Inventory Valuation. (a) An Inventory Amount with respect to the Closing, a Subsequent Closing or the Distribution Center Closing shall be calculated as follows: (i) The parties shall commission WIS International or another mutually acceptable inventory valuation firm (the “Inventory Service”) to conduct a physical inventory (with a representative of each of the Company and Purchaser Sub present thereat in order to observe such Inventory Audit) at certain Acquired Stores to be inventoried at the Closing or such Subsequent Closing (which shall be such Acquired Stores as are mutually agreed in good faith by the Company and Purchaser Sub prior to the Closing Date (or the applicable Subsequent Closing Date)) (such Acquired Stores so sampled are collectively referred to as the “Sampled Locations”), as described herein (each, an “Inventory Audit”). The Inventory Service shall also conduct a physical inventory (with a representative of each of the Company and Purchaser Sub present thereat in order to observe such Inventory Audit) at each Distribution Center prior to the Distribution Center Closing Date. The Inventory Audits shall be performed within the ten (10) days prior to the Closing Date or applicable Subsequent Closing Date or Distribution Center Closing Date. The Inventory Audits will be performed as of the close of business at each selected location on the date of its Inventory Audit. In the case of a 24-hour store, the Inventory Audit will be performed as of 11:59 p.m. store time. The Inventory Audits will be performed in accordance with the inventory count and valuation procedures set forth on Exhibit A attached hereto (the “Inventory Procedures”). The fees and expenses of the Inventory Service shall be borne equally by Purchaser Sub and the Company. The Inventory Service shall conduct a physical inventory of at least 20% of the aggregate number of Acquired Stores being transferred at the Closing and any applicable Subsequent Closing. (ii) The Inventory Service will calculate the aggregate count of Inventory counted by it at each Sampled Location with respect to the Closing or the applicable Subsequent Closing and applicable Inventory in the Distribution Centers with respect to the Distribution Center Closing in accordance with the Inventory Procedures (such count with respect to each Sampled Location and the Distribution Centers, the “Retail Inventory Value”). If the Book to Physical Adjustment Ratio with respect to the Sampled Locations with respect to the Closing or the applicable Subsequent Closing is greater than or equal to 5% (based on a physical inventory valuation report), the Inventory Service will conduct an Inventory Audit (an “Additional Inventory Audit”) of an additional number of Acquired Stores selected by the Company and confirmed by Purchaser Sub (each such additional Acquired Store thereafter deemed to be a Sampled Location for purposes of this Section 2.5). The Inventory Service shall conduct an Additional Inventory Audit of that number of Acquired Stores being transferred at the Closing and any applicable Subsequent Closing as may be mutually agreed by Purchaser Sub and the Company. (b) At the conclusion of each Inventory Audit and Additional Inventory Audit, (i) the Inventory Service shall provide each of the Company, Purchaser Sub and Purchaser Sub’s financing sources with a physical inventory valuation report in the form attached hereto as Section 2.5(b) of the Company Disclosure Schedules setting forth the Inventory Amount with respect to the Acquired Stores and Distribution Centers to be transferred as of the Closing Date, applicable Subsequent Closing Date or Distribution Center Closing Date (each, an “Inventory Statement”), which such report shall be signed by each of Purchaser Sub and the Company and (ii) the Inventory Service shall provide each of the Company and Purchaser Sub prior to each of the Closing, each Subsequent Closing and to the extent applicable to the Inventory to be transferred thereat, the Distribution Center Closing, a report as to the retail and cost value of the applicable Inventory to be transferred as of such date (including in each case shown by front end, pharmacy, cigarettes and liquor) and prescription volume, in each case as of the most recent month ended prior to such date in form and substance consistent with the Company’s past practice.
Appears in 4 contracts
Samples: Asset Purchase Agreement (Walgreens Boots Alliance, Inc.), Asset Purchase Agreement (Rite Aid Corp), Asset Purchase Agreement (Walgreens Boots Alliance, Inc.)
