Common use of Inventory Value Clause in Contracts

Inventory Value. (a) No later than five (5) days after the date of this Agreement, Seller shall deliver to Purchaser a letter signed by Seller’s independent auditors describing in reasonable detail the procedures undertaken by such auditors in connection with measuring and testing the Inventory. At least five (5) Business Days prior to the Closing, Seller shall close each of the Premises and cease all sales and transfers of Inventory thereat (the date of such closure and cessation, the “Shutdown Date”), provided that Seller may continue, from and after the Shutdown Date, to transfer Excluded Inventory to Seller’s other store locations. As used herein, “Excluded Inventory” shall mean any Inventory in which the name of Seller or any of its subsidiaries or any tradenames under which the Seller or any of its subsidiaries operates is inscribed or otherwise attached thereto. For purposes of Sections 2.2(b) and 2.2(c) hereof, shortly after the Shutdown Date the Inventory will be valued as of the Shutdown Date based upon a physical inventory (the cost of which shall be shared equally by Seller and Purchaser) taken of the Inventory on hand as of the Shutdown Date at each of the Premises by RGIS Inventory Specialists (“RGIS”). Seller will make its personnel available to assist RGIS in performing such physical inventory and shall permit representatives of Purchaser to observe such physical inventory. Upon completion thereof, Seller shall, in consultation with Purchaser and in accordance with Section 2.2(b) of this Agreement, determine the value of the following: (i) inventory of the Business consisting of merchandise in the current assortment; (ii) inventory of the Business consisting of salable merchandise in packaway or other backroom facilities; and (iii) inventory of the Business consisting of discontinued items (the items described in Sections 2.2(a)(i), (ii) and (iii) of this Agreement shall hereinafter be referred to as the “Inventory”). Promptly following such determination, Seller shall deliver to Purchaser written notice thereof, together with reasonable detail showing the calculations therefor. Purchaser shall be entitled to perform sample “price testing” of the Inventory and shall promptly notify Seller of any initial disagreement with Seller’s determination. In the event of such disagreement, the parties shall endeavor to resolve their differences promptly.

Inventory Value. (a) No later than Within five (5) business days after the Closing Date, the Seller and the Purchaser shall jointly conduct a physical count of the Inventory as of the Closing Date and the Purchaser shall make or cause to be made a calculation of the value of the Inventory as of the Closing Date (the "Inventory Value") in accordance with the Seller's accounting policies applied on a consistent basis for determining standard costs (the "Calculation"), except that unmerchantable or obsolete Inventory ("Obsolete Inventory") shall be excluded from the Calculation. Any finished goods Inventory with a shelf life expiration date of this Agreement, less than twelve (12) months from the Closing Date shall be considered unmerchantable and obsolete for purposes of determining Obsolete Inventory. Any finished goods Inventory not in full unopened case cartons shall also be considered unmerchantable. The Seller will retain the Obsolete Inventory which the Seller shall deliver destroy within ninety (90) days after the Closing Date. Any non-finished goods Inventory that exceeds a 12 month supply (as measured on the basis of the Seller's shipment production forecast for the 12 month period following the Closing Date), to Purchaser a letter signed the extent of such excess, shall be excluded from the Calculation and shall be retained by the Seller’s independent auditors describing in reasonable detail . Any Inventory that has been ordered by the procedures undertaken by such auditors in connection with measuring and testing the Inventory. At least five (5) Business Days Seller but not received prior to the Closing, Seller Closing Date shall close each of not be included in the Premises Calculation but will be accepted by the Purchaser and cease all sales and transfers of Inventory thereat (the date of such closure and cessation, the “Shutdown Date”), provided that Seller may continue, from and after the Shutdown Date, shall be considered to transfer Excluded Inventory to Seller’s other store locations. As used herein, “Excluded Inventory” shall mean any Inventory in which the name of Seller or any of its subsidiaries or any tradenames under which have been purchased by the Seller or any of its subsidiaries operates is inscribed or otherwise attached thereto. For purposes of Sections 2.2(b) and 2.2(c) hereof, shortly after the Shutdown Date the Inventory will be valued as of the Shutdown Date based upon a physical inventory (the cost of which shall be shared equally by Seller and Purchaser) taken of the Inventory on hand as of the Shutdown Date at each of the Premises by RGIS Inventory Specialists (“RGIS”). Seller will make its personnel available to assist RGIS in performing such physical inventory and shall permit representatives of Purchaser to observe such physical inventory. Upon completion thereof, Seller shall, in consultation with Purchaser and support firm purchase orders in accordance with Section 2.2(b) of this Agreement, determine the value 4.1 of the following: (i) inventory Supply Agreement. The Purchaser shall also provide the Seller with copies of the Business consisting of merchandise Calculation and all work papers associated therewith within thirty (30) days after the Closing Date. The Purchaser may not assert a claim for indemnification with respect to any Inventory that is not included in the current assortment; (ii) inventory of the Business consisting of salable merchandise in packaway or other backroom facilities; and (iii) inventory of the Business consisting of discontinued items (the items described in Sections 2.2(a)(i), (ii) and (iii) of this Agreement shall hereinafter be referred to as the “Inventory”). Promptly following such determination, Seller shall deliver to Purchaser written notice thereof, together with reasonable detail showing the calculations therefor. Purchaser shall be entitled to perform sample “price testing” of the Inventory and shall promptly notify Seller of any initial disagreement with Seller’s determination. In the event of such disagreement, the parties shall endeavor to resolve their differences promptlyCalculation.

