection with the calculation determination of the Closing Inventory Value, Purchaser and its independent accountants, if requested by Purchaser, will have reasonable access to all requisite accounting and other records of Sellers and to the Real Property and the Distribution Center, if necessary. Sellers will provide Purchaser with an initial calculation of Closing Inventory Value on or prior to November 15, 2007. The parties will use their respective reasonable best efforts to complete an estimate of said count by agree upon the Closing Inventory Value based on the Inventory Count no later than one day prior to Closing. The Inventory Count shall be completed no later than three days ten Business Days following the Closing Date, or five Business Days after delivery of the ClosingSellers’ calculation, whichever is later. If the parties cannot agree upon the Closing Inventory Value based upon the Inventory Count three days after within the Closingtime period specified above, the parties shall submit such matter to a mutually agreed upon third party the Independent Accountant for review and resolution, with the fees and expenses thereof to be shared equally by the parties; and any determination by such third party shall be final and binding upon the parties. (b) Immediately following the determination of If the Closing Inventory Value, but in no event later than three Business Days after Value (as finally determined) exceeds $189,000,000 (the Closing Date, Purchaser or Sellers, as the case may be, shall pay (or in the event that Purchaser shall be obligated to pay“Excess Amount), Finlay shall cause Purchaser to pay) pay by wire transfer to the other party an account designated in writing by Sellers in immediately available U.S. funds in an amount equal (i) such Excess Amount, not to the excess or shortfall, as the case may be, of the Closing Inventory Value as compared to $189,000,000, subject to a maximum payment by Purchaser of exceed $26,000,000. Notwithstanding the foregoing, to the extent that all or a portion of the Closing Inventory Value is being disputed in good faith, the disputed portion shall not be payable at the time specified in the preceding sentence but instead shall become due and shall be paid within three (3) no later than fifteen Business Days following the resolution Closing Date, and (ii) if such Excess Amount is greater than $26,000,000, the balance of such disputethe Excess Amount on February 4, 2008. If not paid when due, interest shall accrue on the amount due at a rate equal to the lesser of (a) 12% per annum or (b) the maximum rate permitted by law. (c) If the Closing Inventory Value (as finally determined) is less than $189,000,000, Sellers shall pay by wire transfer to an account designated in writing by Purchaser in immediately available U.S. funds an amount equal to the shortfall no later than fifteen Business Days following the Closing Date. If not paid when due, interest shall accrue on the amount due at a rate equal to the lesser of (a) 12% per annum or (b) the maximum rate permitted by law.

Inventory True-Up. (a) Beginning ten days prior Prior to the scheduled Closing Date, representatives of Purchaser and Sellers, supervised or observed, if requested by either Purchaser or Sellers (and at the requesting party’s sole expense), by Xxxxx Xxxxxxxx LLP, shall may elect to conduct a physical count inventory of Sellers Inventory and bear the Inventory at the Real Property costs and the Distribution Center such physical count to be brought forward and adjusted (utilizing perpetual inventory records) through the close of business immediately prior to the Effective Time, using methodology consistent with past practices and GAAP principles (“Inventory Count”). It is acknowledged and agreed that all expenses incurred by Purchaser conducting such inventory. Purchaser shall provide Sellers with a copy of the inventory report generated as a result of such physical inventory and all sales made by deliver its calculation of the Business on and after the Effective Time shall be for the account and benefit of Purchaser. The value of the Inventory to Sellers, together with reasonable documentation supporting such calculation (the “Closing Purchasers’ Inventory ValueValue Calculation”) ). For purposes of valuing Purchaser’s Inventory Value Calculation hereunder all usable and saleable Inventory shall be determined based valued at book value. If Purchaser does not elect to conduct a physical inventory then the inventory represented on Sellers’ cost for such Inventory as reflected on Sellers’ the Sellers books and records (including freight in and freight out, excluding reserves). In connection with the calculation of the Closing Inventory Value, Purchaser and its independent accountants, if requested by Purchaser, will have reasonable access to all requisite accounting and other records of Sellers and to the Real Property and the Distribution Center, if necessary. The parties will use their respective reasonable best efforts to complete an estimate of said count by no later than one day prior to Closing. The Inventory Count shall be completed no later than three days after used to determine the Closing. If the parties cannot agree upon the Closing Purchasers’ Inventory Value based upon the Inventory Count three days after the Closing, the parties shall submit such matter to a mutually agreed upon third party for review and resolution, with the fees and expenses thereof to be shared equally by the parties; and any determination by such party shall be final and binding upon the partiesCalculation. (b) Immediately For a period of five (5) calendar days following Sellers receipt of the Purchaser’s Inventory Value Calculation, Sellers may notify Purchaser of its objections to, or acceptance of, Purchaser’s Inventory Value Calculation. For a period of ten (10) calendar days following an objection by Sellers, the parties hereto shall work together in good faith to resolve the calculation of the value of the Closing Inventory. If the parties hereto are unable to agree on the value of the Closing Inventory, such matter shall be submitted to the Bankruptcy Court to be resolved; and the determination of the Bankruptcy Court shall be final and conclusive as to the value of the Closing Inventory, such value the “Final Value of Closing Inventory”. If Sellers fail to object within the applicable ten (10) calendar day period, the Purchaser’s Inventory Value Calculation shall be the Final Value of Closing Inventory, or, if Sellers and Purchaser otherwise agree as to the value of the Closing Inventory, such agreed upon amount shall be the Final Value of Closing Inventory. (c) On the later of (i) the date of determination of the Final Value of Closing Inventory Value, but in no event later than three Business Days and (ii) twenty (20) calendar days after the Closing Date, Purchaser or Sellers, as the case may be, shall pay (or in the event that Purchaser shall be obligated to pay, Finlay shall cause Purchaser to pay) by wire transfer to the other party immediately available U.S. funds in Sellers an amount equal to the excess or shortfallPrepaid Inventory Payment less the difference, as if it is a positive number, between (x) the case may beMinimum Inventory and (y) the Final Value of Closing Inventory; provided, that, for the avoidance of doubt, there shall not be any adjustments to the Prepaid Inventory Payment if the Final Value of the Closing Inventory Value as compared to is more than the Minimum Inventory. For the avoidance of doubt, Sellers shall spend not less than $189,000,000250,000 per week on the purchase of new Inventory between the week starting January 27, subject to a maximum payment by Purchaser of $26,000,000. Notwithstanding the foregoing, to the extent that all or a portion of 2020 and the Closing Inventory Value is being disputed in good faith, the disputed portion shall not be payable at the time specified in the preceding sentence but instead shall become due and shall be paid within three (3) Business Days following the resolution of such dispute. If not paid when due, interest shall accrue on the amount due at a rate equal to the lesser of (a) 12% per annum or (b) the maximum rate permitted by lawDate.