Inventory Valuation. (a) An Inventory Amount with respect to the Closing, a Subsequent Closing or the a Distribution Center Closing shall be calculated as follows:
(i) The parties shall commission WIS International or another mutually acceptable inventory valuation firm (the “Inventory Service”) to conduct a physical inventory (with a representative of each of the Company Parent and Purchaser Sub Buyer present thereat in order to observe such Inventory Audit) at certain Acquired Stores to be inventoried at the Closing or such Subsequent Closing (which shall be such Acquired Stores as are mutually agreed in good faith by the Company Parent and Purchaser Sub Buyer prior to the Closing Date (or the applicable Subsequent Closing Date)) (such Acquired Stores so sampled are collectively referred to as the “Sampled Locations”), as described herein (each, an “Inventory Audit”). The Inventory Service shall also conduct a physical inventory (with a representative of each of the Company Parent and Purchaser Sub Buyer present thereat in order to observe such Inventory Audit) at each the Distribution Center prior to the Distribution Center Closing Date. The Inventory Audits shall be performed within the ten (10) days prior to the Closing Date or applicable Subsequent Closing Date or Distribution Center Closing Date. The Inventory Audits will be performed as of the close of business at each selected location on the date of its Inventory Audit. In the case of a 24-hour store, the Inventory Audit will be performed as of 11:59 p.m. PM store time. The Inventory Audits will be performed in accordance with the inventory count and valuation procedures set forth on Exhibit A E attached hereto (the “Inventory Procedures”). The fees and expenses of the Inventory Service shall be borne equally paid fifty percent (50%) by Purchaser Sub Buyer and the Companyfifty percent (50%) by Seller. The Inventory Service shall conduct a physical inventory of at least 20% of the aggregate number of Acquired Stores being transferred at the Closing and any applicable Subsequent Closing.
(ii) The Inventory Service will calculate the aggregate count of Inventory counted by it at each Sampled Location with respect to the Closing or the applicable Subsequent Closing and applicable Inventory in the Distribution Centers Center with respect to the Distribution Center Closing in accordance with the Inventory Procedures (such count with respect to each Sampled Location and the Distribution CentersCenter, the “Retail Inventory Value”). If the Book to Physical Adjustment Ratio with respect to the Sampled Locations with respect to the Closing or the applicable Subsequent Closing is greater than or equal to 5% (based on a physical inventory valuation report), the Inventory Service will conduct an Inventory Audit (an “Additional Inventory Audit”) of an additional number of Acquired Stores selected by the Company Parent and confirmed by Purchaser Sub Buyer (each such additional Acquired Store thereafter deemed to be a Sampled Location for purposes of this Section 2.52.10). The Inventory Service shall conduct an Additional Inventory Audit of that number of Acquired Stores being transferred at the Closing and any applicable Subsequent Closing as may be mutually agreed by Purchaser Sub Buyer and the CompanyParent.
(b) At the conclusion of each Inventory Audit and Additional Inventory Audit, (i) the Inventory Service shall provide each of the CompanyParent, Purchaser Sub Buyer and Purchaser SubBuyer’s financing sources with a physical inventory valuation report in the form attached hereto as Section 2.5(bSchedule 2.10(b) of the Company Disclosure Schedules setting forth the Inventory Amount with respect to the Acquired Stores and Distribution Centers Center to be transferred as of the Closing Date, applicable Subsequent Closing Date or Distribution Center Closing Date (each, an “Inventory Statement”), which such report shall be signed by each of Purchaser Sub Buyer and the Company Parent and (ii) the Inventory Service shall provide each of the Company Parent and Purchaser Sub Buyer prior to each of the Closing, each Subsequent Closing and to the extent applicable to the Inventory to be transferred thereat, the Distribution Center Closing, a report as to the retail and cost value of the applicable Inventory to be transferred as of such date (including in each case shown by front end, pharmacy, cigarettes and liquor) and prescription volume, in each case as of the most recent month ended prior to such date in form and substance consistent with the CompanySeller’s past practice.
Appears in 3 contracts
Samples: Asset Purchase Agreement (Rite Aid Corp), Asset Purchase Agreement (Freds Inc), Asset Purchase Agreement (Walgreens Boots Alliance, Inc.)