Inventory Value. The actual value of the Inventory to be paid by Buyer to Seller shall be calculated and paid in accordance with this Section 2.2. The portion of the Purchase Price to be paid by Buyer at Closing will include an amount equal to the estimated value of the Inventory (athe "Estimated Inventory Value"), but not in excess of Three Million Seven Hundred Thousand Dollars ($3,700,000.00) No later than five (5the "Closing Inventory Payment"). The Estimated Inventory Value shall be the amount of Inventory shown on the balance sheet of Seller for the most recently ended accounting period prior to Closing, prepared in the ordinary course of business of Seller and certified in writing to Buyer as of Closing by the Chief Financial Officer of Seller. Commencing on the day before the Closing Date, RGIS (or another valuation service acceptable to Buyer and Seller) shall count and compute the value of saleable non-petroleum Inventory as of Closing using the valuation procedure and criteria set forth in EXHIBIT 2.2. Buyer and Seller will share equally the costs of such Inventory valuation and shall each be permitted to have a representative present during such valuation. In addition, commencing on the day before the Closing Date, Buyer and Seller shall jointly determine the actual quantities of saleable petroleum Inventory as of Closing (the "Petroleum Inventory") and shall promptly thereafter compute the value of the Petroleum Inventory using the Petroleum Inventory valuation procedure and criteria set forth in EXHIBIT 2.2. The determination of the actual Inventory shall commence as soon as practicable on the day before the Closing Date and continue as rapidly as possible and shall be completed within three (3) days. If the computed aggregate value of Inventory exceeds the Closing Inventory Payment, Buyer shall pay the difference to Seller within ten (10) days after the date of this Agreement, Seller shall deliver to Purchaser a letter signed by Seller’s independent auditors describing in reasonable detail the procedures undertaken by such auditors in connection with measuring and testing the Inventory. At least five (5) Business Days prior to the Closing, Seller shall close each of the Premises and cease all sales and transfers of Inventory thereat (the date of such closure and cessation, the “Shutdown Date”), provided that Seller may continue, from and after the Shutdown Date, to transfer Excluded Inventory to Seller’s other store locations. As used herein, “Excluded Inventory” shall mean any Inventory in which the name of Seller or any of its subsidiaries or any tradenames under which the Seller or any of its subsidiaries operates is inscribed or otherwise attached thereto. For purposes of Sections 2.2(b) and 2.2(c) hereof, shortly after the Shutdown Date the Inventory will be valued as of the Shutdown Date based upon a physical inventory (the cost of which shall be shared equally by Seller and Purchaser) taken of the Inventory on hand as of the Shutdown Date at each of the Premises by RGIS Inventory Specialists (“RGIS”). Seller will make its personnel available to assist RGIS in performing such physical inventory and shall permit representatives of Purchaser to observe such physical inventory. Upon completion thereof, Seller shall, in consultation with Purchaser and in accordance with Section 2.2(b) of this Agreement, determine the value of the following: (i) inventory of the Business consisting of merchandise in the current assortment; (ii) inventory of the Business consisting of salable merchandise in packaway or other backroom facilities; and (iii) inventory of the Business consisting of discontinued items (the items described in Sections 2.2(a)(i), (ii) and (iii) of this Agreement shall hereinafter be referred to as the “Inventory”). Promptly following such determination, Seller shall deliver to Purchaser written notice determination thereof, together with reasonable detail showing interest thereon from the calculations therefor. Purchaser Closing Date to the date of payment at the prime rate of Chase Manhattan Bank in New York in effect on the last business day prior to Closing ("Prime Rate") by wire transfer to Seller's Bank Account; provided, however, that to the extent that the computed value exceeds the sum of Three Million Seven Hundred Thousand Dollars ($3,700,000.00), the amount in excess of said Three Million Seven Hundred Thousand Dollars ($3,700,000.00) shall be entitled paid with interest at the Prime Rate from the Closing Date to perform sample “price testing” the date of payment as aforesaid on such date as may be determined by Buyer, but not later than sixty (60) days after Closing. If the computed value is less than the Closing Inventory and Payment, Seller shall promptly notify Seller pay the difference to Buyer within ten (10) days after the determination thereof, together with interest at the Prime Rate thereon from the Closing Date to the date of any initial disagreement with Seller’s determination. In the event of such disagreement, the parties shall endeavor payment by wire transfer to resolve their differences promptlyBuyer's Bank Account.