Inventory Valuation. (a) An Inventory Amount with respect to For purposes of determining the Closing, a Subsequent Closing or the Distribution Center Closing shall be calculated as follows:
(i) The parties shall commission WIS International or another mutually acceptable inventory valuation firm (the “Inventory Service”) to conduct a physical inventory (with a representative of each amount ------------------- of the Company and Purchaser Sub present thereat in order to observe such Inventory Audit) at certain Acquired Stores to be inventoried at the Closing or such Subsequent Closing (which shall be such Acquired Stores as are mutually agreed in good faith by the Company and Purchaser Sub prior to the Closing Date (or the applicable Subsequent Closing Date)) (such Acquired Stores so sampled are collectively referred to as the “Sampled Locations”), as described herein (each, an “Inventory Audit”). The Inventory Service shall also conduct a physical inventory (with a representative of each of the Company and Purchaser Sub present thereat in order to observe such Inventory Audit) at each Distribution Center prior to the Distribution Center Closing Date. The Inventory Audits shall be performed within the ten (10) days prior to the Closing Date or applicable Subsequent Closing Date or Distribution Center Closing Date. The Inventory Audits will be performed as of the close of business at each selected location on the date of its Inventory Audit. In the case of a 24-hour storeRoyalty Note Adjustment, the Inventory Audit will be performed as of 11:59 p.m. store time. The Inventory Audits will be performed in accordance with the inventory count and valuation procedures set forth on Exhibit A attached hereto (the “Inventory Procedures”). The fees and expenses of the Inventory Service Valuation shall be borne equally by Purchaser Sub and the Company. The Inventory Service shall conduct a physical inventory sum of at least 20% of the aggregate number of Acquired Stores being transferred at the Closing and any applicable Subsequent Closing.
(ii) The Inventory Service will calculate the aggregate count of Inventory counted by it at each Sampled Location with respect to the Closing or the applicable Subsequent Closing and applicable Inventory in the Distribution Centers with respect to the Distribution Center Closing in accordance with the Inventory Procedures (such count with respect to each Sampled Location and the Distribution Centers, the “Retail Inventory Value”). If the Book to Physical Adjustment Ratio with respect to the Sampled Locations with respect to the Closing or the applicable Subsequent Closing is greater than or equal to 5% (based on a physical inventory valuation report), the Inventory Service will conduct an Inventory Audit (an “Additional Inventory Audit”) of an additional number of Acquired Stores selected by the Company and confirmed by Purchaser Sub (each such additional Acquired Store thereafter deemed to be a Sampled Location for purposes of this Section 2.5). The Inventory Service shall conduct an Additional Inventory Audit of that number of Acquired Stores being transferred at the Closing and any applicable Subsequent Closing as may be mutually agreed by Purchaser Sub and the Company.
(b) At the conclusion of each Inventory Audit and Additional Inventory Audit, (i) the Inventory Service shall provide each fair market value of the Company, Purchaser Sub and Purchaser Sub’s financing sources with a physical inventory valuation report in Purchased Inventory remaining on the form attached hereto books of Buyer as Section 2.5(b) of the Company Disclosure Schedules setting forth the Inventory Amount with respect to the Acquired Stores and Distribution Centers to be transferred as first anniversary of the Closing Date, applicable Subsequent Closing Date or Distribution Center Closing Date other than Excluded Inventory (each, an “Inventory Statement”the "Remaining Purchased Inventory"), which such report shall be signed by each of Purchaser Sub and the Company and plus (ii) the book value of ---- any Purchased Inventory Service shall provide each utilized by Buyer after the Closing and before the first anniversary of the Closing Date; provided, however, that Company and Purchaser Sub Buyer may agree, in writing, to a value other than book value for any item of Purchased Inventory, plus (iii) the book value of any inventory purchased by ---- Buyer prior to each the Closing pursuant to that certain Interim Operating Agreement between Buyer and Company of even date herewith (the "Interim Operating Agreement"); provided, however, that Company and Buyer may agree, in writing, to a value other than book value for any item of Purchased Inventory, as set forth in the Interim Operating Agreement. For purposes of subpart (i) of the preceding sentence, Remaining Purchased Inventory shall include any item of Excluded Inventory, if any, remaining on the books of Company as of the first anniversary of the Closing Date and which Company, in its sole discretion, deems unnecessary for the completion of the Unfinished Safeco Orders (as defined in Section 13.02). Any such item of Excluded Inventory so identified shall thereafter be deemed Purchased Inventory for purposes of this Agreement. For purposes of subpart (ii) of the preceding sentence, Purchased Inventory shall be deemed utilized if it is actually utilized or directly tied and related to an existing contract or purchase order to be shipped within twelve (12) months after the first anniversary of the Closing, each Subsequent Closing and to the extent applicable to the Inventory to be transferred thereat, the Distribution Center Closing, a report as to the retail and cost value of the applicable Inventory to be transferred as of such date (including in each case shown by front end, pharmacy, cigarettes and liquor) and prescription volume, in each case as of the most recent month ended prior to such date in form and substance consistent with the Company’s past practice.
Appears in 1 contract
Inventory Valuation. (ai) An Inventory Amount In accordance with respect Section 2.6(b) of this Agreement, and prior to the Closing, Seller shall deliver to Purchaser a Subsequent Closing or the Distribution Center Closing shall be calculated as follows:
(i) The parties shall commission WIS International or another mutually acceptable inventory valuation firm preliminary estimate (the “Preliminary Estimate”) of the aggregate value of the Inventory Service(“Inventory Value”) to conduct a physical inventory be acquired by Purchaser hereunder (with a representative of each of the Company and Purchaser Sub present thereat in order to observe such Inventory Audit) at certain Acquired Stores to be inventoried at the Closing or such Subsequent Closing (which shall be such Acquired Stores as are mutually agreed in good faith by the Company and Purchaser Sub prior to the Closing Date (or the applicable Subsequent Closing Date)) (such Acquired Stores so sampled are collectively referred to as the “Sampled LocationsClosing Inventory”), as described herein (each, an “Inventory Audit”). The Inventory Service shall also conduct a physical inventory (with a representative of each of the Company and Purchaser Sub present thereat in order to observe such Inventory Audit) at each Distribution Center prior to the Distribution Center Closing Date. The Inventory Audits which preliminary aggregate value estimate shall be performed within the ten (10) days prior to the Closing Date or applicable Subsequent Closing Date or Distribution Center Closing Date. The Inventory Audits will be performed as of the close of business at each selected location based on the date of its Seller’s Cost information supplied to Purchaser for each Inventory Audit. In the case of a 24-hour store, the Inventory Audit will be performed as of 11:59 p.m. store time. The Inventory Audits will be performed in accordance with the inventory count and valuation procedures set forth on Exhibit A attached hereto (the “Inventory Procedures”). The fees and expenses of the Inventory Service shall be borne equally by Purchaser Sub and the Company. The Inventory Service shall conduct a physical inventory of at least 20% of the aggregate number of Acquired Stores being transferred at the Closing and any applicable Subsequent Closingitem.
(ii) The Purchaser and Seller shall jointly conduct an actual physical count and inspection of the Inventory Service will calculate in order to (A) verify the aggregate count of Inventory counted Seller’s Cost information provided by it at each Sampled Location with respect to the Seller on the Closing Inventory and (B) examine the Closing Inventory to identify items of Closing Inventory, if any, that constitute Defective Merchandise or the applicable Subsequent Closing and applicable Display, Return or Obsolete Inventory in the Distribution Centers with respect to the Distribution Center Closing in accordance with the Inventory Procedures (such count with respect to each Sampled Location and the Distribution Centers, the “Retail Inventory ValueNonqualifying Closing Inventory”). If the Book to Physical Adjustment Ratio with respect to the Sampled Locations with respect to The physical inventory shall commence on the Closing or Date and be completed within five (5) Business Days after the applicable Subsequent Closing is greater than or equal to 5% Date (based on a physical inventory valuation report), unless extended by mutual agreement of the Inventory Service will conduct an Inventory Audit (an “Additional Inventory Audit”) of an additional number of Acquired Stores selected by the Company and confirmed by Purchaser Sub (each such additional Acquired Store thereafter deemed to be a Sampled Location for purposes of this Section 2.5parties). The Inventory Service Purchaser shall conduct an Additional Inventory Audit of that number of Acquired Stores being transferred at the Closing prepare, and any applicable Subsequent Closing as may be mutually agreed by Purchaser Sub submit to Seller, for Seller’s review and the Company.