Inventory Value. (a) As promptly as practicable, the Sellers and Purchaser shall cause to be taken a physical inventory of the Inventory, other than a physical inventory of the Inventory at the Stores identified by Purchaser (the “Inventory Taking”), which Inventory Taking shall be completed prior to Closing, unless otherwise agreed to in writing by the Sellers and Purchaser (provided that the Inventory Taking shall not be required to occur on Saturdays and Sundays) (the “Inventory Completion Date”, and the date of the Inventory Taking at each of the Stores, the Clearance Centers and the Warehouse being the “Inventory Date” for each such Store, Clearance Center and Warehouse). The Sellers and Purchaser shall jointly employ a mutually acceptable independent inventory taking service (the “Inventory Taking Service”) to conduct the Inventory Taking, or if the Sellers and Purchaser mutually agree, shall jointly conduct the Inventory Taking without utilizing a third party Inventory Taking Service. The Inventory Taking shall be conducted in accordance with the procedures and instructions to be mutually agreed by the Sellers and Purchaser and made a part of this Agreement as Schedule 3.5(a) (the “Inventory Taking Instructions”). Purchaser shall be responsible for 100% of the fees and expenses of the Inventory Taking Service, if such service is utilized. In the event that no third party Inventory Taking Service is utilized, then each of the Sellers and Purchaser shall bear their respective costs and expenses incurred in the Inventory Taking. The Sellers and Purchaser shall each have the right to have representatives present during the Inventory Taking, and shall each have the right to review and verify the listing and tabulation of the Inventory Taking Service. During the conduct of the Inventory Taking in each of the Clearance Centers, Warehouse and Stores, the applicable location shall be closed to the public and no sales or other transactions shall be conducted until the Inventory Taking at such location has been completed. No later than five (5) days after the date of this AgreementInventory Completion Date, Seller Sellers shall deliver to Purchaser prepare a letter signed by Seller’s independent auditors describing in reasonable detail the procedures undertaken by such auditors in connection with measuring and testing the Inventory. At least five statement (5“Pre-Closing Inventory Statement”) Business Days prior to the Closing, Seller shall close each of the Premises and cease all sales and transfers of Eligible Inventory thereat (the date of such closure and cessation, the “Shutdown Date”), provided that Seller may continue, from and after the Shutdown Date, to transfer Excluded Inventory to Seller’s other store locations. As used herein, “Excluded Inventory” shall mean any Inventory in which the name of Seller or any of its subsidiaries or any tradenames under which the Seller or any of its subsidiaries operates is inscribed or otherwise attached thereto. For purposes of Sections 2.2(b) and 2.2(c) hereof, shortly after the Shutdown Date the Inventory will be valued Value as of the Shutdown Closing Date based upon a such physical inventory (the cost of which shall be shared equally by Seller and Purchaser) taken of the Inventory on hand as of the Shutdown Date at each of the Premises by RGIS Inventory Specialists count (“RGISPre-Closing Eligible Inventory Value”). Seller will make its personnel available to assist RGIS in performing such physical inventory and shall permit representatives of Purchaser to observe such physical inventory. Upon completion thereof, Seller shall, in consultation with Purchaser and in accordance with Section 2.2(b) of this Agreement, determine the value of the following: (i) inventory of the Business consisting of merchandise in the current assortment; (ii) inventory of the Business consisting of salable merchandise in packaway or other backroom facilities; and (iii) inventory of the Business consisting of discontinued items (the items described in Sections 2.2(a)(i), (ii) and (iii) of this Agreement shall hereinafter be referred to as the The “Inventory”). Promptly following such determination, Seller shall deliver to Purchaser written notice thereof, together with reasonable detail showing the calculations therefor. Purchaser shall be entitled to perform sample “price testing” of the Inventory and shall promptly notify Seller of any initial disagreement with Seller’s determination. In the event of such disagreement, the parties shall endeavor to resolve their differences promptly.