(b) At the conclusion of each Inventory Audit and Additional Inventory Auditapproval, (i) the Inventory Service shall provide each of the Company, Purchaser Sub and Purchaser Sub’s financing sources with a physical inventory proposed final valuation report in the form attached hereto as Section 2.5(b) of the Company Disclosure Schedules setting forth the Inventory Amount with respect to the Acquired Stores and Distribution Centers to be transferred as of the Closing Date, applicable Subsequent Closing Date or Distribution Center Closing Date Inventory within twenty (each, an “Inventory Statement”), which such report shall be signed by each 20) Business Days after the completion of the physical inventory. Purchaser Sub will provide Seller with access to its records and the Company and (ii) the Inventory Service shall provide each of the Company and Purchaser Sub prior to each of the Closing, each Subsequent Closing and Facilities to the extent applicable reasonably related to the Inventory to be transferred thereat, the Distribution Center Closing, a report as to the retail and cost value its review of Purchaser’s proposed final valuation of the applicable Closing Inventory. All items of Closing Inventory to that are not Nonqualifying Closing Inventory shall be transferred valued at Seller’s Cost, as verified by Purchaser. All Nonqualifying Closing Inventory shall be reviewed for appropriate lower of such date cost or market valuation adjustment as mutually agreed upon by Purchaser and Seller, it being expressly understood that the calculation of market value shall be determined by using the expected selling price reduced by (including in each case shown by front end, pharmacy, cigarettes X) normal selling costs and liquor(Y) and prescription volume, in each case as a reasonable selling margin representative of the most recent month ended prior to such date historical selling margin of Seller in form and substance consistent with the Company’s past practiceproduct category.
Appears in 1 contract
Inventory Valuation. The Inventory as of May 31, 2000 ("May 31 Inventory") has an agreed to value of U.S.$15,000,000 (the "Initial Inventory Value"). The Inventory value will be calculated as of the Closing Date according the rules listed below:
(a) An If material was May 31 Inventory Amount with respect to the Closing, a Subsequent Closing or the Distribution Center Closing shall be calculated as follows:
(i) The parties shall commission WIS International or another mutually acceptable inventory valuation firm (the “Inventory Service”) to conduct a physical inventory (with a representative of each of the Company and Purchaser Sub present thereat in order to observe such Inventory Audit) at certain Acquired Stores to be inventoried at the Closing or such Subsequent Closing (which shall be such Acquired Stores as are mutually agreed in good faith by the Company and Purchaser Sub was sold prior to the Closing Date (or the applicable Subsequent Closing Date)) (such Acquired Stores so sampled are collectively referred to as the “Sampled Locations”"Sold Inventory"), the "Sold Inventory Valuation Adjustment" will be calculated as described herein follows: the Sold Inventory Valuation Adjustment is equal to the (eachi) sales price less (I) any repair and overhaul expenses incurred after May 31, an “2000 and less (II) any gross profit margin of the Sold Inventory Audit”)multiplied by (ii) the corresponding Valuation Percentage, as listed on Schedule 2.5. The May 31 Inventory Service shall also conduct a physical inventory (with a representative of each of that remains in the Company and Purchaser Sub present thereat in order to observe such Inventory Audit) at each Distribution Center prior to the Distribution Center Closing Date. The Inventory Audits shall be performed within the ten (10) days prior to on the Closing Date or applicable Subsequent Closing Date or Distribution Center Closing Date. The will not affect the Sold Inventory Audits will be performed as of the close of business at each selected location on the date of its Inventory Audit. In the case of a 24-hour store, the Inventory Audit will be performed as of 11:59 p.m. store time. The Inventory Audits will be performed in accordance with the inventory count and valuation procedures set forth on Exhibit A attached hereto (the “Inventory Procedures”). The fees and expenses of the Inventory Service shall be borne equally by Purchaser Sub and the Company. The Inventory Service shall conduct a physical inventory of at least 20% of the aggregate number of Acquired Stores being transferred at the Closing and any applicable Subsequent Closing.
(ii) The Inventory Service will calculate the aggregate count of Inventory counted by it at each Sampled Location with respect to the Closing or the applicable Subsequent Closing and applicable Inventory in the Distribution Centers with respect to the Distribution Center Closing in accordance with the Inventory Procedures (such count with respect to each Sampled Location and the Distribution Centers, the “Retail Inventory Value”). If the Book to Physical Adjustment Ratio with respect to the Sampled Locations with respect to the Closing or the applicable Subsequent Closing is greater than or equal to 5% (based on a physical inventory valuation report), the Inventory Service will conduct an Inventory Audit (an “Additional Inventory Audit”) of an additional number of Acquired Stores selected by the Company and confirmed by Purchaser Sub (each such additional Acquired Store thereafter deemed to be a Sampled Location for purposes of this Section 2.5). The Inventory Service shall conduct an Additional Inventory Audit of that number of Acquired Stores being transferred at the Closing and any applicable Subsequent Closing as may be mutually agreed by Purchaser Sub and the CompanyValuation Adjustment.
(b) At If new Inventory has been purchased between June 1, 2000 and the conclusion of each Inventory Audit Closing Date, and Additional Inventory Audit, (i) is still in the Inventory Service shall provide each as of the CompanyClosing Date (the "New Inventory"), Purchaser Sub and Purchaser Sub’s financing sources with a physical inventory valuation report any increase in the form attached hereto as Section 2.5(b) value of the Company Disclosure Schedules setting forth total Inventory (the "New Inventory Amount with respect Valuation Adjustment") will be calculated as follows: the New Inventory Valuation Adjustment will be equal to the Acquired Stores and Distribution Centers to be transferred net book value of the New Inventory as of the Closing Date. Only JT8D spare parts will be counted in the New Inventory. No other spare parts will be considered New Inventory. Any Inventory purchased and sold between June 1, applicable Subsequent 2000 and the Closing Date or Distribution Center will not be factored into the calculation of the New Inventory Valuation Adjustment.
(c) If the Company incurs any repair and overhaul expenses between June 1, 2000 and the Closing Date (each, an “which are directly attributable to May 31 Inventory Statement”), which such report shall be signed by each of Purchaser Sub and the Company and (ii) the Inventory Service shall provide each of the Company and Purchaser Sub prior to each of the Closing, each Subsequent Closing and to the extent applicable to the Inventory to be transferred thereator New Inventory, the Distribution Center Closingcost of these expenses, a report excluding the amount attributable to Sold Inventory, will be referred to as to the retail "Repair and cost value of the applicable Inventory to be transferred as of such date (including in each case shown by front end, pharmacy, cigarettes and liquor) and prescription volume, in each case as of the most recent month ended prior to such date in form and substance consistent with the Company’s past practiceOverhaul Valuation Adjustment".
Appears in 1 contract
Samples: Share Purchase Agreement (Willis Lease Finance Corp)
Inventory Valuation. (ai) An Inventory Amount In accordance with respect Section 2.6(b) of this Agreement, and prior to the Closing, Seller shall deliver to Purchaser a Subsequent Closing or the Distribution Center Closing shall be calculated as follows:
(i) The parties shall commission WIS International or another mutually acceptable inventory valuation firm preliminary estimate (the “Preliminary Estimate”) of the aggregate value of the Inventory Service(“Inventory Value”) to conduct a physical inventory be acquired by Purchaser hereunder (with a representative of each of the Company and Purchaser Sub present thereat in order to observe such Inventory Audit) at certain Acquired Stores to be inventoried at the Closing or such Subsequent Closing (which shall be such Acquired Stores as are mutually agreed in good faith by the Company and Purchaser Sub prior to the Closing Date (or the applicable Subsequent Closing Date)) (such Acquired Stores so sampled are collectively referred to as the “Sampled LocationsClosing Inventory”), as described herein (each, an “Inventory Audit”). The Inventory Service shall also conduct a physical inventory (with a representative of each of the Company and Purchaser Sub present thereat in order to observe such Inventory Audit) at each Distribution Center prior to the Distribution Center Closing Date. The Inventory Audits which preliminary aggregate value estimate shall be performed within the ten (10) days prior to the Closing Date or applicable Subsequent Closing Date or Distribution Center Closing Date. The Inventory Audits will be performed as of the close of business at each selected location based on the date of its Seller’s Cost information supplied to Purchaser for each Inventory Audit. In the case of a 24-hour store, the Inventory Audit will be performed as of 11:59 p.m. store time. The Inventory Audits will be performed in accordance with the inventory count and valuation procedures set forth on Exhibit A attached hereto (the “Inventory Procedures”). The fees and expenses of the Inventory Service shall be borne equally by Purchaser Sub and the Company. The Inventory Service shall conduct a physical inventory of at least 20% of the aggregate number of Acquired Stores being transferred at the Closing and any applicable Subsequent Closingitem.
(ii) The Purchaser and Seller shall jointly conduct an actual physical inspection of the Inventory Service will calculate in order to (A) verify the aggregate count of Inventory counted Seller’s Cost information provided by it at each Sampled Location with respect to the Seller on the Closing Inventory and (B) examine the Closing Inventory to identify items of Closing Inventory, if any, that constitute Defective Merchandise or the applicable Subsequent Closing and applicable Display, Return or Obsolete Inventory in the Distribution Centers with respect to the Distribution Center Closing in accordance with the Inventory Procedures (such count with respect to each Sampled Location and the Distribution Centers, the “Retail Inventory ValueNonqualifying Closing Inventory”). If the Book to Physical Adjustment Ratio with respect to the Sampled Locations with respect to The physical inventory shall commence on the Closing or Date and be completed within five (5) Business Days after the applicable Subsequent Closing is greater than or equal to 5% Date (based on a physical inventory valuation report), unless extended by mutual agreement of the Inventory Service will conduct an Inventory Audit (an “Additional Inventory Audit”) of an additional number of Acquired Stores selected by the Company and confirmed by Purchaser Sub (each such additional Acquired Store thereafter deemed to be a Sampled Location for purposes of this Section 2.5parties). The Inventory Service Purchaser shall conduct an Additional Inventory Audit of that number of Acquired Stores being transferred at the Closing prepare, and any applicable Subsequent Closing as may be mutually agreed by Purchaser Sub submit to Seller, for Seller’s review and the Company.
(b) At the conclusion of each Inventory Audit and Additional Inventory Auditapproval, (i) the Inventory Service shall provide each of the Company, Purchaser Sub and Purchaser Sub’s financing sources with a physical inventory proposed final valuation report in the form attached hereto as Section 2.5(b) of the Company Disclosure Schedules setting forth the Inventory Amount with respect to the Acquired Stores and Distribution Centers to be transferred as of the Closing Date, applicable Subsequent Closing Date or Distribution Center Closing Date Inventory within twenty (each, an “Inventory Statement”), which such report shall be signed by each 20) Business Days after the completion of the physical inventory. Purchaser Sub will provide Seller with access to its records and the Company and (ii) the Inventory Service shall provide each of the Company and Purchaser Sub prior to each of the Closing, each Subsequent Closing and Facilities to the extent applicable reasonably related to the Inventory to be transferred thereat, the Distribution Center Closing, a report as to the retail and cost value its review of Purchaser’s proposed final valuation of the applicable Closing Inventory. All items of Closing Inventory to that are not Nonqualifying Closing Inventory shall be transferred valued at Seller’s Cost, as verified by Purchaser. All Nonqualifying Closing Inventory shall be reviewed for appropriate lower of such date cost or market valuation adjustment as mutually agreed upon by Purchaser and Seller, it being expressly understood that the calculation of market value shall be determined by using the expected selling price reduced by (including in each case shown by front end, pharmacy, cigarettes X) normal selling costs and liquor(Y) and prescription volume, in each case as a reasonable selling margin representative of the most recent month ended prior to such date historical selling margin of Seller in form and substance consistent with the Company’s past practiceproduct category.
Appears in 1 contract
Samples: Asset Purchase Agreement (Steinway Musical Instruments Inc)